Time for a Shareholder Protection Act

Five members of the Supreme Court have defied logic by assuming that corporations are people. They are not. They are legal fictions, nothing more than bundles of contractual agreements. They are owned by their shareholders.

So what do we do now, other than wait for another Supreme Court opening, and for the President to appoint another Justice who understands this?

Push Congress to enact the “Shareholder Protection Act.”

For many years, anti-union lobbyists have pushed what they call “pay-check protection” laws, supposedly designed to protect union members from being forced, through their dues, to support union political activities they oppose. Under such laws — already in effect in several states — no union dues can be spent for any political purpose unless union members agree.

The same principle should protect shareholders from being forced to spend their share of corporate earnings in favor of or against a particular candidate. Surely a First Amendment that protects corporate free speech protects individuals no less.

Under a shareholder protection law, shareholders would not have to spend their share of corporate earnings on candidates who they personally oppose. If a company dedicates, say, $100,000 to a particular campaign in a given year — directly, or indirectly through a front organization — shareholders who don’t want their money used this way would get a special dividend or additional shares representing their pro rata share of that campaign expenditure. (Mutual funds and pension plans would have to notify their shareholders of any such political activity among the companies they’ve invested on their shareholders’ behalf, and seek their shareholders’ permission.) This way, corporate money for or against a particular candidate would be paid for only by shareholders who wanted to spend their portion of company earnings on it.

robert_reich.jpgThe Shareholder Protection Act is something even Scott Brown should be able to get behind. As should a Supreme Court supremely sensitive to First Amendment rights.

by Robert Reich

This article first appeared on Robert Reich’s Blog. Republished with permission

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