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Originally Published: 1/22/2010

 

CORPORATE TAKEOVER
 By The Issue Wonk

 
Remember the date. January 21, 2010. The Supreme Court handed over the United States of America to corporations. In a 5-4 decision, the majority struck down key campaign-finance restrictions that prevented corporations, unions, and other non-profit organizations (including churches) from pouring money into political ads. What will happen now is that unrestricted amounts of corporate money will be influencing American elections. What the implications are for churches, which are hindered by the tax haven they've been granted in exchange for political non-participation, is yet unknown. But the results with regard to corporate money are known. It's already infiltrated our electoral system and this will just make it worse.

Previously, federal law prohibited corporations and unions from using their money to advocate for candidates. They could only participate by donating to Political Action Committees (PACs), which are tightly regulated. Corporations are still prevented from donating directly to candidates, but they can spend as much as they want on issue ads. Think we've been barraged in prior elections? Wait until the election this year. With spending unlimited amounts on ads, they can steer the (sadly) uninformed public into voting for people who will act in the corporations' best interests rather than their own.

This was what is commonly known as an activist decision. The Court's decision in Citizens United v. Federal Elections Commission1 overturned the prior decision of McConnell v. Federal Election Commission, 540 U.S. 93, 203-209, which upheld limits on “electioneering communications.” The McConnell decision relied on Austin v. Michigan Chamber of Commerce, 494 U.S. 652, which held that “political speech may be banned based on the speaker's corporate identity.” Now, the Citizens United decision has declared that corporations are “persons” under the law and thus are entitled to all the Constitutional rights that we have. This means they have the same right of free speech, the right to spend as much money as they want in order to persuade voters to elect or defeat candidates for Congress and the White House. This means that a multi-national corporation, lodged in Hong Kong, the Caymans, Dubai, China, India or even Saudi Arabia, Iran, or Israel, has the same Constitutional rights as you and me. A company that may not employ any Americans, whose officers and stockholders are predominantly citizens of other countries, whose only connection to the U.S. is that it bilks the citizens and manipulates or monopolizes the markets or buys up our property, can help set national policy based on its interests. But they have more “speech” because they have more money.

It was another 5-4 decision. Voting for giving corporations the rights of natural persons were Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia, and Anthony Kennedy. Clarence Thomas concurred with them, but dissented regarding Part IV. Dissenting were Justices John Paul Stevens, Ruth Bader Ginsburg, Stephen Breyer, and Sonia Sotomayor. Justice Kennedy penned the majority Opinion. He wrote:

The ongoing chill upon speech that is beyond all doubt protected makes it necessary in this case to invoke the earlier precedents that a statute which chills speech can and must be invalidated where its facial invalidity has been demonstrated.

I have to ask. How can a corporation “speak.” It's officers can speak. It's shareholders can speak. As much as they want to. But a corporation cannot “speak.” It cannot have an opinion. The people who run it can and do. But not the corporation itself. And what if the opinion is not unanimous among all the stakeholders?

Justice Kennedy laid out quite well their arguments for overturning precedent, known as stare decisis. However, Chief Justice Roberts, who wrote a concurring opinion, amply demonstrates the degree of disdain to which he holds average citizens:

The First Amendment protects more than just the individual on a soapbox and the lonely pamphleteer. I write separately to address the important principles of judicial restraint and stare decisis implicated in this case.

And Justice Scalia, in an obvious attempt to split hairs, wrote in his concurring opinion:

The [First] Amendment is written in terms of “speech,” not speakers. Its text offers no foothold for excluding any category of speaker, from single individuals to partnerships of individuals, to unincorporated associations of individuals, to incorporated associations of individuals . . .

It all sounds very rah-rah. But the dissent, written by Justice Stephens, gives us the insight we need to interpret the meaning of Citizens United.

The basic premise underlying the Court's ruling is its iteration, and constant reiteration, of the proposition that the First Amendment bars regulatory distinctions based on a speaker's identity, including its “identity” as a corporation. While that glittering generality has rhetorical appeal, it is not a correct statement of the law. Nor does it tell us when a corporation may engage in electioneering that some of its shareholders oppose. It does not even resolve the specific question whether Citizens United may be required to finance some of its messages with the money in its PAC. The conceit that corporations must be treated identically to natural persons in the political sphere is not only inaccurate but also inadequate to justify the Court's disposition of this case.

In the context of election to public office, the distinction between corporate and human speakers is significant. Although they make enormous contributions to our society, corporations are not actually members of it. They cannot vote or run for office. Because they may be managed and controlled by nonresidents, their interests may conflict in fundamental respects with the interests of eligible voters. The financial resources, legal structure, and instrumental orientation of corporations raise legitimate concerns about their role in the electoral process. Our lawmakers have a compelling constitutional basis, if not also a democratic duty, to take measures designed to guard against the potentially deleterious effects of corporate spending in local and national races.

. . . The Court today rejects a century of history when it treats the distinction between corporate and individual campaign spending as an invidious novelty . . .

Even more interesting is that no one asked the Court to overturn Austin or McConnell, which is what this decision does. Justice Stephens wrote:

In fact, no one has argued to us that Austin's rule has proved impracticable, and not a single for-profit corporation, union or State has asked us to overrule it. Quite to the contrary, leading groups representing the business community, organized labor, and the nonprofit sector, together with more than half of the States, urged that we preserve Austin.

