By David Lazarus 
First Published by the San Francisco Chronicle, June 27, 2007

The Supreme Court loosened restrictions on campaign financing this week by ruling that corporations and unions are entitled to run a wider variety of political ads in the final weeks of federal elections.

This was good news for corporations and unions. And bad news for Shannon Tracey.

Tracey is local projects director of Democracy Unlimited of Humboldt County, a grassroots group dedicated to repealing the notion of corporate personhood — a legal distinction that grants constitutional rights to businesses and other organizations.

“It’s awful that the court is continuing to uphold the idea that companies have what should be rights for human beings,” Tracey said of Monday’s decision, in which the justices backed a lower-court ruling that a Wisconsin anti-abortion group should have been allowed to air ads during a 2004 Senate race.

The 5-4 Supreme Court vote was widely seen as opening a loophole in the 2002 McCain-Feingold campaign-finance law, which placed strict limits on donations to political campaigns. In effect, it broadens the types of ads that moneyed interests can run prior to an election.

Editor’s note: while the writer calls the limits “strict” the McCain-Feingold bill more than doubled the amounts that wealthy individuals may invest in candidates to $4600 per candidate, per federal election ($2300 each for primary and general elections).

For Tracey and other foes of corporate personhood, the ruling doesn’t change the mountain they’re trying to climb. It only makes it a little steeper.

“The challenge we face is the same,” said Jeff Milchen, founder of ReclaimDemocracy.org in Montana. “We’re still seeking an end to constitutional rights being given to corporations.”

The stakes, he said, couldn’t be higher.

“Our democracy is founded on the idea of human rights, that the legitimate source of political power comes from the people,” Milchen said. “Allowing companies to exercise political power comes at the expense of citizens. It’s a zero-sum game.”

I wrote a few years ago about the origins of corporate personhood. Perhaps this is a good time to review the basics. Not everyone may realize that the Constitution’s phrase “We the people” applies just as much to the likes of Starbucks, Google and AT&T as it does to you and me.

The founding fathers probably never envisioned that private companies would one day enjoy the legal status of people — just as they couldn’t have anticipated the availability of cafe lattes on every street corner, Internet searches and cell phones.

There’s no mention in the Constitution of corporations being people. It could be argued that private companies were the last thing that Colonial rebels wanted to protect when they rose up in the Boston Tea Party in 1773.

The colonists weren’t attacking the British government. They were making their displeasure known to Britain’s East India Co., which owned the tea that ended up floating in the harbor.

Until the 19th century, corporations were basically viewed as artificial creations — the property of owners. They could be taxed and regulated pretty much as state authorities saw fit.

Things changed after the Civil War. As the U.S. economy rapidly expanded, corporations increasingly sought ways to strengthen their political influence and protect their wealth.

Business leaders focused on the 14th Amendment, adopted in 1868. It declares that no state can “deprive any person of life, liberty, or property, without due process of law; nor deny any person within its jurisdiction the equal protection of the laws.”

Corporate lawyers of the day argued that corporations are in fact groups of people and, as such, should have the same rights as people themselves.

A number of cases were heard in various courts, including Santa Clara County vs. Southern Pacific Railroad Co., in which the railroad challenged the county’s claim of unpaid taxes by arguing that it was forced to pay an unfairly high amount and therefore had been deprived of equal protection under the 14th Amendment.

In other words, the railroad was defining itself legally as a person.

In 1886, the Supreme Court accepted this argument with virtually no discussion. Chief Justice Morrison Remick Waite declared that “The court does not wish to hear argument on the question whether the provision in the 14th Amendment … applies to these corporations. We are all of the opinion that it does.”

There it was. In a mere two sentences, the notion of corporate personhood was established.

This week’s court ruling only reinforces the concept. There was no question that companies and other economic interests enjoy a right to free speech as per the First Amendment. The only question was whether the McCain-Feingold law unfairly limited that right.

The matter of corporate personhood would appear to be settled. But opponents of the concept maintain that it was essentially a historical accident — no hearings, no discussion, a two-sentence decision — and that it’s not too late to even the playing field.

“The biggest stumbling block to democracy is corporate constitutional rights,” said Tracey at Democracy Unlimited. “The notion of corporations having the same constitutional rights as you and I is inherently unjust.”

By that, she means that both companies and individual people may enjoy a right to free speech, but a company, because of its relatively vast wealth, is capable of exercising that right with far greater force and influence.

