Tag: citizens united

Citizens United Doesn’t Mean What Campaign Finance ‘Reformers’ Think It Does

Building on the excellent fisking of Newsroom by my colleague Caleb Brown and Reason’s Scott Shackford, let me  reiterate that Citizens United has nothing to do with any problems regarding how we regulate political campaigns, perceived or real.  

Perceived: Campaign finance “reformers” think we’d be a lot better off if corporations, particularly foreign corporations, weren’t able to fund candidates and parties.  Of course, Citizens United didn’t disturb the ban on that sort of thing, which has been in place since 1907. 

Real:  Independent political speech – be it individual, corporate, union, advocacy group, neighborhood association, or informal group of friends – is largely unregulated (though you do have to register SuperPACs and disclose donors, be they individuals or corporations) but candidates and campaigns bear onerous burdens regarding contribution limits, disclosure requirements (which scare off small donors rather than large bundlers), and arcane coordination rules.  A Supreme Court ruling is indeed at fault for the bizarre and largely unworkable way in which our laws have developed in this areas, but it’s not Citizens United.  Instead, it’s the 1976 baby-splitting opinion in Buckley v. Valeo, which saw the Court rewrite the Watergate-era Federal Election Campaign Act, creating a piece of legislation much different than the global reform Congress passed (sound familiar?).

I’ve written a law review article about all this called “Stephen Colbert Is Right to Lampoon Our Campaign Finance System (And So Can You!),” which will run in the University of St. Thomas (MN) Journal of Law & Public Policy this fall. 

And Tuesday afternoon I’ll be testifying to that effect to the Senate Judiciary Committee’s Subcommittee on the Constitution (here’s the link to the hearing site, where you’ll be able to watch).  Here’s an excerpt from my written statement (which isn’t online yet):

The underlying problem, however, is not the under-regulation of independent speech but the attempt to manage political speech in the first place.  Political money is a moving target that, like water, will flow somewhere.  If it’s not to candidates, it’s to parties, and if not there, then to independent groups or unincorporated individuals acting together.  Because what the government does matters and people want to speak about the issues that concern them.  To the extent that “money in politics” is a problem, the solution isn’t to try to reduce the money—that’s a utopian goal—but to reduce the scope of political activity the money tries to influence.  Shrink the size of government and its intrusions in people’s lives and you’ll shrink the amount people will spend trying to get their piece of the pie or, more likely, trying to avert ruinous public policies.

… .

The solution is rather obvious:  Liberalize rather than further restrict the campaign finance regime.  Get rid of limits on contributions to candidates—by individuals, not corporations—and then have disclosures for those who donate some amount big enough for the interest in preventing the appearance of quid pro quo corruption to outweigh the potential for harassment.  Then the big boys who want to be real players in the political market will have to put their reputations on the line, but not the average person donating a few hundred bucks—or even the lawyer donating $2,500—and being exposed to boycotts and vigilantes.  Let the voters weigh what a donation from this or that plutocrat means to them, rather than—and I say this with all due respect—allowing incumbent politicians to write the rules to benefit themselves.

Curiously, there will be six witnesses taking the “get corporate (and maybe even all private) money out of politics” view as against one, me, for deregulation and freedom of speech.  That seems a bit unfair; I’d think that the campaign-finance-reform zealots need at least a dozen people to stand up against my very simple “remove contribution caps but require disclosure for big players” argument.  Should be fun.

In short, while there are (at least) 99 problems with how we manage elections, Citizens United ain’t one.

Free Speech Trumps First Amendment

If you watch HBO’s “Newsroom,” you may have seen Cato, IJ and others get a quick namedrop in relation to the Citizens United Supreme Court case. Actor Jeff Daniels misstates the holding of the case, claiming that Citizens United “allowed corporations to donate unlimited amounts of money to any political candidate without anyone knowing where the money was coming from.”

