Corporations that donate to political campaigns – including through so-called super PACs that have no contribution limits – would have to report their activity if they have shareholders in California under a bill introduced this week in the state Legislature.
The bill, introduced by Sen. Noreen Evans, D-Santa Rosa, would require corporations to publicly disclose a summary of their previous year's political spending and plans for future spending once each year.
Similar legislation introduced in 2010 by then-Assemblyman Pedro Nava, a Santa Barbara Democrat, failed to gain traction and died in committee. Both bills were sponsored by the California Public Interest Research Group.
Since the 2010 Supreme Court ruling in Citizens United v. Federal Election Commission, campaign reform advocates often have worried aloud about the newfound ability of corporations to influence campaigns by spending unlimited amounts from their own treasuries in support of their favored candidates.
But many of those concerns have only begun to manifest in recent months, as super political action committees have begun financing expensive advertising campaigns in the early stages of the Republican presidential primary. The Center for Responsive Politics estimates that super PACs have spent more than $35 million so far, largely on television advertisements in key primary states.
Still, with limited exceptions, most of the donors bankrolling the major super PACs have not yet been revealed. Of the major super PACs supporting Republican candidates, only Restore Our Future, which supports former Massachusetts Gov. Mitt Romney, has disclosed its donors so far.
Because of federal filing deadlines, the rest of the major organizations – some of which have been operating since last summer – will not be required to disclose their contributors until the end of this month. Some groups would have been required to make key disclosures in advance of state primary contests, but instead shifted their filing status to hold off disclosure for several more weeks.
Evans' bill would not require corporations to disclose their political contributions more frequently, but it would require them to report all of their major political spending in one place. Beyond super PACs, corporations have a number of other conduits through which to spend money on elections, including independent expenditure committees, ballot measure campaigns and other soft money groups.
"Shareholders should have enough information regarding a corporation’s political activity to make an informed decision about where they invest their money," CALPIRG Legislative Director Pedro Morillas said in a statement. "Right now, a corporation could be sinking millions of dollars into a political campaign and the actual owners of the company, the shareholders, would have no idea."
A key difference between this year's version of the bill and Nava's in 2010 is a narrower focus on disclosure provisions. In addition to annual disclosure, the 2010 bill also would have allowed shareholders who objected to a corporate contribution to essentially receive a refund for their share of the contribution in the form of a small dividend. Both bills would expose companies to civil lawsuits if they fail to disclose their contributions.
A broad coalition of business groups that opposed the previous version of the legislation argued that forcing corporations to disclose their contributions – and opening them up to lawsuits if they do not comply – would create a chilling effect on their campaign activities that would violate their free-speech rights after the Citizens United ruling.