If corporations are people, why can’t they go to jail?

The Supreme Court has come up with some unusual meanings for some common words.  In the process, they have changed the nature of the American corporation at the expense of average citizens.

Because this has to do with the Court, it gets a little legalistic, but much less than you might expect.

In law, affected parties may be called “persons.”  Historically, there have been two kinds of persons – natural and artificial.  “Natural persons” are human beings.  “Artificial persons” are organizations, like corporations.

The big question raised by the Supreme Court is whether there is any difference between them.  This Court seems to be saying there isn’t.  In other words, corporations should be treated pretty much like human beings.

In a case decided less than two weeks ago, the Court ruled that, because government cannot force individuals to support contraception, it cannot force corporations, owned by individuals, to provide health insurance coverage paying for contraception.

A lot has been said about this decision applying only to “closely held” corporations, ones owned by a small group of people, not those whose shares are available for purchase in the open market by anybody who’s interested.

The Court said individual rights of human beings applied also to corporations owned by a small group of people.

What about major corporations? The majority opinion says, "it seems unlikely that the sort of corporate giants to which [the government] refers will often assert...claims" like those of the small corporations.  "Seems unlikely" may not sound like what a major Supreme Court decision should conclude about the law of the land.

It seems unlikely the Supreme Court would decide differently if a majority of any corporation's shareholders wanted it be to exempt from the contraceptive requirement.

The Court’s decision is based on the belief that a corporation is nothing more than a collection of natural persons, so it should be treated just its individual owners would be.

If that were true, there would be almost no reason for corporations to exist.  The main reason they exist is to shield their owners from legal liability.  If you want to sue a company for its wrongdoing, the corporate form keeps you from getting at the owners.

In other words, according to the Supreme Court, corporations have more privileges than people, because their owners have the rights of natural persons, but not the same exposure to liability for their actions.

It gets even better.  If you commit a crime, you can go to prison.  If a corporation commits a crime, it pays a fine that probably comes out of the pockets of shareholders who have no control over corporate actions.  In fact, the government probably won’t even bother charging it with a crime, just levy the fine.

If corporations are nothing more than collections of their individual owners, why can’t members of their boards of directors go to jail when their companies break the law?  That could be the best way to cut down on corporate lawbreaking.

But, the corporations might argue, we don’t have the most important right of individuals – the right to vote.  Individuals have votes, which should give them more power.

In a decision a few years ago, the Supreme Court ruled that corporations have the same freedom of speech as individuals.  Almost 40 years ago, in a decision giving a new meaning to common words, the Court ruled that political contributions were a form of speech.  Result: corporations can contribute freely to political campaigns.

Corporations may not the vote the way individuals do, but they have a lot more money to contribute.  And the record shows that money determines political outcomes.

Getting back to the Court’s decision on contraceptives, the majority said that the decision really would have no effect, because the government had already created an easier method for providing coverage if a company declined to participate.  Just use that method, and the decision would not harm employees of companies refusing to pay for contraceptive coverage.

That decision had a shelf life of three days.  In a new decision, the Court said that it would have to consider whether that method was legal and, in the meantime, it could not be imposed on an entity that objected.

The three female justices on the Court blew up on that one.  They had warned the original decision would lead to an expanded ability for artificial persons to exempt themselves from laws on the grounds of their religious beliefs.  The majority had scolded them for overreacting.  Then it did just what they had predicted.

Johnnie Walters dies and so does his spirit

Let us remember Johnnie M. Walters, who died last week.

He has been forgotten, though people should honor what he did.  I do. 

In 1972, he was the commissioner of the Internal Revenue Service.  He had been picked by President Richard M. Nixon for that job.  The president probably thought he should be so happy to have the title that he would follow orders.

“I want to be sure he is a ruthless son of a bitch,” Nixon said, “that he will do what he’s told, that every income-tax return I want to see I see, that he will go after our enemies and not go after our friends.”

Walters succeeded a commissioner who would not obey Nixon.  But nobody told this unknown tax lawyer from South Carolina that he had a special set of instructions from the president.

Still, the wheels were grinding.  John Dean, the White House counsel, searched for “how we can use the available federal machinery to screw our enemies.”

A good way, it turned out, was to get the IRS to carry out tax audits of “enemies.”  Dean called Walters to the White House and, in 1972, gave him Nixon’s infamous “enemies list.” As a Senate staff member and campaign official for Sen. George McGovern, Nixon’s election opponent, I was on the list.

Walters balked. The Watergate scandal involving the Nixon campaign break-in at the headquarters of the Democratic National Committee was public, and Walters warned Dean that using the IRS for political purposes would create a far bigger scandal.  But Dean insisted.

The IRS commissioner told Treasury Secretary George Schulz of his orders, and Schulz advised him to lock the list in his safe.  Three days later, Schulz was ordered to fire Walters if he did not cooperate.  Schulz’s own job was at stake.

