PUBLISHED WEEKLY VOLUME 11, NUMBER 45 MONDAY NOVEMBER 24. 1997
CORPORATE CRIME REPORTER
INTERVIEW WITH RICHARD GROSSMAN,
PROGRAM ON CORPORATIONS, LAW AND
DEMOCRACY, CAMBRIDGE, MASSACHUSETTSIn the late 19th century, the Nebraska Supreme Court declared that "it is doubtful if free government can long exist in a country where such enormous amounts of money are . . . accumulated in the vaults of corporations, to be used at discretion in controlling the property and business of the country against the interest of the public and that of the people for the personal gain and aggrandizement of a few individuals."
The court was reflecting the dominant public view of corporate power circa 1880. According to Richard Grossman, the corporations set out to transform the law and recreate themselves to replace the basic tools of sovereign people -- chartering, defining corporation laws, charter revocation -- with regulatory and administrative law, new legal doctrines and fines as corporate punishment.
They succeeded, Grossman argues, to the detriment of the people. Now, Grossman and a number of colleagues have formed the Program on Corporations, Law and Democracy to begin to discuss how to regain sovereignty over corporations.
Grossman has been travelling around the country, talking with activist groups about their work and how to reframe the debate over corporate power.
We interviewed Grossman on November 18, 1997.
CCR: What is the Program on Corporations, Law and Democracy (POCLAD)?GROSSMAN: I'll read to you our signature statement that we worked out last month:
POCLAD is a group of persons instigating democratic conversations and actions that contest the authority of corporations to define our cultures, govern our nations and plunder the Earth. We work in the tradition of people's struggles to replace illegitimate and tyrannical institutions with democratic ones that disperse rather than concentrate wealth and power.We are presently a group of eleven people -- a few part-time, most full time -- from around the country.
CCR: Eleven people or eleven groups?
GROSSMAN: Eleven people. And we don't have a central office. We are trying to figure out a different way of operating.
CCR: When did you start this work?
GROSSMAN: My work on corporations began in 1990 or so, when I first started to look into the history of corporations and corporate law. Before that, I was active in a variety of environmental and labor struggles. I worked with the Highlander Center, to help start the "Stop the Poisoning, Save the Planet" (STP) schools. We modeled them after the Citizenship Schools that Highlander ran for the civil rights movement. The STP schools brought scores of community groups together to talk about more effective resistance to corporate toxic assaults.
By the end of the 1980s, my sense was that citizen movements had been struggling for many generations to resist all manner of corporate harms. People educated, organized, passed laws -- all kinds of things. But the destruction kept increasing, along with the political and economic power of giant corporations. There was a need to rethink what we had been doing.
I realized that I didn't know much about corporate history, so I started researching. That led to a publication in 1993 of a pamphlet titled Taking Care of Business, written by Frank Adams and myself.
CCR: You argue that we, the citizens, decide what corporations are and what they do.
GROSSMAN: If we take seriously the constitutional theory of this country, that is what is supposed to happen. We are the people. We are supposed to be sovereign. We create corporations -- whether they are business, or government, or charitable, or educational -- to help us do our work. We are supposed to define those institutions. We have to be responsible and accountable to one another and to the future.
If we are going to create institutions, we have to define them in ways that keep them subordinate. We don't talk the language of corporate accountability and corporate responsibility. We don't talk about voluntary codes of conduct, or about asking corporate leaders to cause a little less harm. We are trying to instigate a very different kind discussion.
We started off looking at the corporation. And increasingly, we keep coming back to ourselves -- who we are as people, as human beings? We ask: what does it mean to act like sovereign people?
CCR: Yours is a critique of those citizen activists who work to reign in abuses of corporate power. You argue that the current model of citizen action to control corporate power has failed.
GROSSMAN: It is not so much a critique as it is an exploration. POCLAD is made up of gray haired people who have been politically active for a long time. We have been part of a generation of efforts to control corporate power. Now, we are looking back at what we have done.
