What if the infamous Powell Memorandum was a timeless literary genre, rather than the blueprint for a recent reactionary sneak attack? What might the basic outline of a progressive Powell Memo look like today? When I want to ask such questions, I pose them to Senator Sheldon Whitehouse. This present conversation focuses on Whitehouse’s book (co-written with Melanie Wachtell Stinnett) Captured: The Corporate Infiltration of American Democracy. Whitehouse represents Rhode Island in the US Senate. He has served as a federal and state prosecutor, a business regulator, courtroom litigator, environmental advocate, and government reformer.
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ANDY FITCH: With your book’s “The Constitution’s Blindspot” opening chapter in mind, could you first describe, from a historical perspective, some of the overlooked or unanticipated dangers that corporate power poses to American democracy? Even before the Koch network’s rise, or the Citizens United decision, what case could you have made that: “Had the founders… foreseen… corporations might slip their bounds of public purpose and public control, every indication is that they would have been skeptical and suspicious of a political role for them”?
SHELDON WHITEHOUSE: I begin there because, with all of the endless drama and anxiety these days, with the news both a torrent and often a wasteland of distractions, I consider it important to sometimes step back and review first principles. So Captured starts from the proposition that our Constitution doesn’t describe any role for corporations. If you sense here some unintentional lapse or oversight, then go read the Federalist Papers. Again you’ll find essentially zero mention of corporations.
If you look back to the time of our nation’s founding, you see that corporations had a very different place in the early American economy than they do today. Corporations operated back then basically as public-purpose entities, established to accomplish a particular goal — often to acquire land and then build a canal or roadway or something similar, and maybe to maintain tolling rights for a time, to pay for this. These corporations stayed under close political monitoring and strict controls. If they got out of hand, the legislature could simply yank their ticket, and that was the end of them. If that didn’t happen, they still had a limited lifespan. So I do think it would stun our constitutional founders to see these behemoths of today’s corporate America, and their dominance in our political system. The founders understood corporations as designed to benefit human people.
Captured refers to the “great boon” and the “fantastic blessing” that corporations can provide to our collective prosperity. Though here in structural (rather than moral) terms, in which most crucial ways do relentless and remorseless American corporations differ from human persons — necessitating government restraint, to protect the public good?
Corporations are not moral beings. They don’t have a soul or conscience. They also have quite different capacities than humans. They don’t need to nap [Laughter]. They have no desire to take a break and go play with the grandchildren. They can amass enormous wealth and power beyond what any individual might acquire. They now can persist indefinitely. All of that differs from human life. All of that can benefit human life, when a corporation operates as an economic entity under proper constraints. The problem comes when this corporation jumps the rails, and steps into behaving as a political entity. It then becomes a liability for the rest of us.
For 21st-century forms of corporate rail-jumping, could we start from the 2010 Citizens United case? Could you sketch some of what makes that particular decision so procedurally problematic, so argumentatively flawed — but also so revelatory about the methods of judicial-branch gamesmanship pushing the Court to this seeming legal madness?
The Citizens United decision stands on factual errors the Court made. That leads us down two roads of critique. To start, how did the Court end up making factual errors, when an appellate court shouldn’t make factual determinations in the first place? When you go down this road, you find a very peculiar procedural path that Citizens United took through our court system. You almost can’t help sensing that strange path got paved to prevent there being any record on important questions of fact when this case reached the Supreme Court. The Court then went off and got these facts wrong. So from a procedural point of view, Citizens United stands out as definitely not a normal case.
Then if you follow the other road, taking up the argument in Citizen United’s majority opinion: who in their right mind, if they’ve had any experience of politics, believes that unlimited corporate spending won’t corrupt our politics? How could somebody even think that? Why would they say that? That makes no sense at all. It runs contrary to human experience and to our own history. Clearly, unregulated corporate funding can and frequently has corrupted our politics.
The Court of course did go a bit further to try to make its argument. Justice Kennedy argued that such money won’t corrupt because we have two safeguards. For safeguard one, elected officials still can act independently from this funding they receive. For safeguard two, all of this funding will be transparent to the voting public. Well, over the last decade, the Supreme Court has had ample opportunities to review cases in which those predicates of independence and of transparency have been flagrantly violated, or proven flagrantly wrong. Yet the Court has sat comfortably on this decision that allowed unlimited corporate funds to flood our politics.