In the end, the Court's rejection of Austin and McConnell comes down to nothing more than its disagreement with their results. Virtually every one of its arguments was made and rejected in those cases, and the majority opinion is essentially an amalgamation of resuscitated dissents. The only relevant thing that has changed since Austin and McConnell is the composition of this Court. Today's ruling thus strikes at the vitals of stare decisis, “the means by which we ensure that the law will not merely change erratically, but will develop in a principled and intelligible fashion that permits society to presume that bedrock principles are founded in the law rather than in the proclivities of the individuals.”

Justice Stephens just about says it all. In overturning Austin and McConnell, the majority based its decision not an anything. It wasn't in the petition. No one argued for it and arguments have lost in prior decisions over and over. It's just that we now have corporatists on the Court and they were acting in behalf of those whom they were sent there to represent.

Just think about some of the corporations that could spend millions, billions of dollars on television advertising to influence voters. There's ARAMCO, the U.S. division of the Saudi Oil Corporation. How about the Chinese Construction Company. (The Weekly Wonk, China's Stimulus, 12/5/09) Or how about the Bin Laden Construction Company?

Before January 21, 2010 corporations could give lots of money through PACs. While these organizations accumulate a lot of money, you can go to the PAC's disclosure filings and see the name of every individual who put money into it. And every contributor had to be a U.S. citizen. Now, with no corporate limit, there is nothing to keep a down-and-out real estate agent from taking money from an Somalian warlord and deposit it into the coffers of a “friendly” candidate. And what if the Taliban forms a Delaware corporation? Do you get my drift? The potential for foreign invasion into our democracy is downright scary. We'll never know who the stockholders are or what their agenda is in their drive for one candidate over another.

Ian Millhiser said: “Today's decision does far more than simply provide Fortune 500 companies with a massive megaphone to blast their political views to the masses; it also empowers them to drown out any voices that disagree with them.2 And The New York Times had an editorial that stated: The Supreme Court has thrust politics back to the robber-baron era of the 19th century.3 Hell, I thought we were already there.

And don't forget the power that this turns over to the lobbyists. While they have unprecedented power now, the fact that they can now spend billions, if they want, to defeat a candidate, turns the entire political process over to them. The only elected officials we will have will be those controlled by the lobbyists.

Remember Benito Mussolini? He's credited with creating fascism. That's right. It didn't exist until then. The word “fascism” comes from the Italian word “fascio” which refers to a “league” or political group. Later a number of these fasci evolved into the fascist movement and became the National Fascist Party. Soon all other parties were outlawed. Italian fascism assembled a corporatist political system. The economy was entirely managed by corporations with state officials, elected with corporate aid. The movement believed that war was the natural state and, since it generated money, put people to work, and expanded the empire, it was not only good, but desirable. What was good for the corporations was good for the nation. Is this what were going to get?

Citizens United will also open a flood of lawsuits in the states to get them to remove their laws. Already the Colorado Republican Party plans to sue “to overturn voter-approved state limits on some campaign contributions.”4 The law, in effect since 2002, bans direct corporate or union expenditures in state races.

One thing is very interesting about this decision. Citizens United had urged the Court to hold the disclosure and disclaimer law as unconstitutional. You know, those little diddies that say, “This ad paid for by ABC.” But the Court refused to do so. Also, the Opinion upheld the Court's commitment to allowing Congress to prohibit direct corporate contributions to candidates.

Nevertheless, the decision in Citizens United v. FEC will result in a huge increase of corporate cash in our elections. Short of passing a Constitutional amendment, there's not much that can be done. Congress could pass some laws, like requiring that any corporation engaging in electioneering be incorporated in the U.S. Or requiring that before spending the money they must have the proposal passed by a vote of the shareholders. But considering that most members of Congress are there because of their corporate donors, that's not likely to happen.

I like the suggestion that several people have made, called the NASCAR law. We require all candidates to wear the logos of their corporate sponsors, like race cars do. Then we'd have a choice between the Halliburton candidate and the Walmart candidate. Or between the health insurance candidate and the oil candidate. It might not help much to discern the difference between the candidates, but it won't be much different than trying to discern the difference between Republicans and Democrats.

Finally, I have a couple of questions. If corporations are now people, does that mean they can be taxed at the same rate as people? Does it mean that mergers are like same-sex marriage? And, until now, a corporation couldn't be put in jail for committing a crime. Can we now put the whole corporation – officers, shareholders, and employees – in prison for conspiring to commit a crime? Or give them the death penalty? It raises some interesting questions, doesn't it?

Now, a ray of hope. Money has overrun our political system for a long time. It's totally corrupting and that's where we are now. Will Citizens United make the problem worse? Yes. So, maybe, finally, something will be done. Not by the elected officials. They are already bought and paid for by the corporations. But maybe by us – We, the people. Maybe finally we'll get angry and demand public financing of federal elections. They won't do it. Will we?

_______________

1 U.S. Supreme Court Opinion No. 08-205, Citizens United v Federal Election Commission, 558 U.S. _____ (2010).

2 Millhiser, Ian. Citizens United Decision: 'A Rejection of the Common Sense of the American People.' Center for American Progress, January 21, 2010.

3 Editorial. The Court's Blow to Democracy. The New York Times, January 21, 2010.

4 Hubbard, Burt. Colorado GOP to Sue to Lift Campaign Money Limits. The Denver Post, January 22, 2010.


© The Issue Wonk, 2010



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