2010 'Citizens United' Decision Made Corporations and Unions Political Powers

Citizens United came after years where the Court chipped away at existing, needed campaign laws. Now the new ruling has unlocked massive campaign spending, much of it through front groups, cutouts, and nonprofits, without disclosing who is paying the bill. Money talks, but refuses to leave its name. In 2010, the anonymous funding vastly favors the GOP. Other years, the money may favor Democrats. But there can be little doubt it will warp policymaking. For example, lawmakers who vote on bank regulation will know that a pro-consumer stance could be punished with sudden, secret spending for a foe. Lobbyists have a new bludgeon with which to persuade. Did Citizens United matter? The answer is yes—significantly. And unless remedied, the ruling points toward a truly dystopian future, when candidates, campaigns, and parties are drowned out by special interest funding as loud as it is stealthy. - Michael Waldman, Supreme Court's Citizens United Decision Will Warp Policymaking, September 27, 2010

The Citizens United decision does far more than simply provide Fortune 500 companies with a massive megaphone to blast their political views to the masses; it also empowers them to drown out any voices that disagree with them. In 2008, the Obama and McCain campaigns combined spent just over $1.1 billion, an enormous, record-breaking sum at the time. $1.1 billion is nothing, however, compared to the billions of dollars in tax subsidies given to the oil industry every year, or the $117 billion fee President Obama wants to impose on the Wall Street bankers who created the Great Recession. Indeed, with hundreds of billions of dollars of corporate profits at stake every time Congress begins a session, wealthy corporations would be foolish not to spend tens of billions of dollars every election cycle to make sure that their interests are protected. No one, including the candidates themselves, have the ability to compete with such giant expenditures. - Ian Millhiser, Citizens United Decision: ‘A Rejection of the Common Sense of the American People’, Think Progress, January 21, 2010

The modern division of labor consists of a ruling class (top 1%) that control about 40% of all financial assets, a managerial class ( the top 2%-10%) who control about 35% of all assets, with the other 90% of the working masses dividing up the 25% that’s left. The pyramid is organized by a complex and highly specialized division of labor, state-run education, massive corporations, government bureaucracy, the judiciary, intelligence organizations, mediatic propaganda machines and mainstream religion. Those rare few that actually wake up and see the zombie world are quickly diagnosed by the DSM-5 and given anti-depressants. There are two things everyone wants all the time, and one of them is money. Control of the money is the magic wand that rules the world. All the other religious, patriotic and historical paraphernalia are directly related to allowing the 1% to control the creation of money. Take that away, and they are nothing but media hacks. The current era which began with the creation of the Federal Reserve and the involvement of the United States in WWI is coming to an end. The great mistake most “awake” people make is believing redemption is at hand while underestimating the ruling class. The masters of propaganda and finance and are much more in control then they will ever reveal through their own channels. Their imaginations are immense and their capacity to orchestrate drama has no limits. They are the voice of reason while the dissenters are “diagnosed” with a collection of ailments that quickly marginalize them. - Robert Bonomo, What QE3 Will Look Like, Activist Post, August 12, 2011

What the Founding Fathers Thought About Corporations

Corporations can literally and legally buy elections and shape the government like never before in our nation’s history.

By Stephen D. Foster Jr., Addicting Info
July 4, 2011

Citizens United — this is the 2010 Supreme Court case that shocked America, influenced an election, and reversed over 100 years of campaign finance laws. In this case, corporations were declared as people and as such declared to have the same rights as people do. It also opened the doors for corporations to pour unprecedented amounts of campaign donations into elections; and what’s more, these donations can be totally secret. Corporations can now literally and legally buy elections and shape the government like never before in our nation’s history.

The economic world we live in today is dominated by corporations. Huge corporations that boast massive profits and span continents. But corporations also wield political power and are lobbying heavily to be free from any and all government regulations that would make them responsible and liable. Republicans have been defending corporations since the late 1800′s and have literally gone on a history revising crusade to show that even the founding fathers supported corporations. But is this the case? What did the founders really think about corporations?

The origin of modern corporations can be traced all the way back to 17th century England when Queen Elizabeth I created the East India Trading Company. At first, corporations were small, quasi government institutions that were chartered by the crown for a specific purpose. If corporations stepped out of line, the crown did not hesitate to revoke their charters. Corporations generated so much revenue that they even began taking on increased political power. Corporations were also organized to finance large projects such as exploration, which leads us to the American colonies.

