comments_image Comments

As The Anti-Citizens United Movement Grows, The Plutocrats Will Surely Attack

Democracy reformers can surmount the coming corporatist attacks.

Continued from previous page


As an example of the inherent rights of a group of people, think again about the Occupy activists in Zucotti Square.  They were not incorporated, and yet they had strong rights of association.  They could, and did, appoint spokespeople to speak on behalf of the group.  If the government had demanded that they turn over a list of all of their names, they would rightly have refused, based upon their individual rights of privacy and association.  They even held collective property, for instance the library of donated books that they maintained.  While there may have been dispute over whether the police used due process in seizing those books, nobody ever argued that those activists had no right to due process simply because they were not incorporated. 

Had the Occupy activists formed a non-profit corporation in order to facilitate entering into contracts, providing their members with some limited liability, and other privileges, all of the above rights would have been maintained.  But no extra rights would have come about. For Occupy Inc. to claim that it had speech rights separate and above the rights of the occupiers who comprised it would be absurd.

Further, the government could condition those privileges with restrictions.  For instance, if occupiers formed a corporation under section 501(c)(3) of the tax code on order to receive tax deductible contributions, the government could prevent those privileges from being used to fund speech that endorsed a political candidate.  Occupy Inc. could not say that because it is now a legal “person” it has the right to use its tax deductable funds for electioneering, although nothing prevents the actual occupy activists from funding electioneering with their own non-tax deductable dollars through a political committee.  Their individual speech rights would be neither restricted nor enhanced by their corporate form.

So, when opponents say that ending the court-fabricated doctrine that corporations have constitutional rights will lead to terrible things like the government being able to seize a corporation’s assets, reformers have a strong answer.  The government could not do so because as with the books in Zucotti Square, the government would be seizing the assets of real people.  Likewise, as in the 1958 case NAACP v Alabama, the government cannot arbitrarily require a group of people to turn over their membership lists, whether or not that group is incorporated.  Further, the corporate charter itself and other statutes and contract law can serve to protect a corporation’s assets.

This response is surely correct, yet taking it to its logical conclusion then undermines some of the upsides that many amendment supporters hope to achieve.  Returning again to the Occupy example, remember that Occupy Los Angeles had almost reached a deal to leave their encampment at City Hall in exchange for some farmland.  Imagine such a deal had been struck, and the activists suddenly found themselves with real property.   Maybe they would choose to incorporate to gain the business advantages of the corporate form, or maybe they wouldn’t.  But either way, suppose now that the city of Los Angeles decided to tax the fenceposts that Occupy Farm had erected to keep their cattle in – and to tax them at a higher rate than on surrounding farms.

Faced with unequal treatment by the law, Occupiers might go to court decrying the unfair taxation scheme.  Would be right to do so, whether they were incorporated or not? It was precisely this question of fair taxation of fenceposts that the Supreme Court tackled in an 1898 case that many grassroots activists say launched the entire doctrine of corporate constitutional rights in the first place. In the head notes, or introduction to its Santa Clara County v. Southern Pacific Railroad, the chief justice is reported to have said: