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Cristina Francisco-McGuire on April 14, 2011 - 12:04pm
In recent weeks, state legislatures and voters alike have continued to push back against last year's Supreme Court decision in Citizens United, which took away the power of government to limit independent spending in elections and effectively overturned laws in 24 states that banned independent political expenditures from corporations and/or unions. In addition to legislative initiatives requiring shareholder approval of corporate political spending or expanding disclosure requirements for independent expenditures, two other tactics to limit the damage of Citizens United are also quickly gaining momentum: local referenda supporting an anti-corporate personhood amendment to the U.S. Constitution and shareholder resolutions urging corporations to adopt political accountability.
This week saw a big victory in Maryland, as the state’s legislature passed a campaign finance disclosure bill just a few hours before the end of their 2011 session. In addition to requiring disclosure for both independent expenditures and electioneering communications, SB 592 is the first measure in the country to require companies trying to influence state elections to report expenditures directly to their shareholders. The bill, which is currently awaiting Governor O’Malley’s signature, follows on the heels of a second win in Washington state. Inspired by the shadowy dealings of campaign consulting firm Moxie Media during the 2010 elections, in which contributions were diverted to dozens of newly-created PACs, SB 5021 is a step toward informing voters about those creating and funding PACs.
However, legislation is not the only means through which dissatisfaction with the Citizens United ruling is being expressed. Citizens who are taking matters into their own hands scored a stunning victory last week in Wisconsin. A city referendum in Madison calling for an amendment to the U.S. Constitution establishing that “only human beings, not corporations, are entitled to constitutional rights,” was approved by a staggering 84% of voters, while a similar county referendum in Dane County was also passed by an impressive 78% majority. The referenda are the first of their kind to urge the rejection of the rationale underlying Citizens United in an effort to void the decision.
Other tactics are also emerging in the battle to limit rampant corporate influence in campaigns. A no-action letter by the U.S. Securities and Exchange Commission (SEC) in late March was a big step forward for those seeking more shareholder accountability over political spending by publicly-traded corporations. Following Home Depot’s attempts to keep a shareholder resolution on corporate political spending off of this year’s proxy statement, the SEC issued the letter rejecting all of Home Depot’s objections and stating that companies must allow shareholders the opportunity to vote on the proposal. With proxy season coming up, shareholder resolutions are currently being considered by scores of corporations – proposals that would require greater transparency of political donations made by executives on behalf of the corporation. Corporations themselves are increasingly recognizing the value of shareholder accountability. The Center for Political Accountability hit a major milestone last month when seven additional companies moved to adopt disclosure and oversight of their political spending, bringing the number of public companies who have voluntarily agreed to the corporate governance standard to 85.
As the challenge of bipartisanship continues to be a major factor in whether federal legislation can move forward, alternative routes to addressing the post-Citizens United landscape are increasingly becoming the focus of those who want transparency sooner rather than later.
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