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David Cobb on how corporations are stealing our self-governing rights

David Cobb
Creative Commons/Ben Manski
David Cobb

Move to Amend is a grassroots movement seeking to build support for a constitutional amendment that would overturn the U.S. Supreme Court’s Citizens United ruling and establish that corporations are not people and do not have the right to spend unlimited sums of money on political advertising.

One of the organization’s leaders, David Cobb, spoke to 100 or so intensely focused activists Tuesday night at the First Unitarian Society in Minneapolis.

I went, expecting the talk to be about the amendment and the strategy for getting it passed and ratified. But Cobb, who was also the 2004 presidential nominee of the Green Party, spent little time on the strategy.

Amending the U.S. Constitution is difficult and rare. It requires first a two-thirds majority in both houses of Congress, then ratification by three-fourths of the state legislatures. Alternatively, the amendment process can bypass Congress through action in two-thirds of the states themselves. The process even can (but never has) lead to the calling of a new constitutional convention, although the results would still have to be ratified by 37 of the 50 states. In today’s polarized political culture, any of those paths would be an extremely heavy lift.

But Cobb, who spoke for more than an hour, spent almost no time on the text of the proposed amendment or the strategy for getting it passed. The strategy, he said, is to build a movement.

In building a movement, facts and arguments are overrated, Cobb told the audience (a savage blow to a fact-and-argument-obsessed old codger like me).

Citing the work of liberal linguist George Lakoff, he said that facts affect people only to the extent that the facts are consistent with key stories in which the people already believe. One thing people believe is that a tiny minority of the very wealthy has hijacked the system.

So Cobb spun a tale of the history of the world that circled at least as far back as the European conquest of Africa and the Americas, and the history of corporations, which used to be chartered by the king, who ruled by divine right. A corporation is a “legal fiction,” he said, adopting a term that is invoked on the first day of any law school course on the topic. A corporation is “whatever we the people say it is,” Cobb said. “A corporation only exists to the degree that we as a society say it exists.”

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Forming a corporation is not a right, it is a privilege, he argued. A corporation limits the liability of those who form it, in exchange for which the corporation is supposed to benefit society, just as every law passed by Congress is supposed to benefit “we, the people.” There was a time when this was understood, Cobb said, and corporations often had their charters revoked for violating the public interest.

But corporate power has turned democracy upside down, Cobb argued. Corporations now rule, for the benefit of themselves and their shareholders and their profits, and, Cobb said, “we the people get to decide between Coke and Pepsi.”

Cobb, a Texas populist with an accent and strong sense of humor, works with a marker in his hand, gradually writing key words, drawing circles around key words (“democracy,” “sovereignty,” “We, the people”) and arrows between them until he ultimately gets to his one (run-on) summary sentence (OK, three sentences) that he suggests most Americans — across the political spectrum — already believe:

When the United States Supreme Court, heck, when five members of the Supreme Court, waltz in and say notwithstanding logic, history, law, precedent, judicial activism, what they say is we, five of us, are going tell 300 million Americans that we now have to treat a corporation not as the artificial entity created under the political process that it actually is, we’re gonna say that you now must treat it as a person with the same inalienable rights, you pervert the entire framework. “Corporate personhood” is a shorthand for the illegitimate, totally court-created idea, that a corporation must be treated as a person with constitutional rights. And what that does, my friends, it steals our sacred right to sovereignty and self-government.

If you want to watch a video put out by Move to Amend explaining their efforts and arguments, you can view it below.

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Comments (37)

It's not corporate entities that people fear,

it's the largest and wealthiest corporations. Even the, it's only those with which they disagree.
Ultimately, it's about fear of the power of money.

So, will this proposed Constitutional amendment differentiate between large and small corporations? LLCs? Limited Partnerships? Unincorporated associations? Unions? Where will we draw the lines and, more important, why will we draw them there?

Drawing the lines between an individuals and the actions of their business entities has always been difficult. That's why we have a well developed body of law governing when one can pierce the corporate veil, or that of any other limited liability entity. What many don't understand about limited liability laws is that they do not protect a person from liability for his or her own actions. They protect an owner (shareholder/partner/etc.) from liability for the acts of the entity in which he or she has simply invested. Employees/officers/directors.etc who are also owners are in fact liable for their own actions.

