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Now that the hoopla is dying over the Supreme Court’s decision to allow political giving by corporations, it’s time to time to consider real political reform, reform that might address the “deficit of trust” the president proclaimed in his State of the Union Address.
What everyone yelling at the high court forgot is that every previous campaign finance reform– including McCain-Feingold– only managed to increase the power of money in politics. The terms “soft money,” “527 groups,” “PACs,” and a host of others all grew from past attempts to control giving.
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The United States Supreme court recently struck down limits on the freedom of companies to spend money on political elections. Large, publicly traded companies in other countries also often face lax limits on their use of corporate resources to influence political outcomes, fueling fears that the interests of shareholders will trump those of other groups, such as consumers and employees. But corporate spending on politics can also hurt the interests of shareholders.
Stock market listed companies control a big share of almost every country’s resources, so the free flow of corporate money into politics can have a profound impact on politicians’ preferences and choices. In particular, the influence of corporations on politicians and political outcomes can be expected to weaken the rules that protect shareholders and ensure that companies are well-governed.
To understand why, it is important to focus on the individuals who make decisions for companies. When corporations decide which politicians to support, what kind of messages to send, and which political outcomes to seek, their general investors are not consulted. Rather, such decisions are likely to reflect the preferences and objectives of the insiders who manage the companies, ostensibly on shareholders’ behalf. And politicians that benefit from corporate spending and access to corporate resources will have an interest in serving the insiders’ preferences and objectives.
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by Zachary Roth
In the wake of last month’s Citizens United ruling, a powerhouse Washington lobbying firm is informing its corporate clients on how they can use middlemen like the Chamber of Commerce to pour unlimited amounts of money into political campaigns, while maintaining “sufficient cover” to avoid “public scrutiny” and negative media coverage.
A “Public Policy and Law Alert” on the impact of the Supreme Court’s ruling, prepared by two lawyers for K&LGates and posted on the firm’s site last Friday, notes that, thanks to disclosure rules, corporations could alienate their customers by spending on political campaigns — especially because they could become the target of negative media coverage.
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by Warren Rudman
THIRTY years ago, I came to the U.S. Senate as a proud member of a Republican party committed to moderation in Congress, restraint in the courts, and good-government reform.
Last month, I was saddened to witness a conservative Supreme Court majority overturn more than a century of Republican-led limits on special interest money in our elections. That such a rash and immoderate ruling could come from a chief justice once publicly committed to respecting precedent, and win praise from leaders of my party, is beyond my power to comprehend. As a concerned citizen and former member of Congress, I fear the long-term consequences of this ill-conceived ruling in Citizens United v. FEC on our republic.
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Talk of the Nation
In January, the Supreme Court threw out decades of campaign finance law. The decision opened the door to corporations to spend freely in support of candidates in coming elections.
Guests discuss how the decision will influence the midterm elections.
Guests:
Peter Overby, NPR Washington correspondent on power, money and influence
Lawrence Lessig, director of the Edmond J. Safra Foundation Center for Ethics at Harvard University
Dan Schnur, former Republican political strategist, current Director of the Jesse Unruh Institute of Politics at USC Copyright 2010 National Public Radio. To see more, visit http://www.npr.org/.
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by David Schultz
In Citizens United v. FEC, the U.S. Supreme Court granted corporations a First Amendment right to expend unlimited resources to influence political campaigns. In doing that, it ignored who actually talks when corporations speak, and it overlooked two other sets of free speech rights worthy of protection: corporate shareholders and citizens.
Who is the corporation for the purposes of political speech? Business law 101 states that, when lawyers represent corporations, the corporation — ultimately the shareholders — is the client. But shareholders do not have real control over corporations. In 1936, Adolph Berle and Gardiner Means penned The Modern Corporation and Private Property, describing the disconnect between ownership and management of corporations.
Real control of corporations resides not with ownership or the shareholders but with those who manage them. Disputes over shareholders seeking input into executive compensation demonstrate that they have limited voice in companies. It is the top management that calls the shots. Thus, when corporations speak, the voice being heard politically is that of the top management, not necessarily the shareholders. These individuals could already speak and make political contributions before Citizens United. That decision gives them a second megaphone, subsidized by their shareholders.
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by Jeanne Cummings
As if voters weren’t mad enough at Washington, the Supreme Court apparently has given them one more reason to fume.