Milchen at ReclaimDemocracy.org agreed. “Economic power is translating into political power,” he said.

Milchen also found it interesting that on the same day the Supreme Court issued its ruling about corporate free speech, it also ruled that an Alaska high school didn’t violate a student’s rights by punishing him for displaying a banner that read “Bong Hits 4 Jesus.”

“Think about it,” Milchen observed. “The court ruled that the government has the authority to suppress the free speech of genuine human beings but not that of corporations. It’s a rather striking contrast.”

© 2007 San Francisco Chronicle

California community blazes a trail that others should explore

Residents celebrated a hard-won victory, but some questioned why a corporation could force them to fight a purely defensive campaign in which “victory” meant merely maintaining the status quo.

Three years later, another global corporation, Maxxam, funded an attempt to recall the District Attorney in Eureka ‘s (Humboldt) County, who had the audacity to aggressively watchdog and even sue the corporation for alleged fraud. Voters thwarted the intimidation and kept the man they elected in office, but again at enormous cost of time and money.

More people began to question why they could be forced to defend against the political agenda of distant corporate executives. They wondered what could be accomplished if absentee-owned companies were barred from bankrolling candidates and ballot questions to advance the corporate agenda, enabling citizens to focus their energy on proactive work.

They now have the opportunity to find out.

In June, Humboldt County residents passed Measure T, a ballot initiative that forbids non-local corporations and other outside organizations from contributing money to political campaigns within the county. In a hotly-contested battle, citizens passed into law perhaps the most significant challenge to corporate political “speech” since Montana citizens voted to ban corporate expenditures on ballot questions in 1996.

Like Montanans, Humboldt citizens likely will face a second hurdle in their quest for self-governance: corporate lawyers (perhaps including some now serving on the U.S. Supreme Court).

Soon after the people of Montana decided elections should be a corporate-free activity, the state Chamber of Commerce and other groups successfully challenged the law as a violation of corporations’ “free speech” rights.

A federal appeals court sided with the Chamber and discarded Montanans’ efforts. The judges cited the U.S. Supreme Court’s First National Bank of Boston v. Bellotti ruling, which nullified a Massachusetts law that forbade corporate spending on ballot initiatives.

As with other key challenges to precedents that suppressed democracy and human rights, the outcome may depend more on social circumstances than legal points. Virtually every advance for human rights in the Supreme Court (e.g. Brown v Board of Education) has been preceded by shifts in public opinion and visible demonstrations of demand for change. At least in part due to fear of social upheaval and undermining the Court’s authority, the Court follows.

It’s time to instill that concern in the Justices again.

For judges, overturning the will of citizens in a single community — especially one that corporate interests marginalize as a hippie enclave — is no cause for concern. But to overturn an ordinance replicated in dozens of communities dispersed around the country is a different equation altogether. In other words, it’s up to us to build irresistible pressure for judges to do the right thing.

Citizens should realize that federal action to reduce corporate dominance is unlikely in the near future and consider such local actions as a necessary means toward building the movement necessary to subordinate corporations to democracy.

In those states and communities permitting ballot questions, revoking corporations’ ability to corrupt what should be the purest form of democracy may be the most vulnerable point of attack.

But such organizing must be approached as a long-term commitment, not a quick fix. Measure T was preceded not only by two instructive local lessons in corporate power, but also by years of local educating and organizing by locals through Democracy Unlimited of Humboldt County. The organization built awareness of the destructive impacts of corporate political power on the lives of residents and helped people recognize that citizens themselves — not elected officials — had the ability and responsibility to change the status quo.

That’s not to say such ordinances can’t be accomplished more rapidly, especially in communities where people already have witnessed corporations overturning democratically-enacted decisions through running initiatives backed by overwhelming advertising. Wal-Mart alone has created fertile ground in communities nationwide, from Bennington, VT to Flagstaff, AZ . And with more educational work on these issues nationally, local campaigns will have a stronger foundation beneath them.

Through wildly creative interpretation of the Constitution, our courts have repeatedly subordinated the rights of citizens by elevating corporations to entities with political “rights.” Almost every national representative of the dominant political parties accepts this perversion of our Constitution (few have even considered the issue), so building a grassroots Democracy Movement is essential to overturn those precedents.

Citizens of Humboldt County have provided one concrete model to help advance this Movement. Let’s ensure their pro-democracy ordinance is joined by dozens more by the time judges decide whether to advance corporate rule further or help restore the long-unrealized ideal of rule by the people.

