Wednesday, June 27, 2012

Here's an idea that Citizens can get United behind

Not to belabor the point, but corporations are not people, except as an artificial legal construct. Unfortunately, that legal construct has been adopted by the Supreme Court of the United States, and then, building on the legal fiction, the Supreme Court acted to protect the free speech rights of corporations.

Not being real people, corporations do not have actual mouths, but they do have mouthpieces. These are the PACs and Super-PACS that are stealing the up-coming election. Corporations can give unlimited amounts of money to Karl Rove’s Crossroads GPS and the U.S. Chamber of Commerce, and the Supreme Court has equated money with speech.

The problems created by billionaires and corporations donating gazillions of bucks are too numerous to catalogue. These donors are all expecting that they will get a return on investment, and they are correct. Of course, the money gets spent on advertising and we have seen what happens when one side of an argument is funded with ten times as much as the other side. Consider the recent recall election in Wisconsin.

Many people have concluded that the only solution is a constitutional amendment that would explicitly deny that money is speech. Good luck with that. But I have another idea.

First, a little discourse on an obsolescent legal doctrine called ultra vires. Corporations are created by the state, and typically the articles of incorporation detail what are the purposes of the incorporation or the range of operations the company may engage in. Rossum’s Universal Robots, for example, might state in its purposes section, something like “to make and sell robots.”

In our example, any acts by RUR that are not related to making and selling robots are void or voidable. So, for example, if they donate a million dead presidents to a group that wants to define a wet dream as a person, the money could, under certain circumstance be clawed back. Why? Because the act of donating to a misogynist right wing hate group is “beyond the power” – ultra vires – of the corporation.

I can almost hear you saying, “Cool, Mitch, but why doesn’t this happen more often?” The answer is that when companies incorporate, they state their purpose is “to conduct any lawful business.” With that or similar language in the objects clause of the articles of incorporation, nothing legal is ultra vires.

Now here’s my idea. Let’s pass a law that says that any corporation that donates to political action committees is presumptively acting ultra vires. It’s not really an unreasonable presumption, because when I bought my ten shares of RUR, I thought they were going to try to make money for me by selling robots, and not take money from my corporation and give it to continuing criminal enterprises that only exist to misinform, mislead and manipulate the masses.

Earlier, I said that the people and corporations who make huge donations to Crossroads GPS get a return on their investment. Don't be confused! The CEO's of corporations with $5,000,000 annual compensation packages get the reduced individual income tax rates, and for them political donations are  money well spent, especially since it is not their money; it’s the corporation’s.

You can easily imagine the conservative majority on the Supreme Court getting worked into a lather about this. After all, they believe that corporations are people, people have free speech rights, and that money equals speech. They also believe, quite correctly, that you can’t regulate speech on the basis of content, and outlawing political donations just won’t pass constitutional muster. But I don’t suggest we outlaw political donations.

What I said is that we make political donations presumptively ultra-vires. The legal concept of a presumption is that this will be the court’s finding of fact, unless the presumption is overcome by a certain amount of evidence. In a criminal case, the presumption of innocence applies unless and until it is over come by proof beyond a reasonable doubt. In a civil case, the plaintiff needs to prove his case by a preponderance of the evidence. To impeach the President you need “clear and convincing evidence,” but to get an indictment out of a grand jury, you only need probable cause.

The same statute that defines political donations as presumptively ultra vires could define what it takes to over-come the presumption. Why not make the presumption conclusive unless it is overcome by specific findings? The findings could be something like a resolution at the last general meeting of shareholders specifically authorizing the payment to the PAC. Why stop there? Let’s have a section in our bill that says that such a resolution must be supported by 60% of the registered shareholders who must vote in their own name (i.e. no proxies.) Or it must be supported by 50% plus 1 of the individuals owning shares in the corporation, irrespective of how many shares they own. And, while we are at it, no corporation owning shares could vote affirmatively on any such resolution unless they had authorization to do so at its last shareholder meeting. By the way, there is such a thing as a conclusive presumption which is binding on the court.

Remember, it’s already class warfare, and it’s already time to fight back.

“… and tell ’em Big Mitch sent ya!”

Tuesday, June 12, 2012

Mitt to America: Drop Dead

Some may recall that President Ford, on Oct. 29, 1975, gave a speech denying federal assistance to spare New York from bankruptcy. The front page of The Daily News the next day read: “FORD TO CITY: DROP DEAD.” 
         Mr. Ford never explicitly said “drop dead” but the faux quote captured the spirit of his remarks.
Today, Mitt Romney, he of the Let Detroit go Bankrupt fame, channeled Ford.
First, the background. President Obama committed one of the worst sins a politician can commit: he told the truth. “The private sector is doing fine,” said the President. Of course, it doesn’t feel fine to millions of Americans who are looking for a job, or whose homes are under water. But the truth is that the private sector has done a prodigious job of creating jobs, thanks, in part to the stimulus, the bailout and the payroll tax holiday, all opposed by Republicans. 
Meanwhile, in the name of austerity or deficit reduction, money to States has been cut substantially, with the result that teachers, fireman and cops have been laid off.  The resultant net loss of public sector jobs is the reason that the unemployment rate is not at or below 7%.  
And that, in a nutshell is what the President was talking about. It was clear from his comments, but even a Democrat like Paul Klugman had to admit that Obama “screwed up” with that line.  When the President, and his surrogates took to the airwaves to clarify, Willard couldn’t resist the chance to step in it.
First, he called the President's suggestion that the Federal government had anything to do with the hiring of teachers, cops and firefighters, “absurd.”
That’s just Willard being ignorant. As HuffPo tells it:
In 1975, Congress passed the predecessor law to the Individuals with Disabilities Education Act, designed to improve special education. Programs under IDEA received $11.6 billion in funding in 2012, and much of that money goes to hiring teachers.
In all, the federal government pays for nearly 11 percent of the country's public school costs.
Uncle Sam also funds thousands of police jobs ever since the Community Oriented Policing Services program was created in 1994. In its first eight years, COPS provided about a billion dollars annually, mostly for hiring. In 2010, separate from any stimulus spending, the federal government awarded $298 million for 1,388 officers. It spent $247 million to hire more than 1,000 officers in 2011. About 800 will be hired with $111 million in 2012. The Congressional Research Service estimated that as of January 2011 the program had paid for the hiring of 117,000 officers.
The feds have doled out less for firefighters, but the money is still substantial. In 2009 and 2010, the Federal Emergency Management Agency awarded some $630 million under Staffing for Adequate Fire and Emergency Response (SAFER) grants, hiring about 3,400 firefighters. Grants are still being awarded in the 2011-2012 period, for which Congress has set aside about $640 million.
But wait! There's more! When the matter was brought to his attention in the friendly confines of a Fox News studio, Romney doubled down on the stupid. He criticized President Obama's stance that the Feds have to do more to help the States, to avoid layoffs of critical workers. He said,
[The President’s] got a new idea though. And that is to have another stimulus, and to have the Federal government send money to try to bail out cities and states. It didn't work the first time, and it certainly wouldn't work the second time. 
Wouldn’t it just have been simpler for Romney to say to the cities and states: Drop Dead!

“... and tell ’em Big Mitch sent ya!”