Richard Grossman / POCLAD

Controlling Corporations

interviewed by Ruth Coniff

The Progressive magazine, March 2002

I first met Richard Grossman when I was following Ralph Nader on the campaign trail through New England. Grossman lives in New Hampshire, and Nader brought him along on a visit to the state capitol, introducing him to lawmakers as "the preeminent historian of corporations" and a "treasure" right there in their home state.

Grossman co-directs the Program on Corporations, Law, and Democracy, which describes its mission as "instigating democratic conversations and actions that contest the authority of corporations to govern."

The group came together in the early nineties, he says, when a dozen activists who had spent much of their lives working on issues of peace, labor, women's rights, and the environment decided that something more had to be done.

"It's funny, we did not set out to become experts on the corporation," he says.

"We set out to try to discover why it is that the activist work of so many good and able people around the country for so many decades had not brought about the kinds of changes that people had been hoping for. Why is it-after so many years of so many groups fighting toxic chemicals and winning, passing laws, and closing dumps, and doing all kinds of good things-that every day more toxic chemicals are produced than the day before? We saw that power was being concentrated even more in corporate boardrooms. The ideal of democracy was moving further out of reach. And by most objective criteria-the wealth gap, public health, the environment, workers' rights-things were getting worse."

In a recent book published by the group, Defiling Corporations, Defining Democracy (Apex Press, 2001), Grossman and his colleagues argue that corporate power has grown unchecked. "Following the Civil War and well into the twentieth century, appointed judges gave privilege after privilege to corporations," the book notes. One of the worst cases early on was the 1886 Supreme Court decision Santa Clara County u Southern Pacific Railroad Co., which ruled that a corporation was a "person" under the Constitution, sheltered by the Fourteenth Amendment. This legal doctrine spawned modern corporations-commercial Frankensteins-with all the rights of real people, and immortality, too. In one stroke, the Court killed future efforts by states and local governments to rein in corporate behavior.

It's time people took back control over corporations, Grossman says. I spoke to him by phone as the Enron debacle was generating front-page news coverage.

Q Do you think Enron is going to be a mass consciousness-raising exercise? How about Dick Cheney refusing to release the list of corporations that helped shape energy policy because it would have a chilling effect on shaping policy in the future?

Richard Grossman: Who's going to be surprised at Dick Cheney's list of corporate executives who participated in the energy plan? We've seen the plan. We know what it's about, we know whose values are represented there, whose ideas. It's not a big question.

The real issue is that Enron's DNA was to do what it did. Enron basically created a new market that wasn't about goods or services that people need; it was about making money. The executives figured out where they wanted to go, what laws they had to change, how they had to reframe the debate about energy, and then within ten or twelve years they accomplished a huge amount of what they set out to do. And that didn't happen because they were the most brilliant people in the world, but because they had all the tools they needed. Enron took advantage of a process that has been going on for the last 200 years, which made it very easy for them. They could use the law, the regulatory agencies, and the Supreme Court doctrine that money is a form of speech. They spread their money around to Congress, to state legislators, to think tanks, the press-all the places where ideas are influenced in this country.

And most of the stuff that they did along the way was perfectly legal. All the money they gave to the elected officials, that was all legal, lobbying in the Federal Trade Commission, that was all legal. Enron executives essentially said, "Well, we've got to go into state legislatures and persuade these guys that the existing state-regulated energy system is inefficient and wrong, and we're going to throw it out, and we're going to go to the federal government and get all kinds of changes, and start creating a federal grid that we can milk more effectively."

Q: So you don't think that any illegalities or any particular political scandal is going to be the point of Enron?

Grossman: What comes out of this depends on how the issues are framed. It seems to me the job of a political movement, of activists, is to think in a different way, to use what's happening now to help people see the underlying questions: What is a corporation? Where does it come from? How can it be that our elected officials create and enable entities like Enron, which fundamentally take over the decisionmaking, which in a democracy is supposed to belong to the people?

Q: How do they take over democratic decisionmaking?

Grossman: As soon as a corporation is chartered- corporations are chartered in the states-at the very moment of conception, the corporate form is endowed with certain rights and privileges. They can shape elections, shape the development of ideas, write the laws, and shape public debate. They can do what Enron did-transform thinking at the federal level about energy, and shut people up and out at the state and local level.

