The SEC has been entertaining, for several years, a rule requiring reporting companies to disclose political contributions.  Yesterday, a compromise budget bill was announced by Speaker Ryan which includes a rider barring the SEC from finalizing, issuing or implementing any action regarding political contribution disclosure.

The general understanding of the proposed SEC action (a rule was first proposed in 2011) was that it was in response to the Supreme Court decision in 2010 (Citizens United) which removed any cap on corporate campaign spending.  That removal is credited with giving rise to Super-PACs.  The proposed SEC Rule, which would be nixed by the budget rider if finally enacted by Congress and signed by the President, drew wide support, including 1.2 million letters from the public, but was staunchly opposed by many Republican lawmakers and by the Chamber of Commerce.

Often overlooked in public discussion is the appropriate SEC role in disclosure.  Corporate management, with and sometimes without specific Board oversight, is spending other people’s money when making a political contribution.  The extent to which that expenditure is sufficiently linked to appropriate corporate purpose is difficult to assess, of course, but it can be argued logically that contributions (at least above a modest trigger amount) are appropriate for disclosure to shareholders.

The House yesterday passed the bill.  Our country’s money runs out December 22; during the next five days, the future of corporate campaign disclosure requirements will be resolved one way or the other.