These are five essays on the takeover of American democracy by corporations
and how we can – and must – take it back for We the People.
- The Pernicious Fiction of Corporate Personhood
- Corporations are Not People
- Justice Lewis Powell and the Rise of the Corporate State
- “A Constant Preference of Public to Private Interest”
- The People’s Rights Amendment
The Pernicious Fiction of Corporate Personhood
“Slavery is the legal fiction that a person is property. Corporate personhood is the legal fiction that property is a person.”
- David Korten, When Corporations Rule the World (former Professor of the Harvard University Graduate School of Business)
While nations long oppressed by undemocratic regimes are rising up and demanding political and economic liberty, the nation long admired as a model of revolutionary democracy – America – has quietly slipped toward a corporatocracy (a system that FDR considered fascism).
It’s ironic that the popular revolt we are witnessing in Wisconsin against an ideologically-motivated attempt to eviscerate the unions is seen by one VPR senior producer who recently returned from the streets of Cairo as “Egypt exporting democracy to the USA”. But that populist rebellion offers hope, as does Vermont’s recent trend-setting introduction of a General Assembly Resolution “urging the United States Congress to propose an amendment to the United States Constitution for the states’ consideration which provides that corporations are not persons under the laws of the United States or any of its jurisdictional subdivisions”.
So how did this state of affairs come to dominate American political and economic life? Since at least the days of the Robber Barons – a term used in an 1880 anti-monopoly pamphlet that castigated the railroad corporations, and that was popularized during the Great Depression – wealthy industrialists have dominated American politics.
Criminal, n. A person with predatory instincts who has not sufficient capital to form a corporation.
- Howard Scott
Corporation, n. An ingenious device for obtaining individual profit without individual responsibility.
- Ambrose Bierce, The Devil’s Dictionary
But the seminal legal case that was assumed to establish that corporations enjoyed the same constitutional protections as people was Santa Clara County v. Southern Pacific Railroad (1886). Just eight years after the 14th Amendment was ratified, intended to grant due process rights and equal legal protections to former slaves (“all persons born or naturalized in the United States”), the railroad barons tried to claim equal protection “of life, liberty, or property”. Their lawyers tried to argue that, since corporations were considered “artificial persons”, they should be granted the same legal protections as natural persons (in this case, California refused to allow the railroads to deduct their mortgage debt from the value of their property for purposes of determining taxable value, which was allowed to natural persons).
In one of the most blatant examples of legal legerdemain, Chief Justice Morrison Waite stated at the outset that “The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does.” The Court Reporter, J.C. Bancroft Davis (former president of the board of directors for the Newburgh & New York Railroad Company), included this statement in the headnotes of the written decision (which was a trivial one, limited to whether fence posts could be considered taxable property).
Such an incidental and collateral opinion that is uttered by a judge (which is known in legal circles as “obiter dictum”), has no legal standing and cannot be used as precedent for future court decisions. In fact, not only is obiter dictum considered non-precedential, the Supreme Court, soon after, decided that headnotes are “not the work of the Court, but are simply the work of the Reporter, giving his understanding of the decision, prepared for the convenience of the profession” (United States v. Detroit Timber Lumber Company, 1906).
But the Supreme Court used those headnotes and the obiter dictum declaration of opinion as the stare decisis(“to stand by decisions”) basis for future, more important, decisions – and thereby it became the defacto law of the land, a case of judicial activism unmatched in our history.
Hugo Black, considered one of the most influential Supreme Court justices in the 20th century, said “Of the cases in this court in which the 14th Amendment was applied during the first 50 years after its adoption, less than one half of one percent invoked it in protection of the Negro race, and more than 50% asked that its benefits be extended to corporations.”
And in his dissent in the 1938 case of Connecticut General Life Insurance Company v. Johnson, Justice Hugo Black wrote: “In 1886, this Court in the case of Santa Clara County v. Southern Pacific Railroad, decided for the first time that the word ‘person’ in the amendment did in some instances include corporations… The history of the amendment proves that the people were told that its purpose was to protect weak and helpless human beings and were not told that it was intended to remove corporations in any fashion from the control of state governments… The language of the amendment itself does not support the theory that it was passed for the benefit of corporations.”
The horrendous irony in this is that the American Revolution was as much a rejection of corporate domination as it was a rejection of the Monarchy – both being necessary for self-determination. Our first act of rebellion – the Boston Tea Party – was the first anti-globalization action (against the monopolistic control of international trade by the East India Company).
The Founders were as leery of the economic power of unrestrained corporations as they were of the political power of the Monarchy – each being examples of non-democratic institutions. For that reason, corporate charters were strictly controlled by the several States, were time-limited, and allowed a corporation to earn a private profit if it served a public purpose. A corporate contribution of any kind to a political campaign, however, was prosecuted as bribery – and a corporation could have its charter rescinded if it failed to meet its public obligations.
Today, corporate power and the consequent corruption of government are so pervasive that we almost take it for granted and forget that it is as dangerous to our Republic as any form of tyranny.
“Yes, we did produce a near perfect Republic. But will they keep it… Law is often the tyrant’s will, and always so when it violates the right of an individual… I hope we shall crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country.“ - Thomas Jefferson, author of the Declaration of Independence
“The end of democracy, and the defeat of the American Revolution will occur when government falls into the hands of the lending institutions and moneyed incorporations.” - Thomas Jefferson
“A corporation is an artificial being … the mere creature of law, it possesses only those properties which the charter of its creation confers upon it…” - Chief Justice John Marshall, 1819
Unless you become more watchful in your States and check this spirit of monopoly and thirst for exclusive privileges, you will in the end find that the most important powers of Government have been given or bartered away, and the control of your dearest interests have been passed into the hands of these corporations. - Andrew Jackson, farewell address, March 4, 1837
“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war. God grant that my suspicions may prove groundless.” - U.S. President Abraham Lincoln, Nov. 21, 1864 letter to Col. William F. Elkins
“Abolish plutocracy if you would abolish poverty …it is a government by the corporations, for the corporations.” - Rutherford B. Hayes, 19th President of the United States, 1877 – 1881
“The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism – ownership of government by an individual, by a group, or by any other controlling private power. “ - Franklin D. Roosevelt, 32nd President of the United States, 1933 – 1945
Of the top 200 biggest economies in 2010, 114 are corporations not countries.
