The Creeping Expansion of Corporate Civil Rightsby Joshua Holland
February 18, 2014

Last week, The Wire creator David Simon told Bill Moyers that the legal doctrine that spending money on political campaigns is an act of political speech protected by the First Amendment poses the greatest threat to American democracy. “That to me was the nail in the coffin,” he said. “If the combination of the monetization of our elections and gerrymandering create a bicameral legislature that doesn’t in any way reflect the will of the American people, you’ve reached the end game for democracy.”

He’s right. Not only does money as speech allow those with the fattest wallets to drown out the voices of average citizens, as John Light points out, it also gives wealthy donors an effective veto over policies that enjoy majority support. But it’s important to understand the other ways that the expansion of civil rights for corporations can conflict with the public interest.

As Simon observed, the notion of corporate personhood isn’t inherently problematic. The concept that companies are “artificial persons” is necessary because you can’t enter into a contract with an inanimate object, and you can’t take an inanimate object to court if that contract is breached.

Problems arise when these soulless artificial persons demand constitutional rights that were designed to protect real, flesh-and-blood people.

Those demands have a long history. As author and commentator Thom Hartmann detailed in his book, Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights, the end of the Civil War brought with it the beginning of a battle for corporate rights under the 14th Amendment, which was intended to confer full citizenship on newly freed slaves.

For several decades, efforts to gain 14th Amendment protections for corporations were stymied by the courts. But in the 1880s, with the help of a court clerk Hartmann described as “a dicey character,” a corrupt federal judge named Steven Field — who had his eye on a White House run — managed to get that right codified in the law on behalf of “very wealthy and powerful guys who ran the railroads and who were the richest men in America,” as Hartmann put it in a 2010 interview.

It wasn’t the only right corporations would gain during that period. According to Hartmann, in the first half of the 19th century, corporations were required to make their books open to the public. By mid-century, they were only required to disclose their finances to the Secretary of State of each state in which they were incorporated. But in the early 20th century, they successfully claimed that even those requirements violated their Fourth Amendment protection against searches and seizures without probable cause.

In the 1970s and 1980s, corporate lawyers became more aggressive in pressing for civil rights. David Gans, civil rights director for the Constitutional Accountability Center, told BillMoyers.com, “What we’ve seen in the last four decades is a huge expansion of claims that corporations are entitled to various individual rights that were long seen as the birthright of the Declaration of Independence.”

The biggest shift was in the realm of First Amendment rights. “In the 1970s,” said Gans, “there were lots of cases claiming that corporations had First Amendment rights both in the area of commercial speech — prior to that, the Supreme Court had long held that it could be extensively regulated — and in the area of political speech.

“Those claims brought us eventually to Citizens United,” Gans continued, “and now we’re seeing new claims — in Hobby Lobby, for example, that corporations have a right to religious exercise, which is really a fundamental matter of human dignity and conscience, and it’s a right that corporations have never even claimed. ” Hobby Lobby is one of several corporations suing to overturn Obamacare’s mandate that employer-based insurance cover a basket of preventive care including contraceptives.

Charlie Cray, director of the progressive Center for Corporate Policy and co-author (with Lee Drutman and Ralph Nader) of The People’s Business: Controlling Corporations and Restoring Democracy, said that First Amendment claims on commercial speech have been central in dozens of regulatory fights — from GMO and bovine growth hormone labeling requirements to tobacco point-of-sale advertising to limits on media consolidation.

But so far, corporations have had less success pressing for other constitutional rights. In the 1980s, for example, Dow Chemicals sued the Environmental Protection Agency, claiming that its aerial surveillance of one of the company’s plants constituted a warrantless search and violated the Fourth Amendment. But the court ruled that the EPA was acting within its regulatory authority, and that Dow had no legitimate expectation of privacy.

Nonethelesss, Charlie Cray tells BillMoyers.com that claims of corporate rights can conflict with the public interest even without being litigated. “A lot of this goes on at the regulatory level,” he said. “Corporate lawyers claim that their rights are being violated and regulators with limited budgets will often back off rather then engage in protracted litigation.” Those bizarre pharmaceutical ads with the lengthy list of awful side effects are a good example — the FDA loosened restrictions on direct-to-consumer advertising largely in response to drug companies’ First Amendment claims.

And it’s a slippery slope. “A couple of years ago, the idea that corporations would claim they’re entitled to the free exercise of religion would have seemed outlandish,” said David Gans, “but here it is, dividing the lower federal courts and about to be heard by the Supreme Court. It is hard to predict where they’ll go in the future.”

