Last year, when the Supreme Court infamously ruled that corporations could freely (and secretly) invest in “electioneering campaigns,” Justice Kennedy wrote that the only way that this could be good for democracy is if companies were required to disclose to whom they were giving. Though politicians may not be willing to force disclosure anytime soon, it looks like plain old dollars and cents might. According to a new report jointly released by Public Citizen and Harvard Law School, companies that disclose where they put their money politically are simply worth more.
In the report, called “Fulfilling Kennedy’s Promise,” the researchers compared the profits of S&P 500 companies that disclose where they give versus those that keep it secret. They found “that companies with pro-disclosure policies are generally more valuable” compared to those that have anti-disclosure policies. In a Washington Post op-ed, the authors of the study suggest that this is likely because disclosure makes the company more responsive to shareholders, who in turn make sure that the company is spending the money wisely.
Though the report only makes a correlative claim (and not a causative one), the authors rightly think that this is enough to push for SEC regulation forcing disclosure. Since companies that are disclosing what they are doing are making more money, it’s hard to argue that regulation would hurt business. On the contrary, this kind of policy could not only improve the function of American democratic institutions, but also align with the interests of business owners. It’s a rare win-win.
With unprecedented sums of money gushing into campaign coffers, the least that regulators could do is let ordinary voters know where that money is coming from. If the SEC takes up the charge put forth in this report, it will also let ordinary shareholders know what CEO’s are doing with their money politically. Indeed, this would force the powerful to be accountable to those who support them – both politically and monetarily. And heck, since reform would also help corporations, it actually has a shot at happening.
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