The ultimate impact of the Citizens United decision depends on the effect political advertisement has on voters. If political advertisement has a minimal effect on voters, then the decision is not that big of a deal. On the other hand, if political advertisement has a significant bearing on voters, then the decision will have significant repercussions.
The source for most political campaign advertisement is the television. Because of the television, political campaign advertisement has become more accessible to voters. Seth Grossman, Creating Competitive and Informative Campaigns, 22 YLLPR 351, 353 (2004) (discussing Reliance on Television Advertising). However, television campaign advertisements are not cheap. In 1996, the total cost of political advertisement on television was $400 million. Id. In 2002, the total cost was slightly less than one billion. Id.
These statistics show that the Citizens United decision could have a huge impact on the amount and type of information that voters receive. The decision allows corporations to fund their own political campaigns for or against a political candidate. Because most of the major television networks are controlled by corporations, corporations could give themselves more “free airtime” or give themselves more time slots. Even though the law does require equal opportunity to airtime, the equal opportunity law does not matter if a candidate cannot afford the airtime. Therefore, the Citizens United decision did not level the playing field.
While the decision did not level the playing field, the impact of this discrepancy depends on the effect political campaign advertisement has on voters. Two effects that political advertising has on voters are as follows. Shanto Iyengar, The Effects of Media-Based Campaigns on Candidate and Voter Behavior, 35 INLR 691, 694-96 (2002) (discussing the effect of advertisement). One effect relates to the beliefs and attitudes toward candidates. Id. The second effect relates to voters feelings about campaigns and the election process. Id.
In essence, the effects of political advertisement are based on party affiliation. For example, “[a]ds aired by Democrats are highly persuasive among Democratic voters, less persuasive among non-partisans, and not at all persuasive among Republicans.” Id. Evidence suggests that negative campaign increases voter cynicism and contributes to lower voter turnout. Id. Because negative campaigns dissuade people from voting, many campaign managers use negative campaign advertisement to their advantage. Id. For example, “the initial attack advertisement spawns a negative campaign, fostering cynical attitudes about the candidates, as well as the political process, and lowers turnout.” Id.
Furthermore, recent research suggests that there are moderate campaign effects on voter knowledge, preferences, and even behavior. Jeremy Sheff, The Myth of the Level Playing Field, 75 MOLR 143, 151-56 (2010) (discussing the effects of political advertisement). The evidence suggests that “repeated exposure to a candidate's campaign advertisements appears to moderately and consistently strengthen positive attitudes toward the candidate.” Id. Further, the evidence has showed that “campaign spending by incumbents does not tend to increase their share of the vote, while campaign spending by challengers does.” Id. To place the effect of political campaign spending into perspective, a recent study showed that “$100,000 worth of television advertising at median rates corresponds with only a fraction of a percent change in vote shares in federal legislative elections.” Id.
In conclusion, the Citizens United decision impact on voters relies on the type of information voters receive. While the decision may not level the playing field among campaigners, the effect of the decision is limited to the effect of the campaign information on the voter. As research suggests, the effect is very limited.
Sunday, October 31, 2010
Tuesday, October 26, 2010
Knowing what you need to know
What effect could the holding in Citizens United have on proxy elections of corporate board if directors? Theoretically, with Citizens United now allowing corporations to use treasury funds to support “electioneering communication” for or against candidates in political races, those seeking places on corporate board of directors could find their political beliefs a central issue rather than their business knowledge or acumen; the qualities typically under scrutiny when electing those to help make the decisions to run a corporation. In essence, by allowing corporations to use general treasury monies to fund political advertisements, it adds another element of decision-making to those already burdened with the decisions necessary to run a successful corporation. Think of it this way, many times shareholders disagree with business decisions boards of directors make because they may not believe it’s in the best interest of the corporation. Now it seems added to the list of decisions being made will include which candidate the corporation finds to support their concerns the best. Shareholders now have another facet to consider when looking at just how happy they are with the board of directors actions.
An issue discussed in the Citizens United opinion was that “disclosure requirements can chill donations to an organization by exposing donors to retaliation.” Kennedy noted in his opinion that, “The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.” Essentially, disclosure is what allows the voter, and shareholder to know where money is being spent so informed decisions can be made. This same information must be utilized by the shareholder when looking at just how its corporations funds are being spent on political issues. The Court also noted that many findings when Congress passed the BRCA were premised on a system without adequate disclosure. As long as there is a system of disclosure in place, there will be enough transparency in the process that all involved parties can know where money is being spent and show support or disdain for that action. However, does this transparency exist or are we closer to a system where disclosure is inadequate.
In a study recently issued by the Investor Responsibility Research Center Institute and the Sustainable Investments Institute, entitled “How Companies Influence Elections: Political Campaign Spending Patterns and Oversight at America’s Largest Companies” found that while almost 80 percent of S&P 500 companies have disclosed direct political campaign spending policies, 86 percent have no disclosed policies regarding indirect political expenditures. Further than that, only 20 percent of corporations disclose how much is actually spend and which organizations or causes receive the funds. (http://www.businesswire.com/news/home/20101014005545/en/Study-Finds-86-SP-500-Companies-Disclosed) The study discussed how backlash from corporate political spending, specifically from the boycott stemming from Target’s indirect political expenditures, show that shareholders want greater disclosure so the system is more transparent, allowing investors to protect their investments. One fact the study found is that while nearly 80 percent of S&P 500 companies have disclosed political campaign spending, a vast minority only have policies readily accessible to describe the decision process of that spending, and the oversight given to it. If this is the case, how can the majority of shareholders have enough information outside of where the money was spent to assess the actions of boards of directors? Beyond this still is the issue that corporations can still donate now unlimited amounts of money to non-profit organizations and trade groups which do not have to show where their donations come from. The question still remains, is there enough transparency in the process to really leave all interested parties satisfied. From a shareholders perspective, as much information about where a corporation is spending money is key, otherwise, without it how can one determine if a company is being mismanaged? As the election comes and goes hopefully information about spending will become more readily available, but it would seem for now without some government intervention we may be slowly falling toward a system where disclosure is inadequate.
An issue discussed in the Citizens United opinion was that “disclosure requirements can chill donations to an organization by exposing donors to retaliation.” Kennedy noted in his opinion that, “The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.” Essentially, disclosure is what allows the voter, and shareholder to know where money is being spent so informed decisions can be made. This same information must be utilized by the shareholder when looking at just how its corporations funds are being spent on political issues. The Court also noted that many findings when Congress passed the BRCA were premised on a system without adequate disclosure. As long as there is a system of disclosure in place, there will be enough transparency in the process that all involved parties can know where money is being spent and show support or disdain for that action. However, does this transparency exist or are we closer to a system where disclosure is inadequate.
In a study recently issued by the Investor Responsibility Research Center Institute and the Sustainable Investments Institute, entitled “How Companies Influence Elections: Political Campaign Spending Patterns and Oversight at America’s Largest Companies” found that while almost 80 percent of S&P 500 companies have disclosed direct political campaign spending policies, 86 percent have no disclosed policies regarding indirect political expenditures. Further than that, only 20 percent of corporations disclose how much is actually spend and which organizations or causes receive the funds. (http://www.businesswire.com/news/home/20101014005545/en/Study-Finds-86-SP-500-Companies-Disclosed) The study discussed how backlash from corporate political spending, specifically from the boycott stemming from Target’s indirect political expenditures, show that shareholders want greater disclosure so the system is more transparent, allowing investors to protect their investments. One fact the study found is that while nearly 80 percent of S&P 500 companies have disclosed political campaign spending, a vast minority only have policies readily accessible to describe the decision process of that spending, and the oversight given to it. If this is the case, how can the majority of shareholders have enough information outside of where the money was spent to assess the actions of boards of directors? Beyond this still is the issue that corporations can still donate now unlimited amounts of money to non-profit organizations and trade groups which do not have to show where their donations come from. The question still remains, is there enough transparency in the process to really leave all interested parties satisfied. From a shareholders perspective, as much information about where a corporation is spending money is key, otherwise, without it how can one determine if a company is being mismanaged? As the election comes and goes hopefully information about spending will become more readily available, but it would seem for now without some government intervention we may be slowly falling toward a system where disclosure is inadequate.
