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Citizens United: Less Important, More Important, and (Even) Weirder Than You Think

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The Supreme Court's decision in Citizens United -- that's the decision that did away with federal restrictions on corporate purchases of political advertisements with general revenue -- is both less significant, more significant, and weirder than you think, assuming that "you" here refers to the majority of commentators here and elsewhere who have sounded off over the past week. Here's why.

Less Important Than You Think.

Here are two propositions, only one of which can be true:

1. Campaign finance regulations were paper-thin, flimsy, ineffective barriers that did nearly nothing to keep corporate money out of elections, a fact amply demonstrated by the last two weeks of the Massachusetts senatorial campaign of Scott Brown.

2. The Citizens United decision opened the door to an unprecedented corporate takeover of our democracy.

Let me say this again: only one of these propositions can be true at a time. You have to choose one. The obvious answer is the first. The regime of rules in place before this decision did nothing to keep corporate money out of elections. Corporations were already perfectly free to use their general revenues to pay for "issue ads" that only a four-year old would not recognize as campaign ads. The same corporations could also funnel those funds through 527s or form a corporate PAC, or contribute to trade associations that would then turn around and use those contributions to purchase ads. And so on. The only new thing that corporations can do with their general funds is purchase ads that identify candidates by name. Which is just not that big a change.

Furthermore, there are lots of reasons why corporations large and small are likely to be very reluctant to get into the political ad-buying business, especially when those ads target particular candidates. Here are only a few:

- consumer backlash: customers might not like it if corporations are identified with candidates of whom they disapprove

- shareholder backlash: shareholders might not think that buying political ads is what they had in mind when they invested in the corporation

- voter backlash (here's a good campaign ad: "my opponent is supported by Goldman Sachs - they have paid for dozens of ads on his behalf")

- candidate backlash (what if the guy you trashed wins? uh-oh ... before you go putting a lot of corporate money to work for a candidate, you had better be damned sure he is going to win. That's why in real life, corporate interests tend to contribute to both parties)

- fear of shakedown - We talk a lot about the fear of donors owning candidates, but if you talk to someone on the donor side it's all about the shakedowns from the candidates and the office-holders, the old "pay to play" scam. A corporation that gets into the business of buying political ads once had better be prepared to hear back from those people again and again and again ...

- the Internet and the diffusion of communications media: it is not actually clear to what extent dominating "the airwaves" works, or will work in 5, 10, or 20 years

In other words, the idea that we are about to see a dramatic change in the way federal election campaigns are run is almost certainly nonsense, for the simple reason that very little has actually changed. This is not just speculation; there is a ton of data on this from the many natural experiments conducted by states with different levels of campaign finance regulation. The hysteria on this point has been shameful, from Obama on down.

More Important Than You Think

A case does not have to do anything terribly substantial to provide an important impetus for politics. From the point of view of how campaigning - and democracy - functions in practical terms, Citizens United is the progressives' answer to Kelo v. New London. You remember that case: that was the one where conservative populists were up in arms (very nearly literally) over the Court's decision to decline to prevent a city from exercising its power of eminent domain. Okay, that one was just strange: all this outrage over the fact that the Supreme Court didn't interfere with local government? Nonetheless, Kelo and the reaction to it, in retrospect, is a pretty good marker for the beginning of the Tea Party movement of populist small-d democrats suddenly (and belatedly) afraid that their property was at the mercy of a rapacious government without respect to political party... even though nothing had actually changed.

The progressive outrage over Citizens United is almost as strange given the fairly obvious fact that the change in the rules is a minimal diminution in what was already a paltry restriction of corporate campaigning. Could it be equally important? Like Kelo, Citizens United has become the focal point of a whole new discussion. Some people who are raging about the ruling are actually (whether they know it or not) raging about the rules that existed before the ruling - that is, the Court's action has called people's attention to the ability of corporations to influence elections, and thus revived the discussion of campaign finance reform. Which might be a Very Good Thing! The proposals for a law to require shareholder approval for corporate expenditures could actually turn out to be a much more stringent restriction on corporate purchases of political advertising than any direct ban, although the rules have to be written carefully: an overall majority of shareholders' votes should be required for such expenditures, not just a majority of votes cast, and where shares are held by mutual funds, pension funds, or other pooling organizations the individual investors in those pools should be asked for their approval.

