WASHINGTON, DC – After a strong statement of disapproval from U.S. Senator Bob Menendez (D-NJ), author of the Shareholder Protection Act, and other Democratic members of the Senate Banking Committee, a vote on two nominees for the U.S. Security Exchange Commission (SEC) was postponed this morning. Menendez made clear he would vote against the nominations of Lisa M. Fairfax and Hester Maria Peirce, saying that “if these two nominees are confirmed, the SEC will continue to obfuscate on this critical policy matter for investors.”
Sen. Menendez’s statement follows:
“I continue to believe transparency and disclosure to shareholders is of the utmost importance—both as matter of corporate governance and investor protection. Corporate political spending is material to how shareholders decide where to invest their money and how to vote in corporate elections.
“Within the past month, both during and after the Committee’s nomination hearing, I asked both SEC nominees for assurances that they understand the value of this important disclosure to shareholders. After hearing and reading their responses, I remain concerned that if these two nominees are confirmed, the SEC will continue to obfuscate on this critical policy matter for investors.
“For years I have been fighting to pass my Shareholder Protection Act and pushing SEC Commissioners and nominees to get started on and stay committed to this critical rulemaking. I’ve also led the charge to protect against harmful riders in appropriations bills intended to hide the influence of dark money in politics.
“And it’s not just me and my colleagues—more than 1.2 million Americans have also implored the SEC to act; this issue has received more attention than any rulemaking petition in the SEC’s history.
“As such, I will vote against these nominees and I believe that before they are considered on the floor, we need strong commitments that they will stand with me and the 1.2 million Americans who have weighed in on this issue. I plan to meet with the nominees in the coming weeks to stress this point.”
At a hearing on the two SEC nominees on March 15, 2016, Menendez asked Peirce and Fairfax about corporate political spending disclosure. Three days later, Menendez led a letter signed by 31 senators urging appropriators not to include any anti-transparency riders in this year’s funding bills. Menendez is the lead sponsor of the Shareholder Protection Act that 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.
Menendez also led a bicameral letter in December to SEC Chair Mary Jo White signed by 95 members of Congress urging swift action be taken to require publicly-held companies disclose their political spending to shareholders following House Republicans’ inclusion of an anti-transparency provision in the must-pass omnibus funding package. Last summer, Menendez was part of a group of 44 U.S. Senators pressing the SEC to complete their rulemaking and, in October, he urged the then newly-named nominees for the SEC to support corporate political spending disclosure.
The SEC has received more than 1.2 million public comments in favor of political spending disclosure, including from leading academics in securities law, investment managers and advisers, 70 major endowed foundations, Vanguard founder Jack Bogle and a number of state treasurers. Additionally, a group of former SEC commissioners, including former SEC Chairs Arthur Levitt (Democrat) and William Donaldson (Republican), and former SEC Commissioner Bevis Longstreth (Democrat) have commented in support.
April 22, 2021