Mr. Sysco, Ms. Time-Warner, won’t you please have some tea?

Warning: This is pretty far outside the normal purview of this blog, except inasmuch as unfettered corporate power is one of the major reasons our health care system is as broken as it is. If you came for baby news, there’ll be some in the next post, I promise.

A few weeks ago, the Supreme Court ruled, in Citizens United v. Federal Election Commission, that Congress may not restrict the amount of money that corporations spend on ads advocating for or against a specific electoral candidate. I’ve been struggling with my own feelings about this, because it seems like a complicated issue, and because it seems the ramifications of the decision can’t yet be fully seen.

Not everyone felt they had to think it through. Keith Olbermann felt pretty confident declaring it the worst danger to the republic since Dred Scott:

Then Ezra Klein came on Olbermann’s show and reminded him that corporations could already contribute to ads that say, “Ask Congressman So-and-So why he voted for the puppy-stomping bill.” This decision just allows them to tack “And don’t vote for him!” on the end.

Olbermann has also been going around proclaiming that his show might not be around for much longer, because the corporations will take over the government and quickly eliminate their progressive critics. Which is, I think, an overly simplified understanding of how corporations operate. NBC, GE, and the Sheinhardt Wig Company are making quite a bit of money on Olbermann, and today’s social mandarins are in any event too adept to go in for brute totalitarianism. Corporations are masters of soft power and the use of persuasion, and I don’t see them eliminating the likes of Olbermann, if only because the polarized political debate he helps encourage is a useful distraction, keeping the proles divided into political tribes instead of united to fight for their own best interests.

Meanwhile, on the other side, the usually worthwhile Glenn Greenwald, defending the decision, went embarrassingly negative in the comments section of his own column, calling his readers ignorant for disagreeing with him and accusing Ghost in the Machine‘s Kevin Murphy of working for the MiniTru.

(I always wonder whether Orwell, in the beyond, wishes he had never written Nineteen Eighty-Four, given the way his imagined Oceania has become such a convenient cudgel in high school debates and, apparently, the comments section of Salon magazine.)

So maybe there’s been some craziness on all sides of the debate.

But there’s a serious point lurking in there somewhere: the Court’s decision strengthens a couple of dubious legal concepts: the personhood of corporations, and the equation of money and speech. (The Court also added a third hilariously dubious proposition: “[T]his Court now concludes that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption. That speakers may have influence over or access to elected officials does not mean that those officials are corrupt. And the appearance of influence or access will not cause the electorate to lose faith in this democracy.” But that argument is so laughable on the face of it that it’s almost immoral to dignify it with a rebuttal.)

Is money speech? In one sense, it certainly seems to be. You can’t reach an appreciable audience without spending money. (Even supposedly “free” media like blogs and podcasts tend to be the province of those with the luxury time to spend on them, and those that achieve serious popularity are, in many cases, promoted by the moneyed media.) And while I’d like to believe that Bill Gates isn’t entitled to a million times as much speech as I am, the truth is that he can buy airtime on any network he wants, and I can’t. This is even more true of large corporations, whose stores of wealth dwarf even Mr. Gates’s considerable personal treasury.

In other ways, of course, money is not speech at all, and to confuse the two is dangerous. Money, unlike speech, can be converted into goods and services, which is why I’m allowed to send my Congressman a letter, but not a check, to persuade him to change his vote.

Money also isn’t speech because, well, it doesn’t say anything. When Rush Limbaugh wanted to influence the 2008 Democratic primary, he had to make the case to his listeners that they should vote for Hillary Clinton, a woman many of them despised. He had to in some sense make his mind known and stand behind his thoughts as a representation of his character. Paying the same people to vote for Clinton is, in some circumstances, illegal, and certainly uncool. But more to the point, it doesn’t require any moral or intellectual investment by the person spending it. Unlike speech, money does not require its user to engage the minds of its recipients, to convince them, to form a coalition based on shared ideas and shared values. Speech is protected in the Constitution because well-deployed speech binds us together in a common purpose; it is the glue of a civil society. Whereas money paid for the same purposes may achieve seemingly similar short-term results, but at the cost of leaving us as atomized and habituated to looking out only for our own coarse short-term interests.

