Reforming Corporate Political Spending: Life on Our Terms

By Jeffrey Keddie

Jeffrey Keddie is Staff Attorney at Coast to Coast Legal Aid of South Florida.  The views expressed in this article are the author’s alone and do not necessarily represent the views of, and should not be attributed to, Coast to Coast Legal Aid of South Florida.  The author would like to thank his wife, son, and fellow advocates for their comments and support.

In Citizens United v. Federal Election Commission, Justice Kennedy stated that ‚Äú[d]ifferential treatment of media corporations and other corporations cannot be squared with the First Amendment, and there is no support for the view that the Amendment’s original meaning would permit suppressing media corporations’ political speech.‚ÄĚ[1]¬† Therein, the Supreme Court of the United States of America granted all corporations the right, under the auspices of the First Amendment, to utilize their assets to influence the political process unburdened by regulation.¬† Arguably, the decision suggests that plutocracy can be supported, not eviscerated, by the United States Constitution.

This decision has rightfully raised significant concerns regarding expansive corporate domination of the political sphere.  Unfortunately, efforts to change the decision asserted by the Supreme Court have fallen short; the legislature could not even agree on corporate political spending reporting requirements.[2]  Fortunately, Article I, section 10, clause 1 of the Constitution provides a different path to re-establishing human-centered government.

The following article will discuss consumer-side terms asserted at the point-of-sale as an option for working toward political-type change via social movements instead of through government.  Part I will discuss how consumer-side terms can reform corporate political spending.  Part II includes a contract that can be used to reform corporate political spending.

 

I.    Reforming Corporate Political Spending

Corporate political spending, as amplified by the decision in Citizens United, presents a clear danger to human-centric democracy.  While Americans want the law changed to reverse the Supreme Court’s decision,[3] the United States Congress does not appear interested in protecting our democracy from this danger.  Citizens, human not corporate, need new tools to stop multinational corporations from further infecting politics.  Those tools are available from the belts of corporations.

A.    Citizens United and the Legislature

Corporations, after Citizens United, are allowed to spend from their treasuries to defeat a candidate for political office.[4]¬† If a candidate intends to vote against corporate interests, special or general, that candidate must be prepared for corporate money to flow toward the opposition candidate.[5]¬† Politicians who believe that corporations have too much power and influence or who are concerned about the effect the profit motive has on our planet and social fabric will move further to the distant fringe of political relevance.¬† Even after a strong economic downturn that can be largely attributed to the unfettered actions of irresponsible corporate officers, politicians will not or cannot act to restrict the power of the wealthiest Americans ‚Äď those who own and run corporations.

Many believe that the only means to alter the effect of the Supreme Court‚Äôs recent decision is a constitutional amendment.[6]¬† Although six democrats have proposed an amendment to the U.S. Constitution,[7] an amendment on this issue is unlikely as one political party substantially benefits (arguably both parties benefit) from unrestricted political speech by corporations and is unlikely to support the super-majority needed to pass an amendment.[8]¬† Piecemeal legislation to dampen some of the symptoms of corporate political speech is entirely off the table in the short term, unlikely in the long term, and only a salve and not a cure.¬† Regardless, the current legislature is ill-equipped to defeat this Supreme Court interpretation of the Constitution ‚Äď no matter how outlandish the analysis or injurious the consequence.¬† If legislative reform is impossible in the short term and unlikely in the long term, how can the effects of Citizens United be mitigated or reversed?

B.    Voter Action

Voters have on occasion been so angry with the actions of corporations that they acted to dramatically alter corporate actions through pressure on legislators.  Upton Sinclair induced a rise in public outrage over conditions in meat packing industry.[9]  Ralph Nader made a career of informing the public of outrageous safety violations in the auto industry.[10]  In both circumstances, legislators responded to public discontent by creating regulatory regimes to alleviate some of the worst effects of the outrageous activities that spurred voters to action.[11]  Legislators on both sides of the aisle were convinced to act for fear of voter retribution.

Regrettably, outrage is less and less likely in recent years.  Corporations mix anti-societal action with effective public relations campaigns.  News agencies, largely owned by corporations with profit interests that influence reporting,[12] are less and less likely to incite public outrage.  Americans are inundated with positive images of corporations through television and internet advertising.  It is easy to ignore that which seems counter to the prevailing feeling Рthat corporate actions are always good.  Thankfully, outrage is not necessary to seek change if you have tools that require limited will to achieve change the majority wants.

