In case you were wondering …

Don Blankenship of Massey Energy, who considers safety regulation “as silly as global warming,” and in whose mine 29 miners died, is the man who bought a West Virginia Supreme Court seat to ensure a favorable verdict for Massey.

Don Blankenship of union-busting Massey Energy – the owner of the grossly unsafe Big Branch mine in which 29 miners died – is the man who spent $3 million to defeat a state supreme court justice in order to secure a favorable vote on a huge lawsuit against his company. The U.S. Supreme Court ruled that having the justice elected as a result of that massive campaign should have recused himself from the case, rather than being the deciding vote in favor of Massey. But of course money is just speech, and there’s no risk that money will corrupt the judicial process.

Oh, yes, and Blankenship is also a heavy Republican donor and a global-warming denier.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

43 thoughts on “In case you were wondering …”

  1. I think there's every risk that the exercise of this or that constitutional right might lead to the corruption of the legal process. Doesn't matter one bit, if it IS the exercise of a constitutional right. The NYT could corrupt the legal process by running editorials and slanted coverage worth millions, which thanks to CU is constitutionally protected now, but that wouldn't justify shutting down the NYT. Well, maybe the SG thinks it would…

    The judicial process can, politicians who nominate and confirm not typically being saints, as easily be corrupted by the non-election of judges. By your reasoning, we shouldn't nominate and confirm judges, either. Maybe we should just select them by lot from among the qualified population? Oh, wait, the dice might be loaded…

  2. Gosh, Brett, you're right. Trying to figure out how to reduce the corrupting influence of wealth on our political system is just too much work, and probably hopeless. We might as well just accept that anything goes. And if that means that reactionary coal industry CEOs are able to buy a judge here and a state senator or two there, what's wrong with that?

    What a dismal world view conservatives have. We mustn't try to do anything about racism, poverty, the oppression of women, the environment, or lack of access to health care, because that's "social engineering" and we all know that anything labeled "social engineering" is either misguided or doomed to failure (oddly enough, though, the various forms of social engineering that benefit corporations and the existing power structures are just fine, however).

    We mustn't try to hold back any of the avaricious impulses of wealth and power. Anything that hinders the ability of those with vast wealth to seize more and more power for themselves is wrong, apparently. Labor unions, environmental regulations, campaign finance reform, anything that interferes with the power of the plutocracy must be destroyed.

    Yes, this is indeed a cramped and dismal ideology that conservatives have.

  3. J – "We mustn’t try to hold back any of the avaricious impulses of wealth and power. Anything that hinders the ability of those with vast wealth to seize more and more power for themselves is wrong, apparently. Labor unions, environmental regulations, campaign finance reform, anything that interferes with the power of the plutocracy must be destroyed." Wow. Your characterization of the conservative world view is remarkable. Certainly, there is a lot to criticize about conservatives and conservative ideas. But isn't it more useful if those criticisms make an effort to correctly describe what they criticize? Attacking a cartoon version of your opponent may be satisfying, but ultimately it just destroys the possibility of respectful debate and persuasion. (None of which, I hope should be obvious, excuses Blankenship's conduct.)

    Kleiman's point in this post is more splenetic than interesting or enlightening. After all, the Supreme Court reached what Kleiman thought was the right result in the Massey Energy case, requiring the judge's recusal, so why is it a good jumping off point to attack the Court's campaign finance cases? And I don't recall the Court ever saying that there is "no" (i.e., zero) risk of corruption in our campaign finance system, so that's hardly a fair criticism. (Which alternative campaign finance system, by the way, promises zero risk of corruption?) Finally, I frequently see criticism of the connection the Court draws between money and speech in the campaign finance area in order to trigger First Amendment protections, but is there anyone out there who really thinks the system would work better if the expenditures of money to support or oppose candidates received no First Amendment protections? If so, how does that work?

  4. "Gosh, Brett, you’re right. Trying to figure out how to reduce the corrupting influence of wealth on our political system is just too much work, and probably hopeless."

    Maybe we could try reducing it in ways that didn't involve violating constitutional rights? Like, impeaching judges who corruptly fail to recuse themselves from cases involving major campaign donors? That, at least, wouldn't violate the constitutional rights of non-judges.