Walters turned the list over to the staff chief of the congressional committee overseeing the IRS.  He told the staffer that he could judge that the IRS did not go after anybody on the list.

His actions halted Nixon’s audit plan.  As Nixon’s new term began, Walters was gone from the federal government. 

I have always been grateful to Walters for not exposing me to an IRS witch-hunt.  We all should be grateful to Walters, a man of great integrity in a sensitive government position, who had the courage to stand up to the president.

This story is relevant today, because efforts go on these days to “use the available federal machinery to screw” somebody’s “enemies.”  The actions are not as downright illegal as Nixon’s, but they may be as threatening to the American political system as was the “enemies list.”

Each house of Congress can freely adopt its own rules, no matter how far from the original and customary understandings that worked well for about two centuries.  In recent years, those rules have been applied to “screw” political opponents rather than to produce good government.

Senate Democratic leaders have blocked GOP proposals to amend pending legislation.  By this simple action, any possibility of compromise has been lost.

The majority Democrats could almost certainly defeat any proposed amendment, so it is difficult to justify this blocking action other than as a way to prevent possible embarrassment for their senators stemming from their opposition to an enemy amendment.

The flip side is the radically expanded use of the filibuster by Republicans who have insisted that any important matter takes 60 votes to pass rather than the simple majority set by the Constitution.

To prevent the president from avoiding the filibuster by making appointments to federal office when the Senate is in recess, the Republicans keep the Senate in phony sessions to prevent the enemy, the Democratic president, from making recess appointments

In eight years, President George W. Bush made 171 recess appointments.  All could have been blocked by the Democrats, but none was.  In almost six years, Obama has made 32.

Last week, the Supreme Court said that the Republican recess tactic was constitutional.  But the Democrats had already blunted its effect by changing the filibuster rule to require only a simple majority to end debate on most appointments.

Also last week, Speaker John Boehner announced he would ask the House of Representatives to authorize a lawsuit against President Obama for having failed to obey the law.  Because Congress cannot pass such a bill without presidential action, this move is pure harassment of the enemy.

The “available federal machinery” is certainly being used to “screw” somebody.  Unfortunately, it’s the people who suffer when the spirit of Johnnie Walters dies.

Beware of political pundits run wild

The political pundits are running wild.

Recent primary elections have produced some unexpected results, unleashing cosmic speculation about the future of American politics.  Most of their supposed insights, which could condition voters’ behavior, is likely to turn out to be completely wrong.

A lot of the “wisdom” results from the Republican primary in a single Virginia congressional district.  U.S. House Majority Leader Eric Cantor was toppled by a Tea Party conservative.

The “experts” claimed that such an upset was unprecedented in modern times.  That’s plain untrue.  In 1994, House Speaker Tom Foley, a Washington State Democrat, lost his seemingly assured re-election.

Cantor was thought to have lost as the result of a couple of votes, when he was willing to compromise rather than to see his party get the blame for dire results like a government shutdown.

Somehow, those votes made him a “liberal.” despite his adherence to a brand of conservatism that put him to the right of Speaker John Boehner.  But his opponent said he failed to take a “my way or the highway” approach often enough.

Another explanation was his constituents thought he paid too much attention to his role as a congressional leader and too little attention to their more parochial interests.  That has happened to others in Congress who had enjoyed the national spotlight.

Or perhaps Cantor’s primary, like most such races, involved only a relative handful of voters, party activists and those strongly motivated by ideology.  When that happens in primaries, extreme views are often overrepresented.

It’s possible that happened in Maine’s second district congressional primaries in which the more liberal Democrat Emily Cain and the more conservative Republican Bruce Poliquin won.  Both Cain and defeated Republican Kevin Raye favor seeking compromise.  The general election could show if voters favor confrontation or compromise.

In the Virginia race at least, one conclusion may be money doesn’t automatically translate into electoral victory.  Cantor massively outspent his rival, but not enough to drown him out.  

In fact, too much money seems to have made Cantor’s campaign embarrassingly wasteful.

The same conclusion can be reached about a Maine race.  Without any precedent in memory, a Democratic primary challenger in the Cumberland County race against incumbent Kevin Joyce spent on his own and with the help of an outside fund far more than Joyce’s normal spending level.  Still, Joyce won.

The results in both Virginia and Maine may show that while money may buy election results, that’s more likely in major campaign than in those closer to the voters.

From Cantor and a few other isolated races, the pundits jumped to conclusions.

They see even more Washington deadlock (is that possible?), because Republicans will resist any compromises making them look the slightest bit moderate.  They ignore any successes of non-Tea Party candidates in the primaries and the resounding defeats of some Tea Partiers.

The pundits also warn that, for the same reasons, President Obama will have no success in the getting his legislation passed.  All hope for immigration reform is gone, simply because Cantor supported some truly modest measures.