Tuesday, October 19, 2010
A Lack of Support: The Court’s Sparse Analysis of Corporate Personhood
Because of the Supreme Court’s January decision in Citizens United, ads going out to the public within sixty days of the election are no longer subject to rigorous reporting requirements that once deterred corporations and unions from attaching their funds to these high profile mud-slinging matches. See Citizens United v. FEC, ___ U.S. ___, 130 S. Ct. 876 (2010). The Court held that the First Amendment protects corporate and union “electioneering” speech from the regulatory requirements of the Bipartisan Campaign Reform Act.
This opinion has drawn criticism. Recently, Chris Coons, a candidate for one of the U.S. Senate seats from Delaware, argued, “The free speech rights of corporations, I don’t think deserve the free speech rights of living breathing humans.” Michael Falcone & Amy Walter, The Note: Dem-Mentum in the Senate, ABCNews.com, (Oct. 14, 2010), http://blogs.abcnews.com/thenote/2010/10/the-note-dem-mentum-in-the-senate.html. Mr. Coons raised an interesting question – why does the Supreme Court of the United States grant free speech rights to corporations? Surprisingly, despite the amount of attention the Court has given this question, there is no clear answer.
Justice Kennedy’s lengthy opinion for the Court in Citizens United covers every conceivable legal issue in a protracted battle with the dissenting justices over the application of important foundational analyses: stare decisis, statutory interpretation, and constitutional construction. Yet the dissenters never challenged Justice Kennedy’s recitation of the Court’s doctrine on corporate First Amendment rights.
Justice Kennedy’s analysis of why a corporation has constitutionally protected First Amendment rights rests almost entirely on the Court’s earlier opinion in First Nat. Bank of Boston v. Bellotti. 435 U.S. 765 (1978). The revolution in Bellotti was not that corporations have constitutionally protected rights in political speech. Rather, the revolution was that the Bellotti Court steered First Amendment analysis out of its doctrinal blackhole regarding why corporations are treated like “living breathing humans” by avoiding the question entirely. The Court boldly maintained that the lower court asked the “wrong question” because it focused on whether corporations have rights that are coextensive with natural persons. Id. at 776. The “right question” was whether the asserted speech was of the kind that the First Amendment seeks to protect. Id.
The Court’s analysis of the “right question” has intellectual appeal. Unlike other amendments in the Bill of Rights, the First Amendment does not limit itself to “persons.” Compare U.S. Const. amend. I (“Congress shall make no law . . . abridging the freedom of speech . . . .”) with U.S. Const. amend. II (“[T]he right of the people to keep and bear Arms, shall not be infringed.”) (emphasis added); U.S. Const. amend IV (“The right of the people to be secure in their persons, houses, papers, and effects . . . .”) (emphasis added); U.S. Const. amend. V (“No person shall be . . . deprived of life, liberty, or property, without due process of law . . . .”) (emphasis added); U.S. Const. amend. IX (“The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.”) (emphasis added); U.S. Const. amend. X (“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”) (emphasis added).
Nevertheless, the problem is that the First Amendment prohibits Congress, not states, from abridging the freedom of speech. See U.S. Const. amend. I. Certainly the First Amendment applies to states despite the language of the First Amendment because it is incorporated through the Fourteenth Amendment’s due process clause. But like the Fifth Amendment, the protections bestowed by the Fourteenth Amendment are limited to “persons.” However, in its holding, the Court maintains that it need not address that question because it is the “wrong question.”
The Court never adequately addressed the question until it analyzed the “wrong” question – whether corporations have a First Amendment right that is coextensive with natural persons. The Court concluded that even if that was the right question, the lower court erred in its analysis when it held that corporate First Amendment rights are only incorporated through the term “property” in the Fourteenth Amendment. The Court noted that the First Amendment has always been incorporated through the term “liberty,” not “property.” Id. at 779. Of course, whether it is property or liberty, it is still limited by the term person. To address this problem, which it handled in two short footnotes, see id. at 780 n.15, 16, the Court cited Santa Clara County v. Southern Pacific R. Co., 118 U.S. 394 (1886), Covington & Lexington Turnpike R. Co. v. Sanford, 164 U.S. 578 (1896), and Grosjean v. American Press Co., 297 U.S. 23 (1936). A quick examination of the latter two opinions reveals that, like Bellotti, both opinions merely cite to Santa Clara County without additional analysis.
To retrace those steps, the Citizens United conclusion that corporations are entitled to First Amendment rights relies upon Bellotti, which relies upon Covington and Grosjean, which rely entirely upon Santa Clara County, the apparent patient zero for this infectious idea. So what is the analysis in Santa Clara County that the corporate First Amendment doctrine hinges upon? “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 opinion that it does.” Santa Clara County, 118 U.S. 394. Moreover, the quoted paragraph is not even a part of the opinion. It was added by the Court reporter in the opinion summary.
Therefore, despite the attention the Court has given this issue, the legal question of what rationale supports a corporation’s status as a “person” looms circularly analyzed within the Court’s corporate constitutional rights jurisprudence. We are left returning to the question that began this inquiry: why are corporations entitled to constitutional protections?
Monday, October 18, 2010
Appearances are Everything . . .
In the case of Citizens United v. Federal Election Commission, 130 S.Ct. 876 (2010), the United States Supreme Court struck down what had been considered firmly-entrenched restrictions on corporate political expenditures. Id. at 913. In doing so, the majority seemingly dismissed the notion that the public does, more often than not, perceive a corporation’s political expenditures (as distinguished from contributions) to be analogous to bribes since the elected representative’s human nature would prompt him to feel as if he owed something to the corporation that essentially put him in office. Id. at 909. In fact, studies have supported that notion by concluding that people are wary of corporate political participation because “[corporations] are more likely to get what they want from elected officials because they wield disproportionate influence on voters, or because they are not people, citizens, or voters and behave differently than those actors in a way that can be harmful to the democratic process.” Saul Zipkin, The Election Period and Regulation of the Democratic Process, 18 Wm. & Mary Bill of Rts. J. 533, 580 (2010). At first glance, it seemed that the Citizens United majority appreciated the abovementioned principal by citing the case of Federal Election Commission v. National Conservative Political Action Committee, where the Supreme Court itself had previously noted that “[e]lected officials are influenced to act contrary to their obligations of office by the prospect of financial gain to themselves or infusions of money into their campaigns. The hallmark of corruption is the financial quid pro quo: dollars for political favors.” 470 U.S. 480, 497 (1985).
