The U.S. House Financial Services Committee approved a bill on August 5 that will restrict the ability of employers to participate in the political process while placing no such restrictions on large labor unions.
Committee members approved H.R. 4790 – the Shareholder Protection Act - by a vote of 35 to 28. Supporters introduced the legislation in response to a U.S. Supreme Court ruling earlier this year that tossed out the decades-old ban on direct corporate and union campaign spending. An earlier labor-backed attempt to re-impose the ban on corporate speech through a measure called the Disclose Act failed in the Senate after leaders there were unable to break a filibuster.
The House bill would require shareholders of corporations to vote on the total political expenditures the corporation would make in the upcoming fiscal year. All corporations would have to include in their bylaws language requiring a majority vote of approval of political expenditures in excess of $50,000.
Moreover, there is also some concern that the bill includes under the definition of political expenditures “dues or other payments to trade associations.” That provision could make dues to associations that engage in political activity subject to shareholder votes.
The House bill targets corporate political speech only and does not apply to unions, which would remain free to spend money on political advertising without seeking approval from dues-paying members.
Representative Michael Capuano (D-MA) is sponsor of the bill. It is co-sponsored by several Massachusetts lawmakers, including Representatives Barney Frank, James McGovern and John Olver.
The Shareholder Protection Act isn’t really designed to protect shareholder. Corporate managers are already legally required to act in the shareholders’ best interest. By singling out political speech – and only political speech – for more burdensome treatment, the proposed law attempts to do indirectly what the U.S. Supreme Court said Congress may not do directly: abridge corporations’ political speech rights. The measure clearly violates the First Amendment to the U.S. Constitution.
The bill could be considered by the full House in September before moving to the Senate, where its prospects remain unclear.
Why not contact Representative Capuano or your U.S. Representative to oppose attempts to give unions a political voice while silencing employers?