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Lewis Powell, a corporate lawyer who sits on the boards of 11 corporations, writes a memo to his friend Eugene Sydnor Jr., the director of the US Chamber of Commerce. The memo, titled “Attack of American Free Enterprise System,” posits that the US business culture “is under broad attack” from a number of venues. (Reclaim Democracy 4/3/2004) Powell is a conservative Southern Democrat and former American Bar Association president who turned down a 1969 offer to sit on the Supreme Court. (Landay 8/20/2002)
Corporate Capitalism under Broad Attack - Powell is worried about “attacks” from left-wing political and social interests and organizations, whom he says want to institutionalize “socialism or some form of statism (communism or fascism)” in the stead of US capitalism, but is more concerned with a few “extremist” critics who strive for many of the same goals as the “statists.” “We are not dealing with sporadic or isolated attacks from a relatively few extremists or even from the minority socialist cadre,” he writes. “Rather, the assault on the enterprise system is broadly based and consistently pursued. It is gaining momentum and converts.” Powell points to a “varied and diffused” number of attackers, including “not unexpectedly, the Communists, New Leftists, and other revolutionaries who would destroy the entire system, both political and economic. These extremists of the left are far more numerous, better financed, and increasingly are more welcomed and encouraged by other elements of society than ever before in our history. But they remain a small minority and are not yet the principal cause for concern. The most disquieting voices joining the chorus of criticism come from perfectly respectable elements of society: from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians. In most of these groups the movement against the system is participated in only by minorities. Yet, these often are the most articulate, the most vocal, the most prolific in their writing and speaking.” Television gives these voices a prominence that their numbers and ideologies should not have, he says. Powell cites university campuses and the national news media as the most troublesome and “dangerous” sources of anti-business sentiment. He cites consumer advocate Ralph Nader as “[p]erhaps the single most effective antagonist of American business,” a “legend in his own time” who, Powell writes, wants to “smash… utterly the target of his hatred, which is corporate power.” Nader and his colleagues want to radically revamp the corporate tax system, Powell says, to gut tax loopholes and “incentives” that keep corporate profits high and tax burdens relatively low; the same tax revisions would harshly impact America’s wealthy. Powell calls these effots “either political demagoguery or economic illiteracy,” and warns, “This setting of the ‘rich’ against the ‘poor,’ of business against the people, is the cheapest and most dangerous kind of politics.” Most corporate entities and personnel have paid little to no attention to these attacks, Powell says; he acknowledges that “businessmen have not been trained or equipped to conduct guerrilla warfare with those who propagandize against the system, seeking insidiously and constantly to sabotage it.” But, he says, this training must commence, for the survival of America’s corporate business culture.
Fighting Back - Individual businesses must designate senior executives “whose responsibility is to counter—on the broadest front—the attack on the enterprise system,” perhaps through the various corporations’ public relations departments. The Chamber of Commerce, both the national entity and its local affiliates, must take a leadership role in organizing, streamlining, and effecting these countering activities.
Countering University Opposition - American college campuses must be targeted, Powell writes, with a particular eye to social science departments, whose members “tend to be liberally oriented, even when leftists are not present. This is not a criticism per se, as the need for liberal thought is essential to a balanced viewpoint. The difficulty is that ‘balance’ is conspicuous by its absence on many campuses, with relatively few members being of conservatives or moderate persuasion and even the relatively few often being less articulate and aggressive than their crusading colleagues.” Attacking academic freedom itself would be a “fatal” mistake, Powell notes, but the “liberal” and “anti-business” voices on university faculties must be “balanced” by Chamber of Commerce speakers and scholars who challenge the rhetoric coming from the universities. College textbooks must be “evaluated” by these Chamber-employed scholars to ensure that they reflect “balance,” in many instances challenging what Powell calls the rewriting of textbooks by scholars affiliated with the civil rights movement. “If the authors, publishers, and users of textbooks know that they will be subjected—honestly, fairly, and thoroughly—to review and critique by eminent scholars who believe in the American system, a return to a more rational balance can be expected,” he writes. Powell says that “avowed Communists” make a large number of speeches and presentations on college campuses every year—over 100 in 1970 alone—and are augmented by “many hundreds of appearances by leftists and ultra-liberals who urge the types of viewpoints indicated earlier in this memorandum.” Such presentations must be “balanced” by pro-business, pro-conservative speakers, put forth “aggressively” by the Chamber and other organizations. College faculties must be “balanced” by the hiring of pro-business professors. One venue that entities such as the Chamber could successfully work through is a university’s graduate school of business. And the Chamber scholars must publish in academic journals and consumer publications such as Life and Reader’s Digest.
