This article originally appeared in the Winter 2011 edition of the Fairhaven Free Press. It examines Citizens United Supreme Court case and the origin of the idea of corporate personhood.
In January of 2010, the Supreme Court issued a controversial ruling that granted new rights to a certain kind of person. Some of these persons are immortal. Some are multinational. Many of them are wealthy. Some of them sell fast food, produce insecticides and, because of the decision in Citizens United v. Federal Election Commission, can legally provide unlimited funding to political campaigns.
These persons are known as corporations. The conflict that led to Citizens United began as an argument about whether trailers for a documentary could be broadcast a few weeks prior to the presidential primary elections in 2008. The 5-4 decision passed by the court not only allowed the trailers and documentary to air, but also declared corporations have a right to free speech under the First Amendment. Additionally, the ruling relaxed regulations on corporate funding of elections.
A report from the Public Citizen Foundation, which showed that funding from big businesses for the 2010 mid-term election campaigns was $294.2 million, a dramatic increase from $68.9 million from the 2006 midterm election.
“The 2010 figures nearly matched the $301.7 million spent by outside groups in the 2008 presidential cycle. Because spending in presidential cycles normally dwarfs spending in midterm elections, the uncharacteristically high spending in 2010 presages blockbuster spending in the upcoming 2012 elections,” according to the Public Citizen report.
The report also mentions that nearly 50 percent of the total $294.2 million came from only 10 groups. In the wake of the Citizens United decision, fewer donors to campaigns disclosed their funding sources before the election. The report ignored party committees in its tally of 308 organizations and corporations that financially influenced the 2010 election. Only 166 of these donors revealed the sources of their money.
“Among the top 10 groups, which accounted for nearly half of all spending, seven disclosed nothing about their donors. These seven groups accounted for 73.6 percent of the total amount spent by the top 10 groups,” according to the Public Citizen report.
Chris Kromm, executive director of the Institute for Southern Studies, explored how unlimited money from big businesses has changed the political process in this country in an article posted on alternet.org.
“[The Citizens United ruling] opened a massive loophole in our country’s already porous campaign finance system, giving corporations the green light to inject unlimited sums of cash into independent groups—527s and 501c4s, references to their IRS tax status—that can intervene in elections,” he wrote.
Before the Citizens United case, corporations funneled money into political action committees (private groups that organize to elect specific candidates or further particular legislation) and used other methods to offer financial support to campaigns and candidates, Kromm wrote.
He also notes data from the report showing that out of 75 congressional races, 60 of the candidates who relied on outside funding emerged victorious. In other words, 80 percent of these candidates had successful campaigns sponsored by external (and often undisclosed) sources.
Todd Donovan, a political science professor at Western Washington University, noted that the Citizens United ruling makes it easier for corporations to contribute large sums of unregulated money to campaigns. After Citizens United, campaign contributions have changed, but elections are still inundated with money.
While the amount of money for the midterm elections increased, Citizens United may not be completely responsible for the greater amount of donations. A substantial conservative interest in the outcome of 2010 midterm election may have also caused the leap in spending, Donovan said. Most of the top 10 groups cited in the Public Citizen report support right-wing interests.
“There’s more at stake as government starts regulating more and doing more and groups are going to start throwing more money [at elections],” Donovan said.
He added that a drawback to the ruling is previous regulations on advertisements during elections have been removed. Many special interest groups run attack ads that crowd out messages from candidates and surround elections with negativity. Donovan mentioned he is also concerned about the arbitrary disclosure process for donors to political campaigns.
Although Justice Anthony Kennedy assumed that further disclosure of donors in elections would result from the Citizens United ruling, the evidence from the 2010 midterm election indicates that many financial sources were not publicized. One method corporations use to circumvent disclosure laws is to claim protection under the First Amendment. They also claim their business could be undermined if they disclosed the sources of money they donated to elections.
While the Supreme Court upheld disclosure laws in Citizens United, congressional democrats knew the laws were going to be adversely impacted by the decision, according to Donovan. Some members of Congress were already drafting legislation that would compel political advertisements to show, for example, the name of the CEO of the company that sponsored the ad. The ruling was an opportunity for Congress to force more disclosure legislation and limit the influence of foreign-based corporations on U.S. elections, but it did not happen, Donovan said.
