Letter Supporting The Shareholder Protection Act (Final)

RE:
Shareholder Protection Act
Dear Member of Congress, We write to you to encourage your support of the Shareholder Protection Act, soon to be introduced by Representative Capuano (MA), and Senators Menendez (NJ) and Blumenthal (CT). Our organizations come from diverse backgrounds, with concerns ranging from constitutional rights to corporate governance to protecting our air and water. We have many different priorities, but we all agree that last years unprecedented Supreme Court decision, Citizens United v. Federal Election Commission, requires a strong response. We are troubled for several reasons by the Supreme Courts decision to give corporations the right under the First Amendment to spend unlimited funds from their corporate treasuries to support or attack candidates. In the electoral arena, this decision has brought a flood of new money into elections, ratcheting up the cost of campaigns and increasing the time and resources needed for fundraising. Spending by outside groups funded largely by corporate interests and intended to influence the 2010 elections was more than four times as high than in 2006, the last mid-term cycle. The ads funded by unaccountable corporate interests fueled massive attacks that compounded the negative tone of campaigns and added to the public cynicism of our elections. In the legislative arena, the mere threat of unlimited corporate political spending gives corporate lobbyists a large new club to wield when lobbying lawmakers, and makes it harder for legislators to vote their conscience. In corporate governance, there are no rules or procedures established in the United States to ensure that shareholders those who actually own the wealth of corporations are informed of, or have the right to approve, decisions on spending their money on politics. The Shareholder Protection Act provides a framework to rein in some of the damage in this troubling, new political landscape. Specifically, the Act would: Mandate prior approval by shareholders for an annual political expenditure budget chosen by the management for a publicly held corporation. Require that each specific corporate political expenditure over a certain dollar threshold be approved by the Board of Directors and promptly disclosed to shareholders and the public. Require that institutional investors inform all persons in their investment funds how they voted on corporate political expenditures. Post on the Securities Exchange Commission web page how much each corporation is spending on elections and which candidates or issues they support or oppose.
American business leaders are concerned about the pressure on business to donate to political campaigns, and the influx of large, undisclosed donations to third party political organizations that are not required to disclose their sources of funding. In a Zogby International poll commissioned by the business-led Committee for Economic Development (CED), two-thirds of business leaders polled agreed with the statement: the lack of transparency and oversight in corporate political
activity encourages behavior that puts corporations at legal risk and endangers corporate reputations. In addition to business leaders, the general public at large believes in transparency and giving shareholders a voice. A SurveyUSA poll commissioned by People for the American Way in February 2010 found that 75% of Americans believe that publicly traded companies should get approval from their shareholders before spending money on an election. Support for shareholder protection was strong across all ideological groups surveyed, with Republicans and those who identified as conservative slightly more likely to support shareholders having a say in their companys political spending (79%) than Democrats and those who identified as liberals (74%). Responsible corporate governance requires the involvement of informed shareholders and is not a partisan issue. We believe that holding management accountable and ensuring that political spending decisions are made transparently and in pursuit of sound business is important for both the market and for democracy. We urge you to support the reasoned response that is the Shareholder Protection Act. Brennan Center Center for Media and Democracy Chesapeake Climate Action Network Citizen Works Citizens for Responsibility and Ethics in Washington Coffee Party USA Common Cause Corporate Accountability International Corporate Ethics International/Business Ethics Network Demos Free Speech for People Friends of the Earth Greenpeace Holy Cross International Justice Office
Illinois Campaign for Political Reform Krull and Company, Peter W. Krull, President & Founder League of Conservation Voters Maryknoll Office for Global Concerns National Consumers League North Caroline Center for Voter Engagement NorthStar Asset Management, Inc. Ohio Citizen Action People for the American Way Progressive States Network Public Campaign Public Citizen Service Employees International Union Social Equity Group, Ron Freund and Duncan Meaney Strategic Counsel on Corporate Accountability, Sanford Lewis Sunlight Foundation U.S. Public Interest Research Group United Food and Commercial Workers West Virginia Citizen Action Wisconsin Democracy Campaign Zevin Asset Management, LLC

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Letter Supporting The Shareholder Protection Act (Final)

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RE:

Shareholder Protection Act

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