Thomas Wuil Joo

Corporate Governance and the Constitutionality of Campaign Finance Reform

361 THE RECENT COLLAPSE of Enron Corporation revealed information that helped revive the movement to rein in corporate political influence. The renewed interest in reform helped the Bipartisan Campaign Reform Act (BCRA) become law in 2002 after many years of failed attempts to revise the campaign finance laws.1 Enron’s large political contributions to politicians from both parties undermined public confidence in the impartiality of government officials. For example, representatives of Enron, the top energy corporation to contribute to the Republican Party, had an unusual degree of access to Vice President Cheney’s energy policy task force, meeting with Cheney or his staff six times in 2001.2 Questions about Enron contributions have also interfered with government functions. For example, Attorney General Ashcroft recused himself from the Enron criminal investigation due to past Enron contributions to his Senate campaign, and the General Accounting Office sued the Vice President in search of information about the contributors who met with his task force. The lessons of Enron notwithstanding, the Supreme Court has consistently held that campaign finance activity is a kind of political speech. Thus, First Amendment case law has required an extremely strong government interest—often referred to as a “compelling” one—to justify such regulations. The Court has upheld some campaign finance laws that regulate business corporations more strictly than individuals or political groups, and struck down others. But it has not clearly identified the government interest that distinguishes the permissible regulations from the impermissible. The BCRA litigation has renewed the debate and will demand clarification of the constitutional issue. Campaign finance jurisprudence under the First Amendment, like First Amendment law generally, is based on the paradigm of individual speech. Campaign finance law has long regulated corporations more closely than individuals, but First Amendment case law has not produced a clear explanation for this distinction. The first part of this article describes the present state of corporate campaign finance regulation under federal law. The second part discusses the confused state of the relevant constitutional case law. Finally, the third part suggests a new approach to the First Amendment analysis of corporate campaign finance regula-

Contracts, Courts, and the Construction of Consent

Contract law sometimes acknowledges that the legal construct of “objective consent” is distinct from actual subjective consent. But contract law also labors to obscure this distinction and conflate the two concepts — indeed, the very term “objective consent” performs this function. Economic analysis of law sometimes engages in a similar conflation by treating the efficiency of an arrangement — as determined by a theorist or judge — as a perfect proxy for subjective consent to that arrangement. Basing contractual obligations on judicial assessments of outward phenomena means contract law depends at least in part on judges’ subjective notions of policy and fairness. Conflating this court-centered process with subjective consent is descriptively inaccurate. It is also faulty normative reasoning, as it invokes simple libertarian rhetoric to justify a more complex, statist process. The conflation problem is especially relevant with respect to form contracts, which fit uneasily with traditional notions of subjective consent. Courts and theorists should avoid the easy invocation of “consent” as the basis of contract law and instead be more specific in disclosing — and defending — the normative assumptions behind their prescriptions.

Natural is Not in It: Hurricane Katrina, Race, and the Built Environment

Hurricane Katrina was not a natural disaster; rather it illustrates the role that human choices play in many arenas we tend to think of as governed by chance natural occurrence. This essay explores this theme on three different levels. First, insights from the legal analysis of the built environment illuminate the disaster as an example of the influence of human choices on the shape of the environment, including urban planning and flood control policy. Second, Katrina underscores the role of race-based choices in the fate of Americans. Like environmental decisions, deliberate racial segregation and neglect were as critical as chance occurrence in contributing to the disaster. While the impact on African Americans is obviously a central aspect of the disaster, a racial analysis of Katrina must go beyond a mere black-white dichotomy. Katrina raises additional issues such as the intersection of race and class and the strained relationships between African Americans and Latino immigrant laborers in the reconstruction of New Orleans. Third and finally, the essay critiques the current trend to conflate social justice with economic efficiency. That view attempts to avoid moral responsibility for policy choices by allowing purportedly natural market forces to determine outcomes. In the wake of Katrina, some argue that New Orleans would do better without assisting the return of its poor residents displaced by Katrina. But not all social choices can be made by balancing material considerations against moral ones: sometimes we must make outright material sacrifices in the name of moral duty. Market-driven decisionmaking is not morally neutral, but constitutes a conscious choice of self-interest over compassion.