The Problem:
Corporations regularly wield immense Supreme Court-created power to defeat citizen ballot initiatives and referenda that are disfavored by company executives and increasingly, corporations and extremely wealthy individuals are putting measures that advance their own self-interest on the ballot. While it is far easier for corporations to defeat citizen initiatives than to pass their own, merely threatening to run a costly initiative campaign often is sufficient to cow local governments into complying with corporate agendas.
Legal background:
- In First National Bank of Boston v. Bellotti (1978) the U.S. Supreme Court struck down a Massachusetts law that prohibited corporate spending to influence the outcome of a state ballot initiative (on First Amendment grounds). Though much of the opinion resorted to “listeners’ rights” arguments that protect the speech, not the (corporate) “speaker,” the effect was to create a presumed corporate “right” to influence initiatives and referenda. Justice Rehnquist’s sharp dissent is notable.
- In Austin v. Michigan Chamber of Commerce (1990) the Court held that there was no First Amendment violation in requiring a corporation to set up segregated funds (a PAC) for spending on candidate campaigns. This meant that while corporate executives and employees could contribute to a PAC affiliated with the corporation, the corporation could not write company checks directly to a candidate’s campaign.
- Following that ruling’s logic, in 1996 Montana citizens drafted and passed Initiative 125,which banned direct corporate contributions to initiative campaigns. The law was challenged by the Montana Chamber of Commerce and others as unconstitutional. Deciding Bellotti, rather than Austin was the guiding precedent, the Ninth Circuit Court of Appeals took Bellotti even further in striking down I-125 (Montana Chamber of Commerce, et. al. v. Argenbright, 2000).
- After Bellotti, a series of Supreme Court decisions (links below) showed increased deference to legislative campaign contribution limits, leading some scholars to believe that a reversal of Bellotti might occur. However, since John Roberts was selected as Chief Justice, the Court seems to have tacked sharply against limiting corporate electoral privileges, with the infamous Citizens United ruling being the most obvious example.
Our Objectives:
We are working to create widespread public awareness of the damage done to democracy by the precedent of granting corporations the right to influence initiatives and referenda. We seek to re-frame local ballot measure battles and coordinate a legal strategy to to begin eroding corporate political speech privileges via local and state campaigns.
Our ultimate goal is to overturn Bellotti in Court or via amending amending the constitution.
Recent examples of the problem and opportunities:
In California:
- In 2012, California’s Proposition 37 — which would require most foods containing GMOs to identify that fact — was overwhelmingly popular, then support dwindled as millions were spent by huge corporations like Monsanto, DuPont and the Grocery Manufacturers Association to discredit the initiative. The outcome now is in doubt.
- Walmart Corporation repeatedly has used petition-gathering to bully local governments into expediting approval for proposed stores.
- Amazon.com Usurps Process of Direct Democracy to Perpetuate Corporate Subsidy (2011)
In Michigan
- 2012’s Proposal 6 competes vigorously for the title of most blatantly self-serving ballot measure in U.S. history. Under the banner of “The People Should Decide,” it would amend the State Constitution to require the approval of a majority of voters at a statewide election, and in each municipality where new international bridges or tunnels are proposed.
This sounds bizarre until you learn there is currently just once bridge linking Detroit to Windsor, Ontario — a private toll bridge that generates $80 million annually for billionaire owner Matty Maroun, whose monopoly would be extended for years just by requiring a vote.
In multiple communities
- Wal-Mart Inc. and their development partners regularly threaten communities with initiatives if local officials do not obey their wishes. These cases present ripe opportunities for local organizing to confront the destructive power of “corporate free speech.” Turlock, CA, Westbrook, ME, Bennington, VT and Flagstaff, AZ are examples, but Wal-Mart is not alone. Target, Home Dept and other chains engage in this behavior, too. This op-ed highlighted some of these cases in 2005, but the scenario continues to repeat.
See also our archive of past ballot initiative cases.
Key Background Resources
Court Cases
- Austin v. Michigan Chamber of Commerce (1990) upheld limits on corporate spending in candidate elections. A detailed, strident argument opposing our position on this issue is provided by Justice Scalia in dissent.
- McConnell v. FEC (2003) upheld most provisions of the Bipartisan Campaign Reform Act of 2002.
- FEC v. Massachusetts Citizens for Life, Inc. (1986)
- Nixon v. Shrink Missouri Government PAC (2000)
- FEC v. Colorado Republican Federal Campaign Committee (2001)
Papers
- Rethinking the Unconstitutionality of Contribution and Expenditure Limits in Ballot Measure Campaigns by Richard Hasen (Loyola Law School paper 2004–link is to summary, full paper is 53 pp pdf). Hasen concludes that Bellotti and Buckley precedents “are ripe for reexamination in light of the Supreme Court’s new-found deference to campaign finance regulation.”
- Autoworkers (1957), and Pipefitters v. United States (1972), Abood v. Detroit Board of Education (1977, summary here).
- Materials on Nike v. Kasky and Corporate Personhood pages may be useful.
- “Corporations and Elections, A Century of Debate.” Paper by Robert Mutch. (2003). Contact us to request a copy.
Additional Resources
- The Initiative & Referendum Institute
- Brief introduction on the use of ballot initiatives at municipal level
- Money Doesn’t Buy Success at Ballot Box (1998 report by Public Policy Inst. of California). The report documents that defeating initiatives with big spending is far easier than passing them.
Montana Initiative 125
Many more related resources can be found on our Corporate Personhood page and Nike v Kasky archive. We seek a volunteer familiar with the subject to help integrate much of our Kasky archive into a more general and extensive library on “corporate free speech.” Contact us to learn more.