Citizens United, June 5th, and Money, Money, Money, Money! by Geminijen

(4 pm. – promoted by ek hornbeck)

“When the madness is directed towards the likes of you and me,

Then our blindness may be lifted and we might begin to see.

For when others are afflicted, with the scourge that has no end,

Then we practice our denial — and the purging, we defend.

So the powers and the peoples of the nations of this Earth

Could be fully in connivance — or denial of the hurt…

And even, in our hubris, in our information age,

We are blinded by our bias — and at petty issues rage.

So the workers were divided and they voted Nazis in,

And so many were the workers, who paid dearly for this sin!

And we see now in Wisconsin, there’s a Walker riding high,

And there’s cash enough from coffers to propagate the lie.”

(excerpted)

Arjun Jalah

Sometimes you would give anything not to be right!  When I started writing this diary three weeks ago, I predicted that Scott Walker would win the recall election for governor in Wisconsin. Walker, with unlimited corporate money, was challenged by a massive people’s movement when he outlawed most collective bargaining rights in what was usually considered a progressive state.  I knew, with the certainty of a cynic that that much money would out-weigh people power.   It was the fight between John Henry and the steel driving machine all over again. Yet, there I was, Tuesday night, praying that the people power would, in the end, win.  Not.  Walker beat Tom Barrett, the Democratic candidate 53%-46%, winning by a whopping 6% points. As Ed of the Ed Show so colorfully pointed out, there was no way to put lipstick on that pig. Or as Chris Hedges had said a couple of weeks earlier: “We lost. They won.”

HOW DID THIS COME ABOUT?

Much of the blame was placed on the Supreme Court decision in Citizens United v. Federal Election Commission, 558 U.S. 08-205 (2010), 558 U.S. —-, 130 S.Ct. 876 (January 21, 2010) In this convoluted 5-4 decision designed to expand corporate rights and often referred to as the “corporations are people” decision, the Supreme Court ruled that the government cannot restrict most corporate spending in elections. Using several of the most treasured democratic protections to turn our own Constitution against us, the Supreme Court held the following:

 

1) prohibition of all independent expenditures by corporations violates the First Amendment’s political protection of free speech. Because corporations are “groups of individuals,” the corporate form must receive the same free speech privileges as individual citizens. The court’s rationale for the Citizen’s United decision is based on the concept that a corporation, is an organization that acts, for legal purposes, as an individual or a “person”. “If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.” In a particularly inverted bit of logic, the Citizens United decision reinforced an expanded an earlier decision under the 14th amendment which guarantees all citizens equal protection under the law. The 14th amendment was originally passed to protect freed slaves after the Civil War. However, in this case, the Court argued that if we, the people, have free speech rights, then corporations, as “persons” must be given the same rights under the equality clause.

 

2)  The Court, likewise, argued that independent expenditures are a form of speech, and limiting a corporation’s ability to spend money also limits its ability to speak. At the same time it overruled that portion of McConnell v. Federal Election Commission, 540 U.S. 93 (2003) that upheld the restriction of corporate spending on “electioneering communications”. The Court’s ruling effectively freed corporations to spend unlimited money both on “electioneering communications” and to directly advocate for the election or defeat of candidates (although not to contribute directly to candidates or political parties). Combined with the court’s decision to strike down restrictions on corporate spending in elections, this gives the corporations unlimited power in the sphere of communications which, next to finance and the military, is the dominant form of control in our modern society. If we look at the historical efforts of our society to provide an electorate with the necessary information for a free and fair choice, it is clear that the corporate “persons” are winning at our expense.

