Issue #73

Last Update May 20, 2013

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National and International Corporations are People by Gert Innsry May 1, 2013   Since the Supreme Court has ruled that corporations are people, we should explore fully the implications of this ruling. In addition to rights, people have responsibilities and obligations under the law. A criminal conviction, for example, carries penalties, some of which are mandated by the law establishing the crime, and limiting a judge's discretion in prescribing punishment.

To what extent does our legal system actually act as if corporations are people? British Petroleum has  pleaded guilty to criminal manslaughter, and the plea has been accepted by the judge hearing the case. BP was sentenced to pay a fine of 1.4 billion dollars. Is this congruent with BP  being a person? A real person would face prison time in addition to fines. If corporations are people, why aren't they subject to "people" penalties?

You can't put a corporation in jail, as a practical matter. It wouldn't fit, even if the corporation only had one location. Some real people, however, are imprisoned in odd ways. House arrest and supervised release are just two of the methods that have been used to "imprison" individuals without actually keeping them in jail. Corporations could lose their freedoms in similar manner.

People penalties that would apply to corporations:

1. The death penalty. The corporation would be dissolved, with all assets going to the governmental body administering the penalty. These could be later sold off or disposed of under organ-donor rules. This penalty would would be appropriate for murder, treason, or death of a police officer or government official. The Board of Directors and senior management of the corporation would be required to give back all bonuses and other non-salary remuneration earned over the past five years. Their stock, of course, would become worthless.
2. Imprisonment for a period of years. The corporation would be put into receivership and run by an administrator appointed by the government assessing the penalty. All crimes for which individuals could be imprisoned would fall under this penalty. During the period of imprisonment, the company, if public, would be delisted. No transfer of company stock (except by inheritance) would be permitted. Any declared dividends would go to the state or federal government. The Board of Directors and senior management would be fired without severance compensation.
3. Commitment due to reason of insanity. A corporation deemed to be a danger to itself or others, or pleading diminished capacity to a criminal charge, could be committed to a mental health facility (as an outpatient, obviously). The period of commitment would depend on the findings of a panel of psychiatrists (or, better,  industrial psychologists) that the patient has been stabilized and is no longer a danger to society. During the period of commitment, the corporation would continue to be run by its Board and senior management, all of whom would be required to see court-ordered psychiatrists or psychotherapists to get them to explore the antisocial tendencies that put the corporation at risk in the first place. Company stock could be traded. Any dividends would be captured as psychiatric fees.
4. Misdemeanor and felony fines. Misdemeanor fines would be paid as under present law. Felony fines would be required, in aggregate (for multiple instances of a particular criminal behavior), to at least equal twice the total benefits derived from the criminal behavior, as determined by a government accountant. Repeat offenders (criminal behavior repeated after being found guilty of the same felony offense) would be subject to confiscation of their annual profits for the period of years that the behavior covered.
5. Civil charges brought by a government agency would have to be approved by a special state or federal court devoted to such matters. In absence of such approval, such matters would automatically be prosecuted as criminal.

If corporations want to be deemed person, they should assume the burdens of personhood. (A corporation, depending on state law, should not be permitted to purchase liquor until it has reached the age of twenty-one, which would certainly prove a hardship to restaurant. Perhaps, after the corporation becomes eighteen years old, it should be given one vote, as well. )

Little or no change to existing laws need be legislated, since the mere act of accepting personhood would make people penalties apply.

Any corporation not willing to bear these burdens and responsibilities should be allowed to renounce its personhood, restricting its activities under Citizens United. This renunciation should hold for all subsidiary and successor entities.

Be careful what you wish for, corporations. You may not like the results.