Menendez, Capuano Reintroduce Bicameral Shareholder Protection Act of 2015

Menendez, Capuano Reintroduce Bicameral Shareholder Protection Act of 2015

“A corporation’s money belongs to its shareholders, not executives. Those shareholders deserve to know if their money is going to be spent on politics.”

WASHINGTON, DC – Today, on the anniversary of the 2010 Citizens United decision, Senator Robert Menendez (D-NJ) and Rep. Michael Capuano reintroduced the Shareholder Protection Act of 2015. This legislation would require public companies to disclose their political campaign spending to their shareholders and seek approval from a majority of shareholders before spending money from the company’s general treasury on political activities.

“Corporate executives should not be able to treat money invested by shareholders as their personal piggy bank for political campaign spending, especially without shareholders’ knowledge or consent,” said Senator Menendez. “As the destructive repercussions of the Citizens United decision continue to give corporations undue influence on elections, this legislation will provide long overdue accountability and transparency. The Shareholder Protection Act will ensure that a company’s executives have the informed consent of shareholders before they can spend shareholders’ money on politics.”

“The Supreme Court’s Citizens United decision has had profoundly negative effects for all parties in our election system, including shareholders. The rights of shareholders must be protected. Instead, they are being compromised by a handful of corporate executives who act as if they personally own the company. A corporation’s money belongs to its shareholders. At a minimum, they should have a say in how that money is being spent,” stated Congressman Capuano.

In 2010, the Supreme Court’s Citizens United v. FEC decision opened the floodgates for corporations to spend unlimited company treasury funds on campaigns. Companies, however, are not currently required to disclose their campaign spending to either the public or their shareholders.  Moreover, they have been able to further conceal their campaign spending by funneling the money through electioneering nonprofit groups and trade associations, which in turn buy campaign ads without disclosing the corporate donors.  As a result, both the public and the shareholders of the company whose money paid for the political spending are left in the dark.

In the Senate, this legislation was co-sponsored by senators: Tom Udall (D-NM); Elizabeth Warren (D-MA); Kirsten Gillibrand (D-NY); Jeff Merkley (D-OR); Richard Blumenthal (D-CT); Sheldon Whitehouse (D-RI); Al Franken (D-MN); Jeanne Shaheen (D-NH).

The Shareholder Protection Act of 2015 would:

  • Mandate a shareholder vote to approve an annual political expenditure budget chosen by the management for a publicly held corporation;
  • Require that each specific corporate political expenditure over a certain dollar threshold be approved by the board of directors and promptly disclosed to shareholders and the public;
  • Require that institutional investors inform all persons in their investment funds how they voted on corporate political expenditures; and
  • Post on the Securities and Exchange Commission website how much each corporation is spending on elections and which candidates or issues they support or oppose.

Click here to download the full text of the Shareholder Protection Act of 2015 and click here to download a summary of the legislation.