“Corporate Personhood”: Should Corporations Have More Leeway To Kill Than People Do?
Next week, the Supreme Court will hear a case with many potential ramifications for American and international law, and for corporate responsibility for human rights around the globe. The justices will be asked to decide whether the corporations to which they have been extending the rights of individuals should also be held accountable for crimes against human rights, just as individuals are.
The story behind the case begins in 1980, when my colleagues at the Center for Constitutional Rights and I helped obtain the first semblance of justice to the family of a slain 17-year-old Paraguayan youth named Joelito Filártiga.
A police inspector general in Asunción, the capital, had tortured the boy to death in retaliation for his father’s opposition to Paraguay’s brutal dictatorship. But the case was decided in New York, far from Paraguay, where the crime had occurred and where justice had proven impossible for the Filártiga family; the boy’s murderer was ultimately ordered to pay the family $10.4 million in damages.
The precedent-setting case was made possible by a remarkable decision by the United States Court of Appeals for the Second Circuit, which allowed it to be brought under a long-obscure law enacted by Congress in 1789. Known as the Alien Tort Statute, the law has been interpreted to mean that foreigners who commit heinous crimes abroad in violation of international law can be held accountable in the United States if they are present or do business here; the Supreme Court upheld its constitutionality in 2004.
Since that decision, dozens of successful alien tort claims have been brought in American courts – at first against individuals, and eventually against corporations. As a result, many foreign victims of egregious crimes – ranging from torture and slave labor to the execution of loved ones – that were sanctioned, endorsed or commissioned by corporations have found justice in our courts.
Yet in September 2010, a divided Second Circuit – the very court that had rendered the Filártiga decision – held that only individuals, and not corporations, can be sued under the statute.
That ruling, in a case known as Kiobel v. Royal Dutch Petroleum, came less than a year after the much more famous – and criticized – Supreme Court decision in Citizens United, which removed restrictions on political spending by contributions and wildly expanded the concept of corporate personhood.
Together, these decisions have triggered a wave of outrage among advocates for human rights, which see in them a signal from the courts that corporations have extensive rights but few responsibilities under American law.
On Tuesday, the Supreme Court will hear arguments on the alien torts ruling, which could produce its first decision regarding corporate personhood since Citizens United.
The question of whether foreign corporations doing business in the United States can be sued here for crimes committed elsewhere has arrayed international businesses against human rights advocates, with many “friend of the court” briefs filed on both sides. Four governments have also chimed in: Britain, the Netherlands and Germany for the corporate defendant and the United States on the side of the Nigerian plaintiffs.
The story behind the Kiobel case is compelling: The plaintiffs are members of the Ogoni people in Nigeria’s Niger Delta, where Royal Dutch Shell had extensive oil operations in the 1990s through contracts with the brutal military dictatorship that held power at the time. The region is widely considered a zone of calamity, in terms of both environmental and human rights. In the suit, Royal Dutch Shell was accused of assisting the Nigerian government in torturing and, through sham trials, executing Ogoni activists who had threatened to disrupt Shell’s operations because of the devastating health and environmental effects of unregulated drilling practices. The plaintiffs are either victims of torture themselves or had relatives who were executed. Esther Kiobel, the plaintiff after whom the suit is named, is the widow of a victim.
If the Supreme Court rules in favor of Royal Dutch Shell and against the plaintiffs, multinational corporations – particularly in mining and other extractive industries – could draw the lesson that it is now safer to forge alliances with autocratic regimes that have poor human rights records because they will not be judged culpable in the way individuals can be.
In fact, many “friend of the court” briefs filed by corporations in this case contend that the companies are committed to voluntarily complying with human rights norms – but that standards set by the United Nations and other public and private organizations are mere guidelines that are not enforceable as legal norms. What they are really saying is that there are legal norms against torture and such, but that they can’t be enforced against corporations because they have never been enforced under international law – a claim the plaintiffs strongly contest.
This leaves the Supreme Court with an extraordinary choice to make, in juxtaposition to its previous ruling in Citizens United: whether to accept an argument that, in effect, leaves corporations less culpable than individuals are for human rights violations committed abroad – or whether to hold that if a 200-year-old law can be used to hold individual violators to account, it can be used against corporate violators as well.