C.    Corporation-side Terms

Corporations not only have control of wages, product specification, and (through extensive marketing) consumer purchasing; corporations have methods to control transactions with consumers via point-of-sale contracts.  Through a forum selection clause, corporations assert terms that force a legal battle between any consumer and the corporation to be on the corporation’s turf.  Through an arbitration clause, corporations take away the right of consumers to go to court.  The point-of-sale contract has become a means of greater corporate control, altering a symbiotic relationship into a parasitic one.

Each purchase a consumer makes from a corporate entity creates a contract.  The terms of this contract are usually very simple: Corporation will give Consumer use of X for Period of Time; in exchange, Consumer will give Corporation Y dollars.  If the terms of the contract are more complicated than the above, those extra terms are generally supplied by the corporation or by the judiciary/legislature.  If a corporation supplies extra terms, the terms are generally intended to lessen liability or ensure some level of predictability.  Consumers rarely supply any extra terms.

One example of an extra term is a forum selection clause.¬† Many years ago, Carnival Cruise Lines wanted to ensure a consistent forum for any and all claims brought against the corporation by consumers who travel on the company‚Äôs ships.[13]¬† So Carnival added an extra term to the point-of-sale contract by printing the term on ‚Äúcontract page one‚ÄĚ of the boarding pass purchased by consumers.[14]¬† The fairness of the extra term was suspect,[15] but the reasoning was clear: the relationship between a consumer and a corporation had become much more complicated than what a simple transactional contract could delineate and corporations had the upper hand in defining complex contracts.

For a contract to truly be an adhesion contract, it must be presented on a standard form on a “take it or leave it” basis, and give one party no ability to negotiate because of their unequal bargaining position.¬† Because Carnival had unequal bargaining power over consumers, the extra terms were defined by the corporation instead of the consumers.¬† The court, in Carnival Cruise Lines, Inc. v. Shute, ultimately allowed the extra term as part of the bargain between the consumer and the corporation because the consumer had the ‚Äúoption of rejecting the contract with impunity.‚ÄĚ[16]

D.    Consumer-side Terms

To enact consumer-side extra terms, one tool that may be used is a reverse contract of adhesion.  Instead of including the extra terms on the back of a receipt or boarding pass by a corporation, a reverse contract of adhesion is placed on the front of a payment by a consumer.  These extra terms need not be printed in full.  Rather, as long as the extra terms were provided to a corporation in advance of the transaction, a consumer can simply show intent to adopt the contract by placing a sticker on his/her method of payment.  By mere acceptance of payment from a contract-adopting purchaser, a corporation assents to the contract.

Consumers rarely provide extra terms to contracts between consumers and corporations.  However, nothing prohibits consumers from adding contract terms regarding corporate actions and product pricing.  Consumers are able to use each purchase as consideration for contracts that will determine the future of relations between consumers and corporations.

E.    Reforming Corporate Political Spending via Consumer-side Terms

If a corporation spends money on political campaigns or advertisements, the cost of those expenditures is passed on to consumers.  Thereby, consumers fund the political goals of corporations.  Because the goal of a corporate entity is to maximize profit, consumers will end up funding the campaigns of politicians interested more in maximizing corporate profits than strengthening democratic institutions.  It is the price increase on a product that results from political expenditure that consumers can eliminate via consumer-side terms.

Consumers can require that the corporation certify that no corporate political expenditures are included in the price of any product the consumer purchases.  The corporation must then ensure that it has not made any corporate political expenditure and that the materials and services purchased from other corporations do not include the cost of corporate political expenditures.  By focusing on the cost of corporate political spending in consumer prices, consumers can create a viral contract that crosses from retail and service industries into manufacturing and non-consumer contact corporations.

For decades we have talked about the ability to ‚Äúvote with your pocketbook,‚ÄĚ[17] but the idea has always been limited by the daily commitment required of the consumer.¬† Consumer-side terms move the onus to the corporation to ensure compliance with consumer values.¬† Otherwise, the corporation will suffer small penalties that will incrementally grow into an incentive to avoid political expenditure.¬† The following contract is one option that I have created to start the consumer-side term movement.

II.    Life on Our Terms

LIFE ON OUR TERMS CONTRACT

Prelude

This Agreement is intended to redefine the relationship between business entities and consumers to ensure life on our terms.  Consumers are not willing to allow corporations to dilute the voice of the people in the political arena.  This Agreement limits what costs may be included in the pricing of goods or services purchased under this agreement and how money received by Seller may be used by Seller.

Terms

This Agreement is not intended to be the complete contract between the parties; however, it is intended to be the complete agreement regarding the terms below.

