Moon of Alabama Brecht quote
January 18, 2006

Ethically Acceptable

Under pressure over lobbying abuses, House Speaker J. Dennis Hastert presented ideas for lobbying reform.

"We need to reform the rules so that it is clear, beyond a shadow of a doubt, what is ethically acceptable,"

he is cited. And he has serious ideas:

First, we must ban privately sponsored travel in the House of Representatives. I know fact-finding trips are important. This body considers legislation that affects people that cannot always travel to Washington to petition their government. Private travel has been abused by some, and I believe we need to put an end to it.

Second, I think we need to tighten even further the gift rules. A Member of Congress should be able to accept a ball cap or a t-shirt from the proud students at a local middle school, but he or she doesn’t need to be taken to lunch or dinner by a lobbyist.

But what is still "ethical acceptable" to Hastert are campaign contributions. Such like meals, travel or various gifts. His new rules are just a new lipstick color for the lobbying pig:

According to lobbyists and ethics experts, even if Hastert's proposal is enacted, members of Congress and their staffs could still travel the world on an interest group's expense and eat steak on a lobbyist's account at the priciest restaurants in Washington.

The only requirement would be that whenever a lobbyist pays the bill, he or she must also hand the lawmaker a campaign contribution. Then the transaction would be perfectly okay.

Under Hastert's new rules, the lobbyist has to give a bit more. A $1 campaign check handed over in that fancy restaurant or on the famous Scottish golf range would be sufficient.

"Beyond a shadow of a doubt", that is all there is to Hastert's ethics.

Posted by b on January 18, 2006 at 7:33 UTC | Permalink

Comments


giving washington or brussels even a cursory look makes clear why "lobbying" is nothing but legalized bribery.

Posted by: name | Jan 18 2006 9:10 utc | 1

"Ethical acceptable"? like say, Plato's idea of the Noble Lie?

Plan:
I recommend the Bernard Shaw style attack. Remember in 1988 when CNN's Bernard Shaw hit Michael Dukakis with: "Governor Dukakis, your wife has been raped and murdered".....

Off w/the gloves Goddamn it or step down!

Posted by: Uncle $cam | Jan 18 2006 10:04 utc | 2

Has anybody an example of a country that manages to keep it parliament free of bribes (open ones I mean).

In the U.S. the influence of cooperations in giving campaign money results from the first ammendment right of cooperations as "persons". Is this correct? Who came up with this redicules idea?

Posted by: b | Jan 18 2006 11:30 utc | 3

Read All About It..........Read All About It.., In Murdoch's SCUM

Now we have "fanatical dads", just like them muslims.

Posted by: Cloned Poster | Jan 18 2006 12:41 utc | 4

In the U.S. the influence of cooperations in giving campaign money results from the first ammendment right of cooperations as "persons". Is this correct? Who came up with this redicules idea?

b, the legal justification for corporate personhood rests on the 14th amendment. Having established corporations as persons under that amendment extends the legal protection of all the other ones to them. Thom Hartmann has done the best job I have seen on this issue. The court case itself, is described as follows:

The railroad was being sued by the county for back taxes. The railroad claimed six different defenses. The specifics are not important, because the central concern is whether the court ruled on the Fourteenth Amendment issue. As will be shown below, the Supreme Court’s decision clearly says it did not. But to put the railroad’s complaint in perspective, consider this:

On property with a $30 million mortgage, the railroad was refusing to pay taxes of about $30,000. (That’s like having a $10,000 car and refusing to pay a $10 tax on it ... and taking the case to the Supreme Court.)

One of the railroad’s defenses was that when the state assessed the value of the railroad’s property, it accidentally included the value of the fences along the right-of-way. The county, not the state, should have assessed the fences. So the railroad withheld all its taxes.

Yes, this is an exceedingly picayune distinction. All the tax was still due to Santa Clara County; the railroad didn’t dispute that. But they said the wrong assessor assessed the fences - a tiny fraction of the whole amount - so they refused to pay any of the tax, and they fought it all the way to the U.S. Supreme Court.

And as it happens, the Supreme Court of the United States agreed:

...the entire assessment is a nullity, upon the ground that the state board of equalization included ... property [the fences] which it was without jurisdiction to assess for taxation...

The Court rejected the county’s appeal, and that was the end of it. Except for one thing.

One of the railroad’s six defenses involved the Fourteenth Amendment. As it happens, since the case was decided based on the fence issue, the railroad didn’t need those extra defenses, and none of them was ever decided by the court. But one of them - related to the Fourteenth Amendment - still crept into the written record, even though the Court specifically did not rule on it.

The 14th amendment part of the RR's argument boiled down to this:

In the Fourteenth Amendment part of their defense, the railroad said:
That the provisions of the constitution and laws of California ... are in violation of the fourteenth amendment of the constitution, in so far as they require the assessment of their property at its full money value, without making deduction, as in the case of railroads [that are only] operated in one county, and of other corporations, and of natural persons, for the value of the mortgages ...(Emphasis added)

The italic portions say, in essence, “The state is taxing us railroads on the whole value of our property, instead of deducting our mortgage the way people do. That’s not fair. Nobody else gets taxed that way.”

