We the Corporation…

Since the decision came down in Citizens United, the application of First Amendment rights to the corporate form has been a topic of debate among many. Citizen United has made me painfully aware of the lack of knowledge I possess about the political process and the influences on those processes. I ask myself many questions that I hope to explore in this post and open myself to responses and criticism.

“What’s the bitch?”

I view the corporate structure in America as a controlling influence on governmental policy. Representatives of corporations have always been connected to the White House, Congress, and the political sphere as a whole. The influence of these individuals effect the decisions made by our representatives. Now due to Citizens United the corporation has been extended First Amendment rights from a case that arguably should have been narrowly construed.

Citizen United has now taken the personal representative’s to private influence over political actors and now allows Corporations to use all of their resources to openly support politicians and platforms.

“Does this promote transparency in the corporate form?”

I wonder if this promotes transparency through the corporate shell? Corporations operate with a division between ownership and control. When a corporation uses assets to enter the political speech arena how will the corporation’s shareholders respond? Since a corporation’s purpose is to maximize shareholder profits, will the courts uphold the corporation’s reasoning that supporting a political candidate(s) is in the furtherance of the corporate interests?

“The Court in disguise”

The Supreme Court did not want to place restrictions on the corporate form. In turn, the Court approved the largest expansion of the corporate form since corporations were considered a person. The Court has placed their duty on the American people, the law community, and the States. The laboratories are open. Lawyers are buzzing. The American people are the moral compass. Lawsuits will come and after several years of fighting over Citizens the Court will finally rule on the restrictions that should have been placed on the corporation at the time of Citizens.

“America, Inc.”

I remember a quote from a history class I took as an undergrad, “What’s good for GM is good for America.” Corporate America has grown stronger over the years at the consent of the Supreme Court. Corporations bind the world through an economic system and banks with global ambitions fund them. The banks supply the money, the corporations supply the mechanism, and the political sphere provides the protection. Since the ruling in Citizens the corporation now can openly advocate for its protectors and use its assets and shareholders, the American people, to do it.

“Removing the veil”

Personally, Citizens United has brought light to an area of neglected thought. How involved is the corporation in our daily lives? What type of information will be disseminated in to the populace? Will we keep a skeptical eye? What form will the corporation take to hide its agendas?

We are constantly bombarded with information. It’s time we removed the veil and paid attention to the information we are receiving and why.

Who is Really Speaking for Corporations?

"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.” This passage from the majority opinion in Citizens United summarizes the decision of the court. However, a major issue that I find with this ruling is deciding who is really speaking for the corporation. The majority gave corporations the right to spend and endorse political campaigns at its discretion, but who makes these decisions and how do we regulate this spending. With corporations, there always exists the issue of shareholder rights. According to the decisions in Citizens United, shareholders have the same right to free speech as the corporation does. How do we protect shareholders from having a corporation speak on their behalf where they do support such ideals? I believe it is imperative that legislators and the SEC, in response to this decision, draft new rules and regulations that would support the interests of both shareholders and corporations, protecting freedom of speech and shareholder rights.

One must think, will this decision by the court have an effect on shareholder investment and involvement in corporations? Will we see a dramatic change in how investors analyze options and choose which corporations to invest in? Will political analysis become a part of shareholderism? Allowing corporations to enter the political process may be a dangerous game. For some corporations, supporting a decision may be easy based on the fundamentals of that organization. Shareholder support for these endeavors may be overwhelming and unquestioned. However, what will be the result when there is great shareholder opposition to such a contribution? Can a corporation exercise reasonable business judgment when there is such a stark contrast with shareholder views? Will this clash lead to an increase in litigation over spending habits of the corporation and how it is furthering a business purpose?

As with other actions of a corporation, some decisions require a shareholder vote while others require a board vote. What should be the standard here? Is a political contribution a corporate decision that the shareholders have a right to vote on? I would argue ABSOLUTELY! In order to protect both free speech and shareholder interest, a corporation cannot be allowed to take a political stance based on the opinions of a few board members. It is imperative that the political position of the corporation reflect not only its board members views, but the views of its shareholders.

While this may sound like a good, in practical application, shareholder voting on a political issue may be a moot point. By the time that the shareholders could exercise their voting power, the election may be over and the opportunity for a contribution may have passed. So how do we both protect rights and allow free speech? In my opinion, the rights of the shareholders trump the need for corporations to contribute to the political process. I agree with Justice Stevens’ dissent in that allowing corporate free speech under the First Amendment was not the original intent of the drafters—protecting the American people was. In allowing a corporation to express its “free speech” through corporate spending at the expense of shareholders appears to change the intentions of the political process and corporate form. In essence this would make the free speech efforts of individual citizens less worthwhile and important as corporations can make a greater impact through spending. In order for the Citizens United decision to not, in effect, run away with the political process, it is crucial that shareholders have a voice in a corporation’s political activities. How this is to be accomplished remains to be seen.

With that final thought in mind, I close with a quote from President Barack Obama: “[the decision] gives the special interests and their lobbyists even more power in Washington — while undermining the influence of average Americans who make small contributions to support their preferred candidates….the Supreme Court reversed a century of law to open the floodgates for [corporations]…to spend without limit in our elections." While I do not go as far as to say corporations should never be involved in the political process, I think there has yet to be implementation of a system of checks and balances that would protect not only shareholders, but the American people as well, from corporate political spending running wild.