Frankly, I see this as simply a case of 21st century populism run amok. Money always has and always will determine how well and how far one's opinion is broadcast. Tom Paine required money to print Common Sense. Abraham Lincoln required it to pay for a campaign train. Every political candidate at every level lives or dies in large part by the strenght of his or her campaign funds. Not surprisingly, most of it comes from those who have the most.

If people want to limit the effect of money, the place to start is by requiring disclosure of its sources, direct and indirect. One legal rationale for doing that with publicly held corporations is the fact that they may have international ownership. (The ban on foreign campaign corporations was upheld in 2012. http://www.mintz.com/newsletter/2012/Advisories/1584-0112-NAT-GOV/index.htm ) There undoubtedly are others.

Exactly

This was the point about Citizens United, which overturned two centuries of legal precedent and allowed corporate 'individuals' to hide the sources of their political contributions, and evade laws enacted to limit corporate spending on political campaigns.

Given his passion

and his distrust of power, it's too bad that he doesn't direct his efforts at minimizing the power wielded by our elected politicians.

I disagree with James Hamilton, above, when he says that "If people want to limit the effect of money, the place to start is by requiring disclosure of its sources ..." If you really want to limit the effect of money, the place to start is by limiting the power of those who control our government.

And the first place to start there is by limiting their ability to tax. "The power to tax involves the power to destroy ..." - Chief Justice John Marshall (1819). Politicians have used the tax code to reward their friends and punish their enemies since the first page of tax code was written in 1862. Replace the income and corporate taxes with a national sales tax. No exemptions, no loopholes, no different rates for different people.

Finally, change the salary, benefits and retirement structure to match the U.S. military's. You start out as an O-1 ($2905/mo.) and you max out as an O-10 with 20 years experience ($16,072/mo.) if you keep getting re-elected.

Corporations exist to make money. They make money by providing a product or service better than their competitors do. They can't force you to buy their product and they certainly can't send you to prison if you don't. Anyone who thinks they have too much power can mitigate that by refusing to buy their product.

If only government worked that way.

Naturally you

Would pick the most regressive, unfair tax. LOL. And corporate products can surely kill you. I like your idea though about changing the pay for politicians; it should also be applied to corporate officers.

Mr. Tester will you stop trying to stick it to poor people

Poorer people consume a larger percentage of their income than other people because the have to to live. Therefore sales or consumption tax is regressive. Although calling every thing income is a nice. Not to mention the older you get the less you consume because you are not in the household formation stage.

Seems kind of unfair to me.

I believe you are taking Marshall's quote out of context. He was speaking of governments not taxing other governments.

Revoking Charters

Can anyone give me an example of what corporations should have their charter revoked? Is there a target in mind? It seems (and someone please correct me if I have this wrong) that recent revocations have almost all been for failure to pay taxes. Is Mr Cobb proposing expanding in a different direction?

Revoking charters

I'd turn the question to "what corporations should NOT have their charters revoked?"

Let's start with some of the biggies: JP Morgan Chase, Citicorp, Goldman Sachs, Bank of America and Wells Fargo.

There have been a series of watered down "consent decrees" entered against the major banking/investment banking/insurance firms (they are all the same after the repeal of Glass-Steagall) for technical violations of banking regulations. There have been no major RICO or antitrust actions, or securities or other criminal violations which certainly occurred. No banking or insurance executive has gone to jail for blatant criminal wrongdoing, like Jamie Dimon's involvement with the "whale", Lloyd Blankfein's double dealing with Jefferson County Alabama and AIG. Why haven't any banks had their charters revoked for participating in price fixing the LIBOR interest rates? Or "fixing" S&P and Moody's ratings? President Obama and AG Holder have handed out blanket pardons to these banks and their leaders who helped Obama get and stay elected. Of course, with the kinds of money these corporations are raking it, they gave freely to both parties and all politicians who toe their pro-corporate line.

I don't think we need a constitutional amendment. I think we need to tighten up some of the laws we have and have existing laws vigorously enforced.

Revoke ALL the Charters!

Jon, your ideas are intriguing to me and I'd like to subscribe to your newsletter.

Outside of closing all of the banks due to 'technical violations of banking regulations', does anyone else have an idea of which corporations should have their charters revoked?

Closing the banks

I did not say "close the banks due to technical violations of banking laws." I said there is sufficient evidence known publicly to have warranted criminal prosecutions for serious violations of criminal law.

Your question reminds me of the old riddle:" Why doth treason prosper? Because if it prosper, none dare call it treason."

