Tag: citizens united

When Individuals Form Corporations, They Don’t Lose Their Rights

The blogosphere has been abuzz on the heels of the Supreme Court’s landmark Citizens United opinion.  Hysteric criticisms of the speculative changes to our political landscape aside – including the President’s misstatements in the State of the Union – one of the most common and oft-repeated criticisms is that the Constitution does not protect corporations. Several “reform” groups have even drafted and circulated constitutional amendments to address this concern.

This line of attack demonstrates a fundamental misunderstanding of both the nature of corporations and the freedoms protected by the Constitution, which is exemplified by the facile charge that “corporations aren’t human beings.”

Well of course they aren’t — but that’s constitutionally irrelevant:  Corporations aren’t “real people” in the sense that the Constitution’s protection of sexual privacy or prohibition on slavery make no sense in this context, but that doesn’t mean that corporate entities also lack, say, Fourth Amendment rights.  Or would the “no rights for corporations” crowd be okay with the police storming their employers’ offices and carting off their (employer-owned) computers for no particular reason? — or to chill criticism of some government policy. 

Or how about Fifth Amendment rights?  Can the mayor of New York exercise eminent domain over Rockefeller Center by fiat and without compensation if he decides he’d like to move his office there?

So corporations have to have some constitutional rights or nobody would form them in the first place.  The reason they have these rights isn’t because they’re “legal” persons, however – though much of the doctrine builds on that technical point – but instead because corporations are merely one of the ways in which rights-bearing individuals associate to better engage in a whole host of constitutionally protected activity.

That is, the Constitution protects these groups of rights-bearing individuals. The proposition that only human beings, standing alone, with no group affiliation whatsoever, are entitled to First Amendment protection – that “real people” lose some of their rights when they join together in groups of two or ten or fifty or 100,000 – is legally baseless and has no grounding in the Constitution. George Mason law professor Ilya Somin, also a Cato adjunct scholar, discusses this point here.

In any event, as Chief Justice Roberts said in his Citizens United concurrence: “The First Amendment protects more than just the individual on a soapbox and the lonely pamphleteer.” Justice Scalia makes the same point, explaining that the text of the Constitution “makes no distinction between types of speakers.” The New York Times isn’t “an individual American” but its speech is still protected under the First Amendment (regardless of any exemption for “media corporations” – whatever those are in a world where conglomerates own interests not limited to media, not to mention the advent of blogs and other “new” media).

A related line of attack is that individuals acting through corporations should be denied their freedom of speech because corporations are “state-created entities.” The theory goes that if a state has the power to create corporations, then it has the power to define those entities’ rights. Somin rebuts the weakness of this argument here, correctly pointing out that nearly every newspaper and political journal in the country is a corporation.

In short, the contention that the First Amendment does not protect corporations ignores the fact that there is no constitutional difference between individuals and groups of individuals, however organized.  Still, I give credit to the groups who are proposing constitutional amendments that would limit corporate rights: at least they recognize that, after Citizens United, there is no basis upon which to argue that the First Amendment does not protect corporate political speech.  The Free Speech Clause, after all, is blind as to the nature of the speaker.

For further concise refutations of the basic arguments against Citizens United, see here (points 3-6 address issues relating to corporations and their rights).

The Unrelenting Battle over Campaign Finance

Following on the heels of November’s gubernatorial elections in Virginia and New Jersey, the loss of Ted Kennedy’s Senate seat in Massachusetts two weeks ago was a devastating blow to Democratic Party hopes.  But it must have been especially devastating to President Obama, who promised an adoring University of Missouri crowd, just before he was elected, that “We are five days away from fundamentally transforming the United States of America.”  Yet it would appear, judging from the unrelenting commentary and from the president’s own behavior last week, that those losses pale in comparison to the government’s loss before the Supreme Court two days after the polls closed in Massachusetts.  For 11 days now the wailing over the Court’s Citizens United decision has not ceased.  Indeed, campaign finance regulation, intimately connected to incumbency protection, is a bedrock principle of modern liberalism.

Exhibit A is E.J. Dionne’s column today in the Washington Post – his second in a week on the subject.  Last week, railing against the “reckless decision by Chief Justice John Roberts’s Supreme Court and the greed of the nation’s financial barons,” he charged the Court with “an astonishing display of judicial arrogance, overreach and unjustified activism” and urged “a new populist-progressive alliance” to demand “legislation to turn back the Supreme Court’s effort to undermine American democracy” – including a bill prohibiting political spending by corporations who hire lobbyists, no less.