Fight Over Minimum Wage Illustrates Web of Industry TiesByERIC LIPTON
FEB. 9, 2014

WASHINGTON — Just four blocks from the White House is the headquarters of theEmployment Policies Institute,a widely quoted economic research center whose academic reports have repeatedly warned that increasing the minimum wage could be harmful, increasing poverty and unemployment.

But something fundamental goes unsaid in the institute’s reports: The nonprofit group is run by a public relations firm that also represents the restaurant industry, as part of a tightly coordinated effort to defeat the minimum wage increase that the White House and Democrats in Congress have pushed for.

“The vast majority of economic research shows there are serious consequences,” Michael Saltsman, the institute’s research director, said in an interview, before he declined to list the restaurant chains that were among its contributors.

The campaign illustrates how groups — conservative and liberal — are again working in opaque ways to shape hot-button political debates, like the one surrounding minimum wage, through organizations with benign-sounding names that can mask the intentions of their deep-pocketed patrons.

They do it with the gloss of research, and play a critical and often underappreciated role in multilevel lobbying campaigns, backed by corporate lobbyists and labor unions, with a potential payoff that can be in the millions of dollars for the interests they represent.

“It is the way of Washington now — and that is unfortunate,” saidJohn Weaver,a Republican political consultant who has helped run several presidential campaigns. “Because if it’s not dishonest, it’s at least disingenuous.”

In this case, the policy dispute is over whether increasing the minimum wage by nearly 40 percent to $10.10 an hour within two and a half years would reduce poverty or further it.

Even if the legislation never passes — and it is unlikely to, given the political divide in Congress — millions of dollars will be spent this year on lobbying firms, nonprofit research organizations and advertising campaigns, as industry groups like theNational Restaurant Associationand theNational Retail Federationtry to bury it. Liberal groups, in turn, will be spending lots of money as they try to make the debate a political issue for the midterm elections.

The left has its own prominent groups, like theCenter for American Progressand theEconomic Policy Institute, whose donors include nearly 20 labor unions, and whose reports, with their own aura of objectivity, consistentlyconcludethat raising the minimum wage makes good economic sense. But none has played such a prominent and multifaceted role in recent months as the conservative Employment Policies Institute.

The Employment Policies Institute, founded two decades ago, is led by the advertising and public relations executive Richard B. Berman, who has made millions of dollars in Washington by taking up the causes of corporate America. He has repeatedly created official-sounding nonprofit groups like theCenter for Consumer Freedomthat have challenged limits like the ban on indoor smoking and the push to restrict calorie counts in fast foods.

In recent months, Mr. Berman’s firm has taken out full-page advertisements inThe New York TimesandThe Wall Street Journalandplastered a Metro stationnear the Capitol with advertisements, including one featuring a giant photograph of Representative Nancy Pelosi, the California Democrat who is a proponent of the minimum wage increase, that read, “Teens Who Can’t Find a Job Should Blame Her.”

These messages, also promoted on websites operated by Mr. Berman’s firm, includingminimumwage.com, instruct anyone skeptical about the arguments to consult the reports prepared by the Employment Policies Institute, most often described only as a “nonprofit research organization.”

But the dividing line between the institute and Mr. Berman’s firm was difficult to discern during two visits last week to the eighth-floor office at 1090 Vermont Avenue, a building near the White House that is the headquarters for both.

The sign at the entrance is for Berman and Company, as the Employment Policies Institute has no employees of its own. Mr. Berman’s for-profit advertising firm, instead, “bills” the nonprofit institute for the services his employees provide to the institute. This arrangement effectively means that the nonprofit is a moneymaking venture for Mr. Berman, whose advertising firm was paid $1.1 million by the institute in 2012, according to its tax returns, or 44 percent of its total budget, with most of the rest of the money used to buy advertisements.

Disclosure reports filed by individual foundations show that its donors in recent years have included the Lynde and Harry Bradley Foundation, a longtime supporter of conservative causes. Mr. Berman and Mr. Saltsman would not identify other donors, but did say they included the restaurant industry. But its tax return shows that the $2.4 million in listed donations received in 2012 came from only 11 contributors, who wrote checks for as much as $500,000 apiece.

Mr. Saltsman, 30, who has an undergraduate degree in economics from the University of Michigan and previously worked for the federal Bureau of Labor Statistics, drafts dozens of letters to the editor and opinion articles for newspapers, arguing that increasing the minimum wage would hurt more than help. Other special institute projects includeda recent surveyof lawmakers who support the minimum wage increase asking if they pay their interns —a reportThe Daily Caller, a conservative online publication, then released, calling out the lawmakers with unpaid interns as hypocrites.