A decision affirming that Shell should go unpunished in the Niger Delta case would leave us with a Supreme Court that seems of two minds: in the words of Justice John Paul Stevens’s dissent from Citizens United, it threatens “to undermine the integrity of elected institutions across the nation” by treating corporations as people to let them make unlimited political contributions, even as it treats corporations as if they are not people to immunize them from prosecution for the most grievous human rights violations.
A more startling paradox is difficult to imagine.
By: Peter Weiss, Op-Ed Contributor, The New York Times, February 25, 2012
Montana Supreme Court Says “Citizens United” Does Not Apply In Big Sky State
Montana’s Supreme Court has issued a stunning rebuke to the U.S. Supreme Court’s Citizens Uniteddecision in 2010 that infamously decreed corporations had constitutional rights to directly spend money on ‘independent expenditures’ in campaigns.
The Montana Court vigorously upheld the state’s right to regulate how corporations can raise and spend money after a secretive Colorado corporation, Western Tradition Partnership, and a Montana sportsman’s group and local businessman sued to overturn a 1912 state law banning direct corporate spending on electoral campaigns.
“Organizations like WTP that act as a conduit for anonymously spending by others represent a threat to the political marketplace,” wrote Mike McGrath, Chief Justice of the Montana Supreme Court, for the majority. “Clearly the impact of unlimited corporate donations creates a dominating impact on the political process and inevitably minimizes the impact of individual citizens.”
The 80-page ruling is remarkable in many respects. Throughout, including in a lengthy dissent by a state Supreme Court justice who felt Montana was dutibound to abide by the U.S. Supreme Court ruling, the Montana Court attacked the thinking behind the Citizens United decision and the impact of big money in political culture, including the notion that corporations are deserving of the same political speech rights as citizens.
“While, as a member of this Court, I am bound to follow Citizens United, I do not have to agree with the [U.S.] Supreme Court’s decision,” wrote Justice James C. Nelson, in his dissent. “And, to be absolutely clear, I do not agree with it. For starters, the notion that corporations are disadvantaged in the political realm is unbelievable. Indeed, it has astounded most Americans. The truth is that corporations wield enormous power in Congress and in state legislatures. It is hard to tell where government ends and corporate America begins: the transition is seamless and overlapping.”
“It should be noted that the Montana Corrupt Practices Act was adopted in 1912 at a time when the country’s focus was on preventing political corruption, not on protecting corporate influence,” wrote Nelson, later in his dissent.
Western Tradition Partnership
The lead group that sued to overturn the Montana ban on direct corporate spending in campaigns followed a very deliberate course of clashing with virtually every aspect of Montana campaign finance law. The lawyers behind the litigation believe that they should face no limits or accountabililty for any political fund-raising or spending.
The Montana Supreme Court’s majority opinion described why Western Tradition Partnership was as slippery an organization as one finds in modern politics. They noted how the groups lawyers claimed that they should be allowed to spend freely because the group would have to disclose that activity under Montana law, when as the state’s Chief Justice noted in his opinion, the same group, using another name, actually had sued the state to overturn those very disclosure laws.
Moreover, the ruling quoted a fund-raising brochure that said, “If you decide to support this program, no politician, no bureaucrat, and no radical environmentalist will ever know you made this program possible.” The group also is involved in a third suit challenging the state’s campaign spending disclosure law.
“We take note that Western Tradition appears to be engaged in a multi-front attack on both contribution restrictions and the transparency that accompanies campaign disclosure requirements,” the Court said, adding in a footnote that the Montana Commissioner of Political Practices called the group a “sham” because it failed to register with the state, and refused to disclose the sources of its funds or its spending—as required by law.
Rebutting Citizens United
Lawyers attacking the Montana ban on direct corporate spending said the U.S. Supreme Court in its 2010 Citizens United ruling removed any barrier to corporate spending. But the Montana Supreme Court disagreed and took a more nuanced view.
