So we’re told Russia spent a hundred grand on Facebook ads. Some money into Instagram’s pocket from the Muscovite Bear, too. Leaving aside for the moment the relative paucity of alleged Kremlin social-media-based influence peddling (considered against the billions in Super PAC and dark money spent in the last election cycle), and the fact that to my knowledge nobody has even attempted to concretely demonstrate the Russian state’s role in the purchase of these ads, this newest “foreign meddling” flap does raise some genuine questions about the security of American democratic institutions. But not necessarily those that the pundits and the policymakers want our eyes on.
To combat the “Russian ads,” Senators Amy Klobuchar (Minn.) and Mark R. Warner (Va.) have introduced a bill (which is often what American legislators do when there’s a national security issue, unless, of course, that issue is recurrent, gun-related massacres of U.S. citizens by other, white, U.S. citizens). This bill would essentially demand that social media companies disclose the identity of those who spend more than $10,000 in aggregate for political ads on their respective sites. So far, so good, as this type of oversight already exists for broadcast media, and it seems like extending it to the internet is a no-brainer for a marginally functioning democracy. There’s also a provision in the bill that requires social media outlets make a “reasonable effort” to determine if their political ad buyers are foreign nationals or governments. Again, this seems a matter of course for legislation like this, as it’s already illegal for foreign entities to spend money on U.S. elections. But a problem arises if you stop to consider what actually defines foreignness (and, for that matter, domesticity) in our neoliberal age’s hyper-integrated, transnational political economy.
You’d think this would be pretty straightforward: nations are nations, and it should be easy to map what’s home and what’s away. But in globalization’s ever-heaving wake, there’s been lots of talk that the mighty nation-state model is capsizing, and that that post-45 global system looks like it’s being replaced by something else—something that makes the old security of the us/them binary a little harder to depend on, something that privileges market relations and aggregates of capital interest over national sovereignty.
(Now, there’s a strong countervailing current here too, one that maintains that globalization has in fact strengthened (if not rigidified, at least from a market perspective) national cohesion; and the current pox of reactionary nativism we’re seeing across the Euro-American world bears ugly testament to this.)
I’m not interested in offering any thoughts on which side of this argument has the goods, as the contemporary global political order is especially volatile—maybe unprecedentedly so—and much of what pretends to be evaluation of the present moment is really horse-blinded guesswork (think polling for the U.S. last presidential election). What I will suggest, however, is that ever accelerating global circulation of capital has created multi-national corporate entities that exhibit some of the attributes of sovereignty, and that this fact is one that should be considered in any conversation about “outside” influence in American electoral politics.
I’m far from the first person to suggest the sovereign-likeness of multi-nationals. Joshua Barkan, to name just one writer who’s taken up this topic, keenly argues that corporations and nation-states are related ontologically, mutually reinforcing each other through a shared trait that amounts to the most fundamental characteristic of sovereignty: legally sanctioned immunity from the law (my post “initial thoughts part 2” goes into the “sovereign immunity” thing a little deeper). This line of thinking is supported by a host of international trade agreements (NAFTA and the erstwhile TPP, just to name two) that seek to strip national governments of jurisdiction in trade disputes; and even arrogate to corporations the right to bring suit against a national government in third party Tribunals (organized under the World Bank of the UN) if that government enacts legislation disruptive to investment returns! Add to this the growing trend of corporations trying to enforce “arbitration” in what would traditionally be class action disputes, and you begin to see the a picture corporate sovereignty drawn in starker lines.
While I think arguments like Barkan’s are good and necessary, I’d like to approach the corporate sovereignty idea from a different angle, and question what implications it might have for campaign finance. We all know by now the Supreme Court thinks corporate political spending is a form of speech, so, on those (utterly cynical) grounds, corporations have the right to pump abhorrent amounts of money into Super PACs, etc. The Supreme Court has not been asked to consider, however, whether or not multinational corporations are in fact properly domestic entities.
Case in point: the Orange Monkey in Chief is presently shilling regressive tax “reform” in order to entice “American” multi-nationals to repatriate some of the TWO AND A HALF TRILLION DOLLARS they’ve sheltered in tax havens. It’s an inconceivable sum (staggeringly equivalent, in fact, to the GDP of Great Britain in 2016), and it leads me to wonder at what point we should stop considering U.S. corporations who hold the majority of their assets abroad to be domestic entities at all? Furthermore, if we except the argument that multi-nationals have the attributes of political sovereignty, do they maybe verge on “foreign” status that might bar them from any kind of campaign spending? In this connection, let’s take a moment to briefly examine some of the offshore antics of Super PAC superstars, the Koch Brothers.
Turns out a liberal (whatever that’s supposed to mean these days) Super PAC called American Bridge 21st Century has done some digging into Koch Industries, and they uncovered 610 Koch subsidiaries spread across 17 known tax shelter nations. As reported by the International Consortium of Investigative Journalists, one deviously baroque shell game saw Koch Industries’ own internal bank (!), Arteva Europe S.À.R.L, mediating hundreds of millions of dollars in “loans” from Koch businesses in higher tax regions to subsidiaries centralized in Luxembourg, which taxes such cash flows at a whopping 1%. ICIJ also details a whiplash-inducing bit a chicanery where a “$736 million loan gets passed from company to company until a U.S.-based subsidiary becomes ‘both the debtor and creditor of the same debt,’… and the debt is canceled.” Is it just me, or does Koch Industries sound spookily like the Federal Reserve?
Moving on, let’s take a look at just one of the right-wing political advocacy groups the Koch Industries has bankrolled: Generation Opportunity. This group’s M.O. is to spread the conservative agenda to young people in the U.S. (in their words, to promote a “free society”…and, hey, who could argue with that, right?). What’s interesting about this group (for this post, anyway) is that the Kochs’ have dumped about $5 million into their coffers over the last half-decade, a significant portion of which went to Facebook-driven campaigns vilifying the Affordable Care Act. Debates about the ACA aside, isn’t it at least worth considering that the vast amount of money spent to influence American political opinion on an up-to-this-point unregulated social media platform may have come from a multi-national corporate entity that (if we take a “global” view of it’s subsidiary network) is at best nominally American? And if we can permit that question to be posed, shouldn’t we also ask what kinds of conflicts of interest deliberately elusive domiciling create when corporations like Koch Industries choke the electoral process with their untaxed cash?
And in the interest of fairness, this multi-national corporate influence problem isn’t just about conservative propaganda. Walmart has tens of billions of dollars coursing through Luxembourg, the Netherlands, Ireland, the Caymans, the list goes on; and it also makes internal loans between its subsidiaries that shift profits to low tax regions. Walmart is also a major donor to the Center for American Progress, a “liberal” think thank that, in addition to tacitly endorsing Israeli apartheid in order to gorge on AIPAC dollars, parents Generation Progress, Generation Opportunity’s center-left counterpart. And while I may personally be more sympathetic to some of GP’s agenda, the fact remains that they’re funded in part by an entity with tenuous claims to American national status.
So what’s the point here? Well, returning to allegations of Russian influence on the the last presidential election and the pandemonium they’ve created, I just want to suggest that it’s maybe worth acknowledging the creeping rot in our democratic institutions that existed before Fancy and Cozy Bears snuck in the back door. Corporate spending is a titanic (sinking pun intended) influence on our electoral process, and it’s incumbent on us as citizens to seriously consider the sovereign relationship (the actual loyalty and best-interest mindedness) corporations have with the American body politic they seek to control. With this in mind, it seems to me that Sens. Klobuchar and Warner might want to consider fumigating their own house before marching the exterminator to dacha Putin.