In August 2011, 10 law professors petitioned the Securities and Exchange Commission (SEC) to require publicly traded companies to disclose their political spending.  This is not a new issue.  Back in 1999, a Harvard Law Review article urged the SEC to require new disclosures by publicly traded companies including reports on corporate political expenditures.  But the urgency for a new rule stepped up considerably after the landmark court rulings Citizens United and SpeechNow in 2010.  Citizens United allowed corporations to spend an unlimited amount on political ads.  SpeechNow allowed corporations to spend through super PACs.  Now corporations can spend freely to influence elections, but there is no single place where they have to report that spending to their investors.

More than 600,000 members of the public, including institutional investors, members of Congress, state elected officials, academics and laypersons have filed public comments urging the SEC to act.  One of the criticisms leveled at this rulemaking effort is that the SEC is not the proper agency to address the issue of money in politics.  In a newly released report from the Corporate Reform Coalition, entitled, The SEC and Dark Political Money: An Historical Argument for Requiring Disclosure, I detail how the SEC already regulates various aspects of money in politics.

First, the SEC regulates foreign campaign contributions that fall under its jurisdiction under the Foreign Corrupt Practice Act (FCPA).  The FCPA is one of the legacies of the Watergate scandal, which revealed that hundreds of corporations had spent millions of dollars on politics here and abroad to get and maintain business.

Second, in response to a spate of pay-to-play scandals in the municipal bond market in the early 1990s, then-SEC Chair Arthur Levitt encouraged the Municipal Securities Rulemaking Board to adopt a rule banning companies that do business underwriting bonds for municipalities from donating to the politicians that award the contracts – an obvious conflict of interest.  The SEC continues to exercise jurisdiction in this market over pay to play pursuant to MSRB Rule G-37, among other rules.

Third, in response to a spate of pay-to-play scandals among public pension funds and their investment advisers, then-SEC Chair Mary Schapiro led the Commission to promulgate Rule 206(4)-5, which bans certain quid pro quos in the public pension fund market.

This historical perspective, illustrated in the timeline below, demonstrates that the SEC is not new to regulating in this space.  The SEC has been using its authority to protect the public interest for decades.  A new disclosure rule would fit into the SEC’s traditional role of providing investors with transparency so that they can compare investments apples-to-apples.  The potential disclosure rule also fits the Commission’s mission of protecting the capital markets from manipulation and corruption.

I will be speaking at greater length about The SEC and Dark Political Money at the National Press Club Tuesday along with other campaign finance reform experts.

*Ciara Torres-Spelliscy is an assistant professor of law at Stetson University College of Law, where she teaches courses in election law and corporate governance. She is the author of “Safeguarding Markets from Pernicious Pay to Play: A Model Explaining Why the SEC Regulates Money in Politics.”

Here at Sunlight, we embrace the idea that brilliant work can grow from seeds sown during organically constructed, discussion-driven sessions -- the foundation of any unconference. Our own unconference, TransparencyCamp, has itself yielded the creation of the Brazilian civic hacking group Transparência Hackers  and CityCamp, and has served for the launch pad for Waldo Jaquith’s OpenVA, a hub for new data and APIs for Virginia, AbreLatAm, an open data unconference in Uruguay, and even inspiration for Josh Tauberer’s “Open Data is Civic Capital: Best Practices for ‘Open Government Data'”.

But what happens when the seed you are trying to plant is legislative change? How do open government unconference attendees (a mix of engaged residents, city officials, and other civic players) help make a legislative seedling grow? What next steps should be taken? Moreover, how can engaged citizens help to promote open data?

We've been thinking about these questions since Alisha Green and Rebecca Williams of Sunlight’s municipal team and Open States lead, James Turk, had the opportunity to sit in on an open data policy brainstorming discussion at CityCampNC in Raleigh, North Carolina, lead by open government guru and Code for America brigade captain, Jason Hibbets, and Raleigh Open Data Manager, Jason Hare. The “Statewide Open Data Policy” session was a popular and well attended one, and took place in every unconference’s coveted spot: the big room. Attendees included software developers, government staff members, members of local civic organizations, and civic hackers. It was a pleasure to see a session focused on open data policy-making because not only would the creation of such a policy directly support the work done at unconferences like CityCampNC, but because such a policy would have the chance to be made stronger by having so many of Raleigh’s relevant open data stakeholders assembled in one place at the same time. Below, we explore some of the strongest takeaways and lessons learned from approaching policy making in an unconference (or similar) setting.

