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Dead Constitution See other Dead Constitution Articles Title: Commentary: Good news for corporations, bad news for voters Commentary: Good news for corporations, bad news for voters Will anyone even bother voting in future elections? Will they get involved in political causes? Will they spend one dime of their savings supporting a political candidate or a campaign? When you look at what is happening with money and politics in 2010, these are not idle questions. Thanks to changes in the law, company honchos can now buy an election as easily as they order office furniture. The president has tried to make an issue of this in the past 10 days, but I suspect his commentary will have little effect. More from MarketWatch.com: • The Nation Tires of Wall Street 'Justice' • Gold Timers Are Quite Subdued Despite New Highs • The Buck Drops Here In case you missed it, recent Supreme Court rulings mean that corporations can now effectively spend freely on political campaigns, including during elections. Loopholes in the tax code, particularly pertaining to 501(c)4 nonprofits, mean they can do so secretly through anonymous front groups. It doesn't matter whether you are a Republican or a Democrat, whether you hate the president or like him. Under this system, the game is over. Our democracy is dead. We just don't know it yet. Don't believe me? Look at the numbers. Up until now, the gold standard for campaign fund-raising was set by Barack Obama in 2008. With brilliant creativity and energy, his team harnessed the Internet, and combined it with on-the-ground logistics to tap sources of funds from big cities and little towns all across the country. In the end, 320,000 individual donors sent in money, a remarkable achievement. About 200,000 of them gave less than $1,000. The total raised by the campaign was $750 million. At the time it was considered the wave of the future -- the utopian marriage of grassroots democracy and technology. How naive that looks. It's already a period piece. Compared with the financial firepower in the hands of major corporations, that amount of money is chicken feed. Many CEOs can cut checks for millions, even tens of millions, without blinking. They can match all that effort without breaking a sweat. According to data from FactSet, there are around 350 companies on the U.S. stock market that have more than $750 million on hand just in cash and equivalents, such as short-term Treasury bills. Exxon Mobil Corp. (NYSE: XOM - News) has $13.3 billion in ready money. That's 18 times as much as Obama raised in all of 2007-08. Johnson & Johnson (NYSE: JNJ - News) has $12.7 billion. UnitedHealth Group Inc. (NYSE: UNH - News) has about $10 billion. The list goes on. In other words, under the new law, the chief executive of any of these companies could match the most successful grassroots, populist fund-raising campaign in history with a single phone call. That understates the issue; only a small percentage of a company's true wealth is tied up in ready cash. Exxon Mobil, the biggest company, is valued at more than $330 billion. So $750 million is just one quarter of 1% of its value. A quarter of one percent. Who notices a 0.25% movement in a stock price? Annual cash flow runs to tens of billions of dollars a year. No one company will have to pay the full tab to buy each election for corporate America anyway: The bill will be shared. How many companies could chip in $20 million or $50 million without even noticing? You think Goldman Sachs Group Inc. (NYSE: GS - News) or Citigroup Inc. (NYSE: C - News) or Bank of America Corp. (NYSE: BAC - News) can't find that cash around to buy off reform? That's plutocracy, pure and simple. Shareholders will have no say. "Political-speech decisions can be made without input from shareholders, a role for independent directors or detailed disclosure," law professors Lucian Bebchuk of Harvard and Robert Jackson of Columbia will report in a forthcoming paper on the issue. As Bebchuk told me: "Companies certainly are not required, and do not disclose, contributions to intermediaries that engage in political spending." Cornelius Hurley, director of Boston University's Morin Center for Banking and Financial Law, said companies can bury these types of spending in the budget for marketing, community involvement, or lobbying. Also, under the rules, the bigger the company, the more it can spend and hide. "It's incredibly rare that corporate contributions rise to the size that would be material, and only material facts need to be disclosed," says Stephen Bainbridge, law professor at the University of California in Los Angeles. "You'd have to have contributions on the order of 10% of assets to be deemed material." Corporations are only just waking up to the good news. In the last few months, money has started pouring into outside groups. According to the Center for Responsive Politics, a remarkable $180 million has gone into independent political organizations. Most of that, about three-quarters, has gone into organizations on the right. It just so happens those organizations tend to be favored by top business executives. But if you're a conservative and you're cheering, just wait until your interests clash with those of company boardrooms. You think you're going to win? What sort of clout does this money buy? According to data tracked by Media Matters for America, the 10 biggest independent right-wing groups aired 60,052 political ads nationwide between Aug. 1 and Oct. 11. At 30 seconds a commercial, that's about 500 hours of commercials. The Chamber of Commerce spent $10 million running 4,700 adverts during a single