Tag: Corporations

Citizens United: The Legacy

Posted on January 19, 2018

Most people have heard of “Citizens United.” It is considered one of the most influential Supreme Court cases of the 21st century – a decision that significantly altered the interaction between money and politics in modern America. Since the 2010 Citizens United v. Federal Election Commission (FEC) Supreme Court decision, countless academics and experts have talked about it, and thousands of people have come out to protest against it. But what is it and what effect has it had on politics in America?

In order to understand the changes that Citizens United v. FEC has had on American politics, it is important to understand the campaign finance laws that had been in place in the United States.

Prior to Citizens United, Campaign Reform Act (McCain-Feingold Act, 2002) had modified the Federal Election Campaign Act to prohibit corporations and unions from spending on “electioneering communications.” This included any communications that directly mentioned a candidate in any context within 30 days of a primary election and 60 days before a general election. Essentially: corporations and unions were not allowed to use their money to directly influence the outcome of an election.

When Michael Moore’s documentary (Fahrenheit 9/11, 2004) about 9/11, the Bush Administration, and the wars in Iraq and Afghanistan came out, an organization called Citizens United challenged this release with the FEC stating that Fahrenheit 9/11 was “electioneering communications.” The FEC found that the film did not violate the Act. As a result, during the next election cycle in 2008 Citizens United created their own documentary entitled Hillary: The Movie.

A district court found that Hillary: The Movie was clearly created to encourage voters to vote against then-Senator Clinton. Therefore, it found that the film and any trailers for the film would be classified as advocacy and would be in violation of campaign finance laws. Citizens United appealed that initial decision and the case was eventually heard in front of the Supreme Court in 2010.

The Supreme Court’s decision in Citizens United v. FEC drastically changed the role of corporations in politics.

In a 5-4 split, the Supreme Court found that any restriction in independent expenditures by corporations and unions violated the First Amendment’s protection of free speech and that the current laws that restricted corporations and unions (or what they deemed “associations of individuals”) from spending money on electioneering communications was violating their right to free speech.

For many Supreme Court decisions, the justices who vote against the ultimate decision release what is called a “dissent.” In his dissent to Citizens United v. FEC, Justice Stevens raised several important points. The first was that this decision conferred the same rights to corporations as citizens and that “although they make enormous contributions to our society, corporations are not actually members of it. They cannot vote or run for office. Because they may be managed and controlled by nonresidents, their interests may conflict in fundamental respects with the interests of eligible voters. The financial resources, legal structure, and instrumental orientation of corporations raise legitimate concerns about their role in the electoral process.”

Justice Stevens’ second point was that with this new freedom, corporations will have significantly greater power in our democracy which may erode our trust in our democracy, as well as our democracy itself: “Corporate “domination” of electioneering… can generate the impression that corporations dominate our democracy. When citizens turn on their televisions and radios before an election and hear only corporate electioneering, they may lose faith in their capacity, as citizens, to influence public policy.”

Justice Stevens ends his dissent with the statement that “While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics.”

Eight years after Citizens United v. FEC, it is important to look back and determine how this decision has changed politics in America – were Justice Stevens’ predictions correct?

The first, and most clear, result is that campaign spending by outside sources has significantly increased since this decision. According to Open Secrets, outside spending by election cycle had been increasing between the 1990 (the earliest data Open Secrets publishes) and 2010. However, in 2012, the first election cycle after Citizens United v. FEC, outside spending jumped to five times its level in 2010. Outside organizations spent one billion dollars in 2012, $500 million in 2014 and $1.4 billion in 2016.

However, the next question is: does it matter? And the answer is: usually, yes.

In 2014, Represent Us investigated the correlations between spending more money and winning elections. They found that in nine out of ten times, the candidate that raised the most amount of money won the election. They also found that winning candidates spent an average of twenty times as much as their competitors.

In reporting on this finding, The Washington Post mentioned a variety of reasons that the better financed candidate might win: the money allows for a better run campaign, incumbents tend to have campaign structures and fundraising already in place, and “some would argue that in many cases the candidates who win the most votes do so based on the same electability, popularity and qualifications that make them the best at fundraising, and vice versa.” However, the outcome is clear: more money correlates very strongly with chances of winning.

