Wednesday, September 8, 2010
You've heard that a recent Supreme Court decision said that corporations can give unlimited funds to politicians.
But did you realize that it said that corporations can give unlimited money to judges?
As William K. Black - professor of economics and law, and the senior regulator during the S & L crisis - pointed out last week:
The Supreme Court’s Citizens United decision allows businesses to make unlimited political contributions to judges and politicians. When judges are elected, the need for these contributions inherently turns judges into politicians. Sympathetic judges are corrupt businesses’ most valuable allies. Corporations and their senior officials can commit civil or criminal wrongs with impunity if their case is assigned to a friendly judge. The Robber Barons often had judges on their payrolls. Judges can serve a corporation as both a shield and a sword. They can declare statutes and regulations unlawful. They can issue favorable decisions when corporations sue their critics, which can intimidate, tie up, or even bankrupt the critics.As Yves Smith noted recently:
The fact that corporations are “investing” so heavily in getting pro-business judges elected demonstrates that their CEOs believe that the election of friendly judges will increase their incomes and decrease the risk that they will ever be sanctioned. It’s a business decision – not a decision based on which judicial candidate would be more qualified or better serve justice. CEOs want to win cases when doing so would be unjust and contrary to the law, which is why they hire top attorneys and make the contributions necessary to elect judges they believe will be allies. The empirical evidence in Texas shows that judicial elections and contributions produces perverse dynamics. One study showed that hiring the former law firm of a Texas Supreme Court justice markedly increased the chances that the Texas Supreme Court would exercise its discretion and hear your appeal from an adverse decision. Hiring the former law firm of the Chief Justice of the Texas Supreme Court produced an even greater chance of having one’s appeal heard.
A Mother Jones article, “Permission to Encroach the Bench,” (hat tip reader Francois T) discusses how already big ticket battles over state supreme court seats are likely to rocket to a new level of priciness:I wrote in April:
For a down-ballot category that even well-intentioned voters pay little attention to, judicial races are astonishingly expensive. In 2004, $9.3 million was spent in the race for a single seat (pdf) on the Illinois Supreme Court. That’s higher than the price tag of more than half the US Senate races in the nation that year. In 2006, three candidates for chief justice in Alabama raised $8.2 million combined.
But those sums could look paltry compared to the spending likely to be unleashed in the wake of the Supreme Court’s Citizens United ruling. In all, 39 states elect judges—and with the stakes including everything from major class actions to zoning and contract cases to consumer protection, workplace, and environmental issues, corporations have always taken a major interest in those races. The US Chamber of Commerce, Forbes reported in 2003, has devoted at least $100 million to electing judges sympathetic to its agenda. “No organization has had more success in the past 10 years of judicial elections,” says James Sample, a professor at Hofstra University who studies judicial reform issues. “Its winning percentage would be the envy of any sports franchise.” Citizens United has essentially wiped out not just federal restrictions on campaign spending, but many state-level regulations as well, Sample notes, and that’s “going to increase the ability of corporations, and to a much lesser extent unions, to engage in electioneering that is basically aimed at winning particular cases.” And given the low profile of these races, it may not take that much to sway that outcome, notes Bert Brandenburg, executive director of the advocacy group Justice at Stake. “A judicial election is a better investment for anyone spending money” than, say, a congressional campaign.
Note the reference to Alabama, a state I know a wee bit about, and my local sources say the Mother Jones figures are greatly understated, and attorneys in the state who’ve turned over a few rocks put the price tag for a state supreme court seat at $12 million. I’ve had a quick look at a Supreme Court justice’s house. It is in an implausibly costly district for his income (and no, there’s no heiress wife to explain the discrepancy).
Why is Alabama such a valuable state to control? It used to be a favorite venue for class action lawyers, since juries often handed out multi-million-dollar awards. Getting business-friendly jurists in place at the highest court has meant that any verdict, no matter how egregious and damaging the violations, is cut to $1 million.
And the degree of banana republic behavior is reaching new levels. Consider: a once prominent corporate firm has been reduced to becoming primarily a foreclosure mill. However, because longevity counts in the South, and many of the firm’s senior partners still dine with judges, it has clout well in excess of its fallen standing.
On a case which is now being tried, this fading firm (we’ll call it Billem) has managed to get the case (which is being heard only by a judge) moved from the court before a decision has been rendered to a sympathetic appeal court judge. In addition, Billem is appending four other cases which that have already been decided and are past the time frame for appeal (in Alabama, you have 43 days in which to file an appeal). The rationale is that these cases present similar issues, but that still has the effect of reopening cases which under existing law are settled. For lay reader, if you miss the deadline for appeal, you can’t appeal…..except in when the right people in Alabama want it to occur.
So this isn’t merely having judges who will provide the opinions big business wants. We now have a court running roughshod over basic elements of procedure. The last bastion of defense of the individual is being gutted, to the point where even the forms of the law will be ignored if that’s what it takes to produce the outcome the big money interests need.
I wrote that before I realized that the Supreme Court's Citizens United decision opened the floodgates to corporations buying judges.
As Supreme Court Justice Louis Brandeis said:We may have democracy [or you can substitute the word "republic"], or we may have wealth concentrated in the hands of a few, but we can't have both.***
Of course, antitrust laws were enacted to protect the economy and democracy, but - like the Depression-era laws separating depository banking from investment banking - are not being enforced.
And the government could use existing laws to force ill-gotten gains to be disgorged (see this and this), fraudulent transfers to be voided and - perhaps - even bonuses gained at the expense of taxpayers clawed back. Such actions would make the 800 pound gorillas a little smaller, helping to reduce concentration of wealth somewhat. But that would assume that America is still a nation governed by the rule of law.
Currently, it's not. Only courageous prosecutors and brave judges can restore the rule of law to America.