 

3) Finally the Court overruled Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990) which allowed a union’s right to advocate and contribute to political elections  while restricting contributions of commercial corporations. In striking down this distinction, they argue that the First Amendment does not tolerate prohibitions of speech based on the identity of the speaker. This further blurs the lines between economic and political democratic rights in elections since a commercial corporation’s members often do not have voting rights and, when they do, the voting rights are based on the number of shares a shareholder owns whereas in a union voting is based on the democratic principal of one person one vote. The present court argued that Austin was based on an “equality” rationale – trying to equalize speech between different speakers – that the Court had previously rejected as illegitimate under the First Amendment in Buckley v. Valeo. It is here that we most clearly see the confusion between, or the merging of, the concept of individual human social rights and the concept of individualism in the economic sphere which is based on the accumulation of wealth.  In Citizens United, the majority argued that the First Amendment purposefully keeps the government from interfering in the “marketplace of ideas” and “rationing” speech, and it is not up to the legislatures or the courts to create a sense of “fairness” by restricting speech.

 

4)  As a secondary corollary to the concept that they couldn’t distinguish between types of corporations, they criticized Austin’s reasoning that the “distorting effect” of large corporate expenditures constituted a risk of corruption arguing that the government had no place in determining whether large expenditures distorted an audience’s perceptions, and that the type “corruption” that might justify government controls on spending for speech had to relate to an individual transaction, not a “general perception”. According to the majority, “there is no such thing as too much speech.”[19] The public has a right to have access to all information and to determine the reliability and importance of the information.” Additionally, they did not believe that reliable evidence substantiated the risk of corruption or the appearance of corruption.

WE ALL KNEW IMMEDIATELY THAT CITIZENS UNITED WAS ABSURD

As we watch the drama unfold, the vision of the behemoth contributions made by corporations competing with the contributions of small, individual donors is, indeed, an overwhelming thought that turns our most cherished beliefs in an individual’s individual rights, democracy and equality on its head.

If there was any question, that Citizens United would not unleash the corporate hoards loose to buy elections it was crushed by the empirical data after the 2012 primary results.  Let’s just give one “general perception.” In the first 3 months of 2012,  outside private contributors spent approximately 800 times more in the last six months than in all the previous election years since 1990 combined. Mitt Romney — the biggest spender of them all — won handily over his opponents although nobody seemed to like him.



The June 5th recall election of Scott Walker in Wisconsin was just the coup de grace.  The failure of one the most popular grassroots people’s movement we have seen in years to recall Gov. Walker can be attributed, at least in large part, to the fact that  Walker’s corporate sponsors from out of state (and a good portion from just two ultra right-wing brothers, the Koch brothers) spent 60 million compared to the populist movement’s 4 million.

There are a couple of caveats to this analysis:

1) Many folks also blame the rather “lukewarm”  middle of the road approach of the Democratic Party’s DNC and the President for dragging down the support for the populist recall. But this, too, can be attributed to the influence of large financial donors to the DNC or the threat of the loss of such donations.

2) In a particularly paranoid view, the fact that Wisconsin has many of the “new” voting machines that can be hacked and  where it is next to impossible to prove the fraud, there were “warning alerts” and some are arguing that the election was stolen. Again, it is the corporate powers that be that generally determine the types of voting machines we use and, as they say, “Just because you’re paranoid doesn’t mean it isn’t true.”

THE ENEMY IN OUR OWN HEADS

In the end, the Citizen’s United decision was just the final nail in the coffin in a long line of government decisions that buried our aspirations for the democracy and individual freedoms promised us in the Declaration of Independence and the Bill of Rights. But the worst betrayal may be the betrayal we perpetrate on ourselves. As we helplessly watch corporate money takeover our elections, we pretend it isn’t happening.

Oh, we might talk the good game about fighting back. We start talking about a Constitutional Amendment that “corporations cannot be persons” — but how would we get it passed when most of our congress people, at both the federal and state levels, who must pass or ratify such an amendment, are susceptible to, if not outright paid for, by corporate wealth?

Or we could target our corporations directly through our votes as shareholders.  The fact is small investors do not hold enough of the shareholder wealth to make many inroads. And in large, multinational corporations the decision making is so removed from the shareholders that even where we might control a large block of stock (i.e., our pension funds) we have little or no control over the decision-making process.

Although more and more of us understand the fact that we live, not in a democratic republic (as we were taught in school), but under a plutocracy, most still suffer from what Richard Grossman and Ward Morehouse in Revoking the Corporation, call the “colonization of our minds”, the corollary of which is the “TINA” (There Is No Alternative) phenomenon.