And, they say, the fact incumbent GOP senators fended off Tea Party challengers who would have made weak candidates against the Democrats increases the likelihood the Republicans will take control of the Senate after this year’s elections.   

These forecasts could as easily turn out to be wrong.

Who knows about intervening events?  Would anybody have forecast a few weeks ago Iraq would be falling apart and the government there, having sent the U.S. packing, would be begging for American help?  Or the U.S. talking with Iran?

There have always been moderate Republican voters.  Where will they go, if the extreme right continues to gain control of their party?  When, if ever, will party loyalty give way to their desire to see government work?

Will the GOP unwillingness to pass immigration reform on which both parties largely agree stimulate support by Hispanics for Democrats?

And, though the chances are slight, will Obama provide a sense of leadership restoring a degree of optimism in the country, which, as President Ronald Reagan showed, can overcome political inertia?

Months of political campaigns are ahead.  They may move enough swing voters to show the country is deeply conservative or there is a premium on moderation.  If Republicans move more to the right, Democrats could try to come across as centrists.  In short, much can happen between now and the November elections.  

So beware of pundits.  Voters are likely to be influenced by events and campaigns, probably even more than by the “wisdom” of pundits.

Security, environment trade-offs on the table

The time has come to consider major trade-offs.

The Ukraine crisis is turning out to have far wider implications than whether that country leans more toward to Russia or the European Union.

In seeking to signal Russian President Vladimir Putin they disapprove of his takeover of Crimea and his efforts to undermine the Ukrainian government, Europe, the United States, and Canada have run into trouble.

 

Western Europe depends heavily on natural gas from Russia.  It has learned to go easy on Russia or run the risk of a major energy problem, if Putin cuts off the flow.

Russia is clearly willing to use natural gas exports as an instrument of its foreign policy.  If Europe doesn’t accept Russian actions, it may be left in the cold.

The situation is much like 1973, when Arab countries in the Middle East placed an embargo on oil shipments to the United States and some European countries, because of their support for Israel.

The effect was immediate and sharp.  There were long lines at gas stations.  And the price of oil shot up.

The embargo ended, because the exporting countries needed the revenues earned from petroleum sales, and the United States and other countries convinced Israel to pull back in Sinai.  They also launched energy policies designed to make them less dependent on Middle East imports.

Now, the Ukraine crisis is causing a similar reshuffling of the energy deck.

Putin has seen Western Europe begin to reduce reliance on Russian supplies.  European countries are considering how to develop more aggressively their own resources, including renewable resources, and to create more energy links with the United States.

Last week, Germany, which is closing all of its nuclear power plants, said it would now push fracking – pushing deep gas to the surface by water pressure – to increase domestic natural gas supplies.  That’s one trade-off.

Having understood the Ukraine crisis will mean the loss of Russia’s captive European market, Putin did his own trade-off and quickly accepted a long-term agreement to supply China, after a decade of unsuccessful negotiations.  There’s little doubt he retreated on pricing to get the deal done.

These developments create opportunities for the United States.  It can play a far more important role in European economies, strengthen its political ties with Europe, and develop significant new export markets.

Here’s where the American trade-off comes in.

Strong and legitimate environmental concerns surround the increasing use of natural gas supplies developed by fracking or “dirty” oil from Canadian oil sands transported by the proposed Keystone XL pipeline.

There are good environmental arguments for imposing much tougher standards on fracking and preventing the pipeline development.

If that’s done, environmental concerns would get higher priority than economic and political needs and opportunities.  U.S. foreign policy options would essentially be limited by environmental issues.

The United States could more fully introduce an “all of the above” energy policy of pushing hard on expanding wind and solar sales to replace Russian natural gas imports and Chinese-made renewables in Europe.

At the same time, as part of a balanced American political compromise, Washington could allow the Keystone deal, capable of making the United States a major oil exporter, and pleasing Canada, one of our most valued allies.

This policy would place environmental concerns in a framework requiring them to be judged not only in terms of the positive qualities they promote but also in light of the political and economic situation.

The political benefit could mean Europe would be better able to adopt the same kind of independent policies toward Russia and China as the United States favors.

Tightening U.S. economic and political links with its northern neighbor is also important.  At the recent G-7 meeting of major industrial powers, only energy-independent Canada stood with the U.S. in urging a tough position in dealing with Russia.

While the Cold War is dead and should remain dead, the world is beginning to understand we are now in what might be called the Commerce War, in which China and Russia seek economic domination and, through it, political influence at the expense of the United States and Europe.

By the end of this decade, China, now with the help of Russian natural gas, will have the world’s largest economy, displacing the United States.

The Ukraine crisis and the growing economic power of China should send Americans, Europeans, and Canadians a clear message about the challenge to their national security and their place in the world.

Of course, sound environmental policy should have high priority, but it should be considered in a wider context of America’s national interest.