Beyond Citizens United: The Solution

January 21, 2010
Guest Post

By Daniel JH Greenwood, Professor of Law, Hofstra University School of Law. Greenwood co-authored an amicus brief in the case for American Independent Business Alliance (downloadable here). This post reflects only his own views.

Today, the Supreme Court announced that corporate campaign spending is protected by the First Amendment. That is, the Federal government and states may not restrict corporations' use of corporate money -- money that corporations got by charging customers more than they had to or paying employees, suppliers, and investors less than they could have -- to influence elections. Obviously, business corporations will be forced by the pressures of competition to use their funds to try to use politics as a new forum for competition. Producing a better product is far less likely to be profitable than winning legislative changes in the rules of the game that advantage companies that are already profitable and hinder potential threats to those profits, whether in the form of competing products or health, safety, anti-pollution or other efforts to support the common good.

The decision turns the First Amendment on its head. The First Amendment has two main purposes: first, to protect republican and democratic politics by ensuring that citizens are free to criticize the government, and second , to create a space free from government intervention where people can follow their own idiosyncratic whims regardless of the taste of others. This decision is a major set-back to both purposes.

Most importantly, if corporations -- which are not citizens and many of which are multi-national organizations with interests that may be radically opposed to those of ordinary Americans -- are allowed to freely intervene in our elections, then each citizen must have a corresponding decrease in influence. My contribution means less if I must compete with BP-Amoco and not just my fellow Americans' money.

Moreover, at least for the managers who will now view themselves as required by law and market competition to spend corporate money to influence elections, the Supreme Court's radical revision of the Constitution forces them to use the corporations they run to advocate policies they may well know are wrong for the country.

When business corporations "speak," the reality is that a manager has made a decision that the corporation's interests -- which the manager may or may not believe are national interests -- would be furthered by spending corporate money to influence the votes of real citizens. Managers are required by corporate law to act in the interests of their employer regardless of what they personally think would be best for the country. So the Supreme Court's "free speech" is actually compelled: managers are required by law to spend money that isn't theirs in support of positions that they may or may not hold. Worse yet, if managers are doing their job as many of them understand it, they may well feel compelled to spend corporate money to elect politicians who they KNOW will be bad for the country. It is often quite profitable -- and therefore 'in the corporation's interest' according to some -- to be legally permitted to pollute, not spend money on safety precautions, exploit employees, defraud investors or suppliers, advertise deceptively, monopolize, discriminate and otherwise compete unfairly. The Supreme Court's decision, left unchallenged, will force corporate managers to compete by trying to force legislatures to allow this kind of bad behavior.

We need immediate action to reverse this decision. Even with the Supreme Court's appalling re-write of the First Amendment, the Congress and the state legislatures are free to change corporate law. Every state and the Congress should immediately enact legislation to guarantee that corporate decisions to affect government are made according to democratic and republican norms. This would do it:

Any corporate decision or expenditure that might affect the American political process, or the rules governing corporate behavior, which is made in this State or would affect the political process in this State, must be approved by a majority vote of every human corporate stakeholder who is a US citizen and might be affected by the decision or expenditure, including directors, managers, employees, human investors (or the human beneficiaries of institutional investors), customers, suppliers and taxpayers who might have to pay additional taxes to replace taxes corporate taxpayers avoid or to clean up messes that such decision might allow. The human beings involved may delegate this decision to elected representatives, including the board of directors of a corporation, so long as the elections of those representatives are held on a fair basis according to democratic norms including one human one vote, limited terms of office, and enfranchisement of all adult humans who are seriously affected by the representatives' actions.
[Image via springstone.]