Saturday, September 25, 2010

Friday, September 24, 2010

State Responses to Citizens United

  • State Responses to Citizens United

  • The following proposals are intended to mitigate the impact of the Citizens United holding that corporations have the same right as citizens to make campaign expenditures (and presumably spend money in other ways that the Court might characterize as "political speech"). They will not eliminate the excessive influence of wealth in our political system. Thus, they are not meant to overturn Buckley v. Valeo or to substitute for effective campaign finance law. Any corporation can simply transfer funds to human beings, who are then free to spend them, even collectively (Clause 3).
    They do, however, mean that the Electioneering/Lobbying Expenditures will come from actual human beings who have made an actual decision to spend their own money -- not corporate money with no clear owner -- to support their own views or interests -- not interests that they believe they are legally or ethically required to promote as fiduciaries for the corporation regardless of their personal views.
    In other words, they effectively reduce the power of corporate money and corporate speech, which is never free speech, without challenging the Buckley v. Valeo claim that money is speech and campaign spending /contributions are protected by the First Amendment. It protects the ability of the rich to use their own money, while protecting corporate fiduciaries from the obligation to promote positions they might not support as citizens or believe are in the national interest or further the public good.
    Possible state statutory solutions to the Citizens United problem include:

    • The Consumer's Protection Opt Out Act
      • Whereas, consumers purchase products and services without intending to support business lobbying efforts to change the rules of the market,
      • No business, whether incorporated or not, shall be authorized to do business in this State or sell any good or service in this State, unless it provides an effective means for in-state customers to opt out of corporate electioneering/lobbying expenditures where ever made, including full disclosure and a system for receiving refunds.
      This would give consumers the means of boycotting politically active corporations and most likely would create some economic pressure on corporations to avoid political activity. However, over time, corporations would probably learn that few citizens are likely to "opt-out" as increased disclosure makes corporate political activity seem more normal.

    • An Act to Prevent Corporate Waste
      • Whereas, corporate assets are entrusted to corporate decisionmakers as fiduciaries for the good of the corporation, and
      • whereas, the purpose of corporations in this state is to pursue lawful activities within the law as determined by the citizenry,
      • whereas, political activity to influence the law or its application to a corporation's business is not in the interests of a business corporation properly understood,
      • whereas, members of the corporation are entitled to assurance that their corporation's assets will not be used to promote political objectives with which they disagree, now therefore
      • Any expenditure for lobbying or electioneering by any business corporations is hereby declared corporate waste, and may be authorized only by unanimous consent of the shareholders.
      This Act would make directors and executives who approve such expenditures personally liable unless the expenditure is approved by unanimous vote of the shareholders.

    • An Act to End Tax Subsidies of Corporate Lobbying and Electioneering
      • The (state or federal) income tax statute is hereby amended to declare that all corporate lobbying and electioneering expenditures shall be deemed expenditures by the human beings who contributed the funds used.
      • To facilitate tax reporting and paying, the corporation shall be required to
        • (1) identify such persons on a quarterly basis, and
        • (2) to disclose to each such person the total expenditures made in their name and the causes for which they made, and
        • (3) to set out the basis on which the corporation allocated the expenditures to that individual.
      • Each individual receiving such imputed income shall be required to report such income for tax purposes and allowed to deduct the associated expenditures to the same extent as if the individual had made them in his or her personal capacity.
      Imputing the income to individuals and requiring them to report it on their income taxes would emphasize the Court's claim that the rights being protected here are individual rights. Moreover, courts are generally quite reluctant to interfere with the state's taxing authority, so framing the statute as an income tax provision would lessen the probability of a successful First Amendment challenge. This is an effective disclosure statute that, presumably, would cause a good deal of unhappiness among those who learn that "their" money was used in this way. For at least a while, shame would inhibit companies from discloseable spending.

    • An Act to Limit Foreign Influence on US Elections
      • No business corporation shall expend any funds to lobby or electioneer using funds that are in any part contributed by a non-citizen investor, employee or customer.
      • In the case of institutional investors, the institution is deemed to have the citizenship of each of its associated participants, looking through all institutions until a human being is reached.
      Every publicly traded corporation has non-citizen investors, so in practical terms this is the same as an outright ban for any publicly traded corporation, but the Court seemed to leave this route open.

    Eliminating Corporate Constitutional Rights Against Us

  • Eliminating Corporate Constitutional Prerogatives Against The People

  • To restrain corporate constitutional rights more generally -- the goal of the misnamed "corporate personhood" movement -- requires reversing the Court's presumption that corporations are more like citizens than government: that like individual citizens, they need protection from the potentially overbearing power of the state, and that unlike the state, they are not power centers themselves. In fact, however, major corporations are, like the state, collective organizations with great power for good or ill and plenty of opportunities for abuse of that power. We need Freedom of Speech or Due Process rights against major corporations far more than they need such rights against us. The following Constitutional amendment makes clear that major corporations in fact pose the same threats of overreaching as the state itself.
    • Any corporation which employs more than 1000 employees, or which has any security issued, outstanding and held by more than 100 people, or which has annual revenue exceeding $10 million, shall be deemed a "state actor" for purposes of the Constitution and shall not be entitled to claim rights under this Constitution except to the extent that state agencies are.
    This text reverses the presumption that public corporations are "private" and so not bound by the Constitution but entitled to claim rights under it against the government. Instead, it creates a presumption that the legislature may regulate public corporations much as it regulates other state agencies, such as the IRS or the EPA or municipal governments, and that human beings have the same rights against public corporations that they do against state actors such as the DMV or the municipal water company: minimum rights to due process, free speech, equal protection, privacy, non-discrimination and so on.
    On first principles, characterizing corporations in this way should be within the common law police power of any state, or the Commerce Clause and XIV Amendment enforcement powers of the Congress. Corporations, after all, exist only by action of the state; they are not pre-legal beings with existences of their own. However, the notion of corporate constitutional rights is deeply embedded in the precedents; the Court may insist that a change of this degree be made by Constitutional amendment.

