Court vs. Court

I’ve been a lawyer for thirty-two years, and I’ve never read a judicial decision like the one that the Montana Supreme Court issued last December 30.

While every court in this country – from the lowest state court to the federal tribunals – sees its job as obeying the dictates of the United States Supreme Court, the Montana Supreme Court chose to obey the U.S. Constitution instead.

The bottom line: the Montana court refused to comply with the US Supreme Court’s infamous 2010 decision in Citizens United, which struck down legal limits on how much corporations could spend on electing politicians or passing ballot measures. The Supreme Court ruled that corporations have a First Amendment right to intervene and influence our democracy with cash. Spending money is a form of free speech, said five of the nine justices. And by that one vote majority, the United States Supreme Court made corporations more powerful than government, more powerful than human beings. The second anniversary of the Citizens United ruling sparked a day of national protest, as my colleague Marty Berg reports.

Like many states, Montana had strong campaign spending laws, including disclosure of campaign contributors and one that prohibits corporations from giving money directly to candidates for public office out of the company treasury. Instead, corporations that want to get involved in elections are required to set up a special fund that can receive donations from individual corporate employees or shareholders and use that money for gifts to politicians or political causes.

As the Montana opinion explains, a Colorado-based organization known as “Western Tradition Partnership” sued to invalidate Montana’s corporate campaign controls, saying they were unconstitutional under Citizens United. Now known as “American Tradition Partnership,” the organization’s supporters and funding are murky, but it’s views are clear: it is extremely anti-environment. The Montana Supreme Court described its purpose as “to act as a conduit of funds for persons and entities including corporations who want to spend money anonymously to influence Montana elections. WTP seeks to make unlimited expenditures in Montana elections from these anonymous funding sources. WTP’s operation is premised on the fact, or at least the assumption, that its independent expenditures have a determinative influence on the outcome of elections in Montana.”

Lots of states have dealt with Citizens United by repealing or rewriting their campaign spending laws. Not Montana.

The Montana Supreme Court decision begins by discussing how in the late 1800s, big mining interests used money to back or bribe elected officials in Montana to take control of state government. The corruption got so bad that many citizens of the state lost their faith in government. “This naked corporate manipulation of the very government (Governor and Legislature) of the State ultimately resulted in populist reforms that are still part of Montana law,” writes Montana Chief Justice Mike McGrath. Among the reforms: the initiative process, and, in 1912, the limits on corporate spending.

“The question then, is when in the last 99 years did Montana lose the power or interest sufficient to support the statute, if it ever did,” the Chief Justice writes. If the statute has worked to preserve a degree of political and social autonomy is the State required to throw away its protections because the shadowy backers of WTP seek to promote their interests? Does a state have to repeal or invalidate its murder prohibition if the homicide rate declines? We think not.”

While the US Supreme Court justices saw no “compelling interest” in limiting corporate contributions, the Montana Supreme Court had a different view: “Montana has a clear interest in preserving the integrity of its electoral process”;  “it also has an interest in encouraging the full participation of the Montana electorate”; and “a continuing and compelling interest in, and a constitutional right to, an independent, fair and impartial judiciary,” one that is not subject to being bought by corporations who elect friendly judges.

Concluding that “the impact of unlimited corporate donations creates a dominating impact on the political process and inevitably minimizes the impact of individual citizens,” the Montana Supreme Court refused to apply Citizens United and upheld the state’s campaign 100 year old reform law.

But that was only the majority opinion. Wait till you hear what the two dissenting justices had to say:

The first, Justice Beth Baker: “The value of disclosure in preventing corruption cannot be understated.” But, she continues, “I believe it is our unflagging obligation, in keeping with the courts’ duty to safeguard the rule of law, to honor the decisions of our nation’s highest Court.”

Justice James Nelson gets the last word, and it’s a doozy.

He writes:

“I thoroughly disagree with the Supreme Court’s decision in Citizens United…. I am deeply frustrated, as are many Americans, with the reach of Citizens United. The First Amendment has now been elevated to a vaunted and isolated position so as to endow corporations with extravagant rights of political speech and, with those rights, the exaggerated power to influence voters and elections….. In my view, Citizens United has turned the First Amendment’s 'open marketplace' of ideas into an auction house for Friedmanian corporatists. Freedom of speech is now synonymous with freedom to spend. Speech equals money; money equals democracy. This decidedly was not the view of the constitutional founders, who favored the preeminence of individual interests over those of big business.”

