Tag: First Amendment

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).

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?

If You Prick a Corporation, Does It Not Bleed?

Well, no, because as my liberal friends all seem to be indignantly announcing in the aftermath of the Citizens United ruling, corporations aren’t really people! They’re creatures of statute, and “corporate personhood” is just a convenient legal fiction.  Which is fair enough, but also seems to miss the point rather spectacularly. As a practical matter, it is hard to imagine any constitutional liberty that could not be reduced to a hollow joke if we refused to count as an infringement any regulation that nominally targeted only the corporate mechanism for coordinating its exercise.

Having dispensed with the repellent doctrine of corporate personhood, we can happily declare that journalists enjoy full freedom of the press … as long as they don’t plan on using the resources of the New York Times Company or Random House or Comcast, which as mere legal fictions can be barred from using their property to circulate unpatriotic ideas. You’re free to practice your religion without interference — but if it’s an unpopular one, well, let’s hope you don’t expect to send your kids to a religious school or build a church or something, because those tend to involve incorporating. A woman’s right to choose is sacrosanct, but since  clinics and hospitals are mere corporations with no such protection, she’d better hope she knows a doctor who makes house calls. Fill in your own scenarios, it’s easy.

The irony here is that it’s libertarians who are often accused of a myopic obsession with formal liberties rather than their real-world value to people — “the law in its majestic equality” and all that. But this, surely, would be the height of empty formalism — a right to swing your fist that stops at the air.

I think people are obsessing over this because we often think of rights as flowing, at least in part, from respect for our intrinsic human dignity, and it seems equal parts farcical and offensive to suggest that institutions like Exxon and Nike are in the same moral category. As a purely ethical matter, of course corporations as such don’t have rights. As a practical matter, though, rights that wither at the corporate touch won’t do you a whole lot of good in the 21st century.

Speech For Me, But Not for Thee

Politico Arena asked a second question today:

Will Citizens United alter American campaigns and if so, how?

My response:

Will Citizens United alter American campaigns?  Probably – and for the good.  Corporations, unions, and their officers will no longer fear criminal prosecution if they run afoul of inscrutable prohibitions on independent political campaign expenditures that not even FEC commissioners understand.  There will be more political speech as a result, and more perspectives on the issues of the day.  That speech will come from all sides – after all, George Soros and Rupert Murdoch are not likely to be saying the same things, and with restraints prior to elections now lifted, differences like those will doubtless be reflected in great variety in the speech that comes from the rest of corporate and union America.  And most important, the core function of the First Amendment, the protection of political speech, has been restored in important, if not in all, respects.
 
But other, more sinister, results may also flow from yesterday’s decision.  President Obama’s new populism surfaced immediately:  He called the decision “a major victory for big oil, Wall Street banks, health insurance companies,” and other “special interests.”  And The New York Times, in an all but unhinged editorial, pronounced that “with a single, disastrous 5-to-4 ruling, the Supreme Court has thrust politics back to the robber-baron era of the 19th century.”  Claiming that the decision “strikes at the heart of democracy,” the Times tells us that ”Congress must act immediately to limit the damage of this radical decision.”  How?  By enacting “a law requiring publicly traded corporations to get the approval of their shareholders before spending on political campaigns.”  So much for corporate internal-governance rights.  And get this:  “Congress should repair the presidential public finance system and create another one for Congressional elections to help ordinary Americans contribute to campaigns.”  As if ordinary Americans could not contribute to campaigns without such congressional assistance.  Concerning the “presidential public finance system,” it’s been in place for years – you can check off a contribution when you pay your taxes.  That fewer and fewer Americans are choosing to contribute through this “public” financing system speaks volumes, of course.  And it tells us too why Citizens United has brought forth such rage among the decision’s opponents:  It’s a major setback to their larger agenda.  You see, the complex federal campaign finance system that has grown steadily – until yesterday – was never meant to be the final word.  It was only a way station to public campaign financing.  Once there, at that ultimate end, political speech in the form of campaign contributions would rest safely in incorruptible public hands – save, of course, for those contributions that take the form of editorials coming from such corporate giants as The New York Times, which the First Amendment would continue to protect.  Now there is a vision that warms the soul of the Great Gray Lady.

The Government Should Have Less Power to Tax and Spend, Not More Power to Regulate Speech

Yesterday, The Hill asked various pundits and politicos to respond to the Supreme Court’s Citizens United ruling.  The Big Question (as their periodic feature is called) was, “Will corporate money change campaigns?”  You can read my response here.

Today, that same newspaper invited me to blog some further thoughts on the Citizens United decision.  Here’s what I wrote:

Critics of yesterday’s decision say the sky of American democracy is falling.  Supporters—including myself—say it’s a great day for the republic and a vindication of the freedom of speech.  How can this be?  Are nonprofit think tanks and advocacy groups like my own Cato Institute, the ACLU, the NRA, and many other odd bedfellows who supported Citizens United all in the pockets of Wall Street, Big Oil, insurance companies, and others that President Obama assails as corrupting our politics?  Leaving aside the issue of why the politician who got more of his campaign funding from Goldman Sachs than any other source would be going after the very industries that most support him, the asymmetry in this debate rests on the myth that money is an evil in the political system, and that therefore the American people want so-called campaign finance reform to “clean up” government.