Big money and big business, corporations and commerce, are again the undisputed overlords of politics and government. The White House, the Congress and, increasingly, the judiciary, reflect their interests. We appear to have a government run by remote control from the U.S. Chamber of Commerce, the National Association of Manufacturers and the American Petroleum Institute. To hell with everyone else. - Bill Moyers, PBS Commentator
“Thus corporations finally claimed the full rights enjoyed by individual citizens while being exempted from many of the responsibilities and liabilities of citizenship. Furthermore, in being guaranteed the same right to free speech as individual citizens, they achieved, in the words of Paul Hawken, ‘precisely what the Bill of Rights was intended to prevent: domination of public thought and discourse.’ The subsequent claim by corporations that they have the same right as any individual to influence the government in their own interest pits the individual citizen against the vast financial and communications resources of the corporation and mocks the constitutional intent that all citizens have an equal voice in the political debates surrounding important issues.” - David C. Korten, When Corporations Rule the World, 2001
“…corporations have no consciences, no beliefs, no feelings, no thoughts, no desires. Corporations help structure and facilitate the activities of human beings, to be sure, and their “personhood” often serves as a useful legal fiction. But they are not themselves members of “We the People” by whom and for whom our Constitution was established.” - Justice Stevens, in his dissent to the January 21, 2010 Supreme Court ruling, in Citizens United v. Federal Election Commission, that corporations are persons entitled by the U.S. Constitution to buy elections and run our government.
Excerpted from the book:
Corporations are Not People
The definitive guide to overturning Citizens United
by Jeffrey D. Clements, 2012
What is – and is not – a Corporation?
A corporation is a government-defined legal structure for doing business. A corporation is created and defined by state legislatures to advance what the state deems to be in the public interest. Corporations as entities are government policy tools; only government makes incorporation possible. Unlike other associations or ways of doing business, a corporation cannot exist by private arrangement.
The corporate legal entity is supremely effective at bringing together and channeling ideas, capital and labor to make a productive, growing enterprise. The corporate form streamlines the making and enforcement of contracts; it encourages, secures and rewards investment; it enables risk-taking as well as sustained operations, expansion and innovation over long periods of time; and it can efficiently spread risk (and reward) over many diverse shareholders.
Because the corporate entity is so useful and so prevalent, we can forget that it is a legal tool created by government to advance government policy. People can start and run businesses without government permission or a government form of organization. But people, or even “associations of people”, cannot form or operate a corporation unless the state enacts a law authorizing the formation of a corporation and provides rules for operations in corporate form.
The attributes of a modern corporation include limited liability, perpetual life (which was not formerly the case), and legal identification as a unitary actor so as to encourage simplicity and efficiency in making and enforcing contracts, suing and being sued, and so on. No one is required to use the corporate form, with its relative benefits and burdens, but if people decide to do so, the privilege of incorporation is a package deal.
Some people mistakenly call corporations “associations of people” or a “product of private contract”. This is incorrect. Corporations are not private matters, and they are not mere “associations of citizens”. Corporations exist only because states enact laws defining what a corporation is, what it can do, and what it cannot do.
The notion that some call “corporate personhood” is the idea that, under the law, corporations are treated as “persons”. As with perpetual existence, limited liability and other features of corporations, the source of this concept of a “corporate person” is not particularly complicated. We came up with it, or rather, our state and federal legislatures did, because treating the corporation as a legal “person” makes sense for certain purposes. That policy choice, though, is our choice and has nothing to do with the Constitution or corporate “rights”.
Section 502 of the Clean Water Act (which prohibits unpermitted discharge of toxics and pollutants into the waters of the United States by any person), says “The term ‘person’ means an individual, corporation, partnership, association, State, municipality, commission, or political subdivision of a State, or any interstate body.” Congress and the states take the same approach when we say “no person shall violate another person’s trademark” or “no person shall sell drugs that have not been approved by the FDA”. We do this because we have decided as a matter of state law that the “person” metaphor can help make the corporation a better tool of public policy.
The Constitution is different from state laws and federal statutes. Our Bill of Rights is not a “policy choice” that government can decide. Rather, the Bill of Rights defines the relationship between us as human beings and our government. The First Amendment and our other rights in the Constitution are the natural human rights that we insist on ensuring to ourselves when we consent to the Constitution’s plan of government.
When we decide, under our state and federal laws, that corporations are “persons” that can be prosecuted (or contract or be sued), that decision cannot transform corporations into “persons” under the Constitution’s protection of rights. The rights in our Constitution, including the rights of “life”, “liberty”, “property” and “equal protection” for all “persons”, are human rights. The Constitution cannot be changed by state or federal laws or majority vote; it can be changed only by the process of amendment as set forth in Article 5 of the Constitution. The people have never added corporations to the definition of “persons” in the Constitution by using the amendment process (a vote of two-thirds of Congress, ratified by three-quarters of the states or a constitutional convention). As the Supreme Court declared in the 1800s, when rebuffing early corporate efforts to create corporate rights, “State laws, by combining large masses of men under a corporate name, cannot repeal the Constitution” (Marshall v Baltimore & Ohio Railroad, 1853).
As economic tools, corporations are highly effective. Yet the same traits that make corporations useful economic policy tools can also make them dangerous to republican government and democracy if people and lawmakers do not watch and restrain abuses. Corporations can aggregate immense power, corrupt government, drive down wages, trash public resources, concentrate markets to squeeze out competitors, and more. As Justice William Rehnquist said in one of his many dissents from the corporate rights decisions in the late 1970s and 1980s, a “State grants to a business corporation the blessings of potentially perpetual life and limited liability to enhance its efficiency as an economic entity. It might reasonably be concluded that those properties, so beneficial in the economic sphere, pose special dangers in the political sphere” (First National Bank of Boston v. Bellotti, 1978).
Corporate power is now subverting our democracy because we have forgotten that corporations are just tools, and we have forgotten our duty to keep an eye on them. Until the corporate rights offensive of recent years, the idea of restraining corporate power was a mainstream, basic American proposition, not a fringe viewpoint.