The implication, of course, is that the state has no right to decide that corporations get different tax rates than humans. And the railroad was using the former slaves’ Equal Protection clause (the Fourteenth Amendment) as its shield.

So the case was decided in the RR's favor but the issue of corporate personhood was never part of the decision even though it was one of six defenses the RR was prepared to make in it's defense. Court reporter Bancroft Davis and Chief Justice Waite did have private conversations about the issue in which they agreed that corporations were persons, though there is no record that any of the other justices agreed with them. Davis later added comments to the headnotes of the decision indicating that the court believed corporations were persons based on those private conversations. What is known about how that transpired is recorded here.

Given it's invalid adoption as a foundation for corporate law, dubious claims and far reaching effects on our system, our corporate sucklings - I mean distinguished Congressional representatives - should be asking prospective SC nominees asked about overturning Santa Clara County vs Southern Pacific Railroad. Might even be a wedge issue on the right.

Posted by: lonesomeG | Jan 18 2006 17:59 utc | 5

@lonesomeG - thanks!

Posted by: b | Jan 18 2006 18:15 utc | 6

I should have been more precise in my first sentence. The legal claim for corporate personhood rests on the 14th amendment. The actual legal justification rests on nothing at all since 1) the SC never ruled on the claim and 2) a court reporter's commentary in the headnotes is not legal precedent.

Posted by: lonesomeG | Jan 18 2006 18:18 utc | 7

b, LonesomeG

Are corporations taxed (in germany, or anyplace else) as non-persons, or on a different set of tax structures, as opposed to having the same rights as a "person"? Are the same "personhood" advantages for a corportion in the tax structure consistently applied also to the realm of campaign contrabutions, bankruptcy, conscription, or other "obligations" of personhood to the state?

Posted by: anna missed | Jan 18 2006 20:54 utc | 8

@anna missed If I can remember any of the commercial law I studied longer ago than I care to mention and with great indifference, in NZ as in many other 'brit' justice style jurisdictions companies/ corporations etc have to register as a limited liablity company before they are a legally recognisable entity.

It is possible to set up 'Two Dollar' companies where the financial exposure of that corporation is $2.

That information is publically available through the companies office. This means no bank is going to lend a $2 corporation anything until they get personal guarantees backed by collateral from the company's shareholders.

In both Australia and NZ there are separate tax rates for people and companies. Called, surprisingly enough, Personal Tax and Company Tax. Land taxes are levied by local government and normally the rates are the same no matter what entity owns it.

Companies are loked after by making the land tax assessment on the 'unimproved' value of the land rather than the 'improved' value.

This means that a person sitting on a block of land with a run down shack on it pays the same tax as the corporation next door which may have a factory or an apartment complex or a 40 floor office building on it.

The great flaw with treating corporations the same as people is that it isn't really possible to imprison or execute corporations.
Plus the nature of the limited liability thing makes it difficult to hold the owner responsible unless a direct link including personal negligence or intent can also be proven.

So corporations are subject to a different type of law, company law which frequently replaces incarceration penalties with huge fines etc.

Of course the whole situation is even more complex with publicly listed corporations since many of the shareholders are a mile away from the day to day running of the business.

Now attempts are being made to hold members of a corporation's board personally responsible for that corporation's actions I think we can safely assume that a lot of pressure will be put on governments to get rid of the financial penalties.

The argument will run that it is unfair to 'punish' the shareholders for actions they had no knowledge of. Yeah right. All they did was appoint the assholes who did the dirty work.

So as far as I'm aware in many parts of the world corporations are treated as a legal entity but not in the same way as a person is an individual entity.

That 14th amendement bullshit needs to go on the list of things to be fixed when the people in the US finally realise that not only do they have the right, they have the power to take control of their nation's actions and ultimately it's destiny.

Posted by: Debs is dead | Jan 18 2006 23:48 utc | 9

If Davis knew his headnote was legally sterile, though, we can only speculate about his tactics. Perhaps he thought judges in the future would read his headnote as if it could serve as legal precedent, and would thereafter invoke corporate personhood in rendering court decisions. That would be grossly irregular, and it would place corporate personhood in stupendous legal jeopardy if it ever came to light. But something of that sort must have happened, because corporate personhood over time spread throughout the world of commerce—and politics.
A review of Thom Hartmanns book by Richard Behhan that claims that corporate personhood is in fact not grounded in http://www.commondreams.org/views02/1226-04.htm>LAW.
................

Mr. Hartmann doesn’t fill in this blank, but his daylighting of the irregularity will be the eventual undoing of corporate personhood. Its alleged source in Santa Clara County is a myth, a lie, a fraud. Corporate personhood simply cannot now survive, after Mr. Hartmann’s book, a rigorous and sustained legal attack.

