Former SEC Commissioner: Political Disclosure Not Always in Shareholders’ Interests


Disclosure proponents are promoting their agenda under the banner of “more information is always better.” Are there times when disclosure can be detrimental?
Although the talking points of democracy—transparency, openness and disclosure—would seem to play well among shareholders, even the activists agree that disclosure isn’t really their goal. For example, Mike Dean, the director of Minnesota Common Cause, has stated, “We want to make the case that political spending is not good for business. You’re going to offend your customer base no matter who you give to.” Similarly, Bill de Blasio, of the Campaign for Accountability in Political Spending and a New York City may- oral candidate, has suggested that disclosure is just the stick to be used to browbeat companies. He said, “What happened to Target [which was attacked for contributing to a pro-business advocacy group] was child’s play compared to the strength that all of these organizations can bring to bear against companies that decide we’re going to go against the people’s will and involve themselves unduly in the political process.”

I understand that shareholders’ first reaction to being asked, “Would you like to know how your company is spending your money?” might be “Sure, I’d like to know.” However, when specific details are highlighted in a way that creates a negative bias against the company, it may not be in the shareholders’ interest. We must remember that the amounts of these expenditures are rarely material to the company.

(My emphasis.)


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