People For the American Way

Edit Memo: Take Back the Constitution from the Corporate Court


Contact: Miranda Blue or Justin Greenberg at People For the American Way

Email: [email protected]

Phone Number: 202-467-4999

To: Interested Parties
From: Jamie Raskin, People For the American Way
Re: Take Back the Constitution from the Corporate Court
Date: July 23, 2012

The American people have been forced several times to amend the Constitution to reverse the damage caused by the Supreme Court when it acts in collusion with the enemies of social justice and popular democracy.

In 1857, in the Dred Scott decision, the Supreme Court ruled that white supremacy was built into the Constitution as the original intent of the Framers, that African-Americans therefore could not be citizens entitled to bring suit in federal court, and that African-Americans had no rights that the white man was bound to respect. After the Civil War, the Radical Republicans moved to reverse that infamous decision through the 13th, 14 th and 15th Amendments, which abolished slavery, proclaimed equal protection and due process under the laws, and protected the right to vote of all citizens regardless of race.

In 1875, in Minor v. Hapersett, the Court ruled that the Equal Protection Clause did not protect the right of women to vote, declaring that the domestic sphere was women’s proper place. In response, the suffragists mobilized campaigns in the state legislatures and Congress, committed civil disobedience by chaining themselves to the White House fence, and accomplished passage in 1920 of the 19th Amendment.

In 1937, in Breedlove v. Suttles, the Court rejected an Equal Protection attack on the imposition of poll taxes as a condition for voting. This decision cemented the plutocratic and racist practice in many Southern states but the Civil Rights Movement finally won passage of the 24th Amendment in 1964 banning poll taxes in federal elections. Still, many states continued to charge poll taxes for voting in state elections, a practice that did not end until the Court read the 24th Amendment as changing the meaning of Equal Protection and struck it down in Harper v. Virginia Board of Elections (1966).

Indeed, most of the 17 constitutional amendments passed since the Bill of Rights have been franchise-expanding and democracy-reinforcing provisions that strengthen the progress of what Lincoln called “government of the people, by the people and for the people.”

Of the Corporations, By the Corporations, For the Corporations

Now, in the bitterly divided Citizens United decision (2010), five Justices on the Roberts Court have held that corporations have the right to spend unlimited sums of money promoting or disparaging political candidates. This decision – built on the dangerous fallacy that state-chartered corporations enjoy the same political free speech rights as the people – strikes another dangerous blow against popular democracy. It is a blueprint for government of the big corporations, by the big corporations and for the big corporations.

Citizens United upended the bedrock understanding, more than a century old, that corporations, because of their “artificial” nature and all of the legal benefits bestowed upon them, have no “money speech” rights in political campaigns. The decision capsized at least four prior Court decisions, wiped out dozens of federal and state laws banning corporate political expenditures that go back more than sixty years, and undermined the rationale for the federal ban on corporations giving contributions directly to candidates that began with the Tilman Act in 1907.

The new doctrine is that, when it comes to campaign finance rights, the “identity of the speaker” is wholly irrelevant, and corporations have a First Amendment right to spend freely in politics because the speech they purvey is intrinsically valuable. Followed faithfully to its logic, this amazing doctrine protecting corporate political spending in the name of speech by citizens will end up not only toppling the ban on direct corporatecontributions to candidate campaigns but also empowering churches, non-profit corporations, aliens, cities (municipal corporations), states and foreign corporations to spend their treasury money on behalf of political candidates too, both as campaign spenders and campaign donors. If the identity of the speaker is irrelevant, well, then, the identity of the speaker is irrelevant – unless, of course, this triumphantly proclaimed categorical doctrine is, like the decision in Bush v. Gore, actually a one-way ticket good only for special persons and classes favored by the ruling faction on the Court.

Furthermore, James Bopp and the other pro-corporate lawyers driving this train are also now making clear that they want to do away with the campaign finance disclosure laws that we were originally told were the certain antidote to a full-blown corporate takeover of our politics. Today, corporate conservatives challenge campaign finance disclosure requirements as unconstitutional compelled speech, like making Jehovah’s Witness school children pledge allegiance to the flag. They argue that corporations should not have to disclose their political expenditures and contributions at all because they will face intimidation and reprisal, even – God forbid – boycotts, from consumers who disagree with their political commitments. In other words, corporations have a right to speak because they are like citizens, but they should be completely insulated from the speech reactions of real citizens and given the power to channel their money not only massively but secretly to promote the corporate bottom line. This is some “marketplace of ideas” that the champions of corporate power have in mind for our democracy.

