Consumer Federation of California

Bill Position: Support

The Consumer Federation of California is pleased to support AB 919 (Nava), the Shareholder Protection Act, a bill that lies at the intersection of consumer protection and our democracy. AB 919 gives shareholders new rights that are needed as a result of the U.S. Supreme Court’s Citizens United v. FEC ruling.

With Citizens United, the Court opened the door for a massive influx of corporate spending on elections. By allowing corporations to use their treasury funds on candidates and independent expenditures ‘ unlimited contributions to the latter’the Court has created the very real possibility that a corporation may spend money for political purposes that a shareholder does not support.

Previously, for federal elections and in many states, corporations had to set up political action committees and solicit voluntary contributions for those PACs from shareholders, employees and board members.

Environmental groups, labor unions, consumer groups, seniors groups and others who have at times stood up to corporations and their influence have cause for concern as corporate interests now have a greater say in our elections and their results.

AB 919 is a critical step in the effort to protect shareholders and limit the influence of big money in politics. It requires corporations to consult their shareholders and give them an opportunity to opt out of having their money spent on elections and political activities. Those shareholders that object will get back the portion of their shares that would have been spent on politics in the form of a dividend.

The Shareholder Protection Act protects consumers by ensuring that their invested dollars aren’t used in the political arena in ways counter to their own political views, and it protects our democracy by giving citizens a tool to limit corporate money in our elections. For all these reasons we support AB 919.