“Did The Founding Fathers Intend For Corporations To Be Covered By The Bill Of Rights?” By Susan Burns Feb. 19, 2016 To begin this paper, I must offer two caveats. First, I am not now, nor have I ever been a lawyer, let alone a corporate lawyer. Secondly, I think we all have come to know a bit more about the late Justice Antonin Scalia this week. His continued insistence on the importance of the original intent of the U.S. Constitution is even echoed in the framing of the question I will attempt to tackle today. That question is “Did the Founding Fathers intend for corporations to be covered by the Bill of Rights?” Did the Founding Fathers intend to put limits on the behaviors of corporations? How did we go from “We, the people,” to “money is speech and “corporations are persons?” Is that a good thing, and if we think not, what can we, the people do about it? As is the Quest Club tradition, that simple original question has led me on a merry chase through sleep- inducing law books and two centuries of court opinions, political theorist’s writings from Adam Smith, Hume, Hobbes, and Locke, as well as Jefferson, Madison, Mason, Hamilton and Jay. I’ve read Washington’s letters expressing his frustrations with the sorry state of affairs under the state-centric Articles of Confederation and the post-Revolutionary War debates of Federalists and Anti-Federalists. It has been a fascinating path over some 700 years of economic and political history, populated by a Pope, pashas, Dutch and English explorers, the slave trade and women’s suffrage, a lucrative client for Abraham Lincoln, a possibly corrupt Chief Justice, and the evolution of multinational companies. Arriving at today, on our TVs and favorite media, billionaires and secret “superPACS” are pouring dollars in to be converted to loud speech and gerrymandered districts – all in a frantic power-struggle to preserve a new status quo that some rational persons believe threatens the very core of our nation’s great experiment in self-governance. Former Secretary of Labor Robert Reich wrote just a few days ago, this description of the political situation today: “No candidate or president can mobilize the public against the dominance of the moneyed interests while being dependent on their money. And no candidate or president can hope to break the connection between wealth and power without mobilizing the public.”
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“Did The Founding Fathers Intend For Corporations To Be Covered
By The Bill Of Rights?”
By Susan Burns Feb. 19, 2016
To begin this paper, I must offer two caveats. First, I am not now, nor have I ever been a lawyer, let
alone a corporate lawyer. Secondly, I think we all have come to know a bit more about the late Justice
Antonin Scalia this week. His continued insistence on the importance of the original intent of the U.S.
Constitution is even echoed in the framing of the question I will attempt to tackle today. That question is
“Did the Founding Fathers intend for corporations to be covered by the Bill of Rights?” Did the Founding
Fathers intend to put limits on the behaviors of corporations? How did we go from “We, the people,” to
“money is speech and “corporations are persons?” Is that a good thing, and if we think not, what can
we, the people do about it?
As is the Quest Club tradition, that simple original question has led me on a merry chase through sleep-
inducing law books and two centuries of court opinions, political theorist’s writings from Adam Smith,
Hume, Hobbes, and Locke, as well as Jefferson, Madison, Mason, Hamilton and Jay. I’ve read
Washington’s letters expressing his frustrations with the sorry state of affairs under the state-centric
Articles of Confederation and the post-Revolutionary War debates of Federalists and Anti-Federalists. It
has been a fascinating path over some 700 years of economic and political history, populated by a Pope,
pashas, Dutch and English explorers, the slave trade and women’s suffrage, a lucrative client for
Abraham Lincoln, a possibly corrupt Chief Justice, and the evolution of multinational companies.
Arriving at today, on our TVs and favorite media, billionaires and secret “superPACS” are pouring dollars
in to be converted to loud speech and gerrymandered districts – all in a frantic power-struggle to
preserve a new status quo that some rational persons believe threatens the very core of our nation’s
great experiment in self-governance. Former Secretary of Labor Robert Reich wrote just a few days ago,
this description of the political situation today:
“No candidate or president can mobilize the public against the dominance of the moneyed
interests while being dependent on their money. And no candidate or president can hope to
break the connection between wealth and power without mobilizing the public.”
