This week I introduced the Shareholders Protection Act, H.R. 4573, which would require a shareholder vote before any corporate general treasury funds can be spent on political activity. The recent Supreme Court ruling in Citizens United v. Federal Election Commission will basically open the floodgates of corporate spending in federal campaigns. Arguing that a corporation should be treated as an individual for the purposes of free speech, the court ruled in a 5-4 decision to allow corporations to freely spend their money on politics. I find the logic of the majority extremely flawed and am very disappointed in this ruling. We should be moving in the exact opposite direction, limiting outside influence, not enhancing corporate voices in our elections. Those of you who are familiar with me know I have always been a strong defender of free speech, and I always will be. This ruling ignores the free speech rights of the shareholders themselves. Shouldn’t they have a say in how these funds are spent? It’s their money after all. My legislation has the support of U.S. PIRG and Public Citizen, and I am optimistic that many of my colleagues will sign on as well. We know that we cannot reverse the full impact of this ruling legislatively, but Congress can certainly take steps to ensure that the voice of the voters is not overshadowed by corporate influence. I am also working with my colleagues to develop a more comprehensive approach to this ruling and I will keep you informed on our progress.
You can read the full text of my bill on THOMAS at http://thomas.loc.gov/cgi-bin/…
to urge their own Members of Congress to sign onto this.
p>And Mike, let us know if your colleagues in the Mass delegation need any encouragement.
Could the Sec. 14A(d) exception swallow the rule by allowing corporations to create “Media subsidiaries” or purchase a small ongoing media operation to make their political speech?
Do loans count as “expenditures,” i.e. could a corporation just loan the money to a political advertising group, then when the entity disbands after the election the loan is forgiven but no “expenditure” has occurred?
Sec. 14A(e)(4)(ii) seems both overly broad and tough to enforce. It applies to all non-profit entities and trade associations. How does a corporation know if a non-profit or trade association is “reasonably expected” to engage in political speech? What if a corporation contributes $10,000 worth of land to a conservation entity as a nature preserve and that conservation entity later runs ads against a candidate. Would that be reasonably expected?
Any group like you suggest should have to say exactly where its funding is coming from and who is making the expenditure decisions.
when was the last time a shareholder election went against what the BoD wanted?
p>Presumably, corporations would buy ads supporting candidates that would improve business, and against candidates that would harm it. Why would shareholders be against that strategy?
is if the big institutional shareholders like pension funds started routinely voting “no,” not because they didn’t like the candidates, but because they didn’t want corporations involved in this kind of activity at all.
p>That said, you’re right that movements to increase shareholder involvement have not been wildly successful up ’til now.
one person one vote? In this way wealthy shareholders won’t get more influence than smaller shareholders. That might change the way these boards operate.
I don’t see how that would be consistent with the way corporations are organized. And I don’t think it’s necessary to junk the entire corporate form over this one decision.
Even if the vote weren’t actually required to pass, just the requirement that a vote be held would have significant effect, IMO. Even if every vote passes, it’ll still make management think twice before bringing up such a proposal, get the board involved in such decisions, and shine light on the ones they do let through.
Will unions also have to have membership ratification to spend union funds on political activity?
only applies to publicly traded entities. Privately owned corporations, nonprofit entities, and unions are not included.
p>I guess this legislation assumes (as it must) that someone has free speech protection after Citizens United, but says that in the case of publicly traded entities it’s the shareholder’s speech that must be protected. There is certainly validity to that position. But, as you point out, there is also validity to protecting the union members’ free speech in the union context. Perhaps Rep. Capuano will also propose companion legislation that applies to unions.
See Communication Workers v. Beck (1988) and Davenport v. Washington Education Association (2007), among other cases.
this is PP’s rejoinder to every proposal regarding Citizens United. Entertaining, but relatively non-constructive.
… if union leaders have to hold a secret vote of their membership for every dollar they wish to spend on political organizing and advocacy. And I get to audit those votes.
However well-intentioned this bill is, the first key problem is that it would only apply public corporations, leaving plenty of well-funded privately-held businesses to spend as they wish. Second, I suspect one could make an argument that corporate governance, as opposed to the interstate purchase and sale of securities, is really a state law issue and not ripe for federal intervention.
p>If you really wanted to influence businesses in this way, you need to change state corporation (and LLC and partnership) laws to provide for this sort of regulation. And the places to start would be Delaware, Nevada and New York, as I suspect most “big” businesses are incorporated in those three jurisdictions. Change the laws in those states, as is their right (unless Citizens United prevents states from taking away statutorily given “rights”!), and you can impact campaign spending across the country.
p>So there’s a job for Joe Biden, Chuck Schumer and Harry Reid, if I ever saw one!
p>BTW, it wouldn’t hurt to introduce such a bill here in Massachusetts either.
why Congress couldn’t enact this bill. There’s little doubt that almost all corporations do business in interstate commerce, which is enough for the Commerce Clause to give Congress the authority it needs. If a particular corporation wants to make the argument that it only operates within the state in which it’s incorporated and has no impact on interstate commerce, and therefore should be exempt, good luck to it.
In terms of the “corporate personhood” thing, I wonder if it would be helpful to bring a new test case to the Supreme Court, by perhaps trying to register BMG PAC to vote in the upcoming Gubernatorial election. If corporations are legal persons with a Constitutionally protected right to free speech, why shouldn’t corporations be able to vote? I know this isn’t the precise issue here, but I’ve often thought the Supreme Court needs to revisit and clarify whether it really believed corporations and unions are legal “persons”.
I think BMG Pac and Lori Ehrlich should just go ahead and get married already! What are they waiting for? Sheesh…
p>But, what would constitute consent to marry? A majority of shareholders? Or would the entire corporation have to consent? Would shareholders be able to marry someone else, or what if they were shareholders in two corporations, and wound up somehow married to themselves? Would that be incest?
Forgive my ignorance as I haven’t read the whole opinion, but it sounds like the question is does an entity with a bank account can spend its money. Obviously plenty of bank accounts do not belong to individuals. To say that because a corporation can spend money also means they can vote seems like quite the leap of logic.
BMG PAC is not incorporated. It’s registered with OCPF, so it’s a political committee, but it’s not a corporation.
Left/right politics is the theatrical division of not only the military-industrial complex but now the globalist organizations which run the world. We now have trillion dollar wasteful industries marketing crap to Charolette Iserbyte dumbed down morons who point to Austrailia and say we should invade Iran next.
p>The answer is to let corporations participate more fully in that fallacy? No the real value here is to just waste money allowing US corporations to fail faster.
Perhaps a law demanding a separate, notarized, filed report with the SEC for every individual political expenditure. Every ad buy requires a ten-page report on how it aligns with corporation interests, promotes the wellbeing of the stockholder, and is integrated into the strategic process outlined in the public filing.