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!”

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