“It defies reality to suggest that millions of dollars in slick television and Internet ads—put out by entities whose purpose and expertise, in the first place, is to persuade people to buy what’s being sold—carry the same weight as the fliers of citizen candidates and the letters to the editor of John and Mary Public. It is utter nonsense to think that ordinary citizens or candidates can spend enough to place their experience, wisdom, and views before the voters and keep pace with the virtually unlimited spending capability of corporations to place corporate views before the electorate.”

“I absolutely do not agree that corporate money in the form of ‘independent expenditures’ expressly advocating the election or defeat of candidates cannot give rise to corruption or the appearance of corruption. Of course it can. Even the most cursory review of decades of partisan campaigns and elections, whether state or federal, demonstrates this. Citizens United held that the only sufficiently important governmental interest in preventing corruption or the appearance of corruption is one that is limited to quid pro quo corruption. This is simply smoke and mirrors.”

“Citizens United distorts the right to speech beyond recognition. Indeed, I am shocked that the Supreme Court did not balance the right to speech with the government’s compelling interest in preserving the fundamental right to vote in elections.”

“I am compelled to say something about corporate ‘personhood.’ While I recognize that this doctrine is firmly entrenched in the law… I find the entire concept offensive. Corporations are artificial creatures of law. As such, they should enjoy only those powers—not constitutional rights, but legislatively-conferred powers—that are concomitant with their legitimate function, that being limited-liability investment vehicles for business. Corporations are not persons. Human beings are persons, and it is an affront to the inviolable dignity of our species that courts have created a legal fiction which forces people—human beings—to share fundamental, natural rights with soulless creations of government. Worse still, while corporations and human beings share many of the same rights under the law, they clearly are not bound equally to the same codes of good conduct, decency, and morality, and they are not held equally accountable for their sins. Indeed, it is truly ironic that the death penalty and hell are reserved only to natural persons.”

Having explained, in the most vivid terms, why Citizens United was decided wrongly, Justice Nelson concludes: “I must return to the central point of this Dissent. Regardless of my disagreement with the views of the Citizens United majority, the fact remains that the Supreme Court has spoken. It has interpreted the protections of the First Amendment vis-à-vis corporate political speech. Agree with its decision or not, Montana’s judiciary and elected officers are bound to accept and enforce the Supreme Court’s ruling….Citizens United is the law of the land, and this Court is duty-bound to follow it.”

Students of the law know that courts are always disagreeing with each other. Like the majority of the Montana Supreme Court, judges seek to “distinguish” the circumstances of one case from the facts in another in order to rule a different way. But rarely do the cases involve issues so fundamentally important to the nation; rarely are the stakes so great and rarely are the differences so stark. My guess is we're going to be seeing more of this gentle judicial civil disobedience as the present US Supreme Court ventures ever farther into the realm of re-writing the Constitution.

All the Montana justices seemed to agree that the United States Supreme Court had made a terrible decision in Citizens United. It’s most vehement critic on the Montana court, certain of that as he was, nevertheless felt bound to obey a higher principle – to obey the law of the land. If only the five justices in Washington had felt the same way.

 

 

Citizens United / Harvey Column / Outrage / Supreme Court - 01/23/2012

Re-Bending the Moral Arc of the Universe

Thanks largely to the Occupy movement, the disparity between the incomes of the wealthiest Americans and everybody else – now a chasm of historic proportions – has exploded onto the national consciousness. Even the Republican presidential candidates have stumbled into the fray; motivated by the fact that the current frontrunner is a financier, they are arguing over what they insist are the differences between “venture” capitalism (good) and “vulture” capitalism (bad).

Debating the role of finance and speculation in our economy in this election year is a bit of good news for beleaguered Americans who have been steadily losing their economic standing for decades and encouraged to offset that long decline through borrowing on credit cards and homes – until this house of cards collapsed in 2008.