Many people have read Citizens United as establishing rights of “corporate personhood” but that step was taken long ago by another corporate-friendly Court, acting under the Equal Protection Clause, in the Santa Clara County v. Southern Pacific Railroad decision in 1886. The Court has essentially recognized since that time that, since the property of real people is tied up in artificial corporations, it cannot be taken or seized outside of the ordinary protections of the constitutional system. But Citizens United advances a far more radical proposition: corporations must be treated not just fairly as economic entities but as equal rights-bearing political citizens of the Republic that may use the vastly greater wealth and resources they have earned from their economic activity to win political power and favorable public policy. This is not corporate personhood, as everyone says; it is super-personhood.

Conservative Judicial Activism Triumphant

The parties in Citizens United had not even asked the Supreme Court to reach this radical result. Indeed, the five conservative jurists sympathetic to Citizens United in the case had available to them numerous statutory routes for finding that the group had a right under the Bipartisan Campaign Reform Act to release its anti-Hillary Clinton movie before the 2008 election. As Justice Stevens suggested in dissent, an on-demand movie that people have to order is nothing like a ubiquitous television ad, and the vast majority of the money raised by Citizens United was from individual political contributions, only a de minimis amount from for-profit corporate sources–a situation that offered another easy way to find for Citizens United without overturning many decades of jurisprudence.

But the conservative justices obviously had much bigger game to kill. They ordered the parties to go back and brief and argue the big question they wanted to answer. And what do you know, after looking at the question they posed, the 5-justice bloc discarded the central canon of “constitutional avoidance” (the judicial preference for deciding cases on statutory rather than constitutional grounds whenever possible and interpreting statutes whenever possible so as not to create constitutional conflict) and came back with a decision that amounts to a declaration of political independence for corporations.

This decision reflected the triumph of a conservative judicial activism that has been pushing hard for decades to make corporate power king in our politics. One key player in this drive was corporate lawyer Lewis Powell, who wrote a memorandum to the Chamber of Commerce in August 1971, just two months prior to his nomination by President Richard Nixon to the Supreme Court, proposing a strategy for restoring corporate political dominance in the country. Once on the Court, Justice Powell authored the thin majority opinion in First National Bank of Boston v. Bellotti (1978), which gave banks and corporations the right to spend unlimited amounts of money in public initiative and referendum campaigns and first floated the radical concept that, when it comes to corporations seeking the right to be financial players in politics, the “identity of the speaker” is wholly irrelevant. Corporations are plain old folk, just like you and me.

The victory of the corporate mindset on the Court became complete in the first decade of the 21st century. Five conservative justices began the decade by shutting down the manual counting of more than 100,000 ballots in Florida and brazenly deciding the 2000 presidential election for George W. Bush, the candidate of right-wing corporate power. Since the next two Court vacancies were filled by Bush, the Court’s conservatives engineered a dramatic pro-corporate makeover of the Court. As a result, five conservative justices ended the decade by authorizing corporations to become key money actors in every election in a way that no one had seen since the Watergate period when big businessmen passed bags of cash to President Richard Nixon’s operatives and bagmen.

Demolishing the Wall of Separation Between Corporate Treasuries and Public Elections

To appreciate the radicalism of Citizens United requires an understanding of what the law was before 2010. Corporations could lobby Congress, states and localities and spent billions of dollars doing so. They could spend freely on “issue ads” promoting their policy positions and castigating their critics. They could spend money on voter registration drives and on internal corporate campaigning. They created Political Action Committees (PACs) and solicited contributions to them from their CEOs, executives and directors; the PACs could then contribute money directly to federal candidates or spend independently. Meantime, CEOs, other executives and directors—people whose income and wealth have soared over the last several decades in relation to the rest of the country – contributed directly to federal, state and local candidates as individuals. In other words, despite all of the ludicrous whining by Citizen United’s defenders, the corporate perspective was never missing in American politics.