Stevens suggested that Citizens United v. FEC would have a demoralizing effect on democracy. Currently, 63% of Americans are dissatisfied with corporate size and influence in politics; in the 2016 election, almost four-in-ten (38.6%) eligible voters did not vote</a>; and fewer than one-in-five (17%) Americans approve of the way that members of Congress are handling their job. It is hard to make the case that Americans are encouraged by the direction of American government and the amount of corporate influence.

The important question now, is what do we do about it?

Tulsi Gabbard Joins Resistance To A&B’s Massive Water Theft

Posted on April 11, 2017

For generations, the myth that what was good for the Alexander & Baldwin corporation was good for the residents of Maui allowed Hawaii’s largest plantation and land development corporation to justify its legally questionable, ecologically destructive diversion of most of the fertile island’s largest streams.

During the late 19th century, after a handful of powerful oligarchs like Alexander and Baldwin seized power from the Hawaiian monarchy through the “Bayonet Constitution,” A&B developed an elaborate ditch system diverting nearly all the streams in rain-rich East Maui and channeling the water to more than 30,000 acres of plantation land in West Maui.  The diversion system has nearly driven indigenous stream life to extinction and deprived Native Hawaiian farmers from growing the historic crops that had sustained Maui for centuries.Instead of paying market rate for the water from public lands and sharing the proceeds with Native Hawaiians, as required by state law, for decades A&B has taken more than 80% of all public water consumed on the island (this means all water not supplied by private wells). That’s 165 million gallons a day, at an outrageously discounted cost of just $160,000 per year, or $3 per million gallons. Meanwhile, the island’s 155,000 residents, as well as those businesses and new small farmers that require  public water, pay $4,000 for 1 million gallons of county-treated drinking water (with volume discounts for large users that reduce this to $1,100 per million gallons) –and some have to wait up to 20 years to access it. In keeping with the new Maui Independent’s mission of Informing to Empower, our first petition, Stop A&B’s Massive Corporate Theft of Hawaii’s Protected Waters, can be signed on our What You Can Do section on the right of this page, or read in full and signed here. Litigation challenging A&B’s massive water diversions began more than 20 years ago, resulting in a series of state court decisions that concluded, in a ruling in January 2016, that A&B’s water leases were indeed illegal. Instead of complying with the court, A&B, which is by far the largest donor to state politicians in Hawaii, went to the state legislature and in 2016 convinced them to pass a special law making their illegal activities legal for the next three years.

 

Last year, A&B closed its sprawling 32,000 acre sugar plantation which, despite using most of the island’s public water, contributed, through the constant cane burning of atrazine-laced crops, most of Maui’s industrial pollution, but less than 1/2 of 1% of its tourist-rich economy. 

 

Earlier this year, despite the closing of the plantation and despite the fact that, as Maui’s Sierra Club has reported, ”documents submitted by A&B indicate there are 132 million gallons per day available from their existing private sources,” A&B began a duplicitously complex process to win approval of a controversial 30-year extension of three-quarters of their massive water diversions from the state’s corporate-friendly resource and water commissions. The proposed lease would resume the delivery of 115 million gallons of water a day to A&B’s 32,000 acre former sugar plantation land, about six times more than all the treated public water consumed by all the people and businesses of Maui. The arid land, made valuable by a no-strings attached water lease, would be subleased to major agribusiness corporations, with some sold off by A&B as developments with multi-million dollar estates.  Because A&B owns the dozens of ditches that divert hundreds of streams across Maui, and because it also owns the tens of thousands of acres of plantation land that the ditches deliver the water to, the company is pursuing a water auction process in which it will be the only viable bidder.

This deliberately rigged system provides the sort of political cover that A&B has used for decades to disguise the inconvenient truth that it plans to continue paying a fraction of 1% of the fair market value of the water, which, even at the County’s volume discount rate, would amount to over $40 million annually.