But, you see, this just shows Aaron Sorkin’s unwavering commitment to realism in his shows. Reporters regularly get the holding of Citizens United wrong. After all, if reporters were crystal clear that Citizens United cleared the way for all manner of groups to use “corporate treasury funds” to fund broad and overtly political statements about candidates, they would inevitably conclude that their own right to make those kinds of statements would be jeopardized by much of the campaign finance regulation on the books prior to Citizens United. And it’s hard to demonize libertarians when they’re fighting for the rights of everyone, including reporters and entertainers who work for subsidiaries of Time Warner (CNN, HBO), Viacom (CBS), Disney (ABC), Comcast (NBC, MSNBC), General Electric (NBC, MSNBC), News Corp. (FOX, Fox News), etc.

If you’d like to know more about the facts of Citizens United, watch this:

As to the claims about secrecy in political speech, Cato Institute senior fellow Nat Hentoff has a few thoughts on disclosure and the jurisprudence of Clarence Thomas.

This Is What Political Judging Looks Like

Today, as I predicted six months ago, the Supreme Court summarily reversed the Montana Supreme Court’s attempt to nullify the controversial 2010 decision of Citizens United v. FEC. The Montana Supreme Court had essentially ruled that Citizens United is a decision based on facts rather than law—that is, that Montana’s situation of corporate corruption in elections was factually unique, thus exempting the state from compliance with Citizens United. In an admirable dissent, Justice James C. Nelson explained precisely where the court went wrong:

Unquestionably, Montana has its own unique history.  No doubt Montana also has compelling interests in preserving the integrity of its electoral process and in encouraging the full participation of its electorate.  And Montana may indeed be more vulnerable than other states to corporate domination of the political process.  But the notion argued by the Attorney General and adopted by the Court—that these characteristics entitle Montana to a special “no peeing” zone in the First Amendment swimming pool—is simply untenable under Citizens United.

Admittedly, I have never had to write a more frustrating dissent.  I agree, at least in principle, with much of the Court’s discussion and with the arguments of the Attorney General.   More to the point, I thoroughly disagree with the Supreme Court’s decision in Citizens United.  I  agree, rather,  with the eloquent and, in my view, better-reasoned dissent of Justice Stevens.  As a result, I find myself in the distasteful position of having to defend the applicability of a controlling precedent with which I profoundly disagree.

That said, this case is ultimately not about my agreement or disagreement with the Attorney General or our satisfaction or dissatisfaction with the Citizens United decision. Whether we agree  with the Supreme Court’s interpretation of the First Amendment is irrelevant.  In accordance with our federal system of government, our obligations here are to acknowledge that the Supreme Court’s interpretation of the United States Constitution is, for better or for worse, binding on this Court and on the officers of this state, and to apply the law faithful to the Supreme Court’s ruling.

Unfortunately, the Supreme Court’s reliably liberal justices did not take the same admirable position as Justice Nelson. In a situation when they should have unanimously asserted the Supreme Court’s position as the final expositor the Constitution and chastised the Montana Supreme Court for its temerity, justices Kagan, Breyer, Sotomayor, and Ginsberg instead decided to re-visit their opposition to Citizens United. All four justices re-registered their dissent with Citizens United, but they did not go so far as to vote to re-hear the case. And given that only four votes are required to grant certiorari, re-hearing the case was an option available to them. It’s good they did not go this far. However, while I am a believer in registering principled dissents, this was not the time to do so. In addition to being constitutionally incorrect, overturning Citizens United after just two years on the books would have severely impaired the legitimacy of the Court.

This is what political judging looks like. While it has become de rigueur to refer to the five conservative justices as being mere pawns of their political opinions, such attacks are hardly ever leveled against the four reliable liberal justices. Here, however, they were driven by their political opinions rather than their duties as Supreme Court justices bound to ensure that the Constitution applies equally in every state.

My colleague John Samples has more here.

‘People’s Rights Amendment’ Would Knock Out People’s Rights

This blogpost was co-authored by Cato legal associate Kathleen Hunker.

Any prizefighter worth betting on knows that the worst thing you can do in a tough match is succumb to frustration.  House Democrats should heed that wisdom.  Frustrated by the Constitution’s interference in their efforts to muzzle certain kinds of political speech, Rep. Jim McGovern (D-MA), House Minority Leader Nancy Pelosi (D-CA), and 27 other congressmen have proposed a constitutional amendment that would overturn the Supreme Court’s holding in Citizens United.