According to Grossman and Morehouse, the fact is there are alternatives to this “way of life”. But in order to change this society we must transform our own conditioned thinking from that of programmed consumer into liberated citizen. And this requires an understanding of how we have been “programmed.”

First, corporate person-hood is simply a legal construct conferred upon corporations exclusively under the law of the United States. Corporations were given certain rights and responsibilities similar to those of an individual so they could do certain economic transactions. However, there is a question about which rights afforded to natural persons should also be afforded to corporations as legal persons.

Much of the confusion in how to deal with the current corporate takeover is a result of the historical fusion between individual political rights described in the Declaration of Independence as the pursuit of “life, liberty and the pursuit of happiness” and the role of an individual’s economic rights such as the right to private property, upward mobility and the accumulation of wealth associated with capitalism that were developing at the same time. It is interesting to note that Locke, who put forth the original bourgeois democratic enlightenment treatise of natural rights defined it as the pursuit of “life, liberty and property.”

Most of us are programmed to think of America as the land of the free, of democracy and opportunity.  Much of that opportunity is economic as well as political. If we want free speech, we also harbor the belief that we, too, can become Bill Gates. If we want equality, we also want upward mobility. The American dream is signified by owning a home of our own. The dream of democracy ties Democracy and Freedom to the free market capitalist system.  And we are reluctant to give up that dream.  We aspire to be part of the great “middle class.” (Even the Wisconsin movement was defined as a “Middle Class” movement (which allowed the right wing to divide the “Middle Class” from the less fortunate members of the working class and might have been one reason for Scott Walker’s victory).

There is no denying that capitalism has, historically given many people the opportunity of upward mobility in its early stages.  Over the years, however, the promise of capitalism as a system that provides freedom and democracy is withering.  The United States in fact has the greatest disparity of wealth between the 1% and the 99% (to use the Occupy framework)and the least  social mobility of any industrialized country.

Economic individualism is the flip side of our individual political or public rights. The role of individual capitalist competition, in the long run, does not result in greater freedoms. In its pursuit of profit,  it results in winners and losers, a drive toward monopoly, the increased accumulation of private property in the hands of a few and unequal accumulation of wealth.  A look at the history of corporations in the United States makes this clearer.

A HISTORY OF HOW CORPORATIONS ARE GOBBLING UP THE WORLD

British Crown Corporations began operating in North America with the start of European settlement. The creation of corporations expanded empire and made the aristocracy wealthy. Colonial anger and resentment against corporate power grew as the English Parliament introduced measures that protected trade by Crown corporations over that of local colonial merchants.

After the American Revolution sovereign power was allegedly transferred from a monarch to “We the People.” Of course, “We, the People,” was still, at that time, the merchant class and constituted only 10% of the population — excluding slaves, property-less people, people of color, women, etc.  The corporate form, however, still had a certain utility for the merchant class in aggregating capital for large scale projects, which is why “the people” allowed them to exist at all. In 1819, the Supreme Court of the United States (Dartmouth College v. Woodward) recognized corporations as having the same rights as natural persons in the economic sphere to make and enforce contracts.

Of course the concentration of capital that goes along with the establishment of corporations also brings with it inherent risk for the populace. For this reason the formation of corporations was restricted to parameters set up by state constitutions and constrained by specific limitations in the state codes. The early 1800s frequently reiterated the fact that corporations could only be created for public benefit.

When we look at the history of our states, we learn that citizens intentionally defined corporations through charters–the certificates of incorporation. In exchange for the charter, a corporation was obligated to obey all laws, to serve the common good, and to cause no harm. Early state legislators wrote charter laws and actual charters to limit corporate authority, and to ensure that when a corporation caused harm, they could revoke its charter. Having thrown off English rule, the revolutionaries did not give governors, judges or generals the authority to charter corporations. Only state legislators (closest to the people) could charter corporations. Up to the mid-1800s:

•The amount of capitalization a corporation could have was limited.

•The corporation had to be chartered for a specific purpose — not for everything, or anything.

