Materiality: A Bedrock Principle Protecting Legitimate Shareholder Interests against Disguised Political Agendas
![handle is hein.journals/hbusrew3 and id is 371 raw text is: Symposium on Corporate Political Spending
MATERIALITY:
A BEDROCK PRINCIPLE PROTECTING
LEGITIMATE SHAREHOLDER INTERESTS
AGAINST DISGUISED POLITICAL AGENDAS
PAUL ATKINS*
TABLE OF CONTENTS
INTRODUCTION .................................................. 363
I. THE COMMISSION CANNOT REQUIRE COMPANIES TO DISCLOSE
INFORMATION REGARDING PUBLIC POLICY EXPENDITURES
BECAUSE SUCH EXPENDITURES ARE IN ALMOST EVERY
CONCEIVABLE CASE IMMATERIAL AND IF NOT IMMATERIAL,
CURRENT RULES ALREADY REQUIRE DISCLOSURE ............... 364
II. THE COMMISSION CANNOT MOVE FORWARD WITH A
RULEMAKING BECAUSE THE COSTS OF THE RULEMAKING
WOULD EXCEED THE BENEFITS ................................. 370
III. ABSENT AN EXPLICIT CONGRESSIONAL MANDATE, THE
COMMISSION SHOULD NOT CONSIDER A RULEMAKING RELATED
TO THE DISCLOSURE OF PUBLIC POLICY SPENDING, WHICH IS
ANTITHETICAL TO THE COMMISSION'S MISSION AND
UNRESPONSIVE TO WHAT SHOULD BE THE SEC's PRIORITY:
RESPONDING TO THE 2008 FINANCIAL CRISIS AND OTHER
MARKET-RELATED ISSUES .................................. 376
C ONCLUSION .................................................... 379
INTRODUCTION
The Committee on the Disclosure of Political Spending recently sub-
mitted a petition (the Petition) to the U.S. Securities Exchange Commis-
sion (SEC or the Commission) urging the Commission to require SEC-
registered companies to disclose their contributions and expenditures for po-
litical activities.' In support of the Petition, Professors Lucian Bebchuk and
Robert Jackson (who are members of the committee that submitted the Peti-
tion) have recently published an article in the Georgetown Law Journal enti-
* Chief Executive Officer, Patomak Global Partners. The author greatly appreciates the
invaluable assistance of William L. Anderson and W. Walton Liles in preparing this article.
' Letter from Comm. on Disclosure of Corp. Political Spending to Elizabeth M. Murphy,
Sec'y, U.S. Sec. & Exch. Comm'n (Aug. 3, 2011), available at http://www.sec.gov/rules/peti-
tions/201 I/petn4-637.pdf. [hereinafter Committee Petition].](ViewImageLocal?handle=hein.journals/hbusrew3&div=18&collection=&method=preview&ext=.png&size=3)
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Materiality: A Bedrock Principle Protecting Legitimate Shareholder Interests against Disguised Political Agendas
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