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Reader K responds & I add a little more info

Posted By: Swami
Date: Friday, 19-Aug-2016 11:57:51
www.rumormill.news/54396

In Response To: Not Good Enough: We are Beyond Apologies, Pull CNN's Charter, Sell Off Their Assets & Give the Money to The Population (Swami)

As a licensed amateur radio operator, I have some idea of licenses and charters.

CNN means "Cable News Network" which means they own no radio stations and need no licenses. As a private corp, they also hold no charter. As a press organization, they're operating according to the 1st Ammendment of the US Constitution, in an unregulatable form. As a corp, the only thing someone can take away from them is their encorporation, which is used for tax advantage. If removed, would have no impact on the entities ability to function as a journalism source.

While I dislike CNN for a host of reasons, yer notions have no credibility whatever. Can you please refrain from further unseemly pronouncements?

~~~

Thanks for responding reader. Now, lets take a closer look at this subject.

~~~

Our Hidden History of Corporations in the United States

http://reclaimdemocracy.org/corporate-accountability-history-corporations-us/

When American colonists declared independence from England in 1776, they also freed themselves from control by English corporations that extracted their wealth and dominated trade. After fighting a revolution to end this exploitation, our country’s founders retained a healthy fear of corporate power and wisely limited corporations exclusively to a business role. Corporations were forbidden from attempting to influence elections, public policy, and other realms of civic society.

Initially, the privilege of incorporation was granted selectively to enable activities that benefited the public, such as construction of roads or canals. Enabling shareholders to profit was seen as a means to that end. The states also imposed conditions (some of which remain on the books, though unused) like these*:

Corporate charters (licenses to exist) were granted for a limited time and could be revoked promptly for violating laws.

Corporations could engage only in activities necessary to fulfill their chartered purpose.

Corporations could not own stock in other corporations nor own any property that was not essential to fulfilling their chartered purpose.

Corporations were often terminated if they exceeded their authority or caused public harm.

Owners and managers were responsible for criminal acts committed on the job.

Corporations could not make any political or charitable contributions nor spend money to influence law-making.

For 100 years after the American Revolution, legislators maintained tight controll of the corporate chartering process. Because of widespread public opposition, early legislators granted very few corporate charters, and only after debate. Citizens governed corporations by detailing operating conditions not just in charters but also in state constitutions and state laws. Incorporated businesses were prohibited from taking any action that legislators did not specifically allow.

States also limited corporate charters to a set number of years. Unless a legislature renewed an expiring charter, the corporation was dissolved and its assets were divided among shareholders. Citizen authority clauses limited capitalization, debts, land holdings, and sometimes, even profits. They required a company’s accounting books to be turned over to a legislature upon request. The power of large shareholders was limited by scaled voting, so that large and small investors had equal voting rights. Interlocking directorates were outlawed. Shareholders had the right to remove directors at will.

In Europe, charters protected directors and stockholders from liability for debts and harms caused by their corporations. American legislators explicitly rejected this corporate shield. The penalty for abuse or misuse of the charter was not a plea bargain and a fine, but dissolution of the corporation.

In 1819 the U.S. Supreme Court tried to strip states of this sovereign right by overruling a lower court’s decision that allowed New Hampshire to revoke a charter granted to Dartmouth College by King George III. The Court claimed that since the charter contained no revocation clause, it could not be withdrawn. The Supreme Court’s attack on state sovereignty outraged citizens. Laws were written or re-written and new state constitutional amendments passed to circumvent the (Dartmouth College v Woodward) ruling. Over several decades starting in 1844, nineteen states amended their constitutions to make corporate charters subject to alteration or revocation by their legislatures. As late as 1855 it seemed that the Supreme Court had gotten the people’s message when in Dodge v. Woolsey it reaffirmed state’s powers over “artificial bodies.”

But the men running corporations pressed on. Contests over charter were battles to control labor, resources, community rights, and political sovereignty. More and more frequently, corporations were abusing their charters to become conglomerates and trusts. They converted the nation’s resources and treasures into private fortunes, creating factory systems and company towns. Political power began flowing to absentee owners, rather than community-rooted enterprises.

The industrial age forced a nation of farmers to become wage earners, and they became fearful of unemployment–a new fear that corporations quickly learned to exploit. Company towns arose. and blacklists of labor organizers and workers who spoke up for their rights became common. When workers began to organize, industrialists and bankers hired private armies to keep them in line. They bought newspapers to paint businessmen as heroes and shape public opinion. Corporations bought state legislators, then announced legislators were corrupt and said that they used too much of the public’s resources to scrutinize every charter application and corporate operation.