•The shareholders (even though it was still based on the amount of share, not a one person, one vote rule)had a lot more rights than they have today, for major decisions such as mergers; sometimes they had to have unanimous shareholder consent.

•There were no limitations protections on liability — managers, directors, and shareholders were liable for all debts and harms and in some states, doubly or triply liable.

•The states reserved the right to amend the charters, or to revoke them, even for no reason at all.

•Corporations had limited duration, 10 years, 20 years, 30 years.They were not given forever, like corporate charters are given today.

•The amount of land a corporation could own was limited.

Still, as the 19th century matured, manufacturing in the U.S. became more complex as the Industrial Revolution generated new inventions and business processes. The favored form for large businesses became the corporation because the corporation provided a mechanism to raise the large amounts of investment capital large business required, especially for capital intensive yet risky projects such as railroads.

The Civil War accelerated the growth of manufacturing and the power of the men who owned the large corporations. Businessmen such as Mark Hanna, sugar trust magnate Henry O. Havemeyer, banker J. P. Morgan, steel makers Charles M. Schwab and Andrew Carnegie, and railroad owners Cornelius Vanderbilt and Jay Gould created corporations that influenced legislation at the local, state, and federal levels as they built businesses that spanned multiple states and communities. Beginning in the 1870s, corporate lawyers became bolder about using the Webster/Marshall theory that corporations could exercise the rights of their shareholders, arguing that as such they were entitled to some of the legal protections against arbitrary state action accorded also to natural persons.

In the late 19th century, railroads were among the most politically powerful corporations in the country as the corporate officers had to work with federal and state legislatures in order to obtain land grants for rights of way and the legislatures. One of the most egregious examples of railroad magnates exploiting the public coffers for private gain was that most of the land offered for free under the Homestead Act for poor landless farmers toward the end of the civil war was in fact gobbled up by the railroads.

As railroads increased their size, a number of conflicts between various states and the railroads began to surface. In four cases that reached the Supreme Court (94 U.S. 155, 94 U.S. 164, 94 U.S. 179, 94 U.S. 180 (1877) railroads tried to argue that the Fourteenth Amendment prevented states from regulating the maximum rates they could charge. These cases did not rely on just an interpretation of the Fourteenth Amendment, but also on the Interstate Commerce clause. In each case, however, the Court based its decision on the Interstate Commerce clause. While the social contract has expended to many groups over the centuries, the corporations have also consolidated their power.  In every case where the social project conflicted with the commercial project, the capitalist commercial project used its wealth to prevail.

Throughout the 1800s but especially after the Civil War, pressure from industrialists and bankers resulted in a handful of judges giving  corporations  more rights in property than human beings enjoyed. The biggest blow to citizen constitutional authority came in 1886. The US Supreme Court, in a statement that was accepted as part of the ruling in Santa Clara County v. Southern Pacific Railroad, that a private corporation was a “natural person” under the US Constitution, sheltered by the 14th Amendment which requires due process in the criminal prosecution of “persons.”

Following this ruling, huge, wealthy corporations were allowed to compete on “equal terms” with neighborhood businesses and individuals. “There was no history, logic or reason given to support that view,” Supreme Court Justice William 0. Douglas wrote 60 years later. Once corporations were legally defined as “natural persons”, they automatically were endowed with the same “Bill of Rights” as human beings, and so came to possess and then exploit with devastating consequences, the same “rights” of the freedom of speech, and the ability to participate in elections and lobby elected officials.

RECENT DECISIONS LEADING UP TO CITIZENS UNITED

In more recent decisions prior to Citizens United, a similar shift of citizens control to corporate control has been occurring in the communications sector, much as the manufacturing sector was taken over during the industrial revolution. In the more modern cases, a shift from legislative control to control through the Executive branch and its agencies and the courts, where corporate influence can more easily be applied, enabled the corporate takeover. Two examples are the Fairness Doctrine and the Equal Time Rule.

