CITY HALL ‚Äî Elected officials appear ready to back a nationwide movement to amend the U.S. Constitution so that corporations would not be afforded the same rights as people and therefore not be allowed to spend an unlimited amount of money on political campaigns.
In April, the City Council ordered its attorneys to draft a resolution in support of the Move To Amend Campaign, which aims to establish that money is not a form of protected speech under the First Amendment and that inalienable rights belong to human beings only, not big businesses or unions.
A resolution is ready for the council‚Äôs adoption, which could come Tuesday night.
The campaign against “corporate personhood” gained momentum following the controversial 2010 U.S. Supreme Court decision in Citizens United v. Federal Election Commission that rolled back limits on corporate campaign spending, essentially allowing businesses and unions to spend as much money as they wanted on political campaigns as long as they did not coordinate their efforts with candidates or their campaign staff. The court ruled in a 5-4 decision that funding campaign advertising amounted to free speech.
Opponents, including members of the Santa Monica City Council, argued that since corporations and unions have millions, sometimes billions, to spend that they had an unfair advantage. Rallies were held across the country on May 10 calling for an amendment to prohibit corporate contributions to campaigns.
The council in March of last year voted to adopt a resolution in support of that effort and is prepared to approve a revised version.
“We are a society and a nation built on the premise of inalienable rights for all human beings,” said Councilmember Kevin McKeown. “The extension of those rights to non-human economic entities has led to environmental injustice and a distortion of our democracy. Corporations are not people, and the legal fiction that they should enjoy inherent rights beyond that for which they are chartered and contracted must end. All those rights are properly invested in and retained by the real life human beings who own corporations, but not by the corporations themselves.”
While supporters of Move To Amend are against corporate personhood, they are in favor of allowing corporations to continue to enter into contracts, sue and be sued.
That said, those opposed to Move To Amend say their effort is too broad and would strip corporations, nonprofits, even media outlets like the Daily Press, of their rights to free speech. Corporations would lose the ability to protect their property from unreasonable search and seizure without just compensation.
“How can the city achieve and maintain its goal to be ‚Äòbusiness friendly‚Äô or promote economic growth if, at the same time, it is encouraging the adoption of a constitutional amendment denying business owners basic constitutional rights,” wrote local land-use attorney Tom Larmore in a letter to the council urging them to rethink their stance and focus solely on corporations‚Äô role in the political process.
“I realize that this is little more than a symbolic vote, but those votes mean something and a support of [Move To Amend‚Äôs] proposal would send a very unfortunate signal to existing local businesses and those considering a move to Santa Monica, as well as to charitable and religious organizations,” added Larmore, who served as the chair of the Santa Monica Chamber of Commerce in 2007-08.
An amendment to the Constitution has to be proposed either by a two-thirds vote of both houses of Congress, or else by a constitutional convention convened when the legislatures of two-thirds of the states so request. The amendment has to be ratified either by the legislatures of three-fourths of the states, or by conventions in three-fourths of the states, depending on which means of ratification Congress proposes.
An Associated Press-National Constitution Center poll found that 83 percent believe there should be at least some limits on the amount of money corporations, unions and other organizations are permitted to contribute to groups seeking to influence the outcome of presidential and congressional races.
Santa Monica has a strict campaign contribution limit for City Council races, placing a cap of $325 per donor. City Hall also provides about $14,000 in taxpayer-funded support to candidates in the form of video production and TV airtime, according to a city staff report from 2011.
The City Council in March also approved the Sustainability Bill of Rights, which asserts that corporations and their leadership do not have special privileges or powers under the law that supersede the community‚Äôs rights. The act was intended to enshrine the rights of the environment and residents‚Äô rights to clean air and water. It emerged following the Citizens United decision.
Re-thinking Prop. 13
The council Tuesday will also consider supporting property tax reform that would require commercial properties to be reassessed regularly, while maintaining property owners‚Äô protections under Proposition 13.
The L.A. Times recently reported that billionaire computer magnate Michael Dell saved about $1 million a year in property taxes by exploiting a loophole in Prop. 13 when he purchased the Fairmont Miramar Hotel in Santa Monica for a reported $200 million. Dell brought on his wife and two of his investment advisors as partners. With no one taking more than 49 percent control of the hotel, the sale was not considered a change in ownership and therefore it has continued to be taxed based on the 1999 property value of $86 million, the Times reported.
Los Angeles County assessors have filed a lawsuit against Dell.
There are those who would like to amend Prop. 13, an initiative passed in 1978, so that the loophole Dell used is closed, but homeowners are still protected from significant increases in their property taxes from year to year.
Voters overwhelmingly approved Proposition 13 out of a concern that homeowners, particularly the elderly, would be forced from their houses by rising tax bills during a real estate boom. The law ensured that property taxes were pegged at 1 percent of purchase price, assessed value could rise no more than 2 percent per year, and property was reassessed to full market value only when sold.