Monday, February 27, 2006

The Corporation as a "Person" To Which Living Human Beings are Subservient

As a former corporate banker with both a business degree and a law degree, I am concerned at the losses Americans are increasingly suffering at the hands of large corporate interests. These corporate interests have much more power to line the pockets of politicians. And their lobbying efforts are emaciating the laws that were created to "establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity," as provided in the U.S. Constitution. Living, breathing human beings are less protected and have less rights, these days, than corporations. In effect, human beings are subservient to corporations. How did this happen?

The Fourteenth Amendment to the Constitution was ratified in 1868, soon after the end of the Civil War. It declares that no state shall deprive "any person of life, liberty or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws." The "person" Congress and the ratifying states had in mind—the human being in need of equal protection, particularly in the states of the old Confederacy—was the newly-freed slave. But it applies to all human beings. And, as the result of a case 18 years later, it applies to corporations.

In 1886, the United States Supreme Court granted corporations the same rights as living persons under the 14th Amendment of the Constitution. The case was SANTA CLARA COUNTY v. SOUTHERN PACIFIC RAILROAD CO., 118 U.S. 394 (1886), and it held that a private corporation is a "person" entitled to the same legal rights and protections the Constitutions affords to any person. The doctrine of corporate “personhood” subsequently became a cornerstone of corporate law, and it was introduced into that 1886 decision without argument. According to the official case record, Supreme Court Justice Morrison Remick Waite simply pronounced before the beginning of argument in the case that:
"The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of opinion that it does.
I am not against the idea of corporate "personhood" in general. However, the actual application of "personhood" to corporations seems to accord mere human beings a lower status to corporations under the law.

Here are some examples:

1. Corporations have the right to put corporate money into politics; and corporations generally have much more money to "contribute." As a result, corporations have taken control of our major political parties and politicians. Corporations also contribute to politicians via PACs ("Political Action Committees," where corporate executives collect the money from employees and spend the money on lobbying efforts.)

2. Banks and businesses make tax-deductible contributions to political causes and lobbies that are intended to, and do influence the vote on Federal, state and local proposals. Mere human beings are not able to compete with these corporate “persons,” because they have less money to play with. Due to their lack of bargaining power, human beings do not have equal access to lobbies and politicians.

3. Corporations use the 4th Amendment right to privacy to keep out OSHA, EPA, and other protections intended to protect working human beings. (Remember the recent spate of coal mining disasters, where numerous human beings died. The mines had received hundreds of fines related to violations of health & safety codes; yet they failed to pay one penny, or to correct the violations.) Human beings work for dangerous corporations at their peril, because they have unequal bargaining power when it comes to the protection of their “health and safety.”

4. Unions were created as a way to give human beings some say in the way they are treated in corporations. Unions have been able to ensure that corporations pay a fair wage, but they also ensure that corporations provide safety in the workplace. Additionally, unions often act as a PAC for human beings. Under the current administration, corporations easily kick out unions whenever they can.

5. The Constitution provides that the bankruptcy laws throughout the U.S. shall be uniform. Powerful bank and corporate-sponsored credit card lobbyists rewrote the bankruptcy law (called the "Bankruptcy Abuse Prevention and Consumer Protection Act," which does not protect consumers.) This law, which took effect Oct. 17, 2005, effectively obliterated the ability of human beings to obtain a "fresh start" after filing for bankruptcy protection, if they are able to file at all. No longer can a human being be relieved from his debts by filing a bankruptcy petition. Again, the law was changed because human beings have unequal bargaining power over corporations.

6. Credit card companies change the terms of their credit card agreements AFTER consumers have used the credit cards. While Federal, state and local governments cannot pass ex post facto laws, and while contracts ordinarily cannot be amended unless both parties to the contract agree, such laws and rules do not apply to credit card companies (who, by the way, have reported record profits over the last several years.) In this one instance, credit card companies have more rights than governments! Because of the power to change their credit card agreements, credit card companies have been able to add charges, outrageous late fees, and exhorbitant interest rates; and consumers are powerless to fight them. There is absolutely no question that the credit card lobbies are powerful. Again, unequal bargaining power.

7. Corporations cannot go to jail is they are indicted for crimes. (How can you jail a fictional entity?)

8. Human beings often cannot afford to litigate against a corporation, whereas corporations have money set aside to litigate against humans.

These are just some of the examples. There are many more. We need to restore the rights of human beings in this country.

By the way, since the U.S. Constitution makes no mention of corporations anywhere, I wonder whether the powerful Federalist Society (which seeks to "limit" strictly the interpretation of the Constitution and not "insert" what was not originally intended) would seek to overturn Santa Clara County v. Southern Pacific Railroad Co. How would they square this case with their doctrinal belief in "Original Intent?" One wonders . . .


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