In August of 1971, Lewis Powell, Jr., an attorney working for the U.S. Chamber of Commerce, wrote a private memo to the group in which be bemoaned the lack of respect accorded business interests in the halls of political power.
“[A]s every business executive knows, few elements of American society today have as little influence in government as the American businessman, the corporation, or even the millions of corporate stockholders,” Powell wrote. “If one doubts this, let him undertake the role of ‘lobbyist’ for the business point of view before Congressional committees. … One does not exaggerate to say 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.’”
The problem, Powell wrote: lawmakers were under the sway of an aggressive “assault on the U.S. enterprise system,” driven not just by the expected sources—“the Communists, New Leftists and other revolutionaries”—but also, and more disturbingly, by “perfectly respectable elements of society,” including academia, religious organizations and the media.
Meanwhile, Powell scolded the American businessman, who, he charged, was submitting docilely to the assault. “[B]usinessmen,” he conceded, “have not been trained or equipped to conduct guerrilla warfare” and instead focus their energies on running their businesses, serving their communities and “generally [being] good citizens.” But the time had come for the business community, led by the Chamber, to launch a counter-attack, which, Powell suggested, could take place through the media, on college campuses and, most significant, in the political arena and the court system.
Four decades later, Powell’s strategy has met with considerable success, particularly on those last two battlefields. As Jeff Clements, president of Amherst-based Free Speech for People, noted in testimony submitted to a Senate committee hearing last July, Powell’s memo served as a blueprint for a concept that would have baffled the framers of the Constitution: “corporate rights.”
The effort picked up speed quickly, helped along by Powell’s appointment to the U.S. Supreme Court by Richard Nixon. “Over the following years, a divided Supreme Court … transformed the First Amendment into a powerful tool for corporations seeking to evade democratic control and sidestep sound public welfare measures,” Clements said.
The most dramatic example of that trend: the Court’s game-changing 2010 decision in Citizens United v. Federal Election Commission, which lifted restrictions on certain political expenditures by corporations and labor unions on First Amendment grounds. That was followed shortly by a federal appeals court ruling in SpeechNow.org v. FEC that struck down limits on contributions to “independent-expenditure committees” and led to the rise of that new breed of political action committee, the “super PAC”—which, in theory, at least, works independently of individual candidates. (In reality, many have clear, if unofficial, allegiances to particular candidates.)
Those two rulings, Clements said, “have resulted in an exponential rise of big money dominance of our politics, presenting a direct and serious threat to our democracy.”
But as corporate America once heeded Powell’s call to battle, so activists are mobilizing now to push back against the Citizens United ruling via the very document that ruling relied on: the U.S. Constitution. Last week, the Valley’s new Congressman, Democrat Jim McGovern, filed two amendment bills that would overturn Citizens United by asserting that the rights guaranteed by the Constitution are limited to “natural persons” and would affirm the government’s power to regulate campaign finance.
“[W]e need to empower people—not corporations or big monied special interests,” McGovern said in a speech on the House floor. “Our current system has been corrupted—it undermines the rights of ordinary citizens. The preamble to the Constitution is ‘we the people.’ Let us hope this Congress doesn’t forget that.”
In 2007, Citizens United, a conservative nonprofit organization (mission: “restoring our government to citizens’ control”) produced Hillary: The Movie, a film critical of then-Sen. (and Democratic presidential hopeful) Hillary Clinton.
The movie also served as a vehicle for challenging portions of the 2002 Bipartisan Campaign Reform Act (BCRA), also know as the McCain-Feingold law. Among other provisions, BCRA prohibited corporations and labor unions from financing “electioneering communications”— messages that advocate for or against a particular candidate—in the 60 days before a general election or 30 days before a primary. CU had run up against that restriction in the past when promoting an earlier movie. Now, with Hillary, it was ready to challenge its legality.
Citizens United, planning to run ads for the movie in the weeks before a primary, went to federal court seeking an injunction declaring that the BCRA prohibitions were unconstitutional. When the court upheld the law, CU appealed, and the case went to the Supreme Court. There, liberal and conservative justices divided sharply over both the merits and the scope of the case—specifically, whether the court should rule on the narrow question of whether the group could air the Clinton movie close to an election, or whether it should take on much broader questions about government restrictions on political expenditures.
In January of 2010, the court announced a 5-to-4 ruling in favor of CU. The majority opinion, written by Justice Anthony Kennedy, found that BCRA’s ban on corporations’ and labor unions’ spending general treasury funds on “electioneering communication” violated the First Amendment’s guarantee that “Congress shall make no law … abridging the freedom of speech.” Kennedy wrote, “Because speech is an essential mechanism of democracy—it is the means to hold officials accountable to the people—political speech must prevail against laws that would suppress it by design or inadvertence.”