This is a discussion that President Obama should embrace for reasons that transcend the usual relentless drive to get re-elected. Obama has frequently recalled Martin Luther King’s dictum that “the arc of the moral universe is long but it bends toward justice.” Economic inequality became as much a priority for King as racial inequality towards the end of his life. As Ron Suskind points out in his masterly assessment of President Obama’s first years in office, Confidence Men, King wrote that, “‘the contemporary tendency in our society is to base our distribution on scarcity, which has vanished, and to compress our abundance into the overfed mouths of the middle and upper classes until they gag with superfluity. If democracy is to have breadth of meaning, it is necessary to adjust this inequity.”

That adjustment is now a matter of great urgency, because the arc of the moral universe has been twisted away from justice.

The middle class is no longer riding the coattails of the rich. To the contrary, the American dream – that through hard work one can hoist oneself up from modest beginnings or even poverty to a better life – has vanished. The Wall Street Journal reports that the economic recovery may take generations. LINK. Saturday’s New York Times contains an interactive feature that illustrates the deepening divide between the wealthy and everyone else. It lets you check out which professions are more likely to usher you into the 1% club, and how much you need to make to qualify as a member of the 1% in various cities throughout the country. ’

Readers' comments to the article are poignant in their reflection of the profound economic struggle so many Americans are facing. Not all those among the 1% are defensive; indeed, many who might be in the 1% themselves point out that when it comes to the distribution of wealth, and the opportunity that wealth provides, it’s really the .01% at the topmost pinnacle vs. the 99.99% – a distinction the data confirms.

Whatever the numerical pivot point, the destruction of the middle class in this country is a stunning transformation that King would have seized upon. As a community organizer, he understood the importance of calling out inequality wherever it is found in order to engage the powerful force that is the American people. Demanding the attention of the affluent, and their intervention, King said, “Injustice anywhere is a threat to justice everywhere.”

Contrary to some pundits and outspoken advocates of the .01%, challenging the increasing distance between the “haves” and the “have nots” – now that the category of “I have because I borrowed to get it” has been foreclosed – isn’t class “warfare.” As the New York Times pointed out: “Class reality has nothing to do with class warfare.”

The super-elites do not want the presidential candidates even to broach the subject of income inequality because they understand, as King knew, that the discussion inevitably will lead to a national demand for action by the 99.99%, which, to this point, is disorganized, fractured and only dimly aware of the strength they might wield if they were united.

Consider this historical example. Back in the mid-1980s, auto insurance rates in California were skyrocketing. Auto insurance companies weren’t just jacking up everyone’s premiums; they were basing rates on where a person lived, rather than their driving safety record. So people who lived in low-income neighborhoods often paid more for the insurance they were required by law to buy – if they could afford it at all. People who couldn’t afford it – lower middle class and the poor – were surcharged with a penalty for not having had prior insurance when they later scraped the money together to buy it. Not surprisingly, there were lots of uninsured motorists on the road, which forced up the price of insurance for those who did buy it. It all came down to one problem: insurance companies were unregulated and free to impose arbitrary prices. But the insurance lobby was able to block any reforms in the state legislature by pitting urban vs. rural drivers, and the middle class against the poor.

California voters, presented with the opportunity, were not so easily manipulated. By directly attacking and then addressing the inequities in the insurance marketplace, Proposition 103 educated and united the constituencies: the 1988 measure mandated an across the board, twenty percent rollback of auto, home and small business insurance premiums. It also ended zip-code based premiums for auto insurance. Everyone saved money; the only losers were the insurance companies. The industry spent an unprecedented $63 million on advertisements scapegoating the urban and, with a thinly veiled racial tinge, the poor. But the strategy didn't work. The voters saw through the industry’s cunning and passed the initiative, with conservative Republicans in Orange County joining Democrats in Los Angeles to provide the margin of victory.

As a candidate in 2008, Obama promised that the presidential election would be meaningful to the vast majority of Americans who had been disenfranchised by the corrupt political system that precipitated the financial collapse. But he failed to wield his victory as a sword on behalf of those Americans. Now he has a chance to win a second chance to do so. He faces a much tougher battle this time around, among other reasons because corporations are far more deeply entrenched in the guts of the democracy, thanks to the U.S. Supreme Court’s decision in Citizens United, which has unleashed the furious, dominating power of corporate money in electoral campaigns.