What do you find equally constrictive about how the John Roberts Court has narrowed the notion of “ corruption,” basically to quid pro quo corruption? Or what makes, say, calls for mens rea reform so questionable: again in terms of prioritizing moral assessments over structural checks and balances (and all while excusing non-moral corporations from yet another category of crime and misdeed)?
One hundred years ago, Supreme Court decisions would address the health of the body politic. They would emphasize the need to protect the public sphere from pernicious influences, in some cases quite explicitly corporate influences. But thinking about corruption systemically like that seems far away from Citizens United, and from a whole recent trajectory of corruption decisions. The Court has whittled down these fundamental questions of: “How do you protect American governance from corrupting influence? What should we establish systemically in order to ensure proper democratic functioning?” The Court has narrowed these questions right down to: “Did this person in a position of authority receive a direct payment or benefit, and then immediately make a policy decision on his/her benefactor’s behalf?”
Right now, if somebody gives you $20,000 worth of luggage, or sends you on glamorous trips to New York City, and if you then call up a university’s trustees and (hint, hint, hint) casually mention this person’s stellar qualifications to get a big contract — well, you’re off the hook. That doesn’t count as quid pro quo. The Court has decided only to concern itself with corruption of the most obvious and amateurish kind. But that’s not the corruption we most need to worry about. We need to focus on the experts, the systematizers, the groups making an entire ongoing operation out of this.
For one clear example taking this topic out of the realm of political science, and into real life, look at climate change. I entered the Senate in January of 2007. For the next three years, we had constant bipartisan activity on climate change. We had hearings and discussions. We had multiple bills. We had a Republican presidential candidate himself from the Senate, who ran on a good climate platform. Then comes January of 2010, and the Citizens United decision. From that very moment until now, not a single Republican Senator has participated on any serious piece of climate legislation.
Picture an echocardiogram going up and down, up and down. Then the day of the Citizens United decision, the Senate basically has a heart attack. The echocardiogram flatlines. Within the Republican Party, the fossil-fuel industry can crush even the slightest deviation from its own party line. We’ve lost a crucial decade on climate thanks to how Citizens United has further empowered that industry.
Could you flesh out what the financial calculus looks like here for high-profit polluters — who for now enjoy not just direct federal subsidies, but also less conspicuous subsidy through the cost-free emitting of greenhouse gases (and other harmful byproducts) into our shared environment? And could you describe how certain cost-effective political interventions by these corporate polluters (say by intimidating office-holders in smaller media markets, or even just through a quiet threat or promise) help to keep the entire Republican Party in line?
Let’s start with scale. The International Monetary Fund has calculated the annual fossil-fuel subsidy in the US as about 600 billion dollars. Most of this actually comes from our government allowing the fossil-fuel industry to violate the basic market rule for negative externalities (economists’ term for pollution and other unwelcome byproducts). Every Economics 101 student learns that, in order for the market to function properly, the costs from the harms caused by a product need to get factored into that product’s price. But our supposedly market-oriented congressional colleagues pay no attention when it comes to these negative externalities imposed by the fossil-fuel industry.
To understand why they let these polluters off the hook, we need to start with that subsidy of 600 billion dollars. That allows this industry to spend enormous amounts of money on marketing and lobbying campaigns. They can set up fake think tanks that look legitimate on paper, and get quoted as authoritative sources. They can pay for phony scientists in white lab coats to pretend to do real research. They can pay prominent public-relations firms to frame the debate their way. And they can tirelessly hector, intimidate, and attack any potential dissenters.
Sometimes the fossil-fuel industry also ends up hectoring and attacking an esteemed scientist like Michael Mann. Though here, to their sorrow, they realized too late that they had grabbed a ferret by the teeth. Michael Mann has stayed relentlessly on their case. But often the industry has succeeded in these tactics, for example by wiping out the congressional career of Bob Inglis, a very conservative Republican who took a principled stand on climate, and refused to bend the knee.