To say that the founding fathers supported corporations is very absurd. Its quite the opposite in fact. Corporations like the East India Trading Company were despised by the founders and they were just one reason why they chose to revolt against England. Corporations represented the moneyed interests much like they do today and they often wielded political power, sometimes to the point of governing a colony all by themselves like the Massachusetts Bay Company did.

But there is more evidence that the Revolutionary generation despised corporations. The East India Company was the largest corporation of its day and its dominance of trade angered the colonists so much, that they dumped the tea products it had on a ship into Boston Harbor which today is universally known as the Boston Tea Party. At the time, in Britain, large corporations funded elections generously and its stock was owned by nearly everyone in parliament. The founding fathers did not think much of these corporations that had great wealth and great influence in government. And that is precisely why they put restrictions upon them after the government was organized under the Constitution.

After the nation’s founding, corporations were granted charters by the state as they are today. Unlike today, however, corporations were only permitted to exist 20 or 30 years and could only deal in one commodity, could not hold stock in other companies, and their property holdings were limited to what they needed to accomplish their business goals. And perhaps the most important facet of all this is that most states in the early days of the nation had laws on the books that made any political contribution by corporations a criminal offense. When you think about it, the regulations imposed on corporations in the early days of America were far harsher than they are now.

That is hardly proof that the founders supported corporations. In fact its quite the opposite. The corporate entity was so restrictive that many of America’s corporate giants set up their entities to avoid the corporate restrictions. For example, Andrew Carnegie set up his steel company as a limited partnership and John D. Rockefeller set up his Standard Oil company as a trust which would later be rightfully busted up into smaller companies by Theodore Roosevelt.

For those who need more evidence, how about statements from the founders themselves. As we all know, big banks are also considered corporations and here is what Thomas Jefferson thought about them. In an 1802 letter to Secretary of State Albert Gallatin, Jefferson said,

“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.”

Thomas Jefferson also said this in 1816,

“I hope that we shall crush in its birth the aristocracy of our monied corporations, which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.”

Jefferson wasn’t the only founding father to make statements about corporations. John Adams also had an opinion.

“Banks have done more injury to the religion, morality, tranquility, prosperity, and even wealth of the nation than they can have done or ever will do good.”

These statements make it pretty clear that corporations were not trusted by the founders. The founders knew that huge corporations only preyed upon the people. But as the founding generation began to fade away, corporations began using their power to gain political favor and eventually that political favor would turn into political power. And corporations would take advantage of a war to do it.

As the Civil War raged across the land, corporations made an effort to take advantage of the situation, selling products at high prices, especially to the government. Corporations even sold to both sides throughout the war. Basically, corporations proved even then that they had no allegiance to any country when great profits were at stake. Abraham Lincoln, the first Republican to be President also had plenty to say about corporations…

“The money powers prey upon the nation in times of peace and conspire against it in times of adversity. The banking powers are more despotic than a monarchy, more insolent than autocracy, more selfish than bureaucracy. They denounce as public enemies all who question their methods or throw light upon their crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe.”

And in a November 21, 1864 letter to Col. William F. Elkins, Lincoln wrote,

“We may congratulate ourselves that this cruel war is nearing its end. It has cost a vast amount of treasure and blood … It has indeed been a trying hour for the Republic; but I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands, and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war. God grant that my suspicions may prove groundless.”

Unfortunately, Lincoln’s suspicions were anything but groundless. They were in fact, prophetic. After the Civil War, corporations began aligning themselves with Republican politicians, who proved themselves to be up to the task of helping corporations gain more power. Corporations had free reign and total power over its workforce and could sell virtually anything they wanted even if the product was a bad one. Corporations treated workers like slaves. Wages were extremely low. Workers received no benefits, no vacation days, no health insurance, no workers compensation. President Grover Cleveland witnessed how corporations treated its labor force and had this to say in 1888,

“As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear, or is trampled beneath an iron heel. Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people’s masters.”

To put it bluntly, corporations didn’t care about its workers or the people who bought their products. The only rule of the game was to make as much profit as possible, no matter what. As the 19th century ended and the 20th century began, corporations were getting bigger and bigger. Many began buying up smaller companies, becoming monopolies that controlled whole industries. This practice eliminated competition and as a result, prices had skyrocketed and no one could challenge them. That was, until Theodore Roosevelt became the President.

Theodore Roosevelt did not hate corporations. He simply wanted them to treat workers how they deserved to be treated and to serve the public faithfully and honestly. He believed in honest competition and fair prices. Roosevelt believed that government had not only a duty, but a right to regulate corporations just as the founding generation had done, stating that,

“The great corporations which we have grown to speak of rather loosely as trusts are the creatures of the State, and the State not only has the right to control them, but it is duty bound to control them wherever the need of such control is shown.”