So money inhabits a shadowy area — in a geographically vast country, it’s clear that speech that reaches a significant portion of the electorate will have money behind it. Yet money is not itself speech. How, then, to regulate the influence of money on our political process while not treading on speech rights themselves?

Perhaps the way to look at money is as a tool for use in the broadcast of speech. There is nothing in the First Amendment that suggests that Congress can’t regulate the mere means of speech. Indeed, carefully constructed regulation of the mechanisms of speech can make speech clearer and more easily heard, as in the case of the FCC regulating the bandwidth and power of radio signals. A case for limiting campaign contributions could be made on that analogy alone — it seems self-evident that the public has a compelling interest in ensuring that a powerful entity’s speech can’t interfere with or drown out the “signal” of weaker entities.

To be fair, the Court considers this argument and rejects it in Buckley v. Valeo: “[T]he concept that government may restrict the speech of some elements of our society in order to enhance the relative voice of others is wholly foreign to the First Amendment.” But what does it mean to “restrict speech”? Here again, Greenwald’s arguments are useful as a starting point:

Anyone who believes that [money isn’t speech] would have to say that there’s no First Amendment problem with any law that restricts the spending of money for political purposes, such as:
“It shall be illegal for anyone to spend money to criticize laws enacted by the Congress; all citizens shall still be free to express their views on such laws, provided no money is spent;” or
“It shall be illegal for anyone to spend money advocating Constitutional rights for accused terrorists; all citizens shall still be free to express their views on such matters, provided no money is spent”; or
“It shall be illegal for anyone to spend money promoting a candidate not registered with either the Democratic or Republican Party; all citizens shall still be free to advocate for such candidates, provided no money is spent.”

Clever, but the above examples miss a crucial distinction between a law that is conditioned on the particular opinion expressed (which obviously violates the spirit of the First Amendment) and one that affects all opinions, including those favored by the ruling party, equally. The modest attempts by Congress to equalize the spectrum on which political opinions are broadcast — so to speak — very obviously fall into the latter category.

Moreover, Greenwald’s own position leads to law that, implicitly if not explicitly, says:

“Citizens shall be entitled to exactly as much speech as they have property; the right to effective free political speech shall be conditioned on the ability to pay for it.”

Which can’t be the way we want to interpret the First Amendment, either.

Justice Kennedy’s majority, quoting Buckley, seems not to be fully engaged with the real world on this point:

The First Amendment’s protections do not depend on the speaker’s “financial ability to engage in public discussion.”

And yet, of course, it’s clear that in a world of unregulated spending on electioneering, one’s ability to speak in any meaningful way depends exactly on the speaker’s financial wherewithal.

Finally, the equation of money with speech — which started with Buckley v. Valeo in 1976 and has been the consistent position of the Court majority right up through Citizens United — leads to some logical problems with the rest of campaign finance law. If I have a right to spend unlimited amounts to influence elections with advertising, why can’t I contribute unlimited amounts to a candidate directly and let her buy advertising with it? Why can’t I spend on that candidate in unlimited ways, especially if I view my campaign contribution as essentially deputizing that candidate to speak for me in the political arena? If my campaign contribution will make Barack Obama or John McCain a more effective spokesman for my point of view, shouldn’t that expenditure also be a form of protected speech? Why allow any limits on campaign finance at all?

Greenwald also argues that the Citizens United decision doesn’t rest on corporate personhood. This is true — at best — only in the most technical and narrow sense. Even Justice Scalia, concurring with the majority, notes that the rights enumerated in the Bill of Rights (or at any rate, in the first eight amendments) are rights of the individual American citizen:

The dissent says that when the Framers “constitutionalized the right to free speech in the First Amendment, it was the free speech of individual Americans that they had in mind.” That is no doubt true. All the provisions of the Bill of Rights set forth the rights of individual men and women—not, for example, of trees or polar bears. But the individual person’s right to speak includes the right to speak in association with other individual persons. Surely the dissent does not believe that speech by the Republican Party or the Democratic Party can be censored because it is not the speech of “an individual American.” It is the speech of many individual Americans, who have associated in a common cause, giving the leadership of the party the right to speak on their behalf. The association of individuals in a business corporation is no different—or at least it cannot be denied the right to speak on the simplistic ground that it is not “an individual American.”

