2011-10-29 The Economics of Occupy Wall Street, Part II: Citizens United v. FEC

"I hope we shall ... crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government to trial and bid defiance to the laws of our country." -- Thomas Jefferson

Earlier this month, a group within the Occupy Wall Street movement (OWS) published a draft of the 99 Percent Declaration, which proposes solutions to economic inequality in the U.S. and announces a plan to organize a national convention to be held in Philadelphia on July 4, 2012. Still a work-in-progress, the Declaration calls for the election of delegates who would draft and vote on a non-partisan petition of grievances to be presented to the U.S. President, each member of Congress, the Supreme Court, and all federal candidates in the 2012 elections. If, warns the Declaration, the government does not act within one year to remedy its stated grievances, OWS will form a third political party to run in every Congressional seat in 2014 and 2016.

In addition to demands for reinstating the Glass-Steagall Act, freezing home foreclosures, recalling military personnel at all non-essential bases, eliminating corporate tax loopholes, and other provisions, the Declaration calls for an end to corporate personhood, particularly through "The immediate reversal, even if it requires a Constitutional Amendment, of the outrageous and anti-democratic holding in the Citizens United case by the Supreme Court, which equates the payment of money by corporations, wealthy individuals and unions to politicians with free speech."

The theory of corporate personhood stretches back more than 100 years. After the Civil War, the 14th Amendment to the U.S. Constitution and other laws were passed to protect the rights of newly-freed slaves. However, some interests that were heavily invested in the powerful railroad companies successfully used these civil rights measures to gain citizenship rights for corporations. One such alleged corporate activist was Supreme Court Justice Stephen Field. In his decisions, Field repeatedly stated that corporations were persons; he then cited to these earlier statements as precedents when ruling later that a railroad company, "being a corporation, a person within the meaning of the 14th Amendment," was "entitled, with respect to its property, to equal protection of the laws." In his dissenting opinion for the 1873 Slaughter-House Cases, Field characterized corporations as citizens with an inherent right to pursue their business interests. Some also attribute to Field's influence the fact that, in the 1886 case Santa Clara County v. Southern Pacific Railroad Co., a court reporter wrote in his summary of the decision that the railroad companies were persons protected by the 14th Amendment's equal protection provisions -- even though no such statement was actually contained within the case. Field later used this statement to aver, in a 1888 decision, that a "private corporation is included under the designation of 'person' in the Fourteenth Amendment to the Constitution of the United States, Section I."

Even during the early 20th century, however, the theory of corporate personhood was not without detractors. In 1938, for instance, Justice Hugo Black objected that the 14th Amendment was passed "to protect weak and helpless human beings," and that "the language of the amendment itself does not support the theory that it was passed for the benefit of corporations."

In 2008, the conservative nonprofit organization Citizens United wanted to air television commercials promoting its documentary Hillary: The Movie. The film criticized Hillary Clinton, who at that time was seeking the democratic primary nomination for U.S. President. But the Bipartisan Campaign Reform Act (BCRA), passed in 2002, prohibited corporations and unions from spending their general treasury funds on "electioneering communications" -- broadcasts that expressly refer to specific candidates for federal office within 30 days of a primary election. And for generations the Supreme Court had issued rulings, including McConnell v. FEC and Austin v. Michigan Chamber of Commerce, that specifically limited corporate political expenditures. In 2010, however, the Supreme Court, led by Chief Justice John Roberts, decided that these prior laws violated the right to free speech, which is guaranteed to all persons under the First Amendment to the Constitution.

Building on Justice Field's precedents establishing corporate personhood, the 5-4 decision in Citizens United v. Federal Election Commission overruled Austin, part of McConnell, and the BCRA. Though acknowledging that the prior laws were intended to prevent corporations from using their vast resources to obtain unfair political advantage, the majority nevertheless ruled that these laws discriminated against corporations; also pointing out that media companies consistently engage in political speech, the Court concluded that it was unfair to suppress the speech of other types of corporations, and that such restrictions could permit the suppression of political speech in television, books, and blogs.

Citizens United and the American Civil Liberties Union applauded the Supreme Court's decision. The Editorial Board of the San Antonio Express-News agreed with the Court that, "While the influence of money on the political process is troubling and sometimes corrupting, abridging political speech is the wrong way to counterbalance that influence.” But others, including President Barack Obama, reacted virulently to the Court's decision. Obama stated: "The Supreme Court has given a green light to a new stampede of special interest money in our politics ... It is a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans." Adding, "I can't think of anything more devastating to the public interest," the President further commented that "the Supreme Court reversed a century of law that ... will open the floodgates for special interests –- including foreign corporations –- to spend without limit in our elections. I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities." He vowed to generate a "forceful bipartisan response" to the decision.

Obama was not alone in his denunciation. Senator Russ Feingold described the decision as "a terrible mistake ... the Supreme Court chose to roll back laws that have limited the role of corporate money in federal elections since Teddy Roosevelt was president." Author and Newsweek journalist Jonathan Alter called it the "most serious threat to American democracy in a generation." Both Representative Alan Grayson and former MSNBC commentator Keith Olbermann compared Citizens United to the infamous case Dred Scott v. Sandford, which in 1857 denied citizenship to blacks in the U.S. Constitutional law scholar Laurence H. Tribe opined, "Talking about a business corporation as merely another way that individuals might choose to organize their association with one another to pursue their common expressive aims ... obscures the very real injustice and distortion entailed in the phenomenon of some people using other people's money to support candidates they have made no decision to support, or to oppose candidates they have made no decision to oppose."

In response to the ruling, some proposed altering the laws to require shareholders to vote before a corporation could make a political expenditure. Others focused on passing campaign reform; Senator Dick Durbin, for instance, suggested implementing a public financing program for federal candidates that would provide $900,000 in public funds to any candidate who raised at least $50,000 in donations of $100 or less. Still other members of Congress, including Senator John Kerry and Representatives John Conyers, Donna Edwards, and Leonard Boswell have called for a constitutional amendment to overrule Citizens United. Grassroots U.S. groups such as Occupy Wall Street, Move to Amend, and other coalitions have echoed support for amending the U.S. Constitution to abolish corporate personhood. Such groups point out that their campaign has historical precedent: the 15th and 19th Amendments were enacted to reverse Supreme Court decisions that denied voting rights to blacks and women, respectively.

The U.S. Constitution provides that any amendment must achieve a two-thirds vote by Congress, then ratification by three-fourths of state conventions or legislatures. An Article V convention may, however, offer an alternative to congressional approval.

The OWS movement is requesting ideas from the public for inclusion in the 99 Percent Declaration.

Abolishing Corporate Personhood: Be Careful What You Ask For

I have an important correction to make to this story, which may give people pause. The concept of corporate personhood is not 100 years old. It is 2000 years old. It was invented by the ancient Romans. It has stood the test of time. Throwing it out because of a bad decision by the Supreme Court last year may be a bit of an over-reaction.

If the ancient roots of corporate personhood don't give people pause, maybe this will: Corporate lawyers are also hard at work trying to abolish corporate personhood in their own quiet way. They have come up with something they like better. It is a frightening alternative that, if we scrap corporate personhood, will likely be its replacement.

I wrote an article: “Abolishing Corporate Personhood: Be Careful What You Ask For”:


that delves into these issues. I encourage people to read it.

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