Tuesday, September 1, 2009

by Craig McDonald, TPJ Director

The banks, insurance companies and utilities that already wield too much political
influence are on the cusp of a new power grab. The U.S. Supreme Court on September 9
will consider demolishing the century-old wall that blocks corporations and unions from
spending money to influence elections of federal candidates--as well as the elections of
Texas state candidates. Pushing past the narrow issue raised in this case, Citizens United
v. FEC, the court is reconsidering the entire U.S. ban on corporate campaigning, which
has withstood 100 years of challenges. With this one case, the court could unleash a tidal
wave of corporate political spending.


U.S. Supreme Court to Reconsider Century-Old Ban on Corporate Campaign Spending
by Craig McDonald, TPJ Director

The banks, insurance companies and utilities that already wield too much political
influence are on the cusp of a new power grab. The U.S. Supreme Court on September 9
will consider demolishing the century-old wall that blocks corporations and unions from
spending money to influence elections of federal candidates--as well as the elections of
Texas state candidates. Pushing past the narrow issue raised in this case, Citizens United
v. FEC, the court is reconsidering the entire U.S. ban on corporate campaigning, which
has withstood 100 years of challenges. With this one case, the court could unleash a tidal
wave of corporate political spending.

Today's ban on corporate campaigning sprang from the popular backlash against the
unchecked powers of banking, railroad, oil and insurance trusts at the turn of the 20th
Century. Farmers and workers organized to stop these corporate trusts from buying up
politicians to undermine corporate regulation and taxation.

Shattering previous campaign-spending records with a flood of corporate funds, William
McKinley won his 1896 presidential campaign against populist William Jennings Bryant.
After trustbuster Teddy Roosevelt followed McKinley into the White House, he used his
famous bully pulpit to pass the landmark 1907 law that bans corporations from spending
money on federal elections. Roosevelt's reforms followed trails blazed in Texas.

Starting as Texas' attorney general and then as governor, progressive Jim Hogg and his
allies began fighting railroads, banks and "wildcat" insurance companies in the 1880s.
They passed tough anti-trust laws and created such new regulatory agencies as the Texas
Railroad Commission. Fighting back, corporate tycoons created the Federated
Commercial Clubs of Texas to try to takeover the Democratic Party. In a counterstroke,
Austin-area Rep. Alexander Terrell--warning that "vast sums of (corporate) money would
corrupt the ballot"--secured passage of a Texas ban on corporate electioneering in 1903.

It would be quaint to argue that these bans on corporate electioneering abolished the
political influence of corporations. Even when businesses cannot raid their corporate
treasuries for political funds, handfuls of cash remain in the pockets of their shareholders,
executives and lobbyists. In Texas' last state elections, the owners, executives and
employees of banks, financial firms and insurance companies gave candidates of their
choice more than $7.3 million. Corporate lawyers and lobbyists spent in excess of $10
million. Then there's the corporate lobby, which has spent up to $2.5 billion to lobby
Texas state officials over the past decade. TXU and its new owners paid 177 lobbyists up
to $14 million during the last legislative session alone. That's almost one lobbyist for
every member of the 181-seat legislature. No wonder Texans pay among the highest
electric rates in the nation.

Texans know the hazards of corporate electioneering better than most. In 2002
Congressman Tom DeLay and the Texas Association of Business (TAB) spent several
million dollars in corporate funds to elect a GOP House majority, install hardliner Tom
Craddick as Speaker and redraw Texas' congressional districts. Asked why he financed
this scheme with money from corporate rather than individual donors, TAB President Bill
Hammond said, "because it's easier." Sure enough.

Corporations don't breathe. They don't think. They don't vote. And they don't enjoy or
deserve the same rights as real people. The High Court should keep it that way for the
rightful masters of government: We the people.