Town of Lincoln, MAWarrant Article 39

Town Meeting March 24, 2012

Citizens United Presentation by Peter Pease

I love our town for its long history of thinking deeply about issues of national and global importance, and occasionally, as today, putting significant issues before the town for a vote. This article proposes that Lincoln join in a nationwide effort to amend the US Constitution, to show our support for Rep. Jim McGovern’s proposal filed in the House, and urge the Commonwealth to pass the bills filed by Rep. Cory Atkins and Sen. Jamie Eldridge. The language in the salmon sheets is the same as Rep. McGovern’s.  Many thanks to Joanna Hopkins for her tireless work on this issue and preparation of the Warrant Article we will vote on today. We are indebted to Jeff Clements of Concord and his organization Free Speech for People. They have been working tirelessly to educate us all on this topic, and leading the effort to amend the Constitution.

This is necessary because the Supreme Court has recently championed the right of corporations to enjoy the protection of the rights in the U.S. Constitution that belong “to the people.”  The Supreme Court held in Citizens United v. Federal Election Commission that the FEC may not enforce the law against corporations running ads to influence an election during certain time periods before primary and general elections.  (slide) ( see PowerPoint posted on site)

You’ll probably remember the campaign by persons other than Barack Obama against Hillary Clinton in 2008.  The FEC prohibited “Citizens United” from televising its production Hillary: The Movie, because the plan was to televise it during the last 30 days before the primary. Any other time was fine, allowed by the law. The rule had been enacted into law in a bipartisan effort led by Senators McCain and Feingold. Remember bipartisanship? But the Supreme Court slapped down this minor rule – no corporate electioneering in the last 30 days before a primary, or 60 days before a general election. The 5-4 decision overruled two very recent Supreme Court decisions upholding McCain/Feingold, one of which was joined in by none other than Chief Justice Rehnquist.

The Supremes based the ruling on their view that corporations have a Constitutional right of freedom of speech.  McCain/Feingold is invalid on its face, even though Citizens United expressly disclaimed this argument, and no one can restrict corporate political speech. Wow.  The floodgates are open, and money has been blasting into the political process. Are the corporations multinationals? This Supreme Court doesn’t care. On the national and the state level, corporations are now free to spend whatever they want, however they want, to influence elections of our national and local leaders. 

This includes judges in most states. I am sure that any judge, like for example the West Virginia Supreme Court Justice who received massive campaign contributions from coal mining company Massey Energy’s President Blankenship, I’m sure that he disclosed the conflict of interest and recused himself from any case involving Massey, didn’t he? (He didn't) Why should we, the people, not give corporations the constitutional rights granted to people? 

A corporation is an artificial entity that is allowed to exist by the permission of the government. It allows people to act without being fully accountable for the acts of the corporation. The corporation can avoid liability for the corporation’s wrongdoing for any amounts greater than the assets in the corporation. So can the company’s officers, directors and shareholders.  There are many good reasons to allow corporations to be formed and do business. They have gathered the capital and talent necessary to create wonderful products, industries, jobs, and our generally vibrant and productive economy. But they are not “people.”

You can’t put a corporation in jail. What about “3 strikes and you’re out?” If the many states that have enacted “3 strikes and you’re out” laws could apply them to corporations, most of the Wall Street financial firms would be rotting in the clink. BP would have been locked away long before the Horizon disaster.  Instead, corporations can commit the same crimes over and over, and get slapped on the wrist by the authorities. Typically the settlements allow the corporation to make no statement about whether the bad acts occurred, to pay a fine, and sign a statement saying they’ll never do it again. 

The fine, which sometimes includes compensation to the injured parties, is generally a small fraction of the injury suffered, and an even smaller fraction of the amount gained or the expense avoided by the corporation. And why do some corporations keep doing bad things, breaking the law? Because, to many, “greed is good.” The primary duty of the corporation is to itself, to its financial success, to make as much money as it can. 

It is not too hard to calculate the benefit of a particular action, the risk of getting caught if it is illegal, and the cost of settling the case, if you get caught, and cannot delay, deny and successfully avoid the plaintiff. If you add it all up, it often pays, and pays very well, to do the wrong thing. Some even go so far as to say that it is the duty of the corporation to maximize its profit, through any means that do not risk the continued existence of the corporation. 

Even when we are not talking about wrong-doing, it is clear that there is an enormous amount of corporate money that is being used to influence, and often create government policy, and to secure direct infusions of your tax dollars.   (slide) Over the 13 year period of 1998-2010, the publicly disclosed top 20 spenders in Washington spent nearly $4B. The top 3 contributors to the Chamber of Commerce are unknown. I just can’t think of any good reason why we should know what companies they are, can you? 

