The Supreme Court Sold Out Our Democracy -- How to Fight the Corporate Takeover of Our Elections
Election 2010 is being fought on a wave of campaign dollars unleashed on the American people by the Supreme Court in its Citizens United v. FEC decision. The court, led by a majority of staunch right-wingers, struck down limits on third-party “electioneering” ads based on a tortured interpretation of the First Amendment guarantee of free speech.
Thomas Mann, a Brookings Institution scholar, wrote that the decision “will likely go down in history as one of the Supreme Court's most egregious exercises of judicial activism.“ Rep. Peter Fazio, D-Oregon, told theHuffington Post last week that “the Supreme Court has done a tremendous disservice to the United States of America… They have done more to undermine our democracy with their Citizens United decision than all of the Republican operatives in the world in this campaign.” DeFazio said he is “investigating articles of impeachment" against Chief Justice John Roberts for committing perjury when he promised he wouldn't be a judicial activist during his Senate confirmation hearings.
The floodgates are open, and American democracy is at risk. But the decision didn’t emerge out of thin air. Rather, it was the culmination of the development, over more than a century, of a bizarre theory of jurisprudence that holds that corporations enjoy the same Constitutional rights as human beings.
For years, it was believed the concept was enshrined in the law by the Supreme Court in 1886, but in his groundbreaking book, Unequal Protection: How Corporations Became People -- And How You Can Fight Back, historian and radio host Thom Hartmann revealed that the principle was in fact the result of what may be the greatest corporate fraud ever perpetrated on the American people.
With the first post-Citizens United election looming -- and the release of Unequal Protection in paperback -- AlterNet caught up with Hartmann to discuss how corporations bought themselves a perverse regiment of civil rights.
Joshua Holland: I'd like to start with a very brief kind of bumper-sticker explanation of ‘corporate personhood.'
Thom Hartmann: Sure. From the sixth-century English law until today there have been two types of persons under the eyes of the law. The first are natural persons, human beings, and the second are artificial persons -- corporations, churches, unions and governments. The reason why there has to be artificial persons is because you have to have some sort of status as a person to be able to own property, pay taxes, enter into contracts, and sue or be sued.
The concept goes back to the sixth century, but it's only in the last 100 years of the United States that anybody has had the weird idea that those artificial persons should be entitled to human rights under the Bill of Rights of the United States Constitution.
JH: So BP and Goldman Sachs have the same constitutional rights that you and I enjoy?
TH: Somewhat. They have not yet claimed their Second Amendment rights.
JH: That's a good thing.
TH: But we're waiting. You got Blackwater, actually.
JH: Yes. I would think they’d be the first on that boat.
TH: The point is that through various claims and cases before the Supreme Court, corporations have explicitly claimed First Amendment free speech rights, Fourth Amendment rights of privacy, Fifth Amendment rights against taking and against self-incrimination, and 14th Amendment rights against discrimination.
JH: Now, although it's been with us for a very long time, it wasn’t until the 1980s that corporate starting breaking it out with increasing frequency. Can you give us just a couple of examples of where corporations asserted these constitutional rights?
TH: Sure. In short form, in 1874 I believe it was, the 13th, 14th and 15th Amendments to the Constitution were passed to free the slaves. The 14th Amendment says that everybody has equal rights under the law.
I think it was clear to the authors, and pretty much to everybody, that they were talking about human beings -- natural persons. But in the 1880s, a decade later, the railroad corporations, which, as a result of the Civil War were the largest corporations in America, started bringing a series of cases before the Supreme Court ... they all started in the 9th Circuit Court in California under Judge Steven J. Field, asserting that because the word "natural" does not exist in the 14th Amendment, that corporations should be considered persons.
JH: Now let me just interrupt you here. If I were to go down to a law school and get out the kind of textbook that maybe a first-year law student would read, it would say that the courts had in fact decided that in the case Santa Clara County v. Southern Pacific Railroad. Is that right?
TH: When I first wrote Unequal Protection --the first edition came out I think in 2000 or thereabouts -- I was invited to the Vermont Law School to give a talk on it, and I spoke to about 300 law students, professors and history teachers. And I said raise your hand if you know that in 1886, in Santa Clara County v. Southern Pacific Railroad, corporations were given the rights of persons under the reconstruction-era amendments to the Constitution? And pretty much everybody in the room raised their hand and I think the few who didn't just hadn't gotten to that point in their studies. And then I proceeded over the course of the next hour to demolish it basically by reading from the case.
