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MORNING. IT IS SATURDAY, MAY 23RD. I'M ALI VELSHI, AND I WANT TO BEGIN THIS HOUR WITH A SIMPLE QUESTION THAT MANY OF YOU HAVE BEEN SCREAMING AT YOUR TV SCREENS FOR SOME TIME NOW. TO WHOM DOES THIS DEMOCRACY, WHOSE 250TH ANNIVERSARY WE ARE CELEBRATING THIS YEAR, TO WHOM DOES THIS DEMOCRACY ACTUALLY BELONG?
SAME QUESTION RAISED EARLIER THIS MONTH BY THE HAWAIIAN REPUBLICAN STATE REPRESENTATIVE, KAINANI SOUSA, AS SHE OPENED THE FLOOR DEBATE ON A BILL THAT EFFECTIVELY BANS CORPORATE SPENDING ON ELECTIONS IN HER STATE. IF YOU HAVEN'T SEEN SOUSA'S SPEECH, YOU ABSOLUTELY SHOULD LOOK IT UP AND WATCH IT. HERE'S A CLIP.
>> HAWAII IS NOT WAITING FOR PERMISSION. NOT FOLLOWING THE LEAD OF OTHERS. WE ARE LEADING. WE ARE MAKING HISTORY BY RESTORING A FUNDAMENTAL TRUTH. POWER BELONGS TO PEOPLE, NOT CORPORATIONS, ESPECIALLY POLITICAL POWER. FOR TOO LONG WE HAVE LIVED WITH A LEGAL FICTION THAT A CORPORATION CAN STAND SHOULDER TO SHOULDER WITH A HUMAN BEING IN THE POLITICAL ARENA THAT IT CAN SPEND WITHOUT LIMIT INFLUENCE, WITHOUT ACCOUNTABILITY, AND PROJECT A VOICE SO POWERFUL THAT IT OVERWHELMS THE VERY PEOPLE OUR CONSTITUTION WAS WRITTEN TO PROTECT. BUT HERE IN HAWAII, WE ARE NOT BOUND TO ACCEPT THAT OUTCOME AS INEVITABLE.
THIS IS A VERY BIG DEAL. HAWAII JUST DID SOMETHING REMARKABLE AND GENUINELY HISTORIC. IT PASSED A BILL INTO LAW WITH NEAR UNANIMOUS BIPARTISAN SUPPORT THAT EFFECTIVELY BANS CORPORATIONS FROM SPENDING MONEY TO INFLUENCE STATE ELECTIONS. AND IT DID THIS BY REDEFINING WHAT POWERS A CORPORATION ACTUALLY HAS. HAWAII GOVERNOR JOSH GREEN SIGNED IT ON MAY 14TH, MAKING HAWAII THE FIRST STATE IN THE NATION TO TAKE ON CITIZENS UNITED, AND DOING SO IN A WAY THAT NO STATE HAS DONE BEFORE. THIS IS GOOD NEWS, BECAUSE IT'S A MODEL THAT AT LEAST A DOZEN OTHER STATES ARE WORKING ON FOLLOWING.
NOW, OBVIOUSLY, YOU KNOW THE STORY OF CITIZENS UNITED, BUT IT'S WORTH REPEATING. IN 2010, THE UNITED STATES SUPREME COURT RULED 5 TO 4 THAT CORPORATIONS LIKE PEOPLE HAVE A CONSTITUTIONAL RIGHT, A FIRST AMENDMENT RIGHT TO SPEND UNLIMITED MONEY IN ELECTIONS. SOON AFTER THAT DECISION, THE FLOODGATES OPENED, AS YOU WOULD EXPECT. FROM 2010 TO 2024, OUTSIDE GROUPS SPENT MORE THAN $4 BILLION WITH A B ON FEDERAL ELECTIONS ALONE. DARK MONEY SPENDING BY GROUPS THAT ARE NOT REQUIRED TO DISCLOSE THEIR DONORS HIT A RECORD $1.9 BILLION IN THE LAST PRESIDENTIAL CYCLE. STATE SENATOR CARL RHODES, THE HAWAIIAN BILL'S LEAD AUTHOR, NOTING THE SCALE OF THE PROBLEM, SAID, QUOTE, IN 2006, DARK MONEY WAS LESS THAN $5 MILLION NATIONWIDE. IN 2024, THERE WAS OVER $1 BILLION WITH A B ANONYMOUSLY SPENT IN THE PRESIDENTIAL ELECTION ALONE. END QUOTE.
FOR MORE THAN A DECADE SINCE THAT INFAMOUS RULING, AMERICANS WERE TOLD THAT THERE WAS NOTHING TO BE DONE. YOU WANT TO FIX IT? GOOD LUCK. AMEND THE CONSTITUTION. GOOD LUCK. WAITING FOR A DIFFERENT SUPREME COURT. BUT A SENIOR FELLOW AT THE CENTER FOR AMERICAN PROGRESS NAMED TOM MOORE DID NOT ACCEPT THAT. AND WHAT HE CAME UP WITH IS, FRANKLY, VERY CLEVER.