The U.S. Supreme Court in Citizens United found there was no compelling reason why a non-profit corporation that produced an anti-Hillary Clinton video should be prevented from showing that video in the weeks before Election Day—as a new federal campaign law had banned. But the Citizens United ruling did not remove all bans on corporate speech, the Montana Court said. “The Supreme Court held that laws that burden political speech are subject to strict scrutiny, which requires the government to prove that the law furthers a compelling state interest and is narrowly tailored to that interest.”
The Montana Court then launched into detailed explanations of sufficiently compelling state interests to merit sustaining the century-old law. The majority opinion read like a history lesson that recounting how the state, especially in the decades following its founding in 1889, struggled to restrict the power and influence of mining corporations. In 1906, the citizenry amended the state Constitution to allow for ballot initiatives. Six years later it passed the ban on corporate spending, specifically to curb mining companies based in Butte. The Court noted that the state—then and now—was beset with corporate players whose money, power and influence easily overshadow individuals.
“What was true a century ago is as true today: distant corporate interests mean that corporate dominated campaigns will only work ‘in the essential interest of outsiders with local interests a very secondary consideration,’” the opinion said, quoting a historian’s testimony from a lower state court that reviewed the case. “While specific corporate interests come and go in Montana, they are always present.”
The Court said Montana had a political tradition that has emerged in intervening decades and they wanted Montana to remain a state where candidates run low-budget, personal campaigns and do not rely on anonymous, well-financed messaging from outsiders.
The Court pointed out that judicial elections were particularly vulnerable to anonymous spending by large corporations. Montana’s 2008 Chief Justice race had advertising from all candidates costing about $60,000, it noted. “It is clear that an entity like Massey Coal, willing to spend even hundreds of thousands of dollars, much less millions, on a Montana judicial election could effectively drown out all other voices.”
These various factors—a history of citizenry fighting corporate corruption, political traditions of low-budget campaigning, and the vulnerability of judicial elections to corporate spending—were sufficiently compelling, the Court said, to preserve the century-old ban on corporate spending in the face of the Citizens United ruling.
“The question then, is when in the last 99 years did Montana lose the power or interest sufficient to support the statute, if it ever did,” the majority said. “We think not. Issues of corporate influence, sparse population, dependence upon agriculture and extractive resource development, location as a transportation corridor, and low campaign costs make Montana especially vulnerable to continued efforts of corporate control to the detriment of democracy and the republican form of government.”
Concluding, the Court said that the sportsman’s group and businessman who sued to overturn the law were not prohibited from participating in politics by the ban on direct corporate spending. And it said Western Tradition Partnership could follow the same rules as anyone else. “WTP can still speak through its own political committee/PAC as hundreds of organizations in Montana do on an ongoing basis,” the Court said. “The difference then is that under Montana law the PAC has to comply with Montana’s disclosure and reporting laws.”
There is little doubt that the anonymous money behind Western Tradition Partnership will appeal the Montana Supreme Court ruling in federal court—and even seek to take the case to the U.S. Supreme Court. However, even it it does that, the ruling issued Friday by Montana’s Supreme Court will endure as a monumental defense of a state’s right to curb political corruption and the excesses of big-money politics.
Corruption and Corporate Personhood
Justice Nelson, who dissented because he believed that the state had to follow the U.S. Supreme Court’s ruling, concluded by fervently disagreeing with the assumptions behind the Citizens United ruling, starting with the Roberts Court’s assumption that spending large sums in campaigns was not inherently corrupting.
Nelson said independent expenditures by corporations in political campaigns—where political players are not supposed to coordinate their actions with candidate campaigns—absolutely were noticed and influenced the lawmaking process. “In the real world of politics,” he wrote, “the “quid pro quo” of both direct contributions to candidates and independent expenditures on their behalf is loyalty. And, in practical effect, experience teaches us that money corrupts, and enough of it corrupts absolutely.”
Nelson closed by slamming the legal theory of corporate personhood—that corporations, because they are run and owned by people, should have the same constitutional freedoms as individuals under the Bill of Rights. Corporatist judges, such as the Roberts Court, believe that corporations and people are indistinguishable under the law. In contrast, constitutional conservatives know very well that the framers of the U.S. Constitution distrusted large economic enterprises and drafted a document to protect individual businessmen, farmers and tradespeople from economic exploitation.
