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Legislation to Require Disclosure of Corporate Political Donations Introduced
Shareholder Protection Act would require corporations to disclose to their shareholders political contributions to groups including Super PACs.
Sacramento, CA—Legislation introduced today will require corporations with shareholders in California, that spend money on political issues, to disclose that spending to those shareholders. SB 982, is authored by Senator Noreen Evans (Santa Rosa) and sponsored by the California Public Interest Research Group (CALPIRG).
For decades, corporate interests have been able to influence public policy and elections by leveraging their money. But the Supreme Court’s decision in the case Citizens United vs. FEC two years ago changed the rules so they can now spend money directly from their corporate treasuries. This change created a situation where shareholders can, and likely do, have their money used to back issues or candidates that they may disagree with.
“Shareholders invest in corporations to make money, not to bankroll the political agendas of CEOs and corporate boards,” said Pedro Morillas CALPIRG legislative director. “If political contributions are going to be part of a corporation’s business strategy, it only seems fair to inform the shareholders ahead of time.”
As the law stands today, corporations can spend millions of dollars on politics directly from their corporate bank accounts without any way to trace it back to them. This lack of transparency is not only a threat to an open democratic process, but, from a shareholder perspective, is also a threat to the value of their shares.
“Shareholders should have enough information regarding a corporation’s political activity to make an informed decision about where they invest their money,” added Morillas. “Right now a corporation could be sinking millions of dollars into a political campaign and the actual owners of the company, the shareholders, would have no idea.”
The legislation introduced by Senator Evans today is a necessary protection for shareholders to ensure that they have enough information to make a good investment.
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