  5. Oh, Brett, that's so right. Because a judge who was beholden to one or a few major campaign donors certainly would make entirely appropriate rulings in all cases not directly involving those donors. And the legitimacy of their court wouldn't suffer at all from the public knowledge that their seat had been bought for them.

  6. It is an amazing stetch of credulity to assert that a corporation is constitutionally or in any other respect a person. It is also absurd to hold that it is legal to put limits on donating money to a political candidate's campaign but an individual or a corporation can personally spend unlimited amounts of money on advocating for a candidate.

    The individual justices who claim that they honestly believe these things were intended by the framers of the US constitution are being disingenuous.

  7. Brett,

    If what Kleiman is trying to promote is the appointment rather than the election of judges, do you have a problem with that? If so, is your objection a constitutional or a practical one? Or is your only issue with Kleiman's post his sarcastic attack on the Court's campaign finance ruling?

    For my part, I think that the election of judges is a bad policy (though infrequent retention elections might have some merit) because judges shouldn't be courting constituencies in order to be elected. Of course, "merit" selection winds up being shot through with politics as well, but I believe that is a lesser harm.

  8. Fred,

    You say that "It is an amazing stetch of credulity to assert that a corporation is constitutionally or in any other respect a person." Not really — it's a completely standard use of the word "person". (See http://www.merriam-webster.com/dictionary/person .) I'm curious, though, do you believe that non-human entities, e.g., corporations, should not have any constitutional rights?

    You also say "It is also absurd to hold that it is legal to put limits on donating money to a political candidate’s campaign but an individual or a corporation can personally spend unlimited amounts of money on advocating for a candidate." Why? If you want to allow for lots of political speech, but believe that large cash transfers to candidates are potentially corrupting, that rule seems rational to me.

  9. J,

    we all know that anything labeled “social engineering” is either misguided or doomed to failure (oddly enough, though, the various forms of social engineering that benefit corporations and the existing power structures are just fine, however).

    A good example being the very existence of large corporations, which is a result of social engineering – laws allowing limited liability business organizations.

  10. Yes, practical. Judges are, regrettably, going to be beholden to SOMEBODY. We've seen over and over again at the state level, judges who are appointed frustrating citizen initiatives politicians dislike, while elected judges tend to uphold them. We've seen at the federal level that judges, nominated by the President, and confirmed by the Senate, show almost mindless levels of deference towards the legislature and executive branch.

    If they're going to be beholden to anybody, it should be the citizenry, not the political class. The political class already have too much power.

    I was serious about selecting judges by lot, by the way. It's really the only feasible approach to rendering the judiciary really independent.

    And, no, money isn't speech. Neither are ink and paper "press", but if the government regulated the use of those to express certain classes of opinions, you'd see the constitutional violation in an instant.

    Well, somebody paying to run an advertisement is just renting their printing press, instead of buying it outright. I fail to see why this should have any constitutional significance at all. And people do not form corporations today for things they'd never have used that form for at the founding for yucks, they do it because the LAW channels those activities into the corporate form. I don't think it should be so easy to take the people's right to associate to exercise constitutional rights away, as just passing laws making it dangerous to associate except in one particular form that denies you those rights.

  11. Well, there are some problems with any system, but I think that selecting judges by lot (for what terms, BTW?) might make judges "independent," but would be utterly unworkable. Good judges need a lot of specialized skills and knowledge. Most Americans are barely literate by any useful standard — how could these lottery-chosen judges understand the relevant laws, recognize the relevant issues, and write comprehensible opinions? And if we stick with electing judges, it does not follow that the elected judges' primary loyalty will be to "the citizenry." It's more likely their loyalty will be to the relevant "political class" that supported their candidacies.

  12. So restrict, as I suggested, the pool from which they're chosen, to those who ARE minimally qualified.

    If the founders screwed up one thing big time, it was the design of the judicial branch, though the 17th amendment exacerbated the problem.

  13. If the founders screwed up one thing big time, it was the design of the judicial branch, though the 17th amendment exacerbated the problem.

    I've honestly never understood the hate for direct election of Senators. Here you are, Brett, complaining about the political class already having too much power. It seems to me that having Senators chosen by the state legislature would increase that power.

    And while we're on the subject, I'd say the big screwup was the design of the Senate, not the judicial branch.

