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Iowa Passes Corporate Governance Fixes to Citizens United

Iowa leads the way in repairing what Citizens United wiped out: to replace the state’s corporate political expenditure laws, they’ve now instituted rules that require board approvals for corporate political spending.

Iowa is used to being a political leader. After all, they get first cut at choosing the Presidential candidates though the Iowa Caucuses. And the Hawkeye State has continued to show leadership by adopting a strong stance against Citizens United.

Iowa was among the two dozen states that banned corporate political expenditures up until January 21 of this year. The Supreme Court’s Citizens United decision wiped out that protective part of Iowa’s statutes. But Iowan lawmakers used the tools that are still at their disposal: they improved Iowa’s corporate governance to ensure that corporations have internal controls over their political spending.

The new law signed by the Governor on April 8, 2010, requires a majority of the board of directors to vote in the affirmative to authorize political expenditures from the corporation’s coffers. This mirrors board approval requirements already in place in Missouri and Louisiana. The bill also bars corporate political expenditures from foreign corporations and has clearer coordination rules. Furthermore, like West Virginia’s new law, and Arizona’s new law, Iowa’s law improves disclosure of corporate political spending so that voters know who is behind political adverts. 

The Brennan Center has suggested that states and Congress could go further to constitutionally require not only board approval, but also shareholder approval as well.  Iowa’s midwestern neighbor Wisconsin, just passed shareholder approval in its Senate and the bill is on the way to the House for further consideration. But Iowa’s groundbreaking law is a step in the right direction towards more accountability that is worthy of duplication.