Print Version-Rep. Capuano and Sen. Menendez Announce Filing of Shareholder Protection Act
Rep. Capuano and Sen. Menendez Announce Filing of Shareholder Protection Act
July 13, 2011
Congressman Mike Capuano is filing the Shareholder Protection Act in the House, requiring a shareholder vote before corporate general treasury funds can be spent on political activity. Senator Robert Menendez is introducing identical legislation in the Senate.
In January of 2010, the Supreme Court issued a decision in Citizens United v. FEC that found corporations should be treated as "persons" for the purposes of free speech in election spending. As a result, corporations can now use unlimited funds on elections through independent expenditures and electioneering communications. Previously, such expenditures could only be made through registered Political Action Committees (PACs) using separately raised funds. According to the Center for Responsive Politics, corporations and businesses spent more than $1.3 billion dollars in the 2010 election cycle. A lot of this money was spent of advertising.
"Shareholders deserve to have a say in how general treasury funds are used in political elections. It is their money after all, and their free speech rights should also be taken into consideration. Shareholders should have the opportunity to cast a vote when money is being spent for political purposes with which they may or may not agree," stated Congressman Capuano.
The Shareholder Protection Act requires:
- Authorization from a majority of shareholders on an annual basis before a corporation can spend money from its general treasury on political activities;
- A Board of Directors vote to authorize all expenditures over $50,000 within the overall budget approved by shareholders;
- Individual board member votes and the details of approved expenditures will be disclosed online within 48 hours and to shareholders and the SEC on quarterly basis.
"The Supreme Court ruling has already increased the level of corporate participation in political campaigns. Congress can and should take action to ensure that the voice of the shareholder is not diminished," stated Congressman Capuano.
Contact: Alison M. Mills (Rep. Capuano) 617-621-6208