I'm not saying all of this effort has been for naught. It has brought a growing number of people to this point where we are engaging one another about where we go from here. There are thousands of citizen groups that have formed all through this century to address specific corporate harms. And people have had enormous experience. There is no question that in some places around the country, particular harms have been abated. We know how to do that. People know how to spend ten years to stop a dump, or close a factory, or cut down some of the particularly horrible and destructive poisons.
But given the enormous authority and power of corporations, given their technological capability for destruction, I don't believe we have the time or energy to keep resisting chemical by chemical, forest by forest, one assault upon democracy at a time. Thanks to all the resistance that has taken place, we have an extraordinary opportunity to reflect on what we have been doing, and to think in different ways about our problem.
We really have a strategic crisis. Our strategies are not working. What are we seeking? How are we going about doing it? What are the arenas in which we are operating? Those are the conversations we are trying to provoke, particularly among activists and activist institutions.
CCR: How are you being received?
GROSSMAN: It varies. The larger the organization and institution, the less interest the people have in engaging us.
CCR: What would be some examples of large institutions not interested in hearing your message?
GROSSMAN: Larger environmental and labor organizations -- there has not been an huge interest in actually having conversations. Among people on the ground, groups around the country that have been engaged in struggles with corporations over human rights, health and the environment, the interest has been increasing over the last couple of years.
At the risk of self-delusion, I would suggest that the language is beginning to change a little bit. People are now starting to look at what it means to challenge corporate authority.
I just came back from Canada, where the Council of Canadians, led by Maude Barlow with Tony Clark, helped the International Forum on Globalization organize an symposium on corporate rule. About 80 people from 20 countries attended at the Canadian Auto Workers Conference Center north of Toronto.
One of the things that became clear was the shift in thought and action that has to take place. We have all been opposing corporate rule in one way or another. But how do we craft strategies that put us on the offensive to actually challenge corporate authority? It is not self-evident. It is something we have to grapple with.
At the conference, we broke out into sectors -- people working on timber, electronics, textiles, logging, energy, finance, and food. After all the groups reported back at the end of a very long day, what became clear was the corporate product didn't matter -- it didn't matter whether it was timber, or computers, it didn't matter if it was money or energy. The thread running through everything was the enormous authority protected by our government that we people had allowed these corporations to wield.
As people and as activists, we need to figure out what to do differently to challenge the authority of corporations to define our cultures, to set our values -- like efficiency and productivity -- to define progress, to define property, to define when violence is legal.
Take energy. If we as citizens try to get the utility corporations to give us a little more solar and do a little more energy efficiency -- that's nice. But a little more solar energy doesn't begin to alter public discussion about who is in charge, much less challenge the legal and cultural authority that energy corporations have. We need to challenge their authority not just to make energy policy, but to control our elections and write the laws, to buy universities and newspapers and television networks.
CCR: You say the power of the corporations is illegitimate. What do you mean?
GROSSMAN: It is not constitutional. Giant corporations are making decisions which fundamentally shape our lives. They make the big investment, technology and work decisions. Beginning after the civil war, these decisions have been increasingly declared matters of private law rather than public law. These are beyond the sovereignty of the American people. We as communities of people who come together to be self-governing, we are not participants in these decisions. We can play around the margins a little bit to try and make the decisions a little less bad -- which is what we end up doing.
But we are not in this process asking -- What is it that we want for our communities? And how are we going to structure our communities? How is work going to be arranged? Work doing what? What should the nation invest in? Who is going to define the trade-offs?
CCR: In what sense is corporate power unconstitutional?
GROSSMAN: In a literal sense. By what authority are corporations making these fundamental decisions? There is no authority. They have usurped the authority of a sovereign people. We are supposed to be making these decisions. Instead, we have created these entities and they refashion themselves and the law, and today they are making these decisions.
