Congress Shall Make No Law...
7:17 PM
Shareholder protection racket

In an op-ed in yesterday’s San Francisco Chronicle, R. Warren Langley and Ciara Torres-Spelliscy argue that Citizens United opens the door to corporate abuse of shareholder rights:


What's really the problem with Citizens United, the case that welcomes corporate money into politics? It lets CEOs spend your money for any political reason they want. So if the CEO wants a ticket to the inaugural ball, a night in the Lincoln Bedroom in the White House or an ambassadorship, he can buy it with your money.

Given the hyperbole to which critics of Citizens United are prone, it seems almost churlish to point out that everything in the preceding paragraph is nonsense.

Citizens United did not “welcome corporate money into politics.” It allowed businesses and nonprofits to do what media corporations like the New York Times, CNN, and ABC have been allowed to do for decades—spend their own money on their own speech supporting or opposing candidates.


Nor did Citizens United allow corporate CEO’s to spend shareholders’ money on anything related to politics that they want. The decision simply recognized that the First Amendment protects the political speech of corporations, as it does any voluntary association. The decision was silent on how corporations should spend their money and on what subjects they should speak. That’s up to the corporation’s shareholders and its officers and directors. If shareholders don’t want their corporation to speak out about politics, they can write that condition into the articles of incorporation. If they believe a CEO is abusing his authority, they can sue him for a violation of fiduciary duties. Or, they can do what millions of shareholders do every day when they are unhappy with the actions of a corporation: spend five minutes on the internet and sell their stock.


But, argue the alleged defenders of shareholder “rights,” many shareholders have large investments in some corporations, so selling their shares would be a hardship. Perhaps, but that doesn’t justify government meddling in a corporation’s decisions about political speech any more than a donor unhappy with the positions of the Brennan Center, Ms Torres-Spelliscy’s organization, would justify government interference with it.


The First Amendment does not guarantee that individuals and groups will only say things that other people like. The assumption underlying the First Amendment is that we are all big boys and girls and can decide, for ourselves, when to stop listening, turn the channel, or disassociate ourselves from those whose views we abhor.


The First Amendment applies to the government, not private parties. It prevents the government from censoring or regulating speech or forcing people to associate with others or to fund their speech. Curiously, Langley and Torres-Spelliscy advocate public financing of all political campaigns as the ultimate solution to the alleged problems of campaign financing. In other words, it’s an injustice if shareholders who willingly associate with a corporation don’t like what the corporation says, but it is perfectly fine for the government to force taxpayers to fund all political campaigns. Where’s the logic in that?