Dollarocracy (15 page)

This was too much even for Rehnquist, who argued that the whole notion of corporate personhood was “artificial,” not “natural” in the sense that the founders had believed human beings were endowed with “natural rights.” “A state grants to a business corporation the blessings of potentially perpetual life and limited liability to enhance its efficiency as an economic entity. It might reasonably be concluded that those properties, so beneficial in the economic sphere, pose special dangers in the political sphere. . . . Indeed, the states might reasonably fear that the corporation would use its economic power to obtain further benefits beyond those already bestowed,” wrote Rehnquist, who observed a long history of state and federal limitation on the ability of corporations to participate in politics. He concluded, “The judgment of such a broad consensus of governmental bodies expressed over a period of many decades is entitled to considerable deference from this Court.”
¹²

Despite Rehnquist's wise counsel, that deference was not paid. A series of decisions, most of them little noted outside legal and campaign-finance circles, not only undid existing reforms but also erected barriers to future attempts to control the Money Power.

The
Bellotti
ruling, which laid the formal groundwork for the
Citizens United
ruling thirty-two years later, was not written by Burger, however. The author, Lewis Franklin Powell Jr., was a jurist who aggressively promoted not just the legal fantasy of corporate personhood but also the remarkable political infrastructure that would come to assert corporate political power.
¹³

Media assessments of Powell's tenure on the High Court frequently portrayed him as a centrist, and few journalists ever described him as an activist. But this view had everything to do with the narrow, frequently listless coverage of the Court, which usually begins and ends with discussions of so-called social issues, such as reproductive rights and protections for lesbians and
gays.
¹⁴
However, when it came to using the Court to extend the reach of corporate power—in the workplace, the media, and politics—Powell was one of the most determined judicial activists in the history of the Supreme Court.
¹⁵

A Virginia lawyer who made a national name for himself in the mid-1960s as the president of the American Bar Association, Powell specialized in corporate law. He served on the board of eleven major corporations, including Philip Morris, and became a legal point man for the tobacco industry in the 1960s, when the Federal Communications Commission (FCC) began cracking down on cigarette advertising on television and radio. After Congress approved the Public Health Cigarette Smoking Act in 1970, which banned advertising for cigarettes, it became increasingly clear to Powell that as the American political process opened up, and as democracy itself extended to include previously disenfranchised groups, corporations were having a harder time dominating the national agenda. It wasn't just that Ralph Nader—whom Powell derided in what he presumed were secret communications as “perhaps the single most effective antagonist of American business”
¹⁶
—was forcing the auto industry to make cars safer, or that liberal Senator Gaylord Nelson of Wisconsin was leading a crackdown on the abuses of the food and drug industries. Even Richard Nixon, who was supposed to be Wall Street's man in the White House, was signing landmark environmental legislation and, in the summer of 1970, using an executive order to create the Environmental Protection Agency.
¹⁷

In 1971, after his tobacco industry clients had been banished from the all-powerful arena of TV advertising, where it had proven profoundly easy to create new generations of tobacco addicts, Powell pondered the political moment where the commercial interests of big business could be so thoroughly upended by regulators. He took two extraordinary steps. One was very public, the other very private. Together, they would redefine the politics and policy-making of America and provide the set of circumstances that led us to write this book.

In 1969, Powell had turned down Nixon's offer of a nomination to serve on the Supreme Court; Powell did not want the scrutiny, or presumably the pay cut, and his family was opposed to the move from Richmond to Washington. Yet less than two years later, as it became clear that two senior justices (Hugo Black and John Marshall Harlan) would be stepping down, Powell expressed
his openness to being nominated. Nixon was thrilled; he desperately wanted to appoint southerners to the High Court, especially old-school southern Democrats like Powell, whose nomination would highlight the president's “southern strategy” of making what was once a “solid south” for the Democrats into a Republican stronghold. And Powell, who did not have a record as a judge and who had a reputation as a moderate, would easily pass muster with the American Bar Association he had so recently led. Nixon, himself a former corporate lawyer, dismissed suggestions that Powell at sixty-four was too old, declaring that “10 [years] of him is worth 30 of most.”
¹⁸

The Senate Judiciary Committee, which was grilling Nixon's other High Court nominee of the moment (Rehnquist), agreed. After what the
New York Times
described as a “friendly five hours” of questioning, most of which related to the multimillionaire Powell's arrangements to sell off his extensive portfolio of corporate stocks and bonds, his nomination was approved and sent to the full Senate. A month later, Powell was confirmed by an 89–1 vote. Senator Fred Harris of Oklahoma, a populist whose politics and rhetoric harkened back to the great struggles to rein in the robber barons, cast the sole opposing vote. Powell, complained Harris, was “an elitist” who “has never shown any deep feelings for little people.”
¹⁹

Fred Harris could not have known how very right he was.

