Guest Commentary: Campaign Finance, Free Speech, and the Scotty Rule
Jan 25th, 2010 • Posted in: Commentaryby Ethics Newsline editor Carl Hausman
The U.S. Supreme Court last week overturned a campaign-finance restriction that dates from the Roosevelt era — Teddy, not Franklin — and opened the door to virtually unlimited spending by corporations in federal campaigns. It’s expected that the ruling, which insists that corporations are like people and have protected First Amendment rights to political speech, will be interpreted to apply to unions and other organizations as well.
While there are many aspects of the ruling, it raises two interesting ethical questions. First, while most of us agree that people should enjoy a high level of freedom of speech, who or what constitutes the “people” who are granted that right? Second, how much should the government involve itself in the mechanisms of granting free speech? Does government have an obligation to mute the more powerful speaker in order to ensure that the little guy can be heard?
A note about the first question: The term “corporation” comes from the Latin word for body. A corporation is a body of people granted some of the same rights and responsibilities as its flesh-and-blood components. A corporation can take out loans, can sue and be sued, can be tried for crimes, can earn an income, and can pay tax.
But corporations enjoy some super-human capabilities as well. They can live forever, they can confer limitations in liability to their members, and they enjoy certain financial and tax privileges not available to mere mortals.
Should corporations enjoy the same rights as their flesh-and-blood components when it comes to donating to political campaigns? Teddy Roosevelt didn’t think so. Alarmed by corporate abuse and the monopolization of capital and power, he convinced Congress in 1907 to bar corporations and national banks from contributing to candidates for federal office. Similar strictures were extended to labor unions after World War II, and the Bipartisan Campaign Reform Act of 2002 (known as McCain-Feingold) added new restrictions on the use of so-called soft money — funds controlled by political parties, not individual candidates. McCain-Feingold also limited the airing of issue advocacy ads during certain time periods before primaries and general elections.
Last week’s Supreme Court decision swept away many of those provisions, although prohibitions against direct contributions to candidates or parties will remain in force. Now, corporations — and presumably unions and other interest groups — will be able to funnel unlimited amounts of money into advertising that backs any candidate or issue.
The sharply divided opinions in the court’s 5-4 ruling speak directly to the ethical question of whether free-expression rights granted to an individual apply to a corporation, and if so, whether the judiciary should put itself in the business of attempting to balance the power of the individual versus the corporation.
“The government may not suppress political speech on the basis of the speaker’s corporate identity,” justice Anthony Kennedy wrote in the majority’s opinion.
But a 90-page dissent written by justice John Paul Stevens maintains that rights granted to the individual do not necessarily apply to the corporate body. Stevens predicts the ruling will “cripple the ability of ordinary citizens, Congress and the states to adopt even limited measures to protect against corporate domination of the electoral process.”
Which course serves the public good? I’m going to invoke an easy answer and declare that there are no easy answers.
On one hand, it’s obvious that money talks, and opening the floodgates of corporate money carries the risk of distorting the ideal of democracy. What’s good for corporate America is not necessarily good for the body public. Also of concern is the fact that multinational corporations inevitably will have a far greater say in U.S. politics, effectively diluting the citizenry’s control of its government.
On the other hand, corporations are comprised of taxpaying stockholders who “speak” with their investments and have a say in the governance of the entity — and thus may argue that keeping corporations out of the political process is de facto censorship.
Chief justice John Roberts invoked this line of reasoning when he commented, according to the Los Angeles Times, that unless a broad free-speech ruling was granted in this case, the law would “would allow censorship not only of television and radio broadcasts, but of pamphlets, posters, the Internet and virtually any other medium that corporations and unions might find useful in expressing their views on matters of public concern.”
With some trepidation, alluded to earlier, I side with Roberts. Clearly, a civil and civilized society cannot allow entirely free expression (think copyright, harassment, and libel), but every restriction relating to expression carries a risk of diminishing commerce in the marketplace of ideas.
In fact, you can make the case that some well-intentioned restrictions on the flow of campaign money actually backfired and cut off the blood supply to the central players in politics — the candidates, who face not only sharp limits in the amounts that can be raised but also intricate requirements on where and how they can raise money. Those strictures, imposed in the 1970s, generally are thought to have increased the power of political action committees. Years later, McCain-Feingold left open a legislative door for the proliferation of so-called 527 Groups (the type of organizations that begat the infamous Swift Boat ad campaign).
The ultimate impact of both reforms has been to force candidates to expend more time and effort in the increasingly complex fundraising process and to inadvertently increase the importance of fringe players by granting more power to certain special interests who exploited the loopholes.
Maybe Milton had a point when he wrote, “We do injuriously by licensing and prohibiting [Truth's] strength. Let her and Falsehood grapple; who ever knew Truth put to the worse in a free and open encounter?”
Or perhaps Montgomery Scott, chief engineer or the Starship Enterprise, put it best in Star Trek III, when he grumbled about complex machinery in a line that the New York Times borrowed and dubbed “The Scotty Rule of Campaign Finance”: “The more they overthink the plumbing, the easier it is to stop up the drain.”
©2010 Institute for Global Ethics
Find this and previous weeks’ commentaries online as a podcast titled Ethicast™ now available on iTunes. Subscribe today!
For more information, see: Washington Post collection of essays on the decision, Jan. 24 — The Thread, a blog of the New York Times, Jan. 22.
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I am avout reader and generally concur with many Ethics Newsline commentaries. Hausman’s commentary is terribly disturbing.