Drafting Open Data Policy Language

The CityCampNC Statewide Open Data Policy session began their policy-making discussion by framing a desire for a statewide open data policy (as opposed to a series of municipal policies) in order to better provide for the regional needs of areas like the North Carolina Research Triangle (where CityCampNC was hosted) and provide a consistent framework for the state. Discussion of what other state policies existed commenced (Utah and New Hampshire, Hawaii in the works, California’s attempt), with eye toward the possibility of using and remixing current policies (delightfully referred to as the “open source way”) for the lightest lift in getting a viable policy in place.

There’s an important lesson here: Although the temptation to use previous legislation as a template is high (laws are after all determined on precedent, highly iterative, and are perhaps themselves the very first instance of the “open source way”) it is actually more helpful to discuss what benefits you see in open data policies that exist currently, what you like best about them, and to share resources that exist in terms of guidance when starting to develop policy. Fortunately, this is the kind of dialogue unconferences were made for. If you find yourself in a similar situation, discussing policy creation in an unconference, brigade meeting, or hackathon-type setting, let the conversation get started and turn the enthusiasm of the room into a strategy session to discuss how participants can form working groups or reach out to government constituents to draw in open data policy bill sponsors.

Creating an Open Data Policy Dialogue with Relevant Stakeholders

Ultimately, partnerships between government and transparency activists to work together on drafting policy are what created the open data policy policies and legislation out there today. The Transparency Working Group of New York City was imperative in the creation of NYC’s open data policy Local Law 11 of 2012, working together inclusively, complete with a policy hackathon and open data priorities wiki. Star players and organizers can come in many forms -- so be sure to not count out any of the stakeholders that attend your unconference. In Hawaii, local technology groups and journalists have been key to the in-progress open data policy. In Utah, it was Jason Williams, a citizen-activist and local journalist, who organized the interest in the state’s recently passed open data law. In Montgomery County, the main driver was Councilmember Hans Reimer and associates, and in New Hampshire, a legislator with a background in tech helped rally execution of their open data policy. At CityCampNC, the open data policy seession attendees used these examples and their own experience to begin identifying relevant stakeholders to reach out, including the IT committees (in both houses), a local League of Municipalities, county delegation members, local representatives, the real estate industry, and North Carolina Press.

While comparing the legislative language out there and drafting policy are excellent thought exercises, the real value in the policy unconference session isn’t to draft a legislation template then and there, but to begin the steps in engaging in the legislative process discussing how to partner with your local lawmakers and relevant stakeholders to eventually come to a consensus together.

As Sunlight revamps its Open Data Policy Guidelines this summer (SPOILER: with more local examples!) and continues its municipal transparency research (see our Guidelines to Open Data Policy Guidelines blogpost series), we hope to provide additional guidance both about how you can connect with your local government and what partnerships and processes have led to successful open data policy making. If you’re curious in following open data policy bills currently in process, check out Sunlight’s Open States and Scout for alerts. To look at local policies that have already been drafted and how they stack up against our Open Data Guidelines check out our ongoing research here. Lastly, importantly, you can reach us at local [at] sunlightfoundation.com for additional open data policy session or drafting feedback.

Tomorrow I will be (guest) moderating #FOIAchat where we will be featuring Lindsay Young -- Sunlight’s staff writer -- as a guest. Lindsay will talk about one of Sunlight’s most publicized series -- Return on Investments by outside spenders. To get you prepped for the chat, you can read more about the most recent story on the series, or check out a list of reporting stories on return on investment. You can also sneak a look underneath the hood and see the methodology behind the project. But don’t stop there, see the fun visualization of the data and discover what $1.3 billion in investment, bought for outside spenders in the previous election cycle.

What: #FOIAchat on Data behind the Return on Investment series

When: June 14, 2013, 2:00pm EST

Where: Twitter -- use #FOIAchat (hashtag)