A rogue Supreme Court seems hellbent on establishing a corporate oligarchy. Congress can’t stop it. Every time Congress or state legislatures tries to curb the power of billionaires or mega corporations the Court slaps them down.
Citizens United v. FEC, the recent Supreme Court decision that allowed corporations to spend unlimited sums of money to influence elections is only the most recent step in this process. There will be more. But the shocking decision may be sufficient to galvanize a political movement that can change the rules and ensure our democracy.
We can save our country by adding eight words to the fundamental law of the land, the US Constitution. “Corporations are not persons.” “Money is not speech.”
Such a development is not without precedent. Once before a political movement has changed the Constitution to nurture democracy. The populist uprising of the late 20th century led to the passage, in rapid succession of the 16th Amendment in 1913 that allowed for an income tax, the 17th Amendment, ratified the same year that required the direct election of Senators and in 1920 the 19th Amendment that gave women the right to vote.
A campaign to strip corporations of personhood would have a similar populist and popular appeal. A recent Quinnipiac poll reveals a whopping 79 percent public disapproval of the Court’s ruling. A Washington Post-ABC News poll puts the figure even higher at 81 percent. And as Dan Eggen of the Post writes, “The poll reveals relatively little difference of opinion on the issue among Democrats (85 percent opposed to the ruling), Republicans (76 percent) and independents (81 percent).”
But win or lose, a campaign against corporate personhood would allow us to regain control of a narrative we lost in 1980 when Ronald Reagan declared in his Inaugural Address, “government is the problem” and initiated a process that has resulted in the greatest concentration of private wealth and power in American history.
People may not know exactly what Goldman Sachs is, but they know it is not a person. A person doesn’t have unlimited life or limited liability. A person is responsible for her decisions. If she makes a decision that kills or maims people she will go to jail. If a CEO makes such a decision she, at worst, receives a golden parachute.
Unlike a real person, a corporation lacks a conscience. It is guided neither by ethics nor morality but rather by laws that required its Boards to elevate the maximization of profits above all other concerns. A real person is an independent actor, subject to many influences that affect how he votes. Warren Buffett, for example, thinks it is in his and society’s best interest for him to be required to pay more taxes. A corporation that made this decision could be taken to court by its stockholders.
In his The Theory of Moral Sentiments, Adam Smith’s first, and in his own mind more important work than Wealth of Nations, he outlined his view of the institutions that make men virtuous. He focused on the inherent human qualities of gratitude and sympathy and empathy that lead to a merging of our self-interest with the public good. To Adam Smith, that was the real invisible hand. A corporation lacks sympathy or empathy although occasionally it might express gratitude in the form of increased financial contributions to politicians who do its bidding.
The curious tale of how a corporation became a person
President Obama had the opportunity to launch a vigorous and informed national campaign on corporate personhood in his State of the Union Address. He came close, tiptoeing up to the topic and then backing away. His was a historic moment, coming just a few days after the Supreme Court decision and in front of an audience of more than 40 million Americans. The President did raise the issue. “Last week, the Supreme Court reversed a century of law to open the floodgates for special interests — including foreign corporations — to spend without limit in our elections,” he noted. “Well I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities.”
From the balcony, Supreme Court Justice Samuel Alito mouthed the words “not true.”
Not true? That was the moment the President should have presented his case. And what better person to explain to people the bizarre history of corporate personhood than a brilliant, articulate African American who was also a Professor of Constitutional Law?
He would have taught his virtually all white Congressional audience that the end of the Civil War did not result in ex-slaves gaining either citizenship or the franchise. The 13th Amendment, ratified in 1865 abolished slavery but it did not grant either citizenship or the right to vote. Congress tried to achieve those goals by passing the Civil Rights Act of 1866, but Andrew Johnson, the man who succeeded to the Presidency after the assassination of Abraham Lincoln, vetoed the legislation, declaring it improper “to make our entire colored population…citizens of the United States.”
Johnson’s veto led directly to the 14th Amendment, ratified in 1868. The Amendment’s first paragraph finally gave all blacks the Constitutional right of citizenship. “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”
President Obama would then have described how the Supreme Court quickly subverted and perverted the clear intention of the 14th Amendment. It did so in 1876 in a case involving a white militia that had attacked ex-slaves gathered at the Colfax, Louisiana courthouse, killing over 100, most of them after they had surrendered. Several members of the militia were indicted by the federal government under the Enforcement Act, a law passed to protect blacks against vigilante groups like the Ku Klux Klan. The Court ruled that the due process and equal protection clauses of the 14th Amendment applied only to state action, not to actions of individuals: “The fourteenth amendment prohibits a State from depriving any person of life, liberty, or property, without due process of law; but this adds nothing to the rights of one citizen as against another.” The Court’s decision paralyzed the federal government’s attempt to protect black citizens and spawned two generations of lawlessness and vigilantism. Indeed, Federal civil rights enforcement was blocked until 1966 when the Court finally overturned the 1876 case and sanctioned the Civil Rights Act of 1964.