  14. As I understand it, the constitutional violation was not Mr. Blankenship's contribution of money to a judicial candidate. Indeed, the making of that contribution probably did not even involve state action. The due process violation was that the judge who received the contribution(s) sitting and ruling in a case in which such a hefty contributor was interested in the outcome.

  15. "I’ve honestly never understood the hate for direct election of Senators."

    If you're going to directly elect Senators, there's no point in having a Senate. It's just another House with longer terms, and bigger egos. Might as well get rid of it. I don't hate a directly elected Senate. I merely find it pointless to have.

    The point of the Senate, in the original constitutional design, was not to represent the people. That was the House's job. It was to represent state governments at the federal level. It functioned to prevent the federal government from centralizing power, by giving the state governments leverage at the federal level.

    So long as federal judges had to pass scrutiny of Senators appointed by state legislatures, the federal bench did not cooperate with federal efforts to usurp powers reserved to the states. Once the Senate was directly elected, individual Senators had no motive to care about state prerogatives, and the bench was rapidly populated with judges who'd reliably uphold laws exercising powers reserved for the states, such as the regulation of intra-state commerce.

    Government design is something I view as an exercise in control system theory. I suppose that's the engineer in me. I understand that the Senate originally served as a feedback mechanism maintaining a fairly stable federal system, with power divided between the levels of government. Direct election of Senators abolished that feedback mechanism, resulting in an uncontrolled accretion of power at the federal level. Like an engine running with the throttle tied down, and no regulator to keep it from overrunning it's design specs. Federalism, meaning a system of government where most matters are dealt with locally, and only certain specified matters that can't be done locally are reserved for the higher level of government, has been all but abolished, with the states treated as redundancies to be worked around.

    Maybe you don't care about this, but I do: The problem here is that we've got a leviathan federal government, and a federalist constitution, and you can't square the two with honest interpretation of the Constitution. You need to systematically lie about the Constitution's meaning to keep a system like this going. And that means that we can't have honest government, because we have to staff the government with people who are comfortable living a lie. People who don't mind running a system based on deliberate doublethink.

    If we had a constitution which actually DID allocate all this power to the federal government, it would be better, we could at least theoretically staff the government with honest people. As it is, honest government is impossible in this country as things stand. We're headed for a breakdown, the gap between the plain text of the constitution, and practice, is getting too large to support.

    I don't think it will be too much longer before they just give up the pretense of constitutional government. The only thing stopping it now is that the political class are aware that, while they might have contempt for the Constitution, the public doesn't. Won't stop them much longer, though.

  16. Brett, I think it's a bad thing (though its partisan impact is often overstated), but you must have noticed at least one other difference between the House and Senate: CA and WY each have 2 senators.

  17. Which made sense when it was representing state governments, (Both are states.) but not now that it's representing people. No, if the Senate isn't going to represent state governments, as it was originally intended to, it's redundant. You've just pointed out that it's badly designed and redundant. About all it accomplishes that's worthwhile is adding a bit of a delay in passing legislation, and there are better ways of accomplishing that.

  18. Hi Brennan- I do believe that corporations are not granted rights by the US constitution. Corporations are legal creations of the government and are granted the privilege of engaging in limited activities allowed by law. The government has the right to control and dispose of a corporate entity as the law sees fit. Corporations are defined by the law and legislatures can proscribe any activity by corporations at their pleasure.

    A corporation could be compared to a marriage. A marriage is a legal creation that you could say 'exists' but a marriage doesn't have rights. The individuals in the marriage are granted (by the government) certain privileges and obligations by virtue of their participation in the marriage. The individuals still have rights as human beings but do not confer those rights to the legal entity of the marriage.

    As to political contributions, if it is legal to limit political contributions then it is absurd to allow an end run around that law by allowing unlimited expenditures on independent advocacy ads. The question of limiting contributions is debateable but when we accept the need for campaign finance limitations as neccessary for a functional democracy we can't then say that some forms of contributions are more equal than others. We can allow a person on a street corner to say what they like but we don't allow that person to do it with a bull horn as it disrupts everyone elses' freedom to speak and to be heard. Unlimited volumes of sound or money drown out free speech so we all need to compromise for freedom to exist.

  19. "Unlimited volumes of sound or money drown out free speech so we all need to compromise for freedom to exist."

