Boston Managing Partner Kathleen M. Donovan-Maher and Associate Steven L. Groopman co-authored an Op-Ed entitled "Why Dark Money Is Bad Business," which ran in The New York Times on May 10, 2016. The Op-Ed addresses the recent debate surrounding a proposed SEC rule that would mandate disclosure of corporate political spending.
The rule, originally proposed in 2011, is designed to stem the tide of anonymous corporate political spending (often referred to as "dark money") in the wake of the Supreme Court's landmark ruling in Citizens United v. FEC. While controversial, the proposal has received a groundswell of support from a bipartisan group of former SEC commissioners, state treasurers and law professors, and has generated more than one million public comments.
The Op-Ed attempts to cut through the political rhetoric surrounding the proposed rule to offer a nonpartisan, investor-rights focused reason to support the rule. That is, shareholders - who own the corporations - are entitled to know how that money is spent as well as what procedural safeguards are in place to ensure political spending is in the corporation's best interest. In doing so, the Op-Ed challenges the conventional wisdom that political spending universally influences politics or legislation in a company's favor, providing a number of examples where dark money spending, in fact, undermined companies' business interests. The Op-Ed therefore concludes that "transparent political spending is essential to good corporate governance and sound investment."