SEC Targets Conservative Investors Just As IRS Targeted Tea Party Organizations, Shareholder Group Says
The free enterprise project of the National Center for Public Policy Research, a conservative activist organization for shareholders, alleges that the Securities and Exchange Commission has demonstrated anti-conservative bias by allowing companies to reject its proposals for shareholders.
“I guarantee you that somewhere in the posh SEC headquarters in DC there is a letter asking staff to blacklist our proposals,” Justin Danhof, Executive Vice President at the VET, Fox News said.
He alleged that the SEC’s bias in rejecting the EFF proposals echoes the Internal Revenue Service’s targeting of Tea Party organizations for unfavorable treatment in the tax exemption application process under the Obama administration. . He mentioned Lois Lerner, the IRS employee responsible for processing Tea Party requests and whose emails revealed a devastating cover-up.
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âThe IRS did it to Tea Party groups under Lois Lerner; now the SEC is doing the same to conservative investors under the Biden regime,â Danhof said.
The FEP has filed shareholder resolutions with public companies in which the FEP invests to protect its investments and counter the impact of leftist interest groups over the past twelve years. On average, the organization files 25 resolutions in the October-December window, during which most companies allow shareholders to file resolutions, some of which are voted on by shareholders the following spring.
When shareholders submit a resolution, the board of directors of the company has three options: it can place the resolution on an annual proxy statement, in which case the proposal is put to a shareholder vote in the spring; he can negotiate with the investor by agreeing to implement part of the resolution in exchange for withdrawing the resolution; or it can reject the resolution, in which case the company must request that the SEC take “no action” against the company for denying an investor’s request.
The SEC encourages the second option, so most proposals end with negotiation and withdrawal, Danhof told Fox News. He claimed left-wing groups table â98% of all bargaining resolutions,â pressuring state-owned companies in a liberal direction.
The SEC sets specific parameters by which a company can reject a proposal, and those parameters are ostensibly neutral in terms of value.
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Yet the recent experience of the EPF suggests an extreme bias against the conservative group, Danhof argued.
About half of VET resolutions go into the âno actionâ process. Danhof claimed that the SEC defends EFF resolutions about 50% of the time. Yet after Biden’s election, the SEC allowed companies to drop the 14 FEP resolutions that the companies challenged.
âAll of them were good proposals, which meant we had a precedent that the SEC had allowed very similar language in the past,â Danhof explained.
He shared several examples with Fox News. In one case, the FEP tabled a resolution that AT&T should prepare an annual report âlisting and analyzing charitable contributions made or committed during the previous yearâ. The company has asked the SEC for permission to reject the proposal, saying it would force AT&T to change its “business as usual.” Still, the FEP cited an almost identical 2010 proposal involving Wells Fargo, which the SEC defended.
As the FEP noted in its letter to the SEC, commission staff have “determined that charitable contributions” involve a matter of corporate policy that is extraordinary in nature and beyond the ordinary business operations of a company ; and that the proposals to report on them do not represent micromanagement of the company. âEven so, the SEC granted the request for no action.
The EFF has tabled numerous shareholder resolutions, urging state-owned companies to embrace diversity goals, just as liberal groups have urged them to adopt racial diversity goals. Transparency resolutions on charitable contributions can shed light on the biases of a business, whether liberal or conservative.
While the EFF expects a pushback, the SEC’s decision to give the green light to reject the 14 proposals looks suspect, Danhof told Fox News.
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âBiden is elected and we are going from an average success rate of 50% per year to zero. There is no plausible explanation for zero,â he said. “The only explanation would be the anti-conservative bias of your decision-makers.”
He noted that most of these decisions fall short of the level of commissioners, many of whom appointed former President Donald Trump. As he said, “the bureaucratic and daily staff who live in the swamp” make these decisions.
The SEC did not respond to multiple requests for comment from Fox News.