A New Way to Overcome
Citizens United
A Maryland State Senator is proposing a creative way to counter the effects of the Citizens United ruling. His idea grew out of a statement by US Supreme Court Justice Kennedy, who noted in his majority opinion of this decision that, if a corporation was engaged in partisan political activity and the shareholders wanted to correct the situation, they could do so “through the procedures of corporate democracy.”
The state senator is Jamie B. Raskin, who is also an attorney and a professor of constitutional law at American University. He has introduced legislation that states if a corporation wants to make political contributions and expenditures, it is required first to get the majority approval of the shareholders. “After all, it’s their money, right?” asked Raskin.
He continued: “Shareholders remain in the dark because nothing requires executives to disclose their political spending.” Besides prior shareholder approval, his proposal also requires on-line disclosure of any corporate political spending.
With legislation in place to require a shareholder vote, Raskin explains that many corporations will not be able to make political expenditures because their shareholders are forbidden to do so: “If no majority will of the shareholders can be formed to spend money for political candidates — because most shares are owned by institutions forbidden to participate in partisan campaigns — then the corporation will be prohibited from using its resources on political campaigns”.
Raskin continues: “The majority of shares of Fortune 500 firms are owned by institutional investors, such as retirement and pension funds, mutual funds, insurance companies, universities, foundations, charities and other nonprofits. These entities are prevented from engaging in partisan political activity, either by their fiduciary responsibilities, their tax status, federal or state laws or contract”.
The legislation he introduced is called “Shareholders United,” and since corporations must register in each state where they wish to conduct business, it will be a progressive state-by-state enactment of the legislation that will dramatically curtail corporate money in politics, Raskin believes.
By way of comparison, Raskin notes that unions must disclose all of their political expenditures and must elect all of their leaders. Members who disagree on political spending can actually seek a personal rebate for a share of the union’s political expenses, which is a remedy far more extreme that anything he is proposing. He also notes that existing law in Britain requires that corporate funds used for political spending must have prior approval of a majority of the shareholders.
Raskin concludes, “It is fanciful to argue that a corporation’s political spending reflects the political beliefs of the shareholders. What unites shareholders invested in McDonald’s or General Motors or hundreds of other corporations is not our political beliefs but our financial investments. If we share any political belief at all, it is probably this one: No corporation speaks for us politically, and no corporation should purport to do so and spend our money on political candidates without our knowledge and our consent.”
A further explanation of the idea is available here: http://www.washingtonpost.com/...
A copy of the submitted legislation is available here: http://mgaleg.maryland.gov/...
Senator Jamie Raskin can be reached here: jamie.raskin@senate.state.md.us
Author
Tom Behan is retired, a Viet Nam veteran and a concerned citizen in Seattle.