January 22, 2010
Corporate Free Speech
“If the First Amendment has any force it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.” Citizens United v FEC.
Interesting. For a bunch of “strict constructionists” they appear to construe the Constitution quite broadly. I dare say the imputation of First Amendment rights to corporations on par with speech rights enjoyed by natural persons would be a concept alien to the founding fathers. Indeed, equating corporations with “associations of citizens” is quite a leap itself. If corporations are anything they are associations of capital and not citizens. The corporate law imposes no citizenship, or even residence, requirement on stockholders.
The globalization of capital markets ensures that stockholders in any of America’s largest corporations will not be made of up US citizens. So, while we correctly restrict the ability of non-citizens to participate in US elections, we leave open a large loophole for non-citizens to be very active participants. Does anyone think Carlos Slim can’t incorporate a Delaware entity named “Elections Are U.S., Inc.” with its stated nature of business reading something like: “The purpose of this corporation is to undertake legal activities to influence the US political process”?
My objections to this decision are almost entirely rooted in the corporate law. For example, the biggest mistake of the decision released last night, I think, was an extension of the argument that corporations are and share the same rights as natural people. Well, they're not. They're state created and regulated entities granted charters by the stated to serve a public purpose. States still, near as I can tell, maintain the right to grant and/or revoke charters on such conditions as they see fit. General incorporation statutes are only a little over a century old. Oh, I could go on, but I'll get off my soap-box.
Update: You know, I've been thinking about it. I think these rules that dictate how and under what circumstances a corporation can communicate with their shareholders are violations of a corporations free speech rights. I think maybe we should also abolish the Federal Securities Laws while we're at it as an impermissible restraint on speech.
January 22, 2010 | Permalink
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But didn't this case, in fact, involve an "association of citizens"? Citizens United was a nonprofit corporation organized for the express purpose of engaging in political speech. Most sizable associations of citizens, from churches to social clubs, are organized as corporations or limited liability companies, because otherwise members of the association will be subjected to serious legal and tax disadvantages. The effect of the statute, therefore, is to impose penalties upon any association organized for the purpose of engaging in political speech and every association organized for another purpose that might like to engage in political speech - penalties that do not apply to any association other than associations that engage in political speech - and then to grant specific exemptions from these penalties to selected specific associations that are favored by Congress.
This case is almost irrelevant to unions and for-profit corporations. The statute exempts them so long as they act through trade organizations and political action committees, which they cheerfully do. These for-profit organizations can raise almost unlimited funds for political purposes from their members, stockholders, executives and employees and the families of those persons, and then funnel that money through the candidates and parties. That is how they achieve their current enormous (not to say dominating) influence over the government and they could scarcely have more influence now that the court has struck down the statute.
What the case will do is get the Federal Election Commission off the backs of genuinely political, not-for-profit organizations that wish to engage in their own political speech without corrupt mediation by the candidates and the political parties.
Posted by: Greg | Jan 22, 2010 9:02:27 AM
I'm not a lawyer, but sometimes I play one in the emergency room. . . and here's my question for you real lawyers. If corporations have the same rights as people, how come people can own them? And would it be possible to initiate some sort of legal action to rescue our corporations from their clearly unconstitutional condition of slavery?
Essentially this would be a way to demonstrate the absurdity of the Supreme Court's 1886 decision in Santa Clara County v. Southern Pacific Railroad Company. What I don't know is who would have standing to bring such an action.
Any thoughts on this?
Posted by: Franz Reichsman | Jan 25, 2010 8:01:29 PM