Citizens United v. Federal Election Commission

I have been giving this Supreme Court decision some thought. Those of you with a legal bent will recall that this case ruled that corporations can give unlimited sums of money to political organizations seeking to influence elections. The court essentially recognizes corporations as persons under the law.

Is that a different animal than the previous creature? I mean if a corporation is more like a person than a contract, does it have citizen like responsibilities? Does it have a character, an ethos? … beyond earning money?

If a corporation is not a mutual agreement, a contract, between a number of individuals but an entity with rights, what does that imply?

It would seem to suggest that corporations are business and political organizations. What I mean to say is, this decision ratifies the idea of a corporation as essentially a small political party. Now, that may appear on its face to be no big deal. But let’s look more closely. Let’s say that a large corporation has 30,000 members counting stockholders and employees. There are many, many corporations with far larger numbers. Nevertheless, let’s use this as our example. The company has yearly profits of a little more than one billion dollars, again not particularly large considering the number and profitability of modern companies.

Thirty thousand members is not a large group compared to Democrats or Republicans or even Libertarians. However the Republicans and Democrats and other interest groups managed to spend about three and one-half billion dollars in the last election cycle’s presidential race. Our hypothetical company can play a major role in the presidential election with only a relatively small contribution of effort. If the company devoted 200 million dollars to the election they could have a major effect on the outcome. But what about the primaries? Well, let’s consider the Iowa primaries, a single state but often a make or break state for presidential candidates earlier on. What if our hypothetical company throws in a mere 20 million dollars to dispose of one candidate in a horse race of seven? How likely is that to be successful, particularly when the numbers are close in the first place?

Citizens United took corporations from a very significant though limited role in American politics and essentially created hundreds of small political parties unified under central leaderships with powerful legislative needs and freed them to use virtually unlimited funds to gain those ends.

I argue that some corporations will take on dual role, not just to make money but to forward pro business ideologies as well as traditional business needs and desires. Would shareholders be willing to tolerate a loss in profit during one quarter of a year every two years? And what if the company was able to prove that by its political advocacy it had made a return on the money of 50 or 100 percent?

Could you form an oil company or a manufacturing company whose sole purpose is to turn money into political power? Would there be people interested in doing this?

They would be investing in a political movement. Look at their advantages. Their money in the form of public shares would always be available. They could get it back provided the company was profitable. Yet, the continued investment in political action could get a far higher return than regular campaign contributions especially considering the unified leadership of a CEO and the other corporate officers who we may assume will have considerable political experience.

We might very well have a de facto multiparty state with all that that implies.

James Pilant

Student Privacy Disappearing!

The increasing use of student surveillance and intrusion of school districts into students’ extra-curricular conduct should alarm us all. Whether it is a district surveilling students in their bedrooms via webcam, conducting random drug or locker searches, strip-searching students, lowering the standard for searching students to “reasonable suspicion” from “probable cause,” disciplining students for conduct outside of school hours, searching their cellphones and text messages, or allegedly forcing them to undergo pregnancy testing, student privacy is under increasing threat.

In this quote from the web site, Pogo Was Right, it’s laid out for us. The schools’ use of surveillance technology is on the rise and students will be conditioned to having it.

Wow, this generation has a rendezvous with destiny. And apparently that destiny is the destruction of their privacy throughout their lives. Gives you a patriotic feeling, doesn’t, … You know. Land of the free and all that.

James Pilant

Seven Ways To Detect Lies

I’m a little doubtful about this stuff. I read that first body language paperback some thirty years ago and it was riddled with errors. Nevertheless I have posted about lies on occasion and this seems on point. So go here and look at the seven ways.

Iraq Not Rebuilt – $Billions Wasted

Just wonderful! Of course, it’s not much of surprise, there were already news stories and photographs of disastrous building projects and corporate contractual malfeasance. But here we are, billions in the hole, no doubt costing American lives as the Iraqis looked around and waited for us to fulfill promises our private contractors had little intention of doing in the first place. As long as the money rolled who cared about results. Here’s the lead in from the AP report -

A $40 million prison sits in the desert north of Baghdad, empty. A $165 million children’s hospital goes unused in the south. A $100 million waste water treatment system in Fallujah has cost three times more than projected, yet sewage still runs through the streets

As the U.S. draws down in Iraq, it is leaving behind hundreds of abandoned or incomplete projects. More than $5 billion in American taxpayer funds has been wasted — more than 10 percent of the some $50 billion the U.S. has spent on reconstruction in Iraq, according to audits from a U.S. watchdog agency.

That amount is likely an underestimate, based on an analysis of more than 300 reports by auditors with the special inspector general for Iraq reconstruction. And it does not take into account security costs, which have run almost 17 percent for some projects.

Business ‘Ethics’ Wrong Focus – Really?

Thomas DiLorenzo writes an article in which he explains that those teaching business ethics tend to emphasize a few bad apples which implies that all businessmen are corrupt. What’s wrong with greed, he says. We’ve always had it. The real problem is with government.

Okay, I get tired of this. I never teach that all businessmen are corrupt but I strongly suggest that those that are do incredible damage to this country and I can prove my point.

There are a lot of things like greed and pride and avarice and sloth, but that they’ve been around a while doesn’t mean they are acceptable.

I have to notice that the American economy (and the world economy) were nearly destroyed by Mr. DiLorenzo’s “greed.” I do not believe that the government is the source of all evil and I have more faith in an organization in which the American People have some kind of input (not as much as I want) than a giant financial company with a proven record of manipulation, overpayment and use of government influence to protect itself from the actual economic consequences of its misbehavior.

I am a business ethics teacher. That’s a lot more than a apologist for corporate malfeasance and a radical who has discovered the source of evil as American self government.

