wo day's before the five SEC commissioners vote on whether to make fund firms publicly disclose their proxy votes, the Washington Post
is taking sides. The paper of record for the nation's lawmakers came out in support of the rule in an editorial
this morning titled "Our Money, Our Votes."
The SEC had originally scheduled the vote for tomorrow, but delayed it by one day to Thursday, January 2, according to Dow Jones Newswire
Leaders on Capital Hill and other government employees closely read the Post, giving it deep influence over how those groups frame issues. In that role, it helps to shape the debate on issues facing regulators.
"Although the industry's arguments are not frivolous, we believe that the rule represents a valuable step toward restoring investor confidence and should be approved," read the editorial.
The paper gave greater weight to arguments from the AFL-CIO than from the fund industry. To buttress its position it cited an example from Tyco provided by the union. According to the paper, Fidelity voted in support of management and against a shareholder proposal that would have required Tyco to add more outside directors to its board. It notes that Fidelity earned some $2 million in fees from Tyco retirement plans, according to the AFL-CIO. It does not add that Fidelity was not Tyco's 401(k) recordkeeper.
It also dismisses the industry's argument that greater disclosure would open fund firms to pressure from groups that have agendas other than maximizing the funds' returns.
"But funds are already subject to such pressures from management and others," said the paper. "Disclosure simply makes them accountable. As the SEC said in proposing the rule, it's time to let the public know what's being done with its money."
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