Hmmm . . .   I see 820 million reasons why its so hard to make any changes in our amazingly expensive and amazingly inefficient health care system. If you add up all the totals spent lobbying by industry, the numbers are absolutely terrifying.    (slide) We’re talking TRILLIONS of dollars now – nearly 30 trillion dollars over the same 13 year time period.  There at the bottom you can see the plaintiffs’ lawyers – nearly $350 million. Some of that was my money, trying to preserve shareholders’ rights. Now who do you think got the better part of that argument?

Now why would these corporations spend so much of their hard-earned profits lobbying in Washington?   (slide) The financial guys got Glass/Steagall repealed, which allowed them to eliminate the wall between banking and investment bank risk-taking for their own benefit.  Glass/Steagall was enacted following the Great Depression, and protected us from the same result, until a few years ago. And guess what, we still haven’t restored that sensible and necessary rule. 

The financial guys also kept the Commodity Future Trading Commission from regulating derivatives. So we let the big boys play – they know best. There has been an amazingly successful effort to stop the EPA from making and enforcing the law. Mercury and the coal industry are prime examples. There is a continuing and shocking procession of elected and appointed officials who leave the government and the areas they regulated to take positions in the industries they regulated. 

Billy Tauzin is one of my favorites. After creating Medicare “Part D” prescription drug coverage, and putting rules in place that make it illegal for the government to negotiate drug prices, he takes a job, a few months later, as President of PhRMA, the Pharmaceutical Research and Manufacturers of America. Salary – more than $2M. There is an ancient Greek saying – “the fish rots from the head.” The culture of a corporation is created by the CEO and senior management. If they do not make it very clear that employees should do the right thing, even when it will diminish profits, there is no chance that this will happen. 

Typically, employees who “blow the whistle” like Sherron Watkins at Enron, will be blackballed in the industry and find themselves unemployable. There are countless tales that can be told, from the customer “muppets” of Goldman Sachs, eyeballs waiting to be gouged, to the falsification of mortgage and foreclosure documents, to accounting tricks and lies through special purpose entities – it goes on forever. Today’s executives are paid hundreds of times the salaries of their base rate employees. It was about 475 times a few years ago, and is now about 300. Compare that with a multiplier of about 40 in the 1960’s. The leaders have never had more incentive to maximize profits and take home fabulous wealth.

Officers and directors sit on each others’ boards, and approve each others’ salaries. Shareholders have minimal, if any, control over any actions taken by the corporation. It is very common for executives who are forced to resign in disgrace to leave with multi-million dollar compensation packages. So, corporations are not people. They do not think like people, they cannot be punished like people, and they are allowed by law to amass tremendous wealth.  It is our task, we, the people, to set the rules that govern the corporations, to do our best to make sure they behave responsibly, abide by the law, and do not damage our citizens, our country and our precious Earth.    

If fair and just laws and regulations are enforced, then the leaders of our corporations will have much greater ability to create and maintain cultures of respect for the law and good business practices, knowing that those corporations that take illegal shortcuts will suffer consequences.  If corporations are allowed the rights of the people under our Constitution, they can, will, and have already avoided and evaded our proper efforts to govern their conduct. Let me provide a few examples.   (slide)

In First National Bank of Boston v. Bellotti, corporations were able to prevent Massachusetts from enforcing a law banning corporate spending to influence the outcome of a citizen’s referendum. The vote was on whether the Commonwealth should have a graduated income tax. Corporations hate that, I guess, or at least their CEOs. In the Central Hudson Gas case, the Supremes decided that NY could not stop the utilities from promoting the consumption of energy.

In Lorillard, the Supremes decided that MA could not enforce rules preventing cigarette companies from advertising Joe Camel near schools to get the attention of “replacement smokers.” That’s the language the tobacco guys were using in-house. They knew they had to get kids going with cigarettes early, because if you get too old before you start, there’s a much better chance that you’ll be able to quit, and avoid being a lifetime addict, before you die of lung cancer. In Amestoy, the 2d Circuit held that the State of Vermont could not require sellers of milk to disclose whether their milk was from cows that had been treated with recombinant DNA bovine growth hormone. A simple yes or no. Can’t do it. The corporations have a Constitutional RIGHT NOT TO SPEAK.

Here’s another good one. Just last Fall the D.C Circuit decided that corporations cannot be required to include information about directors nominated by the shareholders, because it infringes on the corporations’ freedom of speech rights. So, the rule promulgated by the SEC was held to be unconstitutional. I can’t take any more of this, so I’ll stop talking. Please join me in voting for this resolution, to support the efforts underway in Massachusetts, in Washington and throughout the nation to amend the Constitution and restore balance to our society.