High School Efforts - Such efforts must be tailored and implemented on a high school level also, Powell writes.
Public Outreach - The public must be reeducated, Powell writes, to see business and corporate interests as inherently good for America. The obvious and most effective venue, he says, should be through the means of television, using educational programs, paid news analysts, and advertising as much as possible—“[i]f American business devoted only 10 percent of its total annual advertising budget to this overall purpose, it would be a statesman-like expenditure,” he writes. News forums such as Meet the Press should be constantly urged to provide “equal time” for pro-business analysts. Radio and newspaper outlets are also important for promulgating the message. Books and pamphlets made widely available are quite necessary, Powell notes.
Political Arena - Only “Marxists” insist that “capitalist” countries such as the US are controlled by big business. Indeed, Powell says, “leftist” and “socialist” interests control much of American politics, particularly in the area of messaging. “One does not exaggerate to say that, in terms of political influence with respect to the course of legislation and government action, the American business executive is truly the ‘forgotten man,’” he writes. Advocates of “consumerism” or the “environment” dominate the political discussion, Powell states. This dominance must be challenged, and Americans must be “enlightened” as to the positive role of a powerful business culture in US politics. Business must adopt some of the more direct tactics now used by US labor groups.
The Judiciary - The US judicial system, he writes, “may be the most important instrument for social, economic, and political change.” Left-wing groups have long “exploited” the judiciary for their own ends, he says; it is time for business to exert some of the same influence in the courts and fight for its own prerogatives. “This is a vast area of opportunity for the Chamber, if it is willing to undertake the role of spokesman for American business and if, in turn, business is willing to provide the funds,” he says. A large and competent cadre of lawyers is necessary to this end, trained to argue pro-business viewpoints in front of “activist” judges, and carefully selected cases should be advanced in the judicial system.
Neglected Stockholder Power - Powell continues: “The average member of the public thinks of ‘business’ as an impersonal corporate entity, owned by the very rich and managed by over-paid executives. There is an almost total failure to appreciate that ‘business’ actually embraces—in one way or another—most Americans. Those for whom business provides jobs, constitute a fairly obvious class. But the 20 million stockholders—most of whom are of modest means—are the real owners, the real entrepreneurs, the real capitalists under our system. They provide the capital which fuels the economic system which has produced the highest standard of living in all history. Yet, stockholders have been as ineffectual as business executives in promoting a genuine understanding of our system or in exercising political influence.”
The Influence of the Stockholder - Twenty million voters are stockholders, Powell says. These people can be a powerful force for pro-business change, if educated and mobilized. Individual corporations can reach out to their stockholders through their stock reports and news publications.
A New Aggression - Corporate interests must, Powell says, “attack [those] who openly seek destruction of the system. There should not be the slightest hesitation to press vigorously in all political arenas for support of the enterprise system. Nor should there be reluctance to penalize politically those who oppose it.” The AFL-CIO labor union is a past master of using this kind of political pressure, Powell writes. Its practices and techniques can be adapted to serve business ends.
