The Political Context of Business Organizations

We spend a lot of time in our Legal Environment classes and space in our textbooks covering the law-making procedures of courts.  Likewise, the administrative rule-making process is well covered. Inexplicably, we spend little or no time and space teaching about legislative law-making. Is it because we are too squeamish about the sausage-making?

Business law educators are familiar with the AACSB guidlines for undergraduate education and have lauded their recognition of the need for business education on legal and regulatory topics.  But one subject among those AACSB topic guidelines is all too often overlooked:

Standard 9: Curriculum content is appropriateto general expectations for the degree program type and learning goals.[CURRICULUM CONTENT] …

General Business and Management Knowledge Areas

· Economic, political, regulatory, legal, technological, and social contexts of organizations in a global society

· Social responsibility, including sustainability, and ethical behavior and approaches to management …

(emphasis added).

In very few business schools do we offer course work exposure to the political context of organizations in society. It would seem that some discussion of the political law-making process in our Legal Environment courses is not only justified but necessary.

Which brings up the topic of the  recently released publication, "The Confessions of Congressman X."  This 65 page pamphlet purports to be the candid inside disclosures of a longtime Congressman.  As reported in the New York Post, the pamphlet contains revelations such as:

“Business organizations and unions fork over more than $3 billion a year to those who lobby the federal government. Does that tell you something? We’re operating a f–king casino.” 

and:

“I contradict myself all the time, but few people notice. One minute I rail against excessive spending and ballooning debt. The next minute I’m demanding more spending on education, health care, unemployment benefits, conservation projects, yadda, yadda, yadda.”

And quoted in the Washington Post:

“The average man on the street actually thinks he influences how I vote. Unless it’s a hot-button issue, his thoughts are generally meaningless. I’ll politely listen, but I follow the money.”

The way that big business money affects public policy as expressed in law is as relevant to a Legal Environment class as a discussion of stare decisis.  Just because sausage such as this is sure to give one indigestion, doesn't mean our students shouldn't know about it.

Thought Provoking Law Quote: Abraham Lincoln

How often do we read or hear people saying that NOW we need to pay attention to business ethics. The implication is that recent events and actions have given rise to inequities, injustice and social detriment. However, a strong argument can be made that ethical challenges exist in the very fabric of a capitalist society and these issues have been worthy of attention from the very beginnings of an industrial society.

As the Civil War was winding down in 1864, President Lincoln began to look ahead to what he perceived as the next great crisis facing the nation.

I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country.  . . .  Corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. 

    

           -Abraham Lincoln in a letter to Col. Elkins, Nov. 21, 1864

People, Special Corporate People, Are The Luckiest People . . .

My apologies for the tortured reference to the old Barbara Streisand standard from the 1960's.  But, it is the start of final exams week and that makes academics a bit giddy as an antidote to the workload. In any event, this will be the last post until the Spring semester starts.

Two Jon Stewart clips below examine corporate personhood in relation to criminal responsibility. As usual, Stewart questions public policy, law and practice and raises pointed questions through humor.

Click on the images below to see Part 1 and Part 2:

Part 1:


Part 2:


Perhaps the legal standard for "personhood" should be whether or not the "person" can sing.

Barbara Streisand, a person who can sing:


JPMorganChase&Co, a "person" that cannot sing:
  

Human persons singing in protest of the practices of corporate person, JP Morgan (addressing CEO Jamie Dimon):

JP Morgan Settlement: Justice or Shakedown? Depends on Perspective.

Financial pundits last week were commenting on the $13B settlement the government negotiated with JP Morgan over the sale of shaky financial securities leading up to the recession of 2008.  On the Daily Show, Jon Stewart takes these pundits to task.  Whether you agree with Stewart or not, these videos can provide provocative prompts for timely discussion or assignments.

Click the image below to see Stewart take on the financial pundits.



Click the image below to see Stewart continue his criticism - especially addressing the Bear Stearns purchase.

Tax Evasion Graphic

I cannot vouch for the sources on this graphic but I do think the graphic is an interesting way to raise an issue that is certainly worth discussing.  The link for the graphic was sent to me by Sarah Wenger at MastersDegreeOnline.org

See related post, here.


Created by: www.MastersDegreeOnline.org

Corporations Are Persons Now

Tell us how you really feel ladies.  Don't hold back, now! See also the The Story of Citizens United.

The Story of Citizens United

The video below was shared on the ALSB listserve some time ago.  Unfortunately, I don't remember who shared it so I can't acknowledge the credit that is well deserved . Since this blog has a potential reach beyond the ALSB membership and the video is now available on YouTube, I am embedding it below.

I think that there are a number of ways to use this video in class.  I use it in an ethics lecture, emphasizing the video's description of the history of the corporation and leading into a discussion about different ethical standards and considerations for human persons and corporations (fictional persons).

To aid in discussing the Citizens United v. FEC case, I have also added below a trailer for the movie Hillary and an ad for the prospective DVD release of the movie that prompted Citizens United to seek judicial determination of its rights.

Tax Day Debate: Double Taxation of Corporate Form - Fact or Fiction?

In teaching the different features of various business organization forms, we advise students that one of the detriments of the corporate form is the problem of double taxation.  By law, the corporation is subject to taxes on its pre-dividend profit and, the corporations' shareholders are subject to taxation on the dividends distributed to them in after tax dollars. Has modern corporate practice relegated this legal concept to the dustbin of theory?

The New York Times reported in 2008 that 2 out of 3 American Corporations paid no income tax between 1998 and 2005. Zero Tax! Now it has been reported that despite soaring profits, General Electric Corp paid no taxes in 2009.  Do we have an obligation to advise students that it is possible to legally manipulate the corporate form to avoid income taxes altogether?

Citing Corporate Social Responsibility, Air CanadaThreatens to Pull NHL Endorsement

In a National Hockey League game, Boston Bruin player Zedeno Chara delivered a check on Montreal Canadien player Max Pacioretty.  The incident is shown in the video below.  Pacioretty was seriously injured.  Chara received a major penalty but no fine or suspension from the league.  Citing "Corporate Social Responsibility," Air Canada, a major sponsor of the NHL issued the following letter to the NHL:

We are contacting you to voice our concern over [the] incident involving Max Pacioretty and Zdeno Chara at the Bell Centre in Montreal. This is following several other incidents involving career-threatening and life-threatening headshots in the NHL recently. From a corporate social responsibility standpoint, it is becoming increasingly difficult to associate our brand with sports events which could lead to serious and irresponsible accidents; action must be taken by the NHL before we are encountered with a fatality. Unless the NHL takes immediate action with serious suspension to the players in question to curtail these life-threatening injuries, Air Canada will withdraw its sponsorship of hockey.



This incident is arguably distinguishable from the Todd Bertuzzi incident. The following video raises an issue regarding consent in a civil battery claim. How much physical contact do you consent to when you lace up the skates? Or, as in the clip further below, you step on the soccer field? At what point does the physical contact go beyond that to which consent may be presumed?