Donald Trump’s leaked tape in which he boasts about sexually assaulting women has cast a shadow on what could have potentially been another scandal in this presidential election: the leaked transcript of Hillary Clinton’s speeches to Wall Street firms. In her speeches, Hillary notably confesses that she dreams of “open borders and open trade” and admits that it is an “oversimplification” to blame the U.S. blanking system for the 2008 financial crisis. This contrasts strikingly with Hillary Clinton’s very left-winged primary campaign in which she came out against the Trans-Pacific Partnership (TPP) and markedly said, “I believe strongly that we need to make sure that Wall Street never wrecks Main Street again.” In a way, this leak confirms some people’s intuition that Clinton cannot be trusted, something she has herself hinted on in the speeches by stressing the need for politicians to have both a private and a public position on issues.
But this disconnect between people’s aspirations and politicians’ actual policy prescriptions is a problem that is way bigger than Hillary Clinton and the 2016 presidential election. In fact, the United States and the wider West are witnessing a trend in which power is slowly shifting away from the people and public interests towards multinational corporations.
I identify three ways in which multinational corporations are able to bypass or manipulate electoral processes and therefore weaken Western democracies for the sake of profit-maximization: court case Citizens United v. FEC in the United States, international trade agreements and the Investor-State Dispute Settlements they provide for, and the democratic deficit of governmental institutions, in particular those of the European Union.
In the 2010 court case Citizens United v. FEC, the U.S. Supreme Court ruled that the U.S. government is not allowed to restrict political expenditures of any entity, including for-profit entities like corporations, as long as the money is spent “independently” from candidates. In reality, however, political action committees, the groups that gather money and spend it to campaign for their candidates, are independent from candidates only by name. Many super PACs are run by members of candidates’ inner circles, and super PACs find ways to circumvent the restrictions on coordination between their activity and official campaigns. It remains that wealthy donors are spending millions of dollars on super PACs in order to buy influence on the future policies of the candidates, if they are elected.
Because campaign spending is unlimited, candidates are fearful that their opponents are going to spend more money and reach out to more people than them. Therefore, they tend to focus on very wealthy donors rather than their more modest constituency. According to Adam Lioz, a senior adviser at the liberal policy group Demos, candidates spend so much time talking to their wealthy donors that they tend “to believe that their problems are the country’s problems.” This skewed view of the world that politicians acquire as a result of groupthink is echoed in Hillary Clinton’s recognition in the leaked speeches that she feels “far removed” from the concerns and finances of average Americans.
And Citizens United v. FEC has had a direct influence on power dynamics in the United States. In fact, a study by Princeton University professor Martin Gilens and Northwestern University professor Benjamin Page indicates that the United States is less a democracy than it is an oligarchy dominated by economic elites.
In addition to campaign donations, corporate interests can influence policy-making to their advantage through the Investor-State Dispute Settlements (ISDS) provisions of many trade agreements such as the North American Free Trade Agreement (NAFTA), the Transatlantic Investment and Trade Partnership (TTIP) that is being negotiated between the U.S. and the European Union, and the Trans Pacific Partnership (TPP) between numerous countries on both shores of the Pacific.
ISDS allow multinational corporations to sue governments over claims of unfair treatment before a panel of corporate lawyers, therefore bypassing national judiciaries. In reality, this means that corporations can sue governments over such things as environmental, food or health regulations that negatively affect their profits. When governments lose court cases, they have to pay huge compensations to corporations, or even overturn regulations. For example, in 1997, the Ethyl Corporation, a U.S. chemical company, sued the Canadian government through the ISDS provision of NAFTA over the ban on imports of MMT, a gasoline additive suspected of neurotoxicity. The Canadian government lost the case and was forced to lift the ban and pay a $15 million compensation to Ethyl Corporation.
But ISDS could prove to be even more dangerous for the ability of governments to promote the wellbeing of their citizens. In 2000 the U.S. postal company UPS sued the Canadian government for treating it unfairly compared to Canada Post, the Canadian public postal service company. Although the case was dismissed, it meant that corporations could legally challenge any public service over claims that the government is giving an unfair advantage to a certain company. For example, in the United Kingdom many people fear that ratifying the TTIP or any other trade agreement containing an ISDS provision could lead to the privatization of the National Health Service (NHS), the publicly funded health care system.
Beyond the trade agreements themselves, what is most worrying for democracy is the way they are being negotiated and the democratic deficit of the institutions that carry out the negotiations, in particular the European Union. Negotiations over the TTIP have been conducted in total secrecy and under intense lobbying from multinational corporations. Molly Scott Cato, British Green politician and Member of the European Parliament (MEP) recalls how she had the privilege, as a MEP, to consult documents relating to the negotiations of the Transatlantic Trade and Investment Partnership (TTIP). But in order to do so, she had to sign documents pledging not to reveal any information, and after being stripped of even her smallest personal items, she was taken to a closed room where she had to read the documents on her own. Mentioning that 92 percent of those involved in the negotiations were corporate lobbyists and only 4.6 percent were public interest groups, Cato writes of the negotiations, “I picture a room full of bureaucrats trying to find ways to facilitate the business of the world’s most powerful companies, many of which have a turnover larger than the economic activity of some EU member states.”
The European Union is particularly vulnerable to corporate lobbying because of its democratic deficit and lack of accountability. In fact, of the seven EU institutions recognized under its current treaty, only one, the European Parliament, is directly elected by the people. And even the European Parliament lacks democratic legitimacy and accountability because of low turnout, a “closed-list” voting system in which party leaders, not voters, choose who gets seats, vast constituencies that do not represent anything, and a multiparty system in which all parties—except eurosceptic parties—agree on most policy issues. In sum, both the EU and the U.S. have political systems that are vulnerable to corporate interests.
When multinational corporations can reverse laws and policies enacted by the representatives of the people, or when those representatives are no longer accountable to their electorate but to the tycoons who finance their campaigns, then clearly democracy is endangered. Opposing Citizens United and trade agreements that trample on popular sovereignty are necessary first steps in the long struggle to reclaim our democracies.
Emile Riachi is a Trinity sophomore. His column, “a political night vision,” runs on alternate Thursdays.
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