āCorporations are people, my friend,ā 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 donāt. But as of now, they can get presidential pardons.
The notion that corporations are people did not originate with the Supreme Courtās 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 Fourteenth Amendmentās 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 ādoes not wish to hear argument on the questionā of whether the Fourteenth Amendment applies to corporations because āwe are all of the opinion that it does.ā Somehow this non sequitur became legal precedent. āLater cases,ā wrote Stetson University law professor Clara Torres-Spelliscy in a 2014 analysis for the nonprofit Brennan Center for Justice, āuncritically cited the headnote as if it had been part of the case.ā
You know what isnāt declining? Pardons for corporations. Trump has granted nine. These were never a thing before Trumpānot in the modern era, and possibly never. According to Bloombergās Ava Benny-Morrison, the nine pardons wiped out $200 million in financial penalties, āsome of which were destined for victims of wrongdoing.ā Frank Bowman, a law professor at the University of Missouri, told Bloomberg: āIn 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 didnāt.ā
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 2024, BitMEX itself pleaded guilty to the same crime, and this past January the company was fined $100 million.
And now for my not-silly response. :)
The ācorporate death penaltyā is called ājudicial dissolutionā and (in the US at least) proceeds similar to chapter 7 bankruptcy. In the 18th and 19th centuries, state legislatures issued corporate charters with specific public mandates. If a corporation abused its power, the state revoked its charter. This is pretty rare these days, both because corporate charters are handled differently (they usually donāt have specific mandates) and because of the awareness of collateral damage to actual innocents. Not shareholders, but employees getting laid off, pensions being destroyed, and so forth. So nowadays the preferred approach is to focus on punishments aimed at making the corporation change its future behaviour. Forced firing of executives responsible, massive fines to make illegal activities unprofitable, and so forth.
There are still judicial dissolutions but theyāre usually targeted fraudulent non-profits, shell corporations, and organized crime fronts. No āinnocentsā get hurt in those cases since they donāt have many actual employees.
A few prominent cases where real corporations were judicially destroyed are Arthur Andersen, BCCI, and Purdue Pharma. Those ones werenāt directly ordered dissolved, though, the court just revoked licenses or placed restrictions on them that made it impossible for them to continue operating and so they immediately went bankrupt.
If only they would apply this logic to individual criminals! But that would disrupt their slave trade.