Sustained it will have to be, for years or decades or even longer: corporations will fight the attack bitterly, but we now know corporate personhood has utterly no basis in law.

..................

Now that its 2006, anyone know why this has'nt (or has) been challenged?

Posted by: anna missed | Jan 19 2006 3:21 utc | 10

@anna missed

What is a corporation?

What sets the corporation apart from all other types of businesses is that a corporation is an independent legal entity, separate from the people who own, control, and manage it. In other words, corporation and tax laws view the corporation as a legal "person," meaning that the corporation can enter into contracts, incur debts, and pay taxes apart from its owners. And there are other important characteristics that result from the corporation's separate existence: A corporation does not dissolve when its owners (shareholders) change or die, and the owners of a corporation are not personally responsible for the corporation's debts; this is called limited liability.

How are corporations taxed? (scroll down)

Unlike sole proprietors and owners of partnerships and LLCs, a corporation's owners do not pay individual taxes on all business profits. The owners pay taxes only on profits paid out to them in the form of salaries, bonuses, and dividends. (Dividends are portions of profits that large corporations sometimes pay out to shareholders in return for their investment in the company.) The corporation pays taxes, at special corporate tax rates, on any profits that are left in the company from year to year (called "retained earnings").

Since corporations pay taxes, the "no taxation without representation" fever caught hold of the RR companies and other large and growing industries right after the Civil War. Corporate attorneys sought to get cases to the SC to make the argument for corporate personhood for several years before Santa Clara County vs SP RR. The big business based Republican Party, which dominated politics at the time, did not oppose it; some Dems, however, argued against it long after the 1886 decision:

THE FIRST THING to understand is the difference between the natural person and the fictitious person called a corporation. They differ in the purpose for which they are created, in the strength which they possess, and in the restraints under which they act.

Man is the handiwork of God and was placed upon earth to carry out a Divine purpose; the corporation is the handiwork of man and created to carry out a money-making policy.

There is comparatively little difference in the strength of men; a corporation may be one hundred, one thousand, or even one million times stronger than the average man. Man acts under the restraints of conscience, and is influenced also by a belief in a future life. A corporation has no soul and cares nothing about the hereafter.

What happens, of course, is that a few powerful people within the corporations make all the decisions and are able to deflect any negative consequences onto the corporate "person" which is legally liable while holding on personally to any wealth those decisions create. Nice deal. Barring an Enron style collapse, the only real risk is from bad publicity (e.g., Merrill Lynch) or corporate infighting in which you lose your power base. Note that in ML's case, only the high profile analyst Henry Blodgett got publically canned - because his emails became a public scandal - but left with about $45 mil just to keep him quiet. Those above him who actually ran the place avoided this fate but some suffered in the corporate board battles that followed. The corporate "person" took the hit, paid a fine equal to about a year's postage costs, got some bad PR, hired a new marketing agency and moved on. It felt no shame or remorse as any normal, decent person would and most of the real people behind the corporate mask who were responsible for the scandal avoided real consequences. I could use a corporate person to hide behind myself.

Posted by: lonesomeG | Jan 19 2006 3:24 utc | 11

And thanks DiD for responding to my question. It seems this whole "personhood" thing (was) is to establish a one way relationship that reaps the benefits of "personhood" while evading the costs -- which then begs the question of why bother with the analogy at all, unless it's only path to (legal) legitimacy is via the 14th amendment. But then, what prevents any group ownership scheme to demand the same privleges as "corporate personhood" -- or how about any person(hood) establishing an off-shore identity while maintaining citizenship and corporate privileges and non-taxable status?

Posted by: anna missed | Jan 19 2006 3:40 utc | 12

@anna missed

Just saw your later post after I finished mine. The Bryan quote in my previous post is from 1912, so there was awareness of this issue at the time and even for a while later. And, since he had run for President 3 times and was the Dems' elder statesman then, this is not coming from the so-called lunatic fringe. Why did the issue fade? I think the answer to your question about why corporate personhood has not been challenged may have a combination of explanations:

1. Powerful interests want it that way and they have the money and influence to keep it that way.

2. The general public finds the issue arcane - a combination of legal and business philosophy that is over their heads - and is not aware of how it affects their day to day life. Abstractions have never resonated as issues in the public domain. Aborted fetuses? Loss of abortion rights? Guns? Marital rights for gays? These are all fairly concrete issues that people can easily understand and get worked up about. Not so with corporate personhood.

3. The labor movement, by succeeding, may have rendered the issue moot for many. After WWII, the large middle class did not go to bed cold or hungry at night. If I have enough, why worry about what others, including corporate "persons", have.

We may revisit this issue after the coming economic meltdown when only corporations and their service class have enough.