Money is no more an evil in politics than it is in life generally.  Some people may not like mud-slinging attack ads, but some people also don’t like SUVs, the Super Bowl, the Jay Leno Show, and many other things that people spend money on—including donations to Cato, the ACLU, the NRA, etc.  The problem with money in politics isn’t the money, but rather the politics.  So long as the government is powerful enough to dole out tax breaks, subsidies, stimulus funds, regulations, earmarks, and a whole host of other goodies (and baddies), those that stand to benefit (and lose) will spend money on the political process.  The way to get rid of this behavior and spending—which is constitutionally protected in a whole host of ways: freedom of speech, freedom of association, the right to petition the government for redress of grievances, etc.—is to reduce the government’s power to affect so many people’s lives and transform economic incentives for businesses big and small.  Reduce the size of government and K Street will melt away.

Finally, as my colleague Roger Pilon points out, 26 states have minimal campaign finance laws, with no evidence that those states have more corruption—or a more unequal “political playing field”—than states that strictly regulate.  And that’s because the real reason we have campaign finance regulations—the dirty little secret behind the whole convoluted regime—is that it’s an incumbency protection racket.  From the so-called “millionaire’s amendment” that the Supreme Court struck down in 2008 to the limits on corporate and union advocacy that the Court struck down yesterday, McCain-Feingold and all other campaign finance legislation—passed by self-interested politicians—is designed to make it harder for challengers.  After-all, incumbents have the benefit of name recognition, taxpayer-funded travel to and around their home districts and states, taxpayer-funded campaign literature disguised as informational flyers touting all the great things a congressman is doing, and a host of other advantages.

The First Amendment is not a “loophole” for big business and those of us who want freer speech—without bureaucrats deciding who gets to speak when and how much—are not corporate shills.  Free speech is the very foundation of our democracy, and we are stronger today for the Citizens United decision.

Citizens United and Corporate Money in Politics

As several of my colleagues noted yesterday, the Supreme Court handed down its landmark decision in Citizens United v. FEC. While I regarded the decision as a victory for free speech, a large number of folks on the left — many of whom support free speech in other contexts — were aghast at the decision, arguing that it would vastly enhance the influence of large corporations in the political process.

Part of my disagreement with these guys is that I’m just a free speech zealot. The First Amendment says “Congress shall make no law … abridging the freedom of speech,” and I don’t see how that language can be squared with a statute that limits the distribution of a political documentary. The best you can say, I think, is that limiting corporate influence is a “compelling state interest” sufficient to overcome the First Amendment’s ban on speech abridgment, but that’s just another way of saying that you don’t care about free speech very much.

Second, I think it’s important to remember that “corporations” encompass much more than large, for-profit businesses. They also include a wide variety of non-profit and advocacy groups, including the ACLU, the NRA, and NARAL, that are, by any reasonable definition, grassroots organizations advocating the views of large numbers of voters. Indeed, as the ACLU pointed out in its amicus brief, the Bipartisan Campaign Reform Act (BCRA) prohibited the ACLU from running ads criticizing members of Congress who voted for the awful FISA Amendments Act of 2008. Even if you think it’s appropriate for Congress to regulate the speech of Exxon-Mobil and Pfizer, I think it’s awfully hard to square the First Amendment with a law that limits the ability of NARAL or the NRA to advocate for its members’ views.

But more fundamentally, I don’t buy the idea that limiting corruption is a state interest sufficiently compelling to overcome the First Amendment interest in free speech. I think supporters of BCRA misunderstand how corporations wield influence and dramatically overestimate the power of television advertisements. It’s true, of course, that a corporation prepared to spend $1 million on ads criticizing a particular legislator will get that legislator’s attention. But there’s nothing unique about this. It can also get his attention by hiring a lobbying firm that employs a former staffer. It can get his attention by arranging $100,000 in bundled contributions from executives, clients, and friends of the company. It can get his attention by creating astroturf organizations. And there are probably lots of other mechanisms I haven’t thought of.

The key difference between independent expenditures and the other mechanisms is that independent expenditures are the most open and transparent. To run an effective “issue ad,” a corporation has to make an argument that is persuasive to voters. I don’t want to sugar coat the situation; sometimes independent expenditures finance ads that are sleazy and misleading. But given a choice between corporations spending their money on ads about how Senator Smith hates America or spending their money on K Street, I’ll take the ads, because at least voters still get the final decision.

Moreover, I think we’re moving toward a world in which traditional high-dollar advertising campaigns will become increasingly ineffective. One smart liberal compares the post-Citizens United world to a debate in which “you get 10 seconds to make your case. I’ll take an hour.” This description of the world had a certain plausibility when most people got their news from newspapers and television — media characterized by severe, technologically imposed bottlenecks. These bottlenecks meant that those willing to spend more money could get a significantly bigger soapbox.

This is a lot less true online where users have practically unlimited choices. The web is littered with lavishly funded corporate propaganda that gets a fraction of the traffic of grassroots blogs like Boing Boing. When people have lots of choices, they aren’t likely to stick around very long at a site that dishes up corporate talking points. So while deep pockets will always be an asset in politics, they won’t give 21st century corporations the huge advantages they gave to 20th century corporations.

So I’m not thrilled at the idea of Fortune 500 companies spending a ton of money on bogus “issue ads.” But I think the dangers of such ads are frequently exaggerated. I’m far more worried about preserving the right of organizations like the ACLU to spread their message. And I don’t see any plausible way to stop the former without seriously restricting the latter. So I’m glad to see the Supreme Court take the words of the First Amendment — “Congress shall make no law” — literally.