Corporations aren’t people, but a recent U.S. Supreme Court ruling focused on the circumstances under which corporations enjoy the same legal rights as individuals. In Citizens United v. FEC, the court upheld political free-speech rights for corporations, nonprofits, and labor unions. Daren Bakst, director of legal and regulatory studies for the John Locke Foundation, discussed the ruling with Donna Martinez for Carolina Journal Radio. (Click here to find a station near you or to learn about the weekly CJ Radio podcast.)
Martinez: This can be a little bit confusing for nonlawyers like me, so help me understand. What does this Supreme Court ruling do, what did it change, and why should we care?
Bakst: It’s confusing for attorneys as well. The court held that it was unconstitutional for the government to prohibit corporations and unions from expressing their views on political candidates, to expressly state whether or not they support a candidate or oppose a candidate. Also, under the McCain-Feingold law, corporations and unions were prohibited from airing campaign ads within 30 days of a primary or 60 days of a general election. So the closer it got to an election, the corporations and unions couldn’t have anything to do with [it]. Even if they didn’t expressly state their support or opposition to a candidate, they couldn’t run ads even mentioning candidates. So, the court said [that is] unconstitutional. Really, what the case does is, it makes it clear that corporations do have First Amendment rights and have the right to engage in political speech.
Martinez: It’s been interesting, the debate that has occurred since this ruling came down, because the critics of the ruling, Daren, say that corporations are not people, that corporations don’t have free-speech rights, and they say this is an abomination. Do corporations have rights? Are they people?
Bakst: Well, corporations certainly aren’t people. I haven’t met a corporation that talked to me or anything like that, so no, they’re not people. But that’s not the point. Corporations do have First Amendment rights.
Martinez: Because corporations are associations of people.
Bakst: Exactly. What are corporations? They’re association of individuals. We join a union — that’s just an association of individuals. If you join a trade association, it’s an association of individuals. We form a partnership, and that’s an association, and then corporations are just a different form of association of individuals. That’s all it is. So, individuals have free-speech rights, and sometimes they get together to actually have their speech heard by politicians. If I want to actually make a difference in the political arena, one voice usually is not going to make a difference. But what do I do? I join with other people to actually amplify my voice so I can get my message heard.
Martinez: So the way I’m understanding this is that, just in the same way that I have free-speech rights as a U.S. citizen, and you have them, so does, for example, the Sierra Club or the Teamsters union or Wal-Mart.
Bakst: Right. When people make this argument about corporations not having free-speech rights, they just think, oh, it’s the big, bad businesses like Exxon and GE. … But they don’t think about the Sierra Club. And how about media corporations? How about The New York Times Company? Does The New York Times not have the right to engage in political speech? … Even with The New York Times, I would have a problem with that because I believe that everybody has the right to engage in political speech. And I believe people have the right to weigh the merits of everybody’s argument. More speech is better than less speech.
Martinez: Let’s talk about the potential impact of this ruling on North Carolina. Does the ruling conflict with any North Carolina laws?
Bakst: It does, because we have similar bans. So it does conflict. And we don’t want to get into too many details, but there are some conflicts, and there’s going to have to be some changes.
Martinez: So we have a Supreme Court ruling, and we have North Carolina law. Do I understand [correctly] that the Supreme Court ruling trumps state law?
Bakst: That’s correct. A Supreme Court ruling would.
Martinez: Here in North Carolina, we have public financing laws in which governments get involved in funding — at least in part — people who are running for particular offices. So that public financing system, is that obsolete? Is that going to have to go away because of this Supreme Court ruling?
Bakst: Well, this ruling wouldn’t affect that program, although I do think our taxpayer-financing program is unconstitutional for other reasons.
Martinez: So separately, you believe these are unconstitutional.
Bakst: Separately, right. An Arizona District Court has ruled on a similar law that North Carolina has, in terms of taxpayer financing, and said it’s unconstitutional. That’s the first case that’s dealt with taxpayer financing since another Supreme Court case. But a lot of the “reformers” are bringing up the fact that they look at this recent Supreme Court case — the Citizens United case that we’ve been talking about — and say, “Well, now we need to have taxpayer financing.” Well, they don’t say taxpayer financing, they say “public financing” or “clean elections.” Really, all it is is taxpayer financing of elections. But it’s very important to understand that these public-financing systems only deal with how much money a candidate spends himself or herself. This Supreme Court case deals with what corporations spend independently of those candidates. So this case has nothing to do with how much a candidate can spend on [his] own or anything like that. So it’s completely not related whatsoever. They found a good case to just use as an excuse to push taxpayer financing. The other important point I want to bring up is that the Supreme Court case in no way prevents the government from banning corporations and unions from giving contributions to candidates. So corporations and unions still are not allowed, at the federal level, to give money directly to campaigns and to candidates. It doesn’t change that. What the case did was, it said that corporations and unions, independently of these campaigns, can get their message out.
Martinez: If you’re a state legislator, what do you do when you’re looking at these issues?
Bakst: Well, first of all, they need to look at what this case said, and they need to be in compliance with the law. That’s the first thing they need to do. Legislators really should just err on the side of promoting political speech and free speech as opposed to trying to restrain it. You know, the big issue here is not necessarily what the critics are saying about the ruling, but what would have happened if they didn’t rule the way they did. It was possible, if the court didn’t rule the way that it did, that certain books and movies could have been banned.