After explaining how the Supreme Court made the 14th Amendment a weak and ineffective tool to defend the rights of natural persons, President Obama would have explained how the Court, in a feat of unprecedented judicial activism, converted the 14th Amendment into a strong and effective tool for defending artificial persons.
It is a fascinating and almost unbelievable tale for the simple fact that the Court never actually decided that a corporation is a person. Indeed, there has never been a Supreme Court decision that has explained how it arrived at this conclusion. In 1886, in a case that had nothing to do with corporate personhood, the court clerk wrote a headnote to the case that contained these fateful sentences, “The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does.” Since the case itself never addressed the question these words did not comprise a legal precedent. Nevertheless, from then on the Supreme Court has considered the question settled.
Corporate lawyers must have breathed a huge sigh of relief when the headnote appeared and was taken as precedent because they knew the Court would it impossible to make a case for corporate personhood. The Constitution doesn’t mention corporations. The American Revolution was, in part, catalyzed by hatred of corporations. As Tea Partyers should know by now, the Boston Tea party was not a protest against government or taxes. It was a protest against a huge private corporation that had been exempted from taxes in order to gain a competitive advantage against domestic suppliers. And how were the Justices going to get around the clear language of the 14th Amendment, “All persons born or naturalized in the United States…”
Throughout the 19th century corporations were highly regulated by and subservient to states. By 1886 a populist wave of anger against corporations was sweeping the country, ushering in the first generation of anti-trust legislation.
No, the Supreme Court never made the case for corporate personhood because it couldn’t. It simply assumed it and we continue to live with the consequences. Some 65 years later Justice William O. Douglas observed, “the Santa Clara case becomes one of the most momentous of all our decisions. Corporations were now armed with constitutional prerogatives.” And they made the most of these new prerogatives.
The 14th Amendment, written to protect weak and largely defenseless ex-slaves, was mostly used to protect big and powerful corporations. Of the 150 cases based on the 14th amendment the Supreme Court heard between 1886 and 1896, 15 involved blacks and 135 involved business entities.
In the next 20 years, relying on the 1886 “precedent” the Supreme Court steadily expanded the number of Constitutional rights accorded to this new type of person. The Women’s International League for Peace and Freedom (WILPF) offers a partial list: in 1893 the Court accorded corporations the right of due process under the 5th Amendment. In 1906 it extended to them the protection against search and seizure in the 4th Amendment. In 1908 it extended to corporations the 6th Amendment right to a trial by jury.
By the 1940s Justice Felix Frankfurter could accurately declare, “Artificial or not, corporations have won more rights under law than people have– rights which government has protected with armed force.”
Imagine if the President had used the bully pulpit at the State of the Union to tell the truth about corporate personhood the week after the Supreme Court gave corporations the right to dominate elections. He didn’t but he still can and the Democratic Party still can, because if is the most important issue of our times.
Money equals speech
The issue of money and speech is separate from the issue of corporate personhood and deserves its own constitutional amendment, although the two issues are related because corporations have the most money and therefore benefit the most from the Court’s 1976 ruling that money is speech.
In that decision, the Court allowed campaign limits on direct contributions but not on indirect contributions. The First Amendment’s free speech rights protected political expenditures. As long as expenditures were not funneled through the candidate or the candidate’s campaign, they would be allowed.
Money has always been important in politics, but today we can without fear of contradiction say that money rules politics. The Center for Responsive Politics puts the total cost of the 2008 elections for Congress and the White House at $5.3 billion, including spending by candidates, national political parties and outside issue advocacy groups. A USA TODAY analysis of campaign contributions in 2007-2008 identified 175 members of Congress who received half or more of their campaign cash from 4600 political action committees (PACs) spawned by the 1976 ruling.
Money matters. The candidate who spends the most money wins over 90 percent of the time. This is true even for open seats. The top spender in House open seat contests won 84 percent of the time. The Senate candidate who spent the most in an open seat race did even better, winning 88 percent of the time. This is the reason members of Congress now spend 25-40 percent of their time begging for money.
A majority of political money still comes from individual contributions, not from PACs. But Jeff Milchen, the Executive Director of ReclaimDemocracy.org points out that just one in a thousand adult Americans contributed $1,000 or more to any candidate in 2004 but those contributions constituted more than 80 percent of the money raised from individuals by candidates for the presidential nomination. “The power of that 1% of citizens making thousand-dollar investments is further amplified by their ability to “bundle” contributions in the name of family members, co-workers or employees to offer many thousands of dollars to a candidate in a lump sum”, notes Milchen. “In George W. Bush’s 2004 presidential campaign, bundling $200,000 was the measure by which donors gained serious influence.”
Jamie Raskin, a Maryland state senator and law professor at American university offers a hypothetical example that demonstrates the Citizens United decision. The Fortune l00 corporations had profits in 2008 totaling about $600 billion. If they spent only l percent of their profits on elections, a trivial sum to protect and foster their interests, the total comes to $6 billion. That is more money than was spent for and on behalf of all congressional and presidential candidates in 2008.