A.    ACCEPTANCE OF PAYMENT WITH TERMS STICKER

‚ÄúTERMS sticker‚ÄĚ is defined as a sticker of any color, shape, and style that has the word ‚ÄúTERMS‚ÄĚ on the sticker in any color, font, or style.¬† The individual who purchases goods and/or services with a TERMS sticker adhered to the method of payment (hereafter “the Purchaser”) from the business entity that offered the goods and/or services (“the Seller”) intends to purchase those goods and/or services subject to this Agreement.¬† By accepting payment from the Purchaser with the TERMS sticker adhered to the card, check, cash, or electronic funds transfer, the Seller agrees to comply with this Agreement.

Should the Seller object to any term or condition of this Agreement or any subsequent modifications thereto or become dissatisfied with this Agreement in any way, Seller’s only recourse is to immediately post a notice that clearly informs future Purchasers that the Seller does not intend to accept payment with a TERMS sticker at present.¬† The Purchaser has the right, but is not obligated, to strictly enforce this Agreement through self-help, community moderation, active investigation, litigation, and prosecution.

The Seller shall notate on the receipt for the goods and/or services purchased the phrase ‚ÄúTERMS accepted‚ÄĚ; however, if the Seller fails to notate the receipt, such failure shall not invalidate acceptance of this Agreement.¬† Rather, failure to notate the receipt shall be a breach of this contract subject to damages as listed in section ‚ÄúG‚ÄĚ below.

B.    USE OF TRANSFERRED FUNDS AND CERTIFICATION OF COSTS

Any funds spent by any business entity that was involved in the design, production, marketing, and/or other development or retail of the good and/or services subject to this Agreement to influence the decision making of any government officer, to influence voter decision making, to fund political campaigns or political action committees, or any combination of the above in the calendar year that this Agreement was enacted will, under the terms of this Agreement, be divided and included in the price of every good and/or service sold by the business entity in the calendar year that this Agreement was enacted.

Seller agrees that no portion of the money transferred under the terms of this Agreement shall be used to influence the decision making of any government officer, to influence voter decision making, to fund political campaigns or political action committees, or any combination of the above.

Seller certifies that no portion of the price of the good and/or service being sold by the Seller under the terms of this Agreement includes any funds used to influence the decision making of any government officer, to influence voter decision making, to fund political campaigns or political action committees, or any combination of the above.

Exception: Any business entity may produce 10 pages intended to influence the decision making of government officials per year.¬† The pages shall be single-spaced, times new roman font, 12 point, with one inch margins on 8.5″ x 11″ paper.¬† Those pages shall not be sent directly to the government official but may be published in any manner that allows any individual to review the pages for free.¬† The business entity need not report any costs to produce or publish these 10 pages.

C.    REPORTING POLITICAL SPENDING

The Seller shall report any payments made to any organization to influence the decision making of any government officer, to influence voter decision making, to fund political campaigns or political action committees, or any combination of the above within 30 days of the payment in a manner accessible to the public at any time.

The Seller certifies that no portion of the price of the good and/or service being sold by the Seller under the terms of this Agreement includes any payments made by any organization that has failed to report any payments made to any organization to influence the decision making of any government officer, to influence voter decision making, to fund political campaigns or political action committees, or any combination of the above within 30 days of the payment in a manner accessible to the public at any time.
The parties agree that this Agreement shall not be construed as placing any unreasonable burden upon the Seller because the Agreement is intended to eliminate business entities from influencing political decision making which is the realm of real persons and not fictitious persons (such as corporations and other business entities).

D.    MODIFICATIONS TO THIS AGREEMENT

The Purchasers reserve the right to change, modify or otherwise alter this Agreement at any time.  Such modifications shall become effective immediately upon the posting thereof.  The Seller must review this agreement on a regular basis to keep apprised of any changes.  The Seller can find the most recent version of this Agreement at: (website to be determined).

E.    ARBITRATION

Regardless of any term asserted by the Seller, no breach of this Agreement or any other terms asserted by the Seller shall be arbitrated unless the parties agree to arbitration after the dispute has arisen.

F.    CLASS LITIGATION

Regardless of any term asserted by the Seller, this Agreement and any other terms asserted by the Seller may be litigated in a class action and/or other form of collective litigation, insofar as permitted by the applicable statutes, precedents, and rules.

G.    BREACH AND LIQUIDATED DAMAGES

The Seller understands and agrees that because damages are often difficult to quantify, if it becomes necessary for the Purchaser to pursue legal action to enforce this Agreement the Seller will become liable to pay to the Purchaser the following amounts as liquidated damages, which the Seller accepts as the reasonable estimation of the Purchaser’s damages for breach of this Agreement.