But there was one crucial thing that CEOs could not do prior to this outburst of right-wing judicial activism: they could not reach into their corporate treasuries to spend directly to advocate on behalf of (or against) the election of candidates for Congress or President.This prohibition essentially established a wall of separation between corporate treasury wealth and federal public elections. This wall was first erected by the Tillman Act of 1907 banning corporate campaign contributions to federal candidates; a policy decision advocated by President Theodore Roosevelt and made after a series of scandalous raids by insurance company executives on what Louis Brandeis called “other people’s money” to finance the campaigns of friendly politicians. The wall was fortified over the last century by progressively stronger bans on independent corporate expenditures enacted in both federal and many state laws These bans were affirmed by the Supreme Court in Austin v. Michigan Chamber of Commerce (1990) and McConnell v. FEC (2003), decisions which recognized the necessity of maintaining sharp distance between corporate wealth and democratic politics to prevent what the Austin Court called “the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public’s support for the corporation’s political ideas.”

The Roberts Court’s demolition of this wall of separation crushed a specific understanding of the corporation that goes back two centuries and had been accepted not only by liberals but by most of the leading conservative justices in our history. A corporation has never been seen as a constitutional person with voting rights or even as a political membership organization, but rather as an “artificial entity” chartered by the states or federal government to serve economic purposes. Chief Justice John Marshall wrote in the Dartmouth College case (1818) that, “A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of creation confers upon it, either expressly, or as incidental to its very existence.” Any constitutional rights claimed by corporations are totally derivative of natural persons and if those rights are separately vindicated for the individuals, the corporation will have none to claim.

In the Bellotti case, conservative Justice Byron White pointed out that we endow private corporations with all kinds of extraordinary legal benefits and subsidies – “limited liability, perpetual life and the accumulation, distribution and taxation of assets” — in order to “strengthen the economy generally.” But, he argued, a corporation has no constitutional right to convert its awesome state-enabled economic resources into political power. As he so cogently put it: “The state need not permit its own creation to consume it.” Chief Justice William Rehnquist agreed, arguing that business corporations, which are magnificent agents of capital accumulation and wealth maximization in the economic sphere, “pose special dangers in the political sphere.”

While champions of corporate political power pretend as if it would be impossible to disentangle corporations from politics, we have an easy model to follow, which is that of municipal corporations and states, which also have the capacity to “speak” on policy issues through their leaders but no constitutional right to spend money in our political campaigns. Of course, if the “identity of the speaker” is truly irrelevant, as the new dogma insists, then cities and states will inevitably come to acquire the corresponding right to spend money in politics influencing people’s votes. Of course, this would be a bizarre inversion of democratic relationships—the same kind of inversion effected by Citizens United itself. Yet, if we fail to pull back from treating corporate wealth as a fountain of political expression, we may be forced to get cities and states involved as political actors as a very modest counterweight to the awesome power of the private corporations. Of course state and municipal governments captured by corporate-backed elected officials could just as well come to promote, rather than counter, the already-immense political voice of private corporations. At a certain point, Big Business and Big Government will just merge.

Enthroning Corporations

By demolishing the wall separating our campaigns from the trillions of dollars of corporate wealth in America, the Roberts Court has enthroned for-profit corporations in our politics and proved itself to be far to the right of the Rehnquist Court.

Consider what the decision might mean in the case of Exxon-Mobil, the nation’s largest company and a powerful political actor even before Citizens United.

In the 2008 election cycle, Exxon-Mobil’s PAC raised more than a million dollars from executives and directors, money that came from the pockets of real-live human beings (and could not be reimbursed to them by the corporation). That not insubstantial sum undoubtedly gave enhanced collective voice to whatever contributions the donors had made individually. Poor people don’t have PACs to compete, but fair enough, this is how the system has worked for many decades.

But imagine if Citizens United had already been the law.

In 2008 the company made $70 billion in profits. If the CEO had taken a modest 10% of those annual profits and spent $7 billion promoting the corporate agenda in elections that year, it would have been more than the Obama campaign, the McCain campaign, and every Senate and House candidate combined.

That’s one company in the Fortune 500. Multiply that new power by the other Big Oil players, the pharmaceutical industry, and the military-industrial complex, and you get a sense of how the Court has replaced the “one person one vote” relationship with the madcap ethos of Wall Street traders playing Monopoly and Risk with other people’s money. All of this money, by law and by the very definition of what a corporation is, must be spent advancing the company bottom line and increasing shareholder value . Concern for the local or national community is an irrelevant, and potentially wrongful and actionable, distraction from maximizing shareholder returns.