Government spending during the Civil War brought these corporations fantastic wealth. Corporate executives paid “borers” to infest Congress and state capitals, bribing elected and appointed officials alike. They pried loose an avalanche of government financial largesse. During this time, legislators were persuaded to give corporations limited liability, decreased citizen authority over them, and extended durations of charters.

Attempts were made to keep strong charter laws in place, but with the courts applying legal doctrines that made protection of corporations and corporate property the center of constitutional law, citizen sovereignty was undermined. As corporations grew stronger, government and the courts became easier prey. They freely reinterpreted the U.S. Constitution and transformed common law doctrines.

One of the most severe blows to citizen authority arose out of the 1886 Supreme Court case of Santa Clara County v. Southern Pacific Railroad. Though the court did not make a ruling on the question of “corporate personhood,” thanks to misleading notes of a clerk, the decision subsequently was used as precedent to hold that a corporation was a “natural person.” This story was detailed in “The Theft of Human Rights,” a chapter in Thom Hartmann’s recommended book Unequal Protection.

From that point on, the 14th Amendment, enacted to protect rights of freed slaves, was used routinely to grant corporations constitutional “personhood.” Justices have since struck down hundreds of local, state and federal laws enacted to protect people from corporate harm based on this illegitimate premise. Armed with these “rights,” corporations increased control over resources, jobs, commerce, politicians, even judges and the law.

A United States Congressional committee concluded in 1941, “The principal instrument of the concentration of economic power and wealth has been the corporate charter with unlimited power….”

