Corporations Are Not People: Why They Have More Rights Than You Do and What You Can Do About It (7 page)

Hints of this work can be seen in the Philip Morris annual reports issued during Powell’s tenure as a director, which reflected the broader campaign of the company and the cigarette industry to discredit the science about smoking and health and to misrepresent
the facts to keep people smoking and get young people to start. We now know, thanks to the 2007 findings of a federal judge, that many of the assertions in these annual reports were knowingly false. According to the reports themselves, these statements and others were made “on behalf of the Board of Directors,” including Powell:

1964: “The industry continues to support major research efforts directed towards resolving the many unanswered questions on smoking and health.”

1967: “The year 1967 was marked by an intensification of exaggerated claims made relative to the possible adverse health effects of smoking on health…. We deplore the lack of objectivity in so important a controversy…. Unfortunately the positive benefits of smoking which are so widely acknowledged are largely ignored by many reports linking cigarettes and health, and little attention is paid to the scientific reports which are favorable to smoking.”

1967: “We would again like to state that there is no biological proof that smoking is causally related to the diseases and conditions claimed to be statistically associated with smoking … no proof that the tar and nicotine levels in smoke are significant in relation to health.”

1969: “No biological or clinical proof that smoking is causally related to human disease … serious doubt that smoking is a causative factor in heart disease.”

1970: “Often the scientific information which is relied on to indict cigarette smoking is of dubious validity.”

Absent convincing evidence, it might be reckless to say that Philip Morris and the other tobacco corporations engaged in a willful, aggressive, wide-ranging conspiracy and racketeering enterprise so that the corporations could sell more products that kill people. But now that the evidence is in, we know that that is exactly what happened. We know this thanks to scientists, victims of the
sconpiracy, state attorneys general (both Democrats and Republicans), the United States Department of Justice (under both Presidents Bill Clinton and George W. Bush), and Judge Gladys Kessler and a panel of U.S. Court of Appeals judges appointed by Presidents Ronald Reagan, Bill Clinton, and George H. W. Bush.

In 2006, the U.S. Department of Justice took the cigarette corporations to trial, alleging that they had engaged in a racketeering conspiracy. Eighty-four witnesses testified in the nine-month trial, and hundreds of internal corporate secrets were finally exposed. When the verdict came in, Judge Kessler concluded that “overwhelming evidence” proved that the cigarette corporations “conspired together” to fraudulently deny that cigarettes caused cancer, emphysema, and a long list of other fatal diseases; to manipulate levels of highly addictive nicotine to keep people smoking; to market addictive cigarettes to children so that the corporations would have “replacement smokers” for those who quit or died; and that they “concealed evidence, destroyed documents, and abused the attorney-client privilege to prevent the public from knowing about the dangers of smoking and to protect the industry” from justice.
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As counsel to the cigarette industry and as a Philip Morris director, Powell already had begun testing the use of activist-minded courts to create corporate rights. In one case in the late 1960s, Powell argued that any suggestion that cigarettes caused cancer and death was “not proved” and was “controversial.” Therefore, according to Powell, the Federal Communications Commission wrongly violated the First Amendment rights of cigarette corporations by refusing to require “equal time” for the corporations to respond to any announcement that discouraged cigarette smoking as a health hazard.
¹⁶

Even the U.S. Court of Appeals for the Fourth Circuit, based in the tobacco-friendly South, rejected this claim. Although Powell lost that time, he went on to win far more than he could have
imagined after he got on the Supreme Court and helped change the Constitution.

Powell’s 1971 memo to the Chamber of Commerce laid out a corporate rights and a corporate power campaign. The Chamber and the largest corporations then implemented these recommendations with zeal, piles of money, patience, and an activist Supreme Court. In equating corporations with “We, the People” in our Constitution, no justice would be more of an activist than Lewis Powell after he joined the Supreme Court in 1972.