That takes us into a whole further set of topics about how big special interests can use unlimited anonymous money right now to manipulate our politics. For example, in the Citizens United decision, the Court failed to comprehend the simple fact that once you’ve given a special interest the power to spend unlimited money, you’ve also given it the power to just threaten or just promise to spend its unlimited money. Whatever safety rails you may have put around the actual expenditure of money mean much less when we have no such safeguards for threats and promises. All this special interest now needs to do is subtly communicate to a candidate what it wants, and how many millions of dollars it might spend or not spend, for or against this candidate, if it doesn’t get its way.
Among the terms most needing redefinition in a post-Citizens United world, “speech” also stands out. What space has Citizens United created, for example, for immense yet shadowy political entities along the lines of the Kochs’ Americans for Prosperity: fueled by undisclosed corporate funding, fronted by phony social-welfare organizations, poisoning and distorting our public conversations in completely unaccountable ways?
Let’s look at the anonymity part. This give big special interests any number of new protections. First, it amplifies the kinds of threats they can make. Imagine, for example, Exxon Mobil coming to me and saying: “Sheldon, we’re tired of how you talk about us. We’re coming after you unless you shut up.” In a world in which Exxon Mobil has to identify themselves in every attack ad they run, I’d say: “Not a problem, dude. Come right after me. You’ll make the case for me with every dollar you spend on my opponent’s behalf.” But when Exxon Mobil can start up Rhode Islanders for Peace and Puppies and Prosperity [Laughter], they can pile on the misleading claims about me, with the public never knowing where those claims really come from.
Similarly, they have no concerns about society holding them accountable for the disinformation they spread. When a big corporation or interest group, operating transparently, has to own up to its claims, it won’t foul our public conversations the way that this post-Citizens United tsunami of slime has.
So let’s say ordinary citizens don’t ever see most of these insidious efforts on behalf of “the corporate agenda” (to cut back on regulations, reduce corporate taxes, advance extremist libertarian philosophies of governance, and cater to the policy preferences of billionaires at the expense of our collective health, safety, prosperity, and retirement). From your own position as a sitting Senator, why does it not matter much whether powerful CEOs themselves have humane or progressive personal values? Why won’t even the most high-minded companies push back against their industry’s or their sector’s or their nation’s “nefarious fringe”?
The lobbying process often reflects the lowest common denominator of an industry or sector. And this gets even worse with the enormous and very powerful multi-industry trade associations. The US Chamber of Commerce and the National Association of Manufacturers stand out as probably the worst. A recent report named these organizations as the two worst climate obstructors in America, despite having big American corporations with good sustainability policies on their boards.
People often don’t understand that Congress sees a very particular face of corporate America. We see the lobbyists, the industry associations, the huge trade associations, the front groups stood up to resemble real think tanks or scientists. Corporate America turns a quite different face to the American public. The public sees a big corporation through its CEO, its advertising, its product design, its press releases.
Those two distinct faces of corporate America rarely come into alignment. And this gets particularly problematic when someone in Congress receives the implicit message: “Look, we’ll give you tons of support, and you can be our legislative thug, and we don’t even need you right now. When we do need you, we’ll want you to go in and get the job done by any means necessary. But we won’t blow the whistle when you help that other industry over there. We may disagree with what the fossil-fuel industry has you doing, but we promise not to interfere, because tomorrow might be your day to fight for our own special interests just as vigorously and thuggishly.”
So how do appropriately calibrated regulations in fact help to promote corporate dynamism? And given the persistent threats of corporate influence, particularly as a regulatory body gets more entrenched and gains more authority, how should we think about finding the right balance between harnessing regulatory clout while impeding regulatory capture?
Well, we do have a variety of safeguards at our disposal. Most significantly, judicial review, under the Administrative Procedure Act, gives the courts a chance to examine a potentially captured entity, and gives those bringing the case a chance to point out where corners were cut, where facts were ignored, where authorities weren’t heeded, where a process failure produced a dysfunctional outcome. These reviews often work quite well. You may have noticed that during the Trump administration, particularly for the EPA and Interior, their regulatory misdeeds just keep getting blown up by the courts.
But two things have to happen for this Administrative Procedure Act judicial-review process to work. First, somebody has to possess the resources to take these claims to court. If you can’t adequately press your claims, you just get rolled. Second, you need to raise big enough concerns, and present a striking APA violation, so that the public interest gets attached to these claims. By contrast, well-funded corporate efforts can just slowly, steadily, incrementally move the regulatory outcome closer to where they want it.