The nation’s future cannot be dictated by the 1% and their money  – not if the country is to retain the democracy that was bequeathed to us by the Founders. If Obama or some other candidate engages the citizenry in a debate over the foundational issue of economic inequality, and offers a vision of democracy in which regular people are back in charge – starting with a constitutional amendment restoring the primacy of humans over money in the electoral process – he will be able to lay claim to having re-bent the moral arc of the universe traced by King.

Citizens United / Harvey Column / Occupy / Outrage / President Barack Obama / Supreme Court - 01/16/2012

Where’s Our Bailout? (Redux)

Between August 2007 and April 2010, the U.S. Federal Reserve handed out up to $1.2 trillion in public money to banks and other companies in the form of short-term loans to help them cope with cash flow problems, according to a recent report by the Bloomberg news service. In addition to U.S. banks and speculators, big bucks went to financial institutions owned by foreign governments; domestic firms like Ford and G.E. as well as Toyota and Mitsui and a German real estate investment firm.

While American taxpayers kept big businesses all over the planet alive, no such loans are available to taxpayers to cover their own personal cash-flow problems, including not being able to pay their mortgages, monthly bills, put food on their tables or a few holiday presents under the tree.

New figures, ironically also issued by the Federal Reserve, show how much help $1.2 trillion could be – if put in the hands of Americans. According to the Fed, the total amount of all money Americans owed on their credit cards as of last September was $693 billion. All of that could be paid off – in full – leaving another $500 billion, say, to help people avoid foreclosures or give every consumer in the United States a hefty tax cut.

Imagine the “stimulus effect” on our economy of paying off every credit card in the nation.

Although the Fed has portrayed the bailouts as the only way to keep money flowing in the economy, the Money Industry has yet to open its spigot and expand lending. Instead, they’ve used our dollars mostly to inflate CEOs’ executive salaries and pay themselves even more ridiculous bonuses.

Zeroing out America’s credit cards would solve that problem instantly. The credit card companies would get the money, of course, but Americans could start fresh and begin investing in their families, their businesses and their local economies.

Unfortunately, our country’s leadership owes its allegiance to the multi-national mega-corporations that grease the system with billions of dollars in campaign contributions. Wall Street’s “investment” in Washington caused the financial depression we are in today, and its no wonder that Washington’s attention is focused so narrowly on the welfare of the wealthy and large corporations. In fact, with its infamous decision equating corporations to human beings, the United States Supreme Court has turned the corruption of our democracy by money into a principle of our Constitution. Until we change that, Americans will be second class citizens in a country controlled by wealth and power.

 

Citizens United / Foreclosure / Harvey Column / Outrage / Supreme Court / TARP - 01/11/2012

The Right to Remain Silenced

Here’s another stark inequality that has come to characterize our nation: for every 99 Occupy Wall Street protestors who’ve been arrested, about one millionth of one fat cat has been arrested. Okay, I realize you can’t arrest a tiny slice of a fat cat, no matter how fat, so let me put it this way: Over a thousand Americans have been arrested around the country for protesting Wall Street in recent weeks, according to estimates. But after a half hour scouring the web, I can only find a handful of  instances of financiers or speculators being arrested for causing the collapse of our economy back in 2008 – that’s out of the hundreds of thousands who work for the Money Industry. Not one of the titans of Wall Street – the hundred-million-dollar-a-year wizards who were manipulating our economy for their personal pleasure – have been perp-walked into a paddy wagon, much less prosecuted.

The internet’s aflame with this irony, so there’s no point in belaboring it.

More important, but far less noticed, is the nature of the crime for which most of the 99% protestors have been arrested:  exercising what many Americans consider basic First Amendment rights – the freedom of speech and assembly. As we’ve witnessed over the last few weeks, in many places in this country you have no First Amendment right to walk down a street, sleep in a park, enter a public building. This isn’t anything new: under many court rulings interpreting the US Constitution, government can place “reasonable” restrictions on your rights, so as to protect the rights of others not to be disturbed.

That made sense back when “rights” belonged only to human beings.

But we now live in a new day, under a different view of the Constitution, courtesy of five members of the United States Supreme Court. According to their infamous decision in the Citizens United case, corporations have the same First Amendment rights as human beings when it comes to the freedom to express themselves by spending money to buy elections or influence votes.