Look at the next steps. Why is it that people in communities, municipalities, and states believe they can't pass laws that ban corporations from spending any money on election campaigns, or that they can't pass laws that even ban particular products of corporations from their communities? If a community set out today to say "within our jurisdiction, no genetically modified food is allowed to enter," or if it passed a law that banned any corporate contribution to public discussion of ideas or to referenda, the corporations' lawyers would run right to federal court. The court would end up throwing the laws out, claiming constitutional rights and privileges of the corporation dating back to the Commerce Clause, the First Amendment, and the Fourteenth Amendment.

Q: It sounds almost conspiratorial to say that corporations shape how we think. How does that work?

Grossman: Well, I'm not sure what conspiratorial means. There's a corporate class that has enormous wealth, and the power of law behind it, and it dominates the way issues are framed. I mean, is it really true that the majority of the American people over the last twenty-five years didn't want a major transition in energy to move to efficiency and solar, didn't want universal health care, but wanted pig genes in fish?

Isn't it extraordinary that despite shelves and shelves of books and all kinds of practical experience on all these issues, the dominant view on everything from energy to corporate agriculture is that big technology, chemicals, and the most complex energy systems possible are the best? Where do these ideas come from, and how are they sustained? They're surely not the ideas that people believe are going to make their communities more harmonious, democratic places.

Q: What's the big picture we're not getting?

Grossman: Look, why was it so easy for GM and Firestone in the 1940s to buy up electric trolley systems all over the country? Destroy the tracks, destroy the trains, and basically set the nation's transportation policy as highways and cars and trucks? That was a scandal, too. There were hearings and trials, and in the end they were fined $5,000. But the whole transportation system, the elaborate intercity electric trolley system, that existed in so many places across the country had been literally destroyed. And the policy of the federal government was to put public wealth into highways and trucks and buses and not rapid transit.

The same thing happened with agriculture. The public wealth and public resources since the beginning of the twentieth century have been behind the notion that the largest farms were the most efficient farms. So, as with Enron, you have private entities created by the state, enabled with vast powers and privilege, and given the authority to make the governing decisions. And they're able to use the coercive force of law-the courts, the police, the regulatory agencies-to get their way. And sometimes they're not clever enough, like Enron, and things fall apart. But it's naive to believe that out of this will come some major legal or societal transformation without a significant movement, a significant uprising of folks who are clear about what's happening here.

Q: You say it's important how this Enron thing is framed. So what is the twenty-five-word summary that would be a really salutary message that could get out?

Grossman: That's a challenge. I think there are many people working towards the bumper-sticker message. I don't have it in twenty-five words, but in general it's about the history of this country, the laws and culture that govern us today. My colleagues and I were really unaware, we were misinformed, we were uninformed, we were ignorant about so much in U.S. history that made what's happening today-what Enron is- totally logical.

People in previous generations were much more aware than people today of what was going on and how the reality of the structure from the beginning disadvantaged the majority of people. So it's about the lack of real democracy from the beginning, the fact that the law and the Constitution have been used to privilege first a propertied class and then a corporate class, and that we've all been taught that the corporation is the only vehicle we can rely on for jobs, for goods, for services, to be "competitive" in the world. And our elected officials don't have to be bought to believe that. Essentially, that's what they believe. They don't see any alternative. They believe they have to turn everything over to these giant corporations.

State legislators don't even know the extent to which they have authority to write the state corporate codes in ways that make corporations subordinate. I would suspect that an awful lot of Senators and Representatives don't know that history.

For example, in the analysis I'm seeing of Enron, I haven't seen a schematic of the 3,500 corporate entities under the Enron umbrella. Where are they chartered? Apparently, there are quite a few chartered out in the Cayman Islands or the Bahamas, offshore. But they're also chartered in Texas and Oregon and other states. Attorneys general and governors of states give what's called a certificate authority for a corporation to do business in a state. They have the authority to prevent-in fact, they have the responsibility to prevent- these corporations from doing what they're doing.

I think that all the attorneys general should be throwing themselves into this Enron situation, seizing assets, setting out to revoke the charters of these entities, throwing themselves into the fight.

Q: Do you see the battle against corporate power as something akin to the civil rights movement where there's a big defining struggle taking place in the courts?

Grossman: No, I think the big defining struggle is going to take place in the culture. And the courts will come last. In a sense, Brown v. Board of Education wasn't worth much until the civil rights struggle really moved into the culture in a very significant way, forced by this extraordinary grassroots-based, multigenerational civil rights movement. It took another twenty years of really serious grassroots mobilizing, agitation in the culture. And that's where this has to happen, and it is happening: in Seattle, or at the demonstrations outside both of the parties' conventions last year, or recently in New York at the World Economic Forum. Those are the visible aspects of a growing ferment in community after community.

