WSJ: Democrats Pressure SEC to Limit Political Speech

Democrats are pushing the Securities and Exchange Commission to restrict conservative groups just as the Internal Revenue Service has in its targeting scandal, according to a Wall Street Journal editorial.

"The IRS targeting scandal is best understood as part of a larger effort to limit the political speech of conservatives and business groups," Journal editors write. "Now evidence is spreading to the Securities and Exchange Commission."

In a letter to new SEC Chairman Mary Jo White, GOP Reps. Darrell Issa of California, Jim Jordan of Ohio and Patrick McHenry of North Carolina wrote last month that they have documents which "indicate that the SEC has been under immense pressure from elected officials and special interest groups as part of a government-wide effort to stifle political speech."

That pressure has largely succeeded in "moving the commission closer to using its authority to regulate public securities markets as a backdoor way to limit the political speech of the same types of groups targeted by the IRS," the letter says.

Just as the IRS delayed applications for tax-exempt status from conservative groups, the SEC could "discourage public companies from supporting independent organizations, while applying no such regulation to labor unions," the editorial says.

"Corporations tend to support groups on both the left and the right, whereas unions are more reliably liberal. If businesses are limited in the public debate, it's a big win for Democrats."

Last year, the SEC received a prod from Democratic politicians including then-Rep. Barney Frank, Mass., and liberal tax-exempt groups such as Public Citizen to require more disclosure from public companies about the organizations they back.

Frank's staff told the SEC, "There is particular interest in what the authority is for disclosure of 501(c)(4) contributions [political contributions]." Frank's staff also spoke of interest in the issue emanating from the House Democratic leadership.

"Democrats couldn't get what they wanted out of the Congress or the FEC. So they went to the SEC," the editorial states. "The SEC staff pushed back, pointing out that it's not their job to regulate political speech."

But Democratic SEC commissioners Luis Aguilar and Elisse Walter kept pushing for new regulations concerning political activity, the editorial says. And they convinced then- SEC Chairman Mary Schapiro to put the issue on the SEC's regulatory agenda at the end of last year.

"White, the current chairman, can go a long way toward restoring the reputation of the SEC as a serious and apolitical regulator by deep-sixing this political assault masquerading as transparency," Journal editors write.