Non-Expert Agency Correct to Focus on Regulating Securities Markets rather than Political Speech
For Release: December 2, 2013
Contact: Joe Trotter
Phone: 210-352-0055 (Cell)
Alexandria, Va. –– The Center for Competitive Politics (CCP) today commended the Security and Exchange Commission for declining to force more unnecessary political disclosure by corporations.
“We applaud the SEC for refusing to allow itself to be dragged into regulating political speech in pursuit of a partisan agenda,” said former Federal Election Chairman Bradley A. Smith. “The SEC can now return its focus to protecting investors and regulating capital markets, and leave campaign finance law to the FEC and the Congress.”
The Commission had been asked to open a rulemaking by a number of legal academics. Their petition argued that corporations should be required to disclose otherwise non-material activity merely because it might have some effect, even indirectly, on politics.
“The overwhelming majority of political activity—corporate or otherwise—is publicly disclosed under current regulations, and federal law already requires the disclosure of all material corporate activity,” said CCP Legal Director Allen Dickerson. “This proposal would have involved the SEC in the difficult business of regulating political speech, a job for which it is poorly equipped, and which would have proved a distraction from its important work in the economic sphere.”
Although a record number of comments were submitted to the SEC in favor of the measure, an analysis by CCP (available here) determined that the vast majority of these comments were form letters pushed out by pro-regulation activists.
“The reform campaign was hollow, designed to cause a knee-jerk reaction by members of the public rather than solve an actual problem for investors,” said CCP President David Keating. “Less than .01% of the submitted comments were substantial letters, as opposed to the hundreds of thousands of form letters that essentially spammed the SEC. Thankfully, Chairwoman Mary Jo White, the SEC and its staff realized that they are ill-suited to the policing of political speech, which would have dragged the agency down the same dangerous trail blazed by the IRS.”
For more information, check out CCP’s corporate governance website, www.ProxyFacts.org, as well as Bradley A. Smith and Allen Dickerson’s latest article: The Non-Expert Agency: Using the SEC to Regulate Partisan Politics, published in October by the Harvard Business Law Review.
The Center for Competitive Politics promotes and defends the First Amendment’s protection of the political rights of speech, assembly, and petition. It is the nation’s largest organization dedicated solely to protecting First Amendment political rights.
