For most American families, retirement savings with Vanguard mean hard work, a smart investment, and the promise of a secure future. But ever since the Supreme Court’s decision in Citizens United, those savings have taken on a different meaning for big corporations working to influence our elections: secret political cash.
Mutual fund investments, supported by our retirement savings, are the lifeblood of every corporation on the stock market. In recent years, many corporations have used those investments to fuel secret political spending, drowning out the voice regular voters and turning our elections into a race for high-dollar donations.
As the largest manager of retirement savings in the United States, and as a representative for millions of American families, Vanguard has fundamentally changed the mutual fund industry since its founding, implementing a consumer-oriented approach to investment and a focus on overall market growth. As our country struggles to address the threat of undisclosed corporate political spending, Americans are again looking to Vanguard to act as a leader in its field.
The 2016 presidential race is quickly becoming the most expensive election our nation has ever seen, in part due to an unprecedented flood of secret political spending by American companies. While socially responsible investors have pressured major corporations to disclose their political spending in shareholder meetings, their efforts have failed time and again as major mutual funds, which own a large share of the U.S. stock market, fail to vote for disclosure.
One new study by the Center for Political Accountability shows that Vanguard - which represents the savings of millions of American families – has voted against or abstained from disclosure votes every time they came up this year. According to the report, that practice isn’t uncommon among major mutual fund families, and companies like Fidelity, American Century, and Blackrock have a similar record on transparency proposals.
What makes Vanguard unique is that it was founded as the first ever company to be owned by its member funds and operated solely in the interests of its funds' shareholders. As the largest manager of retirement savings in the United States, and as a fund family that prides itself on prioritizing customer savings over corporate profits, voting for secret spending disclosure is an opportunity for Vanguard to stand with the families it represents and build on its reputation as a champion of consumer interests.
Political spending disclosure is favored by an overwhelming majority of the American public. Recent polls show that a full 78 percent of Americans want to reverse the Citizens United decision that opened our elections up to secret money politics, and 85 percent of the public believes our campaign finance system is in need of fundamental changes.
The timing for Vanguard to stand with these families against secret political spending has never been better. As the season for shareholder meetings approaches, our current presidential race is breaking all kinds of political spending records and the public is calling out for reform.
In addition to fulfilling a social responsibility to its investors, a vote for disclosure by Vanguard would benefit the company and the families it represents financially. When companies use secret money politics to lobby for tax loopholes and industry-specific government subsidies, our economy and the overall marketplace suffers. That’s bad for Vanguard, bad for investors, and bad for our country.
The secret spending that’s flooded our democracy is political, but when it’s funded by our retirement savings, the issue becomes personal. That’s why U.S. PIRG is leading a coalition of organizations in a campaign urging Vanguard to oppose secret political spending. Already, thousands of consumers have joined our campaign, writing to Vanguard with one simple message: Americans want disclosure now, and they’re counting on Vanguard to get on board.