N94: Nation of the Corporations, by the Corporations and for the Corporations

I lifted the title itself from a short post via Brilliant at Breakfast, describing this sorry excuse of a US Attorney General, Michael Mukasey’s justice department’s refusal to prosecute at least 50 businesses in the last 3 years.

Deferred prosecutions have become a favorite tool of the Bush administration. But some legal experts now wonder if the policy shift has led companies, in particular financial institutions now under investigation for their roles in the subprime mortgage debacle, to test the limits of corporate anti-fraud laws.

Firms have readily agreed to the deferred prosecutions, said Vikramaditya S. Khanna, a law professor at the University of Michigan who has studied their use, because "clearly it avoids a bigger headache for them."

Some lawyers suggest that companies may be willing to take more risks because they know that, if they are caught, the chances of getting a deferred prosecution are good. "Some companies may bear the risk" of legally questionable business practices if they believe they can cut a deal to defer their prosecution indefinitely, Mr. Khanna said.

Legal experts say the tactic may have sent the wrong signal to corporations -- the promise, in effect, of a get-out-of-jail-free card. The growing use of deferred prosecutions also suggests one road map the Justice Department might follow in the subprime mortgage investigations.

Gee, ya think?

I trust that most readers are like me. My civics classes, my history books were filled with Myths America. I was educated with taxpayer’s money to believe that anti-trust, anti-fraud and environmental laws were passed and that our justice system meant something. You know, equal justice under the law. Silly me. Specifically, I don’t remember anything about the Fourteenth Amendment beyond what I might have learned by rote.

Ratified July 9, 1868 (140 years ago) this amendment was intended to secure the rights of slaves, newly emancipated post civil war. According to Wikipedia it was called the Reconstruction Amendment. It begins with this commanding paragraph. . .

“ Section 1. 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.

I know for a fact I was not taught the following information about the Fourteenth Amendment and corporations.

Very soon after the Fourteenth Amendment became law, the Supreme Court began to demolish it as a protection for blacks, and to develop it as a protection for corporations. However, in 1877, a Supreme Court decision (Munn v. Illinois) approved state laws regulating the prices charged to farmers for the use of grain elevators. The grain elevator company argued it was a person being deprived of property, thus violating the Fourteenth Amendment's declaration "nor shall any State deprive any person of life, liberty, or property without due process of law." The Supreme Court disagreed, saying that grain elevators were not simply private property but were invested with "a public interest" and so could be regulated.

One year after that decision, the American Bar Association, organized by lawyers accustomed to serving the wealthy, began a national campaign of education to reverse the Court decision. Its presidents said, at different times: "If trusts are a defensive weapon of property interests against the communistic trend, they are desirable." And: "Monopoly is often a necessity and an advantage."

By 1886, they succeeded. State legislatures, under the pressure of aroused farmers, had passed laws to regulate the rates charged farmers by the railroads. The Supreme Court that year (Wabash v. Illinois) said states could not do this, that this was an intrusion on federal power. That year alone, the Court did away with 230 state laws that had been passed to regulate corporations. [emphasis mine]

By this time the Supreme Court had accepted the argument that corporations were "persons" and their money was property protected by the due process clause of the Fourteenth Amendment. Supposedly, the Amendment had been passed to protect Negro rights, but of the Fourteenth Amendment cases brought before the Supreme Court between 1890 and 1910, nineteen dealt with the Negro, 288 dealt with corporations. [emphasis mine]

The above and this excerpt below are from Howard Zinn’s Robber Barons and Rebels.

When Grover Cleveland, a Democrat, ran for President in 1884, the general impression in the country was that he opposed the power of monopolies and corporations, and that the Republican party, whose candidate was James Blaine, stood for the wealthy. But when Cleveland defeated Blaine, Jay Gould wired him: "I feel ... that the vast business interests of the country will be entirely safe in your hands." And he was right.
One of Cleveland's chief advisers was William Whitney, a millionaire and corporation lawyer, who married into the Standard Oil fortune and was appointed Secretary of the Navy by Cleveland. He immediately set about to create a "steel navy," buying the steel at artificially high prices from Carnegie's plants. Cleveland himself assured industrialists that his election should not frighten them.

Lest we think electing a Democrat would have made much of a difference then (as with the current political climate), I cite the Democratic President Grover Cleveland,

"No harm shall come to any business interest as the result of administrative policy so long as I am President ... a transfer of executive control from one party to another does not mean any serious disturbance of existing conditions."

That could easily be Clinton or Obama. Bet on it.

One of the best videos I have watched in the last four years is “The Corporation.” If you haven’t seen it, you might want to check out the trailer here. It was profoundly moving for me. It doesn’t mean I won’t give the election a go. I’ll vote, but the reasons to do so are dwindling. I feel I am largely going through the motions. The corporations have always been around and they now have surpassed most all world governments. I will continue to make noise and to work at mastering my own life.