Here for yet another essential component of our democracy’s proper functioning, in what ways can civil juries provide the ultimate defense against state capture in various forms? How can empowering a perpetually rotating class of non-expert citizens gum up even the most elaborate schemes to reengineer government, with corruption still stinking pretty bad when everyday Americans sense it up close? And what biggest dangers do you detect as corporate powers game our public legal system to stifle possibilities for civil-jury trials, or increasingly steer cases into private arbitration?
Let me start again from our country’s very beginnings. The founders considered civil juries a really big deal. Every colony had them. Many colonists resented the intrusion of royal British authority into our jury system. This assault on civil juries actually served as part of the casus belli for the Revolutionary War. You can see it right there in the Declaration of Independence. You can read about it in the Federalist Papers. The Bill of Rights directly puts the civil jury in this formidable, formidable role as the last bastion for defending the individual.
Everybody back then knew of corrupted kings and lords and governors who acted disgracefully. They’d already had an experience of colonial legislatures and early state assemblies behaving badly. But the notion by then had cohered that when all else fails, you still can go into a courtroom. And if you can convince 12 people (then 12 men) of the justice of your cause, then you can get your remedy — even if you’ve taken an unpopular stand, even if you don’t have much in terms of resources or support. That was the structural check.
Now scroll forward to today, with corporate powers swaggering through the Capitol, expecting everybody to roll out of their way, with this enormous new weaponry Citizens United gave them, and basically with the run of the Oval Office and most executive-branch regulatory agencies. It feels good to enter a forum already rigged in your favor. So when these corporate powers instead step into a courtroom, and have to account before a jury for having harmed somebody, for having poisoned somebody, for having wrecked something of value, all this business about “equal treatment before the law” really bothers them.
So they’ve tried to systematically disable the civil jury. Sadly, they’ve succeeded at recruiting Republican appointees on the courts to share in this goal. Despite these justices’ and judges’ talk of “originalism” and the sacred Constitution and all that, they’ve whittled this core constitutional protection of civil juries down to a nub. That gives great satisfaction to certain corporations, or certain wealthy and powerful citizens, who consider it beneath them to face the judgment of commoners.
And here again, absorbing Captured’s account of this decades-long string of stealthy corporate successes at seizing power through procedural change, I also couldn’t help contrasting those insidious maneuvers to the public, position-foregrounding tactics of many progressive activists. But what are some perhaps non-sexy, non-moralizing, brutally mechanistic, and/or abstrusely legalistic approaches to rebalancing American political power to which today’s progressives should give more time? Let’s say, for example, that the Powell Memorandum was a timeless literary genre, rather than the blueprint for a late-20th-century reactionary sneak attack. What might the basic outline of your own 2020 progressive Powell Memo look like?
It would be very simple. Its cover would read: Dark Money. You’d open it, and the only page would say: “Follow and expose dark money.”
Do you want to add to that? Or I do like conceptualist answers [Laughter].
Well if you want to track the most rampant political mischief right now, so much of it gets done by and through dark money. The bipartisan group Issue One has singled out this topic as really the central issue if we ever hope to clean up our politics. I mean, I consider the American people quite capable of making good decisions when given a true story, and when decision-making processes get carried out on a level playing field. We don’t do so great a job at making decisions when fed a pack of lies masterfully distributed across our political system and media institutions until they sound like an authentic narrative. And ridding our public conversations of this kind of bogus narrative usually means following the money.
People up to no good typically don’t want you to know about it. When you detect dark money in operation, you can assume somebody’s up to no good. And you can’t effectively participate in American democracy if you can’t accurately identify the players whose conduct you’re supposed to judge and adjudicate as a voter. It harms and insults and disempowers the American citizen to allow special interests to go about their business in this way.
So where do you see room today to bring together the vast majority of business owners who don’t benefit from this current stranglehold on our political economy? Where do you see room to empower everyday Americans who don’t want to be incessantly exploited? Where might you even bring in some conservatives turned off by billionaire-funded Tea Party stooges and spectacles? How to get these various constituencies all to see themselves as allies to a properly functioning democratic government that checks predatory corporate powers?