Nevertheless, the Citizens United majority reached the opposite result, concluding that just because speakers may influence elected officials, it does not necessarily follow that those officials are corrupted by that influence. “The fact that a corporation, or any other speaker, is willing to spend money to try to persuade voters presupposes that the people have the ultimate influence over elected officials.” Citizens United, 130 S.Ct. at 910. In a weak attempt to illustrate its unsound proposition, the Court glossed over the case of Caperton v. A.T. Massey Coal Company, 129 S.Ct. 2252 (2009). In carefully choosing only the language that supported its opinion, the majority highlighted the Caperton Court’s holding that a judge is required to recuse himself “when a person with a personal stake in a particular case had a significant and disproportionate influence in placing the judge on the case by raising funds or directing the judge’s election campaign when the case was pending or imminent.” Citizens United, 130 S.Ct. at 910 (citing Caperton, 129 S.Ct. at 2263-64). The Citizens United Court was quick to rely on the superficial conclusion that the Caperton decision did not restrict speech; rather, it merely required a judge’s recusal when impartiality would be questionable. Id. The issue, however, is whether unlimited corporate expenditures could result in the appearance of impropriety. That being said, was not the questionable impartiality in the Caperton case caused by the influence of the “speech” involved? Simply put, the Caperton case seems to prove, rather than negate, what the Citizens United majority was trying so hard to deny—that independent expenditures can potentially promote the appearance of corruption when dollars essentially manifest themselves in the form of political favors.
On the other hand, in his dissenting opinion in the Citizens United case, Justice Stevens (joined by Justices Ginsburg, Breyer, and Sotomayor) fathomed what the majority did not—that the Caperton case actually proves “that even technically independent expenditures can be corrupting in much the same way as direct contributions . . . .” 130 S.Ct. at 967. In the Caperton case, Don Blankenship was the chief executive officer of a corporation that was involved in a lawsuit pending before the West Virginia Supreme Court of Appeals (“WVSCA”). Id. (citing Caperton, 129 S.Ct. at 2257). Before the lawsuit arrived in front of the WVSCA, Blankenship had spent the statutory maximum on contributions to Brent Benjamin, a candidate who ran for, and successfully obtained, a seat on the WVSCA. Id. Furthermore, Blankenship “donated almost $2.5 million to ‘And For The Sake Of The Kids,’” a §527 corporation that ran advertisements attacking Benjamin’s adversary. Id. As if that were not enough, Blankenship also spent over $500,000 on independent expenditures in support of Benjamin’s campaign. Id. The question of “whether a constitutional violation existed when a justice refused to recuse himself from a case when he had received numerous campaign contributions and expenditures from one of the parties” was subsequently appealed to the United States Supreme Court. The Court could not in good conscience, after considering all of the facts, deny that Blankenship played a pivotal role in getting Benjamin elected to the WVSCA. Id. Thus, the Supreme Court concluded that the entire situation created a “constitutionally intolerable probability of actual bias.” Id. (citing Caperton, 129 S.Ct. at 2262).
The Citizens United dissent thus recognized that, in the Caperton case, “Justice Benjamin would nevertheless [have felt] a debt of gratitude to Blankenship for his extraordinary efforts to get him elected.” 130 S.Ct. at 967. Accordingly, the Citizens United dissent appreciated the fact that “some expenditures may be functionally equivalent to contributions in the way they influence the outcome of a race, the way they are interpreted by the candidates and the public, and the way they taint the decisions that the officeholder thereafter takes.” Id. at 968. Thus, the Caperton decision, although addressing an individual’s participation rather than a corporation’s, demonstrated that “‘certain restrictions on corporate electoral involvement’ may likewise be needed to ‘hedge against circumvention of valid contribution limits.’” Id. Such restrictions are necessary after considering the general public’s bitterness toward a corporation’s expenditures that seem to “buy” political access and favors from the particular candidates it essentially puts in office. Therefore, one may wonder: “Is it really a good idea to allow corporations the opportunity to spend unlimited amounts on political expenditures, even if it would result in the appearance of impropriety?”
Nevertheless, the Citizens United majority reached the opposite result, concluding that just because speakers may influence elected officials, it does not necessarily follow that those officials are corrupted by that influence. “The fact that a corporation, or any other speaker, is willing to spend money to try to persuade voters presupposes that the people have the ultimate influence over elected officials.” Citizens United, 130 S.Ct. at 910. In a weak attempt to illustrate its unsound proposition, the Court glossed over the case of Caperton v. A.T. Massey Coal Company, 129 S.Ct. 2252 (2009). In carefully choosing only the language that supported its opinion, the majority highlighted the Caperton Court’s holding that a judge is required to recuse himself “when a person with a personal stake in a particular case had a significant and disproportionate influence in placing the judge on the case by raising funds or directing the judge’s election campaign when the case was pending or imminent.” Citizens United, 130 S.Ct. at 910 (citing Caperton, 129 S.Ct. at 2263-64). The Citizens United Court was quick to rely on the superficial conclusion that the Caperton decision did not restrict speech; rather, it merely required a judge’s recusal when impartiality would be questionable. Id. The issue, however, is whether unlimited corporate expenditures could result in the appearance of impropriety. That being said, was not the questionable impartiality in the Caperton case caused by the influence of the “speech” involved? Simply put, the Caperton case seems to prove, rather than negate, what the Citizens United majority was trying so hard to deny—that independent expenditures can potentially promote the appearance of corruption when dollars essentially manifest themselves in the form of political favors.
On the other hand, in his dissenting opinion in the Citizens United case, Justice Stevens (joined by Justices Ginsburg, Breyer, and Sotomayor) fathomed what the majority did not—that the Caperton case actually proves “that even technically independent expenditures can be corrupting in much the same way as direct contributions . . . .” 130 S.Ct. at 967. In the Caperton case, Don Blankenship was the chief executive officer of a corporation that was involved in a lawsuit pending before the West Virginia Supreme Court of Appeals (“WVSCA”). Id. (citing Caperton, 129 S.Ct. at 2257). Before the lawsuit arrived in front of the WVSCA, Blankenship had spent the statutory maximum on contributions to Brent Benjamin, a candidate who ran for, and successfully obtained, a seat on the WVSCA. Id. Furthermore, Blankenship “donated almost $2.5 million to ‘And For The Sake Of The Kids,’” a §527 corporation that ran advertisements attacking Benjamin’s adversary. Id. As if that were not enough, Blankenship also spent over $500,000 on independent expenditures in support of Benjamin’s campaign. Id. The question of “whether a constitutional violation existed when a justice refused to recuse himself from a case when he had received numerous campaign contributions and expenditures from one of the parties” was subsequently appealed to the United States Supreme Court. The Court could not in good conscience, after considering all of the facts, deny that Blankenship played a pivotal role in getting Benjamin elected to the WVSCA. Id. Thus, the Supreme Court concluded that the entire situation created a “constitutionally intolerable probability of actual bias.” Id. (citing Caperton, 129 S.Ct. at 2262).
The Citizens United dissent thus recognized that, in the Caperton case, “Justice Benjamin would nevertheless [have felt] a debt of gratitude to Blankenship for his extraordinary efforts to get him elected.” 130 S.Ct. at 967. Accordingly, the Citizens United dissent appreciated the fact that “some expenditures may be functionally equivalent to contributions in the way they influence the outcome of a race, the way they are interpreted by the candidates and the public, and the way they taint the decisions that the officeholder thereafter takes.” Id. at 968. Thus, the Caperton decision, although addressing an individual’s participation rather than a corporation’s, demonstrated that “‘certain restrictions on corporate electoral involvement’ may likewise be needed to ‘hedge against circumvention of valid contribution limits.’” Id. Such restrictions are necessary after considering the general public’s bitterness toward a corporation’s expenditures that seem to “buy” political access and favors from the particular candidates it essentially puts in office. Therefore, one may wonder: “Is it really a good idea to allow corporations the opportunity to spend unlimited amounts on political expenditures, even if it would result in the appearance of impropriety?”
Sunday, October 17, 2010
Constitutionality of Citizens United Under the Equal Protection Doctrine
This blog is part two of a two part series. Part I defended the Constitutionality of Citizens United from the point of view of the government. Part II will argue against the Constitutionality of Citizens United from the point of view of the natural born persons of the United States.