Of course, Exxon-Mobil need not spend anything like billions of dollars in order to make its point. If the CEO drew down a mere 1% of its annual profits to spend $700 million, this would be more than enough to propel its agenda and end the political careers of the two or three most difficult Members of the Senate and House, sending a sharp signal to all the others about the price of crossing its path.

We have already seen the difference that free-flowing corporate money makes. The 2010 election should have been defined by three recent corporate catastrophes–the BP Oil spill in the Gulf of Mexico, which wrecked an entire eco-system and inflicted billions of dollars of damage on the economy; the Massey company’s collapsing coal mines in West Virginia, which cost 29 people their lives and were made possible by the corporation’s aggressive lobbying and corruption of government; and the sub-prime mortgage meltdown brought to us by the misconduct and political machinations of AIG and Wall Street, which cost the American people trillions of dollars in lost home values (and lost homes), ravaged pension and retirement funds and destroyed stock equity.

But the massive infusion into the 2010 election campaign of tens of millions of dollars in corporate and personal wealth through secretive 501(c)4 and 501(c)6 organizations and the new super-PACs completely changed the subject away from these debacles. With 84 special-interest super-PACs in action and unknown numbers of 501c4 and 501c6 organizations pumping in secret money, the dominant theme of the election became—amazingly—the importance of further deregulating corporations. The Republican Party and the corporate-backed Tea Party captured control of the U.S. House of Representatives and brought near paralysis to national government. The corporate catastrophes experienced by the nation went unaddressed in the campaign and ignored by Congress.

Citizens United did not accomplish this feat alone but rather had a key strategic partner in SpeechNow v. FEC, another carefully staged 2010 right-wing legal production. This decision came from the U.S. Circuit Court of Appeals for the District of Columbia, which wiped out any limits on what individuals can give to independent expenditure campaigns and thus made Super-PACs what they are today. While Citizens United freed the corporations, SpeechNow emancipated the billionaires, like Sheldon Adelson, the casino king, whose $20 million Super-PAC spending kept Newt Gingrich’s 2012 presidential campaign on a system of parallel life support through barrages of negative advertising unleashed on Mitt Romney in the Republican primaries. After Romney won the nomination, Adelson put $10 million into an anti-Obama Super-Pac and promises to spend tens or even hundreds of millions dollars more to elect Romney president.

Today there are 577 Super-PACs and experts predict that more than $1 billion will be channeled into the 2012 election.

A Constitutional Amendment is Democratic Self-Defense

Amending the Constitution today to rebuild the wall of separation between corporate treasury wealth and political campaigns is an act not only of essential democratic self-respect but urgent democratic self-defense and self-preservation.

An Amendment gives us the chance to exorcise the plutocratic demons that have haunted us since the rise of industrial capitalism and were constitutionalized when the Court in Buckley v. Valeo ruled that wealthy individuals cannot be limited in their independent political expenditures. The Buckley Court dismissed as invalid a democratic interest in promoting the conditions for political speech equality. Ignoring the rigorously equal speech allotments we use in every major political and legal institution–including the Senate, the House of Representatives, and the Supreme Court itself, not to mention candidate political debates and the equal access rules governing broadcast radio and television, the Court simply declared that the “concept that government may restrict the speech of some [in] order to enhance the relative voice of others is wholly foreign to the First Amendment. . .” This was the moment when the Court drove a deep wedge between political liberty and political equality in favor of class power.

A constitutional amendment that empowers Congress and the states to regulate campaign contributions and expenditures would permit revival, on a viewpoint-neutral basis, of the essential but invalidated prohibitions on corporate political expenditures and unlimited billionaire spending. Such an Amendment could also reassert the public’s imperiled interest in campaign finance disclosure and, as Professor Laurence Tribe has pointed out, the public’s much-eroded interest in building public campaign financing regimes that make publically financed candidates at least minimally competitive with privately financed candidates–an interest that the Supreme Court has trashed of late, in cases like Davis v. FEC (2008) and Arizona Free Enterprise Clubs Freedom Club PAC v. Bennett (2011). In these decisions, the Court has, in essence, ruled that privately financed candidates backed by wealthy interests have not only a right to spend to the heavens to win office but a right to freeze their financial advantages over publically financed candidates, whose campaigns may not be subsidized or aided by government in any way to enlarge their power to communicate effectively against candidates of massive private wealth. Here, as distorted beyond recognition by the Roberts Court, the First Amendment becomes not the guardian of equal democratic liberties but the guarantee of unequal protection of the laws.