Unfortunately, in their haste to deliver a blow against evil corporations, these lawmakers have exposed the Constitution’s flank in a way that would lead to debilitating blows against individual civil rights were this measure ever adopted.

The proposed change, absurdly titled the People’s Rights Amendment, asserts that the Constitution protects only the rights of “natural persons” and that Congress retains the ability to subject “all corporate entities” to any regulation or restriction Congress deems “reasonable.”  Its supporters contend that the Amendment is necessary to reduce the role of money in politics and ensure that elections represent the voice of the people.  As several commentators have already observed, however, the amendment does far more than subject corporations to new campaign finance regulations.

Although the People’s Rights Amendment says that it shall not be construed “to limit the people’s rights of freedom of speech, freedom of the press, free exercise of religion, freedom of association and all such other rights of the people,” it radically contracts those and other rights entrenched in America’s political tradition.

George Will’s latest column explains this very point. In addition to denying “natural persons” the right to associate and speak in concert,

McGovern stresses that his amendment decrees that “all corporate entities — for-profit and nonprofit alike” — have no constitutional rights.  So Congress — and state legislatures and local governments — could regulate to the point of proscription political speech, or any other speech, by the Sierra Club, the National Rifle Association, NARAL Pro-Choice America or any of the other tens of thousands of nonprofit corporate advocacy groups, including political parties and campaign committees.

Newspapers, magazines, broadcasting entities, online journalism operations — and most religious institutions — are corporate entities.  McGovern’s amendment would strip them of all constitutional rights.

Instead of removing corporate money – which goes much more to lobbyists (petitioning for redress of grievances) than electioneering anyway – the amendment grants Congress the power to strip think tanks, advocacy groups, charities, newspapers, political parties, and even a candidate’s campaign of the right to criticize and oppose the government.  Any political speech more complex than standing on a park bench at an Occupy rally becomes subject to the whims of federal bureaucrats.  Even books don’t escape the amendment’s long reach, as the government lawyer admitted would be the case under the pre-Citizens United law that the amendment hopes to reinstate.

McGovern and Pelosi haven’t answered how the People’s Rights Amendment ensures that elections represent the voice of the people when it takes away the very venues on which the people stand to have their voice heard.

George Will makes a second foreboding observation.  He notes that, by stripping corporations of all constitutional protections, the amendment would empower the government to do much more than proscribe speech:

[G]overnment, unleashed by McGovern’s amendment, could regulate religious practices at most houses of worship, conduct whatever searches it wants, reasonable or not, of corporate entities, and seize corporate-owned property for whatever it deems public uses — without paying compensation. Yes, McGovern’s scythe would mow down the Fourth and Fifth Amendments, as well as the First.

For more on these dangers, see here and here.  Of course corporations aren’t human beings, but that brilliant insight is legally irrelevant.  Corporations are formed by individuals as a means of exercising their constitutionally protected rights, and those individuals do not lose the protection of the Constitution by choosing to exercise their right to associate and pool their resources.

Thus, while a corporation does not enjoy the full breadth of constitutional rights (i.e., sexual privacy), it warrants whatever degree of protection is necessary for its members to exist as free and rational beings.  These rights certainly extend to the ability to publicize and support political initiatives.

Before the supporters of People’s Rights Amendment make that massive lunge against what they view as constitutional frustrations, they should take a step back and reassess whether the satisfaction they derive from sticking it to corporations is worth the potential collapse of our political system’s commitment to a free society.

Why Corporate Speech Rights But Not Corporate Liability for Violating the ‘Law of Nations’?

Yesterday the Supreme Court heard argument in Kiobel v. Royal Dutch Petroleum, the case (which I’ve discussed before and in which Cato filed a brief) that asks whether, under the Alien Tort Statute, the “law of nations” can be applied against an entity that is not a natural person: a corporation.  As the majority of the Court seemed to think, and as I wrote in the New York Times online, the answer is no because Congress never gave U.S. courts the power to entertain lawsuits alleging corporate malfeasance involving foreign actors abroad.

It seems like a discrete enough issue – does this statute contemplate corporate liability? – one that international law junkies and the “human rights” establishment are passionate about, but not one that should have much broader purchase.  Yet the blogosphere, not least the response to my Times piece, is up in arms about organizations like Cato saying that “corporations are people” when it gets them political speech rights (Citizens United) but not when it subjects them to liability for their dastardly deeds (Kiobel).