James Pilant

Business Ethics NEWS – Governor Rick Perry Has Accumulated A Cool Million During Twenty Years Of Government Service?!

How do you do that? I guess you could be really clever. Or you could take some ethical shortcuts. I remember reading Milton Friedman, he says you are supposed to make the maximum profit for shareholders within the rules of the game. Now, I find ole Miltie utterly contemptible. However, that phrase “within the rules of the game” has always troubled me. What does that mean? Here is a situation in which the rules appear to be very flexible. What’s more – How vigorously can you fight or maintain the public interest with such “close” friends?

The Houston Chronicle suggests it might be like this -During two decades of full-time government service, Gov. Rick Perry has accumulated a net worth of about $1 million – perhaps through good investment timing.

However, almost everyone who steered Perry to his money-making deals has seen rewards from Texas government.

Six received key state government appointments or jobs. Two benefited from government actions that had the potential to enhance their real estate holdings. Another was poised to get a state grant for his business until the deal fell through.

The bottom line is, all of the real estate deals that made Perry money occurred because of an insider’s tip. The profits mostly go into a blind trust outside of public view or scrutiny.

“Every transaction I have been involved in has been at arms length, has been transparent and it has been reported on so many cotton-picking times that, if there was something there, it would have been reported on,” Perry said recently.

Southern Methodist University political scientist Cal Jillson said Perry’s real estate deals remind him of the story of Texas oilman Sid Richardson hiring future governor John Connally as a lawyer. Richardson told Connally his salary would not be big, but “I’ll put you in the way to make some money.”

Chinese Corruption

Russell Flannery covering the China beat for Forbes has an interview with Chinese ethicists. This is an excerpt from the article. This is only the introductory part I recommend you read the rest.

Last week brought a reminder of China’s troubling business ethics landscape when the government was forced to investigate reports that infants who consumed milk powder supplied by Nasdaq-listed Synutra International had premature breast growth. The Ministry of Health cleared Synutra, yet the allegations recalled the sale of tainted infant formula in 2008 and a long list of product safety and other problems involving business ethics  in the country.
Ultimately, what can be done to improve business ethics in China? I talked to two professionals working at the front line of research and education here, Professor Hengda Yang and Stephan Rothlin from the Center for International Business Ethics at the University of International Business and Economics in Beijing.  Yang is the author of a pioneering Chinese book about business ethics, “The Conscience of Business.”   Rothlin is also associated with the University of Zurich and the Insead Business School in Singapore.

Wikipedia has an entry on Chinese Corruption. Below is an excerpt.

The People’s Republic of China suffers from widespread corruption. For 2008, China was ranked 72 of 179 countries in Transparency International’s Corruption Perceptions Index. Means of corruption include graft, bribery, embezzlement, backdoor deals, nepotism, patronage, and statistical falsification.

Cadre corruption in post-1949 China lies in the “organizational involution” of the ruling party, including the regime’s policies, institutions, norms, and failure to adapt to a changing environment in the post-Mao era. Like other socialist economies that have gone through monumental transition, post-Mao China has experienced unprecedented levels of corruption, making the ruling Chinese Communist Party (CCP) “one of the most corrupt organisations the world has ever witnessed,” according to Will Hutton. Public surveys on the mainland since the late 1980s have shown that it is among the top concerns of the general public. According to Yan Sun, Associate Professor of Political Science at the City University of New York, it was corruption, rather than democracy as such, that lay at the root of the social dissatisfaction that led to the Tiananmen protest movement of 1989. Corruption undermines the legitimacy of the CCP, adds to economic inequality, undermines the environment, and fuels social unrest.

Since then, corruption has not slowed down as a result of greater economic freedom, but instead has grown more entrenched and severe in its character and scope. In popular perception, there are more dishonest CCP officials than honest ones, a reversal of the views held in the first decade of reform of the 1980s. China specialist Minxin Pei argues that failure to contain widespread corruption is among the most serious threats to China’s future economic and political stability. Bribery, kickbacks, theft, and misspending of public funds costs at least three percent of GDP.

Corruption as a key factor in the collapse of the former Soviet Union and its Eastern European client states. While there are no numbers to tell us the gravity of the problem in economic terms, it would a reasonable to conclude that only the rapid growth of manufacturing, the huge quantity of national resources, and the highly favorable media portrayal of China have prevented an accurate perception of the problem.

But there are stories of economic corruption in real estate and manufacturing. There are troubling accounts of disasters both natural and artificial concealed from the West and unreported in China itself.

I predict that by the end of this decade, corruption in China will become a brake on foreign economic investment.

James Pilant

Sunday – All Day Dungeons And Dragons Game

I went up two levels from 8th to 10th and led a 700 man recon force in a successful defensive battle. Be back posting tomorrow. jp

My son’s cat marched up and down his keyboard [it likes to hear the beeps] and totally crashed his system. It took me close to three hours to reload his programming, so it wasn’t all fun.

The Number One New Story In Australia!?

That’s right, click over to News.com.au and Paris Hilton is the lead story. Good Grief, they are in the aftermath of an historic election.

They’ve got a guy who held a another guy as a slave turn himself in. If you want gaudy, strange news, isn’t that good enough? They have a nuclear reactor that spewed poison gas for hundred of miles from Sydney to Melbourne, and Paris Hilton is the top story. (By the way, they didn’t tell the public about the poison gas for fear of causing alarm. I don’t guess it would have been a big deal anyway. After all, the citizen of Melbourne who went to the internet for news would have had to read about Paris Hilton before he drifted down the page to the headline, Poison Gas Drifts Toward City.)

Has all news got to be on the level of short attention spanned five year old?

James Pilant

A Brief Comic Strip Explaining CDO’s And How The Banks Use Them

Go to this web site.