House Republicans Question SEC’s Plans To Weigh Corporate Political Spending Rule
House Republicans March 5 questioned the Securities and Exchange Commission’s plans to consider requiring disclosure of corporate political spending, saying the agency should conserve its resources for mandatory rulemaking.
“The Commission appears to be allocating its limited resources on a discretionary project wholly unrelated to its mandate to ‘protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation,’” House Financial Services Committee Chairman Jeb Hensarling (R-Texas), Oversight Committee Chairman Darrell Issa (R-Calif.), and two others said in a letter to SEC Chairman Elisse Walter.
“This is especially problematic because, as SEC staff have neither experience nor expertise regulating the disclosure of political expenditures, any such rulewriting is likely to be both staff and resource intensive.”
Last year the commission placed the rulemaking initiative–to require companies to disclose corporate funds they use for political expenditures–on its semi-annual regulatory agenda (06 SLD, 1/9/13). In 2011, the SEC received a rulemaking petition to mandate the disclosure and received hundreds of thousands of comment letters from investors in support of such a requirement (153 SLD, 8/9/11). The issue was spotlighted by the U.S. Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission, which lifted long-standing limits on corporate political spending, placed the issue in the limelight.
The lawmakers, however, said the commission’s focus should be on mandatory rulemaking rather than a “discretionary rule.” Specifically, they pointed to the agency’s missed deadlines in implementing the Jumpstart Our Business Startups Act. At a recent Senate hearing, the lawmakers recounted, Walter said the SEC lacks the funding to complete the rulemaking on time.
“In light of the SEC’s extraordinary delays in meeting the JOBS Act’s mandatory statutory deadline, an allocation of resources devoted to non-essential rulemaking raises serious questions,” the letter said.
The lawmakers asked Walter to respond to multiple questions by March 19, including how much the agency has spent on the rulemaking.
The letter can be seen at http://about.bloomberglaw.com/blaw2/files/2013/03/letterjobs.pdf.