CCR: You have written that "during the 19th century, both law and culture reflected the relationship between sovereign people and their institutions. People understood that they had a civic responsibility not to create artificial entities which could harm the body politic, interfere with the mechanisms of self-governance, assault their sovereignty." Somehow, that changed.
GROSSMAN: Right. Up until the Civil War or so, the states had exercised their authority to define the corporations with precision, both through the individual charters and the state corporations codes. Corporations were chartered for specific purposes -- to build a road, or to produce a certain thing. There were time limits on corporate existence -- ten or fifteen years. There were limits on how much capital they could control, how much property they could own. The internal governance was precisely defined so that small stockholders actually shared in corporate decision-making. The states reserved the right to amend or revoke the charters.
Look at some of the larger charter revocation decisions of the 1890s, of some of the giant trusts during the last wave of states asserting their rights over corporate power -- the New York v. North River Sugar Refining Company, Nebraska v. Nebraska Distilling Company, and Ohio v. Standard Oil Company. The decisions reflect the 19th century view that these corporate creations of the people had screwed up the civic order. These corporations had become so invasive that they were preventing the democratic process from functioning. In order to set the public order right, these corporations had to be expunged.
It was not a question of punishing the corporations. It was a matter of protecting the sovereign people, protecting the body politic, preserving the opportunity to have a democratic process.
In the last decade of the 19th century, and into the 20th century, the corporations transformed the law and transformed themselves. So rather than our defining them, they became the authority to define us.
With the backing of the federal courts, they created a whole realm of private laws dealing with property, investment and work. The whole regulatory structure that developed over the 20th century conceded that the giant corporation would be the defining institution of our society and that the regulatory laws would prevent their excesses and try to perfect the market and serve as barriers between the corporations and the people.
One of the great differences between the Populists of the 1890s and the Progressives was that the Populists refused to concede that the giant corporation was inevitable, that it was going to be the most efficient mechanism for production and progress, and that the best we could do was make it a little less bad.
Progressives did concede all of this, as did the New Deal. When I came to Washington in 1976 and jumped right into to what folks were doing, that was the political, social thought context -- we would try to get regulatory laws passed, dealing with corporate behavior, and then spend years enforcing them. I certainly didn't meet people who were talking about defining the very nature of the corporation.
CCR: Let's look at Exxon, one of the largest corporations in the world. The traditional public interest groups would say -- this company has a criminal record, it pollutes the atmosphere and these wrongs must be punished and curtailed. If we correct their wrongs, we would live in a better world. You are saying that we should control Exxon?
GROSSMAN: Corporations have wealth and power because they are backed by the state, because the laws protect them. If I go on Exxon corporation property to try to prevent it from doing harm, the police will arrest me -- they won't arrest Exxon for polluting.
CCR: Although Exxon was convicted of environmental crimes. The state did prosecute Exxon for crimes.
Are you saying that if "the people" controlled Exxon, Exxon would be a better oil company?
GROSSMAN: To the extent that people decide we need oil and want oil and oil products, we would have to create the institution that would do that. To oversimplify a little bit, we would say, "Your job is to find oil, dig it up, refine it, get it to where it needs to go. Your job is not to write the environmental laws. Your job is not to write the worker laws. Your job is not to educate people on how to use energy. Your job is not to tell us the future. Your job is not to influence how we think. Your job is not to lobby. Your job is not to get involved in any elections. Your job is not to give charitable contributions. Your job is not to endow chairs in universities. Your job is to get the oil and bring it back. Your job is not to be a cultural, political institution.
We would have to create the kind of institution that would be subordinate and be very limited in order to do what we wish it to do.
CCR: So, how do we go about redefining Exxon?
GROSSMAN: It can't happen in a vacuum. There needs to be a movement in this country that is about people redefining themselves and therefore redefining all the institutions that we create.
Exxon right now is creating a lot of harm at many levels -- physically to life and the planet, and also politically, socially and culturally, because of the sophisticated way in which it uses its money and influence to warp how people think; to manipulate elections; lawmaking, law enforcement, research, education; to inhibit transitions to less destructive energy systems and greater democracy.
