I have an old, ratty t-shirt that says “Corporations are not people.” It dates back to the (in)famous exchange between a heckler and Mitt Romney, in which Romney–then the Republican candidate for President–proclaimed that “Corporations are people, my friend.” Needless to say, that declaration didn’t win him many votes. After all, corporations don’t vote.
At least, not in most places. Yet.
A reader of this blog recently sent me a CBS News article about a Delaware town planning to extend the franchise to “corporate citizens.”
Seaford, a town of about 8,000 on the Nanticoke River, amended its charter in April to allow businesses — including LLCs, corporations, trusts or partnerships — the right to vote in local elections. The law would go into effect once both houses of Delaware’s state legislature approve it.
The proposal has rekindled a debate over how much power corporations should have in local government, with fierce opposition from civic interest groups who say businesses already wield too much influence over politics.
“It was very shocking to see this attempt to have artificial entities have voting rights,” said Claire Snyder-Hall, executive director of Common Cause Delaware, a watchdog group.
Delaware is probably the most “corporate-friendly” state in the U.S., with business laws so favorable to the corporate form that the state boasts more than 1.8 million entities registered there. According to the linked article, companies outnumber human residents by nearly two-to-one.
This effort would seem to be the flip side of the widespread efforts to suppress the votes of human citizens. Whatever the merits of the proposal (admittedly, I’m at a loss to identify those), allowing artificial persons to cast ballots would dilute the votes of actual people. I assume that’s the goal–giving the ballot to corporations would certainly tilt the playing field further in the direction of the communities’ business interests.
In all fairness, when human voters fail to show up at the polls, they bear considerable responsibility for their subsequent loss of voice. What’s that phrase? Use it or lose it…
Legislators have cast the change as a fix for low turnout in municipal elections and a way to attract business owners to the community.
“These are folks that have fully invested in their community with their money, with their time, with their sweat. We want them to have a voice if they choose to take it,” Seaford mayor David Genshaw told local station WRDE. Genshaw cast the deciding vote in a split City Council decision on the charter amendment in April, according to The Lever.
According to Delaware Online, there are 234 entities, including LLCs, trusts and corporations, headquartered in Seaford — a significant number for a town where an April election only garnered 340 votes.
It appears that other Delaware towns already allow corporations to vote, with results that might have been predicted:
In 2019, it was revealed that a single property manager who controlled multiple LLCs voted 31 times in a Newark, Delaware, town referendum, an incident that led Newark to amend its rules. And residents in Rehoboth Beach in 2017 beat back a proposal to allow LLCs to vote.
Delaware has long been noted for being “corporation friendly,” but until I read this particular news item, I didn’t realize just how friendly. The state allows owners of LLCs to stay anonymous. It relieves businesses of the “burden” of paying corporate income taxes. And as every business lawyer knows, the vast majority of corporations headquartered in Delaware– including two-thirds of Fortune 500 companies– don’t have a physical presence there.
American laws do consider corporations “people” for certain very specific purposes–doing business in the corporate form encourages economic activity that benefits us all. If you start a business and it goes broke, your personal assets can be protected from the business’ creditors. Without that protection, many fewer businesses would be formed. And–giving Romney credit for what he evidently meant in that infamous exchange–corporations are indeed formed, managed and owned by real people.
But in a society where the economic gap between the haves and the have-nots is uncomfortably large and continuing to grow–a country where legal structures already favor those with money and status– giving the already-privileged an extra tool to cement and augment their already significant advantages doesn’t seem like a particularly good idea.
The preamble to the Constitution of the United States begins with “We the People.” I’m pretty sure the Founders didn’t intend that “people” reference to include corporations.
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