Corporate Political Spending: Relief through Consumer & Shareholder Pressure

Thanks to the Supreme Court’s decision in Citizens United v. FEC which granted corporations the same rights as people to spend unlimited, undisclosed money to influence elections, the 2012 election cycle promises to bring the biggest flood of political spending from outside groups we’ve ever seen. Such outsized influence by a few corporations and special interest groups is a staggering reflection on the state of our democracy, and it’s clear that corporations are well on their way to becoming our elected officials’ primary constituency. If this pattern continues unabated, American citizens will be left in the dust.

A recent story by the Washington Post examines two studies showing that although special interests are likely to continue flooding the electoral process with political donations, many are beginning to realize that avoiding political spending altogether is good for government and good for business.

Americans are taking back our democracy by showing corporations that staying out of the political process is in their best interest after all. Under pressure from customers and shareholders, corporations are realizing that when they engage in political spending, they become a symbol of what they support – and the public-relations impact isn’t always positive.

When Target gave money in July to a pro-business group in Minnesota, the company thought it was helping its bottom line by backing candidates in its home state who support lower taxes. Instead, the retailer has found itself in a fight with liberal and gay rights groups that has escalated into calls for a nationwide boycott and protests at the company’s headquarters and stores.

The potential for a consumer backlash has caused corporations to reevaluate the benefit of interfering in the political process, and some are banning it outright. The threat of a shareholder backlash looms large as well, and shareholders are beginning to demand disclosure of where their investments ultimately end up. The Corporate Reform Coalition, along with PFAW, has been a strong supporter of the Shareholder Protection Act, which would require corporations to disclose their political donations to their shareholders, preventing a company’s investors from indirectly contributing to a candidate without their knowledge.

Citizens United may have opened the door to a corporate takeover of our democracy, but through public pressure, reform such as the Shareholder Protection Act and ultimately a constitutional amendment enabling the government to limit corporate influence in elections, we can ensure that the American people retain the loudest voice in our democracy.


Citizens United v. FEC, corporate court, corporate personhood, corporations, disclosure, money in politics, secret money, Shareholder Protection Act, Supreme Court