 But times are changing in Hawaii, even for A&B. Fueled by a new era of transparency and accountability brought about by indigenous and environmental rights activists, as well as people-powered new media, ever-growing waves of change have been washing against the shores of Maui for three years now. As described here, a grassroots political movement of Native Hawaiians, environmentalists, farmers and parents joined forces in 2014 to oppose Monsanto and pass a GMO Moratorium initiative.  But the power of the Hawaii’s agrochemical industry to pollute without local regulation was greater than Maui’s democracy.  Monsanto, allied with Maui’s pro-GMO mayor and County Counsel, won an injunction in Federal Court effectively invalidating the initiative. Maui now has the dubious distinction of being the only  county or state in the nation in which a publicly passed ballot initiative was blocked by a federal court.  Last year, Bernie Sanders and his populist Second American revolution fired up public interest activism on Maui, where Sanders received more than 70% of the Democratic primary vote. More recently, last November’s election delivered an upset victory by four grassroots Maui ‘Ohana (“family”) County Council Members, who have all lined up against a handout of public water for one of the state’s richest corporations.  Unlike the local officials in North Dakota who opposed the Lakota people’s Standing Rock uprising with a militarized army of police and mercenaries, the people of Maui have voted a new breed of grassroots representatives to power. The island’s young leaders are willing to challenge the once unchecked power of the “old guard,” and to blow the whistle on the rigged agrochemical and land development scheme that has dominated the state for decades.Elle Cochran, the fiery Maui Council Member whose re-election in November garnered 25% more votes than any member of Maui’s old guard establishment, believes that A&B is telling the public and government one thing about diversified agriculture, and telling their investors another thing.  “I  want to make sure A&B understands that all of us haven’t quite bought into their picture,” Cochran says. “This is an investment is in our future and our children’s children future.  It’s in our power to hold them accountable. To me this it has not been a transparent  process and I am in complete dissatisfaction.”In a statement to the Maui Independent, Congresswoman Tulsi Gabbard, who represents Maui in Washington and is Hawaii’s best known national leader, agrees,  “Water rights are enshrined in the Hawaii Constitution, and it must be managed as a precious public resource.”

 

 “For too long,” notes Congresswoman Tulsi Gabbard, “the diversion of Maui’s streams and water have disproportionately negatively impacted Native Hawaiians, small farmers, and residents in rural communities.  It’s time to right these wrongs and ensure that access to water is fair and equitable to all. Water is life. We cannot survive without it. ”

 

Kaniela Ing, a Maui member of the State House of Representatives, who helped support his family working on pineapple plantations as a teen, has led the grassroots resistance to A&B’s water theft in the statehouse. Ing calls for an end to what he has called “plantation mentality” politics. “The A&B corporation is the largest campaign contributor in Hawai‘i,” he explains. “You can expect tens of thousands of dollars for your campaigns if you support A&B.  We might be the only state in the country where it is easier to change the law in the legislature than to prevail in court. It was wrong for the legislature to approve an extension of holdover permits for A&B.  The biggest problem in Maui is there is too much power in too few hands.”Ing is joined by Maui’s popular populist County Council members in recognizing that the future of the island’s agriculture will depend upon whether A&B continues to receive vast amounts of public water at a tiny fraction of its market value while growing pesticide reliant, polluting mono-crops, or whether citizens and their elected representatives can transition to a system that benefits the public, Native Hawaiians, and the island’s fragile ecosytem. “A&B takes more than half the water on Maui,” Ing says. “There’s something wrong with that much power.  If we’re serious about renewable, diversified sustainable agriculture, we’re going to have to break the plantation into small plots and allow small farms to pool resources, to support agricultural parks.  If you allow the market to play out, A&B will lease land to other large landowners. So how do we encourage small farmers? We’re going to need some serious political disruption in order to do that.”  Mark Sheehan, a leading grassroots activist (and contributing editor of the Maui Independent), believes that  “the fight for east Maui water is our Standing Rock. We are the Standing Rock of the Pacific.”Tiare Lawrence, a passionate Native Hawaiian political leader who ran for Senate last year and nearly won, believes that the enormous “100 year storm”  that hit Maui this winter was an omen of the times. “The rains that happened this past week are a clear indication that Maui needs cleansing,” she said at a public meeting early in January. “Here in Hawai‘i there is a history of insider backroom dealings that people are clearly frustrated with.”Maui’s new County Council Member Alika Atay, a passionate outspoken organic farmer, anti-GMO activist and leader of the ‘Aina (earth) Protectors United effort, now heads Maui’s water resources committee. Atay believes that, “the end of the plantation era brings an opportunity for native water rights. We are very similar to our brothers and sisters in the Dakotas fighting to protect the Missouri River because Ola Ka Wai: Water is life.”“We all have a responsibility to stand up for future generations,” Atay says. “This is our indigenous right that we are born with. We need to stand up and say enough of the oppression. Water and earth protectors: Maui needs you.”Atay says that a group of Native Hawaiian families are reviewing their legal remedies to water rights and unpaid profits from the past, as well as claims on some of A&B’s sugar plantation land.First year Maui Council Member Kelly King, an articulate eco business leader who co-founded Hawaii’s fast-growing Pacific Biodiesel corporation, believes that historic claims may open the way for dramatically more empowered negotiations with A&B over water rights,