It's interesting how ideas form and shape and what takes root and what doesn't. It's not pure chance. If there's a social movement that's trying to inject new ideas into the culture, it takes generations. Look at desegregation. Look what it took to move that idea through society. And that idea is still not totally accepted in this society.

Q: So is this the same case for what you're trying to do? It's going to take generations?

"All the attorneys general should be throwing themselves into this Enron situation, seizing assets, setting out to revoke the charters of these entities, throwing themselves into the fight."

Grossman: I think so. And it's more complicated because it's not a single, tangible issue. It's not about the rights of a single class of people. It's about how people become self-governing. How do almost 300 million people come together in all these different jurisdictions to make the rules and to live as harmoniously as possible? If the ideal in this country has always been that the people rule, well, how are we going to do that? And can we do that if the Constitution and the law prevent us from doing that because they are enabling the few and disabling the many?

If the government had been neutral on slavery, if the slave owners could not rely on the fugitive slave clause in the Constitution to return runaway slaves or indentured servants, and the militia couldn't be called out to put down slave rebellions, and it was just the slave owners against the slaves, slavery would have been gone very quickly. The same is true of segregation. If the police wouldn't have come out and enforced all the Jim Crow laws, segregation would not have lasted.

What we have now is a system where the coercive force of government and the culture that goes along with it enable a few people through the law and through their institutions called corporations to dominate the governing of this country. Many people don't want to acknowledge that. Because to do something about it means to change this country in very significant ways. If this country were really a country of democratic self-governance where the people actually were the source of all political and legal authority, it would be a very different country. And the people who govern today wouldn't govern. The class that governs today wouldn't govern.

Q: So what can people do right now?

Grossman: Compared to five or six years ago there's so much more going on. Activists are investing their energies beyond regulatory proceedings, beyond reform laws that basically choose paper or plastic.

In Pennsylvania, nine townships have passed laws banning the corporate ownership of farms. The issue was big corporate hog farms coming in. And so people decided there that they weren't going to do regulations about hog manure, and how many hogs per square feet, which activists are doing in North Carolina and many other states. They're saying, "In our jurisdiction, no corporations can own farms."

So that issue is being totally reframed. It's not about the science of hog odor and hog manure. It's about municipalities exercising their authority to define what goes on within their jurisdictions. That's the kind of confrontation that needs to take place in communities around the country, and at the state level, in order to drive this movement eventually into national struggles over who gets to decide and who sets the values in this country. A few people behind the shield of giant corporations empowered by our elected officials? Or the public through directly elected officials not chosen by the corporate class?

On a couple levels, it's working. So far, no corporate hog farms have come into those communities. And agribusiness corporations and the Farm Bureau have launched the lawsuit we anticipated. They are suing one of the townships, and the lawsuit is very clear. It basically says, "This township does not have the legal and constitutional authority to pass such a law." All that did was infuriate folks. And every time the head of the Farm Bureau in Pennsylvania writes an article saying he's trying to talk about efficiency and the consumer and this and that, more and more people who are getting involved with the issue through neighbors and friends see it as absolute nonsense. Because you don't have to read too carefully in a 400-word article where the main themes are the corporations know best, the Constitution says that the corporations have all these rights, and you people have no rights. It just drives these folks to be stronger and clearer and more determined.

And that's a lesson for activists around the country. If you frame the issue about who's in charge, about power, and not around six parts per million or eight parts per million or how many kilowatts here versus kilowatts there, that's what arouses people. That's what educates people. That's what pushes some people on their own to say, "I didn't know any of this history, let's check it out."

Q: What's the ultimate goal?

Grossman: The abolitionists eventually had to take their struggle into the Constitution and write the Thirteenth, Fourteenth, and Fifteenth amendments because the ownership of humans as property and the denial of human rights had been imbedded in the Constitution. The women's suffrage movement also had to go into the Constitution. The same is true with what we're talking about. Eventually, when the culture changes, when there's been enough contesting, revealing, and educating, these issues will either be driven into the Constitution or they won't. Eventually, the fundamental law of the land will change or it won't. And our job and the job of the next generation is not to be diverted into paper versus plastic, but to keep our focus on that fundamental work.

Ruth Conniff is Political Editor of The Progressive. For more information, contact the Program on Corporations, Law, and Democracy at PO. Box 246, South Yarmouth, MA 02664. Or go to www.poclad.org, e-mail peopleatpoclad.org or call (508) 398- 1 145.

Corporate Control of American Democracy

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