retail news in context, analysis with attitude

The New York Times reports that the Securities and Exchange Commission (SEC) has been "flooded" with calls to propose new disclosure rules that would "require publicly traded corporations to disclose to shareholders all of their political donations, a move that could transform the growing world of secret campaign spending."

According to the story, "S.E.C. officials have indicated that they could propose a new disclosure rule by the end of April, setting up a major battle with business groups that oppose the proposal and are preparing for a fierce counterattack if the agency’s staff moves ahead." However, the calls for just such a rule also could be described as fierce: "A petition to the S.E.C. asking it to issue the rule has already garnered close to half a million comments, far more than any petition or rule in the agency’s history, with the vast majority in favor of it. While relatively few petitions result in action by the S.E.C., the commission staff filed a notice late last year indicating that it was considering recommending a rule."

Trade associations representing major public companies in a variety of industry have called for the SEC to avoid any such regulation, and some members of the US Congress have proposed legislation that would prevent the SEC from issuing regulations in this area.

The Times writes that "while campaign finance regulations are usually the province of the Federal Election Commission, advocates for the new proposal have pressured the S.E.C. to issue its own disclosure rule. They argue that shareholders should be able to evaluate business executives’ oversight of company resources and that S.E.C. regulations already require disclosure of similar information, like executive compensation."
KC's View:
For a moment, let's forget the politics of this. And trust me, this has the potential to turn into a partisan hairball.

I cannot help but think that the people and organizations that do not want this information divulged, and do not want regulations that require that such information be made available, are deluding themselves. These days, the internet makes pretty much everything knowable and findable. And what cannot be found on the internet inevitably gets revealed by people within organizations who have a problem with certain political positions and financial contributions.

To try to prevent such information from being made public is to fight the last war. It doesn't make sense. People should look at this potential regulation and see it as an opportunity to be up-front and transparent with investors, rather than as an obstacle to be avoided or overcome.

That all said, I have to admit that I think that such information should be public, regardless of whether the SEC mandates it or not. My feeling is that there are certain companies in which I will not invest, just as there are some companies that I will not patronize because of positions they have taken. It ought not be permissible to obfuscate such information from the people who are thinking about investing their money in such companies.