This is, on its face, the strongest argument that corporations have free speech rights — because they are collections of individuals. But consider — surely not all voluntary associations of individuals can be considered as having political speech rights. The city council is a group of American citizens, yet we would doubtless find it improper for the city council to spend its funds on political ads encouraging people to vote for the incumbents on that same council. Likewise, our all-volunteer Army is an association of individual human beings, but it does not follow from that that the Army may invest its money in ads advocating for a specific foreign policy. (Indeed, Army officers are limited even in their individual speech rights — as they represent the armed wing of their society, they may not criticize or undermine the civilian leadership while speaking in their capacity as a representative of the military. In other words, here is a case where membership in a group limits one’s personal First Amendment rights!)

Leaving aside governmental organizations, consider the case of churches: is there any clearer example of a free association of individual Americans based on a common intellectual framework, usually with the intention of changing the society at large? Yet it is commonly accepted that as a result of being granted special privileges by the government (tax-exempt status), and based on a compelling state interest to avoid the appearance of any establishment of religion, churches are not allowed — at least in theory! — to engage in political advocacy. A church may not spend money on candidate ads and a preacher may not urge his flock to vote for a particular candidate.

(That this restriction is frequently flouted or cunningly circumvented by means of technicalities is no challenge to its constitutionality or appropriateness.)

Corporations are similarly granted special privileges by law — and these privileges arguably make them something greater than simply the sum of their shareholders. Corporations are effectively immortal, something clearly not true of ordinary men. They act as liability shields to their members, which effectively reduces an individual shareholder’s moral and financial stake in the social consequences of the behavior of the corporation. And the construction of our tax code makes it far easier for Exxon Mobil to claim its political-speech expenditures as losses (to offset its tax burden) than it would be for an employee of that same corporation to do so on his 1040.

There’s nothing wrong with these privileges, per se — they are all designed to make business more rewarding and the accumulation of wealth easier. (The immortality of the corporation as an entity, for example, makes it possible for people to invest in long-term, costly business ventures together without worrying that the whole deal will fall apart if a single investor passes away.) But because this artificial legal construct receives special statutory consideration from the government — because it is, in a very literal sense, constituted by the government — it is not unreasonable for the government to set certain conditions on the body as a construct, while leaving untouched, obviously, the rights of the shareholders, officers, and employees as individuals. This is especially the case if the rights granted the corporation cause it to behave in ways fundamentally different from the way that the same group of Americans would act if they were constituted as a non-incorporated group.

The for-profit corporation presents special problems as an association of individuals, because it’s not clear, if a corporation spends money on political advertising, whose political beliefs are being represented. Those of the employees? Probably not. Those of the shareholders? Well, that’s hard to say. The decision to spend money will certainly be made by the company’s officers, who are both legally obligated and personally motivated to maximize profit for the corporation. This means that shareholders who may desire political action that reduces those profits — by, say, increasing corporate tax burden, or imposing more stringent environmental regulations — are disenfranchised from this particular kind of political speech. In short, corporate structure forces corporate officers to act in the best interests of the corporation, even if a majority of shareholders in the corporation were willing to reduce their own profits for the public good.

This in and of itself should point to a disconnect between the obvious First Amendment rights of the individual shareholders and the alleged free speech rights of the corporation as a thing. (Or, despite Greenwald’s objections, as a “legal person.”) It cannot be the case that the corporation’s speech enjoys First Amendment protections because a corporation is an association of actual persons unless its speech fairly represents the views of at least a majority of those persons.

(It must also be noted that although a citizen may freely depart from membership in a political party when its advocacy no longer aligns with his own beliefs, it is rather more difficult for a shareholder or an employee to simply walk away from the for-profit corporation, since his livelihood may depend on it.)

