The American Federation of Labor and Congress of Industrial Organizations (“AFL-CIO”) Office of Investment Director Heather Slavkin Corzo complained that SEC Chair Mary Jo White mischaracterized the AFL-CIO’s position on the SEC’s disclosure initiative. Director Corzo took issue with a July 22, 2016 response to questions posed by Senator Elizabeth Warren, in which SEC Chair White suggested that despite the challenges, the AFL-CIO supported the SEC initiative to eliminate or modify disclosure. The SEC Chair had stated:
[T]he AFL-CIO … noted that “redundancy adds volume to an already cumbersome report but provides little value to investors” and that “where possible, duplicative information should be eliminated.” Comments like these have provided insights on the challenges of improving disclosure effectiveness for investors, including by illuminating the complexities in considering eliminating, modifying or adding any disclosures.
Ms. Corzo suggested that the quote used by Chair White “implied that [the AFL-CIO] disagree[s] with the issues raised by Senator Warren,” and emphasized that “[t]his is not the case.” Ms. Corzo reiterated the position that was taken by the AFL-CIO in a November 20, 2015 letter to the SEC: “We are deeply concerned that this review seems intended to limit investors’ access to information which undermines the [SEC’s] core purposes of investor protection and facilitation of capital formation.” Ms. Corzo also referenced a July 21, 2016 comment letter, in which the AFL-CIO made the following assertion:
[The AFL-CIO does not] believe any investors are worse off for access to too much information. Conversely, [it] believe[s] that additional disclosures tend to provide useful information. The problems with unwieldy corporate reporting lie in the form and style of the disclosure.
Lofchie Comment: Inasmuch as Senator Warren and the AFL-CIO are united in their support for a number of disclosure measures that are considered to be either helpful to union members (such as executive pay ratio disclosures) or politically advantageous (such as political contribution disclosures), it is not surprising that the AFL should come to the Senator’s aid in a given dispute with the SEC Chair. The question is this: should the SEC mandate disclosures based on (i) investors’ concerns, (ii) political interests, or (iii) whatever interests motivate any particular Senator?