There’s just one hitch to the Supreme Court’s equation of humans with corporations: when corporations exercise their First Amendment right to spend money, they completely overwhelm the First Amendment rights of humans. Sure, you can exercise your First Amendment right to donate a few bucks to a candidate for public office, or to a ballot initiative. But once a corporation opens its bank vault, your freedom of speech right is obliterated.

It used to be that the Supreme Court upheld laws that put “reasonable” restrictions on corporate spending in politics, under the theory that one person’s exercise of their rights should not disturb another’s. But Citizens United stripped that quaint notion from the law books. Until we amend the Constitution, the fat cats get to make the laws and break the laws. The rest of us have the right to remain silenced.

This travesty of democracy is now laid bare in cities and towns throughout the United States. There’s been plenty of fun poked at the strange hand gestures developed by the Occupy Wall Street supporters to substitute for applause or boos – so as not to disturb the peace of the nearby corporations. Protestors who dare to up the decibel level by using more advanced technology – a megaphone – in a public park in New York City, in the hope they can make themselves heard merely across the street, face arrest. Meanwhile, up in the executive suites, a small number of stupendously wealthy and powerful individuals order billions of dollars worth of lobbyists, lawyers and propaganda pumped into our democracy every year. It’s a deafening and unstoppable inundation… intended to make sure no one can hear what the rest of us have to say.

Citizens United / Harvey Column / Occupy / Outrage / Supreme Court - 10/24/2011

9 For the 99 – Restoring the Real Economy

Remember how aggressively our leaders have talked about tackling unemployment and the housing crisis?

Remember all the strong action to make good on their promises?

Me neither.

Remember how all our leaders criticized each other for taking money from Wall Street and other powerful corporate interests?

Remember all the potent steps they took to rid our democracy of corporate money?

Me neither.

You’ve probably heard of Herman Cain’s 9-9-9-tax plan, the scheme he says will get the economy going. Do you think it will work?

Here’s our proposal to restore the real economy. Unlike the solutions proposed by our leaders, these proposals focus on the problems faced every day by most people, not bankers.

We’ll be offering it at OccupyLA in the next couple of days to complement their work.

  1. Support 28A, constitutional amendment overturning U.S. Supreme Court “Citizens United” ruling to stop the flood of toxic corporate cash poisoning our democracy
  2. Prosecute Wall Street crime, not Wall Street protestors
  3. Give citizens same right to borrow taxpayer money from the Fed at the same low interest rates that Wall Street got in the bailout
  4. Cap bank fees and interest rates
  5. Offer real foreclosure relief:  Require banks to provide principal reduction for underwater mortgages, including allowing judges to reduce home mortgage principal in bankruptcy court to encourage mortgage modifications
  6. Repeal unnecessary tax loopholes and other corporate subsidies (overseas tax breaks, local & state tax bribes for moving jobs from one community to another, make corporations pay taxes) and transfer savings to taxpayers and small businesses in the form of tax cuts.
  7. Repeal corporate-backed NAFTA-style trade deals, which export U.S. jobs overseas, reduce wages of American workers to that of laborers in foreign countries and weaken environmental regulation.
  8. Restore traditional separations between federally guaranteed consumer banking from other, riskier, financial business.
  9. Reform student debt, stop predatory practices.

 

 

For more information, check out http://www.wheresourmoney.org

On Facebook https://www.facebook.com/wheresourmoney

Twitter http://twitter.com/ - !/WheresOurMoney

Support 28A http://www.wheresourmoney.org/campaign-2011/

 

 

 

 

 

Action / Citizens United / Congress / Foreclosure / Martin Column / Supreme Court - 10/20/2011

Disorder in the Court

I went to law school in a less cynical age, back when justice was a cause, lawyers were respected for their commitment to that cause, and courts were hallowed institutions where, unlike the halls of Congress, might did not make right.

In July 1974, I was just a few weeks away from starting my first year at Georgetown Law when the U.S. Supreme Court issued its momentous decision on whether President Richard Nixon had to turn over secret Oval Office tape recordings to a special prosecutor, who Nixon had reluctantly appointed to investigate crimes committed by Republican political operatives – the infamous break-in at Democratic Party offices at the Watergate Hotel.