    Corporations, Democracy and Popular Sovereignty

    Corporations, Democracy and Popular Sovereignty

    Our Constitution is founded in twin ideals of liberty and democracy.  Good government is essential to human freedom, but incompetent or overreaching government is a threat to it.  We need government to restrain private power, to organize people for the common good, and to create the conditions for security, economic prosperity, health, happiness and human flourishing.  At the same time, we must constantly beware lest the government of the people turn from our servant to our master.
    Americans have long believed that we need two basic controls on our government:
    • First, limitations on government designed to preserve liberty -- certain areas of private life should be beyond collective control, so that individual human beings have a space in which to live and exercise their own individuality based solely on their own consciences.  We, therefore, guarantee each American freedom of speech and religion and basic rights to privacy in our own homes, in order to preserve a space for the individual free from collective pressure. 
    • And second, democracy.  The basic purpose of government is, in the language of our Constitution, to "promote the General Welfare."  The government must remain answerable to the people, first because only the people can, in the end, determine what is their general welfare, and second, in order to preserve government from being taken-over by powerful groups or individuals or -- today -- corporations that seek to use it to promote their own private interests and increase the power of the already powerful.   
    Today, much of our collective governance is outside the formal state.  Our largest, richest and most powerful bureaucracies are far less likely to be city school boards or state departments of motor vehicles than business corporations, funded by the profits on sales of necessities or ordinary consumer goods all over the world, governed by self-perpetuating bureaucracies answerable only to the institutional investors of the financial markets or the not-always benevolent anonymous forces of the market itself, and subject to neither the restraints of limited government nor democratic control.
    As America becomes increasingly unequal, the threat of concentrated wealth to our system becomes increasingly dire.  Neither democracy nor capitalism can survive if law is for sale -- the rich will simply use their money to buy elections, or, cheaper still, threaten to buy negative campaign ads, in order to assure that politicians think first and foremost about preserving the wealth and power of the already wealthy and powerful.  Capitalism thrives on innovation and competition, but innovation and competition always threaten the currently dominant companies and their owners.  Successful capitalism requires a large and well-paid middle class to buy its products and services -- but the quickest way for the upper class to get richer still is to increase the share of profits at the expense of middle class wages and salaries.  Capitalism requires an extensive and powerful set of regulators and regulations to assure that the powerful do not use their power to avoid the rules of the game -- but if the rich can buy legislation, they will simply change the rules to benefit themselves.
    No capitalist economy has long survived the combination of corrupt politics and sharply unequal wealth.  We must act now to regain control of our country and economy before we decline into a slough of corruption, in which great wealth is made not by innovation but simply by pressing the middle class.
    The techniques are clear -- well known since almost the beginning of the capitalist era.  We need democracy -- to keep the government under the control of the middle class so that wealth comes from serving the needs of the middle class and not simply using the government to redistribute it upwards.
    The following proposals are directed at reversing the Supreme Court's catastrophic holding that corporations -- human institutions that like the government agencies they so closely resemble are instituted among men deriving their just powers from the consent of the governed -- are, instead, entitled to be treated as citizens, as if we were their servants and not the other way around.  Only by securing the independence of the government from the corporations can our corporate-based market system survive.
    Moreover, they seek to extend the lessons we have learned about democracy itself to the corporate sector.  Just as, by long and bitter experience, we have learned that government should never be viewed as the private property of those entrusted with running it, so too our other large, bureaucratic, publicly financed governance organizations.  Multi-national corporations are no more private than the King's Exchequer was in the bad old days.  It is time we applied the basic lessons of Eighteenth Century liberal republicanism to the institutions of the Twenty-first Century.
    • Constitutional Amendment: Corporate Rights and Obligations

    • An amendment to the Constitution to reverse the Supreme Court's lawless misreading of the Constitution to secretly create Constitutional rights preventing us from controlling the behavior of our economic organizations, including the Santa Clara and Citizens United cases. The Amendment seeks to establish clearly that business corporations, like municipal corporations and other governmental agencies, are creations of the people, not their masters.
      • I. This Constitution grants no rights against the People or their governments to any legal person that is not a human being.
      • II. Corporations shall be fully subject to the police power and regulation by the states and Federal government.
      • III. Corporations shall be deemed state actors for purposes of the Fourteenth Amendment.
      • IV. Corporations shall not be deemed citizens of the United States or any state under this Constitution, or persons entitled to protection under the Constitution, regardless of the citizenship or rights of the human beings affiliated with them.
      • V. For purposes of this provision, "corporations" shall include similar entities defined or created by law or by permission of the law, that have privileges of entity liability, legal personality or a legal existence separate from some or all of the human beings associated with them, including but not limited to trusts, limited partnerships, and limited liability companies.