Citizens United overview
The origins of this case began when the activist organization Citizens United produced a film titled “Hillary: The Movie.” The website for the documentary declares, “If you want to hear about the Clinton scandals of the past and present, you have it here!” The description notes that “Hillary: The Movie” includes nearly 40 interviews “with experts, opinion makers, and many of the people who personally locked horns with the Clintons” such as Newt Gingrich and Ann Coulter. Every complete sentence in the description concludes with an exclamation point.
The issue Citizens United faced by airing trailers for “Hillary: The Movie” concerned restrictions on “electioneering communication,” which is a term for “any broadcast, cable, or satellite communication [that] refers to a clearly identified candidate for federal office,” according to the Supreme Court decision. The Bipartisan Campaign Reform Act of 2002 explicitly states that corporations and unions cannot use finances from their treasuries to produce electioneering communication.
A turning point in the case arose when Citizens United claimed that as a corporation, they were entitled to protection by the First Amendment. They argued that their right to free speech was being threatened by the FEC. Citizens United wanted to advertise and show their documentary regardless of when the election was (There was a specific ban on airing electioneering communication within 30 days of when an election occurs.). The majority of the justices agreed that censoring “Hillary: The Movie” breached the First Amendment and, as documented in the case proceedings, previous Supreme Court rulings about regulating corporate funding of political campaigns were reinterpreted to support the outcome of Citizens United.
The Washington Post reported reactions from various politicians the day the Citizens United ruling was announced. President Obama expressed that he would work with Congress to immediately initiate “a forceful response” to the decision.
“[Citizens United] 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,” he said.
Former Republican presidential candidate and one of the sponsors of the BCRA, John McCain, declared his opposition to the ruling.
“I am disappointed by the decision of the Supreme Court and the lifting of the limits on corporate and union contributions,” he said.
Not all of the reactions to the Citizens United ruling were negative. Senate Minority Leader Mitch McConnell, for example, praised the decision.
“For too long, some in this country have been deprived of full participation in the political process,” he said. “With today’s monumental decision, the Supreme Court took an important step in the direction of restoring the First Amendment rights of these groups by ruling that the Constitution protects their right to express themselves about political candidates and issues up until Election Day.”
The chair of the National Republican Senatorial Committee John Cornyn was also in favor of the court’s decision.
“I am pleased that the Supreme Court has acted to protect the Constitution’s First Amendment rights of free speech and association,” he said. “These are the bedrock principles that underpin our system of governance and strengthen our democracy.”
Anthony Dick, author for the National Review Online, wrote an article supporting the ruling of Citizens United. He agreed with claims that political funding should be considered speech and therefore protected under the First Amendment.
“[S]pending money is an indispensable component of effective political speech, especially when it involves any audience above a trivial size,” he wrote.
Dick also disregarded the notion that corporations should be denied similar rights as people.
“[T]he First Amendment has long been extended beyond isolated individuals to groups and associations whose members gather for a wide variety of purposes ranging from political to commercial,” he wrote. He added the issue of granting corporations such rights was really a question of how freedom of expression should be interpreted in the U.S.
According to Dick many negative responses to the decision claimed it was an example of judicial activism. He rebutted such protests by asserting that the Supreme Court was faithfully preserving the rights of the First Amendment and there was no activism performed by the justices at all.
“The government argued in Citizens United that it had the power to outlaw books and movies produced by unions and corporations, both non-profit and for-profit, if they included even a single line addressing an election or a political issue,” he wrote.
Dissent
Former Justice John Paul Stevens composed the 90-page dissent for the Supreme Court decision, which he begins by noting that Citizens United is a wealthy nonprofit and its political action committee has millions of dollars that could have aired “Hillary: The Movie” at any time.
Stevens asserted that the basic dispute in the case is whether Citizens United used money from its own treasury to fund the documentary.
“The notion that the First Amendment dictates an affirmative answer [to the case] is, in my judgment, profoundly misguided. Even more misguided is the notion that the court must rewrite the law relating to campaign expenditures by for-profit corporations and unions to decide this case,” he wrote.
