Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Are Corporate Donations a Threat to Democracy and the Rule of Law?

Corporate donations could now be a threat to democracy, the Constitution, and the rule of law. Corporations and industry groups gave $5.152 million to members of Congress who voted against certifying President Joseph R. Biden Jr.’s (D-Delaware) election.

Citizens for Responsibility and Ethics in Washington (CREW) alleges 251 corporate and business political action committees (PACs) gave money to 110 members of Congress who voted against certification. Axios claims Toyota (NYSE: TM) was the biggest donor to what CREW calls the “Sedition Caucus.

”However, CREW estimates that Boeing (NYSE: BA), a major defense contractor was the top corporate donor. CREW estimates Boeing gave Congressional Republicans  $210,000. Ryan Grim of The Intercept and The Hill’s Rising describes CREW as “a left-wing group.”

CREW lists the Boeing Co. (NYSE: BA) as the biggest donor to the National Republican Senatorial Committee (NRSC) and the National Republican Congressional Committee (NRCC) after the 6 January riot at the US Capitol.

Boeing gave the NRSC and the NRCC $210,000, CREW alleges The NRCC and the NRSC are political action committees (PACs) that support Congressional Republicans. To its management’s credit, Boeing gave no money to individual members of Congress who voted against certification.

The Sedition Caucus

In contrast, Toyota’s PAC gave $55,000 to 37 Republicans who voted to nullify Biden’s electoral win after the 6 January 2021 Capitol siege, Axios claims. Note: CREW estimates Toyota gave $56,000 to the Sedition Caucus.

Toyota donated no money to NRSC and NRCC and instead gave directly to members who voted against certification. Toyota donated over twice as much as the number two Sedition Congress donor Cubic Corp.

Hedge funds Veritas Capital and Evergreen Coast Capital Corporation an affiliate of  Elliott Investment Management L.P. acquired Cubic for $3 billion in May 2021, a press release indicates. Cubic Corp builds virtual training systems for the military and payment systems for transit organizations.

The corporate donors to the Sedition Caucus include: Boeing (BA), Koch Industries, Walmart (WMT), CVS Health (CVS), General Electric (GE), T-Mobile (TMUS), Johnson & Johnson (JNJ), Comcast (CMSA), Pfizer (PFE), Humana Inc. (HUM), Cigna (CI), General Motors (GM), PG&E, Delta Airlines (DAL), Home Depot (HD), AT&T (T), Rocket Mortgage (RKT), and JetBlue Airways (JBLU), CREW alleges.

The leader of the Sedition Caucus is US House of Representatives Minority Leader Kevin McCarthy (R-California), CREW alleges. Corporations gave McCarthy’s Leadership PAC and Campaign $70,000.

Do Corporate Donations Threaten Democracy?

If they are accurate. CREW’s allegations show that corporate donors have become a threat to our democracy. Additionally, corporate donations are now undermining the Constitution and the rule of law.

To explain, politicians can take actions that hurt the country and receive corporate donations. Politicians such as McCarthy suffer no losses for voting against the Constitutional election of a president.

Thus corporations are normalizing hysterical fear mongering that drives violence and encourages treason and sedition. Consequently, corporate donations threaten the rule of law and the Constitution.

Do Corporate Donations threaten Capitalism?

To be fair, many corporations have no choice but to donate. Remember, US Representatives and US Senators can hurt many corporations if they want. McCarthy, for example, could order Republicans to vote against defense and NASA contracts Boeing needs.

Hence, many corporate executives who hate the Sedition Caucus have to write checks to it. Many companies do not have the luxury to say no to the Sedition Caucus.

Consequently, corporate leaders finance destructive political activities that threaten their businesses. Hence, our campaign finance system breeds corruption, and threatens both capitalism and democracy.

Instead of free enterprise, America has crony capitalism in which corrupt politicians can bully companies into donating money to them. Corporate campaign financing is a key component of that horrendous system.

What Can Be Done?

America’s sick campaign-financing system could be a threat to the Constitution, capitalism, the law, and democracy. Hence we need serious reform if we want Constitutional government to survive.

I think those reforms need to include

Overturn Citizens United

Overturn the US Supreme Court’s ruling in Citizens United v. Federal Election Commission  558 U.S. 310.

In Citizens United declared almost all federal restrictions on corporate and other group campaign donations unconstitutional. In particular, Citizens United overturned the Tillman Act of 1907. The Tillman Act banned corporate campaign contributions.

One way to overturn Citizens United is to pack the US Supreme Court. That is add enough Justices dedicated to overturning Citizens United to get rid of it.

I think just a threat to pack could force Chief Justice John Roberts and other justices to change their votes on Citizens United. I believe Roberts is so committed to the Court he will abandon his ideological agenda to protect the institution.

Moreover, President Biden could force the Supremes to act by ordering the Federal Election Commission (FEC) and the US Justice Department to enforce the Tillman Act and other campaign finance laws. Consequently, donors will appeal the FEC’s actions to the courts which could lead to new rulings.

Public financing of elections

A shift to a direct public financing of electoral campaigns is another solution.

Some possible public funding options include Andrew Yang’s Democracy Dollars. Under Yang’s proposal the government will give every American $100 to give to candidates.

I calculate Democracy Dollars could provide $333billion in alternative campaign funding. To explain, WorldOMeters estimates the US population at 333 million, and 333 million times 100 is $33.3 billion.

Another possibility is for the federal government to match all large campaign contributions dollar for dollar. To explain, if the Koch brothers give candidate Smith $500,000, the feds will give Smith’s opponent Candidate Jones $500,000.

Public funding of elections could be problematic. First, it could encourage corruption by giving unethical campaign strategists and managers access to taxpayers’ money. Second, there could be no way to keep extremists; including Nazis and Communists, from receiving the money.

Small Donations Only

A final solution is to only allow small donations for political campaigns. Cap donations at $500 or $1,000 for example.

Politicians such as US Senator Bernie Sanders (I-Vermont) and US Representative Alexandria Ocasio-Cortez (D-New York) demonstrate it is possible to raise enormous amounts of money through small donations.

Sanders’ 2020 presidential campaign raised $211.126 million from small donors, for example, Open Secrets estimates. Similarly, Ocasio-Cortez raised $20.665 million including many small donations in 2020

Sanders’ 2020 presidential campaign raised $211.126 million from small donors, for example, Open Secrets estimates. Similarly, Ocasio-Cortez raised $20.665 million including many small donations in 2020

Beyond Financing

Beyond financing we could consider structural changes to Congress and our elections process.

Structural changes to Congress could include the creation of a well-paid professional civil service to support Congress. That would reduce Congressional members’ reliance on think and tanks and lobbyists for research and support services. The provision of services to Congress by partisan interests is a form of corruption we usually ignore.

Other structural changes could be proportional representation, party-list elections, an end to gerrymandering, and making the US Senate representative of the population instead of states. Unfortunately, some of these changes will require Constitutional Amendments.

I cannot imagine Constitutional Amendments passing without massive public pressure in today’s political environment. To elaborate both methods of amending the Constitution require the support of the nation’s state legislatures. Getting state legislatures to pass to those amendments could be impossible without massive public pressure.

America needs to fix the campaign financing system if we want democracy, the Constitution, and the rule of law to survive. Unfortunately, any fix to that system will require brutal political battles that could destroy our system of government.