The decision wiped out precedent set by earlier cases, overruling Austin v. Michigan Chamber of Commerce, a 1990 decision in which the Court had upheld a state law banning corporate expenditures for or against candidates, and also overturning part of a 2003 ruling, in McConnell v. FEC, which had upheld the constitutionality of BCRA’s ban on corporate spending on electioneering communications. (The decision did leave intact a ban on corporations or unions contributing directly to candidates for federal office.)
Justice John Paul Stevens, in the dissenting opinion, expressed dismay at the Court’s decision to “rewrite” campaign finance law in order to decide the narrow question of when Citizens United could air ads for its Clinton movie—a restriction, he added, that did not amount to a “ban” on the group’s speech. The decision marked a “dramatic break from our past,” Stevens wrote, noting the Court’s long history of upholding restrictions on campaign contributions, reaching back to the 1907 Tillman Act, which made it illegal for corporations to donate to campaigns.
The Citizens United ruling, Stevens warned, threatened the integrity of the democratic system, opening the door to the “appearance of corruption,” with corporate donors wielding undue influence over elections and legislation. “A democracy cannot function effectively when its constituent members believe laws are being bought and sold,” he wrote.
The framers of the Constitution, Stevens said, intended free speech rights for individuals, not corporations. “At bottom, the Court’s opinion is thus a rejection of the common sense of the American people, who have recognized a need to prevent corporations from undermining self-government since the founding …” he concluded. “It is a strange time to repudiate that common sense. While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics.”
The day after the decision was released, John Bonifaz, an Amherst lawyer and founder of the National Voting Rights Institute, and Clements, former head of the Mass. Attorney General’s Public Protection and Advocacy Bureau, launched Free Speech For People. FSFP’s signature effort is its campaign, in conjunction with other groups, for a Constitutional amendment that would overturn the court’s ruling. More broadly, the group works against the notion of “corporate rights,” the idea that corporations have First Amendments rights comparable to individuals’ rights.
“It gets to the fundamental issue of who we are as a nation,” Bonifaz, FSFP’s executive director, told the Advocate. “Is it ‘we the people’? Or is it ‘we the corporations’?”
The most immediately obvious consequences of the Citizens United and SpeechNow rulings have been on the elections process. Even before those decisions, Bonifaz said, corporate spending on elections was a major problem: “Now it’s the Wild West. It’s open season for any billionaire to come in and choose their candidate.”
And that’s led to record-breaking campaign fundraising and spending. In the 2012 presidential race, the Democrats and Republicans raised a combined $1.3 billion, according to a Center for Responsive Politics analysis of FEC data. House races cost hundreds of thousands, Senate races millions. Massachusetts’ Senate contest between Scott Brown and Elizabeth Warren holds the dubious distinction of being the most expensive Senate race in U.S. history; the two candidates spent a combined $76 million. In total, CRP found, the 2012 federal elections (president, House and Senate) cost more than $6.2 billion dollars—almost $1 billion more than the 2008 elections, and more than double the cost in 2000.
The biggest news of the 2012 elections was the dominance of the super PACs. According to the New York Times, super PACs and other independent groups spent a total of $524 million on advertising in last year’s presidential race. Of the 10 groups that spent the most, nine were Republican-affiliated, with the pro-Romney Restore Our Future topping the list with $143 million in spending. The sole Democratic group on the list, the pro-Obama Priorities USA Action, spent $66 million.
Much post-election commentary has focused on the apparent ineffectiveness of such big spending; Romney, after all, did not beat Obama, despite receiving so much more support from super PACs. And he wasn’t the only loser; billionaire casino executive Sheldon Adelson donated more than $60 million to super PACs and other independent groups that backed eight Republican candidates, making him the biggest single campaign contributor in U.S. history, only to see all eight lose, the Times reported.
But that notion—that the election results were some sort of victory over Big Money—“misses the mark,” said Tyler Creighton, field director for Common Cause Massachusetts, which also is working to overturn Citizens United. “Huge amounts of money were spent on both sides,” he noted. (According to the Times, Obama spent just $7 million less than Romney, and raised $80 million more, counting party and super PAC funding.) And the vast majority came from a small group of wealthy donors.
“The truth is, it’s just a few hundred people writing six- and seven-figure checks,” Creighton said. “It’s not the 1 percent—it’s the .001 percent of people that bankroll elections.”