There was a case before the Supreme Court in the 1980s, called First National Bank of Boston v. Belotti, which was one of the first cases in the modern era that really gave corporations the right to participate in political elections. Massachusetts had this law that said corporations could only give money to ballot initiatives that affected their businesses. But the case involved a ballot initiative to regulate gay marriage, and the banks had no rights to spend money on that -- the stockholders' money. And the First National Bank of Boston had broken that law. The Attorney General sued them and won in Massachusetts, and it was taken to the Supreme Court. And in that case, Justice Rehnquist -- who, regardless of what you think of him, was one of the most brilliant jurists of our time -- wrote a dissent in Boston v. Belotti. And in that dissent -- what I'm giving you is my bad paraphrasing of it -- Renquist said, "Back in 1886, in Santa Clara County v. Southern Pacific Railroad, this Court, without the benefit of public debate or discourse, decided that corporations have equal rights under the 14th Amendment." Then he went on to say how he thought that it was a wrongly decided case.
Well, it turns out, it wasn't wrongly decided. And even Renquist didn't know it! Forget the law students in Vermont Law School!
JH: Now let’s recap the story. You went down to a dusty Vermont courthouse -- I don't actually know if it was dusty, I'm just making that up ...
TH: The book was dusty! I don't think anybody had pulled it off the shelf in 100 years.
JH: And you found that what the real deal was. Tell me about that, and also tell me who JC Bancroft Davis is.
TH: Yes. Jack Chandler Bancroft Davis is his name. I started out writing a book about Thomas Jefferson's view of America and how we went off track. How we got off the rails. And I wanted to primary source everything in the book, like a good historian would do. And when I came to the 1800s -- when corporations became a major force in America, and led right to the massive accumulations of wealth that were marked the ‘Robber Baron Era’ -- there was a lot of material about how this case had been decided in 1886. And so I thought I ought to read the case so I could quote the exact language. Because nobody was quoting the exact language. Everybody was saying it was decided, but even Renquist in his Belotti dissent didn't quote the exact language. So I went into Montpelier, Vermont’s, old law library and spoke to Paul Donovan, the librarian there. And I said I'm looking for that 1886 case of Santa Clara County v. Southern District Railroad. And he said, ‘Oh, the one where corporations became people?’ And I said ‘Yeah, that one.’ And so he finds the book of Supreme Court proceedings from the term of 1886. He pulls it out, blows the dust off the top, and opens it on the table. This was before they started putting acid in paper in the 1930s, so the pages were still in pretty good shape. And he flipped through it, and he found the case, and he said, ‘Here's the head note. You can ignore that-- that has no legal status.’
And so I sat down and I just read it, all the way through, looking for those magic words that I could put in my book. And they weren't there. In fact, what the case was about was Santa Clara County was charging property tax to the Southern Pacific Railroad. And the way that they calculated property taxes for right of way was by fence posts along the railway. So X number of dollars for every 100 fence posts. And because Santa Ana County was charging a lower rate than Santa Clara County, the railroad was screaming foul, and in fact refused to pay the tax. And this ended up before the Supreme Court. And the railroad made a whole bunch of different arguments. And one of those was that this was illegal discrimination under the 14th Amendment, that they weren't being treated equally under the law by two different counties in the same state.
But the argument that I just described to you was not even referenced in the decision. Because there was a clear and explicit part of California law that gave each county the right to determine their own property taxes. The California law and the California Constitution backed it up.
And at the very end of the case, it basically said that the Court did not feel the need to address those federal Constitutional claims because they were able to find remedies within the California law and in the state Constitution.
JH: So they didn't even consider those arguments, they didn't need to, because they were able to decide the case based on other issues.
TH: Right. One of the core concepts of jurisprudence is minimalism. You always try to-- it's called "judicial restraint" -- you always try to decide a case as narrowly as possible, and if within that narrow band, you can find the remedy, then you don't go beyond that.
