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the OTHER paper
Box 11376
Eugene, OR 97440
April, 1996

Who's in charge here?

by Wanda Ballentine

In 1984, at least 10,000 people were killed in the world's worst industrial accident at the Union Carbide pesticide plant in Bhopal, India. At least 200,000 forgotten victims still suffer the effects of this corporate Hiroshima. Justice should have been simple -- Union Carbide had ignored design flaws in the plant and was clearly culpable. But the $5 billion company thumbed its nose at criminal charges, refusing to appear in India's court. The U.S. government looked the other way. The corporation settled out of court for less than $800 per claimant, sold off product lines to avoid boycotts, paid large dividends to shareholders to protect assets from the victims, downsized its workforce by 90%, and in 1994 rang up $379 million in profits and rewarded six top executives $4.9 million in pay and bonuses.

In 1989, the Exxon Valdez dumped 12 million gallons of oil into Prince William Sound, causing an estimated $15-20 billion of damage. The captain, a known alcoholic, had abandoned the helm at a crucial navigation point. Exxon executives admitted knowledge of his problem following the accident but denied culpability in court, maintaining the event was simply an accident requiring clean-up, not criminal fines. The $1 billion clean-up was woefully inadequate, while the company fights a $5 billion criminal judgment. Exxon is numero 3 of the Fortune 500, the 26th largest entity in the world -- bigger than France -- with $107 billion after-tax profits.

Charles Hurwitz of MAXXAM infamy uses junk bond financing and savings and loan shenanigans like a corporate Genghis Khan. In 1977, he looted a New York insurance company; in 1978, he took over an oil company; in 1984, he withdrew, for $8 million, an attempt to take over Castle-Coke; in 1985, he grabbed Pacific Lumber in a high-leverage buy-out; in 1988, it was Kaiser Technology; this year he made a play for Kaiser Aluminum. Thirty-one different groups have tried to stop him, including the U.S. Forest Service, the Department of Labor, the Federal Reserve Board, Congress, and state governments. Ballot initiatives and multiple lawsuits for gutting pension funds and logging redwoods have been used -- none have yet been very successful.

Corporations are literally getting away with murder. Why and how?

"Who's in charge here?" was the question at nine seminars on "Corporations, Lawyers, Democracy, Justice and the Law" presented by the Program on Corporations, Law and Democracy (POCLAD) at the 1996 Public Interest Environmental Law Conference at the University of Oregon last month.

The answers are clearly "no." Change "should" to "do," however, and the answers are clearly "yes." The reason, according to Richard Grossman and Ward Morehouse, POCLAD co-founders, stems from industry's assault on laws governing corporations in the late 19th and early 20th centuries. The most outrageous result was the 1886 Supreme Court ruling that corporations -- which are legal fictions -- are persons with a person's rights and privileges.

This decision was based on the 14th Amendment, the purpose of which was to remedy the status of slaves following the Civil War: "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws."

That such a bizarre interpretation as corporate personhood could be made of this Amendment by no less than the Supreme Court testifies to the power and wealth accrued by industry despite restrictions in their charters. The boom in railroad, mining, and timber industries in the opening of the continent was aided by corrupt officials in the rush to riches. Lincoln, to finance the Civil War, capitulated to even more corporate demands.

That this history is not even taught in law schools testifies to the power of corporations regarding what will be included in textbooks and curricula. "We were just told the corporate system is the most efficient way of doing business," said Tom Stephens, Chair of the National Lawyers Guild's Toxics Committee.

What does it mean for corporations to be deemed "persons?" It means Bill of Rights protection, such as the 1st Amendment right of free speech. The average person exercises his/her right to free speech by speaking at a public meeting, writing a letter to the editor, calling a talk show, posting on the Internet. Corporate "persons" use advertising, paying millions to experts in the manipulation of thought and desire via the use of language and image. Corporations determine via sponsorship what media programs are selected and thus what ideas and values are disseminated to every home in America. Now, they're buying the networks. The just-enacted Telecommunications Act has already generated radio mergers and buyouts worth an average of half-a-billion dollars a week according to media watchdog Norman Solomon.

Prior to the revolution in corporate law, corporate charters, granted by States, were very restrictive. Corporations were chartered for a specific purpose and for a limited period of time. They were to do no more and no less than the specified purpose; either was grounds for dissolution. Corporate books and documents were open for scrutiny by the state, sometimes even by the public. In many states corporations could not own land; they could donate neither to political causes nor to charities. When applying for renewal of their charter, they had to prove they were acting in the public good.

What a concept.

But where it once was a privilege, with definite responsibilities, to be chartered, states began vying for the "privilege" of having a corporation and started giving away the store. Corporations chartered in one state may operate in another by obtaining its Certificate of Authority. These could apply restrictions, but are usually just rubber stamps in the competition to be abused.

Thus it is, that where small business owners have to pay the full costs of doing business, corporations are subsidized by federal, state and local taxpayers.

Thus it is, that while regulations prohibiting environmental poisoning have had some wins, corporations can delay or avoid implementation through legal tactics -- or just label the fines a business cost and write them off.

Thus it is, that these wealthy and powerful "persons," many with assets greater than some nations (fifteen corporations surpass 120 U.N. nations), can influence every step of the legislative process. If they can't satisfactorily shape the dialogue via the media, they help write the legislation; if that doesn't work, they help write the regulations; finally, they determine implementation. If they can`t dilute or revoke laws, they cut funding to the enforcing agency. This year, corporations poured $775 million into the federal electoral process. In 1972, it was $2 million.

There are good laws on the books, but citizens can't get them enforced. Instead, they spend huge amounts of time, money and energy fighting corporate pollution and labor inequities, destruction of wilderness, and takeover of the political system. They fight issue by issue, case by case, on very uneven playing fields against these corporate "persons," while new threats proliferate.

Restrictions on corporate activities should be spelled out in their charters, as originally intended. Grossman and Morehouse advise activists to become experts on corporate charter provisions of their state's original and current constitutions. Power over corporation originally belonged to the people via their state representatives -- what is left of that power? How can it be used? How can it be improved?

POCLAD chapters are springing up across the country, including Oregon. If interested, call 508/398-1145, and/or email

From the OTHER paper, April, 1996, pg. 7, POB 11376, Eugene, OR 97440.
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