The interpretation of the First Amendment became a central and contentious issue in the case. Stevens disagrees with the view put forth by Dick that there is long history of free speech rights extending beyond individual people. He expresses that when the First Amendment was conceived, there was “not a scintilla of evidence” that predicted the legislation would later be used by corporations to deregulate campaign spending.
Besides, corporations of today are created and managed very differently than those of the 1700s. Stevens targeted Justice Antonin Scalia’s reasoning of the nebulous nature of the First Amendment in terms of exactly who or what it protects.
“Nothing in [Scalia’s] account dislodges my basic point that members of the founding generation held a cautious view of corporate power and a narrow view of corporate rights,” Stevens wrote.
Dick wrote that money has an important place in politics and has so much influence that it should be considered speech and protected by the First Amendment. Johann Neem, a history professor at Western, is critical of the Citizens United decision because it threatens the marketplace of ideas. He agrees with Dick that finances play an essential role in politics. Unlike Dick, Neem sees this as a vast inequity and detrimental to the democratic process.
“Money is a form of speech,” Neem said in an interview. “Any interest that has an issue at stake ought to be allowed to come to the table and enter the marketplace of ideas. The First Amendment protects the competition of interests.”
Neem continues noting that optimal organization is advantageous for participating in interest group politics. For this reason, it is harder for the public at large to organize and unite behind common causes. Organized interests are focused precisely on causes that further their agendas, Neem said.
Stevens continued his dissent mentioning the case failed to resolve what Citizens United and its political action committee are permitted to finance. Instead, the decision opened the door to greater corporate influence in elections.
“The court operates with a sledgehammer rather than a scalpel when it strikes down one of Congress’ most significant efforts to regulate the role that corporations and unions play in electoral politics. It compounds the offense by implicitly striking down a great many state laws as well,” he wrote.
The idea that the court revisited and manipulated other cases to come to a ruling on Citizens United is the basis for the argument that the decision was reached through excessive utilization of judicial activism, a topic which Dick addressed but claimed had no role in the final verdict.
The term judicial activism means that “Supreme Court justices (and even other lower-ranking judges as well) can and should creatively (re)interpret the texts of the Constitution and the laws in order to serve the judges’ own considered estimates of the vital needs of contemporary society,” according the definition on the website for Auburn University.
“Surely, the argument runs, [the Citizens United ruling] is judicial activism, and surely it reveals the critique of judicial activism as just a convenient tool by which conservatives decry decisions to which they object for political reasons, cloaking their real concerns in feigned constitutional principles,” wroteCarson Holloway, a political science professor at the University of Nebraska. His article appeared on The Witherspoon Institute’s website and discussed the inherent complications of judicial activism.
A key issue Holloway proposed is most justices, regardless of their political affiliation, developed an intellectual framework that causes them to value their own interests and beliefs more than the rights laid before the Constitution.
Further, Holloway suggests that judicial activism was present in Citizens United because the Supreme Court was deliberating with not only the meaning of the Constitution, but also with a judicial record, a history that has been built through previous cases. The court chose to reverse, in Holloway’s words, “the usual presumption of constitutionality.” In this case, rather than compelling Citizens United to explain why censoring their documentary was unconstitutional, the FEC was challenged to prove how censoring the documentary was constitutional.
Neem suggested that Citizens United might further corruption of the political process in the U.S. He explained that the court ruled that corruption can include the appearance of corruption and both of these concepts erode the public’s trust.
“Corruption doesn’t necessarily mean I pay you and you vote what I want. Corruption also means that if it appears that my paying you will affect your vote and your ability to be an objective legislator or judge, that appearance of corruption is problematic to the system,” he said.
The more cynical the public becomes about political engagement, the easier it will be for corporations to control the legislative agenda. Neem said that greater corporate influence in political elections is troubling because most voters get their information from television and Internet film clips. It costs a lot of money to broadcast and promote such information, but corporations can afford it and so they help shape the opinions of voters. The crux of this reality is corporations that fund such campaigns do not invite people to formulate and express their own opinions.
“[Corporations] are not going to encourage people to deliberate,” Neem said. “They are not going to encourage people to think.”
