Battle in Seattle: Citizens United
Religion & Liberty Online

Battle in Seattle: Citizens United

As a child of the 1970s, your writer was witness to an amazing transformation in a large swath of the religious community. In what seemed like a wink of an eye, clergy, religious and nuns grouped together with yippies, hippies, and other left-of-center tribes to advance progressive causes. Never you mind that much of these initiatives have little overlap with Judeo-Christian principles, just believe in your heart that Jesus would oppose genetically modified organisms and the U.S. Supreme Court’s Citizens United ruling, while championing diversity and staunchly advocating the curtailment of greenhouse gases.

Of the above bugbears embraced as major issues by progressives, perhaps none resonates more than overturning Citizens United. Why, you ask? Because a reversal of the SCOTUS decision would tilt political discourse decidedly to the left, making all other issues fall like so many dominoes toward larger government, higher taxes and exponentially more regulations.  Take away businesses’ political voice and you’re left with nothing but one side of the debate.

This was the topic I watched debated on July 12 in Seattle at the Society of Corporate Secretaries & Governance Professionals’ Governance/Wired Conference. I attended the conference to help clarify the political spending and disclosure policies that seem to be front-of-mind for the shareholder-activist members of the Interfaith Center on Corporate Responsibility and As You Sow I’ve written so much about for Acton these past few months.

The debate featured Brian G. Cartwright, senior adviser, Patomak Global Partners, as advocate for Citizens United, and Bruce F. Freed, president and founder, Center for Political Accountability, arguing that the ruling posed grave threats to current political speech. Freed’s CPA nonprofit, incidentally, authored many of the campaign-finance proxy resolutions issued by shareholders.

Freed rhetorically asked: “Why is disclosure important?” and answered: “To reduce shareholders’ risk” by preserving the reputation of the business in which they hold stock. Among the threats listed were potential legal issues and risks of extortion.

“There is an overwhelming concern of risk by shareholders,” Freed said, adding companies are disclosing as never before. He said 118 of the S&P 500 have reached disclosure agreements with CPA, or have adapted or strengthened existing disclosure requirements.

Freed asserted disclosure is good for shareholders because corporate political spending “distorts markets” and “creates problems in the free market.” He added: “Political disclosure has not led to any negative results” and that “standardized disclosure creates a level playing field.”

Freed said voluntary disclosure as promulgated by CPA is a strong foundation for Securities & Exchange Commission rules currently under consideration, and listed two major takeaways of CPA’s efforts:

  1. Steady growth of corporate political spending disclosure is making it a corporate standard.
  2. It is in companies’ best interest to disclose political spending, which Freed said leads to considered decision making.

Cartwright began his seven minutes by declaring that “a government large enough, pervasive enough and intrusive enough” makes it necessary for businesses to engage in politics. To live meaningfully and effectively in a republic such as the United States, he said, requires an engagement with government if companies have any hope of protecting or advancing their interests.

Cartwright labeled trial lawyer associations and unions as two key factors of the anti-business community that has been “very aggressive in electoral politics. Business cannot afford to cede the field” to these groups.

In fact, As You Sow’s 2013 Proxy Preview features an essay by John Keenan, Corporate Governance Analyst, American Federation of State, County and Municipal Employees Capital Strategies, wherein he states: “[L]obbying by trade associations uses corporate resources that are substantial and largely unreported. For example, the Chamber of Commerce has spent more than $500 million on lobbying since 2009, making it the country’s largest lobbying spender.” Keenan and Freed are likely in agreement that shushing the Chamber of Commerce in the same manner companies abandoned the American Legislative Exchange Council in droves due to shareholder activism is a desired outcome.

Cartwright said it was beneficial for corporations to work with trade associations, “which are smart and efficient, and very effective at eliminating the ‘free-rider’ [companies enjoying the benefits of another’s efforts at no cost to themselves] effect. He called trade associations “very savvy.”

Responding to charges made by Freed, Cartwright said donations made to trade associations such as the U.S. Chamber of Commerce, which doesn’t disclose donors, only poses a modest obstacle. Regarding the companies who have adopted CPA’s disclosure resolutions and Freed’s assertions that political spending disclosure “levels the playing field,” and is “free-market,” Cartwright stated: “Removing the voice of business from the playing field is not in the best interest of business.”

He also said trial lawyers don’t disclose their express “goal to keep business out of the [political] arena.” He said that the political activist organization Media Matters has engaged in a three-year campaign – working with a particular partner [the audience left to assume he’s referring to Freed’s CPA; and that both Media Matters and CPA are funded by leftist billionaire George Soros] – to convince businesses they’ll suffer irreparable harm if they engage anonymously in the political process.

Cartwright posed the question: “How much money is too much for business” to spend on political activity. He responded: “Whatever’s in the best interest of the company.” He acknowledged that the “effect of money in politics is a legitimate concern,” but warned that any solution must be conducted in an “even-handed, neutral fashion,” adding, “the SEC has two members from each party for a reason.”

Cartwright continued: “Personally I find it problematic [that campaign finance reform] is focused entirely on the business community [while] trial lawyers get a free pass.”

Cartwright rebutted Freed’s claims that CPA was making great strides in bringing companies to the political expenditure disclosure camp. He said Freed was attempting to make it seem that “resistance” to CPA’s disclosure efforts “was futile” and “the wave is unstoppable” so companies may as well “get on board.” Cartwright countered that Freed failed to calculate shareholder abstentions from voting, which he claimed is “misleading” as shareholders privately don’t favor political expenditure disclosure resolutions, but publicly abstain from voting.” In fact, Cartwright said, shareholders effectively “clobbered” CPA’s resolutions.

Bruce Edward Walker

has more than 30 years’ writing and editing experience in a variety of publishing areas, including reference books, newspapers, magazines, media relations and corporate speeches. Much of this material involved research on water rights, land use, alternative-technology vehicles and other environmental issues, but Walker has also written extensively on nonscientific subjects, having produced six titles in Wiley Publishing’s CliffsNotes series, including study guides for "Alice’s Adventures in Wonderland" and "One Flew Over the Cuckoo’s Nest." He has also authored more than 100 critical biographies of authors and musicians for Gale Research's Contemporary Literary Criticism and Contemporary Musicians reference-book series. He was managing editor of The Heartland Institute's InfoTech & Telecom News from 2010-2012. Prior to that, he was manager of communications for the Mackinac Center's Property Rights Network. He also served from 2006-2011 as editor of Michigan Science, a quarterly Mackinac Center publication. Walker has served as an adjunct professor of literature and academic writing at University of Detroit Mercy. For the past five years, he has authored a weekly column for the mid-Michigan Morning Sun newspaper. Walker holds a bachelor’s degree in English from Michigan State University. He is the father of two daughters and currently lives in Flint, Mich., with his wife Katherine.