    Yes, you've just explained why this reasoning will inevitably lead to press censorship. After all, who is in a better position to deploy unlimited sound than MSNBC? And they're just a corporation, after all, no 1st amendment rights.

  20. Fred, Well, I think you're wrong as a descriptive matter. It is well-established that corporations do have constitutional rights and governments cannot simply "control and dispose of a corporate entity as the law sees fit." (Would you find it constitutional if Congress passed a law ordering all corporations to sell their assets to the government for penny on the dollar?) A corporation is rather different than a marriage since, among other things, the participants in a marriage must stay the same, while the corporate owners can change incessantly. (Thus, the usual business form analogized to a marriage is a partnership.) So I take your primary point to be that corporations SHOULD NOT have constitutional rights. Why is that?

    As to political contributions, you seem to think that a cash contribution to a candidate and individual's expenditures to endorse that candidate are effectively indistinguishable "contributions". I don't agree, but the logic of your position would seem to require the prohibition of volunteering for a candidate — after all volunteers often contribute hundreds of hours of unpaid labor, often worth far more than the contribution limits — and even prohibition of endorsements by celebrities, other politicians, and well-known advocacy groups. That would prevent "some forms of contribution from being more equal than others" but it would seem like bad change in our political culture.

    More fundamentally, how does the fact that Person A spends a million dollars to endorse her preferred candidate drown anyone out? Person A might be more successful in reaching voters with her message, true, but no one has been prevented from speaking. The analogy of the bullhorn seems deeply flawed — all voters are not somehow crammed into a box in which only one person at a time can speak. Lots of people can speak at the same time. In fact, lots of people are speaking simultaneously in the public space all the time.

  21. Brett,

    I guess I don't find the idea that the Senate was designed to represent state govts vis-a-vis the federal govt all that convincing or desirable, even in the context of two centuries ago. That's an awfully limited purpose for a legislative body that deals with issues of national importance. The Constitution, for example, explicitly gives the Senate alone the power to ratify treaties and confirm various appointees. The Senate also shares the enumerated powers which, no matter how narrowly you want to construe them, all have nationwide impact. Why the states (as distinguished from their citizens) have any legitimate interest here is not at all clear.

    Of course, I'm influenced by my view that the whole business of sovereign states is a mistake. This is not to say that many governmental functions can't be usefully decentralized, just that the notion of the state as having some political significance as a piece of land doesn't make sense to me. Historically, as opposed to legally, speaking the US is not really that much of a federation to begin with. Most of the states were created by the central government, not the reverse. Hardly any ever enjoyed an independent existence. I see no logical reason why Wyoming ought to have the same representation as California.

  22. Bernard, most of the current states were created by the Federal government, but the federal government itself was, historically, created by sovereign states which long predated it. And the constitution they created guaranteed that any new states would enter the federation on the same terms as the existing states. Which, I think, was a reasonable principle to adopt.

    It's true that one might not, presented with a territory lacking any existing governmental arrangements, have arrived at anything like the Constitution's system of divided sovereignty. But that's not the situation the Constitution arose under, nor is it the situation we face today.

    Now, faced with an existing constitution, we face a different question: Are the people who run the government going to be bound by the rule of law? If so, they must follow or amend the existing constitution, not pretend that it's some other constitution that didn't actually get adopted.

    I happen to think a government bound by the rule of law, albeit a less than optimal law, is better than a lawless government. Which is what we have if the Constitution is going to be 'interpreted' to 'mean' whatever our government finds convenient, regardless of what it might happen to actually say.

  23. As long as litigants have the opportunity to fire judges by spending millions of dollars accusing them of favoring child molestation, it doesn't much matter whether the replacement judges get to rule in favor of the litigants or not. The combination of getting rid of unfriendly judges and the implicit threat to the rest should do the job amply.

    That's the case for judicial service "during good behavior," per the federal Constitution, or alternatively for long non-renewable terms.

  24. the federal government itself was, historically, created by sovereign states which long predated it.

    Sovereign states which "long predated" the federal government? At best you have twelve years from the D of I to the Constitution.

    Anyway, what does that have to do with whether direct election of Senators is a good idea or not, especially since direct election meets your requirement of having come about through an amendment to the Constitution?

  25. "Sovereign states which “long predated” the federal government? At best you have twelve years from the D of I to the Constitution."