And in his State of The Union Address in 1902, Roosevelt stated his intentions toward corporations.

“Our aim is not to do away with corporations; on the contrary, these big aggregations are an inevitable development of modern industrialism, and the effort to destroy them would be futile unless accomplished in ways that would work the utmost mischief to the entire body politic. We can do nothing of good in the way of regulating and supervising these corporations until we fix clearly in our minds that we are not attacking the corporations, but endeavoring to do away with any evil in them. We are not hostile to them; we are merely determined that they shall be so handled as to serve the public good. We draw the line against misconduct, not against wealth.”

To that end he fought for corporate regulation, he fought for fair wages for workers, he fought for safe and healthy work environments, and he fought to protect consumers. And the people loved him for it. Roosevelt’s policies toward corporations were immensely popular. He busted up so many giant corporations that he became known as a “trust buster”. The busting up of these corporations created a lot more competition for customers and for employees, resulting in higher wages and lower prices and more jobs. And you know what? Corporate profits did just fine.

Teddy never stopped fighting for workers and consumers even after his presidency when he said this as the Progressive Party candidate for President in 1912,

“We wish to control big business so as to secure among other things good wages for the wage-workers and reasonable prices for the consumers. Wherever in any business the prosperity of the businessman is obtained by lowering the wages of his workmen and charging an excessive price to the consumers we wish to interfere and stop such practices. We will not submit to that kind of prosperity any more than we will submit to prosperity obtained by swindling investors or getting unfair advantages over business rivals.”

Roosevelt didn’t win the presidency in 1912, although he most certainly would have if the Republican ticket hadn’t been split. But Woodrow Wilson would continue the fight for workers and consumers. As America entered the 1920′s, corporations began to gain political favors once again as business minded Republicans controlled the White House and Congress. Regulations were being stripped away and banks as large entities were on the rise. These banks and corporations abused the stock market which would lead to the crash of 1929 and the Great Depression. Corporate profits had surged throughout the decade and unfair speculation had caused economic bubbles that had to burst.

Corporate bosses also flexed their muscles over America’s legal system, spending great deals of money to get away with nearly anything. In a statement of sarcasm that speaks to this despicable practice, Senator George Norris, after an industrialist was acquitted of charges of corruption, said that “We ought to pass a law that no man worth $100,000,000 should be tried for a crime.”

The Franklin Roosevelt era would bring new calls for corporate regulation and corporate tax hikes. These new regulations once again kept corporations honest and protected consumers. Workers also benefited from these new regulations, getting fair wages, pensions, and safe working conditions. Corporations were taxed at a rate of 91% and even with all of that, corporations still made huge profits. Life changed dramatically for the middle class. People had jobs with livable wages and promise for the future. Corporations once again served a purpose as consumers were treated fairly and the economy soared. Unemployment was also very low. But these trends did not last long as corporate greed would once again fuel another grab for political power. Corporations began aligning themselves more and more with the Republican Party, and as this relationship grew, corporations found a way to make record profits.

Throughout the 1980′s up to today, corporations have outsourced millions of American jobs to cheap labor overseas. As a result of this, corporate profits have broke record after record, while the unemployment rate has jumped higher and higher. Corporate tax rates began getting lower and lower, while more tax loopholes were created to help corporations evade most of them altogether.

When the Republican Party took control of government in 2001, they went on a crusade on behalf of corporations (how could they refuse, they were on the payroll), to blame workers for economic downturns and outsourcing. Corporations also decided to take advantage of a national tragedy.

After 9/11, there was an understandable push to go to war against terrorists hiding in Afghanistan. But corporations, as in other times of war and tragedy, began pushing for a war against Iraq. And they got their wish. Corporations have since made billions in war profits off of the War in Iraq and have proven once again that profit is far more important than the lives of soldiers. Lincoln was right. This is yet another reason why corporations need to be put in their place. As Henry Ford once said, “Do you want to know the cause of war? It is capitalism, greed, the dirty hunger for dollars. Take away the capitalist and you will sweep war from the earth.”

Republicans are now on the verge of stripping away all corporate regulations and worker’s rights. But it was the 2010 Citizens United decision that really made corporations into political powers. Not only were corporations declared to be people but corporations also now have the power to buy elections at will. The problem with this Supreme Court decision is that it goes against everything the founding fathers believed in. In the Constitution, it says

“We the people…”, not “We the corporations…”.

The founding fathers never addressed corporations in the Constitution because it never occurred to them that corporations would be perceived as people. And why would they have? Corporations don’t eat, they don’t breathe, they don’t vote, they don’t fight battles in wars. Remember all the limitations the founders placed on corporations mentioned earlier? In the Constitution, the founders speak only of the people. The founders did not limit lifetimes of people, nor did they outlaw a persons right to donate to political campaigns. They also did not limit people to specific life goals like they did with corporations.

This should make it absolutely clear that the founders never intended for corporations to be people. The decision by the clearly activist, conservative majority of the court is an abomination that can never be Constitutionally justified. Now it is our duty to call on Congress to bring forward a Constitutional Amendment that bans corporate personhood and bans corporations from interfering with government and legal elections that only real people have the right to donate to and vote in. Because whatever these greedy, arrogant CEO’s and Republicans think, its the opinion of the founding generation that matters most. Corporations are not people. People are people.

Citizens United Decision Profoundly Affects Political Landscape

By Spencer MacColl, OpenSecrets.org
May 5, 2011

Effects of the Citizens United v. Federal Election Commission

The slide show above shows how political spending by outside groups has morphed over the years and how Citizens United made it easier for big donors to pay for political advertisements. Click bottom right hand corner to view presentation full screen.

Unprecedented political spending. Secret donors. New ways for unions and corporations to spend money on politics.

An analysis by the Center for Responsive Politics reveals that the Citizens United v. Federal Election Commission Supreme Court ruling of January 2010 has profoundly affected the nation's political landscape.

Corporations and unions both benefited from the ruling, being able to use their general treasuries to pay for independent expenditures for the first time.

Unions spent more than $17.3 million from their general treasuries on independent expenditures opposing Republican candidates such as Roy Blunt (R-Mo.), Tim Walberg (R-Mich.) and James Renacci (R-Ohio). The American Federation of State County and Municipal Employees spent more than $7 million out of their general treasury, the most of any other union.

The National Education Association had a different strategy. It set up a so called "super PAC" and financed it with $3.3 million from its general treasury. Pre-Citizens United unions could only spend money on independent expenditures using funds that were voluntarily donated to their political action committee by union members. Now unions can tap into funds that come directly from union member's dues. Unions are still banned from using their treasuries to donate to congressional campaigns and party committees.

Corporations generally did not directly get involved in political spending but rather donated more than $15 million to a new type of political group known as a "super PAC". These groups may raise unlimited amounts of money from any source as long as the donors are disclosed and the groups only spend money on independent expenditures. The top two corporate donors in 2010 were TRT Holdings and Alliance Resource Partners, which each donated about $2.5 million to the 'super PAC' American Crossroads. Corporate donations are likely higher than reported as conservative non-profit groups spent $121 million without disclosing where the money came from.

The ruling allowed corporations and unions to use their general treasuries to pay for political advertisements that expressly call for the election or defeat of a candidate, also known as independent expenditures. This ruling subsequently allowed non-profit corporations under the tax code 501c to spend unlimited amounts of money running these political advertisements while not revealing their donors.

Influencing elections cannot, by law, be the primary purpose of the non-profits.

These nonprofits certainly took advantage of their new power, however, spending $61.3 million on independent expenditures in 2010.

Top findings of the Center's study include:

• The percentage of spending coming from groups that do not disclose their donors has risen from 1 percent to 47 percent since the 2006 midterm elections
• 501c non-profit spending increased from zero percent of total spending by outside groups in 2006 to 42 percent in 2010.
• Outside interest groups spent more on election season political advertising than party committees for the first time in at least two decades, besting party committees by about $105 million.
• The amount of independent expenditure and electioneering communication spending by outside groups has quadrupled since 2006.
• Seventy-two percent of political advertising spending by outside groups in 2010 came from sources that were prohibited from spending money in 2006

Study Shows Powerful Corporations Really Do Control the World's Finances

ScienceNews.org
August 19, 2011

For many years conventional wisdom has said that the whole world is controlled by the monied elite, or more recently by the huge multi-national corporations that seem to sometime control the very air we breathe. Now, new research by a team based in ETH-Zurich, Switzerland, has shown that what we’ve suspected all along, is apparently true. The team has uploaded their results onto the preprint server arXiv.

Using data obtained (circa 2007) from the Orbis database (a global database containing financial information on public and private companies) the team, in what is being heralded as the first of its kind, analyzed data from over 43,000 corporations, looking at both upstream and downstream connections between them all and found that when graphed, the data represented a bowtie of sorts, with the knot, or core representing just 147 entities who control nearly 40 percent of all of monetary value of transnational corporations (TNCs).

In this analysis the focus was on corporations that have ownership in their own assets as well as those of other institutions and who exert influence via ownership in second, third, fourth, etc. tier entities that hold influence over others in the web, as they call it; the interconnecting network of TNCs that together make up the whole of the largest corporations in the world. In analyzing the data they found, and then in building the network maps, the authors of the report sought to uncover the structure and control mechanisms that make up the murky world of corporate finance and ownership.

To zero in on the significant controlling corporations, the team started with a list of 43,060 TNCs taken from a sample of 30 million economic “actors” in the Orbis database. They then applied a recursive algorithm designed to find and point out all of the ownership pathways between them all. The resulting TNC network produced a graph with 600,508 nodes and 1,006,987 ownership connections. The team then graphed the results in several different ways to show the different ways that corporate ownership is held; the main theme in each, showing that just a very few corporations through direct and indirect ownership (via stocks, bonds, etc.) exert tremendous influence over the actions of those corporations, which in turn exert a huge impact on the rest of us.

The authors conclude their report by asking, perhaps rhetorically, what are the implications of having so few exert so much influence, and perhaps more importantly, in an economic sense, what the implications are of such a structure on market competitiveness.

More information: The network of global corporate control, Stefania Vitali, James B. Glattfelder, Stefano Battiston, arXiv:1107.5728v1 [q-fin.GN] http://arxiv.org/abs/1107.5728

Abstract
The structure of the control network of transnational corporations affects global market competition and financial stability. So far, only small national samples were studied and there was no appropriate methodology to assess control globally. We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic "super-entity" that raises new important issues both for researchers and policy makers.

2010 Election Spending Up 40 Percent, Watchdog Estimates

ABC News
October 19, 2010

With just under two weeks before voters head to the polls, the 2010 midterm election cycle is on track to be the most expensive in history, flush with 40 percent more cash than in 2008, according to the latest figures from the nonpartisan Campaign Finance Institute.

The group estimates $564 million will be spent by political committees and nonprofit groups this year, including $334 million by pro-Republican organizations and $230 million by pro-Democratic groups.

Experts say spending by independent third-parties are driving the surge, infusing 73 percent more cash into the campaign through mid-October than they did two years ago.

President Obama and top Democrats have pointed to the record sums as the basis for their criticism of groups like Crossroads GPS and Americans for Prosperity, which don't have to disclose the identities of their donors.

"Their lips are sealed, but the floodgates are open," Obama said. "If we just stand by and allow the special interests to silence anybody who's got the guts to stand up to them, our country is going to be a very different place."

The administration has said the Supreme Court's "Citizens United" decision has played a key role in unleashing the flood of cash, by lifting campaign finance restrictions on direct, independent electioneering by corporations, and unions using their general funds in the weeks before elections.

But Campaign Finance Institute executive director Michael Malbin said it's too soon to tell whether the court's decision facilitated an influx of new money – or just allowed corporations to spend it differently.

"While the [Supreme Court's] decision enables more direct business participation, it does not mean more business corporations will feel an incentive to act in this way, instead of giving money through intermediaries (including trade associations and non-profit advocacy groups) as they have done in the past," he said. "The evidence so far is mixed; any conclusion is highly premature."

Impact of Citizens United Debated

Malbin points out that a significant amount of campaign spending by third party groups does not have to be reported at all, under the law. Moreover, groups that do report, occasionally overestimate spending to gain a competitive advantage, or underestimate to later show they exceeded expectations, he said.

Many corporations may also be wary of directly, publicly tying their names to specific candidates. Target Corp. and Best Buy, for example, drew fire earlier this year when they made direct contributions to a political group supporting Republican gubernatorial candidate Tom Emmer.

And some experts say the uptick in political spending by third-party groups may simply be continuing through the channels that they have always used.

"The day before 'Citizens United,' corporations had the right to make unlimited contributions to issue advocacy," said Allison Hayward of the Center for Competitive Politics. "The one thing that's changed is specific advocacy [for candidates]… There would have been a lot of spending even if there hadn't been 'Citizens United.'"

Still, skeptics say the court's decision has undoubtedly given business corporations new confidence in directly campaigning for or against a candidate, and allowed them to give secretly to nonprofit interest groups, like the U.S. Chamber of Commerce, which orchestrate elaborate election advertising campaigns.

"'Citizens United' represents an enormous change in how elections are funded," said Trevor Potter, president of the Campaign Legal Center, adding that, in his view, even if the influence of 'Citizens United' is not fully apparent it is definitely having an effect.