Posted by: lonesomeG | Jan 19 2006 3:47 utc | 13

But then, what prevents any group ownership scheme to demand the same privleges as "corporate personhood" -- or how about any person(hood) establishing an off-shore identity while maintaining citizenship and corporate privileges and non-taxable status?

Nothing.

The question is: what advantage would you gain from doing it?

There is a cost to setting these things up. It is nominal for corporations which want to hide/move money around but maybe not so nominal for the rest of us.

Shell companies are a common creation in the corporate world. They exist to avoid taxes, shelter money, conceal it's source or hide it's path. The international arms and drug trades also use them for moving money, arms and drugs. These little corporate offspring are created by parent companies for specific purposes that are encoded in their corporate DNA while they are still fetuses in corporate legal depts.

In the world of actual people, shell companies serve no purpose so it is not worth the expense to create them. There are, however, some shell people. When they reach adulthood, we call them empty suits or even President. They, too, can be a big help to corporate persons.

Posted by: lonesomeG | Jan 19 2006 4:17 utc | 14

My take on the "personhood" claim of Corporations is a little different from lonesomeG and Thom (ADD) Hartmann. My argument will more closely follow that of the excellent film "The Corporation", which, if you haven't seen it is highly recommended. (It goes beyond the personhood doctrine of Corporations to examine, in depth, the pathological ramifications of their legally proscribed, and mandated, behavior.)

From their website: "A corporation is designated as a legal person under law. What kind of person would it be? Answer: A psychopath. While this may strike some as obvious, others will find The Corporation a real eye-opener as it delves into the mindset and character of corporate America. This insightful documentary comes to us from Mark Achbar (Manufacturing Consent: Noam Chomsky and the Media), Jennifer Abbott (A Cow at My Table), and Joel Bakan, whose book The Corporation: The Pathological Pursuit of Profit and Power (to be published March 8) serves as the basis for the film.

Through interviews with left-wing staples such as Noam Chomksy, Naomi Klein, and Michael Moore; company CEOs from Pfizer, Goodyear, and Royal Dutch Shell; activists and whistleblowers; and highlighting specific cases of corporate deception, the three-hour mini-series paints a somewhat unflattering picture of multinationals. Some of the most damning evidence is the film's exploration of FOX News executives pressuring its reporters to kill a story that exposed links to cancer in a synthetic Monsanto bovine milk hormone.

The Corporation addresses three different themes. In the first program, The Pathology of Commerce, filmmakers examine the pathological self-interest of the modern corporation. Planet Inc. looks at the scope of commerce and the sophisticated, even covert, techniques marketers use to get their brands into our homes. The final program, Reckoning, examines how corporations cut deals with any style of government - from Nazi Germany to despotic states today - that allow or even encourage sweatshops, as long as sales go up.

The Corporation received critical acclaim at the Toronto International Film Festival, and has just been named as one of the Festival's "Canada's Top Ten 2003" films. The Corporation also garnered the Joris Ivens Special Jury Prize at the Amsterdam Film Festival in November and will be screened at the Sundance Film Festival in January. "

I think it is essential to look at the background to all of this because this story is a case in point of the methods the elite use to take a good (in the social justice sense) ruling and turn it upside down to justify their thievery--a tactic they use to this day.

Originally, corporations were essentially limited partnerships formed for a specific purpose (building a bridge) and then dissolved after the task was completed. The increasing role of capital in industrial development in this country, following the grand vision of St. Croix's most famous bastard son, Alexander Hamilton, led to a number of court cases increasing the rights and purviews of corporations.

To examine how the issue of "personhood" was formed, we must first step back and examine an earlier case, Scott v. Sanford, a case which had nothing to do with corporations, yet improbably, provided an unlikely justification for further rulings. One of my heros, Buckminister Fuller, first postulated in "Operating Manual for Spaceship Earth" that invention proceeds centripetally, that is, at right angles to intention. This is certainly one of those instances.

It is commonly acknowledged by non-wingnut fascist constitutional scholars that the Dred Scott decision represented the moral nadir of Supreme Court rulings until, at least, Bush v. Gore. Both have been described by Supreme Court Justices as a "self-inflicted wound."

To quote Wikipedia: "Dred Scott v. Sandford1, 60 U.S. (19 How.) 393 (1857), known as the "Dred Scott Case", was a lawsuit decided by the Supreme Court of the United States in 1857. It is considered by many to have been a key cause of the American Civil War, and of the later ratification of the Thirteenth, Fourteenth, and Fifteenth Amendments to the United States Constitution, leading to the abolition of slavery and establishment of civil rights for freed slaves. The decision for the court was written by Chief Justice Roger Taney.

Dred Scott was an American slave who was taken first to Illinois, a free state, and then to Minnesota, a free territory, for an extended period of time, and then back to the slave state of Missouri. After his original master died, he sued for his freedom. He initially won his freedom from a Missouri lower court, but the decision was reversed by the Missouri Supreme Court and remanded to the trial court. Simultaneously, Scott had filed suit in federal court, where, after prevailing on the issue of his status as a citizen of Missouri, he lost a trial by jury. Scott appealed to the U.S. Supreme Court, which used the case to fundamentally change the legal balance of power in favor of slaveholders.

