back to corporations | rat haus
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the OTHER paper
Box 11376
Eugene, OR 97440
April, 1996
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Who's in charge here?
by Wanda Ballentine
In 1984, at least 10,000 people were killed in the world's worst
industrial accident at the Union Carbide pesticide plant in
Bhopal, India. At least 200,000 forgotten victims still suffer the
effects of this corporate Hiroshima. Justice should have been
simple -- Union Carbide had ignored design flaws in the plant and
was clearly culpable. But the $5 billion company thumbed its nose
at criminal charges, refusing to appear in India's court. The U.S.
government looked the other way. The corporation settled out of
court for less than $800 per claimant, sold off product lines to
avoid boycotts, paid large dividends to shareholders to protect
assets from the victims, downsized its workforce by 90%, and in
1994 rang up $379 million in profits and rewarded six top
executives $4.9 million in pay and bonuses.
In 1989, the Exxon Valdez dumped 12 million gallons of oil into
Prince William Sound, causing an estimated $15-20 billion of
damage. The captain, a known alcoholic, had abandoned the helm at
a crucial navigation point. Exxon executives admitted knowledge of
his problem following the accident but denied culpability in
court, maintaining the event was simply an accident requiring
clean-up, not criminal fines. The $1 billion clean-up was woefully
inadequate, while the company fights a $5 billion criminal
judgment. Exxon is numero 3 of the Fortune 500, the 26th largest
entity in the world -- bigger than France -- with $107 billion
after-tax profits.
Charles Hurwitz of MAXXAM infamy uses junk bond financing and
savings and loan shenanigans like a corporate Genghis Khan. In
1977, he looted a New York insurance company; in 1978, he took
over an oil company; in 1984, he withdrew, for $8 million, an
attempt to take over Castle-Coke; in 1985, he grabbed Pacific
Lumber in a high-leverage buy-out; in 1988, it was Kaiser
Technology; this year he made a play for Kaiser Aluminum.
Thirty-one different groups have tried to stop him, including the
U.S. Forest Service, the Department of Labor, the Federal Reserve
Board, Congress, and state governments. Ballot initiatives and
multiple lawsuits for gutting pension funds and logging redwoods
have been used -- none have yet been very successful.
Corporations are literally getting away with murder. Why and how?
"Who's in charge here?" was the question at nine seminars on
"Corporations, Lawyers, Democracy, Justice and the Law" presented
by the Program on Corporations, Law and Democracy (POCLAD) at the
1996 Public Interest Environmental Law Conference at the
University of Oregon last month.
Should a corporation have the right of free speech?
Should corporations contribute to political campaigns?
Should corporations elect officials?
Should corporations write laws?
Should corporations dump poisons into our air, water and
soil?
Should corporations have greater wealth than many countries?
The answers are clearly "no." Change "should" to "do," however,
and the answers are clearly "yes." The reason, according to
Richard Grossman and Ward Morehouse, POCLAD co-founders, stems
from industry's assault on laws governing corporations in the late
19th and early 20th centuries. The most outrageous result was the
1886 Supreme Court ruling that corporations -- which are legal
fictions -- are persons with a person's rights and privileges.
This decision was based on the 14th Amendment, the purpose of
which was to remedy the status of slaves following the Civil War:
"All persons born or naturalized in the United States, and subject
to the jurisdiction thereof, are citizens of the United States and
of the State wherein they reside. No State shall make or enforce
any law which shall abridge the privileges or immunities of
citizens of the United States; nor shall any State deprive any
person of life, liberty, or property, without due process of law;
nor deny to any person within its jurisdiction the equal
protection of the laws."
That such a bizarre interpretation as corporate personhood could
be made of this Amendment by no less than the Supreme Court
testifies to the power and wealth accrued by industry despite
restrictions in their charters. The boom in railroad, mining, and
timber industries in the opening of the continent was aided by
corrupt officials in the rush to riches. Lincoln, to finance the
Civil War, capitulated to even more corporate demands.
That this history is not even taught in law schools testifies to
the power of corporations regarding what will be included in
textbooks and curricula. "We were just told the corporate system
is the most efficient way of doing business," said Tom Stephens,
Chair of the National Lawyers Guild's Toxics Committee.
What does it mean for corporations to be deemed "persons?" It
means Bill of Rights protection, such as the 1st Amendment right
of free speech. The average person exercises his/her right to free
speech by speaking at a public meeting, writing a letter to the
editor, calling a talk show, posting on the Internet. Corporate
"persons" use advertising, paying millions to experts in the
manipulation of thought and desire via the use of language and
image. Corporations determine via sponsorship what media programs
are selected and thus what ideas and values are disseminated to
every home in America. Now, they're buying the networks. The
just-enacted Telecommunications Act has already generated radio
mergers and buyouts worth an average of half-a-billion dollars a
week according to media watchdog Norman Solomon.
Prior to the revolution in corporate law, corporate charters,
granted by States, were very restrictive. Corporations were
chartered for a specific purpose and for a limited period of time.
They were to do no more and no less than the specified purpose;
either was grounds for dissolution. Corporate books and documents
were open for scrutiny by the state, sometimes even by the public.
In many states corporations could not own land; they could donate
neither to political causes nor to charities. When applying for
renewal of their charter, they had to prove they were acting in
the public good.
What a concept.
But where it once was a privilege, with definite responsibilities,
to be chartered, states began vying for the "privilege" of having
a corporation and started giving away the store. Corporations
chartered in one state may operate in another by obtaining its
Certificate of Authority. These could apply restrictions, but are
usually just rubber stamps in the competition to be abused.
Thus it is, that where small business owners have to pay the full
costs of doing business, corporations are subsidized by federal,
state and local taxpayers.
Thus it is, that while regulations prohibiting environmental
poisoning have had some wins, corporations can delay or avoid
implementation through legal tactics -- or just label the fines a
business cost and write them off.
Thus it is, that these wealthy and powerful "persons," many with
assets greater than some nations (fifteen corporations surpass 120
U.N. nations), can influence every step of the legislative
process. If they can't satisfactorily shape the dialogue via the
media, they help write the legislation; if that doesn't work, they
help write the regulations; finally, they determine
implementation. If they can`t dilute or revoke laws, they cut
funding to the enforcing agency. This year, corporations poured
$775 million into the federal electoral process. In 1972, it was
$2 million.
There are good laws on the books, but citizens can't get them
enforced. Instead, they spend huge amounts of time, money and
energy fighting corporate pollution and labor inequities,
destruction of wilderness, and takeover of the political system.
They fight issue by issue, case by case, on very uneven playing
fields against these corporate "persons," while new threats
proliferate.
Restrictions on corporate activities should be spelled out in
their charters, as originally intended. Grossman and Morehouse
advise activists to become experts on corporate charter provisions
of their state's original and current constitutions. Power over
corporation originally belonged to the people via their state
representatives -- what is left of that power? How can it be used?
How can it be improved?
POCLAD chapters are springing up across the country, including
Oregon. If interested, call 508/398-1145, go to
http://www.poclad.org/, and/or email people@poclad.org.
From the OTHER paper, April, 1996, pg. 7, POB 11376, Eugene, OR
97440.
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