    You've got a remarkably mixed up understanding of American history if you think the states originated with the Declaration of Independence. And they were, in fact, sovereign states, for quite a long while. The revolutionary war was less, in reality, a case of the Americans revolting against existing British rule, than of the British attempting to reassert control they'd long since lost. That's why it turned out better than most revolutions, I think: They weren't inventing new institutions for the most part, but defending existing institutions against outside attack. We were already independent in a real sense, and King George was attempting to undo that.

    And it's true that direct election of Senators came about by legitimate amendment. That doesn't mean it didn't abolish a critical mechanism for maintaining the balance of power between state and federal levels of government. And in so doing open the way for the federal government to free itself from any remaining constitutional restraints by staffing the bench with compliant judges.

  26. The Lincoln-Douglas debates were for Illinois's Senate seat back when it was an appointed post. Lincoln and Douglas were trying to convince the electorate to vote a Republican or Democratic majority into the state house for their senatorial appointment; this was considered a more significant function of the state government than actually governing the state. If you put senatorial appointments back in the state houses' hands, you'd probably get more of this sort of Senate-tail-wagging-the-state-government-dog and plain old corruption (the impetus behind the 17th Amendment) than a Senate that actually represents the state governments' interests.

    And I say this as someone who largely agrees with Mr. Bellmore's views on constitutional interpretation.

  27. Approaches to constitutional interpretation should be independent of what you'd prefer the text said. Honestly interpreting a text doesn't imply you like what it says, after all…

  28. After all, who is in a better position to deploy unlimited sound than MSNBC?

    So MSNBC has the power to strap people down and force them to watch their broadcasts? To take over other broadcasters' signals? Just how are you defining "unlimited" here?

  29. To the extent anybody has that power, (Which is essentially not at all.) it is clear that media companies possess much more of it than anybody who rents a tiny fraction of their facilities. The whole "unlimited sound" excuse for political censorship is a joke from the start, but it's a joke which, if taken seriously, would justify going after "the press" before you got around to mere advertisers. And given the "corporations have no 1st amendment rights" argument, with essentially all media in this country being run by corporations, it's an argument to kill off freedom of political speech.

    Let's not forget why the Supreme court suddenly decided to go for the heart of the issue in CU, instead of deciding the immediate case on the least available grounds: The Solicitor General was arguing before them that he could ban any book that mentioned a political candidate, if published by a corporation. When you've got the government arguing in favor of the constitutionality of book banning, the time for half measures is over. I'm glad the Supreme court didn't avoid the core issue here. Anyone who values freedom of speech should be.

  30. I’m glad the Supreme court didn’t avoid the core issue here. Anyone who values freedom of speech should be.

    Actually, the court completely missed the core issue. The question is, under what conditions may those who run corporations use the corporation's money for political purpose? Lumping together organizations that exist for explicitly political purposes with ordinary businesses, just because both use the corporate form, is a huge blunder.

    If you want to organize the Brett Bellmore Political Committee, Inc., with the stated objective of gathering contributions and using the money to support candidates you like, then I see no real problem. You really are just aggregating the funds of individuals who expect you to do that.

    But if you start Brett Bellmore Software, Inc., with the avowed purpose of developing and selling software for a profit, then you really shouldn't be able to use shareholders' money for political purpose. (Before we even start, let me just say that I think the various "you can sell the stock" arguments are nonsense, and I don't want to derail the thread any further by having the nth argument about it).

    So the failure to distinguish the two cases, lumping them together as corporations, is an error. You may as well treat cars and airplanes as the same thing because both are transportation vehicles.

  31. Bernard said:

    "If you want to organize the Brett Bellmore Political Committee, Inc., with the stated objective of gathering contributions and using the money to support candidates you like, then I see no real problem. You really are just aggregating the funds of individuals who expect you to do that. But if you start Brett Bellmore Software, Inc., with the avowed purpose of developing and selling software for a profit, then you really shouldn’t be able to use shareholders’ money for political purpose. (Before we even start, let me just say that I think the various “you can sell the stock” arguments are nonsense, and I don’t want to derail the thread any further by having the nth argument about it)."

    So you believe that the best rule is that corporations should have free speech rights if their bylaws state that management may use corporate funds for political purposes? Really? So the whole debate goes away if corporate America amends its bylaws en masse? Or is there supposed to be some sort of test which allows an impartial observer to determine which organizations exist "for explicitly political purposes"? (What would such a test look like? And what answer would such a test give if applied to unions?)