As Part I discussed, the four parts to an Equal Protection claim are as follows: (1) who is the actor, (2) what is the classification, (3) based on this classification, what is the appropriate level of scrutiny, and (4) does the government satisfy that level of scrutiny?
Part I analyzed questions one and two. Part I one assumed that an allegation that the government is the actor would be successful, and Part I also established that that classification is natural born persons versus corporations. These assumptions will be assumed in Part II and will not be discussed.
In determining the level of scrutiny, the Supreme Court has considered the ability of the group to protect itself through the political process. This protection is based on whether the group has access to the political process; the ability to vote. Part I argued that the government would argue for rational basis because corporations are taxed and are unable to vote.
Here, natural born persons would want to argue for strict scrutiny because this standard is the highest standard to meet. Under this standard, the government must show that its policy furthers a compelling interest, and the policy is narrowly tailored. However, strict scrutiny is usually applied in instances where the government has discriminated against a group based on ethnicity, national origin, or an immutable characteristic. Here, the classification is not based on ethnicity, national origin, or an immutable characteristic. Therefore, an argument for strict scrutiny will probably be rejected, and the argument for rational basis will most likely be upheld.
Under rational basis, the government must have a legitimate interest, and the means chosen must be reasonably related to that interest. As analyzed in Part I, the government may have a legitimate interest to protect a corporation’s freedom of speech because a corporation cannot vote. However, the means chosen by the government is not reasonably related to that interest.
In attacking the means chosen, the natural born persons will allege that the means chosen are not reasonably related to the interest because the classification is under inclusive and that an alternative means exist. A law is under inclusive if it does not apply to individuals who are similar to those to whom the law applies. Here, the interest alleged is that the government wants to protect corporations because corporations are taxed and cannot vote. However, aliens pay taxes, cannot vote, and are capped on the amount of political campaign contributions they can make, unless the alien is part of a corporation. On the other hand, the government will counter by stating that aliens are not citizens of this country, while corporations are citizens of this country, cannot vote, and are being taxed without representation.
Next, natural born persons would want to allege that an alternative means exist that furthers the government’s legitimate interest. The alternative means is that the government can place the same campaign restrictions on corporations that it uses on natural born persons. This treatment will further the governments interest and will not create a suspect classification between corporations and natural born persons. The government may attempt to counter this argument, but I believe the Court would uphold that an alternative means exist.
In conclusion, natural born citizens can attack the constitutionality of the Citizens United decision. The Court will probably review the classification under the theory of rational basis. Because the burden under this test is minimal, the government would probably be able to satisfy the test, except for proving that the means chosen are sufficient. However, the Court could potentially dodge the issue. In this argument, the remedy requests the government to impose the same campaign restrictions on corporations as it does natural born persons. To dodge the issue, the Court would likely conclude that the remedy lies with the legislature and not with the Court.
As Part I discussed, the four parts to an Equal Protection claim are as follows: (1) who is the actor, (2) what is the classification, (3) based on this classification, what is the appropriate level of scrutiny, and (4) does the government satisfy that level of scrutiny?
Part I analyzed questions one and two. Part I one assumed that an allegation that the government is the actor would be successful, and Part I also established that that classification is natural born persons versus corporations. These assumptions will be assumed in Part II and will not be discussed.
In determining the level of scrutiny, the Supreme Court has considered the ability of the group to protect itself through the political process. This protection is based on whether the group has access to the political process; the ability to vote. Part I argued that the government would argue for rational basis because corporations are taxed and are unable to vote.
Here, natural born persons would want to argue for strict scrutiny because this standard is the highest standard to meet. Under this standard, the government must show that its policy furthers a compelling interest, and the policy is narrowly tailored. However, strict scrutiny is usually applied in instances where the government has discriminated against a group based on ethnicity, national origin, or an immutable characteristic. Here, the classification is not based on ethnicity, national origin, or an immutable characteristic. Therefore, an argument for strict scrutiny will probably be rejected, and the argument for rational basis will most likely be upheld.
Under rational basis, the government must have a legitimate interest, and the means chosen must be reasonably related to that interest. As analyzed in Part I, the government may have a legitimate interest to protect a corporation’s freedom of speech because a corporation cannot vote. However, the means chosen by the government is not reasonably related to that interest.
In attacking the means chosen, the natural born persons will allege that the means chosen are not reasonably related to the interest because the classification is under inclusive and that an alternative means exist. A law is under inclusive if it does not apply to individuals who are similar to those to whom the law applies. Here, the interest alleged is that the government wants to protect corporations because corporations are taxed and cannot vote. However, aliens pay taxes, cannot vote, and are capped on the amount of political campaign contributions they can make, unless the alien is part of a corporation. On the other hand, the government will counter by stating that aliens are not citizens of this country, while corporations are citizens of this country, cannot vote, and are being taxed without representation.
Next, natural born persons would want to allege that an alternative means exist that furthers the government’s legitimate interest. The alternative means is that the government can place the same campaign restrictions on corporations that it uses on natural born persons. This treatment will further the governments interest and will not create a suspect classification between corporations and natural born persons. The government may attempt to counter this argument, but I believe the Court would uphold that an alternative means exist.
In conclusion, natural born citizens can attack the constitutionality of the Citizens United decision. The Court will probably review the classification under the theory of rational basis. Because the burden under this test is minimal, the government would probably be able to satisfy the test, except for proving that the means chosen are sufficient. However, the Court could potentially dodge the issue. In this argument, the remedy requests the government to impose the same campaign restrictions on corporations as it does natural born persons. To dodge the issue, the Court would likely conclude that the remedy lies with the legislature and not with the Court.
Tuesday, October 12, 2010
Some musings on the effect of Citizens United
It seems that the decision in Citizens United sparked, not so much spending as it has lively debate. The most controversial Supreme Court ruling in sometime (Rep. Alan Grayson demoaned the ruling as the “worst Supreme Court decision since the Dred Scott case”) has publicly been the target of attack from all directions, including President Barack Obama himself. The obvious thought that has dominated most press outlets and commentators everywhere is that the new ruling will cause a massive influx of money into campaigns, and as often happens when large amounts of money are involved, corrupt the politicians and system in general. But is this really the case?
There is no doubt that the ruling will, and has opened up the treasury coffers of many corporations, and flowed the funds into various political fronts. Notably, Target gave money to support an anti-gay measure in Minnesota, and in West Virginia mining executives are funneling money to those candidates who will help protect the industry so vital to this state’s health. Is there a greater advantage however from one side of the aisle to the other? Many new outlets would have you believe that, of course, the GOP and deep pocket Republicans will absolutely gain a huge advantage as a result of Citizens United, and many stories recently show that money for GOP campaigns and causes is up at the moment, but a larger question was raised: Is it truly because of Citizens United or a reflection of the feeling toward the current administration? My honest opinion on that topic is it’s probably a bit of both. As with the normal political landscape, when the party in control of the White House and Congress isn’t living up to the expectations of those who elected them (see George W. Bush’s 2nd term), there is backlash by more support for the other side in hopes of a change for the better. In reality, this occurs whether or not Target, Wal-Mart, Nike, or G.E. can spend lots of money on Republican supported issues or Democrat supported issues.
In the Court’s eyes, what this ruling did was level the playing field for all “persons” with respect to First Amendment rights of election speech. Prior to this ruling, news corporations were the only corporations that weren’t subject to the same rules as regular corporations. Now, it’s simply covered the gap between the two. Let’s be real, do any of us see either Keith Olbermann or Bill O’Reilly not running their mouths 60 days prior to an election? Of course, not so in that sense, one could argue that simply giving regular non-news corporations the same right to speak (through spending unlimited amounts of money on ads of their choice) isn’t all that bad.
