Corporations Are Not “We the People”

The Citizens United ruling contradicts the Founders, decades of Supreme Court precedent and the will of the American people.

There is nothing in the text of the Constitution that explicitly recognizes corporations or grants them individual rights. Nor do the records of the Constitutional Convention provide any hint that the Founders ever thought about whether the Constitution was meant to extend its protections to corporations. 

Moreover, everyone knew when the Fourteenth Amendment was ratified in 1868 that its guarantees were designed primarily to secure the rights of the newly freed slaves, not to protect the rights of corporations. Indeed, at the time no one would have imagined that that would someday be the case. 

Although the Supreme Court in the late nineteenth and early twentieth centuries began recognizing the property rights of corporations in cases like Lochner v. New York, it emphatically rejected arguments that corporations had other rights protected by the Constitution. 

As the Court declared in 1907, referring to corporations, “the fundamental rights guaranteed by the Fourteenth Amendment are the rights of natural, not artificial, persons.” 

Indeed, in a famous decision in 1916, the Michigan Supreme Court, in People v. Gansley, endorsing the universal view at the time, rejected outright the claim that corporations had the same free speech right as individuals, and upheld the constitutionality of Michigan’s campaign finance law that banned corporate campaign spending. 

Twenty years later, in Grosjean v. American Press Company, Louisiana Governor Huey Long of newspapers that criticized his actions, held for the first time that the First Amendment’s protection of freedom of the press applied even to media corporations like the New York Times and the Washington Post. 

Indeed, after the decision in Grosjean, media corporations came to be treated as valuable contributors to American democracy.

Nonetheless, over the next sixty-five years the Supreme Court continued to reject the proposition that non-media corporations had the same free speech rights as individuals.

In Austin v. Michigan Chamber of Commerce, for example, a six-member majority, including even Chief Justice William Rehnquist, in 1990, upheld the constitutionality of a state law that prohibited corporations from attempting to influence elections by using their general treasury funds.

The Court explained that in light of the “unique legal and economic characteristics” of the corporate entity-including such special advantages as limited liability, perpetual life, and favorable treatment in the accumulation and distribution of assets, corporations must have more limited rights to spend money on electoral politics than ordinary people.

Thirteen years later, in 2003, the Court, in McConnell v. Federal Election Commission, upheld the constitutionality of the Bipartisan McCain-Feingold Campaign Reform Act of 2002, which had bipartisan support in Congress and was signed into law by President George W. Bush.

The majority opinion was written jointly by Justices John Paul Stevens and Sandra Day O’Connor, both of whom had been appointed to the Court by Republican presidents – Gerald Ford and Ronald Reagan, respectively.

In their opinion for the Court, Justices Stevens and O’Connor pointed to the long history of special restrictions on non-media corporations in campaign finance. Invoking the Court’s decision in Austin, the majority in McConnell explained that “we have repeatedly sustained legislation aimed at preventing the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no connection to the public’s support for the corporation’s political ideas.” 

In short, the Court embraced the view that the powerful impact of corporate spending in the electoral process could seriously undermine and distort the essential precepts of a well functioning democracy. 

Three years later, though, Justice Sandra Day O’Connor stepped down from the Court and she was replaced by Samuel Alito. With that change in the makeup of the Court, pretty much everyone suspected that, with its new five-member conservative majority—including Roberts, Scalia, Kennedy, Thomas and Alito—the Court was likely to overrule both Austin and McConnell, as well as a century of prior Supreme Court precedents, and hold that corporations, like individual citizens, have an equal right to participate in our democracy and therefore a First Amendment right to spend unlimited corporate funds in order to shape the outcomes of our political process. 

And so it did. In Citizens United, decided in 2010, only seven years after the Court’s decision in McConnell, the Court, in a five-to-four decision, overturned a century of Supreme Court precedents and held that corporations have a First Amendment right to spend limitless general treasury funds to finance independent expenditures in favor of, or against, candidates for public office. 

Moreover, corporations also gained the right in Citizens United to contribute limitless amounts of money to “Super PACs” — a special type of political action committee that, unlike ordinary PACs, is able to accept unlimited contributions from corporations, as long as their independent expenditures are not coordinated with any specific federal candidate. 

As a result of Citizens United, corporations were able to spend hundreds of millions of dollars in 2012 to shape both national and state elections. And, of course, those corporate expenditures have increased exponentially over the past decade.

As Justice John Paul Stevens observed in his dissenting opinion in Citizens United, the justices in the majority, unlike justices in the past, had simply ignored both the reality and the appearance of corruption in our political process.

Indeed, Stevens observe that the Court had long recognized that to deny Congress the power to safeguard our nation against “the improper use of money to influence the results of our elections” is to deny to the nation a vital and essential ability to protect and preserve our democracy.

Citing the Court’s decision in Austin, Stevens maintained that the majority’s decision failed to recognize the dangers of the corporate form and opened the door to the potentially distorting influence of a dominant funding source. Corporations, he wrote, are not “We the People” for whom our Constitution was established. 

As Stevens pointed out, although corporations “make enormous contributions to our society, they are not, and were never intended to be, actual members of it.” Indeed, he noted, “they cannot run for office and they cannot vote.” 

“Our lawmakers,” he observed, “have a compelling constitutional basis, if not also a democratic duty, to take measures designed to guard against the potentially deleterious effects of corporate spending in local and national races.” 

At the bottom, Stevens concluded, “the Court’s opinion is a rejection of the common sense of the American people, who have consistently recognized the compelling need to prevent corporations from undermining self-government, and who have fought against the potentially corrupting potential of corporate electioneering at least since the days of Theodore Roosevelt.” 

Conceding that American democracy is “imperfect,” Stevens maintained that few outside the five justices on this Court ”would have thought its flaws included a dearth of corporate money in politics.” 

The Framers, he said, would be shocked and horrified if they could step into the present to see how these justices had distorted the original meaning and understanding of our Constitution. 

It was, indeed, stunning that these five justices, who purported to believe in “originalism,” would have so dramatically disregarded all of the principles of originalism in order to reach the outcome they embraced in Citizens United. 

It is noteworthy, by the way, that the Citizens United decision triggered a major public backlash. Polls showed that eight in ten Americans were opposed to the Court’s decision; that number remains more or less the same to this day. In short, the vast majority of Americans believe, as they have always believed, that corporations should not have the right and power to dominate our democratic process. 

But given the makeup of the current Supreme Court, it seems pretty clear that any law designed to return our democracy to a sense of, well, democracy, will never be possible as long as the current justices remain in place.

This speech was originally given at the University of Chicago Center on Law and Finance.