“Did the Founding Fathers intend for corporations to be covered by the Bill of Rights?” Quest Club, 2/19/2016
Page 2
“This system is not sustainable. We must get big money out of our democracy, end crony
capitalism, and make our economy and democracy work for the many, not just the few.”1
On the other hand, the late Justice Scalia, as a guiding light of the powerful Federalist Society, noted
during the arguments before the court on Burwell v. Hobby Lobby that “most corporations are
“indistinguishable from the individual who owns them.”2 And conservative columnists, including George
Will just last week, note that the rights corporations seek to assert are useful and important. How is it,
those in favor pointedly ask, that The New York Times can assert a right to freedom of speech but 100%
of the shareholders of a company are not entitled to put a religious belief they share into practice in the
business they own? And if an order of nuns is not entitled to follow the directives of the Catholic Church,
who is? As Will notes:
“The decision (Citizen’s United vs. Federal Election Commission) simply recognized that
Americans do not forfeit their First Amendment rights when they come together in incorporated
entities to magnify their voices by speaking collectively.
“Opposition to Citizens United is frequently distilled into the slogan that “corporations are not
people,” to which Sen. Elizabeth Warren (D-Mass.) adds this example of progressive insight:
“People have hearts. They have kids. They get jobs. They get sick. They cry. They dance. They
live. They love. And they die.” And a few teach at Harvard Law School, as Warren was able to do
only because Harvard did not die: It is descended from the first corporation chartered in
Colonial America.”3
The debate of Reich, Warren, Scalia and Will would be very familiar to the Founding Fathers, who might
wonder that after 220 years more effort, we are still sorting through just what is meant by “property,”
“rights,” “liberty,” and “the pursuit of happiness.”
Let me first give you a short answer to the original question: No, the Founding Fathers did NOT intend
for corporations to be covered by the Bill of Rights. I am convinced that if you were able to suggest,
during that fateful Summer of 1787 and the long ratification struggle the next 4 years, that someday the
federal government would permit owners of large companies employing thousands of people and doing
1 Robert Reich blog posts retrieved from https://www.google.com/webhp?sourceid=chrome-
instant&ion=1&espv=2&ie=UTF-8#q=robert%20reich%20on%20moeny%20in%20government, “It Takes a Movement,” Feb. 1, 2016, and “Why We Must Try,” Feb. 7, 2016. 2 New York Times Opinion Page, “The Rights of Corporations,” Sept. 21, 2009, retrieved from
http://www.nytimes.com/2009/09/22/opinion/22tue1.html?_r=1 3 George Will, The Washington Post, Feb. 12, 2016 https://www.washingtonpost.com/opinions/progressives-anti-
“Did the Founding Fathers intend for corporations to be covered by the Bill of Rights?” Quest Club, 2/19/2016
Page 6 Clause,” which says “The Congress shall have the power … to regulate commerce with foreign nations,
and among the several states, and with the Indian tribes.” Nowhere is the term “corporation”
mentioned, and the word “persons” is used rarely – most notably in the phrase “free persons” in Article
1, Section 2’s famous apportionment clause counting slaves as “three fifths of all other Persons” and in
Article IV, where it refers to “persons charged with treason, felony or other crime.” In general, the
chartering of corporations was one of the powers “not otherwise delegated” that are protected in
Amendment 9. Distrust of corporations ran so deep that Thomas Jefferson proposed, unsuccessfully,
that freedom from monopolies be included in the Bill of Rights. He later wrote, “I hope that we shall
crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our
government to a trial of strength, and bid defiance to the laws of our country.”12
With that history review under our belts, we have arrived at a point where discussions of the law take
precedence. Sir William Blackstone, the great English jurist and a contemporary of Washington and
Franklin would have been well-known to younger lawyers including Madison and Jefferson. Blackstone
defined a corporation as an “artificial person constituted to maintain perpetual succession and enjoy
legal immortality, in order to preserve Personal rights.” He noted that in English law, there are two types
of corporations, the corporation sole (and example of that would be the King of England) and
corporation aggregate, which is the more familiar form composed of a group of individuals. In England,
there can be three types of corporations aggregate: those chartered through a grant from the King,
statutory through an Act of Parliament, and registered after individuals agree to band together for a
shared purpose.