Some models to right this problem have been suggested: NYU’s Brennan Center for Justice proposes requiring shareholder approval for political spending.

Finally, I mentioned before that corporations can write off their election spending as business expenses, while spending by individuals does not enjoy similar tax advantages. This is perhaps the most troubling aspect of Citizens United — it appears to actually give corporations a huge tax advantage over individual Americans when it comes to electioneering. A dark horse candidate like Howard Dean or Barack Obama, relying on a grassroots network to gain and sustain campaign momentum, is put at disadvantage, since individuals wishing to spend on ads for such a candidate are not able to put their spending in the “loss” column.

Corporations are also problematic because they do not require U.S. citizenship of their shareholders, officers, or employees. The Court explicitly did not rule on the consitutionality of 2 USC 441e, which prohibits “foreign nationals” from interfering in American elections — the term being defined to include corporations and other associations. But it’s been argued back and forth in the media and the blogosphere whether this includes foreign investors in American corporations, American subsidiaries of foreign companies, and foreign corporations or governments which own stock in American companies through intermediaries. Talking Points Memo covers some of the main concerns here, while Joe Conason here rounds up experts who believe that the ruling definitely allows foreign-owned American companies to spend on electioneering.

Brad Smith of the “Center For Competitive Politics” claims that the problem has been overstated:

[T]he FEC’s regulations [11 CFR 110.20(i)] provide that:

A foreign national shall not direct, dictate, control, or directly or indirectly participate in the decision making process of any person, such as a corporation, labor organization, political committee, or poltiical organization with regard to such person’s Federal or non-Federal election-related activities, such as decisions concerning the making of contributions, donations, expenditures, or disbursements in connection with elections for any Federal, State, or local office or decisions concerning the administration of a political committee.

That is an extremely broad prohibition on any involvement in decisions on political activity. 

So what is left? Well, conceivably a group of foreigners could form a U.S. corporation, then hire some permanent legal resident aliens (“green card” holders) to make decisions about spending its money….

If this were really a worry, it could be addressed legislatively simply by broadening the definition of foreign national to include corporations with majority foreign ownership.

There are several problems with this sunny gloss on the issue. First, it’s not clear that corporations with “majority foreign ownership” are the only ones in which undue influence can be exerted. Imagine a corporation whose stock is purchased by three major investors — two domestic, one foreign, none owning a controlling interest. Any two can form a coalition, however, and create a controlling number of votes. Can it really be argued that the foreign investor would not have a dramatic influence over the governance of that corporation, even though he didn’t control a “majority” of the stock? In this case, we might well hope for the board of directors that ignores its shareholders’ wishes, but that’s hardly a guarantee.

Second, to exclude foreign-owned corporations presents its own problems — chief among them that it switches the problem of limited speech based on corporate identity for one of limited speech based on foreign citizenship. But this is arguably even more unfair, and certainly susceptible to constitutional challenge. Now you would have American corporations, with American employees, whose fortunes may rise or fall based on the electioneering of other corporations, yet which have no opportunity to speak for themselves. It can hardly be the case that we want to put some American corporations at a competitive disadvantage based on the identity of their owners. (Or, indeed, their officers — the above FEC regulation is vague enough to make it questionable whether, for example, an American-owned American corporation with a foreign national for a CEO, CFO, or other influential officer could legitimately engage in election spending.)

Third, there is, of course, the practical problem of determining who owns what, and where loyalties lie, given that corporations can own other corporations. For example, we can easily imagine a U.S. corporation, Corporation A, which is owned by Corporation B, whose owners are foreign but which has been incorporated in the United States. Is the owner of Corporation A a “U.S. person” (Corporation B), or a “foreign national” (the investors)? Add a few levels to this scheme — move ownership in and out of the country, hide it in the Cayman Islands, use proxies — and as a matter of enforcement it becomes far more difficult to determine who is exerting control over a given company.

