The House Financial Services Committee is considering a bill to restrict the political speech of companies in an attempt to subvert the Supreme Court’s ruling in Citizens United v. Federal Election Commission.
The shareholder regulation bill, H.R. 4790, would amend the Securities Exchange Act of 1934 to require an authorization of a majority of shareholders before a public company may make political expenditures. A manager’s amendment, which was not publicly available before today’s hearing, was introduced to make “corrections” to the bill, said Rep. Mike Capuano (D-Mass.), the bill’s sponsor.
“Instead of empowering shareholders, this bill would thwart the ability of companies to engage in political spending to further the economic interests of shareholders,” said Center for Competitive Politics Chairman Bradley A. Smith, a former Federal Election Commission Chairman. “Restricting political decisions to one vote a year would obliterate the First Amendment right of shareholders to advocate for policies that affect legitimate business interests.”
Rather than advancing a less restrictive proposal to allow a majority of shareholders to affirmatively decide to abstain from political spending, this proposal would force all companies to wade through a cumbersome layer of regulation simply to speak out on issues and candidates that may impact their bottom lines.
“This bill addresses a nonexistent problem by unconstitutionally curbing the speech of business groups,” said Center for Competitive Politics President Sean Parnell. “For decades, Congress has placed similar campaign finance regulations on business and unions. This law would depart from that standard and only restrict corporations.”