Smart Money: Rolling back corporate personhood

Posted Tuesday, March 18, 2014 in Analysis

Smart Money: Rolling back corporate personhood

by Gina Hamilton

Another election season is heating up, and it seems destined to be another expensive one.  This is, in large measure, because of a court decision in 2010 that reiterated that political speech is protected speech even for corporate persons, and that speech is money.

But let's start with corporate persons. How can corporations be persons?  Since at least 1819, the federal government has recognized corporations as "legal persons" for the purposes of signing contracts, being sued, or enforcing their legal rights.  After the fourteenth amendment, which grants equal protection of the laws to all persons, was ratified, the high court also acknowledged that corporate persons would have to be treated the same as natural persons - that is, actual physical human beings - in each state.

So, corporate personhood has a long history, but until recently, the original intent of protecting corporations' fictive legal status as a "person" for business purposes, signing leases and enforcing contracts and so on, and making them culpable as a "person" for misdeeds or injuries to other businesses or consumers, was left alone.

Over time, corporations wanted to get their message out to the public, and to lawmakers.  One of the ways they did so was to invoke their right to "free speech" and the right to redress, which allowed for lobbying and spending money on campaigns.

Another way they did so was to create model legislation, along with friendly lawmakers, and use those models for a series of cookie cutter laws in state after state that would benefit the corporations in some way. 

One such partnership is the American Legislative Exchange Council, consisting of mostly conservative lawmakers, corporations, and special interests.  Among well-known legislation to gain traction and to be enacted in many states that originated with ALEC is the infamous "Stand Your Ground" legislation, supported by gun manufacturers and the National Rifle Association, and pushed through state legislatures by conservative lawmakers.  Other issues include privatizing public education, often with online schools, and private prisons, supported materially by corporations that would benefit from laws allowing those institutions.

But the biggest issue has been corporate funding of campaigns.  In 2002, Bipartisan Campaign Finance Reform, the so-called McCain-Feingold Act, was enacted. This had the effect of limiting corporate contributions to campaigns because it prohibiting the national political parties from raising or spending any funds not subject to federal limits.  It also raised individual donations to $2,000. It banned issue advocacy ads, by defining as "electioneering communications" broadcast ads that named a federal candidate within 30 days of a primary or caucus or 60 days of a general election, and prohibiting any such ad paid for by a corporation, including nonprofits.

It had a target on its back before the ink was dry.

In 2010, a conservative special interest group, Citizens United, got its case to the Supreme Court, and the 2002 Bipartisan Campaign Finance Act was declared unconstitutional. The rationale is that political speech is financed with money, and therefore, prohibiting any corporate person to inject money into the campaign limits its right to free speech.

Congress could write legislation that would pass constitutional muster, but with the gridlock in Washington, no legislation has even been proposed.

Whatever is done will have to begin with the creative fiction of corporate personhood, beyond the legal necessities of doing business. A separate class of corporate personhood for business purposes must be established. Corporations are full of persons with individual natural rights of citizenship.  They should not be permitted to use a loophole in constitutional law to receive extra rights not due to them because of their tax filing status.

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