 

“If you go back and you look at the rights of the Hawaiians and actually what’s owed to them by A&B,” Councilmember King said, “you could probably buy that whole system and most of that land with the money that they actually owe to the beneficiaries.” 

 

Among the many similarities between the struggle of the water protectors at Standing Rock and in Maui is the surprising leadership of indigenous teenagers.  Maluhia Stoner (whose name means peace in Hawaiian) spoke with compelling conviction at a crowded pubic hearing in which nearly everyone opposed A&B’s water lease extension.  “Nature has taken the waters of life from you because you have the nerve to abuse such a sacred element,” the 15-year-old Hana High school sophomore said. “You have already deprived our culture of the once abundant source of life and you dare take more.  I testify that the East Maui Irrigation Company and A&B is guilty for the theft of our culture and the endangerment of native and indigenous species, the choice to ignore the claims of the Hawaiian people, the people of this island, and the destruction of the home in which we will always and have always resided.”“The biggest distorter of the free market are monopolies,” Representative Kaniela Ing explains. “I think when it comes to the water supply there shouldn’t be one corporation controlling it because they become more powerful than the government and we have to do their bidding.  Where misdeeds are being exposed, all of a sudden, we are told  it’s ‘not Aloha.’ That’s a convenient response–and it’s oppressive.”

 

 “The ruling class always says the sky will fall if we change things,” Ing concludes. “But we cannot let their fear tactics impede our progress.”

NAFTA’s Legacy: Expanding Corporate Power To Attack Public Interests Laws And Outsource Jobs

Posted on February 28, 2017

At the heart of the North American Free Trade Agreement (NAFTA) is a stunning corporate power grab: NAFTA grants rights to thousands of multinational corporations to bypass domestic courts and directly “sue” the U.S., Canadian and Mexican governments before a panel of three corporate lawyers.

These lawyers can award the corporations unlimited sums to be paid by taxpayers, including for the loss of expected future profits. These corporations need only convince the lawyers that a domestic law, safety regulation or court ruling – that we rely on for a clean environment, essential services and healthy communities – violates the new rights and privileges NAFTA grants to them. The corporate lawyers’ decisions are not subject to outside appeal.

How could multinational corporations attack domestic health, environmental and financial protections on which we all rely and that local companies have to follow?

NAFTA and other corporate-rigged deals include terms formally known as Investor-State Dispute Settlement (ISDS). ISDS gives multinational corporations stunning powers, including the ability to challenge new policies – from Wall Street regulations to climate change protections – if corporations claim these policies violate their NAFTA rights and frustrate the corporations’ “expectations” of how they should be treated.

If an ISDS tribunal of three corporate lawyers rules against a challenged policy, there is no limit to the amount of taxpayer money a government can be ordered to pay a corporation. The amount is based on the “expected future profits” the tribunal surmises that the firm would have earned in the absence of the policy it is attacking. The number of ISDS attacks launched each year has exploded in recent years and the variety of policies being attacked is expanding.