Since the beginning of our country, virtually every generation of Americans has acted to prevent corporate power from being leveraged into political power at the expense of the people. During the colonial period, only a handful of native business corporations carried on business, and only twenty business corporations were formed by 1787 when the American people convened the Constitutional Convention in Philadelphia. Legislatures, however, increasingly permitted the creation of corporations in the new republic to facilitate and expedite all kinds of public purposes, such as the building of roads, dams and bridges. Yet it remained clear that corporations were legal instruments of the state, defined and controlled by the state, with limitations on their purposes and their duration.
It would have been bizarre if the generation that defiantly declared to the world that “all men are created equal” and that “they are endowed by their Creator with certain unalienable rights” and who wrote a constitution opening with “We, the People”, would have tolerated corporate constitutional rights. Founders such as Thomas Jefferson and James Madison could not have been more clear about the dangers of unregulated corporations and the need for, as Madison put it, “proper restraints and guards”. Another founder, James Wilson, a Pennsylvania man who signed the Declaration of Independence, served in the Continental Congress, helped draft the Constitution, and was nominated by George Washington to be one of the first six justices of the Supreme Court, agreed.
The Supreme Court at the time knew that any “rights” of corporations come from the state charter, not from the Constitution (let alone the Creator). That is because corporations are “creatures of law”. The corporate legal form today is not fundamentally different than it was in 1819 when Chief Justice John Marshall used that terminology. A corporation is charted by the state just as in 1809 when a unanimous Supreme Court held that “a body corporate as such cannot be a citizen within the meaning of the Constitution” (Hope Insurance Co. v. Boardman).
For nearly two hundred years, the Supreme Court rejected the argument that corporations were entitled to the rights of citizens under the Constitution’s “privileges and immunities” clause. In 1839, the Court said, “The only rights [a corporation] can claim are the rights which are given to it in that character, and not the rights which belong to its members as citizens of a state” (Bank of Augusta v Earle, 1839). Fifty years later, the Court said that the term “citizens” in the Constitution “applies only to natural persons, members of the body politic owing allegiance to the state, and not to artificial persons created by the legislature, and possessing only such attributes as the legislature has prescribed” (Pembina Consolidated Mining Co. v. Commonwealth of Pennsylvania, 1888).
At least until recently, the vigilance of American leadership toward corporate power did not waver as corporations became more dominant in our economy. “Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people’s masters”, warned President Grover Cleveland (the conservative leader of the pro-business Bourbon Democrats, he was the only president to serve two non-consecutive terms, the winner of the popular vote for president three times, and the only Democrat elected to the presidency in the era of Republican political domination that lasted from 1861 to 1913).
Theodore Roosevelt sought to end “a riot of individualistic materialism” and successfully called for a ban on corporate political contributions: “Let individuals contribute as they desire; but let us prohibit in effective fashion all corporations from making contributions for any political purpose, directly or indirectly.” President Roosevelt said he “recognized that corporations and combinations (trusts) had become indispensable in the business world, that it is folly to try to prohibit them, but that it was also folly to leave them without thoroughgoing control.”
Until the success of the Powell-Chamber of Commerce Plan, the Santa Clara line of “corporate person” cases was rendered largely meaningless by the people’s rejection of corporate rights throughout the twentieth century. The Republicans under Theodore Roosevelt restrained corporate power with effective antitrust enforcement, labor laws, environmental laws, and laws banning corporate political spending. Democrats under Woodrow Wilson and Franklin Roosevelt likewise regulated corporate power to ensure the strength of the people and the country as a whole. And Republicans, Democrats and Independents came together to amend the Constitution in 1913 to weaken the corporate hold on government by requiring senators to be elected by the people rather than appointed by state legislatures.
Finally, in a 1938 dissenting opinion, Justice Hugo Black, a former Alabama senator, demolished the idea that corporations were “persons” under the Constitution’s Fourteenth Amendment. While he wrote the dissent, the clarity of his expression about corporations and persons sounded a warning to any justice who might try to slip corporate rights into the Constitution with the “glittering generalities” and glib citation of Santa Clara.
“I do not believe that the word ‘person’ in the Fourteenth Amendment includes corporations…A constitutional interpretation that is wrong should not stand. I believe this Court should now overrule previous decisions which interpreted the Fourteenth Amendment to include corporations. Neither the history nor the language of the Fourteenth Amendment justifies the belief that corporations are included within its protections. Certainly, when the Fourteenth Amendment was submitted for approval, the people were not told that the states of the South were to be denied their normal relationship with the Federal Government unless they ratified an amendment granting new and revolutionary rights to corporations…The records of the time can be searched in vain for evidence that this amendment was adopted for the benefit of corporations.” - Justice Hugo Black, in dissent, Connecticut General Life Insurance Co. v. Johnson (1938)
With Justice Hugo Black’s warning shot that there would be no more free rides for corporate rights on the Supreme Court, Santa Clara ”corporate personhood” was a dead issue for decades. Indeed, the Court said little more about corporation’s “rights” until Justice Lewis Powell and his Chamber of Commerce plan came to the Supreme Court following the death of Justice Black in 1971. Through most of the twentieth century, the Court returned to the basic American understanding that corporations were economic, not political, entities.
For example, in rejecting the claim of corporations for privacy rights in 1950, the Supreme Court said:
“Corporations can claim no equality with individuals in the enjoyment of the right to privacy. They are endowed with public attributes. They have a collective impact upon society, from which they derive the privilege of acting as artificial entities…Law enforcement agencies have a legitimate right to satisfy themselves that corporate behavior is consistent with the law and the public interest.” (United States v. Morton Salt Co., 1950).
For more than a century until Citizens United, most states and the federal government banned corporate political contributions and spending. Some states, such as Kentucky, even made control of corporate political activity part of their state constitutions.
