June 14, 2016

Corporate Citizen? An Argument for the Separation of Corporation and State

by Ciara Torres-Spelliscy, Associate Professor of Law at Stetson University College of Law; Brennan Center Fellow.

Corporations are strange bedfellows to have in a democracy. My new book, Corporate Citizen?, explores how, over the course of American history, corporations have aggressively sought to expand their constitutional rights.  And, American courts, especially the U.S. Supreme Court, have often obliged - enabling the slow, yet steady, expansion of corporate rights since near the founding of the nation. But the current Roberts Supreme Court has taken this enabler role to new heights and earned the nickname the “Corporate Court” because of its solicitude towards corporate litigants.

My basic thesis in Corporate Citizen? is that corporations have gained more rights that previously, and appropriately, only applied to human beings, like religious and political speech rights. This could have been palatable if human style responsibilities were also being given to corporations. Instead corporations get to have their cake and eat it too. They are spared concomitant responsibilities, as they are given a First Amendment veto to shoot down reasonable regulations of their economic activity.

By contrast, when we conceptualize real (human) citizenship, typically there are a cluster of rights and responsibilities that are mixed together. We pay taxes, and we get a Congress to represent us. We serve on juries, and we get a fair trial. We sign up for the selective service (if we are men), and we get the protection of the military. If we are victims of a crime, we can seek justice. If we are guilty of committing a crime, we can expect to be held accountable under the rule of law.

But with corporations, which are at their essence just a pile of papers, U.S. courts have granted them more and more rights, and then simultaneously, absolved many firms from responsibilities. The book examines the lack of accountability in areas including environmental stewardship, paying taxes and respecting human rights.

Interestingly, these developments around expanded corporate power have not gone unnoticed and have been met with resistance from many sectors including from investors, customers and lawmakers. The final section of the book addresses these responses, and offers a potential path forward. Institutional investors, in particular, have been on the forefront of asking for corporations to be more transparent about using their new Citizens United rights to spend money in politics.

Meanwhile, customers are finding that when they want more information about corporate behavior – guess what – there’s an app for that. Smartphone applications can provide a wealth of information that customers can use while shopping to align their personal preferences in their hearts with what is in their shopping carts.

Lawmakers, on the other hand, have struggled to mitigate the role that corporations can play in our democracy since the Supreme Court has left them very little leeway to maneuver. The good news is that many states have improved their laws to bring more clarity to political spending including an innovative law in Maryland that requires disclosure of corporate political spending directly to investors. The bad news is legislatures are so hamstrung in what they are allowed to do, that retired Supreme Court Justice John Paul Stevens, among other jurists, have called for a constitutional amendment to put corporations back in economic sphere and stop them from encroaching so much in the political sphere.

Corporate Citizen? includes my interviews with many leading thinkers and actors in the field including the president of Demos Heather McGhee, the president of the Campaign Legal Center Trevor Potter, congressional candidate Professor Zephyr Teachout, co-founder of Ben & Jerry’s Ben Cohen, the executive director of the Center for Media and Democracy Lisa Graves, executive director of the Sustainable Investments Institute Heidi Welsh, and the former head of Greenpeace Phil Radford. While the topic is law, the book is written in a conversational tone so that it is accessible to a wide audience.

In this election year, the topic of the appropriate bounds of corporate power continues to be raised by candidates and voters alike. History shows that size matters. We’ve gone from “too big to fail” to “too big to jail.” We cannot reach the point where there are firms that are “too big to regulate.” And gigantism matters a great deal if real (human) citizens are expected to compete with corporations for the attention of elected officials in policy making, or for the attention of their fellow citizens during elections. Protecting the ideal of one-person-one-vote requires mitigating the power of corporate money in politics.

The ultimate hope articulated by Corporate Citizen? is that we are not so far gone that we cannot restore real citizens back to their proper place at the center of American democracy. And the book serves as a reminder, there are still formidable forces to resist the slide towards too much power pooling in too few hands.