The concept of the group acting as a unit dates back to the mid 1200s, when Pope Innocent IV is
credited with a legal brainstorm to declare monasteries, abbeys and universities being established all
over Christendom as persona ficta, or “fictional persons.” By defining a group of people a single legal
entity, he gave them immortality and stability. Thus, the Roman Church can be considered as the oldest
“corporation.” In those turbulent times, as Crusaders roamed and orders and new schools and churches
were founded in the wake of St. Francis and St. Dominic, this allowed the new centers of devotion to
exist while simultaneously, the individual monks and clerics could remain pledged to poverty. As
12
Tom Stites, “How corporations became 'persons': The amazing true story of a legal fiction that undermines American democracy.” UU World magazine, May/June 2003 issue; Retrieved from http://www.uuworld.org/articles/how-corporations-became-persons#correction
“Did the Founding Fathers intend for corporations to be covered by the Bill of Rights?” Quest Club, 2/19/2016
Page 7 "fictional people," the persona ficta could not be excommunicated or considered guilty of negligence.
Property left to eth church could be shielded the property from seizure. 13
Leaping ahead to the 1600s, the English, Dutch and Russian merchants adapted the fictional person idea
to allow them to band together as joint-stock companies, pooling resources, as in Lloyd’s of London or
the East India Company, to share the risk on shipping and explorations. And, as we have already heard,
that arrangement worked out quite well for many of the investors.
Once the United States had an established national court system, it did not take long for the question of
the durability of charters to arise. In the 1819 Dartmouth College v. Woodward decision, Chief Justice
John Marshall echoed Blackstone when he defined a corporation as:
“an artificial being, invisible, intangible, and existing only in contemplation of law. Being the
mere creature of law, it possesses only those properties which the charter of its creation confers
upon it, either expressly or as incidental to its very existence. These are such as are supposed
best calculated to effect the object for which it was created. Among the most important are
immortality, and, if the expression may be allowed, individuality; properties by which a
perpetual succession of many persons are considered as the same, and may act as a single
individual. They enable a corporation to manage its own affairs, and to hold property without
the perplexing intricacies, the hazardous and endless necessity of perpetual conveyances for the
purpose of transmitting it from hand to hand. It is chiefly for the purpose of clothing bodies of
men, in succession, with qualities and capacities, that corporations were invented, and are in
use. By these means, a perpetual succession of individuals is capable of acting for the promotion
of the particular object, like one immortal being."
During that same important 1819 set of decisions, Marshall’s fabled pro-business attitude peeks through
in the majority opinion giving a green light to the establishment of a Second Bank of the United States in
McCulloch v. Maryland. Listen to how a prohibition becomes permission:
“Among the enumerated powers, we do not find that of establishing a bank or creating a
corporation. But there is no phrase in the instrument which, like the Articles of Confederation,
excludes incidental or implied powers and which requires that everything granted shall be
expressly and minutely described. Even the 10th Amendment, which was framed for the
purpose of quieting the excessive jealousies which had been excited, omits the word
13
John Dewey, “The Historic Background of Corporate Legal Personality,” Yale Law Journal, Vol. 35, April 1926, pages 655-673.
“Did the Founding Fathers intend for corporations to be covered by the Bill of Rights?” Quest Club, 2/19/2016
Page 8
"expressly," and declares only that the powers not delegated to the United States, nor
prohibited to the States, are reserved to the States or to the people, thus leaving the question
whether the particular power which may become the subject of contest has been delegated to
the one Government, or prohibited to the other, to depend on a fair construction of the whole
instrument.”14
In Indiana, like many states, if you wish to create a business, there are informal and formal ways to
structure the formation of the business. Informal forms of business formation are the Sole Proprietor
and Partnership. To form one of six (6) types of business associations formally recognized under Indiana
law, the new corporation must file organizational documents with the Corporations Division of the
Secretary of State:15 The forms are:
o Corporation: A legal entity which is created by filing Articles of Incorporation. The
Corporation itself assumes all liabilities and debts of the Corporation. A corporation is
owned by shareholders. A shareholder enjoys protection from the corporation's debts and
liabilities.
o S-Corporation: After filing Articles of Incorporation, a Corporation may seek to obtain S
Corporation status for federal income tax purposes. The income of an S Corporation is
taxed only once: at the employee or shareholder level. To qualify, the corporation may not
have more than 75 shareholders and must meet other certain Internal Revenue Service
criteria.
o Limited Liability Company: An LLC is a formal association which combines the advantage of
a corporation's limited liability and the flexibility and single taxation of a general
partnership. An LLC has members rather than shareholders. A member enjoys protections
from the liabilities and debts of the LLC. Although not required by law, an LLC should
operate under an Operating Agreement which is like a Partnership Agreement.
o Limited Partnership: A partnership with at least one General Partner and one Limited
Partner. A limited partner's liability is limited to the amount invested, while the General
Partner(s) assumes all the liabilities and debts of the partnership.
