Citizens United v. FEC

Citing a recent action by the Securities and Exchange Commission (SEC), John C. Bogle writes in a column for The New York Times, “Shareholders – not self-interested corporate managers – should, and can, decide policies on corporate political contributions.” 

Earlier this year, the SEC issued a decision that shareholders of Home Depot would have the chance to vote on a measure regarding the corporation’s political expenditures. “This action provides shareholders with greater protections when corporations spend their money, in the form of general corporate funds, on politics,” the March 25 SEC letter states. The SEC action was prompted by Home Depot’s effort to keep shareholders from voting this June on the political expenditure resolution.

Bogle, founder of the Vanguard Group, writes:

What makes this strengthening of shareholder rights particularly important is that over the past 50 years control of corporate America has shifted from individual stockholders to institutional stockholders. But these institutional investors have been unwilling to challenge political activities by corporate boards, even when those activities are not in their shareholders’ interests.

Noting the high court’s opinion in Citizens United v. FEC, which found that corporations have First Amendment rights to freely funnel expenditures into political campaigns, Bogle maintains that institutional investors have “an obligation to act.”

He continues:

For all its faults, the Citizens United ruling upheld the disclosure requirements of the campaign financing law, and I had hoped full disclosure might limit corporate contributions. But in fact, corporations are able to exploit provisions in the law governing nonprofit groups to make lavish political contributions without disclosure, making it easier than ever for cash to subvert our political system. Action to limit contributions at the corporate level is therefore urgent.

The billionaire brothers, who head of Koch Industries and finance Tea Party activities, campaigns to crush unions and undercut environmental regulations, are, not surprisingly, quickly taking advantage of the Supreme Court’s opinion in Citizens United v. FEC to influence the way their employees vote.

In a piece for The Nation, Mark Ames and Mike Elk report on recent efforts of Charles and David Koch to sway their workers during the midterm elections. The magazine highlights a “Koch Industries election packet,” sent to most of the company’s workers rife with “alarmist right-wing propaganda.” The packet contained a list of candidates favored by the brothers as well a newsletter with an editorial trumpeting “Tea Party themes,”  and an article portraying an out-of-control federal government determined to muzzle the free speech of the brothers.

Ames and Elk, however, write that “the strangest and most disturbing article of all comes from the head of Koch Industries himself, Charles Koch, who offers an election-year history lesson to his employees.” Part of that history includes that claim that President Warren G. Harding helped lead “one of the most prosperous [eras] in U.S. history.” Koch said Harding’s slashing of taxes and federal spending were what helped make him such a wonderful president.

Marquette University law school professor Paul M. Secunda told The Nation, “Before Citizens United, federal election law allowed a company like Koch Industries to talk to officers and shareholders about whom to vote for, but not to talk with employees about whom to vote for. Now companies like Koch Industries are free to send out newsletters persuading their employees how to vote. They can even intimidate their employees into voting for their candidates.”