Why Don’t Shareholders Know About Corporate Political Donations?
The short answer to why shareholders have so little information about corporate political spending is that neither the Federal Elections Commission (FEC) nor the Securities and Exchange Commission (SEC) requires corporations to disclose political spending directly to their shareholders, or to corporate boards of directors. Publicly traded corporations are governed by securities laws,[22] which require detailed public reporting of many aspects of organizational structure and financial status. Political contributions are not one of the categories of required reporting. Campaign finance disclosure law varies state to state and often fails to capture modern political spending. For example, independent expenditures—the very type of political expenditures unleashed by Citizens United—are underreported in most states. One study found that a mere five states make information about independent expenditures readily available to the public. As this report noted, “holes in the laws—combined with a