Apologies

When you said that the question is more what corporations shouldn't have their charter revoked and then spoke about bad behavior by banks, I thought you were suggesting that we should revoke the charters of banks. I must have read too quickly. My apologies.
Ok, then let me take a step back and try ask again. Can you give me an example of a corporation that should have its charter revoked?

Revoking charters

Apology accepted but maybe I was not clear.

A bank is no different from any other incorporated entity. If any incorporated entity engages in criminal conduct. it should have its charter revoked. Revocation or cancellation of a corporate charter is not a criminal sanction but a civil or administrative one. But revocation of a corporate charter is a sanction for violation of a criminal law.

Maybe you need to explain why you seem to believe "revocation of a corporate charter" is not an acceptable sanction for the crimes that have been publicized within the last six years. Matt Taibbi, author of "Griftopia" has identified a lot of these in that book, which I highly recommend as reading for anyone who wonders about the financial manipulations of the last few years. Last year, JP Morgan Chase admitted to $200 billion in criminal fines. How can its CEO, Jamie Dimon, still be a free man? How can JP Morgan Chase still be a viable corporate entity?

Obviously, one concern is the impact on employees.

I'll refer you to Mr. Taibbi's recent interview on "Democracy Now!" fir other corporations which should have their charters revoked:

http://www.democracynow.org/2014/4/15/who_goes_to_jail_matt_taibbi

Charters

"Obviously, one concern is the impact on employees."

Well, yeah. If you want to punish five people for obvious wrong-doing, it's best if you can do it without throwing 1000 people out of work. The customers are also a concern. That was a repeated point during the fiscal crisis of 2008-2009. If you destroy the financial companies, you create incredible havoc for the populace at large.
None of this, of course, means that certain employees shouldn't face prosecution. If they can be charged by law and found guilty, then I have no problem whatsoever with giving white collar criminals fines or prison time. If you want to know why this didn't happen under the Obama presidency, well, I'll just say that's a good question and let you fill in whatever blanks you find appropriate.

Without getting too deep into the weeds, I do want to say that I'm skeptical that regulators will really ever be able to stay ahead of financial wizards. This is a pretty obvious area where the more technical the laws, the easier it is to find loopholes around them. The solution is to make certain that risky behavior hurts the ones taking the risks. If that means banks holding on to more of their mortgages and similar actions, then that's the direction to go.

Why we revoke

As the law now stands in most states, corporations may be dissolved involuntarily if it is proven that the corporation was formed for a fraudulent purpose. Failure to pay taxes does not necessarily dissolve a corporation, although failure to make required paper filings to say that the corporation will lead to a ruling that the corporation is no longer in good standing.

Mr. Cobb is in fact proposing a new direction. As the law now stands, a corporation may be convicted of a crime, but the sanctions are limited to a fine (factored into the cost of doing business), and possibly debarment from federal contracts for a period of time. Involuntary dissolution can be ordered for failure to pay debts, but there is no punitive aspect to it.

As far as which corporations should be dissolved, I will leave that to others. As President Obama noted some years ago, the problem with the companies that caused the financial meltdown is not that what they did was illegal, the problem is that what they did was legal (paraphrasing).

Revoking

RB, thank you for the serious response. It makes sense that fraud could cause a revocation. Or lack of paperwork. I can't imagine anyone being bothered if Generic Inc disappears over such things.

I still don't quite understand what Mr Cobb is getting at. Would corporations be at risk if they made campaign donations?

Revoking

Revoking charters and banning campaign contributions by corporations are two different issues, although I'm not clear whether, as you say, corporations would be at risk under Mr. Cobb's proposal if they made contributions. Dissolution as a criminal sanction would probably be doable through purely legislative action (although it wouldn't surprise me to see the current Supreme Court accept an 8th Amendment argument here). Banning corporate campaign contributions would require a constitutional amendment.

If corporations are people, require they file 1040 household tax

return. Of course, it is a single, head of household return. No marriage and no dependents.

98+% of all tax law suddenly "disappears".

ALL corporate income is taxable EARNED income--just like every other "person". So they have to pay FICA. No deductions for business expenses because there is no such deduction any more (people do not have deductions for their 'business costs'--food, clothing, shelter, transportation, etc).

The problem is

that corporations will (and do) arrange to have the income 'earned' in Ireland (like Apple) or Switzerland (like Walgreen) so that they avoid paying taxes in the United States.'

We would need a major change in the tax code so that all income earned in the United States would be taxed in the United States. 'Diversion' must be eliminated.

