What about states' rights?

Before Enron, WorldCom and the rest of the Wall Street hustler stories broke, in this most recent wave of corporate criminality, anti-globalization protesters and other factions of what I loosely refer to as the economic justice movement were derided by even the liberal media as being senseless when it comes to economics.

But now that the bad apple theory has been exposed as a red herring offered by unregulated free-market worshippers, those so-called idiots who took to the streets of Seattle in 1999 appear to be, well, prophetic.

The muted message coming out of the protests has been: There's something wrong with the global economic system itself -- namely, a lack of democratic accountability.

And now, with even our business-is-king president conceding the point, we can finally have a discussion about corporate responsibility and social ethics without some F.A. Hayek or Milton Friedman fanatic drowning out opposition voices by using meaningless political epithets like "you're a socialist, Marxist, communist, liberal."

Late last week, The Wall Street Journal reported, "Ultimately, the proposals Mr. Bush advanced in (his) speech on Wall Street may well serve as the floor rather than the ceiling for Washington action."

Following the president's address, the Senate moved to go beyond Bush's timid proposals, voting 97-0 to establish sweeping new powers to target corporate fraud, creating a new corporate-fraud chapter in the federal criminal code.

The Senate also voted 96-0 to toughen criminal penalties for white-collar crimes, such as pension fraud, mail fraud and conspiracy -- a provision that would, according to the Journal, "allow courts to mete out the same punishments to guilty executives as now apply to drug kingpins."

The essence of what the Senate was trying to do was captured by Vermont Democrat Patrick Leahy when he said: "If you steal a $500 television set, you can go to jail. Apparently if you steal $500 million from your corporation and your pension holders and everyone else, then nothing happens. This makes sure something will happen." That's an implicit admission that our criminal justice system has long served the interest of the wealthy at the expense of the less affluent.

And not that anyone was expecting it, but the president could have appointed an independent counsel to investigate Vice President Dick Cheney's tenure at Halliburton, amid allegations by the conservative legal watchdog group Judicial Watch that the oil-field services business headed by Cheney engaged in fraudulent accounting practices from 1999 to 2001. It kind of puts the Clinton-Whitewater affair in a whole new perspective.

So now that the momentum has shifted toward greater corporate accountability, maybe the ideas coming out of such organizations as the Program on Corporations, Law and Democracy (POCLAD) will get broader consideration. That will remind us that the sovereignty rights of real people come before so-called corporate rights, as the framers of our Constitution intended (see www.poclad.org).

It was through pro-corporate judicial activism in the early 1900s that the Constitution and concept of private property found therein came to be interpreted as justification for the legal absurdities we have today in which individual rights and liberties meant for flesh-and-blood human beings are extended to corporations.

Want some relevant summer reading? Check out POCLAD's collection of essays and speeches called "Defying Corporations, Defining Democracy." In that book, I found this gem from an 1890 New York Court of Appeals case, involving the North River Sugar Refining Corp.

Writing on behalf of the court, Justice Finch declared: "The judgment sought against the defendant is one of corporate death ... The life of a corporation is, indeed, less than that of the humblest citizen ... Corporations may, and often do, exceed their authority only where private rights are affected. When these are adjusted, all mischief ends and all harm is averted.

"But where the transgression has a wider scope, and threatens the welfare of the people, they may summon the offender to answer for the abuse of its franchise or the violation of its corporate duty. The (North River Sugar Refining) corporation has violated its charter, and failed in the performance of its corporate duties, and that in respects so material and important to justify a judgment of dissolution ... All concur."

Corporations used to be under the authority of the states in which they were chartered. Where are states' rights advocates on this issue today?

Why are they not echoing the sentiments of our great nation's founders -- such people as Thomas Jefferson, who spoke of the need "to crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country"?

Sean Gonsalves is a columnist with the Cape Cod Times. E-mail: sgonsalves@capecodonline.com

©1999-2002 Seattle Post-Intelligencer

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