The Court ruled that:
No Negroes, not even free Negroes, could ever become citizens of the United States. They were "beings of an inferior order" not included in the phrase "all men" in the Declaration of Independence nor afforded any rights by the Constitution.
The exclusion of slavery from a U.S. territory in the Missouri Compromise was an unconstitutional deprivation of property (Negro slaves) (Note the "Libertarian" Property Rights argument rearing its fetid little head even here, a precursor to Gail Norton and the Mountain States Legal Foundation arguments which we must combat to this very day.) without due process prohibited by the Fifth Amendment to the United States Constitution. This is the first appearance in American constitutional law of the concept of "substantive due process," as opposed to procedural due process.
Dred Scott was not free, because Missouri law alone applied after he returned there."

The amendment provides a broad definition of national citizenship, overturning a central holding of the Dred Scott case. It requires the states to provide equal protection under the law to all persons (not only to citizens) within their jurisdictions. The framers' main intent was to ensure equal protection regardless of race, while including some protection of the right to vote.

Current Supreme Court Justice David Souter has called this amendment "the most significant structural provision adopted since the original Framing". (McCreary County v. ACLU of Kentucky (2005).)

The ramifications of this ruling led directly to the civil war. Again from Wiki: "The decision was a culmination of what many at that time considered was a push to expand slavery. The expansion of the territories and resulting admission of new states meant that the longstanding Missouri Compromise would cause the loss of political power in the South as all new states would be admitted as free states. Thus, Democratic party politicians sought repeal of the Missouri Compromise and were finally successful in 1854 with the passage of the Kansas-Nebraska Act, which naturally ended the "compromise." This Act permitted each newly-admitted state south of the 40th parallel to decide whether to be a slave state or free state. Now, with Dred Scott, the Supreme Court under Taney sought to permit the unhindered expansion of slavery into the territories.

Although Taney believed that the decision would settle the slavery question once and for all, it produced the opposite result. It strengthened the opposition to slavery in the North, divided the Democratic Party on sectional lines, encouraged secessionist elements among Southern supporters of slavery to make even bolder demands, and led to the establishment of the Republican Party and rise of Abraham Lincoln.

The reaction to the decision from opponents of slavery was fierce. The Albany Evening Journal combined two themes in denouncing the decision as both an offense to the principles of liberty on which the nation was founded and a victory for the Slave Power over the free states:

The three hundred and forty-seven thousand five hundred and twenty-five Slaveholders in the Republic, accomplished day before yesterday a great success — as shallow men estimate success. They converted the Supreme Court of Law and Equity of the United States of America into a propagandist of human Slavery. Fatal day for a judiciary made reputable throughout the world, and reliable to all in this nation, by the learning and the virtues of Jay, Rutledge, Ellsworth, Marshall and Story!
The conspiracy is nearly completed.
Note the "Conspiracy Theory" concept being used without apology in MSM! The Legislation of the Republic is in the hands of this handfull of Slaveholders. The United States Senate assures it to them. The Executive power of the Government is theirs. Buchanan took the oath of fealty to them on the steps of the Capitol last Wednesday. The body which gives the supreme law of the land, has just acceded to their demands, and dared to declare that under the charter of the Nation, men of African descent are not citizens of the United States and can not be — that the Ordinance of 1787 was void — that human Slavery is not a local thing, but pursues its victims to free soil, clings to them wherever they go, and returns with them — that the American Congress has no power to prevent the enslavement of men in the National Territories — that the inhabitants themselves of the Territories have no power to exclude human bondage from their midst — and that men of color can not be suitors for justice in the Courts of the United States!

That editorial ended on a martial note:

... All who love Republican institutions and who hate Aristocracy, compact yourselves together for the struggle which threatens your liberty and will test your manhood!"

O.K., so the ruling was a complete travesty and embarrassment internationally to US mercantile interests as slavery had been ruled out in Europe and its colonies for twenty and up years.

The Fourteenth Amendment to the United States Constitution was enacted post-Civil War as an attempt to correct the racist ramifications of Dred Scott. Again from Wiki: "The amendment provides a broad definition of national citizenship, overturning a central holding of the Dred Scott case. It requires the states to provide equal protection under the law to all persons (not only to citizens) within their jurisdictions. The framers' main intent was to ensure equal protection regardless of race, while including some protection of the right to vote.

Current Supreme Court Justice David Souter has called this amendment "the most significant structural provision adopted since the original Framing". (McCreary County v. ACLU of Kentucky (2005).)"

