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Citizens United Case – Corporate Campaign Contributions

Citizens United Case – Corporate Campaign Contributions

By Ilene

This was a poor decision, not only because the results are bad for society, but because Citizens United should have been considered as a Fourteenth Amendment as well as a First Amendment case.  I.e., on what basis are corporations considered citizens?

First Amendment:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Should corporations and unions have all the constitutional protections that individual "natural" persons (i.e. you and me) have when it comes to First Amendment rights? How about "associations" of people? Are all associations equal? I don't think so.

Justice Scalia wrote in his concurring opinion:

It is the speech of many individual Americans, who have associated in a common cause, giving the leadership of the party the right to speak on their behalf. The association of individuals in a business corporation is no different—or at least it cannot be denied the right to speak on the simplistic ground that it is not "an individual American."

Should political parties and corporations should be treated similarly? Members of a political party voluntarily engage in the party due to their political beliefs and free choice of association, whereas corporations do not speak for all persons associated with the corporation such that all members (shareholders, management, employees) are freely and voluntarily choosing to fund the corporate political message.

As Justice Stevens wrote in his dissenting opinion in the Supreme's Court ruling in the Citizens United case:

Corporations are not actually members of [our society]. They cannot vote or run for office. Because they may be managed and controlled by nonresidents, their interests may conflict in fundamental respects with the interests of eligible voters. The financial resources, legal structure, and instrumental orientation of corporations raise legitimate concerns about their role in the electoral process. Our lawmakers have a compelling constitutional basis, if not also a democratic duty, to take measures designed to guard against the potentially deleterious effects of corporate spending in local and national races.

Abraham Lincoln may have seen the writing on the wall years ago:

We may congratulate ourselves that this cruel war is nearing its end. It has cost a vast amount of treasure and blood. . . . It has indeed been a trying hour for the Republic; but I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war. God grant that my suspicions may prove groundless. [my emphasis]

The passage appears in a letter from Abraham Lincoln to (Col.) William F. Elkins, Nov. 21, 1864.

Legal Background

"County of Santa Clara vs. Southern Pacific Railroad" was perhaps the worst U.S. Court Decision, not for its actual decision, but for its signficance based on an unargued, undecided issue (dictum). 

Santa Clara County v. Southern Pacific Railroad Company, 118 U.S. 394 (1886) was a United States Supreme Court case dealing with taxation of railroad properties. The case is most notable for the obiter dictum statement that juristic persons are entitled to protection under the Fourteenth Amendment."…

[A "juristic person" is a legal fiction through which the law allows a group of natural persons to act as if it were a single composite individual for certain purposes. The most common purposes are lawsuits, property ownership, and contracts. The concept goes by many names, including corporate personhood. A juristic person is sometimes called a legal person, artificial person, or legal entity (although the last term is sometimes understood to include natural persons as well). Statemaster.com]

Fourteenth Amendment (relevant section):

Section 1.
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Whether or not protections under the Fourteenth Amendment were intended by the Supreme Court to be extended, and to be extended fully, to corporations was never actually decided by the justices. Santa Clara was a tax law case. The statement conferring Fourteenth Amendment protections to corporations was written by the court reporter, J.C. Bancroft Davis, as part of a headnote (introductory summary of the case): 

"The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does."

Thus, the extent to which corporations are entitled to legal protections under the Fourteenth Amendment was not discussed in the context of a question before the Court at the time – and hence would not usually be considered controlling and settled law.  

Later, Chief Justice Morrison Waite responded to Davis's inquiry regarding the accuracy of his headnote:

I think your mem. in the California Railroad Tax cases expresses with sufficient accuracy what was said before the argument began. I leave it with you to determine whether anything need be said about it in the report inasmuch as we avoided meeting the constitutional question in the decision.

According to the Wikipedia article:  

C. Peter Magrath, who discovered the exchange while researching Morrison C. Waite: The Triumph of Character, writes "In other words, to the Reporter fell the decision which enshrined the declaration in the United States Reports…had Davis left it out, Santa Clara County v. Southern Pac[ific] R[ailroad] Co. would have been lost to history among thousands of uninteresting tax cases."

Author Jack Beatty wrote about the lingering questions as to how the reporter's note reflected a quotation that was absent from the opinion itself.

"Why did the chief justice issue his dictum? Why did he leave it up to Davis to include it in the headnotes? After Waite told him that the Court 'avoided' the issue of corporate personhood, why did Davis include it? Why, indeed, did he begin his headnote with it? The opinion made plain that the Court did not decide the corporate personality issue and the subsidiary equal protection issue."

