Laslo Boyd: Jamie Raskin's Challenge to "Citizens United"

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By: Laslo Boyd

This afternoon, the Senate Committee on Education, Health and Environmental Affairs will hold a hearing on SB 153, Corporations-Political Expenditures-Stock Holders.  The lead sponsor, Senator Jamie Raskin of Montgomery County, hopes to stem the torrent of unregulated campaign contributions that was unleashed by the U.S. Supreme Court through their decision “Citizens United v. FEC.”
 
For anyone who cares about the United States remaining a democracy rather than morphing into a plutocracy, this decision ranks as one of the worst in the history of the Supreme Court.  By a 5-4 vote, Court conservatives gutted decades of efforts by Congress to regulate campaign contributions.  In a dazzling twist of logic that would have seemed right at home to Alice in Wonderland, they concluded that, for determining coverage by the 1st Amendment freedom of speech provision, corporations are people and spending money is a protected form of speech.

That decision has opened the floodgates to super wealthy individuals and corporations pouring millions of dollars into political campaigns often without having to disclose doing so.   Justice Anthony Kennedy, writing for the majority, was either stunningly oblivious to the realities of politics or deliberatively disingenuous when he wrote:

     “This Court now concludes that independent expenditures, including those     made by corporations, do not give rise to corruption or the appearance of     corruption. That speakers may have influence over or access to elected     officials does not mean that those officials are corrupt. And the appearance of     influence or access will not cause the electorate to lose faith in this     democracy.”

Efforts to pass a constitutional amendment to reverse the “Citizens United” decision have gone nowhere in Congress.  Raskin, who teaches constitutional law at American University, is, with his legislative proposal, trying to find a different way to lessen the impact of unlimited and unchecked money flowing into our electoral system.

His approach comes directly from a line in Justice Kennedy’s majority opinion stating that shareholders can control corporate political spending “through the procedures of corporate democracy.”  While Kennedy’s language could be read as merely a throwaway to critics, Raskin has crafted a bill that takes Kennedy seriously.

Under the provisions of SB153, corporations would be required to establish formal procedures for obtaining shareholder approval of any political spending.  In the case of privately-held companies, that process would be a simple one and likely having little impact on their decisions to contribute or not contribute to political campaigns.

Public corporations would be quite a different matter.  Raskin’s legislation would require that they set up a process for obtaining consent of shareholders in order to make political contributions.  He has crafted the bill so that approval would be annually for an overall political budget, countering the inevitable arguments that the task would be too onerous for the corporation.

Two other points are important.  Many of the large institutional shareholders, that often control more than half a company’s total outstanding shares, are prohibited by law from engaging in political activities.  A state pension fund, for example, would not be able to cast its votes in favor of political expenditures.  Under “Citizens United”, those entities see some of their money spent for political causes over which they have no control.

Raskin takes on another of Kennedy’s assertions, that disclosure of expenditures can by done online within a very short time.  The problem is that neither Congress nor the Securities and Exchange Commission, despite huge numbers of comments urging them to take action, has instituted disclosure rules in the aftermath of “Citizens United.”  SB 153 would require companies to disclose their campaign contributions on their web sites within 48 hours.

Is Raskin just tilting at windmills? Is the fight against large amounts of undisclosed money in politics a hopeless cause?

Raskin clearly doesn’t think so.  He points to more than 20 states considering similar legislation.  He notes that a comparable requirement has been in place in the United Kingdom for some time.  He also cites overwhelming public support for overturning the “Citizens United” decision.

Efforts to pass a constitutional amendment have stalled.  In any case, that path is a long and difficult one.  

Raskin had success with an earlier effort to reform corporate behavior.  His bill establishing a category called a “benefits corporation” is now law in over 20 states, including Maryland.  That legislation allows corporations to have objectives beyond just financial return, including social responsibility and environmental protection.  

He would like a similar trajectory for what he refers to as “Shareholders United.”  If SB 153 can generate enough support in Maryland, Raskin hopes that it can become a national model in much the way his “benefits corporation” legislation did.  

Today’s hearing is an important step on a challenging path.  Congressman Chris Van Hollen, who has introduced a bill in the U.S. House of Representatives requiring disclosure of corporate political expenditures, will be testifying as will other experts Raskin has identified who support his bill.    SB 153 and its companion in the House, HB 885, offer an opportunity for Maryland to take the lead in fixing a campaign system that is terribly broken.
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Laslo Boyd's professional experience includes serving as education advisor to the Governor of Maryland, Acting Secretary of Higher Education, senior administrator in several higher education institutions and university professor.  His work in political campaigns has involved strategic communications, public opinion polling, and development of position papers.  Dr. Boyd has consulted for a wide range of clients in higher education, government, and business.  He has provided political commentary and analysis in both print and electronic media.