Political scientist Thomas Ferguson has developed an “investment theory” of politics. By tracing the source of campaign funding to the parties and their candidates, he insists, you can predict the issues the parties will push and their policy positions once in office. “Public opinion has only a weak and inconstant influence on policy. The political system is largely investor-driven, and runs on enormous quantities of money”.
“…most of American business and the superrich have espoused increasingly radical versions of “laissez faire” economics…demands for tax ‘relief’, freedom from regulation, cuts in social welfare expenditures, labor cost reductions and tighter control of increasingly decentralized production systems dominate the funders’ consciousness and thus public consciousness…”, Ferguson maintains. For these sectors, ‘compromise’ means foregone profits. They are, accordingly, unbending and expect their political mouthpieces to be similarly unyielding.”
Each time Congress or the states have tried to rein in the power of concentrated wealth the Roberts Court has said no. Citizens United is simply the latest and so far the most egregious example.
When states or the federal government try to make elections fairer the Roberts Court says no. Vermont passed a law to cap campaign expenditures for state offices. The cap for Governor was $300,000. On a per capita basis, that is about $18 million for a California gubernatorial candidate. In 2006 the Roberts Court struck the law down.
In 2002, Congress tried to close a loophole in the campaign finance law that allowed billionaire candidates to spend an unlimited amount of their own money on their own campaigns. Congress didn’t try to impose a limit on their spending. The Court had already forestalled that option in 1976. Instead it allowed a candidate to gain access to more public and other financing when her opponent spent more than $350,000 of her own money.
The Roberts Court struck down what has been called, appropriately, the “millionaire’s amendment”. Speaking for a 5-4 majority, Justice Samuel Alito, the same Justice who shook his head at President Obama told Congress that it may not act to “level electoral opportunities.”
In 2007 in a case based on the same provision of the same law as Citizens United, the Court held that corporate and union ads were constitutionally protected so long as they did not explicitly endorse or oppose candidates. Citizens United expanded that constitutional protection. David Kairys, Professor of Law at Temple University wryly observes, “before Citizens United, a corporation or union could sponsor ads with its treasury funds that said ‘Tell Congressman Smith to stop destroying America.’ After Citizens United, they can add at the end ‘and, by the way, don’t vote for him.’”
Nathaniel Persily, Director of the Center for Law and Politics at Columbia predicts that Citizens United will not be the Supreme Court’s last obeisance to corporations. “… the ban on soft money, which prevents corporate and union contributions to political parties and candidates, might be the next restriction to fall. If corporations are like individuals, how can Congress completely ban soft-money contributions from one while letting the other give within limits? The case RNC v. FEC, now working its way up to the court, poses a very similar question. Given the tone of Citizens United, we should expect a bold response.”
Heather Gerken, Professor of Law at Yale Law School believes the impact of Citizens United goes even further to undermine democracy by dramatically narrowing the definition of political corruption. “For many years, the Court had gradually expanded the corruption rationale to extend beyond quid pro quo corruption (donor dollars for legislative votes). It had licensed Congress to regulate even when the threat was simply that large donors had better access to politicians or that politicians had become ‘too compliant with the[ir] wishes’. Indeed, at times the Court went so far as to say that even the mere appearance of ‘undue influence’ or the public’s ‘cynical assumption that large donors call the tune’ was enough to justify regulation. That is true no longer.” As the Court announced in Citizens United, “ingratiation and access . . . are not corruption” and “The fact that speakers may have influence over or access to elected officials does not mean that these officials are corrupt. …”.
The Roberts Court has ruled that Congress cannot intervene to make elections fairer by reducing the campaign advantage of a billionaire candidate. It has denied Congress the power to intervene to make elections fairer by reducing corporation influence. And it has intimated that Congress cannot even intervene to eliminate the potential for money-related corruption.
It is time for a four word Constitutional Amendment: “Money is not speech.”
Happily many groups are working for a constitutional amendment that strips corporations of personhood and ends the free speech rights of unlimited campaign spending. Most are small and poorly financed. Some like Public Citizen’s www.dontgetrolled.org focus on getting names on a petition urging Congress to act. Others like the coalitions around www.movetoamend.org and www.freespeechforpeople.org are proposing the actual text of amendments.
In February Representative Donna Edwards (D-MD), introduced a resolution to amend the U.S. Constitution. It reads, “The sovereign right of the people to govern being essential to a free democracy, Congress and the States may regulate the expenditure of funds for political speech by any corporation, limited liability company, or other corporate entity.”
This is a step in the right direction but I worry about the wording. First of all, a national campaign to give Congress the right to regulate may end up putting the spotlight on Congress, the only institution that has a lower approval rating than Goldman Sachs. Secondly, the amendment does not get to the heart of the issue by challenging the personhood of corporations and cutting the link between money and free speech rights.
But all of this is a quibble. Four stars for Donna Edwards for getting off the block. We can work out the wording later. Right now, however, we need to mount a national campaign to explain to people what is at stake and what needs to be done. It is a natural for the Democratic Party. Perhaps we can persuade President Obama to kick it off by delivering the speech he should have given in January.
David Morris is co-founder and vice president of the Institute for Local Self Reliance in Minneapolis, Minn., and director of its New Rules project.