If Corporate Cash Scares You, Rethink This Boycott
This week the NCAA announced that North Carolina will host opening-weekend games of the men’s basketball tournament in 2020, along with several other events over the next few years. Ah, but one must smile at the sight of corporations exercising their First Amendment rights!
The state legislature’s decision last month to repeal House Bill 2 -- the notorious “bathroom bill” -- was a recognition of the reality that big business was lining up on the other side. True, the repeal did not go as far as LGBTQ activists would like. But the fact remains that after going toe-to-toe with the National Collegiate Athletic Association, which pulled its events from the state, and PayPal and Deutsche Bank, which canceled expansion plans, the Republican-controlled legislature blinked.
One has to see the irony, of course. For years now, we have been loudly warned about the dangers posed to democracy by the weight corporate cash is likely to carry in elections, even though there isn’t much evidence of large amounts corporate cash slinging around at election time. We have been admonished that private corporations should not be considered to have the same First Amendment rights as natural persons. Big business, we are told, holds too much sway over our lives already.
But the reason to worry about the outcome of elections is the policy output that follows the election. It’s hard to see why using small amounts of corporate cash to influence voters is wicked but using all of a corporation’s considerable clout to influence a legislature is great.
(The roster of companies pressuring North Carolina also included Dow Chemical, General Electric, Google ...)
Don’t get me wrong. I’m glad North Carolina has partially repealed HB 2, which was a terrible piece of legislation. As I have written before, although I am in many ways a traditionalist, my sympathies are strongly with transgender folk forced to use the “wrong” bathroom. 1 It’s unfortunate that corporate pressure was needed to bring about the state’s retreat; still that’s what had to happen. But here I at least try to be consistent: I don’t have any particular problem with the use of corporate cash at election time.
(Also Pepsi, Hyatt, Levi Strauss ...)
Which brings me to my own state of Connecticut. Democrats in the state legislature are pushing a bill that would try to restrict what critics call “dark money.” The bill would among other things place stringent disclosure requirements on businesses making political contributions and place a cap on the amount of money that a single source can contribute to a Connecticut group that makes independent expenditures.
(Also Apple, PNC Financial, Ralph Lauren ...)
Supporters claim that the purpose of the Connecticut bill is to be sure that we residents know who is paying for election advertisements. I’m not entirely sure why we need to know this, but let’s assume we do. 2 So then North Carolina isn’t a problem: The companies pressuring the state, we might say, signed their names.
But what about the dollar cap? The cap makes sense only if the underlying concern is that there’s something inherently nefarious about corporate money in election campaigns, even if it’s disclosed. If that’s so, then it’s hard to see why there’s not also something inherently nefarious about big businesses throwing around their considerable weight -- and, potentially, much more money -- as a way of influencing state policy.
(Also Hewlett-Packard, Lionsgate, Northrop Grumman ...)
To clarify the point, suppose that Connecticut -- or, more likely, North Carolina! -- were to adopt a statute prohibiting any corporation doing any business there from boycotting the state or bringing to bear any pressure in an effort to influence any law or regulation. It’s not clear why such a law would be significantly different from a similar law forbidding the same companies from trying to influence the outcome of elections. Here, too, we would see a state trying to tame the power of private corporations to sway public policy.
(Also Qualcomm, Barnes & Noble, Facebook ...)
But I think the statute would be unconstitutional. For First Amendment purposes, a private, for-profit corporation is just like any other person. It can argue its views in private or shout them from the rooftop. Deutsche Bank and the New York Times have the same right to use corporate clout to influence the outcome of policy debates -- or of elections.
(Also Pfizer, Lyft, Citibank ...)
What we saw at work in the battle over HB 2 is the growing role of corporate power as a check on government power. Of course if you find frightening the idea of private capital as a form of resistance to officialdom, then what happened in North Carolina should terrify you. After all, the same influence that is deployed in a cause one likes today might be deployed in a cause one hates tomorrow. So if special rules are needed to limit the ability of corporations to influence the outcome of elections, maybe special rules are needed to limit the ability of corporations to engage in other forms of political speech. 3
(Also Cisco Systems, Marriott International, Ingersoll-Rand ...)
But in my own libertarian soul, I don’t have the same instinctive shirking from corporate speech that others do. Sure the power of big corporations scares me as much as it does most people. But where political speech is involved, I don’t see the compelling case for drawing a constitutional line between for-profit and not-for-profit corporations, or between those that happen to own media properties and those that don’t. Certainly I’m against regulating speech because we suspect that it might be dangerous to democracy. I’d rather see evidence first.
(Also American Airlines, Microsoft, Kellogg’s ...)
As I said, I’m glad that North Carolina has partially repealed HB 2. But let’s be clear. The case is all about corporate free speech. Continued pressure from some of the biggest companies in the world is what moved the legislature to act. The paltry sums companies spend on electioneering pale beside the billions of dollars in business that they threatened to yank from North Carolina. If one scares you so should the other.
(Also Twitter, Starbucks, IBM ...) 4
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
I am a longtime skeptic about disclosure requirements, because their practical effect is to discourage contributions to unpopular causes. Thus do majorities entrench their power.
I should emphasize that my own opposition to House Bill 2 does not rest on the view that those who support it must be knaves or fools. I do understand their arguments. I simply and respectfully disagree.
To see a thoughtful argument to apply special rules to all forms of political speech by publicly held corporations, see this paper.
My list of corporations either boycotting North Carolina or pressuring the state to change its policy is drawn from the Charlotte Observer, a source which ought to know.
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