Friday, July 13, 2012

Citizens United + Public Pensions = Compelled Speech

Sachs_B-lrOr so says Benjamin Sachs (Harvard) in his New York Times essay How Pensions Violate Free Speech.  Here's an excerpt:

In its Citizens United decision, the Supreme Court held that companies have a First Amendment right to make electoral expenditures with general corporate treasuries. And they’ve done so, with relish, pouring millions into the political system.

What Citizens United failed to account for, however, is that a significant portion of the money that corporations are spending on politics is financed by equity capital provided by public pension funds — capital contributions that the government requires public employees to finance with their paychecks.

This consequence of Citizens United is perverse: requiring public employees to finance corporate electoral spending amounts to compelled political speech and association, something the First Amendment flatly forbids.

Contrast this situation with how the court treats political spending by unions. In many states, public employees are required to pay dues to a labor union. If the public employees union were to spend any of the money raised through dues on politics, the court has ruled, the dues requirement would amount to forced political speech and association. To prevent this First Amendment violation, the court has held that no union may use an employee’s dues for political purposes if the employee objects.

The same should be true for pension funds and corporate politics.

Hat tip to Joe Slater (Toledo) for posting a link to this article on facebook. 


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So, after initially abortive efforts to equate union forced-fees for politics to corporate stock ownership, Professor Sachs has finally found compulsion in the purchase of corporate stock? Perhaps, and if so, good for him.

Of course, he fails to mention the fact that union officials frequently participate in the governance of these pensions plans (not fewer than four members of the CalPERS Board, for instance), and therefore make these investment decisions. Or that there are other, perhaps easier alternatives, such as governments switching to SEP-IRAs, which would allow employees to direct their own pension contributions, and remove the defining element of government compulsion, absent in most other stock transactions.

Posted by: James Young | Jul 14, 2012 6:13:57 PM

I'd expect nothing less from a former Assistant General Counsel of the Service Employees International Union.

Posted by: James Young | Jul 14, 2012 6:15:39 PM

The article is very good. It's bizarre that James Young seems to think it's some sort of counter to say that sometimes union officials have roles on pension boards. The point, of course, was that under the logic of Abood through Knox, the First Amendment is implicated when money is deducted from the pay of public employees that might be spent on political causes with which the employee disagrees. The analogy in that regard is very tight with pension deductions, whoever is making the investment decisions. It's also no answer to wish away defined benefit plans. They still have advantages for employers and employees, but moreover the point is that's the system we have in many places.

The second comment is an embarrassing but typical ad hominem. Were one to respond in kind, one might speculate that Mr. Young is has been made uncomfortable by Sachs showing that the exact same sort of "forced political contribution for public employees" Mr. Young claims to care so much about when it involves union dues exists with pension plans -- and yet Mr. Young's organization doesn't care about the latter issue.

Posted by: Joseph Slater | Jul 16, 2012 7:02:34 AM

I'm not sure what is "bizarre" about thinking "it's some sort of counter to say that sometimes union officials have roles on pension boards." Actually, that's not what I said. What I said was that they "frequently" do, and it took me about thirty seconds to find four examples on the largest state pension board in the country. However, since Joseph Slater seems to feel no need to explain why it's bizarre, I will explain why it's not: because such officials engage in the very decisionmaking that those who complain about corporate political expenditures claim to care about. What is bizarre is that Joseph Slater seems to think that it has no relevance. Perhaps what Joseph Slater really objects to is any suggestion that individuals should make their own investment decisions, a hardly unrealistic or unreasonable suggestion that he wishes away by dismissively deeming it an effort to "wish away defined benefit plans."

And, of course, it is very entertaining to watch those who oppose "the logic of Abood through Knox" trying to tell us what it actually means.

What is bizarre is that Joseph Slater seems to consider reference to one's experience as a shorthand for his underlying ideology as "embarrassing but typical ad hominem." Perhaps he actually believes it. More's to pity. One doesn't have experience as an Assistant General Counsel of an organization as radical as the SEIU without having drawn deeply from the Kool Aid well.

What is equally bizarre is that Joseph Slater would attempt to score points by piously decrying "embarrassing but typical ad hominem" ... while proceeding to provide at least as fine an example himself in his second paragraph. Were one to respond in kind, one my speculate that Mr. Slater has been made uncomfortable that the veil has been lifted somewhat in recent months on various union myths which he has worked to hard to advance and perpetuate (like the public employees fleeing AFSCME in droves when given the substantive choice to do so).

But I'll bite, to a degree: "uncomfortable," Mr. Slater? Hardly. In fact, were you not so bent on engaging in the tactics you purport to decry, you might have noticed that I commended Mr. Sachs for (finally!) finding an example where one could at least construct an arguable theory --- one not based in Marxist premises about value and ownership --- that there is compulsion. And as for "my" organization, Mr. Slater? "My" organization was founded when I was about five years old with the sole purpose of aiding employees suffering from compulsory unionism abuses. It is one of a multiplicity of organizations which was founded to meet a specific need in a specific context.