By asking the ....

question you are entirely missing the point of the David Cobb Move to Amend argument. In your first sentence you ask, "Can anyone give me an example of what corporations should have their charter revoked?" Their" you ask dare I ask ? I point you to one dictionary definition of the word not spelled "there" as in over there but spelled "their." As defined, http://dictionary.reference.com/browse/their
The word "their" is being misused which might be leading to your misunderstanding of the concept being presented by Move to Amend. If you go to the definition of the term "their" as is most typically used it implies something organic. This most basic grap of the vocabulary might be at the root of why some are willing to interpret as coorporations as having life. Might I suggest that these people are exercising the "freedom of choice" in creating their own definition ? I hope there is a pregnant pause in your reading here. Notice how I am applying the term their to living organisms. As for what I really think on the matter ? It is that people who are convinced that corporations have life and therefore rights, well, they're crazy.

Um, Ok

Joe, are you under the impression that the word 'their' only applies to living things? Your link says that it is the possessive case of 'they'. When you follow the link to 'they' it says: "1. nominative plural of he, she, and it." The word 'it', of course, often refers to non-living things.
Right? I mean, how else would you phrase the question that I asked? 'Can anyone give me an example of what corporations should have '----' charters revoked?' As I look at the question, I wish that I'd used the word 'which' instead of 'what' but I can't think of a different word that I would use for a collective possessive. Did you have one in mind?

Look, I'm trying to understand a point here and I'm asking for some kind of concrete example to help me out. I don't think that's unreasonable.

Do you honestly think that a corporation has no rights at all? Or that they should have no rights? I'm hoping that's a stylistic excess but I'm not so sure. The New York Times is a corporation. Does it have the right of free speech? Does it enjoy fourth amendment protections? It's located at a building, does it enjoy third amendment protections? I think it does, even though the New York Times is obviously not a living thing. Do you disagree?

The term 'corporation'

is not in the Constitution.
Therefore corporations as entities have no constitutional rights; just the rights of the individuals that make up the corporation -as individuals-.
This is the enormity of Citizens United: it treats corporations as if they were individuals with Constitutional rights.
Of course corporations have many rights defined by the body of case law, but these are not basic constitutional rights.

Not in the Constitution

Well hold on here. Does this mean that we could quarter soldiers in the NYT building against their will? If it did (and I realize that this is a wild hypothetical), wouldn't they use third amendment arguments against it? Or would they simply make some kind of protest on state law grounds? Trespassing or some such? That doesn't sound right to me.
If the government wants information from some corporation like Google, they still need a warrant to satisfy Google's fourth amendment rights, don't they? They don't have to swear out a warrant for each employee whose computer they're searching.
Or maybe I'm wrong on this. I have zero formal law training. If an actual lawyer would like to weigh in, I'd be curious as to what they'd say.

You're correct

that neither of us are constitutional lawyers (although it might be significant that the President is).
However, I suspect that if the army tried to quarter troops in the NYT building the legal argument would rest more on case law than on direct constitutional issues. Those would come up only if it went to the Supreme Court.
I don't think that a corporation's ownership and control of its property (assuming that the NYT actually still owns the building that it is located in) rests only on constitutional issues.
And as you say, property issues are often tested on state or municipal levels first (I doubt that the NYT building is zoned or approved for residential purposes), then in Federal courts. It would be up to individuals with legal standing (those directly affected by the government action) who would decide which court to bring it to.

Constitutional issues usually arise when some new issue comes up where no case law clearly applies. Something like Google might be such a case. And of course they wouldn't be search employee's personally owned computers; they'd be accessing Google's server farms. Some of them are overseas, which complicates the issue.

Constutional Lawyer

The President is a constitutional lawyer? Really? Where did he pass the bar? Where did he practice? My understanding is that he taught some courses at the University of Chicago on constitutional law. I do know that his administration has lost a number of Supreme Court cases 9-0. Forgive me if I don't simply rely on his judgment.

"Constitutional issues usually arise when some new issue comes up where no case law clearly applies." This is clearly not true, or at least wildly incomplete. Fourth and fifth amendment rules apply all the time in criminal law. If some government force, at any level, wanted info from Google, they would have to get warrants. That would be step one.
I think that you are 100% wrong about the idea that corporations don't have rights. They enjoy general rights like property rights. They enjoy constitutional rights, most obviously the fourth amendment. The idea that rights only belong to living things is not true.