-EN receives corporate funding. EN and Hausman, need to explain how they reached the conclusion independent of their self interest – more funding. There is a fundamental problem with corporate sponsored opinion and EN needs to address it.
-Hausman uses the ‘free markets of ideas’ analogy with out reflection. By using this analogy, he is already accepting a corporate and limited model of the world. Ideas, truths, ethics do not exist in any type of market mechanism. Ideas may be controlled by verying interests using corporate power. I would have expected EN to argue against these interests because of the ethical implications.
-Hausman argues that disclosure rules are burdensome and expensive. This is unethical. Full disclosure of who and how interests shape public policy is fundamental to an open society. In my opinion, the court’s decision now requires even more disclosure; especially by corporations.
-Applying the ‘Scotty Rule’ is trivializing the nature of modern society. Democratic societies are complicated and complex. That is their nature. The federal government controls over $4 trillion in annual expenditures. 537 people (including the President and VP) oversee how this money is spent and the policies for which it is used. There is no organization, let alone a star ship, of comparable scale or scope. The details are important and our particular form of government (checks and balances, three institutions, federalism, etc) results in lots of details – including elections.
-The ethical dilemma that should be the focus of EN is whether the risks to society of corporate electoral largesse is larger or smaller than the benefits of protecting corporate opinion. More pointedly, is corporate free speech worth the risk of public corruption.
Daniel Shostak
Strategic Affairs Forecasting
How can you call it censorship when no content is being censored, and no person’s speech is being censored? Every board member, shareholder, and employee of a corporation has the right to support any candidate with any words and nearly every action he or she wants. They can form a PAC together to make contributions in addition to their direct contributions. They can fundraise together, protest together, hold rallies together, set up phone banks, etc. Your argument would apply to contribution limits, too. Are you against placing limits on contributions so that officials cannot be bought or cannot insist on big doses of pay-to-play cash?
Milton’s “truth” did not contend with the power of corporate managers. Further, the charade that managers speak politically for their stockholders is naive. Why would we as a people (the flesh and blood variety) grant to the least democratic of institutions a nearly unlimited political voice, not to mention giving voice to U.S. and off-shore based multinational corporations whose interest in, much less allegiance to this society is at minimum suspect.
This is a just-plain-bad ruling. It is supposed to ensure Free Speech ? As if there hasn’t been enough diminution of the individual voter’s impact in this country, we now have the Judiciary ruling that it is OK for big corporations to force-feed us their political opinions for as long as their funds hold out. As if TV isn’t already a wasteland, especially around election time.
Why not also let the big corporations give the politicians all the money they want ? Wouldn’t that be ensuring Free Enterprise ?
I believe the Founding Fathers were interested in preserving the rights of us individuals and would be appalled at the idea of granting such power to huge, special-interest groups just because they are incorporated.
To those who believe the Supreme Court ruling allowing corporations and unions to spend freely on political speech is misguided, I say, “Your fears are ridiculous!” In the age of the internet, of dozens of think tanks cranking out “studies,” of TV channels numbering in the hundreds, of proliferating blogs, and of uncounted ways of speaking publicly, there is no danger that corporate or union money can dominate the political forum. The First Amendment is simple and clear, while laws made in the misbegotten quest to purge money from politics are complex, ineffective and unconstitutional. (Isn’t it interesting that so long as Republicans are raising more money than Democrats, money is polluting the political process, but when Obama raises record amounts and refuses matching government funds, it’s “the people” making their voices heard.) If you truly wish to remove the influence of money on politics, the answer is to first remove the influence of politics over our money. Every time government would regulate a new facet of our economic lives, corporations and their lobbyists are forced to become involved. As a business or corporation owner, how would you respond if a politician and the bureaucrats he empowers were to decide to regulate your business, while knowing nothing about what you do or how any business functions? You would reluctantly hire a lobbyist who does know your business and send him to Washington to educate the politicians and protect your interests, of course. And you might spend some of your corporation’s money, again reluctantly, to unseat the politician involved and overturn the regulatory authority. But none of that would be necessary if the government were not meddling in your business.
Corporations are just people, and they have the right to political speech, as a group, just as individuals do, whether you like it or not. This demonization of big corporations is as ridiculous as attempts to limit free speech, but that’s another argument. Three cheers for the Supreme Court that has finally found the guts to stand by simple but profound principles. We should remove any and all limits on campaign financing, with the only provision being that all spending and donations must be made public, and make violation of that provision a serious crime. That should clear up any ethical questions about money and politics.
Corporations are not people. They don’t breathe, sleep, eat, give birth, suffer, or die. They don’t have bodies. They don’t have complex needs that have to be balanced. They are like the ancient T-Rex – all they know is to devour everything in front of them for their one goal – profits. Their search for profits can’t poison them, as they don’t have bodies – but can poison people. Their search for profits can’t torture them, but sweat shop labor (much more of it coming!) can harm people.
This is truly the most corrupt decision in a long line of corrupt decisions over the last 30 years moving America towards facism – i.e. corporate control of the government and of society. The strategy has been well designed and gradually implemented. Like frogs in the pot slowly being heated, we have let it happen.
I agree with the concept of unintended consequences. The best defense against undue influence is transparency. Attempts to block influence only caused them to go underground or use loopholes, such as PACs, that coverup their influence. Only ill-informed people have been duped into thinking corporations don’t have all the influence they can afford.