14
Chief Justice Marshall writing for the majority retrieved from https://www.law.cornell.edu/supremecourt/text/17/316#writing-USSC_CR_0017_0316_ZO 15 From An Entrepreneur’s Guide to Starting a Business in Indiana posted on the website of Indiana Secretary of State Connie Lawson. This text was retrieved from http://www.in.gov/sos/business/2428.htm .
“Did the Founding Fathers intend for corporations to be covered by the Bill of Rights?” Quest Club, 2/19/2016
Page 9
o Limited Liability Partnership: A General Partnership which elects to operate as an LLP. To
operate as an LLP, a Registration must be filed with the Secretary of State. Unlike a General
Partnership, the partners in an LLP enjoy protection from many of the partnership's debts
and liabilities.
o Nonprofit Corporation: A corporation whose purpose is to engage in activities which do not
provide financial profit to the benefit of its members. Such corporations must obtain
nonprofit or tax exempt status from the IRS and Indiana Department of Revenue to be free
from certain tax burdens. The section of the IRS Code governing whether entity will be
taxed or exempt from taxation is Section 501c, within which are nine (9) categories
depending on what activities for the public good the new entity intends to conduct. Some
will do charity or educational work, some will be political or lobbying, some will operate
philanthropic foundations.
As John Marshall listed, the formally constituted corporate enterprise enjoys a few key advantages for
its physical human owners:
o Shielded from personal liability;
o No expiration date
o Can loan and borrow money; amass savings and pay dividends
o Own and sell property
o Can enter into contracts
o Can file lawsuits, seek injunctions, and be sued
o Hire employees
o Pay taxes
o Can buy and sell other corporations
o Can keep and bear arms.16
Corporations also come with a few limitations:
o Double taxation – both for the corporation itself and, when dividends are paid, the human
beings who receive the corporate payments must pay income tax on the payments.
o Is subject to municipal zoning laws and local taxes
o Is subject to regulation under the Commerce Clause.
16
Jim Seidman, Quora blog, “U.S. Supreme Court: Should Corporate Personhood as it currently stands be undone or fixed? And if so, how?” Sept. 2, 2013, retrieved from https://www.quora.com/U-S-Supreme-Court/Should-corporate-personhood-as-it-currently-stands-be-undone-or-fixed-If-so-how
William Dalrymple, “The East India Company: The Original Corporate Raiders” published in The Guardian, March 4, 2015, retrieved from www.theguardian.com/world/2015/mar/04/east-india-company-original-corporate-raiders 20
William Maurer, “Illuminating Citizens United: What the Decision Really Did,” Engage, Volume 12, Issue 3, November 2011, retrieved from http://www.fed-soc.org/publications/detail/illuminating-citizens-united-what-the-decision-really-did
o Shapiro, Ilya and Caitlyn W. McCarthy, “So What If Corporations Aren’t People?” The John Marshall Law Review, retrieved from http://object.cato.org/sites/cato.org/files/articles/Shapiro-JMLR-vol44-n4-2011.pdf
Web resources:
o https://movetoamend.org/why-abolish-all-corporate-constitutional-rights
o www.billofrightsinstitute.org/founding-documents/bill-of-rights/
o www.thefederalistpapers.org ---
o www.npr.org/2014/07/28/335288388/when-did-companies-become-people-excavating-the-legal-evolution
o https://riversong.wordpress.com/myth-of-corporate-personhood/
o http://theusconstitution.org/issue/corporations
o http://www.corporatepolicy.org/issues/constit.htm
“Did the Founding Fathers Intend for Corporations to be Covered by the Bill of Rights?” 2/19/2016
Handouts1
Role of the Government Federalists Anti-Federalists
Strong government Weak government Superior to the states Inferior to the states Vision of a business based society Vision of an agrarian based society
Structure of the Government Felt that separating power among the three branches would keep one branch from becoming too powerful
Thought that the Congress had too much power and didn’t represent the interests of the people
Supported checks and balances between each of the branches
Feared the executive could become a tyrant
Economics Most Federalist politicians were wealthy Promoted the interests of the yeoman (farm
owners) Protective tariffs- makes foreign goods expensive so people buy American
Weary of big business and of the government supporting business over agriculture
Supported a National Bank to regulate money, fiscal policy
Opposed a National Bank
Individual Rights Strong government = protect individual rights Strong government = tyranny A closer state gov’t has opportunities to oppress the people than a distant federal gov’t
Wanted a Bill of Rights to protect individual liberties from government