It might be interesting to see

what proportion of legal cases actually cite the Constitution.
The high profile cases that make the news are not typical.

Also, before the Constitution there was British Common Law.
That's what our legal system is based on.

Constitutional Cites

I don't know what the percentages are, but I'm sure the vast majority of arrests have a lawyer somewhere checking that Miranda rights, etc, were checked on. And if things weren't done properly, then a judge throws out the arrest well before the Supreme Court comes in to play.

Have you dropped the idea that corporations don't have rights because they aren't alive?

No

Corporations should not have the same rights as individual citizens of the United States because they are not citizens of the United States.
Bacteria are alive, but they don't have rights (although I believe that some Jain Hindus do believe that all living things have rights).

Rights

Hold on, earlier you said that corporations had *no* constitutional rights. Now you're just saying that they don't have 'the same rights as individual citizens'. Did you change your mind?

Rights

Corporations are creatures of state law, so they have the powers granted to them by the state. Unlike individuals, they exist at the sufferance of state law (it would not be unconstitutional for a state not to have a corporation law).

State Law

This doesn't sound right to me. Let's go back to my earlier hypothetical about putting soldiers in the NYT building. Would this only violate the NYT's rights if New York State had passed a law forbidding it?

Corporations and David Cobb

Absolute claptrap. Two points:

first, while corporations may or may no be persons, they are REFLECTIONS of the persons they represent--shareholders, employees, customers, etc. Just from a personal liberty standpoint, these persons are ENTITLED to their say.

Second, most corporations I KNOW (and I worked 38 years at a big one--eventually at the upper eschelons) are scared sh*tless at the prospect of offending ANYONE.

After the way Target Corp got the crap beat out of them for giving money to a bus-advocate group that eventually gave a littel money to Tom Emmer, who made some off-hand (maybe) anti-gay comments, how many corps do you see lining up to dump tons of money into ANYTHING the least bit controversial>

Answer: They DON'T

Now, Can we talk about Public Sector Employee Unions as corporations???

Claptrap Indeed

Dennis, I couldn't disagree more. Corporations are "reflections of persons"? Nonsense. If that's true, what's Exxon's view on gay marriage? What's Walmarts view on defense spending? Heck, what's Best Buy's favorite color?

And you seriously believe corporations are scared to pour money into controversy? I can give you a hundred examples off the top of my head, but let me give you just a couple of examples. Ever heard of a corporation called Hobby Lobby? Or, better yet, how about these 4 letters.....K-O-C-H.

Those people already have their say

There is nothing preventing the individual corporate shareholders from contributing to political campaigns as individuals, providing they are US citizens.

If corporations were really persons...

They would pay income tax at personal rates.

They would not be allowed to enter into contracts until they had existed for 18 years.

They would be allowed to merge with only one other corporation at a time. If they wanted a new merger partner, they would first have to dissolve the previous merger.

They would have to go out of existence at the end of the average lifespan of their country.

If they deliberately acted in ways that caused innocent people to die and they were headquartered in a death penalty state, they would suffer the death penalty (i.e. dissolution).

If a foreign company wanted to establish a branch here, it would have to meet the requirements for a green card.

OK, I am being facetious, but I think we could take care of the whole corporate personhood issue with a Constitutional amendment that read something like this. I'm not an attorney, so I would leave the actual wording up to others.

"The rights and obligations described in this Constitution shall apply only to individual human beings and not to any voluntary association of human beings for commercial, professional, charitable, or persuasive purposes."

Yes, this would eliminate contributions by unions, but that would be a small price to pay for eliminating corporate contributions, which are much larger and more likely to promote legislation harmful to the general public.

Corporate Rights

Karen, I'll refer you to the comments upstream about corporate rights. Are you really wanting to deprive the New York Times of first amendment rights? The NYT is certainly a 'voluntary association of human beings for commercial...purposes'. I think Minnpost would also lose any first amendment protection under your proposal.

Setting that aside, do consumers lose their constitutional protections alongside Google and Yahoo? Can the government search your email then if it's hosted by a corporation? Can your car be searched if it's parked at Target?

I'm simply amazed at just how many babies the anti-Citizens United folks are willing to throw out for such a small amount of bathwater.

Articles and columns in the

Articles and columns in the newspaper are written by people. Said people have Constitutional rights.

By People

So if Generic Corp has an actual person cut the check, then there is no problem right? Also, let me point out that corporations are composed of people too.

How do you put

a corporation in jail?
(as opposed to the individuals who comprise it).