I suppose I simply choose to look at the upside this could bring rather than fall into the presumption that inevitably money will corrupt the system. Now that all corporations may have their say as persons, the voters are likely to be bombarded with much more material than normal heading into an election. Again, this could be a double edged sword. Information never hurt anyone, unless of course it’s inaccurate information. I don’t believe that this ruling will simply benefit the GOP because they have historically been the big money party, but I believe both sides will have greater support and the advantage of deep pockets will become a moot point. After these midterm elections, we will perhaps know more of the real effects this ruling had on political spending, since FEC reports occur monthly, the last big push of spending won’t be reported until after the elections.
Should the Democrats lose some key positions this November, the backlash from the left against Citizens United is a certainty, but is it warranted? This is a thought that will be debated for some time, but until there are concrete facts showing a one-sided advantage from this ruling, we can’t throw the Citizens United ruling under the bus just yet.
There is no doubt that the ruling will, and has opened up the treasury coffers of many corporations, and flowed the funds into various political fronts. Notably, Target gave money to support an anti-gay measure in Minnesota, and in West Virginia mining executives are funneling money to those candidates who will help protect the industry so vital to this state’s health. Is there a greater advantage however from one side of the aisle to the other? Many new outlets would have you believe that, of course, the GOP and deep pocket Republicans will absolutely gain a huge advantage as a result of Citizens United, and many stories recently show that money for GOP campaigns and causes is up at the moment, but a larger question was raised: Is it truly because of Citizens United or a reflection of the feeling toward the current administration? My honest opinion on that topic is it’s probably a bit of both. As with the normal political landscape, when the party in control of the White House and Congress isn’t living up to the expectations of those who elected them (see George W. Bush’s 2nd term), there is backlash by more support for the other side in hopes of a change for the better. In reality, this occurs whether or not Target, Wal-Mart, Nike, or G.E. can spend lots of money on Republican supported issues or Democrat supported issues.
In the Court’s eyes, what this ruling did was level the playing field for all “persons” with respect to First Amendment rights of election speech. Prior to this ruling, news corporations were the only corporations that weren’t subject to the same rules as regular corporations. Now, it’s simply covered the gap between the two. Let’s be real, do any of us see either Keith Olbermann or Bill O’Reilly not running their mouths 60 days prior to an election? Of course, not so in that sense, one could argue that simply giving regular non-news corporations the same right to speak (through spending unlimited amounts of money on ads of their choice) isn’t all that bad.
I suppose I simply choose to look at the upside this could bring rather than fall into the presumption that inevitably money will corrupt the system. Now that all corporations may have their say as persons, the voters are likely to be bombarded with much more material than normal heading into an election. Again, this could be a double edged sword. Information never hurt anyone, unless of course it’s inaccurate information. I don’t believe that this ruling will simply benefit the GOP because they have historically been the big money party, but I believe both sides will have greater support and the advantage of deep pockets will become a moot point. After these midterm elections, we will perhaps know more of the real effects this ruling had on political spending, since FEC reports occur monthly, the last big push of spending won’t be reported until after the elections.
Should the Democrats lose some key positions this November, the backlash from the left against Citizens United is a certainty, but is it warranted? This is a thought that will be debated for some time, but until there are concrete facts showing a one-sided advantage from this ruling, we can’t throw the Citizens United ruling under the bus just yet.
Monday, October 11, 2010
International Campaign Influence after Citizen United: Misplaced Attention
President Obama stated his displeasure of the Supreme Court decision in Citizen United only days after the opinion was released when he said that the decision “open[ed] the floodgates for special interests — including foreign corporations — to spend without limit in our elections. Well I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities.” These feeling and concerns have not been forgotten as recently reported by the Wall Street Journal, members of Congress have been attacking certain independent spending groups about the use of foreign money in political spending in the upcoming midterm elections. This type of political pressure being applied can best be seen in recent complaints about the U.S. Chamber of Commerce, a strong supporter of several GOP gubernatorial and senatorial candidates, using general treasury funds which contain some $300,000 of annual dues collected from foreign members in their recent string of political ads. What the article does not point out is that the U.S. Chamber of Commerce collects hundreds of millions of dollars a year in annual dues and budgeted $75,000,000 in spending for this election cycle alone. The point that I would like to make is if foreign influence on political elections is such an important issue, their efforts would be better served amending §310 of the Communications Act of 1934 than pining about $300,000 of general treasury funds.
Before turning to the provisions of the Communications Act, I will discuss how the members of the Court addressed foreign involvement in U. S. elections. The majority opinion written by Justice Kennedy only briefly touches on this issue and largely dismisses these concerns without much thought. “We need not reach the question whether the Government has a compelling interest in preventing foreign individuals or associations from influencing our Nation's political process. Cf. 2 U.S.C. § 441e (contribution and expenditure ban applied to “foreign national[s]”). Section 441b is not limited to corporations or associations that were created in foreign countries or funded predominately by foreign shareholders. Section 441b therefore would be overbroad even if we assumed, arguendo, that the Government has a compelling interest in limiting foreign influence over our political process. See Broadrick, 413 U.S., at 615, 93 S.Ct. 2908.”
Justice Stevens voiced more concern about foreign involvement in his dissent. “Unlike voters in U.S. elections, corporations may be foreign controlled. Unlike other interest groups, business corporations have been “effectively delegated responsibility for ensuring society's economic welfare”; they inescapably structure the life of every citizen. “ ‘[T]he resources in the treasury of a business corporation,’ ” furthermore, “ ‘are not an indication of popular support for the corporation's political ideas.’ ” Id., at 659, 110 S.Ct. 1391 (quoting MCFL, 479 U.S., at 258, 107 S.Ct. 616). “ ‘They reflect instead the economically motivated decisions of investors and customers. The availability of these resources may make a corporation a formidable political presence, even though the power of the corporation may be no reflection of the power of its ideas.’ ” 494 U.S., at 659, 110 S.Ct. 1391 (quoting MCFL, 479 U.S., at 258, 107 S.Ct. 616).
While the idea that limiting foreign influence in the American election process is sound, I would argue that it would be better accomplished by revising the laws concerning the licensing of broadcast, radio, and common carriers. The impact that media stations have over the flow of information is monumental. While the recent explosions of internet advertising has drastically change the landscape of political advertising over the last 10 years, the majority of campaign funds are still spent on ads involving traditional media outlets. The current status of federal statutes allows foreign investors significant influence entities holding these licenses. Specifically, 47 U.S.C. §310(b)contains the following provision:
No broadcast or common carrier or aeronautical en route or aeronautical fixed radio station license shall be granted to or held by—
(1) any alien or the representative of any alien;
(2) any corporation organized under the laws of any foreign government;
(3) any corporation of which more than one-fifth of the capital stock is owned of record or voted by aliens or their representatives or by a foreign government or representative thereof or by any corporation organized under the laws of a foreign country;
(4) any corporation directly or indirectly controlled by any other corporation of which more than one-fourth of the capital stock is owned of record or voted by aliens, their representatives, or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country, if the Commission finds that the public interest will be served by the refusal or revocation of such license.
Allowing a corporation holing a license to be influenced by 20% ownership foreign investors or be controlled directly/indirectly by a corporation with 25% foreign investment greatly exceeds the level of potential influence that is currently being complained of in Washington. While I do not suggest a grand reorganization of licensing statutes, I feel that it would be a better way to address the concerns of those fearing foreign influence. That is to say that foreign influence is the real concern, and not just their pending re-elections.
Sunday, October 10, 2010
Constitutionality of Citizens United Under the Equal Protection Doctrine
This blog is part one of a two part series. Part I defends the Constitutionality of Citizens United from the point of view of the government. Part II will argue against the Constitutionality of Citizens United from the point of view of the natural born persons of the United States.
