This article will explore the implications of the Supreme Court’s disparate treatment of similarly-situated, politically active corporations and unions. Two paths lead to more equitable treatment of these two groups: either (1) corporate political speech should be regulated more or (2) union political speech should be regulated less. This piece argues in favor of the former. In particular, corporate political spending lacks the transparency and consent mechanisms present in union political spending. Policymakers should address both of these failings in the corporate context.

The Roberts Supreme Court’s asymmetrical treatment of corporations and unions was on full display in the 2011–2012 term. American Tradition Partnership, Inc. v. Bullock coupled with Knox v. Service Employees International Union, Local 1000 demonstrates that a double standard persists between corporations, who are now privileged speakers in the Court’s eyes, and unions, who are currently disfavored speakers. The Supreme Court imposes different degrees of consent from corporations’ and unions’ constituent parts before they electioneer. Under U.S. law, corporations are not required to get consent from their shareholders before the corporate entity speaks politically using corporate funds. By contrast, public-sector unions must receive nonmembers’ consent before political spending in certain circumstances.

With the Supreme Court unlikely to change legal positions on this issue until the Court’s composition itself changes, the responsibility to foster more equitable regulations for corporations is left to the American electorate, Congress, the States, and executive agencies, such as the Securities and Exchange Commission (“SEC”), which must work within the boundaries of current precedent. The Supreme Court’s ruling in Knox requiring opt-ins for union political expenditures provides an additional basis for arguing that publicly traded American corporations should likewise marshal shareholder consent before corporate political expenditures are made.

At first blush, the SEC’s regulation of money in politics may seem to fall outside of its jurisdiction, but this is a mistake. This view ignores three previous times when the SEC stepped in to curb pay to play: (1) in the municipal bond market in 1994; (2) in the public pension fund market in 2010; and (3) in investigating questionable payments post-Watergate from 1974 to 1977. The result of the first two interventions led to new Commission rules and the third intervention resulted in the Foreign Corrupt Practices Act (a federal statute).

When these three previous SEC interventions into the role of money in politics are examined, a principled model emerges for when the Commission’s regulatory intervention is appropriate. The principled model, hereinafter known as the “Money in Politics Model,” has the following characteristics: there must be (1) a potential for market inefficiencies; (2) a problem that is not likely self-correct through normal market forces; (3) a lack of transparency; (4) a material amount of aggregated money at stake; and (5) a high probability for corruption of the government.

The Money in Politics Model’s characteristics were present in the all three past SEC interventions. As will be explained in more detail below, in the municipal bond market and public pension funds, there was an endemic problem of pay to play between state elected officials and businesses eager to contract with them for lucrative fees. The post-Watergate investigation revealed even more profound problem of secret corporate funds used for political contributions domestically and bribes of foreign officials abroad.

So does the post-Citizens United world of corporate political spending rise to the same level as these three previous examples? Does post-Citizens United political spending fit the SEC’s Money in Politics Model and merit the SEC’s intervention? This article will argue that the Model fits and the SEC should act.

The SEC is not new to the inherent conflicts of interest between business and government, especially when elected officials have the ability to make private contractors in the financial services industry rich through commissions and fees. The risk of corruption is intrinsic in such a situation. Here corruption is best captured by the definition as “the misuse of public…office for direct or indirect personal gain.” What is new as of January 2010, thanks to Citizens United, is the potential for every publicly traded company to try to influence the government not just through traditional lobbying, but also through campaign expenditures. This new problem merits a new SEC intervention to reveal the campaign activities of public companies.