Letter from Frederick A.O. Schwarz, Jr.
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To the Honorable Chris Van Hollen, Barney Frank and Robert Brady,
The undersigned lawyers have represented corporations and associations large and small all over America for many years. We write to express our shared support for the Shareholder Protection Act (H.R. 4790).
The Supreme Court’s Citizens United decision held that corporations have the same First Amendment rights as American citizens. Thus, the Court has freed corporate managers to spend corporate money on political advertisements for the first time in decades. This may increase special interest money from corporations paid for by shareholders who will unwittingly foot the bill. While some of us agree with the Court’s substantive decision and others of us disagree with the holding, we are united in feeling that shareholders need new protections after Citizens United.
Therefore, we strongly urge Congress to take decisive action in response to Citizens United. There are many policy changes which would help like creating public financing for Congressional races, improving campaign finance disclosure and tightening restrictions on foreign owned corporations. But in the face of an upcoming election, another change in law is absolutely crucial: reforming our securities laws to require a shareholder vote on corporate political expenditures as well as prompt disclosures of political spending from companies to shareholders.
We urge you to support this legislation and to include it in the overall Citizens United reform package.
Frederick A.O. Schwarz, Jr.
Adam C. Bonin
Michael A. Cooper
Christine D. Rogers
Letter from Ciara Torres-Spelliscy
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Dear Rep. Van Hollen,
Thank you for your leadership role in shaping the policy response to Citizens United. Although the final bill language has not been released yet, the legislative framework outlined by your office in February has many elements which will be necessary to blunt the impact of Citizens United on our democracy.
While the Brennan Center supports an array of robust reforms to counter Citizens United ranging from improved voter registration modernization, to stronger campaign finance disclosure and coordination rules, to the Fair Elections Now Act, we write today to express our strong support for the Shareholder Protection Act (H.R. 4790) and to encourage you to add this to the Schumer/Van Hollen reform package.
The Brennan Center for Justice at NYU School of Law has examined the issue of money in politics since our inception and we continue to play a principal role in shaping First Amendment jurisprudence.
Before Citizens United, shareholders were protected by the federal corporate PAC requirement which kept investments out of federal elections. By ending the PAC requirement, Citizens United has a particularly pernicious effect in publicly traded companies because corporate managers can now spend vast amounts of corporate treasury funds on political advertisements using other people’s money. And mangers can do this without disclosing this political spending to shareholders either before or after the fact and without obtaining shareholders’ consent or authorization.
Therefore, the Brennan Center’s recent report, “Corporate Campaign Spending: Giving Shareholders A Voice,” suggests two key reforms to strengthen U.S. laws to protect the interest of investors by:
(1) providing shareholders with a vote on corporate political spending and
(2) requiring corporations to disclose all political spending to shareholders on a periodic basis.
This model has been in effect in the U.K. protecting shareholders in British companies since 2000.
In the face of the upcoming midterm elections that could be inundated with corporate spending, this change in law is absolutely crucial. We must reform American securities laws to require a shareholder vote on corporate political expenditures as well as prompt disclosures of political spending from companies to shareholders. We urge you to co-sponsor this legislation and to include it in the overall Citizens United reform package.
We hope you can support this legislation and we look forward to working with you to address the democratic harms caused by Citizens United.