That FEC regulation, which sounds very broad and inclusive, is on closer reading simply vague. What does it mean to “direct, dictate, control, or directly or indirectly participate in the decision making process”? Can we simply exclude “majority foreign ownership,” as Mr. Smith claims? It seems unlikely that that will close the hole, because even if the statute is made perfectly clear, the nature of corporate ownership doesn’t allow for practical identification of who is allowed to spend money to influence American elections and who is not. Corporations are not citizens; they do not carry passports; and tracking influence through a chain of corporate ownership (to say nothing of the composition of the board, which poses its own problems) is a significant impediment for legal enforcers and a practical impossibility for the average citizen who may wish to know what foreign power is sponsoring a given advertisement.

These problems were not created by Citizens United, of course — corporations had a limited ability to spend on electioneering prior to this. But Citizens United raises the stakes and — at least potentially — makes it more attractive for foreigners to use a variety of identity shields to control American corporations for the purpose of pouring money into our electoral communications.

Some have argued that banning foreign influence may itself be unconstitutional. Justice Stevens, as usual, is on point here:

“The notion that Congress might lack the authority to distinguish foreigners from citizens in the regulation of electioneering would certainly have surprised the Framers, whose ‘obsession with foreign influence derived from a fear that foreign powers and individuals had no basic investment in the well-being of the country.’”

So these are the arguments against the majority’s ruling in Citizens United. They are many and compelling. And yet… intuitively, the Court’s decision doesn’t feel wrong, given the facts of the case.

Citizens United, a politically conservative non-profit, made a video called Hillary: The Movie. It was an unabashedly partisan attack on Hillary Clinton, who you may remember was running for president at the time. Citizens United wanted to run ads for the movie, which it would show on pay-per-view channel DirecTV. In January 2008, the U.S. District Court in Washington ruled that they could not run ads for the, uh, film, because doing so would constitute “electioneering communication.”

Despite my personal distaste for Citizens United and its views, I think none of us want to live in a world where a document expressing political opinion is not available to those who wish to purchase it. Buying a movie on pay-per-view is essentially the same act, after all, as purchasing a book at Borders, and it can’t be the case that, say, ads for Sarah Palin’s memoir count as electoral or candidate ads, even if they occur around the election.

Or, a closer analogy: Michael Moore’s Fahrenheit 9/11 played on pay-per-view on 1 November 2004, and Moore himself expressed hope that the film would influence the 2004 presidential election. One cannot imagine a constitutional challenge to the advertising of that pay-per-view broadcast, so what makes Hillary: The Movie any different? The fact that it was produced by a corporation? So what? Moore certainly spent corporate money to make his film.

Trying to determine where personal expression stops and corporate expression begins is a bit of a fool’s errand. An exemption for “media corporations,” the traditional solution, is at best a fig leaf, since not only are media corporations frequently owned by other, larger corporations, but nearly every large corporation today produces some sort of independent content, much of which can’t be neatly classified as advertising.

Perhaps those of us concerned about corporate overreaching ought to accept that campaign finance reform is not the field in which we’re likely to win major victories. Instead, perhaps we ought to rethink the corporation itself — its structure, its legal loyalties, its moral obligations.

The modern corporation, as Mark Achbar, Jennifer Abbott, and Joel Balakan demonstrate quite convincingly here, is not a natural, unchangeable phenomenon. It was created through a series of quite deliberate legislative and court decisions for the public good. The corporation should be considered a machine for making money, whose legal structure requires it to place profit over all other concerns. But if we created a machine to make money, there is no reason we can’t tinker with that machine to make it behave differently — particularly if its own shareholders choose to put other values first. The Brennan Center’s suggestions, which I linked to above, are a good first step. But there’s no reason we can’t expand on that idea and rethink the ground rules for capitalism from the ground up, so that phrases like “corporate money” and “corporate influence” cease to ring so ominously in our ears and corporate management can be tempered with morality and social responsibility.


8 responses to “Mr. Sysco, Ms. Time-Warner, won’t you please have some tea?

  1. Seth, you may be a grumpy old man, but at least you’re not telling Keith Olbermann to get off your lawn.

    Good post, thanks for the food for thought.