“If any corporation shall directly or indirectly, offer, promise or give, or shall authorize, directly or indirectly, any person to offer, promise or give any money or any thing of value to influence the result of any election in this State, or the vote of any voter authorized to vote therein, or who shall afterward reimburse or compensate, in any manner whatever, any person who shall have offered, promised or given any money or other thing of value to influence the result of any election or the vote of any such voter, such corporation, if organized under the laws of this Commonwealth, shall, on conviction thereof, forfeit its charter and all rights, privileges and immunities thereunder; and if chartered by another State and doing business in this State, whether by license, or upon mere sufferance, such corporation, upon conviction of either of the offenses aforesaid, shall forfeit all rights to carry on any business in this State; and it shall be the duty of the General Assembly to provide for the enforcement of the provisions of this section.” - Kentucky Constitution (1891)
With the exception of Justice Powell’s early foray into corporate rights in the 1978 First National Bank of Boston case, this basic understanding of the place of corporations in American democracy guided the Supreme Court, even as Justice Powell’s “corporate speech” cases worked away at creating the new corporate rights doctrine.
The one time before Citizens United when the Supreme Court went off the rails with respect to corporate political spending occurred with Justice Powell’s maiden corporate rights decision in First National Bank of Boston, striking down a state law banning corporate spending in referendum elections. That exception should have proved the rule, in large part because of the force of Justice Rehnquist’s dissent. Rehnquist concluded that the “Fourteenth Amendment does not require a State to endow a business corporation with the power of political speech.” Congress, he wrote, and numerous “states of this Republic have considered the matter, and have concluded that restrictions upon the political activity of business corporations are both politically desirable and constitutionally permissible. The judgement of such a broad consensus of government bodies expressed over a period of many decades is entitled to considerable deference from this Court.” - Justice Rehnquist, dissent, First National Bank of Boston v. Bellotti (1978)
The different opinions of these two Richard Nixon appointees – William Rehnquist and Lewis Powell – showed the stark gap between the conservative and the corporatist understanding of our American republic. For a time, the conservative Rehnquist was able to form a majority on the Court. In 1990, the Chamber of Commerce in Michigan attacked a law restricting corporate political spending and lost. The Court upheld the right of the people to keep corporations out of politics. In that case, Austin v. Michigan Chamber of Commerce, Justice Rehnquist’s dissenting views in the corporate speech cases became the majority view.
Rehnquist joined the liberal Thurgood Marshall, who wrote for the Court in affirming Michigan’s regulations of corporate spending in elections. Marshall’s words for the Court were drawn from the earlier Rehnquist dissents:
“State law grants corporations special advantages…These state-created advantages not only allow corporations to play a dominant role in the Nation’s economy, but also permit them to use ‘resources amassed in the economic marketplace’ to obtain ‘an unfair advantage in the political marketplace’.”
Even as late as 2003, before Chief Justice John Roberts and Justice Samuel Alito replaced Chief Justice Rehnquist and Justice Sandra Day O’Connor, the Court agreed that the same corporate election spending law that the Court would later strike down in Citizens United was perfectly fine under our Constitution. In that 2003 case, McConnell v. Federal Election Commission, the Court affirmed that the people’s representatives in Congress were entitled to “the legislative judgement that the special characteristics of corporate structure require particularly careful regulation”.
Just seven years later, in Citizens United, which posed the same fundamental question, a radically activist Court ignored not only the 2003 decision and the Austin v. Michigan Chamber of Commerce decision of 1990, but also the New Deal, Theodore Roosevelt’s presidency, the populist movements of the late 19th and early 20th centuries, and the principles of Thomas Jefferson, James Madison and President Washington’s Supreme Court Justice and founding father James Wilson.
Justice Lewis Powell and the Rise of the Corporate State
Lewis Franklin Powell, Jr. (1907 – 1998) was an Associate Justice of the Supreme Court of the United States. He developed a reputation as a judicial moderate, and was known as a master of compromise and consensus-building. But he has become infamous for drafting the Powell Memorandum, a confidential memorandum for the US Chamber of Commerce that described a strategy for the corporate takeover of the dominant public institutions of American society.
Powell was a partner for over a quarter of a century at Hunton, Williams, Gay, Powell & Gibson, a large Virginia law firm. Powell practiced primarily in the areas of corporate law (especially in the field of mergers and acquisitions) and in railway litigation law. He had been a board member of Philip Morris between 1964 until his appointment in 1971 and had acted as a contact point for the tobacco industry with Virginia Commonwealth University. Through his law firm, he represented the Tobacco Institute (which was later stripped of its charter for decades of false science and fraudulent statements about the connection between smoking and health) and the various tobacco companies in numerous law cases. He was also a director of more than a dozen transnational corporations.
Based in part on his experiences as a corporate lawyer and as a representative for the tobacco industry, he wrote the Powell Memorandum to a friend at the US Chamber of Commerce. The memo called for corporate America to become more aggressive in molding politics and law in the US and sparked the formation of several influential right-wing think tanks, including the Heritage Foundation, the Manhattan Institute, the Cato Institute, Citizens for a Sound Economy, and Accuracy in Academe.
In August 1971, prior to accepting Nixon’s request to become Associate Justice of Supreme Court, Lewis Powell sent the “Confidential Memorandum”, titled “Attack on the American Free Enterprise System”. The previous decade had seen the increasing regulation of many industries and Earth Day 1970 saw 20 million Americans participating in a call for greater environmental responsibility – a demand which led, in rapid succession, to:
- Environmental Protection Agency
- Clean Water Act
- Clean Air Act Extension
- Toxic Substances Control Act
- Safe Drinking Water Act
- Wilderness Act
- Surface Mining Control and Reclamation Act
- Endangered Species Act
- Marine Mammal Protection Act
- Resource Recovery Act
- the first fuel economy standards for motor vehicles
In his memo, Powell began, “No thoughtful person can question that the American economic system is under broad attack…There always have been some who opposed the American system…But what now concerns us is quite new in the history of America. We are not dealing with sporadic or isolated attacks from a relatively few extremists or even from the minority socialist cadre. Rather, the assault on the enterprise system is broadly based and consistently pursued. It is gaining momentum and converts.”
He complained that, “The most disquieting voices joining the chorus of criticism came from perfectly respectable elements of society: from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians…these often are the most articulate, the most vocal, the most prolific in their writing and speaking.”