1972: Powell Gets His Chance

In January 1972, President Nixon filled two Supreme Court vacancies, appointing Powell to one seat and William Rehnquist, a conservative Republican lawyer from Phoenix, Arizona, to the other. Rehnquist never hid his conservative views, which were well known and, to some, controversial. At the same time, neither Congress nor most Americans knew of Powell’s radical corporat-ist views. In his Senate confirmation hearing, no one asked about his recent proposal to the Chamber of Commerce recommending the use of an “activist-minded Supreme Court” to impose those views on the nation. No one asked because neither Powell nor the Chamber of Commerce disclosed the memo during his confirmation proceedings.
¹⁷

Once on the Court, these two Nixon appointees followed very different paths. Justice Powell would go on to write the Court’s unprecedented decisions creating a new concept of “corporate speech” in the First Amendment. Using this new theory, the Court struck down law after law in which the states and Congress sought to balance corporate power with the public interest. With increasing assertiveness by the Supreme Court even after Powell retired in 1987, the new corporate rights theory has invalidated
laws addressing the environment, tobacco and public health, food and drugs, financial regulation, and more.
¹⁸

Powell helped shape a new majority to serve the interest of corporations, but for years, several vigorous dissents resisted the concept of corporate rights. The most vigorous came from the conservative Justice William Rehnquist. He grounded his dissents in the fundamental proposition that our Bill of Rights sets out the rights of human beings, and corporations are not people. For years, Rehnquist maintained this principled conservative argument, warning over and over again that corporate rights have no place in our republican form of government.
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Here Come the Foundations

Despite the Rehnquist dissents, Powell’s vision of an unregulated corporate political “marketplace,” where corporations are freed by activist courts from the policy judgment of the majority of people, won out. Powell, of course, could not have acted alone. He could not have moved a majority of the Court to create corporate rights if no one had listened to his advice to organize corporate political power to demand corporate rights. Listen they did—with the help of just the sort of massive corporate funding that Powell proposed.

Corporations and corporate executives funded a wave of new “legal foundations” in the 1970s. These legal foundations were intended to drive into every court and public body in the land the same radical message, repeated over and over again, until the bizarre began to sound normal: corporations are persons with constitutional rights against which the laws of the people must fall.

Huge corporations, including Powell’s Philip Morris, invested millions of dollars in the Chamber of Commerce’s National Chamber Litigation Center and other legal foundations to bring litigation demanding new corporate rights. In rapid succession,
corporations and supporters funded the Pacific Legal Foundation, the Mid-Atlantic Legal Foundation, the Mid-America Legal Foundation, the Great Plains Legal Foundation (Landmark Legal Foundation), the Washington Legal Foundation, the Northeastern Legal Foundation, the New England Legal Foundation, the Southeastern Legal Foundation, the Capital Legal Center, the National Legal Center for the Public Interest, and many others.
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These foundations began filing brief after brief challenging state and federal laws across the country, pounding away at the themes of corporations as “persons,” “speakers” and holders of constitutional rights. Reading their briefs, one might think that the most powerful, richest corporations in the history of the world were some beleaguered minority fighting to overcome oppression. The foundations and the corporate lawyers argued that “corporations are persons” with the “liberty secured to all persons.” They used new phrases like “corporate speech,” the “rights of corporate speakers,” and “the corporate character of the speaker.” They demanded, as if to end an unjust silence, “the right of corporations to be heard” and “the rights of corporations to speak out.”

This corporate campaign sought to redefine the very role of corporations in American society. The message was insistent: We should no longer think of corporations as useful but potentially insidious industrial economic tools. We should no longer be concerned that corporations might leverage massive economic power into massive political power or trample the public interest for the profit of the few. Instead, we should think of corporations as pillars of liberty, institutions that Americans can trust. They would protect our freedom for us. They would stand up to “bad” government for us.