week. It's easy to say, "Oh, we're too smart to fall for that marketing stuff. You can't just buy an election. Look at Jerry Brown!" But watch out for the law of small numbers. There will always be the occasional exception. And Brown, who comes from another era, built up a formidable political base before we became a plutocracy. This election is just the beginning. Expect the amounts spent in the future to be vastly greater. Political ads are merely the tip of the iceberg. The real action will come from hundreds of millions spent in areas of propaganda that you'll never see -- from Astroturfing and smears to slush funds. We're talking unlimited money. Expect personal scandals to erupt, as if by magic, around any reform politician with half a chance. Remember, an election isn't like shopping. In politics, if the majority eats Ring Dings, we're all eating Ring Dings. Various experts will try to tell you the new system of unlimited, secret corporate donations can't survive. "I don't believe secretly funding our elections can be sustained," Fred Wertheimer, head of reform group Democracy 21, told the New York Times. "It won't hold up. The public won't stand for it. This is guaranteed corruption." I'm glad he's so optimistic. But who is going to stop it? There are no gatekeepers left with any power. How can you fix a broken political system with a broken political system? How can someone in manacles strike off his own chains? Brett Arends is the author of "Storm Proof Your Money," on how to survive the slump. ___ Popular Stories on Yahoo!: • 3 Ways to Beat Rising Tax Rates • The Best States For Business and Careers • A Reaganesque Proposal for Obama Follow Yahoo! Finance on twitter_logo.jpg Twitter; become a fan on facebook_logo.jpg Facebook. Copyrighted, MarketWatch. All rights reserved. Republication or redistribution of MarketWatch content is expressly prohibited without the prior written consent of MarketWatch. MarketWatch shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. 55 comments Show: Post a comment * Comments 1 - 10 of 55 * First * Prev * Next * Last * A Yahoo! User 0 users liked this comment Vote for this comment Vote for this comment 0 users disliked this comment A Yahoo! User 3 minutes ago Report Abuse Only 6 corporations control ALL the media in this country anyway, this was just the final nail in the coffin. Dave K Reply * Scott 0 users liked this comment Vote for this comment Vote for this comment 0 users disliked this comment Scott 7 minutes ago Report Abuse Thanks for telling the truth. The only thing to do is free your mind, be aware no matter how painful it is to watch the gullible, the young who don't have anything to compare the current situation with, just fall for it. Yes, they don't take out a reformer on the issues. It's the affair, the income tax discrepancy. The opposition is so scared, they know they're against the tilt. So much easier to obey the real boss. Now. What will the rest of the world think? And will people get desperate to riot in the streets? Reply
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#2. To: tom007 (#0)
Oh noooees. People using their own money for economic self defense and freedom of speech. The horrors! Will we ever survive all of those people finally getting a say, where only socialists and progressives were allowed before? Oh nooooes.
people finally getting a say I don't consider corporations people. The right of freedom of speech is an INDIVIDUAL right. Self defense is an INDIVIDUAL right. Corporate personhood was a dagger to our rights.
Corporations are groups of people, thus a corporation has the same rights as those people. For example, freedom of religion. If a corporation does not enjoy that right the government could force your business to participate in a religion, or prevent it's participation. Say goodby to the Boy Scouts, Catholic hospitals, etc. Pick any right in the Bill of Rights, and imagine your business without that right.
Every person in the group has INDIVIDUAL rights--why should they get the right twice at election time? A corporation is an institution that is granted a charter recognizing it as a SEPARATE LEGAL ENTITY having its own privileges, and liabilities DISTINCT FROM THOSE OF ITS MEMBERS. A corporation is a LEGAL entity, not a HUMAN entity. You are lumping all business together as well--a sole propietorship is not governed by the same rules as a corporation or even an LLC.
Oh come on, that's sheer sophistry. According to that standard, if I as an individual go out knock door to door for a candidate in September, that means I cannot in October. Because, you know, that would exercising the right twice. And since when, honestly tell me when, was there a "number of times" limit on rights? Who gave you, or anybody, the authority to tell me or anybody else how many times we're allowed to speak?
You entirely ignore my main point on this thread--corporations are NOT individuals, so they don't deserve individual rights. As an individual, you have your rights to use as many times as you like and so do the shareholders and the people who work for corporate entities. Giving the entity personhood is the crux of the problem.
Corporations are or aren't anything, fact is, they're composed of individuals. Some of those individuals are owners of the wealth of the corporation. In a free society (not ours!) how you use and dispose of your wealth is YOUR business. Further, given the right of freedom of speech, you can decide to pool your resources with any ol' person you wish, and engage in politics. That's how freedom works. Regardless of how you see "corporations".
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