So, the question is a strategic one, whether you are dealing with Exxon, Maxxam, or Chase Manhattan Bank. Now, people are resisting the harms one at a time. We have to continue to do our work resisting these harms, because these harms are killing people and the planet. But how do we do our work to not only resist the harms, but begin to challenge the authority of these corporations to wield so much power, to take away their governing, power. That is what POCLAD is encouraging people to grapple with.
How would groups mobilize or strategize to cut down Exxon Corporation's polluting in ways that challenge its First Amendment protections, its authority to own other corporations, its authority to give charitable contributions.
How do we hold debates in this country about property rights? Property is a social construct, just like personhood has always been a social construct. Legal violence is a social construct. The right-wing corporate ideologues have been adept at couching their claims to authority in the language of property and political liberty.
Property has always been a political construct. Federal courts in the late 19th century declared that corporate decision-making was private property. This is what the American people have been taught to believe today. We are so far from having a healthy debate on all of this. It would be a blessing -- it would be a revelation -- if unions and environmental groups, for example, started challenging corporate claims that their decision-making was private property protected by the Constitution.
It is essential for activists to take the initiative on a slew of local authority and local control issues. Think what would happen if municipalities began laying out the terms on which they would permit corporations to do business within their jurisdictions!
CCR: What is MAI?
GROSSMAN: It is the multilateral agreement on investment. It is coming down the line. The OECD countries have put together this international agreement on finance. It gives investors all kind of property rights that would subordinate the laws, traditions and history of each of the countries that signed on. It would legitimate a slew of corporate values and move arenas of decision-making further and further from our communities and our states.
CCR: Someone described MAI as moving corporations from the status of personhood to the status of statehood.
GROSSMAN: It is giving them a whole new set of rights backed by the state. It gives to institutions of foreign capital and property -- global corporations -- the right to go anywhere, do anything, no matter what the people of a particular area or region want.
It is a very clear delineation of rights and powers that corporations, in fact, already have taken in the United States.
I'm glad Congress didn't vote for fast track. But that vote does not reveal a new people's offensive against corporate authority. Corporations already have a free trade zone in this country. They already can rely upon the federal government to prevent and undermine communities and states from defining corporations operating in their areas and their regions. They are strong enough to boss our governments around. NAFTA and MAI are only mechanisms to get governments to be the enforcer for giant corporations.
The East India Company, at the height of its power in India, still kept going around to the states that hadn't given them charters and asked for a charter. But they were still already clearly the most dominant entity on the subcontinent of India. But they still needed additional charters.
Corporations are the dominant institutions of our era. They define the culture as well as the economy. They define how we think. They define how we resist them. They define our aspirations. They write our history. They get us speaking their language -- the language of sales and deceit.
CCR: Why would they want to go through this effort to codify what they have?
GROSSMAN: Why did they need to get the courts to declare them legal persons? Why did they need to design a whole century of regulatory laws which they sometimes even pretended to fight? They wanted to interpose the state between them and we the people.
The smartest among them also understand that as long as they keep the citizen groups on the defensive, fighting corporate harms one-by-one, fighting their next NAFTA, GATT, MAI, they keep us from going on the offensive. They keep us from strategies that challenge their authority. They even have us believing that when we ban one chemical, or stop a dump here, or stop a factory there, or pass some little thing like the Maine Clean Elections law, it is a great setback for the corporations.
As long as they keep us thinking that way, then we are not thinking about who we are as people, we are not thinking about our sovereign authority, and we are not aspiring to the revolutionary idea of self-governance. As long as we are not challenging corporate authority to govern, then we are always on the defensive, we are always fighting the symptoms.
CCR: The Maine law says that if you agree not to take any outside money, the state will finance your campaign. What didn't you like about the Maine election law?