A 1977 brief of the Chamber of Commerce, for example, argued that the Court should strike down a state law that limited corporate political spending in citizens’ referendum elections
because corporations help maintain our freedoms: “Business’s social role is to provide the people a valuable service which helps maintain their freedoms…. The statute at issue prevents the modern corporation from fulfilling a major social obligation….”
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By 1978, the millions of dollars invested in the radical corporate rights campaign began to pay off. The first major victory for the corporate rights advocates came in 1978, with a corporate attack on a Massachusetts law in
First National Bank of Boston
v.
Bellotti.
Several international corporations—including Gillette, the Bank of Boston, and Digital Equipment Corporation—filed a lawsuit after the people of Massachusetts banned corporate political spending intended to influence a citizen referendum. Justice Lewis Powell cast the deciding vote and wrote the 5-4 decision wiping off the books the people’s law intended to keep corporate money out of citizen ballot questions.
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For the first time in American history, corporations had successfully claimed “speech” rights to attack laws regulating corporate money in our elections.

With that success, an emboldened corporate rights campaign next attacked energy and environmental laws. In the 1982 case of
Central Hudson Gas & Electric Corporation
v.
Public Service Corporation of New York,
utility corporations and the array of corporate legal foundations all argued that a New York law prohibiting utility corporations from promoting energy consumption violated the corporations’ rights of free speech. The corporations won again, and again Justice Powell wrote the decision for the activist Supreme Court that he had imagined in his 1971 Chamber of Commerce memo. The corporate interest in promoting energy
consumption
for corporate profit trumped the people’s interest in energy
conservation.
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Over a period of six years, Justice Powell wrote four key corporate rights decisions for the Supreme Court. These unprecedented cases transformed the people’s First
Amendment speech freedom into a corporate right to challenge public oversight and corporate regulation.

Powell led a majority of the Court to accept the repeated mantra that “corporations are persons” and corporate “voices” must be free, and the sustained attacks on the people’s laws continued for the next two decades. Oil, coal, and utility corporations, tobacco corporations, chemical and pharmaceutical corporations, alcohol corporations, banking and other Wall Street corporations, and many others all successfully claimed corporate speech rights to invalidate federal, state, and local laws. As you will see in
Chapter Two
, corporations even succeeded in attacking the right of parents to know whether the milk they fed their children came from cows treated with Monsanto’s genetically engineered recombinant DNA bovine drug.

In 2007, the U.S. Chamber of Commerce’s National Chamber Litigation Center celebrated thirty years of using judicial activism on behalf of corporations and admitted that it was “the brainchild of former U.S. Supreme Court Justice Lewis Powell.” The brainchild, with its motto of “Business Is Our ONLY Client,” bragged about such “victories” as convincing the Supreme Court to throw out a decision by a jury of people to impose punitive damages for the unlawful conduct of Philip Morris, Inc.
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The Consequences

The success of the Powell-Chamber of Commerce plan transformed American law, government, and society, with two devastating consequences for the country. First, corporations gained new political power at the expense of average citizens and voters. Corporations poured out money to lobbying and election campaigns and to help friendly politicians and hurt unfriendly politicians. With even modest reform crushed by corporate rights decisions such as
Bellotti
v.
First National Bank of Boston
—and
now much more so,
Citizens United
—corporations could threaten “independent expenditure” campaigns against politicians who did not bend their way. Corporate money to influence legislative votes and politician behavior lost its scandalous, shameful nature. Bags of corporate cash were no longer bags of cash; they were “speech.” How could “speech” be corrupt or scandalous?

Washington and many state capitals became playgrounds for corporate lobbyists, and our elected representatives became increasingly disconnected from the will of the people. With the new, organized corporate radicalism, staggering amounts of corporate money flooded Washington and our political system. Between 1998 and 2010, for example, the Chamber of Commerce spent $739 million on lobbying. Pharmaceutical and health care corporations spent more than $2
billion
on lobbying in the past twelve years. Three corporations seeking military contracts, Northrop Grumman Corporation, Lockheed, and Boeing, spent more than $400 million on lobbying. GE Corporation ($237 million), AT&T ($162 million), the pharmaceutical corporate lobby PHRMA ($195 million), ExxonMobil ($151 million), Verizon ($149 million), and many more corporations all joined the lobby-fest.
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Financial, labor, energy, environmental, health, trade, and other legislation and policy tilted in favor of corporate interests; the hurdles for advancing the public interest became much higher.