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Seattle’s stand against treating corporations as people

Seattle City Councilmembers take on the plastic bag industry. Credit: Seattle City Council

Mitt Romney famously said, “corporations are people … everything corporations earn ultimately goes to people.” He went on to ask: “Where do you think it goes?” The answer is: often to foreign investors.

For example, Peabody Energy, which plans massive long term coal exports through Seattle by train, is 12 percent foreign owned. When Facebook co-founder Eduardo Saverin renounced his American citizenship in May to avoid $67 million in taxes, he pushed the company’s foreign ownership above 10 percent. Foreign investors own more than 10 percent of Alcoa, 9 percent of Bank of America and 7 percent of Microsoft.

The word corporation doesn't appear in the Constitution but the U.S. Supreme Court first granted constitutional protections to corporations in 1819, then formally established corporate personhood and extended constitutional rights such as the Fourteenth Amendment’s equal protection clause in 1886.

The problem is that our founding documents provide no basis for the transfer of constitutional rights and privileges to foreign investors. In fact, the Court has denied these rights to resident aliens in other cases. And, it’s quite common for U.S. corporations owned in part by foreign investors to use corporate personhood and judge-made constitutional rights to overturn the wishes of actual Americans.

In 2009, the Seattle City Council’s tax on plastic grocery bags was overturned by a $1.4 million referendum campaign led by the so-called American Chemistry Council, whose members include Japan’s, Mitsubishi Chemical Corporation, Germany’s Evonik, Dutch Akzo Nobel, and India’s Dorf Ketal. The legal basis of the industry’s referendum relied on corporate personhood, free speech rights, and the right to spend money on elections.

Since May 2011, Seattle’s been defending a costly lawsuit for offering residents the right to opt out of unwanted phonebook deliveries. The program has been popular with residents and good for the environment; the city reports that more than 75,000 homes and businesses have stopped nearly 420,000 unwanted phonebook deliveries, saving 375 tons of paper.

In the suit, the phonebook companies assert their corporate personhood and claim that the phonebooks are free speech and that their right to equal protection has been violated. They also claim constitutional protections from having the city (not Congress) regulate the interstate transfer of the phonebooks’ content. Foreign ownership is also at play in this situation. One of the key litigants is the Yellow Pages Integrated Media Association which represents Yellow Media Inc., a Canadian corporation.

With legal costs mounting, it’s no surprise that the Seattle City Council chose only to pass a non-binding resolution stating its opposition to Peabody Energy’s coal train expansion. While the city objects to the local and global dangers coal presents such as coal remnants, diesel emissions, and climate change, state and federal regulations provide the city no legal means to stop the company’s plan. If Seattle tried to ban the company’s trains, Peabody would likely sue asserting corporate personhood and claiming constitutional protections from the city’s attempt to regulate interstate commerce.

If it seems we’ve fought this fight before, we have. The American Revolution wholly rejected the dwindling legitimacy of foreign control over the colonies. But today, innumerable foreign companies once again own trillions in U.S. corporations. Some examples:  Barclays more than $500 billion, Norwegian Norges Bank $115 billion, German Deutsche Bank $93 billion, Credit Suisse $60 billion, and  Japan’s Sumitomo Mitsui Bank $53 billion. And in turn, these corporations wield corporate constitutional rights against American communities in court.

President Obama and retired Supreme Court Justice John Paul Stevens have expressed concern for how the Citizens United decision allows foreign-owned corporations to spend unlimited amounts to influence elections. But even if we reverse Citizens United, foreign-owned corporations will still wield corporate personhood, equal protection, and commerce clause protections to overturn community wishes.

Corporate personhood is a 19th century idea formed by an all white male court before women and blacks universally had the right to vote. The Fourteenth Amendment protections corporations typically assert were actually added to the Constitution to remedy discrimination against freed slaves; they were also the legal basis used to end segregation in Brown v. Board of Education. In other words, the anti-discrimination laws of the post civil war era are the legal foundation which corporations routinely use in court.

The problem with the legal fiction of corporate personhood isn’t just the “affront to the inviolable dignity of our species” as Montana State Supreme Court Justice James C. Nelson recently wrote, but the lack of any legal basis for foreign, non-citizen investors to benefit from judge-made corporate constitutional rights wielded against American communities.

Seattle Initiative 103 seeks to establish a community bill of rights that eliminates corporate personhood and judge-made constitutional “rights” and privileges. If enacted, it would be the first time that the voices of more than 300,000 municipal voters reverse Citizens United locally and call for changes to broader state and federal laws that would restore our national democracy.

You can hear Jeff Reifman speak about Initiative 103 at the Common Good Cafe Thursday evening, June 21, at 7 pm in the University District.



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