MOORE'S INSIGHT WAS THIS: CITIZENS UNITED ASKED WHETHER THE GOVERNMENT COULD REGULATE A CORPORATION'S RIGHT TO SPEND MONEY IN ELECTIONS. THE COURT SAID NO, IT COULD NOT. BUT THE SUPREME COURT WAS NEVER ASKED, NOR DID IT ASK, A DIFFERENT, MORE FUNDAMENTAL QUESTION: DOES A CORPORATION HAVE THE POWER, NOT THE RIGHT, THE POWER TO SPEND MONEY ON ELECTIONS IN THE FIRST PLACE? AND THAT QUESTION, IT TURNS OUT, BELONGS ENTIRELY TO THE STATES.
HERE'S THE KEY TO UNDERSTANDING THIS. CORPORATIONS ARE NOT BORN. THEY ARE, IN FACT, CREATED BY STATE LAW. UNLIKE HUMANS WHO ARE ACTUALLY BORN, CORPORATIONS ARE CREATED BY STATE LAW. THEY ARE GIVEN THEIR POWERS BY STATE LAW. THEY ARE DEPENDENT ON STATE LAW FOR THEIR VERY EXISTENCE, WHICH IS WHY PEOPLE CHOOSE TO INCORPORATE IN VARIOUS DIFFERENT STATES BASED ON THE RIGHTS THAT THAT STATE OFFERS. ANYONE WHO EVEN HAS A SMALL COMPANY KNOWS THAT A CORPORATION IN AMERICA IS A STATE ENTITY.
CHIEF JUSTICE JOHN MARSHALL ESTABLISHED THIS PRINCIPLE IN 1819, WRITING THAT A CORPORATION IS AN ARTIFICIAL BEING, INVISIBLE, INTANGIBLE, AND EXISTING ONLY IN CONTEMPLATION OF LAW. BEING THE MERE CREATURE OF LAW, IT POSSESSES ONLY THOSE PROPERTIES WHICH THE CHARTER OF ITS CREATION CONFERS UPON IT, END QUOTE. PRETTY SIMPLE WRITING. IN OTHER WORDS, CORPORATIONS ONLY EXIST BECAUSE STATES CREATED THEM AND GAVE THEM THEIR POWERS. THINGS LIKE THE RIGHT TO OWN PROPERTY, TO SIGN CONTRACTS, TO SUE, AND TO BE SUED. THAT 200 YEAR OLD SUPREME COURT DECISION HAS NEVER BEEN SUPERSEDED.
SO TOM MOORE'S STRATEGY, HE CALLS IT THE CORPORATE POWER RESET, BUILDS DIRECTLY ON THIS CONCEPT. STATES CREATE CORPORATIONS, STATES GRANT CORPORATIONS THEIR POWER. STATES HAVE ALWAYS RETAINED THE AUTHORITY TO REWRITE THAT LIST, AND WHAT THE STATE GRANTS, THE STATE CAN TAKE BACK. SO INSTEAD OF TRYING TO RESTRICT CORPORATE SPEECH, WHICH IS WHERE CITIZENS UNITED DWELLS AND WHERE STATES HAVE LOST REPEATEDLY IN FEDERAL COURT, HAWAII SIMPLY DECIDED THAT IT WILL DECLINE TO GRANT CORPORATIONS THAT POWER IN THE FIRST PLACE. IT IS A SUBTLE DISTINCTION, BUT IT MAY BE A LEGALLY AND POLITICALLY CONSEQUENTIAL ONE. IT MAKES CITIZENS UNITED IRRELEVANT, AT LEAST WITHIN THE BORDERS OF STATES THAT ADOPT THIS NEW WAY OF THINKING ABOUT IT.
HAWAII'S NEW LAW, WHICH TAKES EFFECT ON JULY 1ST OF NEXT YEAR, REDEFINES CORPORATIONS DOING BUSINESS IN THE STATE AS ENTITIES THAT DO NOT POSSESS THE POWER TO SPEND MONEY ON ELECTIONS OR BALLOT MEASURES. IT DOES NOT ELIMINATE SUPER PACS, BUT IT CUTS OFF THEIR MOST CORROSIVE FUEL SOURCE: ANONYMOUS CORPORATE MONEY. SUPER PACS CAN STILL OPERATE, BUT ONLY ON MONEY RAISED FROM HUMAN BEINGS WHOSE NAMES MUST BE DISCLOSED.
STATE SENATOR RHODES NOTED THAT ANONYMITY ISN'T JUST A TRANSPARENCY PROBLEM. IT'S ACTUALLY A NATIONAL SECURITY PROBLEM. QUOTE. IT'S VERY DIFFICULT TO KNOW WHETHER RUSSIA OR IRAN OR CHINA ARE FUNNELING MONEY INTO AMERICAN ELECTIONS, END QUOTE. THAT'S TRUE. AND HERE'S THE IMPORTANT PART. IF A CORPORATION IN HAWAII VIOLATES THE NEW LAW, THE CONSEQUENCES ARE REALLY SERIOUS: LOSS OF TAX PRIVILEGES, SUSPENSION OF THE RIGHT TO SELL PRODUCTS TO THE STATE GOVERNMENT, POTENTIALLY THE LOSS OF THE RIGHT TO DO BUSINESS IN HAWAII ALTOGETHER.