Relationship to Freedom - All of this must be characterized as an essential “return” to the fundamental tenets of American freedom, Powell writes. “The threat to the enterprise system is not merely a matter of economics. It also is a threat to individual freedom. It is this great truth—now so submerged by the rhetoric of the New Left and of many liberals—that must be re-affirmed if this program is to be meaningful. There seems to be little awareness that the only alternatives to free enterprise are varying degrees of bureaucratic regulation of individual freedom—ranging from that under moderate socialism to the iron heel of the leftist or rightist dictatorship.” America is well on its way to institutionalized socialism, Powell warns. It is up to American business interests to counter that shift. (Powell 8/23/1971)
Effects - Powell’s memo triggers a seismic shift in the way business and corporate interests function, though the Chamber of Commerce proceeds more cautiously than Powell may hope. As a result of Powell’s memo and other influences, the Chamber, wealthy businessmen such as beer magnate Joseph Coors and Richard Mellon Scaife, and an array of corporate activists create, among other entities: the Heritage Foundation, the Manhattan Institute, the Cato Institute, Citizens for a Sound Economy, the Analysis and Research Association (ARA), Accuracy in Academe, the Pacific Legal Foundation, and other powerful organizations. When Ronald Reagan takes the presidency in 1981, they will begin to solidfy and extend the reach of their efforts. In 2002, progressive journalist Jerry Landay will write that Powell’s memo will spawn “a well-paid activist apparatus of idea merchants and marketeers—scholars, writers, journalists, publishers, and critics—to sell policies whose intent was to ratchet wealth upward. They have intimidated the mainstream media, and filled the vacuum with editors, columnists, talk-show hosts, and pundits who have turned conservatism into a career tool. They have waged a culture war to reduce the rich social heritage of liberalism to a pejorative. And they have propagated a mythic set of faux-economic values that have largely served those who financed the movement in the first place.” Landay calls Powell’s language and proposals “baldly militant” with “authoritarian overtones.”
Powell Joins Supreme Court - In January 1972, Powell will join the Supreme Court, where he will become regarded as a moderate-to-conservative justice, sympathetic to business interests but not unwilling to consider other points of view. (Though the press will subsequently publish leaked copies of the memo, no senator will ask Powell about his memo or his business interests in his confirmation hearings.) One of his most pro-business decisions is his majority opinion in 1978’s First National Bank of Boston v. Bellotti, in which Powell will create a First Amendment “right” for corporations to influence ballot questions. (Landay 8/20/2002; Reclaim Democracy 4/3/2004)
The US Supreme Court, in what becomes informally known as the “Keith case,” upholds, 8-0, an appellate court ruling that strikes down warrantless surveillance of domestic groups for national security purposes. The Department of Justice had wiretapped, without court warrants, several defendants charged with destruction of government property; those wiretaps provided key evidence against the defendants. Attorney General John Mitchell refused to disclose the source of the evidence pursuant to the “national security” exception to the Omnibus Crime Control and Safe Streets Act of 1968. The courts disagreed, and the government appealed the decision to the Supreme Court, which upheld the lower courts’ rulings against the government in a unanimous verdict. The Court held that the wiretaps were an unconstitutional violation of the Fourth Amendment, establishing the judicial precedent that warrants must be obtained before the government can wiretap a US citizen. (US Supreme Court 6/19/1972; Bernstein and Woodward 1974, pp. 258-259) Critics of the Nixon administration have long argued that its so-called “Mitchell Doctrine” of warrantlessly wiretapping “subversives” has been misused to spy on anyone whom Nixon officials believe may be political enemies. (Bernstein and Woodward 1974, pp. 258-259) As a result of the Supreme Court’s decision, Congress passes the Foreign Intelligence Surveillance Act. (Conyers 5/14/2003)
Opinion of Justice Powell - Writing for the Court, Justice Lewis Powell observes: “History abundantly documents the tendency of Government—however benevolent and benign its motives—to view with suspicion those who most fervently dispute its policies. Fourth Amendment protections become the more necessary when the targets of official surveillance may be those suspected of unorthodoxy in their political beliefs. The danger to political dissent is acute where the government attempts to act under so vague a concept as the power to protect ‘domestic security.’ Given the difficulty of defining the domestic security interest, the danger of abuse in acting to protect that interest becomes apparent.” (US Supreme Court 6/19/1972)
Justice Department Wiretapped Reporters, Government Officials - In February 1973, the media will report that, under the policy, the Justice Department had wiretapped both reporters and Nixon officials themselves who were suspected of leaking information to the press (see May 1969 and July 26-27, 1970), and that some of the information gleaned from those wiretaps was given to “Plumbers” E. Howard Hunt and G. Gordon Liddy for their own political espionage operations. (Bernstein and Woodward 1974, pp. 258-259)