Conflicts of Interest

NAFTA allows the lawyers on these tribunals to rotate between serving as “judges” and bringing cases for corporations against governments – a conflict of interest that would be forbidden as highly unethical under most legal systems. These “tribunalists,” as the three private sector attorneys are formally called, are not bound by precedent or the opinions of governments about what an agreement means. And there is no outside appeal to their rulings. If governments do not pay, the corporations can seize government property or assets directly to make up the ordered amount.

If that were not sufficiently outrageous, these special protections for multinational corporations also incentivize job offshoring. These corporate rights and powers eliminate many of the usual costs and risks that make firms think twice about moving to low-wage countries, literally incentivizing corporations to launch a new wave of job offshoring.

While this shadow legal system for multinational corporations has been around since the 1950s, just 50 known cases were launched in the regime’s first three decades combined. In contrast, corporations have launched approximately 50 claims in each of the last six years. ISDS is now so controversial that some governments have begun terminating their treaties that include ISDS.

NAFTA Cases Target Health and Environmental Policies

More than $392 million in compensation has already been paid out to corporations in a series of investor-state cases under NAFTA. This includes attacks on oil, gas, water and timber policies, toxics bans, health and safety measures, and more. In fact, of the 11 claims (for more than $36 billion) currently pending under NAFTA, nearly all relate to environmental, energy, financial, public health, land use and transportation policies – not traditional trade issues.

Here are just some examples of the overreach of the ISDS system under NAFTA.

The Investor Wins Taxpayer Compensation via Tribunal Order

Bilcon v. Canada: A NAFTA ISDS tribunal ruled in favor of a company that planned to blast a basalt quarry and marine terminal in an environmentally-sensitive area in Nova Scotia, deciding that the impact assessment that had been ordered by Canada’s Department of Fisheries and Oceans was a violation of the company’s NAFTA rights. A dissenting tribunalist called the decision “a remarkable step backwards in environmental protection.” But the Canadian government was ordered to pay more than $100 million to the firm.

Mobil / Murphy Oil v. Canada: A NAFTA ISDS tribunal ruled in favor of U.S. oil corporations Mobil (of ExxonMobil) and Murphy Oil, deeming a Canadian province’s requirement that any firm—domestic or foreign— obtaining a drilling license must contribute a small share of oil revenue to fund research and development in Newfoundland and Labrador – one of Canada’s poorest provinces. The tribunal ruled this was a NAFTA-barred performance requirement and ordered the Canadian government to pay the firms $19 million.

Metalclad v. Mexico: A Mexican municipality’s refusal to grant U.S. firm Metalclad a construction permit, which it had also denied to the contaminated facility’s previous Mexican owner (until and unless the site was cleaned up), resulted in $15.6 million in compensation being paid by Mexico to the firm after one of NAFTA’s first ISDS rulings.

S.D. Myers v. Canada: A NAFTA ISDS tribunal ordered Canadian taxpayers to pay $5.6 million for a temporary Canadian ban on the export of a hazardous waste called polychlorinated biphenyls (PCB). Though the ban complied with a multilateral environmental treaty encouraging domestic treatment of toxic waste, the tribunal deemed it to be discriminatory and a violation of the corporation’s NAFTA right to a “minimum standard of treatment.”

The Investor Extracts Payment Through a Settlement

Ethyl v. Canada: The U.S. Ethyl Corporation used NAFTA’s investor-state system in the late 1990s to reverse a Canadian environmental ban of the carcinogenic gasoline additive MMT, also banned by numerous U.S. states, while also obtaining $13 million in compensation from the Canadian government to pay for revenue lost during the ban. Canada also was required to post advertisements in newspapers claiming the chemical was safe.

AbitibiBowater v. Canada: AbitibiBowater, a paper corporation, extracted a $123 million ISDS settlement after challenging the decision of Newfoundland and Labrador, a Canadian province, to take back various timber and water rights held by AbitibiBowater after the corporation closed a paper mill. The provincial government argued that under the terms of an agreement the firm had made with the province, which was working to save the mill that employed 800 people in a rural area, AbitibiBowater’s control of the forest lands and water rights were contingent on the company’s continued operation of the paper mill.

