Citizens United Ruling Part 2

by Barb and Kellye

This is the second part of a series of posts outlining the 7 major questions considered by the Supreme Court in making its Citizens United decision (Part 1). This post deals with two of those major questions. One question involves whether the political speech rights of corporations should be curbed, and the other involves the rights of shareholders when there is disfavored corporate political speech. (Be sure to read to the end of the post; there is a link to an action that each of us can take to help minimize the effect of the Citizens United decision).

Do corporations have the right to unlimited political speech?

Majority Opinion:
In previous court cases, Buckley v. Valeo (1976) and FEC v. Colorado Federal Campaign Committee (1996), the Court had ruled that individuals and groups (other than corporations and unions) were not limited in the amount of money that could be spent independently of a candidate’s campaign on “express advocacy” for the election or defeat of candidates. In 2002, BCRA (McCain-Feingold) added another type of political spending, “electioneering communications,” that was also banned when paid for with funds from corporate (and union) general treasuries. Why should corporations (and unions) be treated differently than individuals or other entities? The identity of the speaker should have no bearing on 1st Amendment rights.

Corporations are “associations of citizens.” If an association’s ability to spend money on political issues is limited, this unconstitutionally limits the ability of its members to speak on political issues. “Spending money is essential to disseminating speech.”

Even though a corporation’s PAC can fund “express advocacy” and “electioneering communications,” it is not an adequate substitute. In addition, because a PAC is “burdensome …. expensive to administer and subject to extensive regulations,” a small corporation may not have the resources to form and maintain one.

Minority Opinion:
Corporations should not be treated as “associations of citizens.” They are not “members of ‘We the People’ by whom and for whom our Constitution was established.” Corporations are not “natural persons.” They have unique characteristics that make them dangerous to the electoral process. Those characteristics are “perpetual life, ability to amass large sums of money, limited liability, no ability to vote, no morality, no purpose outside of profit-making, no loyalty.” Therefore, corporations should not be given speech protections under the 1st Amendment. Both federal and state legislatures should be allowed to regulate corporate spending on elections.

Corporations have another way of participating in the political process. They have the ability to fund “express advocacy” and “electioneering communications” through PACs. PACs also protect the corporation’s shareholders from funding corporate speech that shareholders disagree with. [A PAC supports the company’s interests, but is funded by the personal funds of corporate members and not from the corporation’s general treasury.] A PAC is not necessary for owners of a “mom & pop” corporation to make their political views known. They can “simply place ads in their own names, rather than the store’s.”

Should shareholders of a corporation have the right to know, control, or determine the political speech of that corporation?

Majority Opinion:
There is already enough shareholder knowledge of a corporation’s political spending because of what corporations currently disclose. Shareholders voluntarily hold stock. They can sell that stock if the corporation is funding speech they disagree with.

Minority Opinion:
Corporate political spending is not disclosed prior to every decision or transaction. Shareholders’ best opportunity to voice their concerns over corporate political spending or question the CEO on details of the corporation’s political spending is at shareholder meetings [only once a year]. The rights of corporate shareholders are “so limited as to be almost nonexistent” for any remedy in opposing corporate political spending. A shareholder lawsuit is “slow, inefficient, risky and potentially expensive.”

Most shareholders invest in companies by way of mutual funds and pension funds, “which makes it more difficult both to monitor and to alter particular holdings.” By the time a shareholder finds out about disfavored political spending by a corporation in which he owns shares either directly or indirectly, it is too late to do anything about it. Another consideration is that a shareholder may not want to sell his stock or mutual fund due to the tax consequences in doing so.

[There has been a recent development involving the second question. After pressure from a grassroots movement, the SEC announced a few weeks ago that it is working on a rule requiring corporations to disclose their political spending to shareholders. One SEC commissioner has already come out in favor of the rule. Only two more commissioners have to agree. Click here to add your support and ask the SEC to implement this rule on corporate political disclosure.]

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6 responses to “Citizens United Ruling Part 2

  1. Regarding the “Do corporations have the right to unlimited political speech?” question, and more specifically, the court’s majority assertion that limiting corporate political spending is an infringement upon the free speech rights of corporate members, I offer this rebuttal:

    Restricting corporate political spending has absolutely no effect on the individual free speech rights of corporate members. All citizens retain the same constitutional rights regardless of where they work or who they associate with. In effect, the court majority established an unusual legal precedent by giving MORE free speech rights to rich corporate executives. Since Citizens United, a CEO can make political expenditures as both an individual citizen and as a corporate officer. Very few Americans are CEO’s. Are the rest being denied these additional first amendment rights simply because of circumstance?

    I’m no lawyer, but the Citizens United ruling appears to me as one of the shakiest legal interpretations in Supreme Court history.

    • Excellent rebuttal! Although we strove to be unbiased in our discussion of the majority and minority opinions of the Court, we are firmly on the side of the minority and are working to change this illogical precedent.
      Thank you for reading & commenting.

  2. Pingback: Story of Stuff Takes On Citizen’s United « Nevada Rural Democratic Caucus

  3. Pingback: Story of Stuff Takes On Citizen’s United « Humboldt County Democrats

  4. Pingback: Citizens United Ruling Part 3 | citizens for truth

  5. Pingback: Citizens United Ruling Part 4 | citizens for truth

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