Lead Sponsor: Senator Jamie Eldridge
Summary: This bill would require corporations spending their general treasury funds on political advertisements to notify their shareholders of those expenditures in quarterly reports. Additionally, this bill would require corporate managers to get approval from their board of directors prior to spending general treasury funds on political ads.
Why This Matters: In January of 2010, on a 5-4 decision, the conservative majority on the Supreme Court struck down bipartisan federal legislation that had limited corporations from spending their general treasury funds on political expenditures. Now, for-profit corporations may spend unlimited amounts of money to influence elections at all levels of government.
If corporate managers intend to spend their shareholder’s money on political advertisements, they should be able to demonstrate that that spending is designed to advance what is best for the company rather than their own personal political agendas.
By empowering investors and boards to review executive decisions, the bill will help ensure that company funds are being appropriately spent.
In addition, by requiring an extra level of approval and review before treasury funds can be spent on political ads, the bill will better protect businesses from the prospect of unscrupulous public officials seeking their political assistance as part of a quid pro quo.
What this Bill Would Do: This bill would:
1) Require corporation chartered in Massachusetts to include the details of their political spending in their quarterly reports to shareholders, and
2) Require any expenditure or combination of expenditures within a single year in excess of $5,000 to be specifically authorized by a majority of a company’s board of directors.