Next, we go back to Wiki, under the topic, "Corporate Personhood":
The Civil War accelerated the growth of manufacturing and the power of the men who owned the large corporations. The systematic bribing of Congressmen was instituted by Mark Hanna, sugar trust magnate Henry Havemeyer, and Senator Nelson Aldrich and their associates. (Jonathan Shepard Fast and Luzviminda Bartolome Francisco, Conspiracy For Empire, Big Business, Corruption and the Politics of Imperialism in America, 1876-1907 (Quezon City, Foundation for Nationalist Studies, 1985), p. 92-97).

Beginning in the 1870s corporate lawyers became bolder about using the Webster/Marshall theory of corporations as persons, arguing that as such they were entitled to some of the legal protections against arbitrary state action accorded also to natural persons.

It should be understood that the term "artificial person" was in long use, prior to the Dartmouth College decision, and was in principle distinct from any contention that corporations have the rights of natural persons. "Artificial person" was used because there were certain resemblances, in law, between a natural person and corporations. Both could be parties in a lawsuit; both could be taxed; both could be constrained by law. In fact the corporations had been called artificial persons by courts in England as early as the 16th century because lawyers for the corporations had asserted they could not be convicted under the English laws of the time because the laws were worded "No person shall..."

In the late 1800s railroads were the most powerful corporations in the country. Most of the nation's farmers were dependent on them to haul their produce; even the manufacturing corporations were at their mercy when they needed coal, iron ore, finished iron, or any other materials transported. In four cases that reached the Supreme Court (94 U.S. 155, 94 U.S. 164, 94 U.S. 179, 94 U.S. 180 (1877)) railroads tried to argue that the 14th Amendment prevented states from regulating the maximum rates they could charge. These cases did not rely on just an interpretation of the 14th Amendment as most also tied in the Interstate Commerce clause as well. In each case the Court refused to render an opinion as to whether the 14th Amendment applied to corporations instead couching their decision on the Interstate Commerce clause.

Now, this finally brings us to the retrospectively historically momentous and infamous 1886 case, Santa Clara County v. Southern Pacific Railroad Company, which Hartmann, unclearly, is referring to.

Back to Wiki:
At the lower court levels the question of whether corporations were persons had been argued, and these arguments were submitted in writing to the Court. However, before oral argument took place, Chief Justice Morrison R. Waite announced: "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 the opinion that it does."

The court decision, written by Justice Harlan in favor of the Southern Pacific Railroad Company, consists of a lengthy discussion of various technical factors and does not rely upon or include the determination that corporations can be classified as "persons" according to the Fourteenth Amendment of the United States Constitution. However, the court reporter, J. C. Bancroft Davis, inserted Chief Justice Waite's comments as "Statement of Facts", even though Chief Justice Waite stressed to Davis that the court did not rely on this information to reach its decision.

Many cases since have referred to this decision as setting a legal precedent for recognition of corporate personhood, even though the Supreme Court decided in the 1905 case of United States v. Detroit Lumber that headnotes and statement of fact can not be construed as being part of official court decisions.

Some historians have speculated that the reason Chief Justice Waite may have declined to hear arguments regarding the personhood status of corporations is because he may have been convinced that this was the original intent of Congress when drafting the amendment through testimony by Roscoe Conkling during the San Mateo County v. Southern Pacific Railroad case of 1882. Roscoe Conkling was one of the authors of the Fourteenth Amendment and he claimed that members of congress were careful to use the word "person" rather than "citizen" when writing the Fourteenth Amendment so that corporations could be included in the definition. As evidence, he read from a secret journal that was written during the drafting process. However, in 1932, a Stanford law librarian, Howard Graham discovered that the entries read during Conkling's testimony differed from the entries in the secret journal. He concluded that Roscoe Conkling, who was working for the railroad industry at the time of his testimony before the Supreme Court, purposely misled the court with his testimony in order to grant corporations the same constitutional rights as natural persons. Eight detailed publications by Graham about the topic were compiled and republished as Everyman's Constitution in 1968.

Furthermore:
In Santa Clara County v. Southern Pacific Railroad Company (118 U.S. 394 (1886)), at the lower court levels the question of whether corporations were persons had been argued, and these arguments were submitted in writing to the Court. However, before oral argument took place, Chief Justice Waite announced: "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 the opinion that it does."

Was the 14th Amendment about corporations? One of the 1886 judges, Samuel F. Miller, had not thought so in 1872, only 6 years after the Amendment had become law, when the court was "called upon for the first time to give construction to these articles." In the Slaughterhouse Cases 83 U.S. 36 1872, Miller delivered the majority opinion and discussed the Thirteenth Amendment and the Fifteenth Amendment as well as the Fourteenth as follows:
The most cursory glance at these articles discloses a unity of purpose, when taken in connection with the history of the times, which cannot fail to have an important bearing on any question of doubt concerning their true meaning. Nor can such doubts, when any reasonably exist, be safely and rationally solved without a reference to that history, for in it is found the occasion and the necessity for recurring again to the great source of power in this country, the people of the States, for additional guarantees of human rights, additional powers to the Federal government; additional restraints upon those of the States. Fortunately, that history is fresh within the memory of us all, and its leading features, as they bear upon the matter before us, free from doubt.
...
We repeat, then, in the light of this recapitulation of events, almost too recent to be called history, but which are familiar to us all, and on the most casual examination of the language of these amendments, no one can fail to be impressed with the one pervading purpose found in them all, lying at the foundation of each, and without which none of them would have been even suggested; we mean the freedom of the slave race, the security and firm establishment of that freedom, and the protection of the newly made freeman and citizen from the oppressions of those who had formerly exercised unlimited dominion over him.