Nixon had turned over some of the tapes, but claimed executive privilege for the rest. Whatever was in the tapes was assumed to be a threat to his presidency. But Nixon had campaigned on a platform to move the Supreme Court in a more conservative direction, and by the time the case got to the high court, he had appointed four of its nine members, including Justice William Rehnquist, who later became Chief Justice. Nixon hoped his conservative appointees would protect his presidency with a favorable ruling. But the Court voted 8-0 to require him to hand over the tapes. Rehnquist properly abstained because he had worked for Nixon. In one of the recordings, Nixon could be heard ordering the CIA to stop the FBI from investigating the burglary. Impeachment proceedings, conducted with great dignity and on a bi-partisan basis, now seemed certain to lead to a conviction. A few weeks later, Nixon became the first president to resign his office. It was a cloudy, humid day in D.C., and I was working on Capitol Hill. I will never forget the sight, nearly thirty-seven years ago to the day, of the President Nixon's helicopter lifting up into the cloudy, humid skies for one last ride that August.

The key figures in this unprecedented moment in American history were all lawyers. For a young and idealistic soon-to-be-student of the law, it was a majestic and inspiring example of the power and wisdom behind our democratic form of government, and a victory for the rule of law.

Those days are long gone. Powerful corporate interests have waged a decades long campaign to vilify lawyers who go to court to defend consumer or civil rights. The lure of big money – and the weight of law school debts – has led the best and the brightest graduates to a corporate law career. And the courts, deliberately populated with judges appointed for their ideological views, have become politicized and, all too often, ideological.

This dangerous development is on display at the very top, where the United States Supreme Court has drawn down a deep reservoir of public trust in the integrity and independence of the judiciary.

The Court unilaterally intervened in Florida’s vote counting process and made George Bush President in 2000. In two arcane procedural decisions over the last decade that were well under the radar of the American people, the Court erected unprecedented new barriers to the ability of plaintiffs to bring a lawsuit in federal courts.

In April, the Court ruled that corporations can require courts to enforce “arbitration clauses” buried in the fine print of AT&T’s cell phone contract, which most people never see, at least until after they sign up for service, and to which there is no alternative. Consumers suing to block nickel and dime rip-offs by big corporations are going to find themselves tossed out of court on their hind parts unless they can prove that they cannot possibly vindicate their legal rights before private arbitration judges ultimately paid by the defendants themselves.

And then there is the infamous Citizens United case, in which the Supreme Court ruled that restrictions on the right of corporations to spend unlimited amounts of money to elect candidates violates the corporations’ free speech rights. By granting these artificial entities the same exact First Amendment protections as human beings, the Supreme Court majority nullified the average American’s right to speak up.

In a thoughtful essay in a legal newspaper, Daniel Purcell, a San Francisco lawyer who typically represents corporations, writes that several of the decisions,

…put more arrows than ever before in the quivers of attorneys like me, who tend to represent defendants. We have more opportunities to end, or dramatically reduce the scope of, litigation before it really begins. But it does not reflect well on our society that our rules favor institutions to the extent they currently do. Throughout our history, when the balance of power has shifted too heavily in one direction, societal forces have corrected the imbalance by changing the procedural ground rules. Time will tell if any counterweight to institutional power still exists in modern America. I have my doubts.

With public respect for the legislative and executive branches at record low levels, the erosion of confidence in the judicial branch is deeply disturbing – reinforcing the impression of many Americans that they have no real power in our democracy; that our governmental institutions protect and placate only the wealthy and powerful.

There is a perceptible and growing sense that the United States Supreme Court has exceeded its rightful authority to interpret the law. Ralph Nader has called for the impeachment of five of the nine Supreme Court Justice – Scalia, Thomas, Roberts, Alito and Kennedy – who have formed the majority in support of these highly controversial decisions. Others are calling for a constitutional amendment specifying that the right of free speech belongs to human beings, not corporations.

With Wall Street and Washington locked in a distasteful and destructive embrace, the Supreme Court could become an issue that joins all elements of the political spectrum.

Harvey Column / Supreme Court - 08/01/2011