“While I recognize that this doctrine is firmly entrenched in law,” Nelson began, “I find the concept entirely offensive. Corporations are artificial creatures of law. As such, they should enjoy only those powers—not constitutional rights, but legislatively-conferred powers—that are concomitant with their legitimate function, that being limited liability investment vehicles for business. Corporations are not persons. Human beings are persons, and it is an affront to the inviolable dignity of our species that courts have created a legal fiction which forces people—human beings—to share fundamental natural rights with soulless creations of government. Worse still, while corporations and human beings share many of the same rights under the law, they clearly are not bound equally to the same codes of good conduct, decency, and morality, and they are not held equally accountable for their sins. Indeed, it is truly ironic that the death penalty and hell are reserved only to natural persons.”
As Nelson said, ending his dissent, “the [U.S.] Supreme Court has spoken. It has interpreted the protections of the First Amendment vis-a-vis corporate political speech. Agree with its decision or not, Montana’s judiciary and elected officers are bound to accept and enforce the [U.S.] Supreme Court’s ruling…”
But the Montana Supreme Court has also spoken—and with a clarity that is rare to behold.
By: Steven Rosenfeld, AlterNet, January 1, 2012
Mitt Romney: The Corporate ‘Person’ And The One Percent
For Mitt Romney, the fundamental argument underpinning his presidential candidacy is his experience as a top executive at Bain Capital, the huge Boston-based private equity firm. That is especially true now because he must disown his most important achievement as Massachusetts governor — health care reform — in order to assuage the Tea Party extremists in his own party. But what does his business career tell us about the economic policies that might be pursued by the Republican front-runner — and about his worldview? Much could have been gleaned from the career history of George W. Bush, if only voters had paid closer attention to the unflattering reports of his experience as oilman and baseball team owner that accumulated in 1999 and 2000.
As the stories behind Romney’s success unfold in the coming campaign, the answer is likely to be that Bain Capital has prospered during the past quarter-century promoting a harsher brand of enterprise — one that ruins communities, impoverishes workers, and exports American jobs, all in the name of shareholder “value.”
In the current issue of New York Magazine, reporter Benjamin Wallace-Wells begins the process of unpacking what Romney and his colleagues in management consulting and private equity have wrought upon the U.S. economy. Wallace-Wells opens his narrative with a telling recent anecdote from the campaign trail in Iowa, where Romney lectured a disbelieving crowd on the issue of corporate personhood. When a heckler urged raising taxes on corporations, Romney replied with condescension: “Corporations are people too, my friend….”
Of course in the strictest sense he was right: The management, shareholders, and workers of every corporation are indeed human beings, and it is to those human beings that the money earned by corporations, after taxes, is paid. But as Wallace-Wells discovers, Romney and company have done much to change how those earnings are apportioned, encouraging massive increases in the amount appropriated by management and huge reductions in wages and benefits paid to workers. Creating incentives for managers to maximize stock prices — which would explode their own compensation — simultaneously undermined old-fashioned corporate responsibility toward employees, communities, and the nation as a whole. The deepest implication of the consultant creed that Romney represents is an ugly Darwinism — or so Wallace-Wells suggests.
But as consultants, there was only so much that Romney and the Bain crowd could do to change any corporation. Wanting to put their theories into practice, and sensing that big profits could ensue, they formed Bain Capital, whose record in corporate takeovers and turnarounds became the envy of the industry — and the ruin of thousands of workers and their families unlucky enough to become collateral damage.
The improved efficiency and productivity of private enterprise over the past two decades certainly were not without benefit to society, in lower prices, better technology and even, for a while, higher employment. But the perfect “alignment” of incentives between corporate managers and shareholders, without any regulatory brakes, led to worsening economic inequality, executive recklessness, stock manipulation, and a laser-like focus on the short term — in short, all of the ills that underlie American economic decline. Those same incentives have been trained on the political system to ensure decisions that benefit those same overpaid, seemingly sociopathic bankers and investors — now known as the “one percent.” They could scarcely hope for a more sympathetic candidate than the man from Bain.
By: Joe Conason, The National Memo, October 25, 2011
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