(Graham, Howard Jay, Everyman's Constitution, State Historical Society of Wisconsin, 1968. See also Graham, Howard Jay, "The Conspiracy Theory of the Fourteenth Amendment," The Yale Law Journal, Vol. 47: 341, 1938)
It has been argued that the men who wrote the 14th Amendment specifically meant for the word person to be a loophole which you could drive a giant corporation through. Apparently in one of the railroad cases an attorney who had been on the committee that drafted the amendment waved a paper before the court claiming that it documented such; but the paper was not entered as evidence, nor apparently was it shown to anyone, nor was it saved. However, careful research has shown that, John A. Bingham the member of Congress who is known to have been chiefly responsible for the phraseology of Section One when it was drafted by the Joint Committee in 1866, had, during the previous decade and as early as 1856-1859, employed not one but all three of the same clauses and concepts he later used in Section One. More important still, Bingham employed these guarantees specifically and in a context which suggested that free Negroes and mulattoes rather than corporations and business enterprise unquestionably were the persons' to which he then referred.

So now corporations have the rights, but not the responsibilites of persons. They are killer sharks trawling the waters of our democracy. Corporations proliferated, and their capitalisation soared.

The final step, in this simplified history, is the step which turned corporations from killer sharks to massive pathological Orcas, the killer whale. And that is the 1919 case of Dodge v. Ford Motor Company in which the Michigan Supreme Court held that Henry Ford owed a duty to the shareholders of the Ford Motor Company to operate his business for profitable purposes as opposed to charitable purposes.

In 1916, the Ford Motor Company earned surpluses in excess of $100,000,000.00. The company's president and majority stockholder, Henry Ford, sought to stop declaring dividends for investors, and instead cut prices below the price for which they could actually sell cars, while at the same time increasing the number of persons employed by his company. Ford said that he wanted to increase the number of people who could afford to buy his cars. He stated:
"My ambition is to employ still more men, to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes. To do this we are putting the greatest share of our profits back in the business."

Minority shareholders objected, demanding that Ford continue to charge higher prices in order to pay them larger dividends...

The Court held that a business corporation is organized primarily for the profit of the stockholders. The discretion of the directors is to be exercised in the choice of means to attain that end, and does not extend to the reduction of profits or the nondistribution of profits among stockholders in order to benefit the public, making the profits of the stockholders incidental thereto.

Because this company was in business for profit, Ford could not turn it into a charity. This was compared to a spoliation of the company’s assets. The court therefore upheld the order of the trial court requiring that directors declare an extra dividend of $19 million.

In other words, a corporation, like BP or ADM, can greenwash, that is, advertise and promulgate their "heartfelt" environmental and ecological sympathies all they want as a marketing ploy. That is legal. But if any of the actions they might undertake in support of these campaigns, in any way, shape, or form, undermines corporate profitability, well, that is illegal as all shit Jack, and they will be successfully sued in court by shareholders. So remember this well, and explain it to others, when you feel taken in by corporate greenwashing, or PBS propaganda. It is simply illegal for corporations to forego profits for any reason.

As a side note, the Dodge brothers used their share of the 19M to expand the competing Dodge Motor Company.

So that ends our tale of how the Dred Scott decision, and its remedy, the 14th amendment, inadvertently led to corporations becoming conscienceless, pathologically driven, profit maximizing leviathans. They have the rights of persons, but not the responsibilities. The way corporations make money is not by competing, as libertarian assholes might try to convince you of, but by externalizing costs. That is to say polluting the environment and getting you to pay for it, or using interstate trucking as a mode of transportation, and getting you to build the highways. But that is a story for another day.

Coming round to the point I made at the beginning of this argument, this is all important because this is the same Orwellian technique Scalia, Thomas et al. have been employing in Bakke and the two Bollinger cases in turning affirmative action on its head. I'm sure there are other examples as well. (Thoughts?) The point is that the right wing troglodites have learned it is far more advantageous to embrace progressive rulings and then work to slyly and covertly subvert their intent, rather than confontationally seeking to overthrow popularly supported legislation. Same with all their approach to abortion, acceed to the right, but make it darn near impossible to exercize.

Sorry for the length of this, folks. I thought it would be about three paragraphs when I started, but I seem to be suffering from loggorhea at the bar tonight.

