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The Case Against Corporate Speech

  Corporate Governance  -   POSTED: 2010/02/10 08:54

Last month, by a vote of 5 to 4, the U.S. Supreme Court gave carte blanche to the world's largest corporations to spend unlimited sums of money to support or oppose candidates for elected office. Big Business domination of Washington and state capitals will now intensify.

The case of Citizens United portends dire consequences for the nation's constitutional premise of "we the people," not we the corporations. Our constitution, at its origins and through all of its amendments, makes no mention of corporate entities, only human beings and their government.

For 120 years, it was not Congress but the Supreme Court that expanded the definition of "persons" to include for-profit corporations for the purposes of applying constitutional protections. For 30 years, the court has granted First Amendment speech protections to corporations as "artificial persons."

But not until last month has the court declared that the First Amendment gives corporations the right to spend unlimited money to influence elections. The court majority, self-styled believers in precedent and judicial restraint, overturned two major Supreme Court decisions and reversed decades of campaign-finance laws aimed at preventing corporations from having undo influence over local, state and national elections.

Granted, existing campaign-finance rules have been inadequate. Regular news reports document how corporate spending debases elections and elected officials. But that doesn't mean things can't get worse. The court has challenged whatever social mores are left that view no-holds-barred corporate cash register politics as unseemly.



In a landmark decision over corporate governance, a Wisconsin appeals court on Thursday threw out a $6.5 million jury verdict against business owners accused of looting their company.

Banks and labor unions blasted the decision, saying it would allow corporate insiders to enrich themselves at the expense of their creditors and employees.

Even the District 4 Court of Appeals agreed its ruling could allow owners of dying companies to use assets for their personal benefit without having any obligation to pay off their debts first.

The three-judge panel acknowledged that the decision could make Wisconsin banks tighten their oversight of corporate loans, driving up the cost of doing business. But the judges said that under a problematic 2004 Wisconsin Supreme Court ruling, they had no choice but to overturn the jury's verdict and dismiss the case.

The panel called on the Supreme Court to fix the earlier decision, but that appears doubtful. The high court deadlocked 3-3 on the matter last year, which sent the case back to the Madison-based appeals court.



Among the interesting arguments in last week's 5-4 Supreme Court decision granting corporations First Amendment protections when making campaign contributions was the majority's decision to effectively treat corporations as persons.

Liberal Washington Post columnist Ruth Marcus, who disagrees with the ruling, wrote, "... the majority acted as if there could be no constitutional distinction between a corporation and a human being."

The ruling came the week of the annual March for Life, which draws thousands to Washington to mark that same court's 1973 Roe v. Wade ruling. The march has become not so much a protest as an affirmation of the value of all human life.

What makes the ruling and the march ironic is that the 1973 court, in essence, downgraded a human fetus to the level of nonperson, while the modern court has invested "personhood" in corporations. Does anyone else see a contradiction or at least a moral inconsistency in these two rulings?

There is evidence that all the marches and the pro-life pregnancy centers are working. There have been roughly 50 million abortions in the United States since 1973. Opinion polls reveal a public increasingly concerned about the unrestricted disposal of human life and the potential contributions those lives could make to America and to humanity.


Barring an instrumental performance of a Christian hymn at a high school graduation did not violate students' First Amendment rights and was within the school superintendent's discretion, a divided federal appeals panel ruled Tuesday.

The 9th U.S. Circuit Court of Appeals' decision in what Judge Richard C. Tallman described as "the legal labyrinth of a student's First Amendment rights" will be appealed to the Supreme Court, a lawyer said.

The case arose a year after a choral performance of the song "Up Above My Head" at the 2005 commencement for Henry M. Jackson High School in Everett, 25 miles north of Seattle. The song, with references to God, angels and heaven, drew complaints and protest letters to The Herald, the town's daily newspaper.

Administrators raised red flags when wind ensemble seniors, who had played Franz Biebl's uptempo 1964 rendering of "Ave Maria" without controversy at a winter concert, proposed a reprise at their graduation in 2006.

School officials said the title alone identified "Ave Maria" — Hail Mary in Latin — as religious and that graduation should be strictly secular.

One of the students, Kathryn Nurre, sued Everett Public Schools Superintendent Carol Whitehead, claiming unspecified damages from infringement of First Amendment rights, but U.S. District Judge Robert T. Lasnik in Seattle rejected that assertion in a summary judgment on Sept. 20, 2007.

Tallman and a second judge from the San Francisco-based appeals court, Robert R. Beezer, agreed with Lasnik across the board.




A U.S. appeals court ruled on Friday that Qwest Communications International Inc ex-Chief Executive Joseph Nacchio was incorrectly sentenced to six years in prison for insider trading.

The 10th U.S. Circuit Court of Appeals ordered the federal district court in Denver to redetermine what the correct sentence should be and strongly indicated the sentence should be less than six years.

The Denver-based appeals court also ruled that U.S. District Judge Edward Nottingham, who presided at trial, had erred in ordering the former executive to forfeit $52 million, the gross proceeds from selling his Qwest stock.

The appellate judges ordered a new trial judge to redetermine the correct amount of proceeds from his insider trading that Nacchio will have to forfeit to the government.

Nacchio is serving his sentence at a federal prison camp in Pennsylvania and is awaiting a decision from the U.S. Supreme Court on whether it will accept his appeal claiming that he did not receive a fair trial.




The Wisconsin Supreme Court deadlocked Tuesday on whether the former owners of a manufacturing business must pay millions in damages for enriching themselves while the company couldn't pay its bills.

The court divided 3-3 on whether to uphold a jury's decision ordering Daniel Virnich and Jack Moores to pay $6.5 million for their excessive compensation at a Lancaster company that makes stereo speaker parts.

The court divided 3-3 on whether to uphold a jury's decision ordering Daniel Virnich and Jack Moores to pay $6.5 million for their excessive compensation at a Lancaster company that makes stereo speaker parts.

Justice Patience Roggensack didn't participate in the case, which had been closely followed by corporate executives, banks and labor unions. The court's ruling sends the case back to an appeals court for a decision but avoids the central issue of what financial obligations the owners of struggling companies have to their creditors.



California's highest court on Monday ruled that Bank of America Corp need not pay a potential $1 billion or more to customers who claimed the bank illegally raided Social Security benefits to collect fees.

Plaintiffs in the class-action case had accused the largest U.S. bank of dipping into their Social Security direct deposit accounts between 1994 and 2003 to collect fees for overdrafts and other debts.

A San Francisco trial court in 2004 ordered the Charlotte, North Carolina bank to pay $284.4 million of damages, plus up to $1,000 to each customer who suffered substantial emotional or economic harm. The case was filed on behalf of more than 1.1 million customers, many of whom were elderly or disabled.

In 1974, the California Supreme Court had ruled that a bank may not satisfy a credit card debt by deducting fees owed from a separate checking account containing deposits that "derived from unemployment and disability benefits."

But in Monday's unanimous ruling, the court distinguished the current case by saying the transactions at issue occurred "within a single account" rather than in multiple accounts.


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