I get quoted in a rather hyperbolic post by breathless WSJ reporter Brett Arends on the effect of Citizens United:
Shareholders will have no say. “Political-speech decisions can be made without input from shareholders, a role for independent directors or detailed disclosure,” law professors Lucian Bebchuk of Harvard and Robert Jackson of Columbia will report in a forthcoming paper on the issue. As Bebchuk told me: “Companies certainly are not required, and do not disclose, contributions to intermediaries that engage in political spending.”
Cornelius Hurley, director of Boston University’s Morin Center for Banking and Financial Law, said companies can bury these types of spending in the budget for marketing, community involvement, or lobbying. Also, under the rules, the bigger the company, the more it can spend and hide.
“It’s incredibly rare that corporate contributions rise to the size that would be material, and only material facts need to be disclosed,” says Stephen Bainbridge, law professor at the University of California in Los Angeles. “You’d have to have contributions on the order of 10% of assets to be deemed material.”
All of which is true, it's the rest of the piece that's over the top. For example, we're told that:
Thanks to changes in the law, company honchos can now buy an election as easily as they order office furniture. The president has tried to make an issue of this in the past 10 days, but I suspect his commentary will have little effect.
In case you missed it, recent Supreme Court rulings mean that corporations can now effectively spend freely on political campaigns, including during elections. Loopholes in the tax code, particularly pertaining to 501(c)4 nonprofits, mean they can do so secretly through anonymous front groups.
It doesn’t matter whether you are a Republican or a Democrat, whether you hate the president or like him.
Under this system, the game is over. Our democracy is dead. We just don’t know it yet.
Before we panic, however, let's consider a few facts. First, in the 2008 election cycle, the total amount spent on all political campaigns by all actors was, according to OpenSecrets.org, $5,285,680,883. By way of comparison, Proctor and Gamble alone--all by itself--spent over $3 billion to advertise soap and toilet paper in 2008. As a society, we spend much more money selling stuff to wipe our bottoms with than we do deciding who should run the most powerful country in the world. Charmin or Scott? Obama or McCain? We still get to decide.
Second, James McRitchie reports on a survey of 68 companies, which found that:
- Many smaller companies stated that because they generally do not engage in the political process, they do not see the need to implement a policy regarding independent expenditures or trade association monitoring.
- Several companies stated that they currently or will begin to inform their trade associations that no portion of their dues may be used for political expenditures. Philip Morris International included a template of the communication it sends with its dues payments stating that none of the dues may be used for election activity. ...
- 30 companies stated that they would not engage in independent expenditures, but were reluctant to monitor or impose conditions on their trade association payments or did not address the issue at all.
Not exactly evidence of massive corporate engagement.
Third, consistent with that finding is the general impression that Citizens United is more myth than fact:
... Fred Malek, a longtime Republican operative who is helping to lead fund-raising for the Republican Governors Association and is chairman of a new nonprofit advocacy group, American Action Network, said the ruling had seldom come up in his conversations with donors.
“‘I don’t find anybody who is contributing based on that ruling,’ he said. ‘People are contributing because they have deep reservations about the policies and direction of this Congress and this administration. That’s what’s bringing them in.’”
Fourth, Arends says nothing--nada, zip, zilch--about the way Citizens United also opens the gate for unions and liberal groups like MoveOn to make independent expenditures.
In sum, if it comes to the end of democracy in the United States, I worry more about the role of counter-majoritarian judges than I do that of corporations. Those 9 unelected old farts in robes on the Supreme Court have a lot more power to affect our lives than does the Fortune 500 combined.