Photo: Jonathan Ernst, Reuters

By: Jonathan Stempel, Reuters, 1/4/16

A federal judge on Monday dismissed a lawsuit seeking to force the U.S. Securities and Exchange Commission to adopt a rule requiring publicly traded companies to disclose political contributions.

U.S. District Judge Rosemary Collyer in Washington, D.C. found no showing by the plaintiff Stephen Silberstein that the SEC had a “clear legal duty” to begin a rulemaking proceeding, and that its failure was arbitrary and capricious.

She also said she lacked jurisdiction to consider whether the SEC engaged in “unreasonable delay” by ignoring Silberstein’s rulemaking petition. Collyer said such a claim might be raised before a federal appeals court.

The lawsuit was filed last May by the nonprofit Campaign for Accountability on behalf of Silberstein, an Aetna Inc shareholder who had unsuccessfully sued the insurer in New York to force it to reveal its political donations.

Silberstein said improved disclosure is necessary in light of the U.S. Supreme Court’s Citizens United decision in 2010, which allowed unlimited independent spending by corporations and labor unions in federal elections.

He said shareholders deserve the right to assess whether corporate contributions are in companies’ best interests.

Daniel Stevens, a spokesman for the Campaign for Accountability, said the group is disappointed in Tuesday’s decision and may file a complaint with the appeals court.

SEC spokesman Kevin Callahan had no immediate comment.

The regulator had argued that it had discretion, but no obligation, to begin a rulemaking proceeding.

The Citizens United decision inspired a wave of new campaign spending, including from politically-focused nonprofits that need not disclose the identities of their donors.

The Campaign for Accountability has estimated that the 2016 U.S. presidential campaign may cost at least $5 billion, roughly double the $2.6 billion that the nonprofit Center for Responsive Politics has estimated was spent on the 2012 campaign.

The case is Silberstein v SEC, U.S. District Court, District of Columbia, No. 15-00722.