“Corporations are people, my friend,” Mitt Romney famously said in 2011 while running for president. The Supreme Court decided the previous year that corporations could give money to political campaigns, just like people, and in 2014 the high court gave corporations religious freedom to deny contraceptives to employees, thereby letting them behave just as badly as people. If you prick corporations, do they not bleed?
Actually no, they don’t. But as of now they can get presidential pardons.
The notion that corporations are people did not originate with the Supreme Court’s notorious Citizens United decision in 2010. Way back in 1886 the high court ruled, in Santa Clara County v. Union Pacific Railroad, that corporations were covered by the 14th amendment’s guarantee of equal protection under the law. To be more precise, this question was addressed not in the decision (which resolved a local taxation dispute) but rather in a headnote that said the court “does not wish to hear argument on the question” of whether the 14th amendment applies to corporations because “we are all of the opinion that it does.“ Somehow this non sequitur became legal precedent. “Later cases,” wrote Stetson law professor Clara Torres-Spelliscy in a 2014 analysis for the nonprofit Brennan Center for Justice, “uncritically cited the headnote as if it had been part of the case.”
Santa Clara was used, for example, to justify the Supreme Court’s 1978 decision in First National Bank of Boston v. Bellotti, a sort of Citizens United precursor in which corporations were granted the right to spend unlimited funds on ballot initiatives. The dissenter in that case, weirdly, was the future conservative Chief Justice William Rehnquist. Rehnquist wasn’t ordinarily a guy to lose sleep over excessive corporate power. But in this instance he worried the majority opinion would expand political rights for labor unions, the ACLU, and the NAACP. Rehnquist wrote:
A State grants to a business corporation the blessings of potentially perpetual life and limited liability to enhance its efficiency as an economic entity. It might reasonably be concluded that those properties, so beneficial in the economic sphere, pose special dangers in the political sphere…. [T]he States might reasonably fear that the corporation would use its economic power to obtain further benefits beyond those already bestowed.
In the event, Rehnquist’s fears were borne out—not by labor unions or liberal nonprofits, but by American businesses.
One reason the Supreme Court justices in Santa Clara County took it on faith that corporations were people may have been that judges and regulators were starting to regard corporations as potential criminals under the legal doctrine of respondeat superior (“let the master answer”). The Sherman Antitrust Act of 1890 leveled criminal penalties against corporations, and so did the Elkins Act of 1903, which added criminal penalties to the 1887 Interstate Commerce Act. (This is your periodic reminder that the federal administrative state was created not by Woodrow Wilson, as the Roberts court would have you believe, but by railroads behaving badly.) In 1909, the Supreme Court upheld the notion that corporations were people for the purposes of criminal prosecution in New York Central & Hudson River Railroad v. United States.
Since you can’t throw a corporation in jail, it’s fair to ask what the point was in subjecting corporations to criminal prosecution. In civil trials judges can levy fines and order corporations to change their behavior, just as they can in criminal cases. But in the early 20th century civil law wasn’t sufficient because little civil liability then existed for corporations; most legal bases for suing corporations were established during the New Deal and after. The practical reason criminal prosecutions persist is that it remains easier, at least in certain cases, to bring misbehaving corporations to justice through criminal law. Also, criminal prosecutions inflict greater reputational damage on corporate scofflaws.
Starting in 2000, though—the same year, ironically, that the Justice Department put out a memo to encourage criminal prosecution of corporations—such prosecutions began a steep decline at the federal level, dropping from 304 to 99 by 2022, according to a 2023 report by the nonprofit Public Citizen. That might not be so bad if federal civil litigation took up the slack, but it didn’t. Lawsuits filed by the federal government declined during the same period. The falloff in prosecuting corporations is of course accelerating right now under President Donald Trump.
You know what isn’t declining? Pardons for corporations. Trump has granted nine. These were never a thing before Trump—not in the modern era, and possibly never. According to Bloomberg’s Ava Benny-Morrison, the nine pardons wiped out $200 million in financial penalties, “some of which were destined for victims of wrongdoing.” Frank Bowman, a law professor at the University of Missouri, told Bloomberg: “In any previous era no president would touch this with a barge pole. Maybe individual cases with some compelling reason, but the systemic elimination of criminal liability of major financial crime would never have happened before, and it didn’t.”
Half of the $200 million in wiped-out fines can be attributed to a single crypto company, BitMEX. The three co-founders of the company, a pioneer in crypto derivatives, all pleaded guilty in 2022 to violating the Bank Secrecy Act, which requires maintaining certain safeguards against money laundering. Each paid $10 million in fines. Then, in July of 2024, BitMEX itself pleaded guilty to the same crime, and this past January the company was fined $100 million.
Something else of interest happened in January. BitMEX created a swap listing tied to the $TRUMP memecoin. Two months later, Trump pardoned the co-founders and the company. The pardon didn’t appear in time to spare the co-founders from paying $30 million, but it was just in time for BitMEX itself to avoid paying the $100 million fine, since the deadline was later that week. Before Trump, pardons and commutations did not spare recipients from having to fork over unpaid penalties. (Once a fine is paid, it’s non-recoverable unless Congress appropriates the money.)
I think probably the fight against corporate personhood is lost. Rather than grieve, fellow liberals, let’s demand corporations be taxed as people. The top marginal tax rate for homo sapiens is 37 percent. The flat corporate tax rate is 21 percent. To properly respect corporations’ innate dignity as human beings, let’s tax both up to 37 percent (and then raise the top rate for both to 70 percent, as it was before Ronald Reagan). Capital gains are kind of corporate too, aren’t they? The top capital gains rate is 20 percent. Raise that to 37 percent as well, and later to 70 percent. To do otherwise would treat you and me differently from corporations, and since 1886 that’s violated the Fourteenth Amendment’s promise of equal protection under the law. People are corporations, my friend.