According to a bipartisan poll released Monday, voters oppose by a 2-to-1 ratio the court’s ruling in Federal Election Commission v. Citizens United that cleared the way for corporations and unions to run political advertising.
The poll suggests that the ruling has reinforced voters’ sense of disconnect with Washington and fueled the frustration that boiled to the surface in last year’s tea party protests and in elections in New Jersey, Virginia and Massachusetts.
Asked if special interests have too much influence, 74 percent of respondents said yes. Asked if members of Congress are “controlled by” the groups and people who finance their political campaigns, a whopping 79 percent said yes.
Only 24 percent of the voters said ordinary citizens can still influence politicians, and just 18 percent agreed with the notion that lawmakers listen to voters more than to their financial backers.
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Supreme Court Justice Sam Alito may not have wanted to hear it during the State Of The Union address, but a new poll shows the majority of Americans agree with President Obama’s take on the Citizens United ruling. More than 60 percent of respondents say it was a bad idea.
The opposition was found across party lines, and according to the pollsters was especially common among independents — the group both parties have desperately fought over for a decade now. The pollsters said that result suggests that the parties would be well-served to take on the ruling and reinstate campaign finance regulations canceled out by the ruling with new law.
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The only sure things in life, Benjamin Franklin should have said, are death, taxes and campaign-finance reform. Trying to keep money out of politics is like trying to keep a basement dry in New Orleans, which made the issue a perfect subject for the Supreme Court: nothing revs up Justices like a symbolic fight over an intractable issue. In Citizens United v. Federal Election Commission, the court struck down certain limits on corporate campaign spending–upholding the First Amendment or selling American politics into bondage, depending on your view.
Some backstory: in 2008 the conservative nonprofit Citizens United produced the anti-Clinton film Hillary: The Movie and arranged to distribute it using money from the group’s corporate treasury rather than from its political-action committee–a crucial distinction under the McCain-Feingold campaign-finance reforms of 2002. In a 5-4 ruling, the court found that distinction unconstitutional. If freedom of speech protects the right of individuals to air their political views, it decided, then that right extends to incorporated groups–like businesses, labor unions, Planned Parenthood and Citizens United.
The case sparked a clash of worldviews. “The right of citizens to inquire, to hear, to speak and to use information to reach consensus is a precondition to enlightened self-government and a necessary means to protect it,” wrote Justice Anthony Kennedy for the majority. A law declaring who can say what about elected officials, and how and when, did not pass muster. On the other side, Justice John Paul Stevens’ 90-page dissent spoke admiringly of McCain-Feingold and shuddered to imagine the influence that big corporations and Big Labor might exercise over politics in the absence of such efforts. The ruling, he wrote, “threatens to undermine the integrity of elected institutions across the nation.” [Read more]
Here’s the Federal Election Commission news release …
Washington – The Federal Election Commission today announced that, due to the Supreme Court’s decision in Citizens United v. FEC, it will no longer enforce statutory and regulatory provisions prohibiting corporations and labor unions from making either independent expenditures or electioneering communications. The Commission also listed several actions it is taking to fully implement the Citizens United decision.
In Citizens United v. FEC, issued on January 21, 2010, the Supreme Court held that the prohibitions in the Federal Election Campaign Act (FECA) against corporate spending on independent expenditures or electioneering communications are unconstitutional. The Supreme Court upheld statutory provisions that require political ads to contain disclaimers and be reported to the Commission. Provisions addressed by the decision are described below.
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The Supreme Court’s seismic January ruling that corporations are free to spend unlimited amounts of their profits to advertise for or against candidates may have been the latest shakeup of campaign finance – but gaping holes already allow corporations to spend enormous sums without leaving a paper trail, a Raw Story investigation has found.
Campaign finance experts confirmed that though disclosure rules remained intact in the new Supreme Court decision, there are effective methods to circumvent them.
Ciara Torres-Spelliscy, an attorney and campaign finance expert at New York University’s Brennan Center for Justice, said corporations already effectively end-run campaign finance law by shuffling money through trade associations.
“One of their favorites right now is spending through trade associations,” Torres-Spelliscy said.
Trade associations are considered tax-exempt non-profit organizations under US law. While they must report contributions received from other corporations to the Internal Revenue Service, the document itself remains confidential and is not made available to the public.
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