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Corporations and Campaigns, Part 3

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The Monday morning column from Clark Judge:

Answering the Call: Corporations and Campaigns, Part 3

By Clark S. Judge, managing director White House Writers Group ( <> )

Bear in the Wood’s comments about political communications are exactly right. As with all communications, the issue is what the audience wants and believes. Getting it right is a serious business that must be approached with sophistication and care.

Hugh is right, too, about the dark dynamic that the Supreme Court’s opinion has disrupted. Labor union top brass, activists, and trial lawyers are typically more politically determined than corporate CEOs, more sophisticated, and until the Supreme Court’s ruling effectively had more freedom to act under the law. For the past year they have totally dominated the economic agenda of the Congress and White House. We all know the headliners: card check, cap and trade, the health overhaul, trillion-dollar bailouts to the UAW through the auto companies, trillion-dollar stimulus packages pushing money through the states to the public employee unions that now represent more than half the nation’s organized employees.

But there are other, less celebrated initiatives coming out of Congress and the Administration, initiatives that are almost as bad as those that would serially seize or disrupt massive sectors of our economy.

For example, have you heard of the Twombly repeal? A child of trial-bar friend Senator Arlen Specter, it would reverse the Supreme Court’s 2007 Twombly decision. In that ruling, the Court found that to file an antitrust civil suit against a company, trial lawyers must show that there is reason to believe that an antitrust violation had actually occurred. Sounds common sense enough. But it is a trial lawyer tactic to file marginal complaints with little more evidence of an actual offense than the accusation, then run up the cost of discovery until the defendants feels they must settle. In big antitrust cases, discovery costs can run in the many tens of millions of dollars. So this tactic is a sophisticated way to rig the civil justice system. The High Court banned it. Congressional Democrats considering bringing it back.

Then again, in considering the Consumer Financial Protection Agency Act, Congressional Democrats inserted a barely germane section would grant sweeping investigative and enforcement powers to the Federal Trade Commission in deceptive practices cases. As one former commissioner has testified, the legislation “would eliminate the requirement that unfair or deceptive practices must be prevalent, and eliminate the requirement… to address the economic effect of the rule… [change] the standard for judicial review, eliminating the court’s ability to strike down rules that are not supported by substantial evidence in the rulemaking record taken as a whole… [and end] current restrictions on Commissioners’ meetings with outside parties” [by “outside parties” read “activists”]. It allows the FTC to go after companies that help others with a Federal Trade Act violation, even if executives are unaware of the violation. Some believe that the proposal is so expansive that it would allow the FTC to act as a kind of unelected legislature governing entire industries and sectors.

Congressional Democrats are encouraging rather than using their oversight powers to restrain the Obama Administration’s overreaching regulators. For example, the Securities and Exchange Commission is in the process of adopting regulations that would make it vastly easier for all sorts of interests to push candidates for boards of directors and push resolutions at stockholder meetings. The idea is to give greater power to activists, and particularly unions. Once the rule is adopted, unions are almost certain to target unorganized companies. Corporate leaders will find themselves acting like precinct captains, counting up every possible friendly vote, making sure shareholders show up at the polls, or in this case, the annual meeting.

I could go on, but you get the drift. Just in time, the Supreme Court has now opened the way for companies to support candidates who defend against such assaults the rule of law, the integrity of the marketplace, and economic liberty. But will corporate America step up to the plate? And if so, will they use their newfound freedom effectively?

Hugh is right. These are key questions in the wake of the landmark decision and the Obama Administration’s decision, following the loss to the GOP of the Democrats’ safest Senate seat, to launch a populist attack on much of American business.

The opportunities are great, but so are the dangers. Many have already started to work at undoing the Court’s decision. It is an old rule of our national life: Freedom must be exercised to be preserved.

In his response to Hugh’s call, Bear in the Woods gave his coordinates. If you are a corporate officer considering what to do next, contacting him would be a smart move. If you wish to contact me, I can be reached at or send a message through the contact page on the White House Writers Group website: .



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