After graduating from law school with a mountain of student loans, Ciara Torres-Spelliscy took a job with a white-shoe corporate law firm in New York to help pay off her debts. While she quickly determined that corporate law was not something she’d be able to stomach for long, it offered her some useful insights into the inner workings of corporate America. Those experiences proved invaluable when she began working on the issues of money in politics at the New York University’s Brennan Center for Justice, and when she started teaching constitutional and corporate law classes at Stetson University College of Law in Florida.
This past summer, Torres-Spelliscy published her first book, Corporate Citizen? An Argument for the Separation of Corporation and State. She argues that corporations have accumulated more legal rights than ever before; at the same time, they have largely abandoned their societal obligations. Meanwhile, amid unprecedented levels of corporate money flowing into politics, there’s a growing movement to demand transparency from companies regarding candidates and causes that they support. The American Prospect recently sat down with Torres-Spelliscy to discuss her work on corporations and the new paradigm of corporate power. What follows is a condensed, edited version of the interview.
Justin Miller: What’s the general scope of your book?
Ciara Torres-Spelliscy: What I was seeing in my constitutional law classes was that corporations were sucking up a lot of rights and being excused from certain responsibilities. When you look at the really big picture, that doesn’t seem fair because that’s not what we do with human beings. Usually when we give a human being a set of rights, we also expect some responsibility from that individual. What I was seeing in the corporate world was that they could get new speech rights—for example, political speech rights—but responsibilities were being either shirked or excused.
The other thing that I found is this is not going unnoticed. There is this reaction to this expanding corporate power from lawmakers, from consumers, and from investors. To a certain extent, you can also see it from other entrepreneurs who are rejecting the classic profit-driven model of corporations and are opting to from what are known as benefit corporations, or B-corps.
Miller: The expansion of corporate rights is obviously due to Citizens United. As someone who is deeply engaged in the study of corporate power, can you describe your reaction to that decision?
Torres-Spelliscy: When I started reading Citizens United, I had brown hair; when I finished reading the decision, I had started to go gray. That’s how upsetting I found that decision. I just couldn’t believe that the Supreme Court had gotten rid of decades of precedent. If you look at earlier Supreme Court decisions, the Court realized that there’s a problem with money in politics or concentrated money in politics, or corporate money in politics. Somewhere along the way, they lost that intuition that there’s a danger in having too many resources concentrated in too few hands. So here we are: Citizens United giving corporations political speech rights.
Miller: Critics have cast the Roberts Court as exceptionally hostile to campaign-finance reform and broadly accommodating to corporations in a way that is starkly more ideological than past Courts. Where does that ideological strain of deference to corporations—going so far as to granting them personhood—come from?
Torres-Spelliscy: The concept of corporate personhood, which I realized doing this book and hadn’t fully appreciated before, is a really old concept that comes from medieval Europe, from a pope who was also a lawyer. The pope had this problem, as a lawyer-pope, which was that the Catholic Church had all of this property, but it was sort of ambiguous at the time that the Catholic Church was something that could continue to exist in lots of different forms and own property. He thought about this, and being a brilliant lawyer-pope, said, oh, it’s a persona ficta, which is Latin for fake person. He is the source of corporate personhood. That concept grew in Europe, and it was adopted in England. When you get to the American colonies, all of the lawyers in the early colonies were trained as British lawyers—and so they learn all of this British common law, and part of British common law is that corporations are persons.
When you get the early Supreme Court wrestling with really deep questions like, should a corporation be covered by the contracts clause or should a corporation have operating rights like a human person, they naturally pull on this old British law, which is actually old European law, which goes back to this damn pope. In the American context, often we think of corporate personhood being created in the 1880s in a case called Santa Clara where the Supreme Court decides that corporations are persons for the purposes of the 14th Amendment’s Equal Protection Clause, but it’s way older than that.
Different attorneys have different responses to the way corporate personhood has taken off. I actually don’t mind corporate personhood, and maybe this is from my time as a corporate lawyer. Where it goes off the rails is when you start giving them citizen-type rights. The ones that really drive me up the wall are the religious rights and the political speech rights: When you say that these corporate entities have the same right as a human being to speak in our political system, that’s where you lose me.
Miller: Do you think corporations have a role to play in public policy, and if so, where do they fit in your ideal world?
Torres-Spelliscy: I would love to keep them out of the electoral process. I can’t even conceive of a Supreme Court that would do that at this point. But who knows? We have an open seat and we’ll see who that fifth vote is. If they have [a] diametrically different approach than Scalia, then a lot of the campaign-finance law that was decided 5-4 could go the other way.
It’s probably appropriate for corporations to act in lobbying around the rulemaking and laws that are going to impact their actual business. The more cabined they can be, the better. But we are so far from that. Right now, corporations have the same rights as humans to lobby for anything—and they do. In some ways, they are very active citizens: They show up for the hearings, they comment on the rulemaking, they are walking the halls of Congress.
Miller: The annual CPA-Zicklin Index shows that more and more Standard & Poor’s 500 companies are becoming more transparent with their political activity. How has shareholder pressure changed how corporations engage in politics?
Torres-Spelliscy: This is what corporate lawyers call “private ordering.” One of the things that an investor can do is put in a shareholder proposal if they own enough stock. That gives other shareholders the ability to vote on that shareholder resolution. [Offering] shareholder resolutions on corporate political spending have been one of the most popular types of shareholder proposal over the past five years. They’ve had enormous results. They’ve been getting high enough votes on these proposals [though not enough to pass] so they can relist [the proposal] the next year.
If a company sees the high numbers and still refuses to be transparent, that means the investors can [debate this issue] in the next annual meeting. That has been encouraging. That puts some leverage in the hands of the person who files it: They can negotiate with the company and say, “C’mon. If your position is that corporate political giving is actually good for the shareholders, then why would you hide it from us?” That’s why the CPA [Index] has been so wildly successful at getting parts of the S&P 500 to be more transparent. That is all to the good.
One of the problems with private ordering is there’s no guarantee that what Company A tells shareholders is going to be comparable to what Company B tells shareholders. If you have someone who has multiple investments and they’re trying to figure out what these companies are doing in politics, it can be enormously frustrating because they’re not disclosing the same thing in the same way. The apples to apples comparisons aren’t there.
That’s why people have been clamoring at the Securities and Exchange Commission, begging for a rule [on requiring uniform disclosure of corporate political spending]. That rulemaking request dates from 2011; it’s just sitting there. The good thing with that is more than one million people from the public have filed comments saying, “Please, please, please.”
Miller: What solutions are you proposing that would help rein in corporate political power?
Torres-Spelliscy: I’ve been working on trying to get more transparency. How the SEC does a rule, [for example]. You could also do rules at the state level—stronger disclosure state-by-state-by-state could also be one way to do it.
The other thing I work on is trying to get shareholders the right to vote on political spending. The shareholder resolutions that they can vote on now are all precatory, which means they are non-binding. I would like to see a binding vote. My model is what they do in the U.K.: Shareholders can vote on corporate political spending before it happens. If the directors ask for the authorization and they don’t get it, then the directors are actually personally liable for any damage that comes to the corporation for their political spending.
That’s a totally different approach—here [in the United States] there’s none of that. My approach has been getting bills introduced in Congress. There’s a bill [sponsored by Democratic Congressman Michael Capuano of Massachusetts] called the Shareholder Protection Act that’s basically modeled after what they do in the U.K.