Less than two months before President Nixon nominated him to serve on the Supreme Court, Powell completed the drafting of a confidential memorandum that, when its full contents were eventually revealed, would come to be known as “a corporate blueprint to dominate democracy”—to borrow a phrase from corporate watchdog Charlie Cray. Author Jeff Clements and Michael Waldman, the executive director of the Brennan Center for Justice at New York University's School of Law, would cite Powell's memo as an essential inspiration for the forty-year campaign to redefine the First Amendment as a “free-market” statement that treated corporate spin as the equal of speech by citizens.
²⁰
Powell's memo was written in secret and delivered to his friend Eugene Sydnor Jr., a former Virginia legislator who chaired the education committee of the U.S. Chamber of Commerce. Sydnor would circulate the memorandum, titled “Attack on American Free Enterprise System,” among the chamber's leadership immediately, as befit the sense of urgency underpinning a document that opened with a warning: “The American economic system is under broad
attack” by consumer activists, environmentalists, civil rights campaigns, and labor unions engaged in a “frontal assault . . . on our government, our system of justice, and the free enterprise system.”
²¹

“There always have been some who opposed the American system, and preferred socialism or some form of statism (communism or fascism). Also, there always have been critics of the system, whose criticism has been wholesome and constructive so long as the objective was to improve rather than to subvert or destroy,” Powell continued. “But what now concerns us is quite new in the history of America. We are not dealing with sporadic or isolated attacks from a relatively few extremists or even from the minority socialist cadre. Rather, the assault on the enterprise system is broadly based and consistently pursued. It is gaining momentum and converts.” Note the word “us.” Powell was identifying himself as a combatant, or at the very least a strategist, in what he hoped would be a counterattack by the most powerful corporations in the United States. His plan urged an across-the-board response “to the chorus of criticism . . . from perfectly respectable elements of society: from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians.”

The corporate lawyer who would in just a matter of months don the robes of a Supreme Court justice did not hesitate to get into the down-and-dirty politics of identifying pressure points that the nation's business elites could attack. “The campuses from which much of the criticism emanates are supported by (i) tax funds generated largely from American business, and (ii) contributions from capital funds controlled or generated by American business. The boards of trustees of our universities overwhelmingly are composed of men and women who are leaders in the system,” wrote Powell. “Most of the media, including the national TV systems, are owned and theoretically controlled by corporations which depend upon profits, and the enterprise system to survive.”
²²

Bluntly declaring that corporations needed to get a whole lot more political, Powell argued:

           
The first essential—a prerequisite to any effective action—is for businessmen to confront this problem as a primary responsibility of corporate management. The overriding first need is for businessmen to recognize that the ultimate issue may be survival—survival of what we call the free enterprise system, and all that this
means for the strength and prosperity of America and the freedom of our people. The day is long past when the chief executive officer of a major corporation discharges his responsibility by maintaining a satisfactory growth of profits, with due regard to the corporation's public and social responsibilities. If our system is to survive, top management must be equally concerned with protecting and preserving the system itself. This involves far more than an increased emphasis on “public relations” or “governmental affairs”—two areas in which corporations long have invested substantial sums. A significant first step by individual corporations could well be the designation of an executive vice president (ranking with other executive VP's) whose responsibility is to counter—on the broadest front—the attack on the enterprise system. The public relations department could be one of the foundations assigned to this executive, but his responsibilities should encompass some of the types of activities referred to subsequently in this memorandum. His budget and staff should be adequate to the task.
²³

Powell's proposal to position corporations as political players was only the beginning. He outlined plans to retake the academy, with proposals that corporations demand “equal time” on campuses and use their resources and influence to pressure colleges and universities to hire corporate-friendly professors. The campaigning, Powell wrote, must extend even into the nation's high schools. And into the media. The soon-to-be Supreme Court justice counseled:

           
The national television networks should be monitored in the same way that textbooks should be kept under constant surveillance. This applies not merely to so-called educational programs (such as “Selling of the Pentagon”), but to the daily “news analysis” which so often includes the most insidious type of criticism of the enterprise system. Whether this criticism results from hostility or economic ignorance, the result is the gradual erosion of confidence in “business” and free enterprise. This monitoring, to be effective, would require constant examination of the texts of adequate samples of programs. Complaints—to the media and to the Federal Communications Commission—should be made promptly and strongly when programs are unfair or inaccurate. Equal time should be demanded when appropriate. Effort should be made to see that the forum-type programs (the Today Show, Meet the Press, etc.) afford at least as much opportunity for supporters of the American system to participate as these programs do for those who attack it.
²⁴

Ultimately, however, none of this would be sufficient, explained Powell. To reassert corporate power, the chamber and its members would need to enter what the soon-to-be justice referred to as “the neglected political arena.” He advised:

           
In the final analysis, the payoff—short of revolution—is what government does. Business has been the favorite whipping-boy of many politicians for many years. But the measure of how far this has gone is perhaps best found in the anti-business views now being expressed by several leading candidates for President of the United States. It is still Marxist doctrine that the “capitalist” countries are controlled by big business. This doctrine, consistently a part of leftist propaganda all over the world, has a wide public following among Americans. . . .

                
Yet, as every business executive knows, few elements of American society today have as little influence in government as the American businessman, the corporation, or even the millions of corporate stockholders. If one doubts this, let him undertake the role of “lobbyist” for the business point of view before Congressional committees. The same situation obtains in the legislative halls of most states and major cities. One does not exaggerate to say that, in terms of political influence with respect to the course of legislation and government action, the American business executive is truly the “forgotten man.”
²⁵

As implausible as that construction was at the time, and as manifestly absurd as it is today, Powell's assessment struck a chord with the board of the chamber, which discussed his memorandum in detail a day after Powell delivered it. The board quickly appointed executives of ABC and CBS (ironically, stewards of the so-called liberal media), Amway, General Electric, General Motors, Phillips Petroleum, 3M, and U.S. Steel to a task force that would develop strategies for implementing the Powell plan within the apparatus of the Chamber of Commerce and far beyond its headquarters in Washington, DC. Central to the project was a recognition that, while “the educational programs” outlined in the memorandum would