Posted by David Madland, Malkie Wall, and Danielle Root, Center for American Progress, on
Wednesday, November 4, 2020
David Madland is senior fellow, Malkie Wall is research associate, and Danielle Root is associate director at the Center for American Progress. This post is based on a CAP memorandum by Mr. Madland, Ms. Wall, Ms. Root, and Sam Berger. Related research from the Program on Corporate Governance includes Corporate Political Speech: Who Decides? by Lucian Bebchuk and Robert J. Jackson Jr. (discussed on the Forum here); and The Politics of CEOs by Alma Cohen, Moshe Hazan, Roberto Tallarita, and David Weiss (discussed on the Forum here).
In establishing the rules that govern engagement with the democratic process— including laws related to elections, campaign finance, and lobbying—unions and corporations are often lumped together under the incorrect assumption that these two types of organizations are roughly equivalent and thus should be subject to similar rules. For example, prior to the Supreme Court’s Citizens United v. Federal Election Commission decision, unions and corporations were subject to identical limits on their ability to spend general treasury funds on federal elections, and since the decision have been equally free to use their general funds on political expenditures.
Efforts to equate corporate and union political activity date back to at least the 1940s with the passage of the 1943 Smith-Connally Act, which barred unions from making contributions to federal candidates in the spirit of parity with the Tillman Act’s limitations on corporate contributions, and the 1947 Taft-Hartley Act, which prohibited any independent expenditures by corporations and labor unions. As former professor of constitutional law at American University Rep. Jamie Raskin (D-MD) explains, the false equivalence between unions and corporations “has sunk deeply into American legal, political, and social consciousness, weakening the sense of unions as organic democratic institutions in civil society … while aggrandizing the political power of CEOs of large companies who are increasingly, if bizarrely, treated as leaders of civic membership associations.”
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