US POLITICS AND CORPORATE SPEECH: A TWO-EDGED SWORD: History suggests that boards think carefully about the side effects of corporate political patronage.

• Author: Sylla, Richard
• Position: RED CORP, BLUE CORP?

In its 2010 Citizens United decision, the Supreme Court gave corporations relatively unlimited free-speech rights to spend corporate funds for political causes and candidates. A part of the majority's reasoning was that if corporate media entities--for example, The New York Times, The Wall Street Journal, Fox News and CNN--have undeniable First Amendment rights to endorse causes and candidates, why should non-media corporate entities be denied the same rights?

In essence, the court based its decision on reasoning that corporations are associations of individuals and so ought to have the same free-speech rights as individuals, that spending money on politics is a form of free speech and that corporate political spending was not and would not be seen as corrupt.

Regardless of one's opinion of the court's decision, it is worth pointing out that having a right does not mean one has to exercise it. American citizens have a right to keep and bear arms, but many of them don't. They have a right to vote, but many don't.

U.S. history suggests that corporate executives and boards might want to think long and hard before exercising the rights granted by Citizens United. They should take note of what President Theodore Roosevelt said in his first annual message to Congress in 1901:"Great corporations exist only because they are created and safeguarded by our institutions, and it is therefore our right and duty to see that they work in harmony with those institutions." Roosevelt reminds us that corporations are "legal-person" creatures of government, not "We the People" who created our governments. Citizens United, in holding that corporations are just like people and have the same rights as people, is antithetical to Teddy Roosevelt's view of corporations.

Banks were the first large corporations in the United States. In the early decades of our history, they were created by individual acts of legislatures, which involved the banks in politics. Corruption became rampant, as would-be banks paid politicians to grant corporate charters and existing banks paid politicians not to do that, so as to avoid more competition. By the 1830s and 1840s, public opinion turned against this corruption, leading to free-banking laws that removed bank chartering from legislatures and made it an administrative function of government with more open access. What had been good for existing banks and the politicians who supported them for a "fee" was not so good for the...