The consequence of this, Neem added, is that people’s opinions will be reinforced and it will become harder for them to accept alternative views. It keeps people from engaging in deliberation and corporations, in this way, shape the outcome of elections. The complexity of differences between people is one of the reasons democracy works, Neem explained. Actually having a conversation with someone who may have contrasting beliefs from your own usually yields an understanding of that individual beyond general stereotypes and dichotomous opinions.
“And, of course, corporations are not those kind of complex beings,” Neem said. “They are seeking to pursue their interests, which is why the extension of First Amendment political speech protections to corporations is really problematic.”
Neem agrees with Stevens and Holloway that the Supreme Court could have made a much narrower ruling that simply would have allowed Citizens United to show “Hillary: The Movie.” Instead, issues of corporate personhood and challenges to campaign finance reform were raised as Citizens United progressed. Historically, the Supreme Court deliberately executed conservative rulings in cases that dealt with corporate rights. The balance between granting freedoms to corporations to engage in commerce and other services while deciding the extent of corporate powers in the U.S. has been an issue the court has taken very seriously. With the broad ruling of Citizens United, corporations have gained more of the same rights naturalized citizens enjoy.
Justice Stevens objected to the Supreme Court upholding the idea that corporations should have such rights, especially since much of the Citizens United ruling was based on this interpretation.
“The conceit that corporations must be treated identically to natural persons in the political sphere is not only inaccurate but also inadequate to justify the court’s disposition of this case,” Stevens wrote.
Corporate personhood and Citizens United
Opposition has risen against the Citizens United ruling and the ideas of corporate personhood. Kromm reported that Maryland Rep. Donna Edwards proposed a constitutional amendment that would eliminate any corporation’s access to the same rights as people.
“The Supreme Court really has left us with no choice but to change the Constitution and make sure that people own our government and our elections,” Edwards said in a YouTube clip posted on freespeechforpeople.org. The bill was introduced on Feb. 2, within two weeks of the Citizens United ruling. The bill passed to the House Committee of the Judiciary on June 15 and made no further progress.
The 2003 documentary called “The Corporation,” directed by Mark Achbar and Jennifer Abbott, critically examined the influences of big businesses on the world and discussed some of the consequences of such influences. One of the first questions posed by the film is if a corporation is legally considered a person, what kind of person it? Noam Chomsky, a political activist and professor of linguistics at MIT, offered an answer in the documentary.
“Corporations were given the rights of immortal persons,” he said. “These are special kinds of persons which are designed by law to be concerned only for their stockholders.”
He added that this concern does not extend to the communities in which businesses are based, nor to the employees who work for the corporations. The emphasis on satisfying stockholders has been built up over time through judicial decisions and marketing practices that are designed to direct corporate interests to short-term financial gains.
This necessity to accumulate wealth quickly puts a lot of pressure on corporations to deliver results faster, Chair and Founder of Interface, Inc. Ray Anderson said in “The Corporation.” The pressure often leads big businesses to externalize, which is an economics term Anderson described as, “Let someone else do it.” An example of externalizing is easily applied to automobile companies. They design and assemble cars, but let other entities make and maintain the roads used by millions of vehicles every day. Corporations utilize externalities to cut costs and are not responsible for the actions of outside entities.
Film director and author Michael Moore admitted in “The Corporation” that there are many corporations that certainly benefit communities and society. They make useful products or provide services that make our lives easier. Problems arise and corporations can be harmful when the motivation for increasing profits becomes the ultimate goal and attention for communities and the environment is neglected. Once a business’ primary goal is only to make money, it is a trap because no matter how much that company gains financially, it is never enough, Moore said.
In many instances, the sole focus of profit resulted in companies severely damaging the environment in ways individual persons could not. Former professorof environmental medicine at the University of Illinois Samuel Epstein noted in “The Corporation” that 1940 marked the beginning of synthetic chemical production. Oil companies sponsored laboratory projects that rearranged molecules that offered an unlimited supply of new chemicals the world had never seen. This led to development of the insecticide DDT. At the time, it was considered a solution to combat disease. As more synthetic compounds were invented and introduced, some data indicated potential health and environmental problems were increasing with the production of petrochemicals.
“Warning signs emerged that some of these chemicals could pose hazards,” Epstein said. As time went on, data began revealing that some of the synthesized products that were widely used in society were blamed for causing cancer and birth defects.