The decision in Citizens United has created a lot of uproar between corporations and natural born persons. The decision allows corporations to contribute potentially an unlimited amount of capital to political campaigns, while natural born persons are limited on their amount of political contributions. Therefore, the issue is whether this distinction violates the Equal Protection Clause of the Fourteenth Amendment.
In analyzing the Equal protection doctrine, four questions must be met. First, who is the actor? Second, what is the classification? Third, based on this classification, what is the appropriate level of scrutiny? Last, does the government satisfy that level of scrutiny?
The Fourteenth Amendment provides in part that “no state shall…deny to any person within its jurisdiction the equal protection of the laws.” This statement requires that the government be the actor. In the present case, the government is the actor. The government is the actor because legislative statutes cap the amount of political activity a natural born person can make. Then, the Supreme Court in Citizens United created the distinction between corporations and natural born persons by giving corporations an unlimited right to donate to political campaigns. Therefore, the government is the actor, and the Equal Protection Clause applies.
Next, the classification needs to be determined. The classification created by the decision in Citizens United is corporations, which are recognized at law as persons, versus natural born persons. Again, legislative acts place restrictions on how the amount of political activity an individual can contribute. The Supreme Court undermined these acts by allowing corporations to contribute an unlimited amount of resources to campaigns. Therefore, the classification is natural born persons versus corporations.
Third, the level of scrutiny needs to be determined. The three levels of scrutiny are as follows: strict, intermediate, and rational. This classification is a first impression. Therefore, both sides would be free to argue either for the rational basis or for strict scrutiny. Because the government would want to uphold its own classification, it would argue for rational basis.
An argument for rational basis by the government could probably succeed. In determining the level of scrutiny, the Supreme Court has considered the ability of the group to protect itself through the political process. This protection is based on whether the group has access to the political process; the ability to vote. If the group lacks the ability to vote, the court usually applies strict scrutiny. However, in this case the classification was created to remedy the effect of being denied the right to vote. Therefore, the government probably would succeed for rational basis because it uses the classification to remedy the inability of the group to be heard through the political process. Here, the classification is corporations as people who lack access to the political process because they cannot vote versus natural born persons who can and cannot vote.
Last, the classification must meet the rational basis test. Under rational basis, the government must have a legitimate interest, and the means chosen must be reasonably related to that interest. Here, the government interest is allowing corporations access to the political process. The government will contend that because corporations cannot vote they need an alternative means to be heard. This alternative means to be heard is the ability to contribute to campaigns. Next, the government will contend that this is fair because corporations are taxed and have a lot to lose through the political process. Last, the government will contend, as it did in Citizens United, that this is extension of the corporations’ right to Freedom of Speech found in the First Amendment.
The government will contend that its means chosen are reasonably related to those interests. The government will contend that corporations do not have the right to vote, and the only way for corporations to be represented is by extending their freedom of speech through campaign contributions. Therefore, the government will allege that giving corporations the ability to contribute to campaigns, as well as funding their own campaigns, is the only method available to extend this right.
In conclusion, the Supreme Court will probably uphold this analysis. This assumption is based on the fact that the Supreme Court was the actor, who made the classification in the first place. Even though the Court overruled another Supreme Court decision to reach the conclusion in Citizens United, the Court will not overrule itself on this issue. Nonetheless, the opposition’s argument is an interesting argument to make and will follow soon.
The decision in Citizens United has created a lot of uproar between corporations and natural born persons. The decision allows corporations to contribute potentially an unlimited amount of capital to political campaigns, while natural born persons are limited on their amount of political contributions. Therefore, the issue is whether this distinction violates the Equal Protection Clause of the Fourteenth Amendment.
In analyzing the Equal protection doctrine, four questions must be met. First, who is the actor? Second, what is the classification? Third, based on this classification, what is the appropriate level of scrutiny? Last, does the government satisfy that level of scrutiny?
The Fourteenth Amendment provides in part that “no state shall…deny to any person within its jurisdiction the equal protection of the laws.” This statement requires that the government be the actor. In the present case, the government is the actor. The government is the actor because legislative statutes cap the amount of political activity a natural born person can make. Then, the Supreme Court in Citizens United created the distinction between corporations and natural born persons by giving corporations an unlimited right to donate to political campaigns. Therefore, the government is the actor, and the Equal Protection Clause applies.
Next, the classification needs to be determined. The classification created by the decision in Citizens United is corporations, which are recognized at law as persons, versus natural born persons. Again, legislative acts place restrictions on how the amount of political activity an individual can contribute. The Supreme Court undermined these acts by allowing corporations to contribute an unlimited amount of resources to campaigns. Therefore, the classification is natural born persons versus corporations.
Third, the level of scrutiny needs to be determined. The three levels of scrutiny are as follows: strict, intermediate, and rational. This classification is a first impression. Therefore, both sides would be free to argue either for the rational basis or for strict scrutiny. Because the government would want to uphold its own classification, it would argue for rational basis.
An argument for rational basis by the government could probably succeed. In determining the level of scrutiny, the Supreme Court has considered the ability of the group to protect itself through the political process. This protection is based on whether the group has access to the political process; the ability to vote. If the group lacks the ability to vote, the court usually applies strict scrutiny. However, in this case the classification was created to remedy the effect of being denied the right to vote. Therefore, the government probably would succeed for rational basis because it uses the classification to remedy the inability of the group to be heard through the political process. Here, the classification is corporations as people who lack access to the political process because they cannot vote versus natural born persons who can and cannot vote.
Last, the classification must meet the rational basis test. Under rational basis, the government must have a legitimate interest, and the means chosen must be reasonably related to that interest. Here, the government interest is allowing corporations access to the political process. The government will contend that because corporations cannot vote they need an alternative means to be heard. This alternative means to be heard is the ability to contribute to campaigns. Next, the government will contend that this is fair because corporations are taxed and have a lot to lose through the political process. Last, the government will contend, as it did in Citizens United, that this is extension of the corporations’ right to Freedom of Speech found in the First Amendment.
The government will contend that its means chosen are reasonably related to those interests. The government will contend that corporations do not have the right to vote, and the only way for corporations to be represented is by extending their freedom of speech through campaign contributions. Therefore, the government will allege that giving corporations the ability to contribute to campaigns, as well as funding their own campaigns, is the only method available to extend this right.
In conclusion, the Supreme Court will probably uphold this analysis. This assumption is based on the fact that the Supreme Court was the actor, who made the classification in the first place. Even though the Court overruled another Supreme Court decision to reach the conclusion in Citizens United, the Court will not overrule itself on this issue. Nonetheless, the opposition’s argument is an interesting argument to make and will follow soon.
Friday, October 8, 2010
A Permissible Solution to the Unfair Corporate Advantage
On a practical level, the Citizens United case is so controversial because advertising works. Viewers of advertisements are thought to be susceptible and suggestible to the ideas presented in advertisements. Opponents of the decision in Citizens United generally believe that corporations have an unfair advantage or that corporate electioneering will corrupt the political process. See Austin, 494 U.S. at 659 (discussing the "unfair advantage in the political marketplace"). A related issue implicated by Citizens United is the need for voters to become informed about the candidates of an impending election by receiving as much information and as many opinions as possible. By restricting certain corporate speech, the electioneering provision of the Bipartisan Campaign Reform Act of 2002 restricted the voters’ ability to receive facts and opinions which were relevant to impending elections.