And so I read that, and I went back to Paul, the librarian, and I said "I'm not finding in this case what I thought I'd find. I'm baffled." And he said, "Well, did you read the headnote? Maybe that will give you a clue where to find it." You know, as if I'd overlooked something. So I said, "What's a headnote?" And he said, "Well, a headnote is basically Cliff notes -- you know, cheat sheets for lawyers to understand what a case is about without having to read the whole case." They're written by the Clerk of the Court. And so we went back and he found the headnote in the book, and I read the headnote. And there, a couple of paragraphs into the headnote, was this language where the author of the headnote, the Clerk of the Court, said he was quoting the Chief Justice of the Court, saying that corporations are persons and entitled to rights under the 14th Amendment.
So I take my 75 cents, or whatever it was, and my copies of the book, and we very carefully copied it on the copy machine there and Paul put it back on the shelf. Then I went around the corner to an old friend who was a lawyer in Montpelier, Jim Deville, and I laid out my copies on his table. And I showed him the language toward the end of the decision. I said, "Okay, here's the argument, here's the argument, here's the argument, here's the language at the end of the decision." And he goes, "Wow! That's not what we learned in law school!"
And so I went back to the headnote, and I highlighted that sentence in the headnote, and I said, "Well, this is probably what you learned in law school, right?" And he goes, "Holy shit!" And I said, "What do you think?" And he said, "Well, this is why they tell you in law school: don't cut corners and just read the headnotes."
Because occasionally the headnotes are wrong! He said in this case, not only was the headnote wrong, it actually contradicted the decision! And I asked him whether it had any legal status. And he said, "No, there was a 1909 Supreme Court decision that explicitly ruled that headnotes have no legal status."
JH: Now the Clerk ... let's get back to the Clerk just briefly.
JH: So this is JC Bancroft Davis.
TH: That's correct.
JH: Tell me a little bit about what you found out about him when you dug into his story?
TH: Well, that was pretty hard to find. Because to the best of my knowledge nobody had ever done anything about him, or looked into him, other than Davis himself -- he had published a number of books. He was quite the dandy. And he was the son of a very wealthy family. His father was the governor of Massachusetts. He had been one of the original incorporators of the New York and Newburgh Railroad, and so he was a railroad guy.
JH: Okay, so basically we're seeing that a lot of what we have taken for granted as legal corporate power, is in a sense a result of what may be the greatest fraud in history.
TH: That's right. And so when I started digging into this, not only did I find out that Davis was questionable-- kind of a dicey character -- but that this was one of a series of cases, tax cases, that all originated in the 9th Circuit in California, with Steven J. Field, and got kicked up to the Supreme Court, in which every single one of them argued that the 14th Amendment gave corporations personhood.
And in the first few, the Court just rejected out of hand. And that was until 1886. And so we started digging into it, and wondered, who the hell was this Steven J. Field guy?’
Field had basically two allies on the Supreme Court, plus Davis, who had no vote. And so we started digging into the Steven J. Field collection at the National Archives, and we found correspondence between him and the railroads that I don't think anybody had looked at in 100 years, if ever. In some of them, the railroad barons were in some cases implicitly, and in one case rather explicitly saying that if he could get them this corporate personhood, they would sponsor him to run for President of the United States in the election of 1888, I think it was, or maybe 1892.
And he didn't actually succeed. In fact, Steven J. Field actually wrote a dissent in Santa Clara County v. Southern Pacific Railroad, in which he loudly complained about the fact that they hadn’t established corporate personhood. And you'd think somebody would read the damned thing!! You know?
JH: So we have this ...
TH: What you had was a corrupted Supreme Court, and it had been corrupted by these very, very wealthy and powerful guys who ran the railroads and who were the richest men in America. And you know, that led to what we have now, which is this kind of corporate aristocracy. And there's a direct line between the two.
JH: So let's bring it from the 19th century into the late 20th and 21st. I just want to kind of get a brief sense, if you can give me a couple of examples of how modern multinationals have used this principle in recent years to push back on regulation, etc.
TH: Sure. Nike argued that they had the right to lie in advertising, because they had a 1st Amendment right of speech. That was ultimately, I guess, arguably decided in Citizens United. There was a chemical company that argued that the EPA invaded their 4th Amendment right of privacy by photographing them -- from the air -- making illegal chemical discharges. There had been a number of cases where giant agricultural operations, toxic waste operations, and large chain stores have argued that keeping them out of a neighborhood or community is the same thing as telling a black person he can't sit at a lunch counter. In other words they claimed their 14th Amendment rights. There have been a number of cases over the years where corporations have claimed that they have the right against self-incrimination.