Pending Cases With Health and Environmental Implications

TransCanada v. United States: In June 2016, the TransCanada Corporation launched a NAFTA ISDS claim demanding $15 billion in compensation because the Canadian corporation’s bid to build a pipeline was rejected by the U.S. government. The company said it had invested $3 billion, but demanded the larger sum to pay for the future expected profits it would lose if the pipeline was not allowed to operate. The U.S. government decision not to approve the pipeline, because it was not in the national interest and would exacerbate climate change, came after years of government studies. Tens of thousands of citizens in the states that would be affected and environmental activists nationwide had worked for years to demonstrate that the pipeline would pose serious health and environmental risks. Even after President Trump announced he would reverse the Obama administration decision and allow the pipeline to proceed, TransCanada is proceeding with its ISDS case. Under NAFTA rules, it could be compensated for lost revenues and costs that resulted from a delay in the pipeline’s completion.

Lone Pine v. Canada In September 2013, Lone Pine Resources, a U.S.-based oil and gas exploration and production company, launched a $109 million NAFTA ISDS claim against Canada under NAFTA to challenge Quebec’s suspension of oil and gas exploration permits for deposits under the St. Lawrence River. The decision was part of a wider moratorium on the controversial practice of hydraulic fracturing, or fracking. The provincial government had declared a moratorium in 2011 so as to conduct an environmental impact assessment of the extraction method widely known for leaching chemicals and gases into groundwater and the air.

Eli Lilly v. Canada In September 2013, U.S. pharmaceutical giant Eli Lilly and Company, launched a $483 million NAFTA ISDS challenge after Canadian courts invalidated the firm’s patents for Strattera and Zyprexa, drugs used to treat attention deficit hyperactivity disorder, schizophrenia and bipolar disorder. In a case that greatly expands the scope of ISDS attacks, the firm is challenging Canada’s standard for issuing patents. Canadian federal courts ruled that Eli Lilly failed to meet the standards required to obtain a patent under Canadian law. Namely, the firm had failed to demonstrate or soundly predict that the drugs would provide the benefits that the firm promised when applying for the patents’ monopoly protection rights. The court’s decision paved the way for generic drug producers to make less expensive versions of the drugs. Eli Lilly is asking a NAFTA ISDS tribunal to second-guess not only the courts’ decisions, but Canada’s entire standard for issuing patents and determining their ongoing validity.

NAFTA ISDS Attacks Force Costly Defense of U.S. Policies

The U.S. government has spent tens of millions in legal costs to defend against NAFTA investor-state cases. But, thanks in part to technical errors by lawyers representing corporations in several cases, the United States has thus far dodged the bullet and avoided paying compensation. There have been 14 ISDS cases against U.S. policies–all by Canadian firms under NAFTA. A Columbia University Law School study shows that we have only narrowly escaped liability in some of these cases. For example, in the Loewen case, a NAFTA tribunal concluded that a Mississippi state Supreme Court decision that a Canadian funeral home conglomerate must follow normal civil procedure rules and post bond to appeal a contract dispute it had lost with a U.S. firm, violated NAFTA investor protections. Luckily for U.S. taxpayers, before compensation was ordered, the Canadian firm’s lawyers reincorporated the firm as a U.S. corporation under bankruptcy protection. This eliminated Loewen’s status (and privileges) as a foreign investor.

When U.S. state laws are challenged under the investor-state system, state governments have no standing and must rely on the federal government to defend their laws. If states are invited by federal officials to participate, they must pay their own legal expenses. California has incurred millions of dollars in legal costs helping to defend two state environmental laws – a toxics ban and a mining reclamation policy – that were challenged under NAFTA.

As corporations and law firms become emboldened and more creative, it is likely only a matter of time before U.S. taxpayers are on the hook, given that as long as NAFTA is in effect, more than 8,500 corporate subsidiaries from Canada and Mexico are empowered to use ISDS to challenge our policies.