And that's not all. This is potentially a rare bipartisan moment of outrage, although those of us on the progressive side of things might not recognize that fact. The inadvertent combination of Right populist and Left populist reactions against Citizens United could give a real boost to banking reform legislation: do you want to be the congressional candidate who stands up in favor of the Court's decision? Obama and his team have a real opportunity here, which probably accounts for his willingness to deploy rhetoric that I presume he knows is nonsensical in his description of the effects of the Court's actions.

There's more. The popular conception of the Court may have changed here. For a long time, the American people have come to view the Court as the guardian or expansive rights claims (whether this was a cause for celebration or denigration), a perception that grew out of the unusual circumstances of the Warren and Burger Courts. Historically, the Supreme Court has always been a pro-business, pro-capital, pro-establishment institution. Citizens United may have gotten even people who have been very slow to pay attention to what courts do when they are not talking about abortion to recognize the fact that with its current majority the Court has returned to that historically "normal" function.

And (Even) Weirder Than You Think

Many commentators are taking the Court to task by saying that "speech ≠ money" and "corporations ≠ persons." The thing is, the premise that Citizens United really rests upon is weirder than either of those propositions. The real premise of Citizens United is that money ≠ persons.

Here's why. No one really thinks that a corporation is the equivalent of a human individual. What the justices in the majority are essentially saying is that a corporation is the equivalent of an association, and after all we have long recognized the importance of allowing people to form associations in order to be heard.

But a corporation is not an association of people, it is an association of capital - of money, in other words. It is ludicrous to suggest that shareholders are being silenced if corporations cannot purchase political ads; shareholders are only being told that they cannot use that particular money to purchase political ads. And that money has been pooled together with other money. To prevent an association from expressing its members views is to tell those members - people - that they cannot express themselves as a group. But investors do not "join" a corporation, only their money does. So the Court is essentially telling us that the offense to the First Amendment is the silencing of the voice of money that is contained in corporate investments. The weirdest premise of the Citizens United decision is that money = people.

There are other, nearly equally weird elements of the argument. Consider the enormous benefits that corporations get from the government: they are immortal, their owners are shielded from both tort and debt liability, they pay lower taxes than other businesses or individuals, they can issue shares in order to raise capital. None of those are either universal or natural functions, they are gifts from the government. We the people, through our government, give those gifts for a very good reason: corporate capitalism enables private capital to perform large-scale projects that in earlier historical periods were only available to governments, (think railroads), and overall the creation of the corporate capitalist political economy has been the greatest wealth-producing engine in history.

In other words, I am not for a moment suggesting that just because corporations are not natural objects, they ought not to exist. But! In any other context, when the government provides a benefit it is understood to be entitled to impose restrictions on the activities of the recipients. Tax-exempt churches are also not supposed to engage in political advertising. Welfare recipients are prohibited from accumulating capital or foregoing employment opportunities, and often are required to give up considerable privacy rights as a condition of their receipt of benefits. Let's take a couple of central free speech example: broadcasters who receive government licenses can be prohibited from broadcasting indecent materials, and doctors who work at clinics that receive government funds can be prohibited from talking about abortion with their patients. So how is it that the Supreme Court finds that corporations, uniquely, cannot be limited in their exercise of rights they would otherwise have as a condition of their receipt of these great government benefits? Even if we were to find sensible the idea that corporations are associations of persons rather than conglomerations of capital, once those associations start raking in government benefits, why are they not subject to restrictions on their activities just like every other association that receives government benefits?

Wait, it gets even weirder. It turns out that in other contests, it isn't just any old association that has First Amendment rights. First Amendment rights only attach to associations formed for the purpose of expression. (I'm not littering this post with citations to cases, but for a primer on First Amendment law generally, with discussions of these and many other topics, may I recommend Speech, Conduct, and the First Amendment.) At this point, the Court's unique solicitude for corporations is not just inexplicable, it threatens to call into question the entire system of First Amendment jurisprudence as it applies to associations and government support.

Ultimately, then, the things to realize are these: 1) Citizens United, despite all the rhetoric to the contrary, does not really represent a new assault on our democracy by corporate interests, it just reflects the extent to which those corporate interests already had as much access to influencing the system as they cared to take advantage of; 2) realizing that last fact comes as something of a shock to many people, which may have significant political consequences as soon as Obama's State of the Union speech tomorrow; and 3) from a purely legal point of view, even leaving aside things like stare decisis and the Court's decision to address the free speech issues in the first place, this case is even weirder than most commentators seem to realize.

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