Shareholders want corporations to quit hiding the ball on how corporate dollars are spent on politics. This proxy season, investors kept up the pressure to learn more about corporate political activity – both classic campaign spending as well as lobbying expenditures – through a spate of shareholder proposals.

According to one 2014 Proxy Preview, shareholders filed 126 proposals on corporate political activity this season, including asking for more transparency for political spending and lobbying. Chair of the Securities and Exchange Commission (SEC) Mary Jo White has addressed shareholder proposals generally, encouraging corporate managers to listen to shareholder proposals. Speaking at the Stanford University Rock Center for Corporate Governance in June 2014, she stated, “[L]ook thoughtfully at the proposals shareholders are submitting to your company. … Look at the voting results at shareholder meetings – the percentage of votes for a shareholder– supported resolution or against a management–supported resolution are important, irrespective of whether the resolution is approved, or not.”

Joe Schmo off the street can’t just get a proposal on a corporate proxy—the ballot where shareholders vote annually on key matters of corporate concern like re-electing the board of directors. Rather, under the SEC’s gate-keeping Rule 14a-8, to get on the corporate proxy, a shareholder must have continuously held at least $2,000 in market value or 1 percent of the company's securities for at least one year by the date the shareholder’s proposal is submitted. To keep the proposal on the proxy year after year, shareholder proposals must garner at least 3 percent of the total vote the first year, 6 percent of votes in the second year, and 10 percent the third year.

This proxy season, there was a particular interest by shareholders in corporate lobbying, which makes perfect sense. Corporate lobbying can signal a corporation’s appetite for risk as revealed by a working paper by Benjamin M. Blau, Tyler J. Brough, and Diana W. Thomas, entitled Corporate Lobbying, Political Connections, and the 2008 Troubled Asset Relief Program. This paper found “Firms that lobbied had a 42 percent higher chance of receiving TARP [bailout] support than firms that did not lobby. Similarly, politically connected firms had a 29 percent higher chance of receiving [bailout] support than non-connected firms.” In other words, lobbying firms may be taking existential risks to the point of needing governmental bailouts to survive.

During this year’s proxy season, shareholder majorities endorsed proposals at Lorillard and at Valero Energy — where a majority voted for disclosure of lobbying — and at Dean Foods — where a majority voted for disclosure of campaign spending.

Aside from these majority votes, there have been some very high percentages votes in favor of more political transparency. At Duke Energy, for example, 49.3 percent voted for campaign spending disclosure. If the corporations refuse to budge on the disclosure issue, these high votes mean they are likely to have a similar battle with investors on their hands next year.

According to the Center for Political Accountability, over 125 companies are voluntarily disclosing their political spending. This is in response to years of high votes on transparency in what is now nearly a decade long campaign to bring sunlight to corporate political spending.

The Center for Public Integrity looked at the spending by voluntarily reporting companies earlier this year and found that “[R]oughly 83 percent of the $173 million in self-reported funds flowed to trade associations, including major political players like the [U.S.] Chamber [of Commerce], America’s Health Insurance Plans and the American Petroleum Institute.”

In other words, if the companies that are voluntarily disclosing their spending stop disclosing, there will be no way to know if they continue to give, since corporations are not generally spending through transparent PACs. This is an issue because so much money in American politics is untraceable. A $2.5 million donation by Chevron in 2012 was an exception that proved the rule. In 2012, $300 million was spent in dark money in the federal election alone. And OpenSecrets.org finds that 2014 is on track to be the darkest election yet.

This may be one of the things driving proposals to change SEC rules by the U.S. Chamber of Commerce — one of the biggest dark money trade groups that spends in American elections. The Chamber is trying flip Rule 14a-8 on its head to make it harder for shareholder to file proposals and to increase the threshold of the percentage of votes required to resubmit a shareholder resolution year after year.

Shareholders are sick of the shell game of trying to guess which firm is spending corporate dollars on politics. More firms need to step up and let their shareholders know the truth. After all, if this spending is for shareholders’ benefit, why do corporate insiders persist in hiding the ball from their own investors?

The views expressed are the author's own and not necessarily those of the Brennan Center for Justice.

(Image: Molly Crabapple)