Luigi Zingales is the Robert C. McCormack Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business, and serves on the Committee on Capital Markets Regulation. He is also a faculty research fellow at the National Bureau of Economic Research, a research fellow at the Center for Economic Policy Research, and a fellow of the European Governance Institute. He is the author of A Capitalism for the People: Recapturing the Lost Genius of American Prosperity.
CHICAGO – You would think that 600,000 comments on a petition would be sufficient to bring an issue to the top of the US Securities and Exchange Commission’s agenda. But public opinion does not seem to matter if the issue is mandatory disclosure of political spending by corporations.
Denying rumors that such a rule will be promulgated soon, SEC Chair Mary Jo White recently told lawmakers that this issue is not at the top of her list of priorities. But it is at the forefront of the Republican Party’s concerns, reflecting its leaders’ determination to prevent any such requirement from taking effect. In April, Ann Wagner, a Republican congresswoman, introduced a bill “to prohibit the Securities and Exchange Commission from issuing rules requiring the disclosure of an issuer’s expenditures for political activities.”
The reason why such an apparently minor issue is gaining so much attention is that it transcends corporate governance and goes to the very essence of America’s democratic system. For this reason, it is important to understand what is at stake.
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