News Feature

Blue Hill
Originally published in The Weekly Packet, August 7, 2014
“How corporations became kings”
Speaker explores history of corporate personhood

Bonnie Preston explains “How Corporations Became Kings”

Bonnie Preston explains a timeline at her presentation, called “How Corporations Became Kings,” on July 11 at the Blue Hill Public Library.

Photo by Tevlin Schuetz Order prints of selected PBP photos.

by Tevlin Schuetz

Activist Bonnie Preston spoke about the history of corporations Friday evening, July 11, before a small audience at the Blue Hill Public Library.

Preston, a Blue Hill resident, is a long-time member of Alliance for Democracy, a populist organization dedicated to ending corporate influence on American life. Her presentation was entitled “How Corporations Became Kings.”

Preston began the presentation with a short film called The Story of Citizens United v. FEC from The Story of Stuff Project film series, which summarized that Supreme Court decision. According to the film, 85 percent of Americans believe corporations have too much power, and corporations spent $300 million in 2010 to wield their influence on political campaigns.

Preston said the Supreme Court ruling in the landmark 2010 Citizens United case essentially equated money with free speech and determined that regulating corporate campaign contributions violates the First Amendment rights of corporations. In so doing, it has opened the floodgates of corporate campaign finance, further tipping the balance of political power away from people and toward big business, she explained.

But as bad as that is, as Preston explained, the Supreme Court decision in Citizens United v. FEC has presented Alliance for Democracy with an “opportunity to really work.” When AFD began, few people understood the issue of corporate personhood, but after the Citizens Unites ruling “everybody knows…what corporate personhood refers to,” she said.

Preston said that corporations cannot literally say “vote for this candidate,” but they can funnel money into organizations categorized as 501(c)(4), after the United States Internal Revenue Code which designates their tax-exempt status as politically active nonprofit outfits. These entities—although they are supposed to be independent—really work for corporations, and thus money equals speech, Preston said.

Corporations in history

Preston illuminated some facts about corporations, one being that they go back much further into history than most people realize. In England, the Magna Carta defined corporations as “legal persons” which could sue or be sued. Spain and Holland also recognized corporate entities at similar points in history, Preston said.

Corporations also directly affected the American Revolution because they received favored status from British government. Preston said that when Parliament lifted the burden of taxation from the British East India Company’s tea, colonial tea importers in America could no longer compete when their prices were undercut. This was the primary cause for the Tea Party, Preston said. “The American Revolution was as much a revolution against corporate power as it was against the King,” she maintained.

Preston said that during the same year in which our nation’s founders claimed their independence from Britain, a publication by Adam Smith, called “Wealth of Nations,” first defined the capitalist system. It was not like what capitalism is today, Preston said; it was intended to protect property and keep distance between people and government.

And ultimately property meant slaves. “The Constitution was written to…centralize government power,” Preston explained, and slavery had to be protected in order to get the South to support the document.

Originally, corporations were limited in their power, Preston said. They did exist independently of the people who created them, but they were granted charters for specific purposes by the government when those purposes were beneficial to the common good. Interested parties submitted applications for incorporation to state governments, and legislatures then voted to approve or deny the requests. Charters were awarded for fixed lengths of time, and they expired when either the purpose was satisfied or the time limit was surpassed. Charters were also occasionally revoked when corporations failed to achieve their intended goals. Corporations also could not buy other corporations, Preston added.

Over time, laws and regulations governing corporate power have loosened. Preston referred the audience to a banner-sized document, spanning several feet, which she had unfurled and pinned to the wall. It was entitled “Timeline of Personhood Rights and Powers” (available at movetoamend.org/sites/default/files/timeline_hmprint.pdf). The chart depicted two types of information along dates beginning in 1772 and ending in 2011. On top were instances in which corporations gained or lost powers, while on the bottom where moments in which people gained or lost rights. Preston identified historical milestones when shifts in power occurred.

Supreme Court for corporations; legislation for the people

Preston identified a trend of Supreme Court decisions favoring corporations, calling attention to the plight of labor unions earlier in history. The National Labor Relations Act of 1935 forbade employers from interfering with workers’ efforts to organize into unions, but in 1939 (Hague v. C.I.O.) the Court denied a labor union First Amendment rights. The opinion of the Court was that “a union cannot be said to be deprived of freedom of speech and of assembly, for the liberty guaranteed by the due process clause is the liberty of natural, not artificial persons.” Preston added, “Unions are not [considered] actual people, but corporations are.”

“Under the First Amendment [alone], the freedom of association should guarantee the right of people to join unions,” Preston maintained, “but it [has] never happened.”

“You have a picture of corporations gaining power through Supreme Court decisions,” Preston said. When people gain or reacquire power, it occurs through legislation and constitutional amendments. “It’s time to do it again,” Preston said.

Imbalance of power

Preston challenged the audience to identify three advantages that give corporations more power than individual citizens. She said, “money,” priming the pump. In the short discussion that followed, the audience easily came up with four more: corporations enjoy greater access to legal expertise; they have eternal life; corporations cannot be jailed; and corporate decision-makers enjoy limitations on personal liability for corporate actions.

Preston then added to the list, stating that corporations “don’t have to respect your rights.” As employees, people have no free speech or property rights at work and can be fired at will in Maine, without any reason being given, she said. She also argued that regulatory systems favor corporations and that corporations have largely captured those agencies. She cited how former Monsanto employee Michael Taylor, now the Deputy Commissioner for Foods at the U.S. Food and Drug Administration, wrote much of the Food and Safety Modernization Act. Earlier in his career, he had influenced the Food and Drug Administration to rule Recombinant Bovine Growth Hormone (rBGH) in milk—now illegal in countries around the world—as safe for consumption in the United States, she said.

Free trade agreements have given more power to corporations as well, Preston said. “Capitalists are praised for their willingness to take risks,” she observed. “[But] a corporation can sue a country for future lost profits.” A corporation’s only duty is to “maximize shareholder profits,” she added.

When asked by a member of the audience why the “promote the general welfare” clause in the preamble to the Constitution is ignored, Preston said, “It has no force of law.”