Personal Privacy Rights for Corporations?

The Supreme Court’s decision in Citizens United v. FEC may have opened the floodgates to whether corporations have the same rights as individuals. In regards to free speech, the Supreme Court answered affirmatively in Citizens United, by striking down certain campaign finance laws. The Supreme Court will next decide whether corporations have the same personal privacy rights as individuals.

The Court has agreed to hear FCC v. AT&T, (Docket Number 09-1279) which will determine whether exemption 7(C) of the Freedom of Information Act (FOIA) protects the “personal privacy” of corporate entities. The FOIA allows ordinary citizens to access federal government records. Thus, the government is legally bound to disclose records to any citizen or organization that files a proper "FOIA" request. The exemption in question, exempts from mandatory disclosure, records or information compiled for law enforcement purposes when such disclosure could reasonably be expected to constitute an unwarranted invasion of “personal privacy.”

In 2005, AT&T objected to a FOIA request for the details of its government contract work in New London, Connecticut. The company argued that it qualifies for a legal exemption under 7(c) from FOIA requests.

AT&T has already won at the Third Circuit Court of Appeals, which held that the plain language of the FOIA allowed certain government documents to be withheld if it could “reasonably be expected to constitute an unwarranted invasion of personal privacy.” The FCC argued the common meaning of “personal privacy” means “personal,” as in human person. The Supreme Court granted review of the AT&T case on September 28, 2010, and arguments are scheduled for January 19, 2011.

Just as Citizens United drew strong protest from those who argued that corporations don’t deserve the same rights as individuals, FCC v. AT&T will surely cause similar protest. Groups such as Public Citizen, Electronic Frontier Foundation, and the Reporters Committee for Freedom of the Press say the exemption for privacy was never intended to protect corporations, which have protection against disclosure of trade secrets and other information under a separate section of the FOIA.

Personally, I think allowing corporations personal privacy rights may further shield any type of transparency that corporations operate under. The legal fiction of "corporate personhood" is beginning to not seem like such a "fiction" after all. An earlier post on the blog had questioned why corporations do not enjoy all the rights of individuals. Seeing that the Supreme Court has already granted corporations free speech rights, I suppose the next logical step would be personal privacy rights? I'm not so sure.

Money as Access to Speech?

Part of the analysis I have found of the Citizens United v. FEC, 130 S.Ct. 876 (2010) decision centers around the ideas of corporate person-hood it relies upon and extends. I would argue, however, that the extension of corporate person-hood advanced by the Court in this decision was not unexpected. For example, a corporation can own property and is afforded all the rights which accompany property ownership. A corporation has the ability to sue and be sued. Also, like the Court indicated in its decision, the First Amendment's protection had long been recognized as applying to corporate speakers. Id. at 899. The Court had previously rejected the argument that a corporation, an association of persons, was not a natural person and not afforded First Amendment rights. Id. So, was this decision really as momentous as everyone believes it to be? With my limited knowledge of the law, I would argue yes. However, my argument stems not from the idea of corporate person-hood, but from the opinion's equation of freedom of speech with spending power or "money as speech."

Several critics of the decision have found the decision's equation with one's voice in free speech to one's spending power perhaps more troubling than its extension of corporate person-hood. Some critics refer to this idea as "money as speech." One critic of the decision, Roger Hodge, former editor of Harper's Magazine, said in a recent interview that he was most troubled by Justice Kennedy's replacement of the word "speak" throughout the decision with the words "contribute," "spend," and "buy." While I am somewhat troubled about the idea of money as speech, I do not necessarily agree with this characterization. The opinion itself explains why the ban on the amount of money a corporation is allowed to spend can invoke the First Amendment by stating that "[a]s a restriction on the amount of money a person or group can spend on political communication during a campaign, that statute necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached." Id. at 898. Thus, limiting its ability to speak freely as protected by the First Amendment.

One main concern about the theory of money as speech centers around value. If we view money as speech, obviously money has a specific value in society, so does this value translate to speech? The intrinsic answer is no. I assume most people would say that just because one speaker may have more money behind his or her message does not make it more valuable than the average person's message. However, if one looks at this theory as "money as access to speech" the message with the most spending power behind it would clearly be more valuable because the speaker would have more access to distribute the message and the listener would have more opportunities to receive that message. Thus, the more money certain a speaker has the more quantity of expression, issues discussed, depth of exploration, and the larger the audience reached. It this idea of money as access to speech which makes corporate political speakers/spenders more valuable.

The rebuttal to the arguments against money as speech are numerous. For instance, without the ability to distribute your speech, i.e. fund what you have to say, what use is the freedom. Putting substantial limits on constitutionally guaranteed freedoms will not with stand strict scrutiny. Therefore, if we view a corporation as a person in the eyes of the law and as defined by the First Amendment, there can be no outright ban political spending to support political speech absent the Government proving that the restriction "furthers a compelling interest and is narrowly tailored to achieve that interest." Id.

In conclusion, it can be argued that the idea of the wealthiest in society having more access to speech is not new. After all, corporations are associations of persons, so they should be acting in the best interests of those persons, which in theory could make a corporate political speaker better for society than an individual political speaker, who may be acting solely for his or her own interests.