What deeply bothered Powell was that the corporately-owned media were giving voice to the critics, and colleges and universities supported by corporate money were breeding grounds for such ideas. He particularly singled out as enemies William Kunstler, Ralph Nader and Yale Professor Charles Reich for his widely publicized book, The Greening of America.
Powell expressed dismay at the “political demagoguery” of politicians who targeted business tax loopholes as benefiting only the rich and the owners of big companies, without benefit to the poor, thereby setting business against the people in a form of class warfare. And he complained that “businessmen have not been trained or equipped to conduct guerrilla warfare with those who propagandize against the system, seeking insidiously and constantly to sabotage it”.
In the memorandum, Powell advocated “constant surveillance” of textbook and television content, as well as a purge of left-wing elements. Powell set as his main goal changing how individuals and society think about the corporation, the government, the law, the culture, and the individual.
This took on the quality of a crusade. Powell wrote of the need “to recognize that the ultimate issue may be survival – survival of what we call the free enterprise system, and all that this means for the strength and prosperity of America and the freedom of our people”.
To fight such a crusade, Powell saw the role of the US Chamber of Commerce as central. “Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.”
Among the tactics he suggested for the Chamber’s crusade were to create a “Staff of Scholars” in the social sciences, a “Speaker’s Bureau” from “the top echelons of American business”, evaluation of textbooks “especially in economics, political science and sociology” to insure “fair and factual treatment of our system of government and our enterprise system, its accomplishments, its basic relationship to individual rights and freedoms, and comparisons with the systems of socialism, fascism and communism”, equal time on campus, balancing of faculties, developing rapport with graduate schools of business as well offering curricula to secondary schools, and getting the message out to the general public through television, radio and press, as well as books and pamphlets, and paid advertisements.
Finally, Powell bemoaned that “in terms of political influence with respect to the course of legislation and government action, the American business executive is truly the forgotten man”. And he concluded that “in the final analysis, the payoff – short-of revolution – is what government does”. What the government does, understood Powell, is not just in the halls of Congress, but the “American business and the enterprise system have been affected as much by the courts as by the executive and legislative branches of government. Under our constitutional system, especially with an activist-minded Supreme Court, the judiciary may be the most important instrument for social, economic and political change (emphasis added).” It was essential, he argued, “that spokesmen for the enterprise system – at all levels and at every opportunity – be far more aggressive than in the past”, “nor should there be reluctance to penalize politically those who oppose it”.
He concludes his missive with this: “The threat to the enterprise system is not merely a matter of economics. It also is a threat to individual freedom…It is this message, above all others, that must be carried home to the American people.”
Supreme Court tenure
In 1969, President Nixon asked him to join the Supreme Court, but Powell turned him down, largely because he was making so much money as a corporate lawyer that it would have been a major step downward, and because he was concerned that his legal experience was too narrow. In 1971, Nixon asked him again and Attorney General John N. Mitchell persuaded him that joining the Court was his duty to the nation.
He and the openly conservative William Rehnquist were nominated by President Nixon on the same day to serve on the Court. Powell took over the seat of Hugo Black, a steadfast opponent of corporate personhood and constitutional rights. Lewis Powell served from January 7, 1972 until June 26, 1987, when he resigned.
The recently sent Powell Memorandum was never mentioned in his confirmation hearings, and did not become available to the public until it was leaked to Jack Anderson, a liberal syndicated columnist, who stirred interest in the document when he cited it as reason to doubt Powell’s legal objectivity.
Powell did embrace expansion of corporate privilege. On social issues, however, he was a moderate, whose votes often surprised his backers. Unlike Rehnquist, Powell was not conservative but radically corporatist. Powell helped shape a new majority of the Court to serve the interests of corporations, but for several years vigorous dissents resisted the concept of corporate rights. The most vigorous, ironically, came from William Rehnquist, who grounded his dissents in the fundamental proposition that our Bill of Rights sets out the rights of human beings, and corporations are not people, maintaining the principled conservative position that corporate rights have no place in our form of republican government.
Justice Powell began his own crusade for “an activist-minded Supreme Court” and participated in the infamous Buckley v. Valeo case , in which the Supreme Court ruled that political money is equivalent to speech and subject to First Amendment protections, U.S. v. Martin Linen Supply  in which a corporation successfully used the 5th Amendment to protect itself against double jeopardy to avoid retrial in an anti-trust case, and Virginia Board of Pharmacy v. Virginia Consumer Council  in which the Court protected advertising as free speech.
But Powell came into his own when he wrote the majority opinion in First National Bank of Boston v. Bellotti, a 1978 decision that effectively invented a First Amendment “right” for corporations to influence ballot questions. First National Bank of Boston v. Bellotti overturned a Massachusetts law restricting corporate contributions to referendum campaigns not directly related to their business, reversing its longstanding policy of denying such rights to non-media business corporations. This precedent is used, with Buckley v. Valeo, to thwart attempts to remove corporate money from politics.
In a dissent by Justices White, Brennan, and Marshall: “…the special status of corporations has placed them in a position to control vast amounts of economic power which may, if not regulated, dominate not only our economy but the very heart of our democracy, the electoral process… The State need not allow its own creation to consume it.”
Rehnquist also dissented: “The blessings of perpetual life and limited liability … so beneficial in the economic sphere, pose special dangers in the political sphere.” Rehnquist also opined, “The free flow of information is in no way diminished by the Commonwealth’s decision to permit the operation of business corporations with limited rights of political expression. All natural persons, who owe their existence to a higher sovereign than the Commonwealth, remain as free as before to engage in political activity…The Fourteenth Amendment does not require a state to endow a business corporation with the power of political speech.”
The crusade that Justice Lewis Powell began with his confidential memorandum and his radically activist jurisprudence, shifted the balance of power in the United States dramatically toward corporatism, and has culminated in the 2010 Citizens United Decision unleashing a tsunami of unaccountable corporate money into the electoral arena. Another element of Powell’s strategy, aggressive lobbying of Congress, has paid off phenomenally (in a 2009 study, Measuring Rates of Return for Lobbying Expenditures: An Empirical Analysis under the American Jobs Creation Act, researchers calculated the return on lobbying investment was 22,000% – for every dollar spent on lobbying, the companies got $220 in tax benefits).
