The Rule of Law and 9/9/09

On September 9, 2009, the Supreme Court of the United States will hear re-argument in the case of Citizens United v. Federal Election Commission, which involves the congressional power to limit corporate campaign activities. The Supreme Court ordered re-argument in order to address whether two of its precedents upholding legislation limiting corporate campaign activities should be overruled. The case has aroused much controversy, and many amicus briefs have been filed. The mainstream media has reported on the case to some extent, but most in-depth coverage appeared only in places like the New York Times or specialized publications.

Professor Richard L. Hasen suggests that if “corporate limits fall . . . we may well look back on the 2008 election as a quaint time when the amounts spent on elections were relatively modest.” Professor Michael Dorf argues that the American people already suspect that American politics is a rigged game. If the Court overrules its prior cases limiting corporate campaign activities “the American people could be excused for thinking that the Court too is part of the rigged game.”

Overruling its prior precedents upholding reasonable limitations on corporate campaign activities will subvert the rule of law and further concentrate economic and political power in a corporate elite that has proven itself inept and inadequately constrained by law. It would cripple a great democracy that endured for years on the principle of one person, one vote. The nation already is struggling to avert a government of elites, by elites, and for elites.

Moreover, under our current system of corporate governance, breaking down limits on corporate campaign support would only serve to empower CEOs, at the expense of the corporation and its shareholders. CEOs have proven themselves capable of indulging their own short term interests at the expense of shareholders, most recently in the subprime debacle. Giving CEOs more power to dominate their firms (as well as society generally) is not vindicating free speech—it is entrenching CEOs to coerce shareholders to expend funds for the benefit of the CEO’s interests. Simply put, under the current regime of CEO primacy, CEOs have hijacked corporate speech. Only if the interests of the shareholders and the corporation itself are secured against CEO domination can corporate speech colorably be termed free speech.

Perhaps the Supreme Court should rule that only corporations that charter an independent subcommittee of the board to supervise all lobbying and campaign activities of the firm to assure those activities are for the benefit of the firm (with substantial shareholder input) can expect to enjoy free speech rights. Otherwise the Court is simply cloaking CEO subversion of the firm in First Amendment protection.

The Corporation exists to enrich shareholders. It is chartered to pursue business interests and profits. It was not created to give voice to unbridled CEO power, without disclosure nor authorization of the shareholders. Under this reality corporate speech is no more "free" speech than the words uttered by a tortured individual with a gun to their head.