For example, The Fairness Doctrine was a policy of the United States Federal Communications Commission (FCC), introduced in 1949, that required the holders of broadcast licenses to both present controversial issues of public importance and to do so in a manner that was, in the Commission’s view, honest, equitable and balanced. The Fairness Doctrine had two basic elements: It required broadcasters to devote some of their airtime to discussing controversial matters of public interest, and to air contrasting views regarding those matters. Stations were given wide latitude as to how to provide contrasting views: It could be done through news segments, public affairs shows, or editorials. The doctrine did not require equal time for opposing views but required that contrasting viewpoints be presented.

In 1985, under FCC Chairman Mark S. Fowler, a communications attorney who had served on Ronald Reagan’s presidential campaign staff in 1976 and 1980, the FCC released a report stating that the doctrine hurt the public interest and violated free speech rights guaranteed by the First Amendment. In August 1987, under FCC Chairman Dennis R. Patrick, the FCC abolished the doctrine by a 4-0 vote, in the Syracuse Peace Council decision, which was upheld by a panel of the Appeals Court for the D.C. Circuit in February 1989.[13] The FCC suggested in Syracuse Peace Council that because of the many media voices in the marketplace, the doctrine be deemed unconstitutional, stating that:

“The intrusion by government into the content of programming occasioned by the enforcement of [the Fairness Doctrine] restricts the journalistic freedom of broadcasters … [and] actually inhibits the presentation of controversial issues of public importance to the detriment of the public and the degradation of the editorial prerogative of broadcast journalists.”

In August 2011 the FCC formally removed the language that implemented the Doctrine.

A similar fate was met by the equal-time rule which specifies that U.S. radio and television broadcast stations must provide an equivalent opportunity to any opposing political candidates who request it. This means, for example, that if a station gives one free minute to a candidate on the prime time, it must do the same for another candidate. However, there are four exceptions: if the air-time was in a documentary, bona fide news interview, scheduled newscast or an on-the-spot news event the equal-time rule is not valid. Since 1983, political debates not hosted by the media station are considered news events, thus may include only major-party candidates without having to offer air time to minor-party or independent candidates. Talk shows and other regular news programming from syndicators, such as Entertainment Tonight, are declared exempt from the rule by the FCC on a case-on-case basis.



IS THERE HOPE?

Ward Morehouse, speaking in Palo Alto this past January 29th, spoke of “The Seven Challenges” we face in order to get out of the mess we are currently in. While some of them seem to presume we can still control the actions of our elected officials by working inside the existing Capitalist Plutocracy, they are still worth some thought:

1. We have to come to grips with is how to overcome this colonization of our minds and to recognize that there are alternatives to a society dominated by giant corporations.

2. Our second challenge involves taking a lesson from the play book of the corporations who […] have spent the last century or more consolidating their power and insulating themselves from meaningful democratic control. We need therefore to try to change a body of legal doctrine rather than fight case after case after case of corporate transgression.

3. Our third challenge is to resist the temptation for co-optation and accommodation and not to accept as “victories” those which leave corporate power unchallenged and intact.

4. Our fourth challenge is to recognize the myth of American democracy and to overcome the plutocracy with which we live. All societies have myths about themselves. Ours is no exception.

5. The fifth is to understand that we will never win in this struggle if we play by their rules because they wrote the rules.

6. Our sixth is to determine how we know when we really have won in the struggle against corporate power, and I would submit to you that we only really win when there is a fundamental shift in power from corporations back to the people where it was in the first place, and should be again [Can we really  go back to regulated corporations like we had in the “good old days”, long before we had global multinationals or must we move forward to some new formation?]

7. The seventh challenge is to take to heart the big lessons of 20th century history, and not to be discouraged by the challenges that indeed do confront us. It was said no where better or more eloquently than by Howard Zinn in one of his recent books, when he wrote that, “[t]he struggle for justice should never be abandoned because of the apparent overwhelming power of those who have the guns and the money, and who seem invincible in their determination to hold onto it. That apparent power has again and again proved vulnerable to human qualities less measurable than bombs and dollars: moral fervor, ingenuity, courage, patience. Whether by blacks in Alabama and South Africa, peasants in El Salvador, Nicaragua, and Viet Nam, or workers and intellectuals in Poland, Hungary and the Soviet Union itself. No cold calculation of the balance of power need deter people who are persuaded that their cause is just.”

