Frank Ahrens of the Washington Post, normally a business reporter, last week ventured into the complicated and arcane waters of campaign finance regulation, and promptly fell in well over his head.
In an online column, Ahrens attempts to address the Citizens United decision as it relates to corporate spending in elections. Unfortunately, by the second paragraph he is floundering:
The decision means that now, corporations and unions can express their free speech by donating directly to political candidates.
No, no, a thousand times no. The Citizens United decision freed up corporations, unions, advocacy groups, and other associations to spend independently of candidates urging their defeat or election, not to make contributions directly to candidates. The law banning direct corporate contributions, the Tillman Act (one of the two lasting legacies of “Pitchfork” Ben Tillman, the other legacy of course being Jim Crow), is still alive and well, as are those sections of the Taft-Hartley Act banning similar contributions from unions.
After swallowing too much of the hysterical rhetoric of the so-called campaign finance “reformers” who have been desperately blurring the distinction between “contributions” and “independent expenditures” in their frantic effort to mislead the public and generate support for their agenda, Ahrens does come up for air long enough to gasp out a pretty good observation:
…who could deny that corporations have as much if not more at stake in elections that [sic] individual citizens? Suppose Candidate X and Candidate Y are running for office. Candidate X supports raising tariffs on products manufactured by foreign countries that a particular company uses. Candidate Y opposes such tariffs. The new tariffs would add considerably to the company’s cost of producing its product, making it less profitable and probably raising the cost to consumers. Why on Earth wouldn’t the company want to contribute money to the campaign of Candidate Y to help defeat Candidate X and his high-tariff ways?
After this rather sensible observation, however, Ahrens once again slips under. His support for allowing direct contributions from corporations to candidates comes with a call for the latest silver bullet offered by the “reform” crowd, shareholder voting on political expenditures.
Allow corporations to donate to political candidates, or spend to defeat others, but only if authorized by some form of binding shareholder vote.
Ahrens recommends online voting, apparently for each individual expenditure/contribution. The problems with such an approach are numerous. To list just a few:
- Shareholder votes require a “record date,” to determine who owns shares at a particular moment in time. Currently corporations have to do this a few times a year (dividends also go only to owners on the record date), but requiring a new record date each time a corporation wants to make an expenditure would be costly.
- Corporations would have to know, as of the record date, the e-mail address of all their shareholders. Such a list would be lmost impossible to compile, given how many shares trade hands each day.
- Using vote-by-mail for the same purpose is time consuming. Given how the Supreme Court viewed dubiously the PAC option for corporations wanting to engage in political speech, due in part to the time it takes to set a PAC up and solicit funds, it’s unlikely they’ll accept such a requirement.
- Many corporations have other corporations as shareholders, making it an almost impenetrable maze of shareholder votes that would need to occur before an expenditure could be made.
- Government entities, including endowments for colleges and universities as well as pension plans, are also significant shareholders. Is it even remotely appropriate for such entities to be voting on making contributions to politicians? What about nonprofit (c)3 organizations that hold stock as part of a bequest, or have endowments of their own?
- The whole point of the corporate form, at least for larger for-profit firms, is to separate ownership and management, allowing people to invest in ventures that they may have little direct exposure or knowledge of. Requiring shareholder votes for political expenditures goes against this purpose.
These are just a few of the significant and for all intents and purposes insurmountable problems that shareholder vote requirements would entail. While Ahrens managed to gain a clear insight into why a corporation should be allowed to participate in the political process, his requirement for their participation would effectively push most of them to the sidelines, or at least prevent them from speaking in a timely manner.
On a final note, Ahrens does reference polling done on Citizens United by the Washington Post, and even points out our objection to the wording:
The decision has, to put it mildly, stirred controversy.
In a poll conducted last month by The Washington Post and ABC News, an overwhelming majority of both parties opposes the idea of corporations and unions being able to spend as much as they want on political campaigns. But there were those who took issue with the way we asked the questions in our poll.
First, it would have been helpful had he also included a description or at least a link to the CCP poll on Citizens United, which actually asked questions with appropriate context and that explored how Americans really feel when given real-world examples of the political speech in question.
Second, and more importantly, given the massive amount of misinformation on the Citizens United decision that has been promoted by the “reform” community and passed along by the media, Ahrens online column and similarly uninformed media accounts certainly call into question the validity of any polling done of the public that ask simplistic questions. We earlier took exception to the Washington Post/ABC News poll on Citizens United, and this column now only strengthens our argument against its results.