But to make this charge – whether labeled shilling for corporations or just plain hypocrisy – is to misunderstand both Citizens United and Kiobel.

Before explaining why, let me just reiterate that I agree with the keen point that corporations are not human beings.  But that brilliant observation is legally irrelevant.  Corporations are formed by individuals as a means of exercising their constitutionally protected rights.  Corporate personhood is simply a convenient legal fiction that we use to enable that rights-pooling for all sorts of purposes.  If using the word “person” in relation to an inanimate entity is confusing or offensive, you could try calling it something else (but then nobody you’re talking to would understand you, so we’re stuck with the word, for better or worse).  In any event, as I explain in my recent law review article – “So What If Corporations Aren’t People?” – none of this changes how the law treats corporations.

Now then, I’m not saying that corporate personhood is operative for purposes of political speech but not for purposes of liability for malfeasance.  Instead, I’m clarifying two areas of law as they relate to corporate actors.  First, the First Amendment guarantees that rights-bearing individuals don’t forfeit their rights (to speak about politics or anything else) when they associate in groups, whether in corporate form or otherwise.  Second, the Alien Tort Statute – a peculiar law by which Congress gave federal courts jurisdiction over ”law of nations” violations alleged by foreigners against other foreigners – doesn’t recognize corporations as a type of party that can in that manner be haled into our courts.  That is so because the “law of nations” doesn’t extend to corporate actions (for reasons explained in our brief and elsewhere that I won’t repeat here).  

Kiobel has nothing to do with corporate liability in general – e.g., liability for manufacturing defective products, dumping chemicals, etc., in violation of U.S. or even foreign law – but rather only concerns corporate liability for human rights abuses and other violations of the “law of nations” by foreign corporations in foreign countries.

The law can surely be “a ass,” but you have to understand what law you’re discussing to understand what type of ass it might be.

Citizens United at Two

The Supreme Court decided Citizens United two years ago this week. The complaints about the ruling that have emerged since are often bizarre and misrepresent much of the landmark ruling’s import. Here’s what the case was about.

Almost nowhere in the complaints about the Citizens United ruling will you hear that the case decided that certain books or Pay-per-View broadcasts could no longer be banned by the Federal Election Commission.

Former FEC commissioner Bradley A. Smith further detailed the breathtaking arguments made by the government during the initial oral argument.

(And here’s more from attorney James Bopp, Jr. on the ultimate ruling.)

Since Citizens United, complaints from Common Cause and occupiers of various parks across the United States tend to focus on corporate personhood, the scourge of SuperPACs and at least one group’s troubling idea to amend the Constitution so that—once and for all—“campaign spending is not a form of speech protected under the First Amendment.”

Published: So What If Corporations Aren’t People?

Six months ago, I wrote about a law review article I had just co-authored with former Cato legal associate Caitlyn McCarthy regarding corporate rights post-Citizens United.  Well, now it’s officially published, in The John Marshall Law Review.  Here’s the abstract:

Corporate participation in public discourse has long been a controversial issue, one that was reignited by the Supreme Court’s decision in Citizens United v. FEC, 130 S. Ct. 876 (2010). Much of the criticism of Citizens United stems from the claim that the Constitution does not protect corporations because they are not “real” people. While it’s true that corporations aren’t human beings, that truism is constitutionally irrelevant because corporations are formed by individuals as a means of exercising their constitutionally protected rights. When individuals pool their resources and speak under the legal fiction of a corporation, they do not lose their rights. It cannot be any other way; in a world where corporations are not entitled to constitutional protections, the police would be free to storm office buildings and seize computers or documents. The mayor of New York City could exercise eminent domain over Rockefeller Center by fiat and without compensation if he decides he’d like to move his office there. Moreover, the government would be able to censor all corporate speech, including that of so-called media corporations. In short, rights-bearing individuals do not forfeit those rights when they associate in groups. This essay will demonstrate why the common argument that corporations lack rights because they aren’t people demonstrates a fundamental misunderstanding of both the nature of corporations and the First Amendment.

Go here to download “So What If Corporations Aren’t People?”

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