THE HAWAII ATTORNEY GENERAL OPPOSED THE BILL, BY THE WAY, WARNING THAT IT WOULD FACE IMMEDIATE LEGAL CHALLENGES. AND SHE'S PROBABLY RIGHT. LAWSUITS ARE COMING. BUT LEGAL EXPERTS LIKE AVIAM SOIFER, THE FORMER DEAN OF THE UNIVERSITY OF HAWAII'S LAW SCHOOL, STUDIED THE MEASURE CLOSELY AND WROTE TO GOVERNOR GREEN, NOTING THAT, QUOTE, STATES HAVE EXERCISED SUCH AUTHORITY FOR OVER TWO CENTURIES, AND THE U.S. SUPREME COURT HAS AFFIRMED THIS STATE AUTHORITY REPEATEDLY, AND EVEN SKEPTICAL LEGAL VOICES ACKNOWLEDGE THAT THERE IS SOMETHING GENUINELY NEW HERE.
UNIVERSITY OF PENNSYLVANIA BUSINESS LAW PROFESSOR JILL FISH TOLD THE ATLANTIC THAT IT'S, QUOTE, NOVEL ENOUGH THAT IT'S HARD TO PREDICT HOW A CONSERVATIVE COURT WOULD REACT. SHE CALLED IT A GREAT CREATIVE INITIATIVE. WORTH NOTING THAT ONE OF MY NEXT GUESTS, THE STATE REPRESENTATIVE SOUZA, THE ONE WHO ASKED SO POWERFULLY TO WHOM THIS DEMOCRACY BELONGS, IS A REPUBLICAN. I'M NOTING THIS BECAUSE THE BILL PASSED THE HAWAII STATE SENATE 24 TO 0. IT PASSED THE STATE HOUSE 50 TO 1.
THE INCREDIBLE BIPARTISAN TURNOUT IS NOT SURPRISING WHEN YOU LOOK AT THE POLLING. A NEW POLITICO POLL FOUND THAT 72% OF REPUBLICANS AND DEMOCRATS AGREE THAT THERE'S TOO MUCH MONEY IN POLITICS. THE ROBERTS COURT MAY HAVE GIVEN CORPORATIONS THIS POWER, BUT THE PEOPLE NEVER WANTED THEM TO HAVE IT. AND HAWAII IS NOT GOING TO BE ALONE FOR LONG.
IN MONTANA, A STATE WITH A CENTURY OLD TRADITION OF FIGHTING CORPORATE INFLUENCE IN POLITICS, ACTIVISTS ARE GATHERING SIGNATURES RIGHT NOW TO RESET DIRECTLY TO VOTERS. THIS NOVEMBER, THE MONTANA SUPREME COURT HAS ALREADY CLEARED THE PATH, UNANIMOUSLY DISMISSING A LEGAL CHALLENGE FROM A COALITION OF BUSINESS GROUPS THAT TRIED TO BLOCK THE INITIATIVE FROM EVEN REACHING THE BALLOT. MEANWHILE, LEGISLATION BASED ON MOORE'S FRAMEWORK HAS BEEN INTRODUCED THIS YEAR IN 14 OTHER STATES FROM CALIFORNIA AND NEW YORK TO GEORGIA, MINNESOTA AND VERMONT. SPONSORS IN CONNECTICUT ARE PLANNING TO INTRODUCE SIMILAR LEGISLATION IN 2027.
IF STATES AS LARGE AS CALIFORNIA AND NEW YORK ADOPT THIS FRAMEWORK, THE IMPACT ON AMERICAN POLITICAL FINANCING WOULD BE, AND THIS IS NOT AN OVERSTATEMENT, SEISMIC. WE'RE LIVING THROUGH A MOMENT WHEN THE CONCENTRATION OF WEALTH AND POWER IN AMERICAN POLITICAL LIFE HAS REACHED LEVELS THAT ALARM MOST AMERICANS, REGARDLESS OF PARTY AFFILIATION. CITIZENS UNITED PLAYED A CENTRAL ROLE IN THAT, OPENING THE FLOODGATES FOR DARK MONEY, FOR ANONYMOUS CORPORATE SPENDING, FOR THE KIND OF INFLUENCE THAT MAKES ORDINARY VOTERS. I'M SORRY THAT THEIR VOICES MATTER LESS.
HAWAII JUST FOUND A WAY TO START ADDRESSING THAT, NOT BY FIGHTING THE SUPREME COURT ON ITS OWN TURF, NOT BY WAITING FOR A CONSTITUTIONAL AMENDMENT THAT MAY OR MAY NOT COME, BUT BY REACHING BACK 200 YEARS INTO THE BEDROCK OF AMERICAN LAW AND USING AN AUTHORITY THAT WAS ALWAYS THERE, ONE THAT TOM MOORE SAYS SIMPLY WENT.