According to the Center for Responsive Politics, the 100 biggest donors to super PACs and their spouses made up just one percent of the total number of super PAC contributors but accounted for 73 percent of the total money they raised in 2012.
And, Creighton added, those contributors expect something for their largesse—namely, access to lawmakers. “The people donating to those campaigns were making an investment,” he said, “and now they’re going to be looking to cash in.”
Meanwhile, the assault on campaign funding restrictions continues. “If corporations are people, the next logical argument is, they should be allowed to contribute directly to candidates,” Bonifaz said. A case that challenges the Tillman Act, which bans direct corporate contributions to federal candidates and political parties, is already working its way through the federal courts. (About half the states allow such contributions to candidates for state office.) The Tillman Act was, in fact, struck down by a U.S. District Court in Virginia in 2011; that ruling, however, was overturned by a federal appeals court. The case, which involved two Virginia businessmen charged with making illegal donations to Clinton’s 2008 presidential campaign, could come before the Supreme Court.
The effort to codify corporate rights is a fairly recent one, beginning in the 1970s with a series of Supreme Court rulings that extended Constitutional protections to commercial speech. Those cases included the 1978 ruling in First National Bank of Boston v. Bellotti, which overturned a Massachusetts law banning corporate contributions to ballot-referenda campaigns. (The justice who wrote that decision? Lewis Powell, the Nixon appointee who seven years earlier had urged business leaders to use the government and courts to advance their interests.)
In recent years, courts have applied the corporate rights doctrine to dozens of cases in which companies have challenged government public interest regulations, overruling, for example, state and municipal laws restricting alcohol and tobacco advertising, placing limits on billboards and setting standards for credit reporting agencies. A list of these cases, compiled by FSFP, includes a 2001 Massachusetts case in which a tobacco company successfully fought a state ban on cigarette ads within 1,000 feet of schools, and a 1996 Vermont case in which an appeals court ruled that a law requiring labeling of products from cows treated with artificial growth hormones violated dairy companies’ First Amendment rights.
The Citizens United and SpeechNow decisions are the latest extensions of the “fundamentally absurd” notion of corporate rights, FSFP warns. As Clements put it in his Senate testimony, “[C]ases challenging corporate political expenditure regulations are not really about the speech rights of the American people; they are about the power of the American people to regulate corporations and the rules that govern such entities.”
“We see examples of unchecked corporate power subverting democracy all the time,” Bonifaz said, from Wall Street’s lack of accountability for the 2008 financial crisis to BP’s plea deal over the 2010 oil spill in the Gulf of Mexico, which required BP to pay $4.5 billion in fines—the largest fine ever imposed on a corporation, but less than one-quarter of its annual profits.
The Citizens United ruling further emboldens corporations to challenge public interest laws by claiming free speech rights, Bonifaz said. Last year, for example, the tobacco industry challenged an FDA mandate that it put graphic warning images on cigarette packs; a federal appeals court found the rules were a violation of free speech. The free speech argument is also key to the biotech industry’s fight to quash efforts to require labels on food containing genetically engineered ingredients. When Vermont lawmakers took up such a bill last year, the industry threatened to sue, and the bill died without coming to a vote. (Backers are expected to refile it this session.) In November, a California ballot question that would have required labeling of GE food lost by a small margin, after the biotech industry spent a reported $46 million to defeat it.
The Citizens United decision, Bonifaz said, relies on a false contention: that corporations are nothing more than an “association of citizens,” due the same rights as individual citizens. “That wouldn’t pass a law-school test,” he said. By definition, corporations, both for-profit and nonprofit, are entities created by government statutes that grant them specific protections and impose specific restrictions. A corporation, then, is an artificial entity created and empowered by the government, he said—not a simple association of natural citizens.
As FSFP puts it in its campaign materials: “Corporations don’t bleed. Corporations don’t have children. Corporations don’t die in war.
“Corporations shouldn’t be running our democracy.”
And on that point, there appears to be a good deal of agreement.
In a September Associated Press poll, 83 percent of respondents said they favored limits on corporate and union contributions to super PACs and other outside groups. In another survey last fall, commissioned by public interest groups, 81 percent agreed that existing campaign finance rules are “bad for democracy.”
And 79 percent of respondents to a 2010 FSFP poll favored a Constitutional amendment overturning Citizens United and asserting the government’s right to limit corporate campaign contributions.
In the last session of Congress, 13 amendments were filed that would, in some form, address the issue. They included Rep. Jim McGovern’s “People’s Rights Amendment,” which asserted that the rights guaranteed by the Constitution were intended for “natural persons” only. FSFP, which endorsed McGovern’s bill, not incidentally helped draft it.
