03.11.2010

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General News

On March 11, Karl Sandstrom, Of Counsel in the Washington, D.C. office of Perkins Coie, testified before the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. During his testimony, Sandstrom addressed the corporate governance implications of the Supreme Court's decision in Citizens United v Federal Election Commission, which permits corporations to spend treasury funds to support candidates. As a result of the decision, corporations will no longer be limited to using funds voluntarily contributed by employees and shareholders to their political action committees to promote or oppose candidates.

"The Court's decision makes an immense difference in the resources that corporate management will have at its disposal to engage in politics," Sandstrom testified. To protect the interests of shareholders, Sandstrom noted, the Supreme Court recognized the importance of disclosure and corporate governance. Transparency and accountability in political spending, he testified, protects shareholders' interests and safeguards companies from the legal and reputational risks that often accompany political spending.

Sandstrom noted that corporations may find themselves contributing to outside organizations without knowing how their contributions will be used politically. In his closing, he stated: "Undisclosed, unaccountable corporate political involvement is bad for shareholders and the economy. This Congress would do well by both if it takes up the challenge laid down by the Court and brings transparency and accountability to corporate political spending."