Meanwhile, on the Western Front

With all the attention focused on the Republican race for the nomination in the midwest and east, two articles about corporations from the Wild West caught my attention last week.

The first is a story by Kelly Carr and Brian Grow of Reuters about a house on a residential street in Cheyenne, Wyoming, where more than 2,000 corporations are registered. These aren't real corporations: they're shell companies like the ones in the Cayman Islands that drug dealers and the mafia use to launder their money. Lax incorporation laws allow people to register their companies in Wyoming and keep the identities of the principles secret so that the money can't be tracked.

Wyoming Corporate Services, as this capitol of crony capitalism calls itself, offers a full menu of deceptive incorporation strategies, including "shelf" corporations. These companies sit "on the shelf" engaging in what appear to be legitimate financial transactions to make them seem like honest, reliable companies. And then someone with a nefarious purpose comes along and buys this phony corporation to give themselves an air or respectability and a fake history. It's all a big fraud, but it's apparently legal.

According to the Reuters article, the company's website boasts:

A corporation is a legal person created by state statute that can be used as a fall guy, a servant, a good friend or a decoy. A person you control... yet cannot be held accountable for its actions. Imagine the possibilities!

I searched WCS's website and couldn't find that exact quote, but perusing their list of services and braggadocio about why Wyoming is so much better for incorporation than Nevada, the quote aptly describes their intent. And the thing is, it's completely true: this is exactly why corporations exist. They almost completely remove personal responsibility and personal financial risk from anyone doing business.

The protections of incorporation are in general a public good, allowing people to take risks creating new jobs without risking their entire future. But Wyoming law allows criminals to hide billions of dollars of illegal income, and for otherwise upstanding citizens to avoid paying billions in taxes. All of which means that the rest of us have to pay that much more to make up the difference.

The second story was from next door: the Montana Supreme Court ruled that Montana's corporate campaign contribution law was constitutional. In a 5-2 opinion, the majority upheld that the 1912 initiative Montana voters passed banning corporate contributions to political candidates and parties.

Echoing what I've long been saying, Justice James C. Nelson wrote:

Corporations are not persons. Human beings are persons, and it is an affront to the inviolable dignity of our species that courts have created a legal fiction which forces people — human beings — to share fundamental, natural rights with soulless creatures of government.

Worse still, while corporations and human beings share many of the same rights under the law, they clearly are not bound equally to the same codes of good conduct, decency and morality, and they are not held equally accountable for their sins. Indeed, it is truly ironic that the death penalty and hell are reserved only to natural persons.

Montana has history on its side in this corporate dogfight. In the early 20th century the "Copper Kings" ran the state. The mining companies bought most every judge and politician in Montana. At a time when US senators were selected by state legislators, banker and mining executive William A. Clark bribed the
Montana legislature to elect him to the US Senate. However, the Senate refused to seat Clark in 1899 because of the bribery scheme, and the incident was the impetus for the passage of the 17th Amendment providing for direct election of senators. Clark was reputed to have said, "I never bought a man who wasn't for sale." Still, he campaigned again and served one term in the Senate, prompting Mark Twain to write:

He is as rotten a human being as can be found anywhere under the flag; he is a shame to the American nation, and no one has helped to send him to the Senate who did not know that his proper place was the penitentiary, with a ball and chain on his legs. To my mind he is the most disgusting creature that the republic has produced since Tweed's time.

The Montana ruling will almost certainly collide with the US Supreme Court's Citizens United decision, which allowed for the public flaying of Newt Gingrich in Iowa by Mitt Romney's Super PAC. Romney's PAC, Restore Our Future, is run by former Romney campaign aides, according to an article in the Washington Post. (Jon Huntsman's Super PAC is mostly financed by his father.)

Gingrich complained bitterly about the "independent" ad campaigns, claiming that he'd been "Romney-boated." This was an implicit acknowledgment that the Swift Boat campaign against John Kerry in 2004 was just a dirty, lying political trick. Which has always been common knowledge, but few Republicans will admit the truth of it to this day. John McCain suffered the same treatment by George Bush's campaign in 2000, prompting him to sponsor the campaign finance reform laws the Supreme Court struck down.

The combination of uncontrolled secretive shell corporations and unlimited secret corporate donations to "independent" political campaigns -- especially in judicial elections -- is a recipe for disaster. Citizens United is making it impossible for the average voter to tell the truth from the lies repeated on the airwaves so often they become a mantra.