Conyers Hails Decision 30 Years Later - In 2003, Representative John Conyers (D-MI) will say on the floor of the House: “Prior to 1970, every modern president had claimed ‘inherent Executive power’ to conduct electronic surveillance in ‘national security’ cases without the judicial warrant required in criminal cases by the Fourth Amendment to the Constitution. Then Attorney General John Mitchell, on behalf of President Richard Nixon sought to wiretap several alleged ‘domestic’ terrorists without warrants, on the ground that it was a national security matter. Judge [Damon] Keith rejected this claim of the Sovereign’s inherent power to avoid the safeguard of the Fourth Amendment. He ordered the government to produce the wiretap transcripts. When the Attorney General appealed to the US Supreme Court, the Court unanimously affirmed Judge Keith. The Keith decision not only marked a watershed in civil liberties protection for Americans. It also led directly to the current statutory restriction on the government’s electronic snooping in national security cases.” (Conyers 5/14/2003)
The US Supreme Court, in a 7-2 decision, legalizes abortion on a federal level in the landmark case of Roe v. Wade. The majority opinion is written by Justice Harry Blackmun; he is joined by Chief Justice Warren Burger and Justices William O. Douglas, William Brennan, Potter Stewart, Thurgood Marshall, and Lewis Powell. Justices Byron “Whizzer” White and William Rehnquist dissent from the opinion. Blackmun’s majority opinion finds that the 14th Amendment’s guarantees of personal liberty and previous decisions protecting privacy in family matters include a woman’s right to terminate her pregnancy. White’s dissent argues that the Court has “fashion[ed] and announce[d] a new constitutional right for pregnant mothers and, with scarcely any reason or authority for its action, invest[ed] that right with sufficient substance to override most existing state abortion statutes.” The decision does not make abortion freely available to women in any stage of pregnancy. It places the following constraints:
No restrictions on availability are made during the first trimester (three months) of a woman’s pregnancy.
Because of increased risks to a woman’s health during the second trimester, the state may regulate the abortion procedure only “in ways that are reasonably related to maternal health.”
In the third and final trimester, since the rate of viability (live birth) is markedly greater than in the first two trimesters, the state can restrict or even prohibit abortions as it chooses, “except where it is necessary, in appropriate medical judgment, for the preservation of the life or health of the mother.”
Originally brought to challenge a Texas law prohibiting abortions, the decision disallows a host of state and federal restrictions on abortion, and sparks an enormous controversy over the moral, religious, and legal viability of abortion that continues well into the 21st century. (ROE v. WADE, 410 US 113 (1973) 1/22/1973; Mears and Franken 1/22/2003; National Abortion Federation 2010) In a related case, Roe v. Bolton, the Court strikes down restrictions on facilities that can be used to provide abortions. The ruling leads to the establishment of so-called “abortion clinics.” (CBS News 4/19/2007)
The Supreme Court case Buckley v. Valeo, filed by Senator James L. Buckley (R-NY) and former Senator Eugene McCarthy (D-WI) against the Secretary of the Senate, Francis R. Valeo, challenges the constitutionality of the Federal Election Campaign Act (FECA—see February 7, 1972 and 1974) on free-speech grounds. The suit also named the Federal Election Commission (FEC) as a defendant. A federal appeals court validated almost all of FECA, and the plaintiffs sent the case to the Supreme Court. The Court upholds the contribution limits set by FECA because those limits help to safeguard the integrity of elections. However, the court overrules the limits set on campaign expenditures, ruling: “It is clear that a primary effect of these expenditure limitations is to restrict the quantity of campaign speech by individuals, groups, and candidates. The restrictions… limit political expression at the core of our electoral process and of First Amendment freedoms.” One of the most important aspects of the Supreme Court’s ruling is that financial contributions to political campaigns can be considered expressions of free speech, thereby allowing individuals to essentially make unrestricted donations. The Court implies that expenditure limits on publicly funded candidates are allowable under the Constitution, because presidential candidates may disregard the limits by rejecting public financing (the Court will affirm this stance in a challenge brought by the Republican National Committee in 1980).
Provisions of 'Buckley' - The Court finds the following provisions constitutional:
Limitations on contributions to candidates for federal office;
Disclosure and record-keeping provisions; and
The public financing of presidential elections.
However, the Court finds these provisions unconstitutional:
Limitations on expenditures by candidates and their committees, except for presidential candidates who accept public funding;
The $1,000 limitation on independent expenditures;
The limitations on expenditures by candidates from their personal funds; and
The method of appointing members of the FEC, holding that as the method stands, it violates the principle of separation of powers.