You know, the original corporate laws, when corporations were created in the early 19th century, their books had to be totally public for the mid part of the 19th century, they had to be totally available to the Secretary of State in each state in which they were incorporated. But since the early 20th century they have been able to claim 4th Amendment privacy rights.
JH: Now, a quick aside. Did you catch a story about the town of Monroe, Maine, rejecting corporate personhood? They passed a local ordinance?
TH: Yes. There have been over 100 communities in the United States that have done this. So yes, there have been a lot of communities that have done this. There has not been a case where a community has made this law and it has been challenged and it has been taken to the Supreme Court. What happens more often is that the communities pass the laws, the corporation comes in and says "Okay, we're going to fight you in court." The community looks at what the legal costs are going to be, and the community then repeals the law. And it's happened numerous times.
JH: Now in your book, you have a chapter on restoring government of, by and for the people. And I think you take a fairly optimistic tone.
TH: I do.
JH: Tell me, what is the basis for that optimism? What are you hoping to see happen? How might we restore government of, by and for natural people?
TH: Right. For natural persons. Well, we had a time in this country when African Americans were not fully people. In fact what's so ironic is that in the Dred Scott decision, the Supreme Court ruled the persons were property. And that was the mirror image of the 2010 Citizens United decision, which ruled that properties can be persons. But over time the idea that African Americans should not have full rights has become unthinkable.
In the early 20th century, if a woman's husband died, she could not dispose of his assets or her assets ... in fact she didn't even have the legal right in most states to decide what religion to raise her child in, or even necessarily to keep her child. A male executor had to be appointed who made all those decisions for her.
And then on top of that there have been times like the late 19th century when the vast mass of working people in the United States have been victims of oppression -- we had kind of descended into a Victorian era kind of serfdom, and the response to that was the rise of the Progressive Movement in the 1880s and 1890s. And the labor movements, and the Wobblies, and all this stuff. Which led to the Progressive Era of Teddy Roosevelt, and then to, again, after the Crash in 1929, the Progressive Era of Franklin Roosevelt.
So what I see when I look at the arc of history in the United States is that we're continuously moving upward towards a more egalitarian, healthier, more (small d) democratic republic. And also that there have been a lot of hiccups along the way -- lot of setbacks. For example, early in the 20th century, there were a number of cases where the Supreme Court actually struck down minimum wage laws, child labor laws, maximum hour laws -- struck all that stuff down, and said that it was a violation of the Commerce Clause.
And I think it was in '36 or '37, when finally enough people on the Supreme Court changed, and Roosevelt was able to start getting into law the things that the Supreme Court, just a generation earlier, had declared unconstitutional. So we've had some major setbacks as a result of the Supreme Court, and as a result of just general public sentiments.
But I think that (small d) democracy ... freedom ... these words are in our DNA as Americans. They're just burnt in there. They're not going to go away. And this oppression of working people by trans-national monopolies--I'm not even going to use the word "corporation" -- is I don't believe something that will stand. I think eventually the pain is going to get so bad that the average American is going to say "Now I understand!" We have a long history in this country of people figuring out that something's wrong, and then figuring out how to fix it. So I'm very optimistic actually.
There are a lot of people who are trying to solve this problem today. And one of the solutions has been legislative, for example trying to just deal with the First Amendment right of free speech stuff, that was addressed in Citizens United. But I think that that's very dangerous, because it doesn't address the real issue of corporate power. It doesn't address the corporations using the Fourth Amendment, the Fifth Amendment, the 14th Amendment. Similarly, there's a movement by some very well intentioned progressives to amend the Constitution, to specifically say corporations don't have First Amendment free speech rights. And I think that that's dangerous also. Because it not only leaves intact the Fourth, Fifth and 14 Amendment rights that corporations are claiming ... and arguably Sixth, Seventh and Eighth Amendment rights ... but it implicitly recognizes them.
And so I believe that the only way to address this is to amend the Constitution clearly and explicitly to say that the 14th Amendment was intended to free slaves who are natural persons ... and that only natural persons, human beings, have rights under the Bill of Rights, and that corporations are merely the creation of governments. Because they are. They are legal fictions, and they have only those rights and privileges that the individual states decide to give them.
I think if we don't do the whole thing, if we only do it part way, we might end up, at least over a short period of time, worse off than we were, even though we'll think that we had a victory.