Corporate Leveraging of Campaign Contributions Under Citizens United

Last week, Dan posted what had been an email message I sent him in response to a link he’d sent me to an article by Thom Hartmann on Truthout about the Supreme Court’s infamous Citizens United opinion.  The key (consecutive) paragraphs of Hartmann’s piece, which I quoted in my email/post, were:

Most Americans don’t realize that the idea that “corporations are people” and “money is speech” are concepts that were never, ever considered or promoted or even passed by any legislature in the history of America. Neither were they ever promoted or signed into law by any president – if anything, the opposite, with presidents from Grover Cleveland in 1887 to Barack Obama in 2010 condemning them.

And Congress and the executive branch are the two of the three branches of government that are elected by the people, and thus the only two to which the founders of this country and the framers of the Constitution gave the right to create laws.

The Supreme Court is so much not supposed to create law, that Article 3, Section 2 of the Constitution even says that it must operate “under such Regulations as the Congress shall make.”

I said there are two problems with what Hartmann’s arguments—arguments that are being made by many others as well who are appropriately outraged by Citizens Unitedand earlier corporate-free-speech Supreme Court opinions. 

One problem, I wrote, is that there needs to be an explicit distinction made between the idea of “corporate personhood” in law, generally, and “corporate personhood” in a constitutional-rights sense.  I said that Hartmann and the others who have adopted this position, including the drafters of the current proposed constitutional amendment to negate Citizens United by declaring corporations non-persons, clearly intend that this apply only to the corporate-free-speech Supreme-Court-created laws.

I said that the “corporate personhood” fiction actually was created, I believe, simply as a practical way to allow corporations to own property, and that eventually that fiction enabled corporations to sue and be sued, to be subject to criminal laws and civil regulatory law and to be charged with violations of those laws and to be fined for violations and required by court order to comply with (say) a particular environmental or securities regulation or whatever.  I noted that state statutes, which provide for the creation of corporations, and federal statutes, which recognize corporations as legal entities, do provide for these things.  And although they don’t use the term “corporate person,” these laws (e.g., tax laws, environmental laws, lawsuit procedural laws) do include corporations in the statute’s “definitions” section, in defining the term “person,” in order to make clear that the statute or regulation does apply to corporations.

I then made the point that the problem of corporate personhood is not that the law, either statutory or court-created, treats corporations as legal entities that have legal rights and obligations, but instead that the Supreme Court has pronounced corporations “persons” for purposes of First Amendment speech rights.  Constitutional rights, I explained, apply only to persons.  In order to accord corporations First Amendment rights, the Court had to declare them persons—not mere legal entities in a statutory sense (as in say, corporations can own property), but persons—in a constitutional sense.  This, I said, is a really important distinction.

And it is.  A really important distinction. 

The distinction gets complicated, though, I said, when you consider that there are some constitutional rights that most people would think do and should pertain to corporations: the Fourth Amendment’s guarantee against warrantless searches and seizures, and the Fifth and Fourteenth Amendments’ due and property “takings” provisions, for example.  But that’s because actual people do own direct monetary shares of corporations, and so corporate property does belong to real people, and because the constitutional protections at issue there—against warrantless searches and seizures of documents, for example—would compromise those rights of real persons (the corporation’s employees or customers, for example).

In other words, to the extent that the corporation—or union, or nonprofit political organization (the iconic example in legal opinions being the NAACP)—has constitutional, rather than mere statutory, rights, those rights are derivatives of the rights of the organization’s human members. 
The First Amendment right to advocate for a particular political candidate or party or political position, using shareholders’ money is hardly a right that logically derives from those shareholders’ own First Amendment speech rights, I said.  “The exercise of those speech rights cannot reasonably be interpreted as intentionally collective among the shareholders; the specific expenditure is not foreseeable to shareholders, and many shareholders, whose politics differ from that of the CEOs, would be horrified by it if the transparency that Justice Kennedy so vaunted in the opinion actually existed and they knew about the corporation’s political role,” I wrote.

My post was posted prematurely.  I’d intended to edit it before it was posted.  And, as I said in a comment I posted to the post, that comment needs clarification, because it implies inaccurately that corporate management normally lacks, or at least should lack, the legal authority to take actions that are unforeseeable to shareholders.  What I meant is that corporate management—and, regarding the use of corporate funds for political purposes of this sort, this presumably would be the CEO—should not be able to leverage the First Amendment speech rights of unwitting shareholders in so unforeseeable a respect. What Citizens United did was authorize corporate top management to leverage shareholders’ First Amendment speech rights and shareholders’ money for political campaign expenditures.  But unlike Goldman Sachs when lending leverage to Bain Capital, these shareholder political donors are captive ones.

Of course, the Fab Five majority in Citizens United did pretend otherwise.  But then, as I said in another earlier post on AB, declaring clearly-false facts in order to arrive at their chosen result in that case is the very hallmark of that opinion. 

In the comments to my earlier post that this post clarifies, there was some discussion about whether the remedy for an objecting shareholder is to simply sell the corporate stock.  But for that to be an option even just for people who own the stock directly rather than through a pension fund or mutual fund, the corporation would have to divulge to its shareholders its intent to make that expenditure.  Suffice it to say that corporations do not divulge the specifics of these expenditures, even after they’re made, much less beforehand.  And the sale on short notice may cause the shareholder to accept a financial less on the sale, all in order to prevent the derivative use of the individual’s First Amendment speech right never foreseeably conferred in the first place. 

This particular constitutional right, by its nature, should not transfer so artificially and unintentionally.


For readers who didn’t see my earlier post, and who are curious, I said that the other problem with what Hartmann and others are arguing is their claim that the courts have no authority to render decisions pronouncing rules of constitutional law.  I said, accurately, that this claim is profoundly dangerous.  I said it mirrors what Clarence Thomas and Antonin Scalia regularly claim, except of course when they themselves are fabricating some new rule of constitutional law.  As they did in Citizens United.

I also said I love Thom Hartmann, but that I think his position here needs some refinement.