In May 1976, following the Court’s ruling, the FEC will reconstitute its board with six presidential appointees after Senate confirmation. (Federal Elections Commission 3/1997; Federal Elections Commission 1998; Campaign Finance Timeline 1999; Center for Responsive Politics 2002 ; Casebriefs 2012)
No Clear Authors - The opinion is labeled per curiam, a term usually reserved for brief and minor Court decisions when authorship of an opinion is less relevant. It is unclear exactly which Justices write the opinion. Most Court observers believe Justice William Brennan writes the bulk of the opinion, but Brennan’s biographers will later note that sections of the opinion are authored by Chief Justice Warren Burger and Justices Potter Stewart, Lewis Powell, and William Rehnquist. The opinion is an amalgamation of multiple authors, reflecting the several compromises made in the resolution of the decision. (Toobin 5/21/2012)
Criticism of 'Buckley' - Critics claim that the ruling enshrines the principle of “money equals speech.” The ruling also says that television and radio advertisements that do not expressly attack an individual candidate can be paid for with “unregulated” funds. This leads organizations to begin airing “attack ads” that masquerade as “issue ads,” ostensibly promoting or opposing a particular social or political issue and avoiding such words as “elect” or “defeat.” (National Public Radio 2012) In 1999, law professor Burt Neuborne will write: “Buckley is like a rotten tree. Give it a good, hard push and, like a rotten tree, Buckley will keel over. The only question is in which direction.” Neuborne will write that his preference goes towards reasonable federal regulations of spending and contributions, but “any change would be welcome” in lieu of this decision, and even a completely deregulated system would be preferable to Buckley’s legal and intellectual incoherence. (Liptak 5/3/2010) In 2011, law professor Richard Hasen will note that while the Buckley decision codifies the idea that contributions are a form of free speech, it also sets strict limitations on those contributions. Calling the decision “Solomonic,” Hasen will write that the Court “split the baby, upholding the contribution limits but striking down the independent spending limit as a violation of the First Amendment protections of free speech and association.” Hasen will reflect: “Buckley set the main parameters for judging the constitutionality of campaign finance restrictions for a generation. Contribution limits imposed only a marginal restriction on speech, because the most important thing about a contribution is the symbolic act of contributing, not the amount. Further, contribution limits could advance the government’s interest in preventing corruption or the appearance of corruption. The Court upheld Congress’ new contribution limits. It was a different story with spending limits, which the Court said were a direct restriction on speech going to the core of the First Amendment. Finding no evidence in the record then that independent spending could corrupt candidates, the Court applied a tough ‘strict scrutiny’ standard of review and struck down the limits.” (Hasen 10/25/2011) In 2012, reporter and author Jeffrey Toobin will call it “one of the Supreme Court’s most complicated, contradictory, incomprehensible (and longest) opinions.” (Toobin 5/21/2012)
The Supreme Court, in the case of First National Bank of Boston v. Bellotti, rules 5-4 that corporations have the First Amendment right to make contributions in order to influence political processes. Writing for the majority, Justice Lewis Powell finds that under the recent Buckley ruling (see January 30, 1976), corporate political donations are protected speech. Powell’s opinion finds that a Massachusetts criminal statute prohibiting corporations from spending money for the purpose of “influencing or affecting” voters’ opinions is not legitimate. The split among the justices is unusual, with Powell, a conservative, being joined by two more conservatives, Chief Justice Warren Burger and Potter Stewart, and liberals Harry Blackmun and John Paul Stevens. The four dissenters are liberals William Brennan and Thurgood Marshall, and conservatives Byron White and William Rehnquist. (FIRST NATIONAL BANK OF BOSTON v. BELLOTTI 2012; Moneyocracy 2/2012) Rehnquist’s standalone dissent advocates for far stricter controls on corporate spending in elections than most of the other justices’ dissents, with Rehnquist writing that such spending could “pose special dangers in the political sphere.” (Reclaim Democracy 4/26/1978; FIRST NATIONAL BANK OF BOSTON v. BELLOTTI 2012)