GROSSMAN: It's not that I didn't like it. It was a grand diversion. One of the main barriers to dealing with elections in this country is a series of Supreme Court decisions that declared that money is a form of speech and therefore protected by the First Amendment. The people who set out to write the Maine initiative have acknowledged that they didn't want to deal with that. And so they didn't deal with that.
Basically, the law doesn't address the legal doctrines which give [a] corporation personhood. It doesn't ask -- should non-humans have any role whatsoever in the election process? It doesn't ask how we can increase the ability of working people to run for office.
CCR: So, Maine is not better off because of the law?
GROSSMAN: It might help some decent people who already can run for office now to win. But it didn't open up a debate. There was no opposition to the initiative in Maine, except from the American Civil Liberties Union. The corporations didn't oppose it. Mainers call it the stealth initiative.
On the same ballot was an anti-clearcut initiative in which the timber companies put in a couple of million dollars. And you had a big debate in Maine that is still going about what Mainers should do about their lands, and all of the questions that come up when a few corporations own ten millions acres of Maine -- about a third of the total land mass.
The clearcut initiative triggered a debate that has caused wonderful ferment. The election initiative triggered nothing. And now, because a number of foundation corporations have put some money in it, it is being taken around the country as the answer to our problem. Groups in several states are attempting to put similar initiative[s] on the ballot without taking time to reflect.
CCR: You were at the Oregon Public Interest Environmental Law Conference in 1996. You spoke to hundreds of people there. People were energized by your talk. Where else in the country do you see citizens being energized by this idea?
GROSSMAN: In the Pacific Northwest, certainly there is action. People are experimenting with different approaches. Last year, Montana activists passed a ballot initiative banning non-humans from contributing to future ballot initiatives. A group in Oregon is trying to do the same thing. In a short period of time, the political language is changing, where people are talking about the distinction between the political rights of humans and the non-political rights of corporate entities.
We have spent much time in northern California doing strategy sessions with local groups who are developing plans to pass local ordinances to define corporate operations. We can sense that the level of interest and activity is intensifying.
CCR: Out of these sessions on strategy, there have been some practical steps people have taken. In Pennsylvania, Tom Linzey sought to get the state to revoke the charter of one company -- Waste Management. Any other concrete actions being taken?
GROSSMAN: Thinking is a form of action. And there is lots of rethinking going on now.
Tom Linzey's work was important, but it took place in an organizing vacuum. Linzey had no statewide organization. He ended up in court alone. It was valiant. It was helpful and informative. It was great to force Waste Management's lawyers to respond to the allegations. We learned through the process.
But absent a movement and ferment, it becomes an exercise in futility. To do it once is an educational experience -- to keep doing it doesn't make a lot of sense.
It took corporations a century to attain their current level of power and authority. It is going to take us a while. Maybe in a couple of years, it won't seem so crazy, so radical, for citizen groups to demand that corporations have no role in elections, no role in making laws, no role in education and that we the people have to strip corporations of their claim to political rights. I think we are going to see people amending state corporation codes, amending corporate charters, and banning corporations from their communities. Maybe, in the not too distant future, we will see corporate leaders coming to activist groups and asking -- "Please, tell us what you would like us to put in our charters so that we can do business in your community."
CCR: If citizens pass a law banning corporations from participating in elections, then you get the corporate lawyers taking it to the U.S. Supreme Court, which will strike down the law.
GROSSMAN: Whether the courts strike it down or not depends on how much ferment there is. Of course the corporate lawyers will take any significant challenge to the courts. They took the National Labor Relations Act to the courts. They took the Minnesota Mortgage Moratorium to the courts. They took the Occupational Safety and Health Administration to the Supreme Court. If we are going to the Supreme Court, we might as well go over the question of who is in charge -- the people or the corporations.
When this is happening in many states, when this is the common parlance about how do we address corporate interference in our elections, and there are people in organized groups in many states doing this, and the climate starts to change, and the language changes, and the culture changes, then there will be change. The courts will come around last on this, as they usually do. When the culture changes on this, the courts will change.
