Two Decisions That Imperil Our Republic

Recently (11Feb'10) I gave this talk at the Olympic Club (Seattle.)


The Roberts court’s overturning of McCain-Feingold restrictions on corporate campaign advertising came as no surprise. Two prior decisions lay the legal foundations that almost made inevitable the legal activism of the conservative majority. They ignored 103 years of precedent…(remember Robert’s reassuring confirmation words about respecting precedent?)

• The first? 1886 – Santa Clara County v. Southern Pacific Railway: corporations are persons.
• The second? 1976 – Buckley v. Valeo: Money is the equivalent of speech

Let’s start with 1886: Corporations’ rights and protections had always presented difficulties. English common law and in colonial times, too, a corporation was termed an “artificial person” as against “natural persons” like you and I. But these were small matters, for corporations played but a tiny part in the economy of the Confederation. Most were chartered hospitals and colleges. In fact, corporations are not even mentioned in the Constitution.

But in early 19th century, corporations grew more numerous, a peculiarly American phenomenon. (By 1810, there were more corporations chartered in Massachusetts than in England and the Continent combined.) And as they became more prevalent, corporations more frequently posed issues of rights and protections as “artificial persons.”

From the Dartmouth case of 1819 on (which had held that corporate charters were contracts) corporations’ rights, especially as railroads expanded into interstate operations, became an increasingly hot issue. What was a corporation’s status under the constitution vis-à-vis that of governments?

In 1886, Santa Clara County sued the Southern Pacific Railroad – a garden-variety property tax dispute. It was appealed to the Supreme Court. At the opening of the hearing, Chief Justice Waite said “The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does."

The Reporter of the United States, Bancroft Davis, charged with preparing summaries of court decisions, wrote in the headnotes that “The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteenth Amendment to the Constitution of the United States which forbids a State to deny to any person within its jurisdiction the equal protection of the laws.”

Years later, correspondence came to light between Davis and Chief Justice Wait in which they had discussed whether the court had really ruled on whether corporations were persons or merely opined that they were – but, Waite wrote Davis, “I leave it with you to determine whether anything need be said about it in the report inasmuch as we avoided meeting the constitutional question in the decision.” In other words, the Chief Justice left it up to the court reporter to decide.

It should be noted that court reporter Davis had served as a jurist, an Asst. Sect. of State. and -- wait for it -- as President of the New York and Newburgh Railroad.

Thus an otherwise inconsequential case enshrined the idea that corporations are persons.

Consider the inherent, ridiculous inconsistencies:

• Why can’t “person” General Electric vote for the Fairfield, CT. school board, where the “person” is headquartered, or for the New York attorney general, in which state “person” GE is incorporated?
• If “person” GE is owned by shareholders, i.e., other persons, then don’t persons own a person? Isn’t that slavery as prohibited under 13th Amendment?

OK, enough of this nonsense – a corporation to me is an enterprise interested mainly in its survival, not a person.

Ninety years later, 1976, the second shoe dropped. Buckley v. Valeo: money is the equivalent of speech.

The campaign spending restrictions of ’74, passed over President Ford’s veto, was contested by Senator James Buckley and others in a lawsuit against Francis Valeo, Chairman of Federal Election Commission. The majority overturned campaign spending restrictions on First Amendment grounds, ruling that money is the equivalent of speech.

As Justice John Paul Stevens said two weeks ago in his dissent to the Roberts decision: “Money is property; it is not speech.” This (waving bills) is my property; you have your property. These pieces of paper are not speech.


Why do I view these two decisions as a threat to our republic? Because corporations can buy a bigger megaphone than can you or I. They can buy more megaphones; they can buy up all the megaphones.

By 1886, as best I can guesstimate, corporations accounted for something around 1/5th to 1/3rd of our GDP. Today, what might it be? Big corps, small corps, S-corps, LLC’s -- ninety plus percent of GDP going through their hands? And the cash flows they command…?

Last Dec., Jaques (a French-born naturalized US citizen, member of the Club) spoke eloquently about why he chose to emigrate to the US. One of the ideas that moved him was that here, rich and poor alike were treated equally. Well, corporations as persons with cash buying the biggest megaphones knock that ideal into a cocked hat.

What is to stop

• Philip Morris from funding a challenger to defeat Jim McDermott, who believes in stricter regulation of tobacco, thus replacing him with a new Congressman who is beholden to whom – a No. Carolina “person” or to the citizens of Seattle?
• EADS/Airbus and Lockheed Martin spending to defeat Norm Dicks, likely chair of Armed Services Committee, to replace him with a new representative beholden to whom – a European “person” and a California “person” or the voters of Tacoma and the Peninsula?
• Carnival Cruise Lines, a Miami Headquartered / Panama registered company founded and still controlled by a US family from campaigning against Patty Murray over reform of foreign tax havens? Who would her replacement represent – a foreign “person” paying no taxes to the US or the taxpaying citizens of Washington?

Am I being overdramatic? Only slightly. This serious issue deserves careful thought, for while corporate personhood is deeply woven into the fabric of our law, and the First Amendment is the fundamental right of citizens, the effect of these two decisions does imperil out representative form of government.

Solutions will require much more time than I am allotted here to explore and craft. But these three questions deserve our concern. Consider well, gentlemen:

1. Are corporations really persons?
2. Is cash speech or merely property?
3. Who does your representative represent?