If the Seller violates the terms of this agreement, the Seller shall pay to the Purchaser the full value (at the time of purchase) of the goods and/or services at the time of contract formation.  The Purchaser does not have to return any goods and/or services or pay any money to the Seller to receive money due to the Purchaser as a result of the Seller’s breach.

If the Seller violates the terms of this Agreement and fails to timely report political spending (as outlined in section three (3) above), damages as outlined above shall be tripled.

The Purchaser‚Äôs failure to exercise or enforce any right or provision of the Agreement shall not constitute a waiver of such right or provision.¬† The Purchaser’s failure to act with respect to a breach by the Seller or others does not waive the Purchaser‚Äôs right to act with respect to subsequent or similar breaches.

H.    SEVERABILITY

If any provision or provisions of this Agreement shall be held to be invalid, illegal, unenforceable or in conflict with the law of any jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.  Invalidity or unenforceability of one or more provisions of this Agreement shall not affect any other provision of this Agreement.

Furthermore, if any provision of this Agreement is found to be invalid by a court of competent jurisdiction, the parties nevertheless agree that the court should endeavor to give effect to the parties’ intentions as reflected in the provision, and the other provisions of the Agreement remain in full force and effect.

III.    Conclusion

With seven billion people becoming more connected every day, with globalism gaining strength, and with corporations amassing more and more wealth and control; the time has come to consider other alternatives to political government.  Global socioeconomic controls, such as consumer-side terms, may be the first step towards liberating people from the whims and wants of the wealthy few who, thanks to the Supreme Court, are more powerful than ever.

 


[1]130 S.Ct. 876, 884 (U.S. 2010).

[2] H.R. 5175, 111th Cong. (2009-2010).

[3] Seventy-seven (77) percent of all voters, in response to the following question, say Congress should support a Constitutional amendment overturning Citizens United: ‚ÄúRestoring the authority of Congress to limit the amount U.S. corporations can spend to influence elections might require a Constitutional amendment: Should Congress support such an amendment?‚Ä̬† People for the American Way, Hart Research Associates, Protecting America from Unlimited Corporate Spending, http://www.pfaw.org/sites/default/files/CitUPoll-PFAW.pdf (last visited Feb. 25, 2012).

[4] Robert Weissman, Let the People Speak: The Case for a Constitutional Amendment to Remove Corporate Speech from the Ambit of the First Amendment, 83 Temp. L. Rev. 979, 987 (2011) (showing the relative financial domination of corporations).

[5] Id. at 996-97.

[6] Numerous websites offer petitions and resources seeking to overturn Citizens United including movetoamend.org, amend2012.org, and democracyisforpeople.org.

[7] See A joint resolution proposing an amendment to the Constitution of the United States relating to contributions and expenditures intended to affect elections, S.J. Res. 29, 112th Cong. (2011-2012).

[8] U.S. Const. art. V.

[9] Benjamin R. Sachs, Consumerism and Information Policy: How Upton Sinclair Can Again Save Us from Ourselves, 95 Va. L. Rev. 205 (2009).

[10] Frank Deale & Rita Cant, Barack Obama and the Public Interest Law Movement: A Preliminary Assessment, 10 Conn. Pub. Int. L.J. 233, 265 (2011).

[11] Meat Inspection Act of 1907, Pub. L. No. 59-242, 34 Stat. 1256, 1260-65 (1907) (prior to 1967 amendment); National Traffic and Motor Vehicle Safety Act of 1966, Pub. L. No. 89-563, 80 Stat. 718 (1966) (repealed 2006).

[12] See Martin Gilens and Craig Hertzman (2000). Corporate Ownership and News Bias: Newspaper Coverage of the 1996 Telecommunications Act. The Journal of Politics, 62, pp 369-386 doi:10.1111/0022-3816.00017.

[13] Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991).

[14] Carnival, 499 U.S. at 587-88.

[15] ‚Äú[T]he Court of Appeals noted that there was evidence in the record to indicate that ‚Äúthe Shutes are physically and financially incapable of pursuing this litigation in Florida‚ÄĚ and that the enforcement of the clause would operate to deprive them of their day in court[.]‚ÄĚ ¬†Carnival, 499 U.S. at 589.

[16] Carnival, 499 U.S. at 595.

[17] T. Nicolaus Tideman, Takings, Moral Evolution, and Justice, 88 Colum.L.Rev. 1714, 1722 (1988).

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