Today, however, Dionne has last Wednesday’s unseemly episode of Obama rebuking a silent Supreme Court to work with.  And, like the immortal Daniel Schorr on yesterday’s NPR Sunday Morning, he puts all the blame on Justice Samuel Alito for seeming to mouth, silently, “Not true” when Obama, before all assembled and a watching nation, tendentiously misstated the holding in Citizens United.  But Dionne doesn’t stop there, of course.  No, he thanks Alito.  You see, “Alito’s inability to restrain himself” brought a long-ignored truth to the nation:  “The Supreme Court is now dominated by a highly politicized conservative majority intent on working its will, even if that means ignoring precedents and the wishes of the elected branches of government.”  Likening Obama’s behavior to President Reagan’s writing a 1983 article criticizing Roe v. Wade – I didn’t make that up – Dionne chastises conservatives for their double standard:  “Reagan had every right to say what he did. But why do conservatives deny the same right to Obama?”  Where does one begin?

Turning finally to “the specifics of Obama’s indictment,” Dionne tries to defend the president’s misstatements, but unfortunately the precision ordinarily expected of such a wordsmith seems to have deserted him.  Citing Obama’s claim that the Court had reversed “a century of law” and also opened “the floodgates for special interests – including foreign corporations,” Dionne writes that ”Obama was not simply referring to court precedents but also to the 1907 Tillman Act, which banned corporate money in electoral campaigns.”  That’s not what the Tillman Act did:  It banned direct corporate contributions to campaigns.  Only in 1947 were independent campaign expenditures by corporations (and unions) banned – and more clearly so only in 1990, which is the ban the Court overturned.  Moreover, pace Obama, foreign corporations are still specifically banned from contributing anything of value “in connection with a Federal, State or local election.”  Thus, in claiming, without more, ”that the ruling opens a loophole for domestic corporations under foreign control to make unlimited campaign expenditures,” Dionne seems simply to be passing along what he’s read or heard from others.  Nothing in the Court’s opinion warrants that conclusion.

But it’s Dionne’s larger claim that most demands an answer – that an “activist” Roberts Court, exercising “raw judicial power,” is ”ignoring precedents and the wishes of the elected branches of government.”  That’s hardly the definition of “activism.”  That’s what the Court should be doing, where it’s warranted by the Constitution, whether the Court is defending the rights of blacks to attend unsegregated schools or of gays to sexual freedom or of corporate owners, the shareholders, to engage in political speech through their corporation consistent with their articles of incorporation and by-laws.  The claim that corporations aren’t people is a red herring.  Corporate owners are people, and their right to speak can take many forms.  Fortunately, we have a First Amendment, which protects not only corporate owners but E.J. himself from all but the error of his ways.

[Cross-posted at Politico Arena]

Post-State of the Union Links

  • Time for the SOTU fact check:  Cato experts put some of President Obama’s core State of the Union claims to the test. Here’s what they found.
  • During this year’s SOTU, President Obama criticized the Supreme Court decision in the Citizens United case. Today’s podcast examines the Court’s ruling.

Don’t Fear the Foreigner

You might have heard that the Citizens United decision will allow foreign corporations to become involved in American campaigns. You might have heard that from the President, in fact, whose speech decrying the decision said foreign corporations “may now get into the act” of pursuing their “special interests” in American politics.

Not true. Justice Kennedy explicitly says the Court did not decide whether Congress has the power to prevent “foreign individuals or associations from influencing our Nation’s political process.” Nothing in Citizens United prevents Congress from prohibiting such political spending by foreign corporations. The Supreme Court might uphold such a law or it might strike it down. The upholding or the striking down of such a law was left for another day. (Other parts of existing laws would also probably preclude foreign nationals or corporations from getting involved in American elections, as Brad Smith argues).

I don’t think I like the new populist Obama as much as I did the old rationalist Obama. The old Obama would have read a Supreme Court opinion before talking publicly about it.

Giving Away the Keys to the Kingdom?

The New York Times editorial board must be baffled by this news story about a few dozen present and former corporate executives appealing to Congress to expand public funding of political campaigns.

The appeal comes one day after the Supreme Court re-extended (some) First Amendment rights to corporations in a move the editorial board branded a “blow to democracy” that will lead to corporations “overwhelm[ing] elections and intimidat[ing] elected officials.” But now some corporate executives want to be dispossessed of the keys to the kingdom immediately after SCOTUS returned them — say what?