The Supreme Court, in the case of Federal Election Commission v. NCPAC, rules that political action committees (PACs) can spend more than the $1,000 mandated by federal law (see February 7, 1972, 1974, and May 11, 1976). The Democratic Party and the FEC argued that large expenditures by the National Conservative Political Action Committee (NCPAC) in 1975 violated the Federal Election Campaign Act (FECA), which caps spending by independent political action committees in support of a publicly funded presidential candidate at $1,000. The Court rules 7-2 in favor of NCPAC, finding that the relevant section of FECA encroaches on the organization’s right to free speech (see January 30, 1976). Justice William Rehnquist writes the majority opinion, joined by fellow conservatives Chief Justice Warren Burger, Sandra Day O’Connor, and Lewis Powell, and liberals Harry Blackmun, John Paul Stevens, and William Brennan. Justices Byron White and Thurgood Marshall dissent from the majority. (Oyez (.org) 2012; Moneyocracy 2/2012)
In the case of Hunter v. Underwood, the US Supreme Court rules that states have the right to legally strip convicted criminals of the right to vote as long as no “racially discriminatory intent” is in effect, and strikes down a portion of Alabama law that is found to be discriminatory. The Court rules unanimously, 8-0 (Justice Lewis Powell does not participate in the case). The two plaintiffs—one black and one white—were barred from voting in Alabama after being charged with a misdemeanor crime, and filed a lawsuit against the state. A district court ruled against them, denying that Alabama’s Constitution disenfranchises citizens convicted of crimes in a discriminatory fashion (see 1802-1857 and 1901). The Supreme Court overturns that decision, finding that Alabama’s law violates the Fourteenth Amendment. The fact that the relevant portion of the Alabama Constitution “may have been adopted to discriminate against poor whites as well as against blacks would not render nugatory the purpose to discriminate against blacks, it being clear that the latter was a ‘but-for’ motivation.… There is no evidence that the disenfranchisement of those convicted of crimes involving moral turpitude was a motivating purpose of the 1901 Convention” (referring to the 1901 revision of the Alabama Constitution to use disenfranchisement as a tool to prevent blacks from voting—see 1901). (Hunter v. Underwood - 471 US 222 (1985) 4/16/1985; ProCon 10/19/2010; Oyez (.org) 2012; Marcus McClellan 5/14/2012)
The Supreme Court rules in Federal Election Commission v. Massachusetts Citizens for Life that an anti-abortion organization can print flyers promoting “pro-life” candidates in the weeks before an election, and that the portion of the Federal Election Campaign Act (FECA—see February 7, 1972, 1974, and May 11, 1976) that bars distribution of such materials to the general public restricts free speech. In September 1978, the Massachusetts Citizens For Life (MCFL) spent almost $10,000 printing flyers captioned “Everything You Need to Vote Pro-Life,” which included information about specific federal and state candidates’ positions on abortion rights, along with exhortations to “vote pro-life” and “No pro-life candidate can win in November without your vote in September.” The Federal Election Commission (FEC) ruled that MCFL’s expenditures violated FECA’s ban on corporate spending in connection with federal elections. A Massachusetts district court ruled against the FEC, finding that the flyer distribution “was uninvited by any candidate and uncoordinated with any campaign” and the flyers fell under the “newspaper exemption” of the law. Moreover, the court found, FECA’s restrictions infringed on MCFL’s freedom of speech (see January 30, 1976 and April 26, 1978). An appeals court reversed much of the district court’s decision, but agreed that the named provision of FECA violated MCFL’s free speech rights. The FEC appealed to the Supreme Court. By a 5-4 vote, the Court affirms that FECA’s prohibition on corporate expenditures is unconstitutional as applied to independent expenditures made by a narrowly defined type of nonprofit corporation such as MCFL. The Court writes that few organizations will be impacted by its decision. The majority opinion is written by Justice William Brennan, a Court liberal, and joined by liberal Thurgood Marshall and conservatives Lewis Powell, Antonin Scalia, and (in part) by Sandra Day O’Connor. Court conservatives William Rehnquist and Byron White, joined by liberals Harry Blackmun and John Paul Stevens, dissent with the majority, saying that the majority ruling gives “a vague and barely adumbrated exception [to the law] certain to result in confusion and costly litigation.” (Federal Election Commission 2011; Moneyocracy 2/2012)
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