Morehouse then went on to present tactics for establishing democratic control over corporations. [Some of which I think might also be tactics for a more far reaching evolution to a different economic system].  Here is an eleven-point program for doing just that:

1. We can start by revoking the charters of especially harmful corporations who have inflicted mass harm on innocent people. There are provisions for the revocation of charters in 49 of the 50 states. They have some provisions similar to that in the New York Business Corporation Law, Section 1101, which specifies that corporations that act contrary to the public policy of the state are subject to dissolution.

2. We can recharter corporations to limit their powers and make them entities subordinate to the sovereign people. For example by granting charters (as used to be the case) for limited time periods, requiring that there be a conscious, deliberate act of approval by communities and workers for corporations to continue beyond the initial time in which they have been chartered. For making corporate managers and directors liable for the harms done by corporations. (If this can be done through a referendum which we have in many states, instead of the state legislature, this might be a real possibility, especially if we only approve charters for corporations where shareholders have voting rights based on one shareholder, one vote.)

3. We can address what is a fundamental obstacle to democratic control over corporations, which is their sheer size. Many of you are well aware that the largest corporations today are larger than most nation-states. General Motors has gross income greater than the gross domestic product of Denmark. So we need to reduce the size of corporations by breaking them into smaller units with less power to undermine democratic institutions. For those of you who think this is a wild flight-of-fancy, I would remind you that as an issue in public policy, this has historical precedence in the Public Utility Holding Company Act of 1935 which did just that: it said certain public utility companies will divest themselves because they may not be larger than a given set of criteria determined through a democratic process. (Maybe — but it woud be a much bigger struggle today with the degree of corporate control and a global economy.)

4. We need to establish effective worker and community control over production units in order to protect the “reliance interest”, an important, if not fully developed, legal doctrine which workers and communities acquire over time in the actions, the activities, and indeed the assets of corporations. This could be done in a variety of ways including prohibitions in the charter of the corporation in the future, prohibitions for the hiring of replacement workers (scabs in other words), requiring independent health and safety audits by experts chosen by workers in the affected communities, required voting rights in corporations based on one worker, one vote, and so on.

5. We can initiate referendum campaigns, or take action through state legislatures and the courts, to end constitutional protections for corporate persons.

6.  We can prohibit corporations from making campaign contributions to candidates in any elections, and from lobbying any local, state, and federal government bodies. If you think this is off-the-wall, you should be aware that in the state of Wisconsin, up until a couple of decades ago, it was a felony for corporations to make political contributions. (Why do you think the right wing spent the last couple of decades buying Presidential candidates and making sure they got Supreme Court Justices who would pass Citizens United?)

7. We can stop subsidy abuse and extortion by corporations through which large corporations rake off billions of dollars from the public treasury. Please let us not call it “corporate welfare”. Welfare should be a positive concept. This is extortion and subsidy abuse and we need to stop it.

8. We need to launch campaigns to cap salaries of corporate executives, and tie them to a ratio of average compensation for production workers (say, five or ten to one).

9.  We can encourage worker and community-owned and controlled cooperatives and other alternatives to conventional limited liability profitmaking corporations. They need not be the only game in town, in fact they are not the only game in town. But we need to work hard to expand alternative types of enterprises that will subject themselves to genuine democratic control.

10. We can prepare model state corporation codes based on the principle of citizen sovereignty, and begin the campaign for their adoption, state-by-state.

11. We can invigorate, from the grassroots up, a national debate on the relationship between public property and private property — including future value – and the rights of natural persons, communities, and other species when they are in conflict with those corporations. This whole subject of how we define property rights is at the heart of much of the accumulation and codification of corporate power. ←THIS IS WHERE I’M STARTING!

REFERENCES:

This is a reprint of a Daily Kos article and I tried to get the extensive references to print but just could not make it work. Sorry. If you wish to see the references, you’ll have to travel to the original post.