Section 441(b), the corporate electioneering provision struck down as unconstitutional in Citizens United, was targeted at “certain disfavored associations of citizens-those that have taken on the corporate form.” Citizens United, 130 S. Ct. at 908. Unlike corporations, wealthy individuals and other associations of citizens which were not incorporated were not subject to Section 441(b). But any danger of quid pro quo bargaining that accompanies independent political expenditures by corporations also accompanies political expenditures made by wealthy individuals and other unincorporated associations. Granted, corporations are probably in a position to amass greater wealth more frequently than are wealthy individuals and unincorporated associations. But this just leads back to the conclusion that the actual purpose of the ban on corporate electioneering was to prevent disfavored corporations from being in a better position to reach voters than were the evidently more palatable wealthy individuals and unincorporated associations.
Although the interests proffered by the government in defense of Section 441(b) were legitimate, the attack on independent political expenditures by corporations was indeed fatally underinclusive because corporations are no more inherently corrupt than are wealthy individuals or unincorporated associations which have considerable resources to allocate toward political expenditures. The dissent in Citizens United claims that the Austin rule and Section 441(b) were not implemented for the purpose of “‘equalizing the relative influence of speakers on elections,’” that the real purpose was to prevent corruption in the political process. Citizens United, 130 S. Ct. at 958 (Stevens, J., dissenting) (quoting Austin, 494 U.S. at 660). Even if preventing corruption was the aim, the unconstitutional effect was to detract from the ability of corporations to communicate with voters. It is not up to the legislature or the courts to decide which information may reach voters, except in a few situations, such as when national security is at stake. Nor should the government summarily decide that corporations will not produce “truthful” advertisements before elections. Each free citizen in our democracy should be given the opportunity to consider biased opinions of all sorts and decide for him or herself the “truth” regarding the issues and political candidates of impending elections.
Censoring corporate electioneering by non-media corporations does not purify the political process. Section 441(b) did not even apply to media corporations like MSNBC. Nor did it apply to News Corporation, the owner of Fox News. Neither of these corporate giants can be reasonably characterized as completely “truthful” or “unbiased.” From a multitude of organizational and individual sources, American citizens are subjected to an incessant stream of biased and arguably false advertisements and news reports. Opinion sharing, however, should not be viewed as a problem. As the Greek playwright Euripides once wrote, “[m]an’s most valuable trait is a judicious sense of what not to believe.” See WorldofQuotes.com (Oct. 8, 2010, 7:41 p.m.), http://www.worldofquotes.com/author/Euripides/1/index.html. The voters of America should thus receive all available information and freely decide for themselves what to believe.
It might be true that corporations occupy an inherently advantageous position because of artificial legal characteristics, including limited liability, perpetual life and the resultant aggregation of wealth. See Citizens United, 130 S. Ct. at 905 (quoting the majority in Austin, 494 U.S. at 658-59). Censorship, however, is not a constitutional solution. On the other hand, one permissible solution is for wealthy individuals and unincorporated associations to incorporate and gain an advantageous position while “equalizing the relative influence of speakers on elections.” This solution is a plus-sum game because voters will be able to make better-informed decisions if they are able to hear all the arguments, some of which are put forward through corporate electioneering. Likewise, unincorporated associations of citizens will be able to match the advertising power of corporations if they incorporate. Finally, if unincorporated associations have political reasons for remaining unincorporated, they must accept the consequences, which sometimes include unlimited liability, non-perpetual life and less aggregation of wealth.
Tuesday, October 5, 2010
Who is Accountable to Whom?
In business school, I was taught that corporations should be accountable to both shareholders and stakeholders, with stakeholders consisting of employees and the community. Also, I have been taught that politicians should be accountable to voters. Now with the Supreme Court’s decision in Citizens United, the Court has changed this philosophy. Instead, politicians will now be accountable to corporations.
This flip has occurred because corporations, as a whole, are probably the largest source of money in the United States. The Citizens United case allows corporations to donate potentially an unlimited amount of money either directly into campaigns or permits corporations to sponsor their own campaign. This unlimited cash flow will ultimately hold politicians accountable to corporations because what politician would have a campaign targeted at Wall Street reform?
Two reasons why politicians should not be held accountable to corporations are as follows. First, politicians will alter their campaigns by not addressing important issues that deal with corporations. Second, politicians will be held accountable to “people” who are not permitted to vote.
First, politicians will alter their campaigns by not addressing important issues that deal with corporations. While it is true that a politician can choose to change their policies after in office, the fact remains that the politician has to be mute on the issue through the campaign. This problem is important because the issue maybe important to the public at large who wants the issue to be addressed. However, because corporations control the majority of the wealth in the United States, the corporations will control the politician’s campaign platform, and the issue will not be addressed. The politician will not address the issue for fear of retaliation from the corporation, who now has the ability to launch its own campaign against the politician.
For instance, imagine the Obama and McCain presidential election if it had occurred after Citizens United. The Obama and McCain presidential election was based primarily on two issues, Wall Street Reform and the War on Terror. By far, Wall Street Reform was an important issue, and an issue that the public wanted the candidates to address. Again assuming this election would have happened after Citizens Untied, how would the issues have been phrased? One assumption would probably be that President Obama would not have boldly targeted Wall Street. However, if President Obama would have continued to target Wall Street, the corporation’s response would probably have been significant enough to alter the outcome of the election. This scenario is not acceptable. The politician is being silenced by a minority of “people” instead of the vast majority.
Second, politicians will be held accountable to “people” who are not permitted to vote.
Politicians should not be held accountable to corporations because corporations cannot vote. Instead, politicians should be held accountable to the natural born citizens of the United States because natural born citizens have the right to vote. This scenario of holding politicians accountable to people who cannot vote undermines the democratic process of the United States.
In conclusion, the decision in Citizens United changed the accountability factor. The decision now holds politicians accountable to corporations because corporations have the potential to sponsor their own campaign and can contribute vast amounts of money into political campaigns. This change is not permissible because politicians will have to alter their campaign platforms to suit corporations, and politicians will now be held accountable to people who cannot vote.
This flip has occurred because corporations, as a whole, are probably the largest source of money in the United States. The Citizens United case allows corporations to donate potentially an unlimited amount of money either directly into campaigns or permits corporations to sponsor their own campaign. This unlimited cash flow will ultimately hold politicians accountable to corporations because what politician would have a campaign targeted at Wall Street reform?
Two reasons why politicians should not be held accountable to corporations are as follows. First, politicians will alter their campaigns by not addressing important issues that deal with corporations. Second, politicians will be held accountable to “people” who are not permitted to vote.
First, politicians will alter their campaigns by not addressing important issues that deal with corporations. While it is true that a politician can choose to change their policies after in office, the fact remains that the politician has to be mute on the issue through the campaign. This problem is important because the issue maybe important to the public at large who wants the issue to be addressed. However, because corporations control the majority of the wealth in the United States, the corporations will control the politician’s campaign platform, and the issue will not be addressed. The politician will not address the issue for fear of retaliation from the corporation, who now has the ability to launch its own campaign against the politician.
For instance, imagine the Obama and McCain presidential election if it had occurred after Citizens United. The Obama and McCain presidential election was based primarily on two issues, Wall Street Reform and the War on Terror. By far, Wall Street Reform was an important issue, and an issue that the public wanted the candidates to address. Again assuming this election would have happened after Citizens Untied, how would the issues have been phrased? One assumption would probably be that President Obama would not have boldly targeted Wall Street. However, if President Obama would have continued to target Wall Street, the corporation’s response would probably have been significant enough to alter the outcome of the election. This scenario is not acceptable. The politician is being silenced by a minority of “people” instead of the vast majority.
Second, politicians will be held accountable to “people” who are not permitted to vote.
Politicians should not be held accountable to corporations because corporations cannot vote. Instead, politicians should be held accountable to the natural born citizens of the United States because natural born citizens have the right to vote. This scenario of holding politicians accountable to people who cannot vote undermines the democratic process of the United States.