The writer directs ReclaimDemocracy.org. See our large library of resources on corporations and ballot initiatives and contact us to for help with related efforts.

Overturning Buckley v. Valeo is an essential step toward enabling a democratic republic

Passed in response to Vermonters’ concern that money could dominate election outcomes and inordinately influence state office-holders, Vermont’s Act 64 attempted to protect the political voice of average citizens. The act limited how much money a single wealthy person could invest in candidates for state elected offices and capped overall spending by those candidates.

The U.S. Supreme Court struck a blow against political equality last month when it voided Act 64 in  Randall v. Sorrell. The justices told legislators and reform advocates — who’ve experienced political corruption first hand — that their concerns are merely theoretical. The justices struck down spending limits and, while not forbidding contribution limits entirely, made themselves the arbiter of what dollar amount is acceptable. They declared Vermont’s $200-$400 limits “unconstitutionally low,” for  a state where $200 can buy multiple TV ads across the state to reach its 600,000 residents.

The Court effectively prohibits states from leveling the political playing field between the wealthy citizens and everyone else. Though the ruling does leave room for cautious limits that might win the court’s blessing, sensible people don’t keep playing a rigged game.

The court clearly is interpreting the Constitution in a way that prevents representative democracy, so it’s up to citizens to rewrite the rulebook, not keep pleading their case to a biased referee. That rewrite is amending the Constitution itself to make clear that First Amendment-protected speech is the expression of ideas, not the purchase of political power.

With its ruling in Randall, the court is supporting the segregation of Americans into two distinct classes, just as it did when it twice supported blatantly discriminatory poll taxes that disenfranchised black citizens (and some poor whites) for nearly a century after the 15th Amendment officially enabled them to vote in 1870.

Today, one political class is the overwhelming majority — we express our preferences with our votes or volunteer efforts. The other class consists of those wielding real power — the ability to finance the bulk of candidates’ campaigns and effectively “set the menu” of candidates from which the rest of us may choose.

The justices’ motivation for treating money as speech may not be racist, but the impact is. Major political donors are fully unrepresentative of Americans. According to a 1996 study by the Joyce Foundation, eighty percent of people investing $200 or more in political candidates are males from households with annual income exceeding $100,000, and about 95 percent are white.

Not surprisingly, Congress closely mirrors those demographics.

When you get into investors with real influence — those writing checks for $1,000 or more — the picture is skewed even further. Just one in a thousand adult Americans contributed $1,000 or more to any candidate in the last election, yet candidates for the 2004 presidential nomination raised more than 80 percent of their individual investments from these elites. And people wonder how Congress can consider repealing inheritance taxes for multi-millionaires who don’t rely on an app to borrow money while plunging us ever-deeper into debt.

The power of that 1% of citizens making thousand-dollar investments is further amplified by their ability to “bundle” contributions in the name of family members, co-workers or employees to offer many thousands of dollars to a candidate in a lump sum. In George W. Bush’s 2004 presidential campaign, bundling $200,000 was the measure by which donors gained serious influence.

In its Randall ruling, the Supreme Court ignored a record of political corruption, perceived corruption and the disempowerment of average citizens. The majority even claimed Vermont ‘s contribution limits endangered the ability of challengers to compete effectively against incumbents, despite overwhelming evidence that contribution limits enhance electoral competition.

This is not to say Vermont ‘s Act 64 was great law. Even reformers voiced concerns that some elements were too restrictive. But the court’s overreach in striking the entire law was judicial activism in the extreme.

As many individuals and organizations focus on influencing the outcome of next year’s Congressional elections, the need is greater than ever for more energy to shift from who gets elected to how we choose our representatives. Public campaign financing efforts continue to spread and make more elections competitive. But when it comes to spending limits, decades-long efforts to find niches in the law have hit a dead end.

Until we fundamentally alter the financing of elections and amend the Constitution to overrule the Supreme Court’s anti-democratic doctrine, members of Congress will continue to resemble and represent the elites who put them in office, not the diverse range of citizens that comprise the United States of America .

Jeff Milchen founded ReclaimDemocracy.org. The organization filed a friend-of-the-court brief on behalf of Vermont in Randall v. Sorrell. A similar version of this article was first distributed by New America Media (now defunct).

Draft language to overturn the Court’s “money = speech” creation via Constitutional Amendment