Opinion: My Money, My Free Speech Act of 2011


Or if you prefer a community perspective, it could be the “Our Money, Our Free Speech” Act. In my last column, I suggested a law that would require approval by stockholders before a corporation could spend money on political advertising. It seems reasonable that stockholders should be the ones to make this decision, as I suspect that they would rather have the money themselves as dividends than give it to some unknown corporate VP to spend on his or her choice of candidates. I received some positive feedback on the idea, so I thought it might be worth exploring further.
This concept is in reaction to the Supreme Court`s overreaching 5-4 “Citizens United” decision that allows non-political organizations like publicly held corporations to put unlimited money into campaigns. The fundamental issue is one of property rights — why does a company I invested in because of its business potential get to spend my profits, without my consent, in support a candidate or issue that I might disagree with?
To address this concern requires defining both the process of gaining consent and the activities that require consent. To address the first point, there seem to be two ways of gaining consent that protect investors — individual opt-in, where the amount spent on political contributions depends of the fraction of op-ins, or requiring a vote, so that without majority consent, nothing gets spent.
Voting seems to be the easiest to implement, since almost all forms of organizations already have some voting structure. Corporations have annual meetings and proxy processes, partnerships have votes, etc. These processes work even if some ownership changes between the vote and the action approved by the vote, as the new stockholders or members can be made aware of prior decisions before buying in. Stock held in mutual funds, 401(k)`s, IRA`s, etc. could be voted by proxy; under this Act, all fund managers and custodians would be required to offer this option. Clearly this is not perfect, but it is far better than having no say at all.
All regulated organizations would be required to set an annual political budget to be voted on; there would be some requirements as to level of detail. There would be an exemption for organizations, like political parties, that spend a large fraction of their income on election issues, since anyone who gives them money knows that this is their purpose. But full disclosure of donors would be mandatory.
Creating a bright line to identify which activities are to be restricted could be tricky. But because this is a process of consent and not one of direct governmental regulation like most campaign finance reform, the line ought to be able to be set more restrictively — if the shareholders say “no,” then the resulting restriction ought to be very tight. My initial suggestion is any direct or indirect contribution to a political candidate or campaign, or any expenditure on activities that even identify a candidate or issue, ought to be forbidden without consent.
Since most people, whether liberal or conservative, young or old, male or female, would rather have a choice in how their money gets spent, the Act ought to have a lot of appeal. From the statistics I have found, the majority of families own stock, so it has broad application. And with wealth being increasingly concentrated in a small fraction of our nation`s citizens, there are plenty of people with a strong financial interest in regaining control over their political donations. Also, this is not a red versus blue issue. Politicians from both sides spend an inordinate amount of time and energy chasing big money for their campaigns, disenfranchising citizens from all parties.
The willingness of the Supreme Court majority to stretch the limits of campaign finance, based on the notion that “money is speech,” could be a problem for this Act. But because it includes the democratic process of voting and is based on property rights, it might be difficult to come up with an excuse to void it.
Getting some of the big money out of politics and allowing politicians to serve the people rather than their financial masters is the first step in the myriad of reforms that are necessary if our country is to ever get back on track.

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