The result of this ascension of aggressive corporate interest was the offshoring of American manufacturing jobs, the financialization of the market, the sub-prime crisis and 2008 real estate crash, the second Great Depression, the bailouts of the largest banks and manufacturing corporations, and the widest divide between rich and poor since the Gilded Age with fully half of all Americans in or close to poverty.
Now America has come full circle again and its people are rising up against such corporate and government excesses – in the form of the Tea Party rebellion against the bank bailouts and government deficits, and the #Occupy movement against corporate power, concentrated wealth and the lack of opportunity for the masses. But, without a long-range strategic plan such as Lewis Powell spelled out for the corporate class, there is little likelihood of a substantive return to popular democracy in America.
“A Constant Preference of Public to Private Interest”
This article is a summation of the last two chapters of Corporations are Not People: The definitive guide to overturning Citizens United by Jeffrey D. Clements, 2012
Jeff Clements served as Chief of Public Protection & Advocacy in the Massachusetts Attorney General’s Office, litigating in the areas of civil rights, environmental protection, healthcare, insurance and financial services, antitrust and consumer protection; as Assistant Attorney General he helped end unfair and deceptive practices by the tobacco industry; he filed an amicus brief in the United States Supreme Court in the landmark case of Citizens United v. Federal Elections Commission, co-founded Free Speech for People, and is an Adjunct Professor in Election Law at the New England School of Law in Boston.
Corporations Can’t Love
“Only a virtuous people are capable of freedom.” – Benjamin Franklin
“Virtue may be defined as the love of the laws and of our country. As such love requires a constant preference of public to private interest, it is the source of all private virtue…A government is like everything else; to preserve it we must love it…Everything, therefore, depends on establishing this love in a republic.” – Thomas Jefferson
James Madison defined faction as “a number of citizens, whether amounting to a majority or minority of the whole, who are united and actuated by some common…interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community.”
The Constitution seeks to increase the odds for the success of liberty and self-government by diluting faction, balancing powers, and declaring rights. Even with better odds, government of the people requires a trait that only people can seek: virtue. Americans have kept this improbable run of human possibility going one generation after another, overcoming grievous injustice and brutal challenge, because of love: love of country and family, of justice and freedom.
In Citizens United, the Court forgot this human underpinning of our Constitution and, in thrall to its imprecise corporate metaphors, forgot the essential relationship of speech and other human rights to a virtuous republic of people. Corporate money is not speech, and corporations do not have the capacity for virtue – nor are they designed for it.
In Justice Rehnquist’s dissents to Justice Powell’s creation of corporate rights, he wrote, “In a democracy, the economic is subordinate to the political, a lesson that our ancestors learned long ago, and that our descendants will undoubtedly have to relearn many years hence.”
Distorting our Constitution and its Bill of Rights to create corporate, rather than human, rights destroys virtue and strengthens faction – the most formidable faction the world has ever known. In America, there can be no such thing as “corporate speakers”, “corporate voices” or “corporate citizens”.
Corporations don’t have voices or rights; they have no virtue or shame; and they do not love America. It is not that corporations are disloyal to our country. Rather, it is more that they are “aloyal”. Loyalty is not a trait that has any meaning or applicability to corporate charters or corporate entities or transnational corporate conglomerates. The global corporations that dominate the Chamber of Commerce agenda and spend billions on lobbying are not American or any other nationality. They have trillions in revenues and profits from around the world. They operate everywhere but are citizens of nowhere. In the modern age of giant corporations with Byzantine international structures and international institutional shareholders, the ruling in Citizens United borders on assisted national suicide.
The virtue that so concerned the founders of our nation is a human aspiration, if not always a human trait. Civic virtue happens because of human, not corporate, love. People don’t always act virtuously. When people commit crimes against society, we expect punishment and shame and hope for repentance and rehabilitation. Corporations do not, cannot, feel shame. As Kent Greenwald describes in The Failure of Corporate Law, corporate managers “do not have an ethical duty to obey economic regulatory laws just because they exist…managers not only may but also should violate the rules when it is profitable to do so.”
Unchecked corporate power poisons food, water and air, and people get sick and die. Workplaces are more dangerous, and people get injured and die. Markets are corrupted, and people lose their savings and jobs are wiped out. Taxes for most people are higher because corporations and the rich do not pay their share and hide money “offshore”, abetted by criminal international banking corporations.
The Court’s Citizens United decision failed to consider whether the problem of serial corporate crime and the reality of global corporate power exposed the fallacy of excess metaphorical thinking when it comes to corporations. If the Court had considered why Congress might have distinguished between corporations and people in the Bipartisan Campaign Reform Act (McCain–Feingold Act of 2002) and the 1907 law banning corporate money in politics, the Court would have inquired into how corporations might be different from people. In doing so, the Court might have connected “speech” to “virtue” as essentially human characteristics and recognized the relationship of both to a self-governing republic of free people. This virtue, as Jefferson and the other Founders knew, is not only “love of the laws and of our country” but also a love that “requires a constant preference of public to private interest”.
Corporations are incapable of virtue, not because they are bad but because they are mere tools. We could design a better tool, but for most of the large public corporations, the risk of crime and fraud runs high because we do not sufficiently conceive of the corporation as a tool to aid the progress of the many rather than as an enrichment machine for a few.
Sadly, the failure to control corporate power corrodes and destroys virtue itself in too many American people. Decent, kind, patriotic, hardworking people go off to work every day in corporations that create terrible consequences for the world, when allowed to do so. When we fail to keep corporations in their proper economic place and to protect our political space, we corrupt virtue in all of us.
The crimes of corporations, from trading with the enemy to despoiling the environment, as well as the political corruption caused by corporate power, happen because people make rational decisions on behalf of the corporations. Yet it is not because those people are evil. It is because government, crippled by corporate “rights” and corporate power, has abandoned its duty to control the powerful tool in which those people find themselves working. When we, the people, cannot control corporations because of fabricated constitutional rights and dangerous imbalances in lobbying and election spending, people making corporate decisions are rewarded for not exercising virtue and punished for exercising it. Corporate decisions overwhelmingly favor the private, not the public, interest, and the corporate, not the American, interest.
