Killing corporations

A movement is quietly taking shape, in Seattle and other cities, to boldly challenge the power of corporations.

The idea is radical in its simplicity: to take on the rapidly expanding power of corporations by revoking their original charters. Corporations may be globetrotters but they all originate somewhere. In the US, there are laws that provide for revocation of corporate charters if the company is violating laws or otherwise operating in ways contrary to the public interest.

Such laws haven't generally been enforced since the 1890s, when a Supreme Court decision gave corporations the same legal standing and constitutional protections as human beings. All of thelegal momentum since then—with a generous assist from well-heeled lawyers—has been toward expanding the rights and protections given theseartificial creations.

In the late 1990s, that may be beginning to change. Two groups of activists in Seattle are in the early stages of crafting initiatives. One would have the city examine the impact of corporations on our ability to govern ourselves; the other would impose a "three strikes" law on city dealings with corporations that have violated the law. The efforts are based on the recent history of a host of developments that, in the past two years, has sought to reclaim the power local governments, and voters, have over corporations:

* In May 1998, New York Attorney General Dennis Vacco began corporate charter revocation proceedings against the nonprofit Council for Tobacco Research and the Tobacco Institute Inc., calling them "shills" for tobacco corporations. In October, he won the revocation of the council's charter, forcing it to close and forfeit most of its assets, which are to be turned over to a state university and a public institute. The Tobacco Institute is still fighting the proceeding.

* In November, New York voters replaced Vacco with Eliot Spitzer, who campaigned on a platform unheard of since the last century: "When a corporation is convicted of repeated felonies that harm or endanger the lives of human beings or destroy our environment, the corporation should be put to death, its corporate existence ended, and its assets taken and sold at public auction."

* In June 1998 in Alabama, circuit court judge William Wynn applied as a private citizen for a writ of quo warranto. Quo warranto hearings (Latin for "by what authority") call corporations to account for their harms or failures, and if found ultra vires ("beyond their authority"), their charters can be amended or revoked. Wynn filed against the four tobacco companies that had settled in a class action lawsuit with 46 states. He cited Alabama child abuse laws that were allegedly violated in the targeted marketing of tobacco products to minors. The four corporations have requested that the hearing be moved to the federal courts, where they expect they'll get a more favorable response.

* In October 1998, the town council of Wayne, Pennsylvania, passed into law an ordinance that prohibits corporations from doing business in the township which have a history of consistently violating regulatory law at the municipal, county, state, or federal level. The ordinance also prohibits corporations from doing business in Wayne that have on their board of directors any person who currently sits on the board of any other corporation that has a history of consistently violating regulatory law. The law has thus far survived legal challenges.

* In November, South Dakota voters approved an initiative that put into the state constitution an amendment that bans non-family farm corporations from owning farmland or engaging in farming or ranching. Nebraska already has a similar constitutional provision, and nearly a dozen other Midwestern states have similar laws.

* In the college town of Arcata, California, voters last fall resoundingly passed an initiative that calls for Arcata to explore ways in which it can rein in corporate malfeasance. The passage of Measure F has generated an enormous amount of publicity for the idea that cities and towns can discuss ways to support democracy and local businesses by challenging the power of large transnational corporations. Activists in a number of other West Coast cities are now drawing up similar initiatives.

* Last September, 30 organizations petitioned California's attorney general to initiate charter revocation proceedings against Unocal (Union Oil of California). The petition identifies 10 counts of significant harms caused by Unocal, including environmental devastation in California and Southeast Asia; complicity in crimes against humanity in Afghanistan, Burma, and Canada; illegal labor practices in California; usurpation of political power in Burma, Afghanistan, and the United States; and deception of the courts, shareholders, and the public. With the election of a new, Democratic attorney general in November, the petitioners refiled in April to revoke Unocal's charter.

These incidents are adding up. In particular, Arcata's Measure F and the Unocal petition, which came from grassroots activists, have encouraged other activists to explore the idea of corporate charter revocation. An Arcata-style initiative is nearing the ballot in Olympia. The Canadian magazine Adbusters is now leading a campaign to revoke Philip Morris' charter in New York state. Even two years ago, such an idea would have seemed preposterous.

It's still unlikely, of course, that transnational corporations, with their global assets and armies of lawyers, are going to start finding themselves dismantled any time soon. But in an era when people's food, housing, health care, education, and very government seem to be held captive to the profit motive, some sort of conversation on how this is shaping our society is long overdue. An initiative that would force corporations to justify themselves not just by how their profitability impacts shareholders, but by how their actions impact the public at large, would be a tremendous step forward.

Trade-obsessed Seattle, proud home of the public-private partnership, may soon have a chance to examine just how useful such approaches really are.

 
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