Mr. Slater should not worry so much about what "my" organization "care[s]" about, as there are certainly a multiplicity of organization which "care" about those issues which so concerning them; that's one of the nice things about a republic founded upon principles of liberty. Were I to respond in kind, however, one might speculate that Mr. Slater is deeply frustrated by the fact that the veil has been lifted from the abuses of those he viscerally defends, and that public employees in places like Wisconsin have, when given the choice, voted in droves against continued union representation.

Posted by: James Young | Jul 16, 2012 2:23:52 PM

(1) The point about some union officials on some pension boards should be obvious, especially to a right-to-work guy like you, James. It doesn't matter *what* the politics are of the investment folks making political moves, it's the fact that they are making political moves that -- per the logic of Abood-through-Knox -- triggers the First Amendment rights of those who might disapprove of those politics. And speaking of those cases (a) I have never said that I thought Abood was wrong, in fact I think it's a defensible opinion; and (b) even if I thought it was wrongly decided, I am perfectly capable of understanding its logic (as I assume you think you are capable of understanding the logic of opinions with which you disagree).

(2) My point about defined benefit plans is that they exist, and that wishing them away does not solve the First Am. problem Sachs describes. To make another analogy to the right-to-work debate, it's like folks who say, "well, if we didn't have exclusive, majority representation by unions, we wouldn't have the agency fee payer issue to worry about." That is of course, true as far as it goes, and it is also true that reasonable minds can differ on the exclusive majority model just as they can differ about defined benefit vs. defined contribution. But as long as the status quo exists, the First Am problem exists.

(3) You perhaps misunderstand what the term "ad hominem" means. You made the fallacy of trying to undermine an argument by referring to part of Sachs's background. I was making an observation about how you typically argue (more examples available on request).

(4) But I am genuinely glad to hear that you think Sachs has a decent point. This, then, is a real opportunity to show that you, and your organization, actually care about the principle that deductions from public employee pay being used for politics with which they may disagree creates a First Amendment issue, and to prove the many folks who (justifiably) think of right-to-work as essentially an anti-union front wrong. Go for it.

Posted by: Joseph Slater | Jul 17, 2012 7:22:41 AM

Addressing your second point, Joseph, no one is suggesting "wishing them away." What I am suggesting is that there is less-restrictive means of addressing the problem Sachs identifies, one that wouldn't frustrate others' First-Amendment rights. Sachs is suggesting there is a problem. Accepting that premise, he (and apparently, you) go immediately to a "solution" which suppresses speech, rather than offering an alternative which protects speech you apparently loathe, a paradigm case of what Madison described as the cure being worse than the disease. Federalist No. 10 (if memory serves).

As to your third point, I don't "misunderstand" your premise; I reject it. And relish the irony of your use of the same tactic of which you accuse me. I suspect that your real concern is that I understand perfectly exactly what it is that Sachs is up to here.

And as to your fourth point, "my" organization has a limited scope. To be sure, I suppose Foundation management could expand that scope, but that is a decision FOR management, not for me. And I suspect they're not foolishly in the habit of trying to appease the sniping of those who have little interest in doing anything but stifling speech with which they disagree.

Posted by: James Young | Jul 17, 2012 8:25:48 PM


Ignoring the personal stuff (and the fact that you apparently genuinely don't understand what "ad hominem" means), I remain puzzled by the way you address my second point. Is your entire substantive response really just "well, we wouldn't have this problem if we didn't have defined benefit plans"? Because that seems pretty inadequate, given the obvious fact that some employers and employees prefer to have defined benefit plans, and therefore such plans aren't going away in the foreseeable future. Thus, your response still seems to me analagous to people who would say to you, "well, we wouldn't have this objecting non-member of a union bargaining unit problem if we didn't have majority, exclusive representation." Sure, but the majority exclusive representation model isn't going way in the foreseabble future either.

Also, I'm curious as to why you think Sachs's proposal "suppresses speech." He's arguing -- analogous to arguments I'm sure you could make in your sleep -- that the speech rights of public employees who object to the way their mandatory deductions are being spent on politics is suppressing the speech rights of individual, dissenting employees. Are you suggesting that Sachs's proposal would suppress the speech rights of pension funds and/or their managers? Because that would be equivalent to saying that the Abood-Hudson-Knox line of cases suppresses the speech rights of unions, and I know you don't believe that.

Finally (and of course we could do this all week, but we probably shouldn't), I'm not saying that you control Right-to-Work organizations. I am saying, however, that we can draw conclusions about the goals and priorities of those who do control such groups by what they do, and what they don't do.

Posted by: Joseph Slater | Jul 18, 2012 8:33:33 AM

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