Then there is the question of lobbying. How would we redefine the lobbying question? Well, corporations should have no role in influencing legislation. That means we have to contest all these corporate front groups -- like the Chemical Manufacturers Association and the Chlorine Council. And we have to get them out of our legislatures. And we have to take away their legal authority.
We shouldn't shy away from struggles over power. We need to provoke these fights in order to instigate a national ferment about the proper role of corporations in a democracy. We want to provoke those fights. We want to address the role of giant corporations in our society.
How about the press? At activist strategy meetings, there always was a workshop on how to curry favor with reporters so they will cover our issues, so that you can get a little mention of some corporate wrong in the press.
General Electric Corporation owns NBC, Disney Corporation owns ABC, Westinghouse Corporation owns CBS, the New York Times Corporation is a $10 billion corporation that owns forests and radio and television stations. Are they merely the press? Should they have unrestricted First Amendment rights?
We need to stop believing that all corporate claims to constitutional rights and privileges can never be challenged or revoked.
Up until the last 100 years, corporations were prohibited from owning stock in other companies. They were prohibited from giving charitable contributions. They were limited in size.
It took 100 years for the corporations to redefine themselves, to define us, and to consolidate their power under the law. And it is not going to be undone quickly.
We are all fighting corporate rule, but what does it mean to challenge corporate power and authority? That is a difficult leap to make.
But you don't need the whole country to create a movement. We are targeting the activist community. We still haven't spent our time on mastering what it means to have a democracy.
CCR: The nuclear industry was effectively defeated by a mass social movement that effectively perfected a democratic revolt.
GROSSMAN: People built a movement. There was an anti-nuclear safe energy movement. It was a political, cultural, artistic movement. But we blew it at the end.
It took a decade or so to go from arguing for safer nukes to demanding no nukes. Starting in 1968, a few scientists like John Gofman and Arthur Tamplin and some others were saying, we think we can make these safer. But it took the rabble to come along over this ten-year period, educate themselves about the technology, the economics and the alternatives and to transform the demand to a simple "no nukes." By 1976, the little sun decal said "no nukes." Almost everybody in the world knew what that meant. A political movement had created a significant shift in the culture.
But we blew it. We let the struggle come to Washington, D.C. before we were prepared to go to the next level, which should have been the question of ownership and control of energy.
We got bogged down in technical quibbles and let some of our friends in the big environmental organizations derail the movement. They thought nukes had been stopped now, and these big corporations are going to bring us solar energy and energy efficiency, and to start to talk about property rights would bring down the wrath of God.
Today, we don't have much solar, we don't have much energy efficiency and the energy and manufacturing companies are rewriting the rules in every state under the framework of deregulation. The whole notion of what a public utility was created to be -- to serve the people -- is so far from our historical and cultural memory that the utility corporations like Pacific Gas & Electric are walking away not only with vast bundles of ratepayer cash, but with even more special privilege to govern over us.
Because we weren't smart enough 20 years ago to force the issue of ownership and control onto the table, we now have this pathetic attempt by well-meaning people around the country to say "all right, since they are going to deregulate, let's use competition to help protect the health and the environment." That is just B.S. It's not competition that we want. It is subordination of the utility companies that we need. We must take the authority to define all energy companies.
CCR: When you say authority, you mean a perfected regulatory regime?
GROSSMAN: No, I don't mean that at all. I'm not talking about better public utility commissions. I'm talking about other ways to structure these corporations, about denying these corporations the political and civil rights of persons, and I'm talking about we the people learning how we can wield our legitimate authority to keep these and all corporations truly subservient.
CCR: It is not what the corporations do wrong, it is what they do well that is the problem.
GROSSMAN: That's right. As long as we don't think and act like sovereign, self-governing people, we'll continue to be subordinate and subservient to corporations -- what Thomas Hobbes called these worms in the body politic.
Russell Mokhiber is editor of the
Corporate Crime Reporter.
Contact 202/737-1680 or russell@essential.org.
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