US House Panel Approves Shareholder Votes On Political Spending
First Published Monday, 2nd August 2010 07:57 pm - © 2010 Dow Jones
By Fawn Johnson
Of Dow Jones NEWSWIRES
WASHINGTON -(Dow Jones)- A bill requiring annual shareholder authorization before a public company can make certain political expenditures cleared the U.S. House Financial Services Committee Thursday.
The 35-28 vote was largely along party lines, with Republicans protesting that it was burdensome on corporations and hindered free speech.
The committee vote occurred two days after the Senate rejected a measure that would require corporations and unions to reveal the funding sources for political ads. Supporters of the Senate bill couldn't muster enough support to break a Republican filibuster.
Both bills are aimed at blunting the landmark Supreme Court ruling in January that struck down major portions of campaign finance laws designed to limit the influence of special interests in political campaigns.
The measure approved in the House committee Thursday would require shareholders to approve the amount of money above $50,000 that corporations spend per year on federal political expenditures.
"If you buy into a corporation, you should have a right to say what is done with your money," bill sponsor Rep. Michael Capuano (D., Mass.) said.
The bill also would require issuers to include in annual shareholder reports a summary of all political spending that exceed $10,000.
Capuano said his bill passes on to shareholders the new rights given corporations under the Supreme Court's ruling in Citizens United vs. the Federal Election Commission. The decision allows corporations to use general treasury funds for independent political expenditures.
It isn't clear what happens next with Capuano's bill. Capuano wants the full House to vote on it, but such a vote couldn't take place until September.
Assuming Capuano can get enough support for the bill to warrant a floor vote, the debate could provide fodder for election-oriented talking points on free speech and corporate interests ahead of November's mid-term elections.
The U.S. Chamber of Commerce sent a letter to committee members Tuesday protesting Capuano's bill. The measure would "would encumber the free speech rights of the American business community, erode the business judgment rule," and infringe on states rights, the chamber's letter said.
-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; firstname.lastname@example.org