The major reports released by the institute are prepared by outside academics, like Joseph J. Sabia, an associate professor of economics at San Diego State University, who has collectedat least $180,000 in grant moneyfrom Mr. Berman’s group over the last eight years to deliver seven separate reports, each one concluding that increasing the minimum wage has caused more harm than good — or at least no significant benefit for the poor.

“There is never a good time to raise the minimum wage,” Mr. Sabia said at a briefing in the Longworth House Office Building late last month that was co-sponsored by the institute, as he laid out the findings of hisnewest reportto Capitol Hill staff members and reporters. “You are not reaching the poor workers you want to help.”

Mr. Sabia said in an interview late last month that his research conclusions were developed independently. “I don’t write advocacy policy briefs,” he said. His papers are also submitted to academic journals, which publish them after a peer-review process — a standard, he noted, that publications put out by left-leaning groups like the Economic Policy Institute often do not meet.

What is clear is that the reports by the Employment Policies Institute are a critical element in the lobbying campaign against the increase in the minimum wage, as restaurant industry groups, in their own statements and news releases, often cite the institute’s reports, creating the Washington echo chamber effect that is so coveted by industry lobbyists.

“Once you have the study, you can point it to it to prove your case — even if you paid to get it written,” said one lobbyist, who asked not to be named because his clients rely on him to use this technique.

But some questions have been raised about the institute-funded work. Saul D. Hoffman, a professor of economics at University of Delaware,examined the employment dataMr. Sabia used for a 2012 paper funded in part by the institute. Mr. Hoffman concluded that the narrow cut of data Mr. Sabia picked was perhaps unintentionally skewed, and once corrected, it would have showed that the 2004 increase in New York State’s minimum wage had no negative impact on employment —the opposite of the conclusionthe institute hadproclaimed in its news releases.

Mr. Berman, 71, a onetime auto mechanic turned labor lawyer and restaurant industry executive, rejected any suggestion that his reports were based on bias or faulty data.

“I get very upset when people say we are putting out junk science and twisted economics, because that happens to be our criticism of other people,” Mr. Berman said in an interview at his office. Yet internal company documents show that members of Mr. Berman’s team — at least when they have been involved in some of the other corporate-backed projects — have discussed ways to massage academic data to change outcomes.

For example, anacademic studypublished by researchers at the University of Southern California concluded that soda had higher concentrations of high-fructose corn syrup than advertised. Mr. Berman’s team, hired by the corn refining industry to defend its sweeteners, mobilized staff at his Center for Consumer Freedom to challenge the results.

“If the results contradict U.S.C., we can publish them,” said an email sent to Mr. Berman and other staff in October 2010 from a Berman employee at the time, referring to the University of Southern California report. The exchange became public recently as a result of a lawsuit between the sugar and corn refining industries. “If for any reason the results confirm U.S.C., we can just bury the data.” Mr. Berman said that the employee who wrote that email left more than a year ago and that such practices were not allowed at the institute.

Left-leaning groups like the Citizens for Responsibility and Ethics in Washingtonhave filed legal complaints, arguing that the large payments to Mr. Berman’s for-profit firm may violate the law, an accusation that Berman and Company strongly disputes.

What is most important, said Lisa Graves, the executive director of an organization responsible for the online publicationPR Watch, is that newspapers detail Employment Policies Institute’s corporate ties when they cite research it publishes. Such disclosure happened in less than 20 percent of the cases over a three-year period, an analysis by PR Watch found.

“They are trying to peddle an industry wish list, but mask it as if they are independent experts,” she said. “They are little more than phony experts on retainer.”

Challenge to Health Overhaul Puts Obscure Think Tank in Spotlight
ByERIC LICHTBLAUMARCH 4, 2015

WASHINGTON — In the orbit of Washington think tanks, theCompetitive Enterprise Instituteis an obscure name with a modest budget that belies its political connections to conservative titans like the Koch brothers.

But the institute, a libertarian research group, enjoyed a coming-out of sorts on Wednesday, as the lawsuit that it organized and bankrolled — challenging the Affordable Care Act — was heard by theSupreme Court. The case has the potential toend federal insurance subsidiesfor some 7.5 million people in 34 states.

Until now, the 31-year-old think tank was probably best known as a strident critic of what it calls “global warming alarmism.” It has also been a ceaseless advocate for small government and free markets and has played what the conservative entrepreneur Steve Forbes called “a critical role in preventing the worst of the left’s utopiannightmaresfrom becoming reality.”

But beyond its research reports and policy papers, the Competitive Enterprise Institute has a litigious side, and it has teamed up with state attorneys general to challenge an array of Obama administration regulations on financial, air-quality and other issues.