When Corporations Are Good Citizens

In many recent social and legal battles, large consumer companies have weighed in on the side of marginalized and endangered groups.

A Walmart sign
Daniel Becerril / Reuters

Of the many rebukes Donald Trump received for his performance after the Charlottesville massacre, the collapse of his business advisory councils of corporate leaders may sting the worst. It undermines his core claim of business expertise and skill at managing the economy, and his central boast that he is adept at creating jobs and growth.

Meanwhile, 2,500 miles to the west, DreamHost LLC, a webhosting company in Los Angeles, is resisting a subpoena by the Department of Justice. During the weeks before President Trump’s inauguration, the company hosted a site called “disrupj20.org,” which allowed organizers and potential protesters to discuss, plan, and communicate about demonstrations during the upcoming inaugural weekend. On Inauguration Day, a small band of protesters  did clash with police, breaking windows and setting fire to wastebaskets in the streets. Some 200 were arrested and charged with such crimes as rioting, inciting or urging to riot, conspiracy to riot, and counts of destruction of property.

As part of the prosecution, the DOJ has demanded that DreamHost turn over digital information about anyone who visited the “disrupt” site. According to the company, that will mean revealing information on 1.3 million visitors to the site—“including the time and date of the visit, the IP address for the visitor, the website pages viewed by the visitor (through their IP address), and even a detailed description of the software running in the visitor’s computer. This information, together with information from the internet service provider for the IP address, would allow the government to identify the visitor to the website and the specific computers used to visit the website.”

The company is resisting the subpoena in court. Its memo opposing the demand makes sobering reading. For one thing, it illustrates the overreach and arrogance of the Justice Department; but for another, its arguments rely overwhelmingly on cases protecting the Fourth Amendment rights of advocacy groups—such as the NAACP and the ACLU—or of for-profit corporations, including Amazon, Google, Yahoo, Facebook, and even the Washington bookstore company Kramerbooks & Afterwords, Inc.

What links these two news items? In both cases, corporations, or agents of corporations, are displaying good citizenship. Americans’ fight—against bigotry, neo-Nazi sympathies, and Big Brother-style surveillance—is, in these two cases, their fight.

Nor is this anomalous. During many recent legal and social battles—for the survival of affirmative action, for example, or for marriage equality, or for protection of transgender people against punitive “bathroom bills,” to name a few—large consumer companies and professional sports corporations have weighed in on the side of marginalized and endangered groups. Tech companies often speak up when they see threats to online privacy or danger of discrimination against their employees. Pharmaceutical companies have firmly disassociated themselves from the death penalty. And health insurance and hospital corporations were an important force in defeating the administration’s plan to gut the Affordable Care Act. In a society where civil society groups—churches, universities, civic groups, and unions—sometimes seem enfeebled, corporate voices have made a difference.

Those facts provide a moment to rethink quietly one of the key ideas that floats around among the progressive community—that corporations are anti-democratic, and that they should be stripped of their constitutional rights.

This demand is at the core of much of the organizing taking place against campaign-finance decisions, such as Citizens United v. Federal Election Commission, that have made possible the domination of our politics by wealthy special interests. Many progressives believe devoutly that Citizens United held that “corporations are people” and “money is speech.” The answer, they argue, is simply to take constitutional personhood, and constitutional protection, away from these sinister entities.

Consider the “People’s Rights Amendment” offered by Free Speech for People, one of the major groups seeking an amendment to roll back Citizens United: “The words people, person, or citizen as used in this Constitution do not include corporations, limited liability companies or other corporate entities...” Move to Amend, another progressive group, proposes inserting this constitutional language: “Artificial entities established by the laws of any State, the United States, or any foreign state shall have no rights under this Constitution and are subject to regulation by the People, through Federal, State, or local law.”

It sounds good. But there’s a problem: If the protections of the First Amendment didn’t apply to corporations, the CEOs of the dissenting companies above would be opening their companies to legal, open retaliation by the government—cancellation of contracts, exclusion from government programs, and other measures a spiteful administration could take to punish them. The First Amendment prevents this sort of retaliation against the leaders as persons—but it would offer no shelter to their corporations, which Trump could punish at whim; the corporation itself wouldn’t even be entitled to Fifth Amendment due process. No CEO faithful to his or her charge would dare open their corporation to such danger.

And if the Fourth Amendment’s protection against “unreasonable searches and seizures” didn’t apply to corporations, DreamHost would have been forced to hand over the required information by now. No court could even hear the company’s challenge.

Republican presidential nominee Mitt Romney (how I miss him!) said—to general ridicule—“corporations are people, my friend.” What he meant by that, I believe, was not that Walmart or Unilever is an Iron Giant-style behemoth that can stride around the landscape, but that corporations are made up of people. My corporations class professor, James Cox, used to say that corporations are “the modern equivalent of the ancient city-state.” The “people” of these odd societies include not just corporate management or shareholders, but also corporate employees and their families, corporate customers, and people in the communities that create and protect the companies. Large companies need to hire talented workers; they need a diverse workforce to understand and operate in the national and world market; they need to project values that make their customers feel affirmed. Consumer companies—food and beverage companies like Coca-Cola or retail giants like Walmart—cannot afford to drive away whole blocs of customers, incur consumer boycotts, or inspire shareholder revolts.

The campaign finance problem, in fact, has little to do with corporations, and everything to do with the increasing share of America’s wealth held by a few greedy individuals. It is wealthy individuals, far more than giant corporations, who are poisoning our politics. Stripping corporations of rights would do nothing to reduce the power of the Koch brothers, casino magnate Sheldon Adelson, or hedge fund magnate Robert Mercer.

As for corporations, Kent Greenfield, a law professor at Boston College, recently wrote that “corporations may provide a brake on the political pendulum’s rightward swing … To survive, corporations must be inclusive and multicultural in ways that homogeneous, economically distressed, insular tribes are not.”

Greenfield argues—in published essays and a forthcoming book—that what we need are corporations that are more fully human, not more “artificial.” He points out that, without any change to the Constitution, states today could amend their corporate laws to require corporations to take account of all their constituencies, and even represent workers and the public on their boards. Such reforms might ensure that corporations would be even more aware of their obligations to serve the interests of the larger society—to practice better corporate citizenship. In 2017, it is remarkable how many of our hopes may depend on that.