States’ Rights Argued for federalism- power trickles down from federal to state to local gov’t
Feared states would lose all their rights
Federal gov’t should be superior to the states to promote national interests
Wanted powers not granted to the Federal gov’t to go to the states
Expansion Wanted to grow the country all the way West Thought a small republic could best protect
individual rights Felt a large republic would best serve the interests of the people and their rights
Feared expansion would hurt individual and state rights
Expansion = more markets and more resources
Standing Army Supported a standing army for national defense
Feared a standing army could be used for oppression
By M. Vinickas retrieved from http://www.slideshare.net/mvinickas/federalists-and-anti-federalists
1 Also provided each attendee with an ACLU Bill of Rights bookmark, available from https://shop.aclu.org/product/ACLU-Bill-of-Rights-
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."2
Text of the Proposed 28th Amendment3 (House Joint Resolution 48, introduced April 29, 2015)
Section 1. [Artificial Entities Such as Corporations Do Not Have Constitutional Rights]
The rights protected by the Constitution of the United States are the rights of natural persons only.
Artificial entities established by the laws of any State, the United States, or any foreign state shall have no rights under this Constitution and are subject to regulation by the People, through Federal, State, or local law.
The privileges of artificial entities shall be determined by the People, through Federal, State, or local law, and shall not be construed to be inherent or inalienable.
Section 2. [Money is Not Free Speech]
Federal, State, and local government shall regulate, limit, or prohibit contributions and expenditures, including a candidate's own contributions and expenditures, to ensure that all citizens, regardless of their economic status, have access to the political process, and that no person gains, as a result of their money, substantially more access or ability to influence in any way the election of any candidate for public office or any ballot measure.
Federal, State, and local government shall require that any permissible contributions and expenditures be publicly disclosed.
The judiciary shall not construe the spending of money to influence elections to be speech under the First Amendment.
2 The entire Amendment has 5 sections, dealing with debt, loyalty to the union, and enforcement of the
amendment. It can be reviewed online, with interesting commentaries at http://constitutioncenter.org/interactive-constitution/amendments/amendment-xiv
3 From Move To Amend website, https://movetoamend.org/wethepeopleamendment
Ralph Nader’s 25 Proposed Redirections and Reforms
Through Convergent Action4
1. Require that the Department of Defense (DOD) budget be audited annually, and disclose all government budgets. Secrecy destroys accountability.
2. Establish rigorous procedures to evaluate the claims of businesses looking for a government handout which would end most corporate welfare and bailouts.
3. Promote efficiency in government contracting and government spending.
4. Adjust the minimum wage to inflation.
5. Introduce specific forms of taxation reform as well as push to regain uncollected taxes.
6. Break up the “Too Big to Fail” banks.
7. Expand contributions to charity, using them to increase jobs and draw on “dead money.”
8. Allow taxpayers the standing to sue, especially immunized governments and corporations.
9. Further direct democracy—initiative, referendum, and recall, for starters.
10. Push community self-reliance.
11. Clear away the obstacles to a competitive electoral process.
12. Defend and extend civil liberties.
13. Enhance civic skills and experience for students.
14. End unconstitutional wars and enforce Article 1, section 8, of the Declaration of War Act.
15. Revise trade agreements to protect US sovereignty, and resume full congressional deliberations, ending fast track.
16. Protect children from commercialism and its physical and mental exploitation and harm.
17. Control more of the commons that we already own.
18. End corporate personhood.
19. Get tough on corporate crime, providing penalties and enforcement budgets.
20. Ramp up investor power by strengthening investor-protection laws and by creating a “penny brigade” to pay for an investor watchdog agency.
21. Oppose the patenting of life forms, including human genes.
22. End the ineffective war on drugs.
23. Push for environmentalism.
24. Reform health care.
25. Create convergent institutions
4 List is excerpted from Chapter 4, Page 65 of Ralph Nader’s book, Unstoppable: The Emerging Left-
Right Alliance to Dismantle the Corporate State or from https://nader.org/books/unstoppable