As studies continued to report the disturbing effects of DDT and other harmful chemicals, the industries that produced them attempted to trivialize the risks, according to Epstein. This returns to the ideas of what kind of person a corporation is and the difference between the levels of harm a person can cause as opposed to a large company.
“If I take a gun and shoot you, that’s criminal,” Epstein said. “If I expose you to some chemicals which knowingly are going to kill you, what difference is there? The difference is it takes longer to kill you.”
He further asserted that industry is largely to blame for the epidemic of cancer in this country. Through corporate sponsorship and distribution, some of the petrochemicals have undermined the environment and public health on a national, sometimes global, scale. The destruction is beyond what any individual could accomplish.
Dr. Robert Hare is a consultant to the FBI on psychopaths and concludes in “The Corporation” that is not difficult to draw a parallel between psychotic individuals and psychotic corporations. Assuming corporations are considered legal persons, most corporations meet all the characteristics of prototypical psychopaths.
“The Corporation” uses case studies to show how some specific companies meet the criteria for psychopathic behavior with the Personality Diagnostic Checklist from the World Health Organization. The list includes: callous unconcern for the feelings of others; incapacity to maintain enduring relationships; reckless disregard for the safety of others (use of DDT); deceitfulness, including repeated lying and conning others for profit; incapacity to experience guilt and failure to conform to social norms with respect to lawful behaviors. The documentary asks if the dominant institutions are psychopathic, who bears the moral responsibility for the actions of those institutions? How did corporations become so prevalent in the U.S. and where did the idea of corporate personhood come from?
Early attitudes toward corporations
Corporate personhood, as defined by Thom Hartmann in his book “Unequal Protection” is “the story that a group of people can get together and form a legal fiction…called a corporation—and that legal agreement could then have the rights and powers given to living, breathing humans by modern democratic governments.”
Agreeing with Chomsky and Moore about corporations being designed to satisfy their stockholders and increasing profits, Hartmann points to a dangerous imbalance that occurs when the same rights of common individuals are granted to big businesses. With such rights, large quantities of money and great size, a corporation can easily pursue its own interests. This form of corporate power can also be used to interfere with the national interests and influence legislation.
“[T]he corporation [is placed] in a position of unbalanced power over human citizens and [is allowed] to manipulate governments, which then lose their connections to their own citizens and instead become instruments to further the corporate agenda of accumulating wealth,” Hartmann wrote. This idea also returns to Epstein’s claim that a corporation can cause greater destruction than an individual because of this imbalance.
Many early leaders of the U.S. recognized the importance of limiting corporate power. Thomas Jefferson believed freedom from monopolies should be a fundamental human right, according to Hartmann.
Jane Anne Morris studies corporate anthropology and writes for Democracy Unlimited of Wisconsin Cooperative. She found remarks from Edward G. Ryan, Chief Justice of Wisconsin’s Supreme Court, that were delivered the night before he was sworn in as Chief Justice in 1873: “[There] is looming up a new and dark power… the enterprises of the country are aggregating vast corporate combinations of unexampled capital, boldly marching, not for economical conquests only, but for political power.”
Morris continues in the same article posted on the website thirdworldtraveler.com with a quote from former President Grover Cleveland. In 1888, he said, “Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people’s masters.” Two years before he made this statement, corporations had already been granted many of same the rights as individual persons.
Railroad rights
By the time the Civil War began, Hartmann noted, the railroads were taking full advantage of their monopoly statuses. With the absence of competition, they could charge whatever they pleased. The railroads were soon using their accumulated wealth in courtrooms to win tax exemption in states and counties where tracks were laid.
The part of the 14th Amendment of the U.S. Constitution that relates to the greatest judicial and corporate success of the railroads is, “[N]o 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.”
This amendment to the U.S. Constitution was made after slavery was outlawed and designed to protect the newly freed slaves. Hartmann wrote that the lawyers for the railroads immediately jumped on the rights guaranteed by the 14th Amendment and argued that the legislation should protect the railroads, too. From a legal perspective, corporations were not referred to as people, but rather as artificial persons. The lawsuits railroads initiated over taxes were made based on claims of discrimination since the railroads were taxed differently depending on local tax codes.
