On the Regulation of Corporate Political Speech: Response to Professor Meese

November 23, 2009 | | Comments Off on On the Regulation of Corporate Political Speech: Response to Professor Meese

By Sam Robinson

First, a note of thanks to both Prof. Van Alstyne and Prof. Meese for sharing their wisdom on these important matters.  Recognizing that I come to this debate at something of a disadvantage against these two heavyweights, I would nonetheless like to offer this brief response to Prof. Meese’s comment.

At the outset, I agree completely with Prof. Meese’s analysis regarding what he terms the “shareholder protection rationale.”  It seems to me that the act of investing money in a corporation implicitly imparts considerable authority to the board of directors of a company to make decisions on behalf of the investor.  Moreover, I agree that there are a variety of mechanisms, imperfect though they may be, that check the power of board of directors to spend money when it will not be in the interest of the company.  However, I very strongly disagree with the premise that bans on “’corporate speech’ are really bans on individual speech, and they must stand or fall under the same standards applied to analyze bans on individual speech.”  Investors do not authorize speech per se, they authorize the pursuit of profit through the means allowed to corporations by the government.

I think that Prof. Meese’s argument too quickly determines that “there is no good reason for treating corporations, large or small, any differently from Ross Perot or Bill Gates.” Simply put, if the argument is: corporations are much like individuals, therefore they should have the same speech rights as individuals, I don’t find that at all persuasive. While I will acknowledge at the outset that I view political spending by individuals as troubling and would welcome an end to the notion that spending equals speech, I think that arguments for limiting political contributions and financed speech have a special urgency when applied to corporations (and especially large corporations).

In my view the reason to treat corporations differently is simple: they are different and for over one hundred years the federal government and 22 states have recognized that corporations, while they may be like people in some important respects, in other important ways,  including application of the First Amendment, they are not.  Corporations are indeed “legal fictions,” created to protect stockholders, and to generate profits.  Corporations exist for economic, not political purposes.  As such, we grant corporations the various “special privileges,” that Prof. Meese discusses, so that they may compete commercially.  Insomuch as these privileges allow corporations to pursue the very laudable goal of generating profits, this is all to the good.  We should and do grant corporations wide latitude in the economic marketplace to pursue profit.  However, the danger of allowing corporations to compete in the political marketplace seems self-evident and is very likely the reason that although corporate personhood is generally an accepted fiction in the law, the Supreme Court has never, to my knowledge, held that corporations have the same First Amendment rights as individuals.  We have had restrictions treating corporations differently from individuals with regards to speech since the Roosevelt (Teddy that is) administration and the court has never found this impermissible.

As profit maximizers, it is obviously in the interest of corporations to be able to influence elections to ensure that politicians favorable to those interests are elected.  And just as obvious, in my opinion, is the necessity of keeping their massed power and economic influence out of politics.  In recent years our political landscape has seen a volume of spending on political campaigns (mainly in the form of contributions) unprecedented in the history of our country.  While I think this is  tremendously damaging to the democratic process, there have at least been some sane limits.  At the federal level we have required that contributions and speech be done or given by individuals, or (worse) individuals acting through Political Action Committees.  While this approach allows a few George Soros’s to spend outlandish amounts of money on issue ads and organizing, the amounts that individuals can bring to bear are miniscule compared to those of corporations, and there are far more compelling reasons to protect them.  While the George Soroses of the world have many and complex motivations for their spending, corporations have only one and, if the Supreme Court allows them, there is no question that they will push spending to new limits and affect the political balance in order to enhance their profitability.

Herein lies a fundamental parting of ways.  If one thinks that we should allow corporations very significant power to pursue profit, and that this is generally a means of pursuing a more wealthy pleasant society, then it is arguable that we should grant corporations this power.  If, like me, one thinks that corporations are creations of society and must be subservient to it, and to the decisions of the political process and not direct players in that process, then this is clearly not the way to go.

