Granting Corporations Bill of Rights Protections Is Not "Pro-business"

Revised January 11, 2012.

While news coverage often refers to expanding corporate political power as a “pro-business" activity, independent business advocates are likely to disagree. In fact, two of the three broad-based national business organizations submitting amicus curiae (friend of the court) briefs in Citizens United v FEC at the U.S. Supreme Court argued against allowing corporations to engage in direct electioneering.

The American Independent Business Alliance (AMIBA) says such a change would badly harm the majority of America’s independent businesses. AMIBA’s brief to the U.S. Supreme Court, written by Demos, argued that even with present limitations on corporate political power, “large corporations have converted their economic power into political favors that extract subsidies from taxpayers, stifle enforcement of anti-trust laws…and other rules that disadvantage small business.”

The tendency of powerful corporations to lobby successfully for lawmakers to erect or sustain barriers to entry is another problem acknowledged by conservatives and progressives alike. To enlarge corporate political power further, AMIBA's brief notes, would both harm the political process and undermine genuine market competition.

The Committee for Economic Development brief argues giving corporations the ability to dominate electoral campaigns would, in reality, harm many companies by subjecting them to an endless series of shakedowns by politicians. “Each corporation,” states the brief, “would be helpless to get out of the political game, fearful of losing out in the economic marketplace to competitors that were willing to play ball.”

The U.S. Chamber of Commerce filed a brief arguing the prohibition on direct corporate electioneering should be abolished and that the century-old precedent serves to “suppress the business viewpoint.” The Chamber's brief ignores existing law, which fully protects the political speech of citizens and allows corporations to form political action committees that can spend freely. Few Americans of any ideology would argue that corporate interests have been muted, never mind silenced, under the status quo.

In its Citizens United brief, the Chamber claimed to represent 3,000,000 businesses, but its purported constituency promptly shrank by 90% when its membership claims were exposed as false (most small businesses that comprise local Chambers of Commerce have no relation whatsoever to the U.S. Chamber). In truth, the U.S. Chamber is dominated by a handful of major corporations, many of which gain advantage through exercising political power that distorts markets and harms smaller competitors.

Many shareholders’ rights advocates express an additional concern: corporate managers would have license to make political investments with other people’s money -- an invitation to personal opportunism and abuse. This argument is among those made by Domini Social Investments in a brief to the Montana Supreme Court in Western Tradition Partnership v Montana. See “Compelled Speech Is Not Free Speech.”

Also in the WTP v Montana case, the AMIBA, Mike's Thriftway and Home Resource Center (all Montana-based), along with Free Speech for People and the American Sustainable Business Council, joined to submit this brief on behalf of the State of Montana. The brief makes arguments similar to those in AMIBA's Citizens United brief, while addressing particulars of Montana and the pending lawsuit.

In sum, laws protecting election integrity also help ensure a competitive marketplace in which businesses succeed based on business performance, not political favors. Allowing corporations to readily translate their economic power into political power is both bad for democracy and bad for legitimate businesses.

See also this January 12, 2012 op-ed by Jeff Milchen in the San Francisco Chronicle or listen to an interview (20 minute mp3 file) with Milchen on Jefferson Public Radio (Oregon/California).

A survey (PDF) released on January 18, 2012 showed that small business owners, by a margin of 7 to 1, believe that allowing corporations to engage in direct electioneering harms small business.