    More fundamentally, you seem to assume that political activity is somehow not a natural part of a corporation's activities, so that a corporate investor would inevitably disapprove of or be surprised by a corporation's political activity, as if business and politics were neatly separable categories. I think that is a badly flawed assumption. Any reasonable investor would expect that any successful corporation would inevitably engage in political activities in the course of its business. To address your hypothetical, if I invest the Brett Bellmore Software Inc., I would certainly hope that BBS's management is savvy enough to realize that they might want to join industry groups that lobby in favor of strong intellectual property protections and that demand that the Administration pressure other countries to enforce anti-software piracy laws. (And if I incorporate an not for profit corporation to provide support and medical care to AIDS patients, I don't think any of my donors would be surprised if I spent some of their money lobbying Washington for anti-discrimination laws and money for AIDS research.)

    It is likely that most of the folks commenting here own stocks or donate to various corporations. Will anyone here claim to have been genuinely surprised to discover that object of their investment/donation spent money to inform or persuade political actors? You could claim, I suppose, to have been surprised that a corporation took the position it did, or addressed an issue that seems superfluous to you, but I submit that would be avoiding the real issue — whether corporations are expected to engage in some political activity.

  32. The core issue is not whether corporations are expected to engage in political activity. Citizens United existed for no other purpose. The cor issue is whether Congress is allowed to censor political speech, regardless of from where it originates. The SG made it quite clear that the administration's position was that political speech routed through a corporation, as almost all political speech is, was constitutionally protected.

  33. I would certainly hope that BBS’s management is savvy enough to realize that they might want to join industry groups that lobby in favor of strong intellectual property protections and that demand that the Administration pressure other countries to enforce anti-software piracy laws.

    1. Lobbying on specific issues is not the same thing as supporting a candidate. A candidate is a bundle of positions. Whether that bundle is or is not attractive to an individual shareholder ought to be left up to the shareholder.

    2. If a shareholder concludes that it is a good idea to support a particular candidate, then nothing prevents him from doing so. Even if a corporation simply does not take sides in an election, its shareholder are perfectly free to do so, once they decide that, on balance, a candidate is worth supporting. Prohibiting corporations from supporting candidates does absolutely nothing except prohibit corporate managememt from using corporate funds for those purposes. The money saved ends up in the shareholders' pockets, and they are free to spend it. If they don't want to spend it in support of the candidates the management prefers, doesn't that mean that the corporation expenditures are unjustified – not in the shareholders' interest?

  34. 1. I continue not to understand how Bernard proposes to distinguish between corporations that are allow to endorse candidates and those that aren't.

    2. "If a shareholder concludes that it is a good idea to support a particular candidate, then nothing prevents him from doing so." True — and irrelevant.

    "Even if a corporation simply does not take sides in an election, its shareholder are perfectly free to do so, once they decide that, on balance, a candidate is worth supporting." True — and irrelevant.

    "Prohibiting corporations from supporting candidates does absolutely nothing except prohibit corporate managememt from using corporate funds for those purposes." Since corporations only act through their management, this appears to be tautological.

    "The money saved ends up in the shareholders’ pockets, and they are free to spend it." I think this is extremely improbable in the real world and it appears to arise out of the (completely undefended) notion that corporate political expenditures are somehow illegitimate and not really for corporate purposes. If a corporation has million dollar budget for political activity and planned to spend 10% on endorsements and 90% on lobbying, isn't the most likely result of a ban on endorsements that the company would simply shift that 10% over to lobbying? Few corporations that find a desired expenditure blocked will respond by increasing their dividends.

    "If they don’t want to spend it in support of the candidates the management prefers, doesn’t that mean that the corporation expenditures are unjustified – not in the shareholders’ interest?" No. Corporate managers decide for the corporation. Under all the corporate law of which I am aware (a little, not a lot), the views of shareholders are simply not relevant to the legitimacy of corporate decisions and expenditures. For obvious reasons, moreover, Bernard's apparent standard for the legitmacy of corporate decisions is impractical. How would the corporation know if all, or even a majority of its shareholders want to sponsor a NAACP or gay pride or Memorial Day event? Does the corporation have to poll its entire (and constantly changing) set of shareholders to make a decision? No, it does not — that's one of the nifty things about corporations.