The people of America must overturn Citizens United and corporate rights and must assert the will of the people over the unchecked power of corporations. As in the past, we have the means, and hopefully the will and the virtue, to do exactly that.
Not long after the BP disaster in the Gulf of Mexico exposed how deeply and corruptly the oil corporations had insinuated themselves into our government, Senator Sheldon Whitehouse, former attorney general of Rhode Island and a former United States attorney, took to the Senate floor and issued a warning and plea to the American people:
Have we now learned what price must be paid when the stealthy tentacles of corporate influence are allowed to reach into and capture our agencies of government?
I pray, let us have learned this; let us have learned that lesson. I sincerely pray we have learned our lesson, and that this will never happen again. But let us not just pray.
In this troubled world, God works through our human hands; grows a more perfect union through our human hearts; creates his beloved community through our human thoughts and ideas. So it is not enough to pray. We must act.
We must act in defense of the integrity of this great government of ours, which has brought so much light to the world, such freedom and equality to our country. We cannot allow this government – that is a model around the world, that inspires people to risk their lives and fortunes to come to our shores – we cannot allow any element of this government to become the tool of corporate power, the avenue of corporate influence, the puppet of corporate tentacles.”
Restoring Democracy and Republican Government
“This is a moment of high danger for democracy, so we must act quickly to spell out in the Constitution what the people have always understood: that corporations do not enjoy the political and free speech rights that belong to the people of the United States.” – Maryland Senator Jamie Raskin
“Great corporations exist only because they are created and safeguarded by our institutions; and it is therefore our right and duty to see that they work in harmony with these institutions.” – President Theodore Roosevelt, first annual address, 1901
How do we, the people, fulfill that duty now? Three key steps will lead the way back to government of the people, not of the corporations.
(1) First and most important, we need to work for the Twenty-Eighth Amendment to the Constitution, a People’s Rights Amendment, to reverse Citizens United and corporate constitutional rights. For thirty years, we have been in a power struggle over the Constitution and the Bill of Rights, but only one side – the side of organized corporate power – has shown up to fight. It is time for the people to take the field. Without ending the corporate rights veto over our laws and without reforming corporate domination of our government, elections will become more meaningless, representative democracy will become a fading memory.
(2) As the second step, we must insist, rather than beg, that corporations actually serve the public interest. Corporate law should ensure that corporations do not merely take benefits from the public; they must also fulfill duties to the public. Reform of corporate law and enforcement of existing laws that have been ignored for too long, such as corporate charter accountability laws in virtually every state, will level the playing field on which responsible and irresponsible corporations alike now compete. No longer should socially responsible businesses be considered “alternative” or “optional” approaches to doing business. Corporate law should no longer give advantages to socially irresponsible corporations.
(3) Third, we need to make election and lobbying laws that punish, rather than reward, corrupt crony capitalism and bribe-based politics. If we intend to control rather than be controlled by corporate power, we must reform how we elect our representatives and clean up the swamp of corporate bribery and corruption of government that we now quaintly call “lobbying”. For elections and lawmaking – two of the most important public responsibilities of citizens in a republic – we now rely on a sliver of rich people and global corporations to fund campaigns and elections. They don’t do it for nothing. Those who pay for campaigns and elections are those who get the most representation; we should not be surprised to find that corporations and the rich are now very well represented and everyone else is not. However, if all of us pay for campaigns and elections through public funding, all the people will be better represented in Congress and the state legislatures. And we will know which politicians are willing to rely on the people for election or re-election and which are cutting deals with the big funders.
1 + 2 + 3
While the amendment campaign is most important, these three steps are not mutually exclusive. They do not require a particular order of accomplishment. Indeed, pushing all of the steps forward at the same time will have a synergistic effect. Each step helps address the fundamental problem of corporate dominance over our government and the American people.
So pick up wherever you find you can do the most good, and join in this work. We will win. And we will leave a somewhat more perfect union to the next generations of Americans and a better example for free people around the globe. Then they, too, can continue the work to ensure that government of the people “does not perish from the earth”.
Those who come after us will inherit the world we leave them; let us not forget to fight for them. But let’s not forget, too, to consider the people who came before us. Much that is right about our democracy, and much that we now take for granted, exists only because Americans before us did the seemingly impossible. They amended the Constitution; they insisted on the people having the last word over the Court and other branches of government.
With successful amendment campaigns, they guaranteed equal voting and participation for all races; they insisted on voting rights for women after the Supreme Court ruled that the Constitution provided no such thing; they demanded that all people eighteen or older have the right to vote after the Supreme Court ruled otherwise; they insisted that equality in voting cannot exist if poll taxes and barriers are placed in front of those with less money, property, or power; they insisted on election of Untied States senators by the people rather than by a corrupt appointment process. None of this happened without successful amendment campaigns by the American people.
Some scholars call the constitutional amendment process a “republican veto”, by which they mean that the American people, the real sovereigns in our system of government, retain the last word when egregious Supreme Court decisions undermine our understanding of democracy and the Bill of Rights. At least six times, Americans have amended the Constitution to overturn Supreme Court decisions. Citizens United deserves the same fate.
Inscribed high on the walls of the Jefferson Memorial in Washington is a more moderate version of Jefferson’s “water the tree of liberty with blood” recognition of the need to preserve a revolutionary spirit among the free people of America. “I am not an advocate for frequent changes in laws and constitutions. But laws and institutions must go hand in hand with the progress of the human mind.”
We now know, having seen the successful execution of the Powell-Chamber of Commerce plan for a long corporate drive for power, that the current interpretation of the Constitution does not reflect “the progress of the human mind”. Accordingly, this is not a mere policy debate. We face a constitutional struggle, a national struggle. If that struggle is to be won, the Constitution must be returned to a charter of the rights of sovereign people, a charter in which corporations have no place. With the People’s Rights Amendment campaign and corporate and election law reform, we can return to a government of the people. We will have preserved once again what the Founders’ generation called the rights of man and what we, after two centuries of hard work and improbable successes by the American people, can proudly call the rights of people.