FSFP also endorsed a pair of companion bills, filed by Sen. Tom Udall (D-N.M.) and Rep. Betty Sutton (D-OH), that would constitutionally affirm the federal and state governments’ power to regulate campaign finance, undoing both Citizens United and Buckley v. Valeo, the 1976 Supreme Court ruling that defined campaign contributions as a form of protected speech.
Sen. Bernie Sanders, a Vermont Independent, also filed an amendment that took on directly the issue of Constitutional rights for corporations. While Sanders’ amendment, like McGovern’s, would overturn Citizens United, it had one key difference: it would apply only to for-profit corporations, exempting labor unions and nonprofit groups. (McGovern’s would apply to all three.) That, Bonifaz said, is the fatal flaw of Sanders’ bill.
“An amendment should not carve out some special protections for unions or nonprofits,” he said. Exempting unions would all but ensure that the amendment would not win the bi-partisan support it needs to pass; exempting nonprofits would mean that groups like Citizens United—itself a nonprofit corporation—could still funnel corporate money into political messages.
Last week, at the start of the 113th Congress, McGovern reintroduced his “People’s Rights Amendment” and also filed a new bill that would constitutionally guarantee the right of both Congress and the states to impose campaign finance restrictions.
“My constituents continue to express concern about the growing influence of corporations in our political discourse,” McGovern said as he introduced the measures. “They are also demanding action on campaign finance reform, because they are repulsed by the large amount of money in our campaigns. And, quite frankly, they want elected officials to spend more time on policy, on debating and deliberating on issues—and less time dialing for dollars.”
Amending the Constitution is far from easy. First an amendment bill needs to pass in both the House and Senate by two-thirds majorities. (The Constitution also allows for amendments to pass via a Constitutional convention, called for by two-thirds of state legislatures, although that process has never been used.) From there, it would need to be ratified by three-quarters of the states.
But, FSFP notes, significant progress has already been made toward meeting those thresholds. In the last Congress, the McGovern and Udall/Sutton bills, in particular, attracted dozens of co-sponsors; although the majority were Democrats, some Republicans were also on board, including Rep. Walter Jones (R-N.C.), a co-sponsor of McGovern’s bill.
Meanwhile, 11 states have already signaled their support for an amendment overturning Citizens United, either through public ballot initiatives or resolutions or letters approved by the majority of state legislators. The Massachusetts Legislature passed a non-binding resolution last summer, with support from both Democrats and Republicans. That vote came after similarly worded resolutions were passed by town meetings or local legislators in 68 communities around the state, including Springfield, Northampton and Amherst. (More communities have passed such resolutions since then.)
In addition, in November, 79 percent of voters in 170 cities and towns approved a non-binding ballot question that supported overturning Citizens United and giving Congress and states the right to limit campaign contributions and spending.
Particularly promising, Bonifaz noted, is the diversity of the Americans who support the effort. The 2010 FSFP poll found that support for an amendment crossed party lines, with 87 percent of Democrats, 82 percent of Independents and 68 percent of Republicans in favor of it. In last fall’s AP survey, 85 percent of Democrats, 81 percent of Republicans and 78 percent of Independents said they support limits on corporate and union spending.
The amendment campaign also has significant political support. Last summer, President Obama, who famously criticized the Citizens United decision in his 2010 State of the Union address, said he supports an amendment. In Massachusetts, Elizabeth Warren’s Senate campaign called for the court decision to be reversed, and Attorney General Martha Coakley led 10 other attorneys general, including Vermont’s William Sorrell, in calling on Congress to pass an amendment.
Mounting political support aside, it’s hard to predict how long it could take to pass one. The 26th Amendment, which lowered the voting age to 18, passed in less than two years, Bonifaz noted; the 19th Amendment, granting women suffrage, took decades.
“Conceivably, it could happen in 10 years,” Bonifaz said of the proposed new amendment. The 2016 presidential election cycle, he said, will draw more attention to the problems caused by unchecked political spending, inspiring more states to get behind the amendment effort and, perhaps, more candidates to make the issue a focus of their campaigns. From there, Bonifaz said, the bills could come up in the next Congressional session.
Bonifaz knows that some consider an amendment unrealistic. In response, he points to the example of Doris Haddock, or “Granny D,” the New Hampshire activist who, at the age of 88, began a year-long cross-country walk to draw attention to the need for campaign finance reform. When Haddock was born, women did not have the right to vote, Bonifaz noted. “She’s an example that change can happen in a lifetime. Our history is filled with examples of people overcoming great odds,” he said. “We can’t sit on the sidelines while democracy is trampled.”•