SCOTUS eviscerates campaign finance regulations: What to do about it

Thursday, January 21, 2010

Posted by smintheus

No doubt by now you’ve heard that the Supreme Court’s “conservatives” took an axe to regulations that for a century have limited corporate spending on political campaigns. By the slimmest of majorities, SCOTUS ruled today that corporations and unions may spend without limit on political issues and in support of candidates because they have free speech rights under the 1st Amendment just as any actual human being.

The ruling threatens to open floodgates to spending on a massive scale by corporations seeking to advance their own interests against the interests of, well, actual human beings. It should also do nicely to enhance the public’s cynicism about corporate influence over legislators (and elective judges). By itself the mere potential for uncontrolled corporate spending will tend to distort political calculations and legislative/judicial decisions – and the public’s perception of those things. The impact could be most severe in congressional elections where corporate spending or its potential will be most likely to overwhelm actual humans’ spending.

National Republicans are overjoyed at the ruling because they gladly and loudly shill for corporate interests. Democrats are talking about trying to limit the damage caused by this cataclysmic change to campaign financing by enacting new legislation. But what kind? Lyle Denniston expresses skepticism that Congress will be able to find any constitutional and practical solution to this crisis.

To my mind, however, the first step is pretty obvious. Congress should prohibit any corporation from engaging in this new political spending if it has any non-American shareholders or owners. Because after all, foreigners have no 1st Amendment protections.

The “logic” behind the SCOTUS ruling is that a corporation composed of individuals ought to possess the legal attributes of its individual owners. Thus the same logic ought to require that partial foreign ownership renders the corporation a foreign body at least in part. The foreign parts of a corporation have no constitutional right to free speech. And since there is no practical way to distinguish the legal rights of the parts from the rights of the whole corporation (that presumption underpins the SCOTUS ruling), then it’s impossible to give American constitutional rights to part of a corporation but withhold them from another part.

Hence it is constitutionally permissible to deny a partly foreign-owned corporation from spending on political speech within the United States. Congress should act to do so immediately.

Why make this a priority? There can’t be many large corporations that are entirely owned by American persons. Indeed large corporations would not find it easy to determine the legal status of their actual human owners (that’s the rotten core of the Supreme Court’s insistence on treating corporations as if they were homunculi, or composite persons). And it should be obvious that the last trade-off that corporations will want to make, in order to be able to interfere directly in political contests, is to drive away foreign investors.

In short, I think the threatened cataclysm to the country’s political system can be contained rather nicely in this way. With such legislation it may turn out, in fact, that the Supreme Court’s “conservatives” have mainly empowered labor unions to spend freely while doing relatively little to bolster the (already great) clout of corporations.

Update:

In the oral (re-)argument of this case before the Supreme Court on September 9, 2009 (PDF), the question of foreign ownership was brought up immediately by Justice Ginsburg (beginning on page 3 of the transcript). Ted Olson, representing Citizens United, conceded that Congress might be able to prohibit foreign-owned corporations (however defined) from engaging in this kind of unlimited electoral spending. Olson argued that Congress would however need to show that it has a compelling governmental interest in acting to prohibit that.

Clearly Olson was discomfited by the line of questioning. Justice Alito rushed to his assistance by asking whether foreign-owned media corporations (cough! Fox News) have less freedom of speech than American-owned ones. Olson was happy for the help.

The deliberate conflation of news corporations with corporations generally was a central pillar of the "conservatives" attempt to justify handing 1st Amendment protection to any and all corporations. Pushed to one side was the basic fact that the Constitution specifically guarantees freedom of the press, whereas it has nothing to say about either the rights or supposed "person-hood" of corporations.