For almost 20 years, the railroads continued to sue, claiming they were denied their rights as naturalized persons. In 1877, four separate cases from railroads made it to the Supreme Court. Five years after the 14th Amendment was ratified and the lawsuits had begun, Justice Samuel Miller reaffirmed that the “one pervading purpose” of the amendment was to establish and uphold the freedom of former slaves.
According to Hartmann, this opinion held throughout the Supreme Court for years while the railroads continued financing lawyers who would put their business beyond the reach of local laws and regulations. One of the problems Hartmann cited with corporations is their immortality. Jefferson worried about corporate wealth, because it made it possible for corporations to perpetually to bring cases before the court, regardless of cost or time, until they got what they wanted. In 1886, the railroads achieved their judicial objective.
More than a decade earlier, Chief Justice Morris Waite, a former attorney for the railroads, had been sworn in. He had no prior experience as a judge, but Waite was committed to the position, even turning down a run for president to remain with the Supreme Court. The 1886 case was Santa Clara County v. Southern Pacific Railroad and the conflict concerned taxation. Santa Clara County taxed the railroad right-of-way in accordance with local tax laws. Southern Pacific argued that taxes were unfair and had refused to pay them for the past six years.
Just as Santa Clara County was only about a tax dispute, Citizens United was originally only concerned with a broadcast and election dispute, but the rulings of both cases commented on much more than the original conflicts. Southern Pacific complained about the issue of taxes, but spent most of the case declaring they should have access to the rights of persons under the 14th Amendment.
Hartmann includes the explanation from S.W. Sanderson, the attorney for the railroad, for why Southern Pacific should have the rights of individuals.
“I believe that the clause [of the Fourteenth Amendment] in relation to equal protection means the same thing as the plain and simple yet sublime words found in our Declaration of Independence, ‘all men are created equal.’ Not equal in physical or mental power, not equal in fortune or social position, but equal before the law.”
Southern Pacific did not dispute they owed taxes, but claimed their property was incorrectly assessed by Santa Clara County. This defense was one of six the railroad used to win the case, but the defense involving the 14th Amendment was not ruled on. After the court sided with the railroad, it also rejected an appeal by Santa Clara County.
Even though the justices explicitly declared they would not make a decision regarding the 14th Amendment protecting corporations, the court recorder made a note about this declaration. Part of the written record of the case reads, “The defendant corporations are persons within the intent of the clause in section one of the Fourteenth Amendment to the Constitution of the United States, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws.” In this passage, the court recorder essentially claims that Southern Pacific Railroad is a person under the 14th Amendment, but this was not the opinion of any of the justices.
While researching his book, Hartmann found the original court record from Santa Clara County and asked an attorney about the significance of the above statement. The attorney identified the statement as part of the headnotes of the case. Headnotes are not part of the formal decision by the Court and have no legal authority whatsoever. When Hartmann pointed out that the headnotes had no legal standing, the attorney said, “a mistake compounding on a mistake.”
In cases that followed, corporations cited the headnotes from the Santa Clara County decision to be legally recognized as persons. Between the 1886 ruling and 1910, 307 14th Amendment cases were brought to the Supreme Court. Nineteen cases were from individual African Americans; 288 were from corporations, according to Hartmann.
Citizens United is the most recent example of the Supreme Court furthering the rights of corporations, especially in the realm of political funding. Aside from possibly limiting deliberation in politics, Neem mentioned another potential consequence of the ruling.
“Voters have the sense that the people who are making the decisions are not them and then what is the point of voting?” Neem said. Whether that scenario actually occurs returns to the idea of corruption or the appearance of corruption. As long as voters feel marginalized by corporate influence that is a threat to the political process.
Corporations also do not encourage people to collaborate or reach across the aisle.
“Your neighbor is conservative and you’re liberal and you realize that ‘We’ve got to make this work together,’” Neem said. “Corporations don’t have that problem. They are not seeking to make it work together.”
This inability to relate and reach a consensus raises the question of what the political landscape might look like when dominated by corporate influence. The Citizens United ruling already resulted in a significant increase in campaign spending during the 2010 midterm election. Citizens United extends corporate rights in the U.S. and, more specifically, allows them to provide unlimited funds to elections. How the decision will affect the nation and its political process in the long run remains to be seen.