To play the devil’s advocate for a moment, even if we accept Prof. Meese’s argument that corporations deserve free speech protection to the same extent as individuals, a position which as noted, is not reflected in one hundred years of laws differentiating individuals and corporations, there are two arguments that can be made: either that the function of corporations is fundamentally incompatible with the exercise of this right or that there are sufficiently compelling reasons to allow restrictions of speech.

In various contexts, we recognize that certain groups, by virtue of their role or function, must sacrifice some of their First Amendment rights.  Various public employees for example are prohibited by the Hatch Act from taking an active part in political activities.  Certain members of the military are restricted by a similar Department of Defense Directive.  We do this because we recognize that the role that these people play is incompatible with activity in the political sphere.  In my view this logic applies with special force to corporations, and particularly very large corporations, which exist only to pursue profit.  In upholding these restrictions in U.S. Civil Service Commission v. Nat’l Assoc. of Letter Carriers Justice White wrote that the decision “would no more than confirm the judgment of history, a judgment made by this country over the last century that it is in the best interest of the country” to restrict speech by certain categories of federal employees.  The same could very well be said of restrictions on corporate speech and supports the continuation of the ban.

I would go even further to argue that restricting money in politics is such an overwhelmingly compelling state interest that it justifies balancing and speech restrictions.  I feel that this is justified across the board regardless of whether the speaker is an individual or corporation, but would apply it with special fervor to corporate speech.  I recognize that this is a dramatic position, and that very few speech restrictions satisfy strict scrutiny, but in my frank opinion our democratic process is being sold wholesale and there is hardly any more compelling interest that could be imagined than reigning in the corruption of the very political system

Proponents of corporate speech also point to the laboratory of the states to suggest that where unrestricted corporate speech or even contributions are allowed, corporations do not wield undue influence.  I could not disagree more strongly.  Anyone who does not believe that Dominion Resources owns the Virginia legislature on energy policy is unwilling to face facts.  The recent Supreme Court decision regarding the West Virginia Supreme Court Justice who had been bought into office by a coal company with a high verdict pending against it is just one of many many more examples.  It seems most unwise to expand this experiment to the national level.

Some First Amendment absolutists, including Floyd Abrams who argued for Mitch McConnell in Citizens United, have argued that the way to handle the massive potential influence of corporations would be to deal with underlying problems.  If the power of corporations is too great, we can deal with them through anti-trust or various other means.  This, I take it, is a typical approach in First Amendment jurisprudence; restriction on core political speech is a last resort.  The problem with this approach is that in a global economy we hamper the economic competitiveness of our corporations by reducing their power to compete in the domestic political marketplace in this manner.  Anti-trust laws are useful in ensuring that markets are competitive, they should not be a proxy for keeping money out of politics.

A note on tailoring.  I have suggested at several points throughout that the concern is primarily with large corporations.  After all, the great majority of corporations do not even have stockholders, let alone millions of dollars which could be devoted to political speech.  Blanket limitations on corporate speech do indeed strike us as odd when they restrict the speech of a corporation which is owned by a single person.  Although these small corporations may not have the same power to influence the political process as a multi-national corporation, and we might safely allow speech from these corporations, the only rationale for doing so would be that these corporations were posed less risk, not that their status as somehow closer to human granted them a more compelling argument for exception to the speech ban.

To conclude, I hope that the Supreme Court will stick to its traditional deference to Congress in determining the speech rights of corporations.  The Citizen’s United case is a clever test case, in that the type of corporate speech at issue does not fit any of the numerous exceptions that are offered by the Bipartisan Campaign Reform Act in this area.  To take just one example, there is an exception for commercial speech, meaning that if a corporation were producing a book or newspaper (to take Prof. Van Alstyne’s point about the New York Times) for sale, there would be no violation of Section 203.  I hope that the Court recognizes that although the thought that a book might be barred from publication should well give us pause, in practice, this law has never functioned to ban books.  This case should be narrowly because the danger of unrestricted corporate speech is immense.  In recent years we have seen the outsized influence that well financed PACs can have on our political process (think Swiftboat or moveon.org, among others).  Why we would want to overturn precedent to encourage more of this activity is beyond me.


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