Many civil libertarian stalwarts, like Burt Neuborne and Professor Geoffrey Stone, have not fallen for this prostitution of the First Amendment and some have expressed strong support for a constitutional amendment to undo the damage.

But it is a matter of some melancholy that others, like the esteemed Laura W. Murphy, head of the Washington office of the ACLU, have been condemning a constitutional amendment strategy. Murphy wrote in the Huffington Post that, “The Constitution’s radical stability is its greatest strength.” But the people have repeatedly amended the Constitution when the Supreme Court makes common cause with the opponents of popular democracy. As Justice Thurgood Marshall observed in his famous speech on the Bicentennial of the Constitution, “the true miracle was not the birth of the Constitution, but its life, a life nurtured through two centuries of our own making . . .”

Yet, Murphy argues that this proposed Amendment would be different from others because “this would be the first amendment in history to limit individual, constitutionally guaranteed rights.” This claim is flawed for two reasons. The first is that the Citizens United case extended no new rights to any individual citizens, with the singular exception of individual CEOs who now enjoy the “right” to write checks from their corporate treasuries to advance or disparage political campaigns. The right to spend our ownmoney in politics was one already enjoyed by every citizen.

The second problem is that, throughout American history, there have been loud complaints that progressive constitutional amendments strip certain people of preexisting rights. The slavemasters and their apologists were adamant that the 13th Amendment deprived them of their property rights – and surely it did under existing law; similarly, many white males felt as if the weight of their votes were diluted by the addition of black and women voters–and surely they were; the opposition to the 16th Amendment on income tax was organized around property rights and some people’s aversion to taxes; and so on. It is simply false to say that kicking corporate money out of political campaigns would be the first time that a constitutional amendment would realign the balance of rights in our country or make some people feel as if they are losing an edge in the legal system.

Plutocracy Distorts the Market as well as Our Politics

We have to face the fact that the new regime being developed by the Supreme Court is straight-up plutocracy, rule by the wealthy, and its structural foundation is private corporate wealth. Defenders of the regime like to point out that there are tens of thousands of corporations in America, most of them small, but this is an irrelevant distraction from how the corporate “wealth primary” works in the real world. Major industries that have an “extractive” character and a parasitic relationship on government—Wall Street, Big Oil, Big Pharma, major military contractors like Haliburton—cultivate a financial dependency in politicians which permits the corporations to continue what economists call “rent-seeking” arrangements with the government.

These arrangements operate on a simple investment and return basis: corporations invest several million dollars in campaigns and lobbying, collect an astounding return of hundreds of millions or billions of dollars in tax breaks, corporate welfare, corporate warfare, sweetheart contracts, big bailouts, deregulation, and inside deals. This squalid form of “public policy” is splendid for the corporations involved but dismal for everyone else, including the smaller businesses that do not have the finance capital to invest in the political system. A plutocratic state denies both political justice and a fair and competitive market economy in which businesses thrive by virtue of their creativity and initiative rather than the size of their campaign spending and their stable of lobbyists. Adam Smith would be just as appalled as Thomas Jefferson and John Adams at this state of affairs.

America has a market economy, which has served us very well in many ways. But we cannot afford to have a total market society in which major corporate power is dominant in our politics, superior to the voices of the people, and controlling of major public policy questions. We should want all private corporations, even the larger ones, to succeed, innovate, create, thrive and prosper, but never to govern and thereby thwart the will – and replace the essential political sovereignty – of the people.

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Jamie Raskin is a professor of constitutional law at American University’s Washington College of Law and a Democratic State Senator in Maryland where he chairs the Special Committee on Ethics Reform and serves as Majority Whip. He is the bestselling author of several books, including Overruling Democracy: The Supreme Court versus the American People and We the Students: Supreme Court Cases for and About Students. He is also a Senior Fellow at People For the American Way. He can be reached at [email protected].