Good question. I think about it all the time, because in a conflict like this one, you absolutely do need to engage the adversary on the front lines — but you also need to disrupt their supply chains, and harass their command structure, and drop some troops behind enemy lines to carry out commando raids. Unfortunately, we as Democrats have trained ourselves to run to where we hear the distress, where we see fighting at the front lines. We then go run someplace else when it gets loud, and then someplace getting even louder. We should retrain ourselves to be more persistent and strategic, more inclined to target the opposing side’s infrastructure and suppliers.
We also need to recognize that dark money has produced these very strange, very striking situations in which basically 10 people (controlling 50 to 80 percent of Republican Party funding) can come together and say: “Alright, here’s the plan. You need to stop the Merrick Garland nomination. You need to save that spot just in case. It’s going to get awkward for all you Senators we fund to explain this to voters. It might not look great for you in the short term. But we consider it essential.” And then, you’ll notice, every Republican Senator lines up.
A few didn’t get the message in the first two or three days. But within a week, everybody had lined up and started marching in synch to this strange new drum. But Democrats don’t operate this way. We’re a big old cat herd. It would take forever to get us all to pivot on command like that. Many of us wouldn’t. So Republicans have this advantage, if you consider centurions to have the advantage over ballerinas [Laughter]. But we also can make this their disadvantage, because when the American public actually sees those strings get pulled, and who pulls them, then the public outrage can come crashing down on this Central Command. I think a lot of the front-line apparatus would also begin to topple. Did you watch Game of Thrones?
Let’s say that many of our readers have watched Game of Thrones.
So at the end of Game of Thrones, there’s this little girl (kind of the hero), and there’s the Army of the Dead overwhelming all of the gathered human tribes. The Night King leads this Army of the Dead. The girl has a one-on-one confrontation with the Night King. She stabs him with her special knife, and he collapses into shards. And as he falls into shards, all of those other creatures in the dead army just topple across the battlefield. Today’s Republican Party, which has come under such strict control by such a small group of self-serving eccentrics, really doesn’t need much resistance to tumble in this way. Once you undo the basic machinery, the whole thing will crumble.
Then finally, for one slightly updated 2020 angle on your book (from 2017), how does the corrosive impact in recent years of dominant digital-platform firms like Google, Facebook, Apple, or Amazon reinforce your foundational concern less with the personal ethics of CEO figureheads, and more with the structural dangers posed by concentrated power? Could Captured’s sequel (or prequel) be titled Concentrated?
Well, those powerful platforms do exploit the novelty and the sheer scale and the extensive reach of these networks to capture people’s attention, and control their information flow, and influence their decision-making. So far, they’ve exercised this power primarily in the economic and the social spheres of our lives. Only recently have they started maneuvering much more in the political and institutional spaces that I focus on in Captured. I do sense, on the frontier, a kind of echo and a red alert about the types of behavior I discuss in the book. In time, if not checked, I think these digital corporate powers will manipulate our legislative and regulatory environment just as much as (or even more than) previous companies. But they’re still pretty new to the game, and I personally just don’t see them as having built up the political infrastructure that the fossil-fuel industry has assembled right in our face, thanks to this massive subsidy it has long received.
It takes time to build that kind of operation. It definitely might be happening right now. And that actually brings us back to the weirdness of this present moment. Creeping corporate forces have infiltrated deeply into the way we write our tax code, the way we regulate, the way we protect common resources. They’ve created an atmosphere of irritation and frustration and resentment that Donald Trump has exploited to his own advantage. So now, we have two interrelated developments playing out. We have the very public, very dazzling destruction and distraction that Trump undertakes in plain view, in front of everyone, unapologetically. We need to worry about this behavior and its consequences. We need to devote ourselves to stopping him, for the health of our democracy. But our body politic also faces this serious, festering, long-term illness.
This illness has spread really, really far in the past few years, partly because corporate powers have negotiated a strategic truce with the TrumpLand folks, and partly because Trump’s endless antics have taken up so much of our time. So even with all of the sensational news, even just today, I’m glad you and I haven’t discussed Trump much until the very end. We all need to put more time and effort into recognizing that the insidious encroachment continues.