The executives’ appeal makes sense if you’ve read this article by law professor Robert Sitkoff (then of Northwestern, now the John L. Gray Professor of Law at Harvard ). Sitkoff argues that the 1907 Tillman Act, which placed the first federal limits on corporate involvement in campaigns, was not adopted because elected officials wanted protection from corporations, but because corporations demanded protection from donation-seeking politicians like William McKinley and his bagman Mark Hanna. Now, in the wake of the Citizens United decision, corporations are asking for renewed protection — this time on the taxpayers’ dime.

As others have argued, corporations are subject to federal laws, regulations and taxation, just like citizens, and therefore should have First Amendment rights just like citizens. If corporations are afraid their regained rights will expose them to politicians’ demands for corporation-financed political ads, then corporate officers should follow their duty to shareholders and learn how to say no.

As for the New York Times Company’s concern about corporations having undue influence on democracy, there are a couple of things it can do to reduce that influence. For one, the New York Times Company can stop endorsing candidates for office — a practice that undermines newspapers’ claims of fair and objective reporting. For another, the New York Times Company can stop using its reporters to electioneer.

Citizen United’s Concept of the U.S. Constitution

The Citizens United decision and the talk that has followed imply two different and incompatible ideas of the Constitution.

The majority in Citizens United believe that the U.S. Constitution establishes a government of limited and defined powers. They asked: “Does the Constitution give government the power to prohibit speech by corporations (and others)?” The First Amendment indicated the government did not have that power.

The critics of the Citizens United decision assume the Constitution created a government of  plenary powers with limited exceptions. They recognize that free speech for individuals is one such exception. But that exception is limited to natural people, not legal constructs. If there is no exception to the plenary power of government, the critics conclude, then there is no right to speak. Congress may prohibit speech by corporations (and others).

The Citizens United decision depends on an idea of the Constitution that forces  government to justify its powers to citizens. The critics of the decision assume an idea of the Constitution that forces citizens to justify their rights to the government. Absent such justifications, the government has plenary power over speech and much else.

Which concept of the Constitution do you find most appealing?

Populism: Good and Bad

Today, Politico Arena asks:

What is it about the word “populist”? (these days)

My response:

“Populist” (or “populism”), in its American usage, invokes the “common man,” yet the idea’s origins – in ”the people” or “the polis” – can be traced to ancient Greek democracy and, in particular, to political demagoguery.  Both Plato and Aristotle had reservations about democracy as a system of government precisely because it was susceptible to corruption by populist appeals to superstition and error.  In America, populism has had a long and varied history, but it is most often associated with the Populist Party that was formed in 1891 and, in particular, with the fiery speeches of the Democratic Party candidate for president in 1896 and 1900, William Jennings Bryan, and his famous ”cross of gold” speech at the 1896 Democratic National Convention.

Thus, in a fundamental way, populism stands opposed to elitism, yet it’s more complicated than that.  On one hand, the populism of the late 19th and early 20th centuries contrasted with the Progressivism of the era, which held that society should be organized and run by “professionals” trained at the best schools.  (Thus, the emergence of political “science,” as distinct from the older tradition of political philosophy.)  But on the other hand, Progressives themselves purported to speak for “the people,” even if in practice they were often contemptuous of the people’s capacity to govern themselves, susceptible as the people were to the appeals of demagogues.

At the end of the day, therefore, populism is a double-edged sword.  Used pejoratively, it stands for the idea that politicians, to obtain or preserve political power, will appeal to base popular sentiments or mistaken (often economic or legal) ideas.  A good example is Obama’s reaction last week to the Supreme Court’s Citizens United decision, rooted in the First Amendment’s guarantee of political speech:  He called it “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.”  There is an element of truth to that sentiment, of course, because the system of government that has evolved in America under the influence of Progressive “professionals” has endowed those professionals (read: the governing class, in all its reaches) with unprecedented power over “the people,” who often feel powerless as a result.  But demagogic appeals like that or like others we’ve heard lately from Obama will only exacerbate that problem.  By contrast, a “populist” appeal that seeks to return power to people (N.B.: I did not say, as in the ’60s, “power to the people”) – power to run their own lives, free from unwarranted government regulation or dependency – is a side of the idea we hear too seldom.  Yet it’s what our founding documents are about.  They established not simply popular government but limited popular government – ensuring the right of the people to govern themselves, not mainly through government but individually or in voluntary association with others.  It is that liberty that Progressive elitists who “knew better” – the folks in Cambridge who voted 84 to 15 against Scott Brown – have gradually extinguished.