Posted by: Malooga | Jan 19 2006 4:20 utc | 15

The Bryan quote foreshadows his future trajectory.

I think the reviewer is a tad overoptimistic about Thom Hartmann's ability to overturn this ruling by writing a book.

Posted by: Malooga | Jan 19 2006 4:28 utc | 16


The Court held that a business corporation is organized primarily for the profit of the stockholders. The discretion of the directors is to be exercised in the choice of means to attain that end, and does not extend to the reduction of profits or the nondistribution of profits among stockholders in order to benefit the public, making the profits of the stockholders incidental thereto.
...........

Why did'nt I know this? So if a corporation is a personhood, it is in this incarnation -- forced by the rule of law -- to be only a Frankenstein, or better yet, a Slavemaster type personhood.

Oh Malooga! The Dread Scott connection, is most adept.

Posted by: anna missed | Jan 19 2006 5:59 utc | 17

@anna missed - Are corporations taxed (in germany, or anyplace else) as non-persons, or on a different set of tax structures, as opposed to having the same rights as a "person"? Are the same "personhood" advantages for a corportion in the tax structure consistently applied also to the realm of campaign contrabutions, bankruptcy, conscription, or other "obligations" of personhood to the state?

Yes the are taxed much differently than persons and they have no "personhood" in other cases either. Campaign contributes by companies are possible, though they are small and only do go to the party organisations not to single representatives. But in general the "lobbying culture" is getting worse especially on the european level.

Posted by: b | Jan 19 2006 9:09 utc | 18

Let's not lose sight of the fact that a corporation's "personhood" can be defined as precisely as the government wishes. No inherent "personhood" attaches to any corporation. The state can change that definition too, as well as eliminate it. Given the way that corporations are used to shield assets and income from lawful regulation, one could build a case that incorporation as a concept should be eliminated in an age when information technology allows any combine to be managed efficiently as a partnership. Is that more risky for the partners. Maybe, but tough. All I ask is that the entity and its funders assume responsibility for its acts. Is that too much to request?

Posted by: PrahaPartizan | Jan 19 2006 12:39 utc | 19

Well, a corporation does allow for investors better than a partnership.

The issue might be more of how corps. are interpreted and regulated, as well as how employees rights are balanced with those of investors and mngmt and BOD.

Posted by: Malooga | Jan 19 2006 14:45 utc | 20

In Sweden companies and also NGOs are refered to as ´legal persons´. Probably roots like the english. However different rules apply then to real persons, and different rules apply to different kinds (public, private and so forth) and sizes of companies (companies with less then 10 employees are exempt from some rules).

By the way in Sweden board members of stock companies are personally responsible if the company does not pay its taxes in time. If they have good reson to believe it was payed in time (ie they asked the financial officer or CEO) they get away and the burden shifts to whoever lied. But this only applies to paying taxes (government making sure government interest comes first) and not to other breaches of law or contract. Is it similar somewhere else, or are there other examples of how real persons within the companies are personally held responsible somewhere else?

Posted by: A swedish kind of death | Jan 19 2006 18:20 utc | 21

Is Abramoff the New Monica? by Frank Rich [a good read]


Posted by: beq | Jan 19 2006 20:07 utc | 22

@Malooga
What an excellent and concise piece on the history of corporate personhood esp regarding 14th amendment. If only that history could be disseminated to all your compatriots.

Although it was pointed out upthread that most people struggle to empathise with abstractions getting this message 'out there' is achievable.

The most obvious and seemingly banal way would be to make poor little orphan Ms Fourteenth Amendment the heroine in a soap opera.

This is a creature so beautiful, innocent and pure that right from the very beginning she is being eyed up with a view to molestation by the sweaty barons and their slimy underlings, politicians and lawyers.

Of course I overdo the imagery but it would be wonderful if some truly creative soul did tell this story in a way that the audience could personalise it and understand how it is that some of the best intentions of people can become perverted by the greedy.

Two things really stick out for me. The first is that right from inception the Republic has struggled to keep corruption at bay. Right from the declaration of Independence through the Civil War many of the 'players' have been just that, players out to consolidate their personal position by accumulating wealth and power.

The second is even more terrifying for me and has a lot to do with why BushCo disdains the UN as much as possible.

That is that as 'globalisation' becomes even more ubiquitous than it is now, nations are having to forgo sovereignty in order to standardise the way that entities such as corporations are regarded by their state. I guess the European standardisation process beginning with the customs treaties etc in the original unification of Germany are the model.

This means that it is all too likely that US corporate interests will succeed in having the notion of corporate personhood imposed everywhere else.

This will happen despite the fact it may not have any basis in law in it's country of origin. Once large sections of the rest of the world adopt this dubious piece of sophistry, that will be used as a reason to prevent any real examination of it's legality in the US.

As K Vonnegut said from time to time:

So it goes.

Posted by: Debs is dead | Jan 19 2006 21:36 utc | 23

The comments to this entry are closed.