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Do corporations have an afterlife?

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By Jim Flynn

Have you talked directly to your bank corporation lately? How about your insurance corporation, your telephone corporation, your investment corporation or your credit card corporation?

“Silly,” you say? You are right. Corporations have no ears, no tongue, and no bodily functions. They do have relatives and offspring, however. They’re called holding companies and subsidiary corporations.

Next time you call a corporation from which you’ve purchased something, ask to talk to an owner. While there may be thousands of stockholder owners, mere customers may speak only to service associates.

Generally,  customers are not allowed to speak to executives or managers, either. Managers and executives used to be employees chosen by the directors, who are elected by the stockholders. Lately many managers have elevated themselves to a level of omnipotence, directors and stockholders be damned.

Corporations do have one human attribute mere mortals do not have. They are eternal – at least until merger, acquisition, or bankruptcy.

Corporations acquired quasi-humanity by deliberate accident. In the now famous tax case of Santa Clara County v. Southern Pacific Railway, Chief Justice Waite said in his opening remarks that the court would not hear arguments about whether the personal rights in the Constitution apply to corporations. He then added unthinkingly that all the justices were of the opinion “they do have such rights.”

The court reporter (a former railroad executive) asked the Chief Justice if it would be all right to include his remarks in the headnote of the printed decision. Headnotes are not part of an opinion. For 75 years corporations had been looking for an opportunity to evade regulation by the states that had created them. A chance remark was the big break.

Corporations viewed the Santa Anna case as an opening to claim equal protection rights under the 14th Amendment to the Constitution, which was passed for the benefit of former slaves, and which talks about “persons” and “citizens,” not corporations.

Lawyers have been known to make silk purses out of sows’ ears. They convinced a succession of lower courts to recognize corporations as persons, even though that subject  was not an issue in the Santa Clara case and was specifically excluded by Chief Justice Waite.

Over the years, other courts have chipped away at personhood rights claimed by corporations, but as fast as one decision sets limits, lawyers look for another case through which to get them back.

The most egregious use of the 14th Amendment by tongue-less corporations (and unions) is their claim to free speech for political purposes. By their broad definition, corporations (and unions) should have an unlimited right to give substantial amounts of money to chronic free speakers and their political organizations.

Some American colonies were controlled economically and politically by foreign corporations, such as the Dutch West India Company. The companies exercised political power in the name of the King of England and were a primary force against democratic governments elected by the people.

Once the Constitution was in place and the original states began to charter corporations, Thomas Jefferson strongly opposed “moneyed corporations which dare to challenge our government in defiance of the laws of our country.”

The primary purpose of corporations was to insulate investors from financial responsibility greater than their individual investment. Over time wealthy investors decided they could not only avoid regulation but could also squeeze economic benefits out of government. They saw the 14th Amendment as their opportunity to end run Mr. Jefferson’s warning.

Now the world has changed again. Corporations have not only avoided control by states, they believe they should be immune from regulation by all national governments.

In Washington world, thousands of lobbyists and their multi-national employers give more direction to government than government gives to them. When big corporations call, Congress and the White House shake hands, roll over, and do tricks.

Jim Flynn was formerly a corporate counsel, served in military intelligence during the Korean War, and once aspired to be a newspaper columnist.