In view of the back-door way in which Fourteenth Amendment equal protection for Corporations has entered into case law, perhaps this protection has been given more weight than deserved. It seems perverse to me that protections conferred by the Constitution and Fourteenth Amendment should be extended to natural persons and corporations equally, without heated argument and debate before the Supreme Court.

From the Wikipedia article

Not being part of the court's opinion, the "person" observation did not technically in the view of most legal historians have any legal precedential value…

Justice Hugo Black wrote "in 1886, this Court in the case of Santa Clara County v. Southern Pacific Railroad, decided for the first time that the word 'person' in the amendment did in some instances include corporations…The history of the amendment proves that the people were told that its purpose was to protect weak and helpless human beings and were not told that it was intended to remove corporations in any fashion from the control of state governments…The language of the amendment itself does not support the theory that it was passed for the benefit of corporations."

Justice William O. Douglas wrote in 1949, "the Santa Clara case becomes one of the most momentous of all our decisions.. Corporations were now armed with constitutional prerogatives."

Flash forward: In regards to the Supreme's Court ruling in the Citizens United case Jeremy Grantham writes in “Stop the Presses!” on the GMO site on January 21, 2010:

… and the Bad News Supremely Extreme: Another “Day That Will Live in Infamy”

Five Supreme Court justices today announced that not only are corporations people and that their money is free speech – this is old hat and a very ugly hat at that – but now, there should be no limit to the money they spend to influence political outcomes. This would be one thing if corporations really were “democratic associations” of humans that the Founding Fathers may have wanted to protect. They are, instead, small oligarchies of top management. Thus, the top management of major oil and coal companies can decide what political outcomes they want to promote, say, unlimited production of carbon dioxide (none of their CEOs apparently has grandchildren!), utterly without any approval of their decisions by the millions of actual owners. The financial power of corporations was already in danger of overwhelming the democratic process in Congress and this makes the damage potentially unlimited and puts the Court’s seal of approval on it. So let’s do it in style and have a name change. The U.C.A. has a familiar look: The United Corporations of America!

*****

Kevin Drum in Mother Jones provides a thoughtful analyses of the Court ruling in the Citizens United case in the following article:

Money in Politics

I'm just enough of a First Amendment fundamentalist to believe that there are plausible arguments for allowing corporations to make political contributions; just enough of a realist to think that it might not make as much difference as a lot of people think; and just enough of a cynic to think that corporations might not be as eager to spend huge pots of political money in plain view of their customers as you might suppose. On the other hand, I'm not credulous enough to think that modern multinational corporations are mere voluntary assemblies of concerned citizens who deserve to be treated the same way as the local PTA. The world is what it is, and in a practical sense corporations have such enormous power that it would be foolhardy in the extreme to think that we can just blindly provide them with the same rights as individuals and then let the chips fall where they may.

In the end, I guess I think the court missed the obvious — and right — decision: recognizing that while nonprofit corporations created for the purpose of political advocacy can be fairly described as "organized groups of people" and treated as such, that doesn't require us to be willfully oblivious to the fact that big public companies are far more than that and can be treated differently. Exxon is not the Audubon Society and Google is not the NRA. There's no reason we have to pretend otherwise.

Full article here.>>

*****

George Washington of Washington's Blog wrote the following article expressing his opinion on the matter.

Supreme Court Ruling Guts Campaign Finance Law, "Threatens to Undermine the Integrity of Elected Institutions Around the Nation"

Courtesy of Washington's Blog

The long-awaited Supreme Court decision striking down most campaign finance laws – Citizens United v. Federal Election Commission – happened today.

One of the dissenting Supreme Court Justices, John Paul Stevens, wrote:

The court's ruling threatens to undermine the integrity of elected institutions around the nation.

Stevens also said that the court reached to expand beyond the scope of the case. In other words, the court acted for political reasons, not judicial reasons:

Essentially, five justices were unhappy with the limited nature of the case before us, so they changed the case to give themselves an opportunity to change the law.

This is a gigantic change, and you will see mammoth corporations – including the giant banks who have received trillions in taxpayer-funded bailouts, guarantees and other perks – inundating the airwaves with campaign blitzes to make sure that "loyal" politicians are elected.

Just watch: money which was taken from our pockets to "bail out" the too big to fails will be used to make sure that tame corporate mouthpieces are put into office.

Note: The decision also allows unions to go wild with buying campaign ads. But given that the too big to fails have unlimited access to the spigot of funds at the public trough, they will be able to outspend unions by many orders of magnitude.

Yes, I know that the giant banks have already bought and paid for Congress and the White House. See this, this and this. The Citizens United decision will just make it cheaper and easier to buy elections.

For other horrible recent Supreme Court decisions, see this and this.

 


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