  2. An excellent post, thank you.

    I’m still undecided about how exactly to respond to Citizens United (the case). I think you’re right on the facts–as much as I may detest Citizens United’s (the organization’s) views, they’re entitled to be aired. On the other hand, I’m not happy with the cash = speech formulation, which (a) clearly seems wrong and (b) suggests bribery ought to be legal. (I have a right to ask a police officer not to ticket me for speeding and to explain why I wasn’t really speeding or why he should give me a pass if I was, no? If a fifty dollar bill helps me illustrate my points, why is that a problem?) Nor am I happy with the notion that a corporation–an entity that exists solely at the sufferance of state statute–is somehow a “person” in the broadest sense. All that having been said, while I find Greenwald’s arguments a little intellectually dishonest on this subject, I find his point a little harder to rebut or ignore. (Too, I agree with the late Spalding Gray’s statement in Swimming To Cambodia that a good liberal questions everything–so when an ACLU loyal partisan like Greenwald takes what I find to be a counterintuitive position on something, my instinct is to start questioning my own perspective as much as anything.)

    Anyway, thank you for the intellectual fodder. Let me add, I’m a little envious of your thoroughness, wishing I’d written this.

    • thehandsomecamel

      @Eric — Yes, I know what you mean about having to question yourself. I started off this post convinced that the Court’s decision was wrong, and ended up deciding it was the right decision, but for the wrong reasons.

  3. Good post. And welcome to Greenwald’s doghouse.

    Regarding the question of majority foreign ownership, I’ve done some research into this in my work life (which I try to keep as distinct as possible from GitM musings), and have found that the problem you describe in the first paragraph on foreign corps can be somewhat finessed with the legal language “by value or vote” (Thus, 50% of voting control, by means fair or foul, would be the same as 50% of actual foreign ownership.)

    The other problems, of course, still stand. My overall feeling isn’t so much that foreign corps are much more evil than domestic corps, so much as here is one of the only tools left to us to close this door even partially, so let’s see what we can shake out.

    Also, you probably saw it in my own post on this subject, but Stevens’ concurrence in Nixon v. Shrink (2000), the one where says “money is not speech,” is worth checking out.

    The point Stevens was making, and that Greenwald seemed to have missed in his state of holy furor, is that the political use of money can still have constitutional protections as property (like, say, in the 4th amendment). It’s just not speech. And thus a new regulatory foundation can and should be created that allows for some use of money as property in elections, but that doesn’t rely on the tortured money=speech formulation in Buckley v. Valeo.

    • thehandsomecamel

      @Kevin — Thanks! I felt fairly sure that there had to be a legal tool for making that clear, but, you know, IANAL, etc.

      I wouldn’t necessarily single out foreign private corporations, but the idea of foreign governments using state corporations as stalking horses and diddling with American elections… I don’t know… there is something troubling about that. Strong disclosure laws might mitigate that problem, but you can already find columns by people who oppose campaign reform arguing against disclosure because it would have a “chilling effect.” We’ll see, I guess.

  4. 1. for some reason, until I got to the comments, I thought Elana was writing. And I thought breastfeeding was much better for her cognitive skills than it ever was for mine.
    2. you oughta take your GI Bill and go to law school.

  5. It seems to me that a lot of the discussion of corporations in politics conflates for-profit and non-profit corporations unnecessarily. I think there are good arguments for restricting the ability of for-profit corporations to engage in political activities of all sorts, and a lot of that complexity is addressed well in your post.

    In my experience, most of the knee-jerk reactions in opposition to such restrictions are predicated on the application of those restrictions to non-profit corporations. The most common argument I’ve encountered (mostly in libertarian circles) has been, if it’s all right for me to spend my money by contributing to political campaigns or advertising for my cause, why isn’t it all right for me to get together with other people who share my beliefs to do the same thing? This clearly says nothing about the ability of for-profit corporations to engage in campaigning or lobbying, and I think it would be worth our while to maintain this distinction.

    What’s right for Citizens United isn’t necessarily the right response for United Technologies, GM, or Toyota.

  6. Pingback: some will rob you with a six-gun, and some with a fountain pen | The Handsome Camel

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