In conclusion, the decision in Citizens United changed the accountability factor. The decision now holds politicians accountable to corporations because corporations have the potential to sponsor their own campaign and can contribute vast amounts of money into political campaigns. This change is not permissible because politicians will have to alter their campaign platforms to suit corporations, and politicians will now be held accountable to people who cannot vote.
After Further thought...
After thinking about the decision in Citizens United a little bit more and after taking some more time to reflect on the way businesses work in real life, I've changed my mind, at least for now, about what the decision may lead to. At first, I thought the decision would lead to a company like GE throwing millions behind a Republican, or millions behind a Democrat. The more I think about it, both are likely to happen, not one or the other. What do I mean? Even corporations who do use treasury funds to support political candidates are likely to give money to both sides (Democrats and Republicans) as a way of hedging their bets.
Businesses “hedge” their bets all the time, and no I’m not talking about hedge funds. Take for example a company who produces natural gas. The price of natural gas, a commodity, fluctuates quite frequently as it is traded on open markets (i.e. it is volatile). In the winter, the price of natural gas traditional spikes as the demand for it increases as a result of its use to heat homes in the Eastern and Northeastern parts of the country. Conversely, in the summer, when temperatures are higher, the demand for natural gas is lower and so is the price that a natural gas company can sell their gas for. So what happens during a unseasonably “warm” winter – does the gas company suffer huge losses? Logically you would think the answer is yes, and logically thinking, you would be correct. However, in reality, this isn’t what happens. In reality, the gas company “hedges” their bets against an unusually warm winter by agreeing to provide their gas at a certain contracted price, agreeing to sell their gas to utility companies at a predetermined price, often times years in advance. For example, if natural gas prices have fluctuated between $3 and $14 dollars on the open market for the past three years, a natural gas company is likely to agree to sell all their gas to a utility company (hedge their gas) at a price of $7. This is a win-win for everybody. Both the utility company and the gas company remove some of the risk that the volatility and uncertainty that comes with the supply and demand of the natural gas market brings to their business models. When natural gas prices on the spot market are $14, utilities are buying it for only $7. When natural gas prices are only $3 on the spot market, gas companies can sell it at $7. Everybody wins. I believe hedging by corporations in political campaigns will work the same way.
From a business standpoint, or more specifically, from a risk standpoint, a corporation like GE would never throw $10 million behind a Republican candidate and no money behind the Democrat. Why? It’s too risky. What is more likely to happen, is that a corporation, like GE would hedge it’s bet and donate $5 million to the Republican candidate and $5 million to the Democratic candidate. As a result of this hedging by corporate donors, my thought is that the decision in Citizens United won’t have as great an impact as I initially thought it might have. There’s no doubt that the amount of money candidates can raise will now increase as a result of a corporation being able to use its treasury funds for political donations, but whether it will swing the balance of power in favor of one political party or another I think, after further thought, is unlikely.
Businesses “hedge” their bets all the time, and no I’m not talking about hedge funds. Take for example a company who produces natural gas. The price of natural gas, a commodity, fluctuates quite frequently as it is traded on open markets (i.e. it is volatile). In the winter, the price of natural gas traditional spikes as the demand for it increases as a result of its use to heat homes in the Eastern and Northeastern parts of the country. Conversely, in the summer, when temperatures are higher, the demand for natural gas is lower and so is the price that a natural gas company can sell their gas for. So what happens during a unseasonably “warm” winter – does the gas company suffer huge losses? Logically you would think the answer is yes, and logically thinking, you would be correct. However, in reality, this isn’t what happens. In reality, the gas company “hedges” their bets against an unusually warm winter by agreeing to provide their gas at a certain contracted price, agreeing to sell their gas to utility companies at a predetermined price, often times years in advance. For example, if natural gas prices have fluctuated between $3 and $14 dollars on the open market for the past three years, a natural gas company is likely to agree to sell all their gas to a utility company (hedge their gas) at a price of $7. This is a win-win for everybody. Both the utility company and the gas company remove some of the risk that the volatility and uncertainty that comes with the supply and demand of the natural gas market brings to their business models. When natural gas prices on the spot market are $14, utilities are buying it for only $7. When natural gas prices are only $3 on the spot market, gas companies can sell it at $7. Everybody wins. I believe hedging by corporations in political campaigns will work the same way.
From a business standpoint, or more specifically, from a risk standpoint, a corporation like GE would never throw $10 million behind a Republican candidate and no money behind the Democrat. Why? It’s too risky. What is more likely to happen, is that a corporation, like GE would hedge it’s bet and donate $5 million to the Republican candidate and $5 million to the Democratic candidate. As a result of this hedging by corporate donors, my thought is that the decision in Citizens United won’t have as great an impact as I initially thought it might have. There’s no doubt that the amount of money candidates can raise will now increase as a result of a corporation being able to use its treasury funds for political donations, but whether it will swing the balance of power in favor of one political party or another I think, after further thought, is unlikely.
Monday, October 4, 2010
Joe the Plumber, Inc.
While some legal spectators have been busy bemoaning the recent decision of Citizens United, others have been more practical-minded. At least one spectator with business acumen, Murray Hill, has explored the newly-opened possibility of running for office as a corporation. His tongue-in-cheek statements – made as a representative of Murray Hill, Inc., of course -- include such things as a desire to “put[] people second, or even third,” and a claim that the corporation would be “the best democracy money can buy.” It’s comforting to know that our new corporate overlords are blessed with a frighteningly dry sense of humor.
While Murray Hill, Inc. is busy attempting to run for office (don’t worry; the corporation is only 5 years old and doesn’t meet the age requirements to hold office), other corporations are satisfied to simply take advantage of the ruling in Citizens United to start donating more money. In fact, nearly a million dollars of corporate money has been donated to one republican campaign in Minnesota. Target, Best Buy, and 3M are the primary drivers in that campaign (it should be noted that 3M was incorporated in 1929 and is of valid age to run for office). Most other Corporations, interestingly, are attempting to stay clear of the political fray and several have pledged to not contribute to any campaigns at all. This is unlikely to be due to low political aspirations, however, and is more likely tied to a desire to not have their products politicized. After all, when I need tape, I want left-wing tape – not that conservative trash they make in Minnesota.
In all seriousness, nobody wishes so see free speech restricted, but the decision in Citizens United goes beyond the preservation of a right and creates something entirely abhorrent. Thomas Jefferson said that “[t]he selfish spirit of commerce knows no country, and feels no passion or principle but that of gain.” Previous Supreme Court cases have held that Corporations are required to operate in that manner (See Ford v. Dodge). The idea that a for-profit corporation, with its massive resources and directives to be self-serving should be afforded the ability to influence our electoral system is revolting.
Many pundits argue that the decision in Citizens United was the obvious choice. They argue that the founding fathers desired that all people would have the freedom of speech and that the right should not be removed simply because individuals chose to organize themselves as a corporation. However, that analysis misses the mark in an obvious and serious manner: not only are those citizens not somehow being deprived of their voice by organizing as a corporation, but, by definition, the corporation which they have formed is not an extension of themselves. That corporation is not formed for the thankless edification of others; it is formed for the purpose of making money. The political views of those who make up the corporation are irrelevant.
The primary differentiation between citizens and corporations when it comes to the electoral system is that citizens may consider, even if they rarely do, the plight of others. Citizens can weigh moral and ethical considerations. Citizens can select a choice that is not in their best interest because it is in the best interest of society. Corporations on the other hand, are legally and physically bound to do what is in their own best interest. That difference makes corporations a dangerous addition to the political battlefield.
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