The People’s Rights Amendment
End Corporate Personhood
In homage to one of the “winter soldiers” that Thomas Paine memorialized, my old colleague Richard Grossman, who died too soon this November 22, 2011, I offer this plea for sanity.
Richard attended Columbia University, graduating in 1965, and then served as a Peace Corps volunteer in the Philippines. In 1968, he signed the “Writers and Editors War Tax Protest” pledge, vowing to refuse tax payments in protest against the Vietnam War. In the 1970s, while living in the Washington, DC area, Grossman founded Environmentalists for Full Employment (EFFE), a group that sought to unite environmental activists and unions years before the critical importance of this alliance was clear to grassroots activists of all stripes.
In the 1980s, he worked at the Highlander Research and Education Center, a social justice organization in Tennessee, and was executive director of Greenpeace USA.
Richard Grossman was the co-director of the Program on Corporations, Law and Democracy (POCLAD). He was co-author of Taking Care of Business: Citizenship and the Charter of Incorporation and lectured widely on issues of corporate power, law and democracy. He was also one of the teachers for the Daniel Pennock Democracy School, which worked to help people understand how and why corporations have more rights than human beings.
The group came together in the early nineties when a dozen activists who had spent much of their lives working on issues of peace, labor, women’s rights, and the environment decided that something more had to be done. “It’s time,” he said, “that people took back control over corporations.”
I first met Richard in DC back in 1978, when I was an organizer for the Clamshell Alliance and he was directing EFFE. I last worked with him in 2004 when I organized the first county Kucinich for President campaign in New Hampshire.
In the month before his untimely death, Richard was working on “An Act To Criminalize Chartered, Incorporated Business Entities”, which stated:
As of 12:01 a.m. on July 4, 2012, no incorporated business shall exist or operate within the United States and its territories, or within any State or municipality.
As of 12:01 a.m. on July 4, 2012, all existing business corporation charters granted by the United States, and by all States, shall be null and void.
Neither the United States nor any State shall issue new charters for incorporated businesses. Any chartered, incorporated business entity – domestic, foreign, alien – existing and operating after the above date shall be deemed a violent, criminal, and terrorist conspiracy. Its directors and executive officers must be charged with ecocide, criminal conspiracy and crimes against humanity.
corporation, n. An ingenious device for obtaining individual profit without individual responsibility. - Ambrose Bierce, The Devil’s Dictionary
criminal, n. A person with predatory instincts who has not sufficient capital to form a corporation. - Howard Scott, first Research Director for the IWW
It would be a fitting tribute to Richard Grossman’s life work if, on that Independence Day 2012, the #OWS National General Assembly scheduled to meet in Philadelphia would stand behind a Constitutional Amendment to outlaw Corporate Personhood.
There is the beginning of a nationwide campaign to introduce, through state legislatures, a resolution to enact a 28th amendment to the US Constitution. Before an amendment can take effect, it must be proposed to the states by a two-thirds vote of both houses of Congress or by a convention called by two-thirds of the states, and ratified by three-fourths of the states. It is a difficult and laborious process, as it should be, but two of its proponents – Ben & Jerry – believe that, with the momentum provided by #OWS, it’s now possible.
“Slavery is the legal fiction that a person is property. Corporate personhood is the legal fiction that property is a person.” - David Korten, When Corporations Rule the World, former Professor of the Harvard University Graduate School of Business
This evening, November 29, 2011, I was part of an overflow crowd at a church in Montpelier VT which assembled to hear a presentation on responses to the Citizens United decision, which affirmed corporate personhood for the purposes of the 1st Amendment and re-affirmed the Court’s 1976 Buckley v. Valeo decision which equated money with speech. At the head table, were the founders of Ben & Jerry’s Ice Cream, two women professors from VT Law School, and David Cobb, the 2004 Green Party candidate for president of the United States and now leading Move to Amend and is a Fellow with the Liberty Tree Foundation for the Democratic Revolution.
“The Tree of Liberty must be watered from time to time with the blood of Tyrants and Patriots both.” - Thomas Jefferson
This is the simple lesson that Cobb provided:
The US Constitution is based on just two categories: We the People (the first three words of the document), and the Government which we “do ordain and establish”. It is clear from the document that We the People are primary and the Government secondary.
We the People are free and sovereign, meaning we alone have the authority to rule our lives, and the Government that we established is subordinate and accountable to us. We the People have rights that precede government – natural or inalienable rights. The Government has only duties. We the People live within a private sphere of civil liberties, while we interact within a public sphere of communitarian responsibilities.
The Government has no sovereignty beyond what limited authority we grant it, and we retain the right to amend or revoke that authority at any time. Since Government has overstepped its legitimate authority, and the Courts have unconstitutionally granted human rights to the legal entities we call corporations, it is time to amend that original charter once again to revoke those grants and to restrain Government. We are living, said Cobb, in pre-revolutionary times.
Free Speech for People conducted a professional survey of public opinion late 2010. They found that the overwhelming majority of Americans don’t care for corporate behavior, think our political system is tilted heavily toward corporations, and support a constitutional amendment to ban corporate personhood.
The People’s Rights Amendment
Section 1. We the people who ordain and establish this Constitution intend the rights protected by this Constitution to be the rights of natural persons.
Section 2. People, person, or persons as used in this Constitution does not include corporations, limited liability companies or other corporate entities established by the laws of any state, the United States, or any foreign state, and such corporate entities are subject to such regulation as the people, through their elected state and federal representatives, deem reasonable and are otherwise consistent with the powers of Congress and the States under this Constitution.
Section 3. Nothing contained herein shall be construed to limit the people’s rights of freedom of speech, freedom of the press, free exercise of religion, and such other rights of the people, which rights are inalienable.
State Resolutions have been introduced in support of amending the Constitution in California, Hawaii, Idaho, Massachusetts, New Jersey, South Dakota, and Washington in 2010; and in Massachusetts, New Mexico, Oregon, Vermont and Washington in 2011. A number of towns in Massachusetts have passed similar resolutions; and on Town Meeting day 2012, 60 Vermont towns passed resolutions supporting a constitutional amendment .