  35. "How would the corporation know if all, or even a majority of its shareholders want to sponsor a NAACP or gay pride or Memorial Day event? Does the corporation have to poll its entire (and constantly changing) set of shareholders to make a decision? No, it does not — that’s one of the nifty things about corporations."

    I once knew somebody who claimed you could make fairly reliable stock picks based on looking to see if a corporation was spending money on that sort of thing. He claimed that it was just a form of displaced compensation for the employees making those spending decisions, a marker of a company that was being looted from within. (Facially plausible: It's got to be easier to get away with giving the company's money to your favorite charity, than spending it to build yourself a villa in Spain.) I merely observed that, if he were so confident of this, he should have been trying to make his money picking stocks, rather than writing a book about how to do it…

  36. Brennan,

    “Even if a corporation simply does not take sides in an election, its shareholder are perfectly free to do so, once they decide that, on balance, a candidate is worth supporting.” True — and irrelevant.

    Absolutely relevant. Read your next point:

    “Prohibiting corporations from supporting candidates does absolutely nothing except prohibit corporate managememt from using corporate funds for those purposes.” Since corporations only act through their management, this appears to be tautological.

    There is absolutely no reason why the shareholders need management to advance their personal political views. They can do it themselves. It's not like building a factory or designing a product. It can be done perfectly well on an individual level. The choices are clear, and the needed actions – write a check, volunteer for the campaign – are easy.

    the views of shareholders are simply not relevant to the legitimacy of corporate decisions and expenditures.

    Which is exactly why the scope of those decisions and expenditures ought to be restricted to ordinary business activities.

    How would the corporation know if all, or even a majority of its shareholders want to sponsor a NAACP or gay pride or Memorial Day event? Does the corporation have to poll its entire (and constantly changing) set of shareholders to make a decision? No, it does not — that’s one of the nifty things about corporations.

    In fact, given a major election, it's a pretty good bet that a significant number of shareholders are on each side. I'd be willing to bet that in 90% or more of American public corporations at least one third of the shareholders supported McCain, and at least one-third supported Obama. If you include indirect shareholders – those who own through mutual funds or pension plans – the numbers would be higher. So you ar esaying that it's just fine for the management to spend the money of, say, a third of its shareholders in support of a candidate they oppose. Sorry. I disagree.

  37. "So you ar esaying that it’s just fine for the management to spend the money of, say, a third of its shareholders in support of a candidate they oppose. Sorry. I disagree."

    More than that, I am saying that it's just fine for management to spend corporate money is support of candidate even if a MAJORITY of the shareholders don't like the candidate. You persist in framing the issue as whether corporations correctly represent the political views of their shareholders (and even of all of the shareholders). But corporations simply are not required to reflect the opinions and preferences of their shareholders AT ALL.

    Bernard, you seem to have some sort of aesthetic distaste for corporate political expenditures, but I don't see any argument showing that corporate political expenditures are illegitimate in any non-aesthetic sense. De gustibus non disputandum, but I had earlier thought that you wanted to make an argument about the legitimacy of corporate political speech based on the actual nature of corporations or the content of the Constitution. Apparently not.

  38. Brennan,

    I fear we are talking past each other.

    You persist in framing the issue as whether corporations correctly represent the political views of their shareholders (and even of all of the shareholders).

    No. I frame it as to whether they ought to be taking positions in support of specific candidates at all. I have no objection to corporations taking political positions on specific issues – taxes, regulation of their industry, etc. I do not think they should support candidates. And I don't know how to be any clearer than I have been as to the reason.

    But corporations simply are not required to reflect the opinions and preferences of their shareholders AT ALL.

    No. But they are required to act in the interests of their shareholders. Where there is substantial and obvious conflict among shareholders' interests management has no business taking sides. Political interests, especially in an election, encompass vastly more than financial interests.

    That's it.

  39. Yes, we are talking past each other.

    But, none the less, I must note that I believe you are misstating facts about the obligations of corporations to their shareholders. It is simply untrue that "[Corporations] are required to act in the interests of their shareholders" when the interests you are talking about go beyond financial interests in profits (and even that requirement is far more nuanced than many people imagine).

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