Many U.S.-based corporations are now transnational, but the corrupted charter remains the legal basis for their existence. At Reclaim Democracy!, we believe citizens can reassert the convictions of our nation’s founders who struggled successfully to free us from corporate rule in the past. These changes must occur at the most fundamental level — the U.S. Constitution.

~~~

CorpWatch : The Death Penalty for Corporations Comes of Age

http://www.corpwatch.org/article.php?id=1810

by Russell Mokhiber, Business Ethics
November 1st, 1998

In two surprising recent cases, a law school professor and a circuit court judge seek to revoke the charters of corporate lawbreakers.

We know what the death penalty for individuals means: Commit an egregious crime, die at the hands of the state. What does it mean to talk about the ''death penalty'' for corporations? Simply this: Commit an egregious wrong, and have your charter revoked. In other words, lose the state's permission to exist. It's an intriguing concept, because most of us never think about corporations needing anyone's permission to exist. But they do.

Throughout the nation's history, the states have had -- and still have -- the authority to give birth to a corporation, by granting a corporate charter, and to impose the death penalty on a corporate wrongdoer by revoking its charter. Activist-author Richard Grossman points out that in 1890, for example, New York's highest court revoked the charter of the North River Sugar Refining Corporation -- referring to the judgment explicitly as one of ''corporate death.'' It was once widely understood that the states had this power. ''New York, Ohio, Michigan and Nebraska revoked the charters of oil, match, sugar and whiskey trusts'' in the 1800s, Grossman wrote in the pamphlet, ''Taking Care of Business: Citizenship and the Charter of Incorporation,'' co-authored with Frank Adams.

For many decades now, this vital power has lain dormant in the public mind. But a small group of activists led by Grossman is hoping to resurrect it. They believe that to stem the tide of growing and unaccountable corporate power, it's not enough to rely on regulation, litigation, legislation, and law enforcement. Grossman and his Cambridge-based Project on Corporations, Law and Democracy want citizens to reclaim the power to put corporations to death.

Although Grossman has written and lectured extensively on the topic, few have taken him seriously. In an interview recently, he admitted to having only eleven citizen activists in his group.

Enter Loyola Law School professor Robert Benson. Benson had never heard about the corporate death penalty until he read Grossman's work. Then, a few years ago, Benson invited Grossman to Los Angeles to speak before the law school, and afterward the two struck up a conversation. Benson was looking for a way to bring corporate wrongdoers into line, and charter revocation struck him as something that might work. He decided to try it -- in a big way.

On September 10, he and a coalition of more than 30 public interest organizations filed a petition calling on the attorney general (AG) of California to revoke the charter of Union Oil of California (Unocal). In social responsibility circles, Unocal is best (or perhaps worst) known for its controversial Burma pipeline, being built by a consortium co-owned in part by Unocal and the outlaw military regime there. For construction of the pipeline, the Burmese regime has reportedly seized land, forcibly relocated villages, and used unpaid labor -- even of children and the elderly. Benson's petition cites many other outrages as well -- including ''unspeakable'' human rights violations in Unocal's dealings with the Taliban militia in Afghanistan, which is known for its extreme cruelty in treatment of women; plus responsibility for the 1969 oil blowout in the Santa Barbara Channel; in addition to hundreds of other environmental and employee-safety violations. Noting that California routinely puts out of business hundreds of unruly accountants, lawyers, and doctors every year, the coalition called upon California Attorney General Dan Lungren (who is running for Governor) to revoke Unocal's charter.

''We're letting the people of California in on a well-kept secret,'' said Benson. ''The people mistakenly assume that we have to try to control these giant corporate repeat offenders one toxic spill at a time, one layoff at a time, one human rights violation at a time. But the law has always allowed the attorney general to go to court to simply dissolve a corporation for wrongdoing and sell its assets to others who will operate in the public interest.''

In California, this power of charter revocation has apparently been invoked only once this century -- in 1976, when a conservative Republican AG asked a court to dissolve a private water company for allegedly delivering impure water to its customers. In New York, it was invoked more recently, when the AG sought to revoke the charters of two corporations that put out allegedly deceptive ''scientific'' research for the tobacco industry.

Unocal spokesperson Barry Lane said ''there is no legal basis'' for Benson's petition. But that's untrue, for a California statute now on the books authorizes the attorney general to seek charter revocation. Similar statutes are on the books in all 50 states plus the District of Columbia.

''We have committed misdemeanors in the past,'' Lane admitted. ''But then so have many companies. We have operated here for 100 years. Yes, we have made some mistakes, but we have always taken responsibility for those mistakes and worked to correct them.''

Whether or not that's true, the company's charter seems in little immediate danger. The attorney general's office rejected the petition a scant five days after it was filed. Delivered on a Thursday, it was rejected the following Tuesday -- hardly sufficient time to review a 127-page document that cited 24 state and federal laws, 45 cases, and 40 international laws. ''We got a three-sentence rejection that a court can clearly reverse as arbitrary and capricious,'' Benson said, as he made plans to appeal.

''We are not politically naive,'' Benson explained. ''We don't think that this is going to get so far along the road that Unocal will actually be broken up anytime soon, although it should be.'' The petition was filed to change the legal and political culture. ''Our fundamental goal here is to change the public discourse and the media perception of the power of corporations versus people, to float the idea that people are sovereign over corporations,'' he said. And it may be working. While the case has failed to draw the attention of major national media, it has been extensively covered on the West Coast and in papers like the Journal of Commerce and the Financial Times of London. ''The next time we go after a corporation to dissolve it,'' Benson said, ''we believe the culture and the media will be much more receptive.''

That hypothetical ''next time'' may already be at hand -- through an unexpected sister case recently filed by Alabama Circuit Judge William Wynn, seeking to revoke the charters of the nation's five major cigarette companies. Remarkably, Judge Wynn expects to succeed.

He had never heard of Grossman or corporate charter revocations, when in May 1998 he filed a complaint in state court in Birmingham, Alabama, demanding that the corporate charters of Philip Morris, Brown & Williamson, R.J. Reynolds, The Liggett Group, and Lorillard Corporation be revoked. The judge was angry that Alabama had refused to join 22 states in suing the tobacco companies, and had spent the better part of a year researching the law, to find a way to force the state to act. He stumbled across an obscure 19th century statute giving any citizen the right to petition the state for a ''writ of quo warranto'' -- a Latin phrase meaning ''by what authority?'' As Judge Wynn explains it, the writ of quo warranto allows a citizen to file a lawsuit against any corporation, posing the question: By what authority are you holding a corporate franchise to do business, when you are in fact breaking the law?

Judge Wynn uncovered a number of laws he believes the cigarette companies have violated, including contributing to the dependency of a minor, unlawful distribution of material harmful to a minor, endangering the welfare of a child, assault in the third degree, recklessly endangering another, deceptive business practice, and causing the delinquency of a child. Though the companies have not been charged with these crimes in Alabama, Judge Wynn says that he's ''calling for the criminal enforcement of these misdemeanors.'' And upon a finding that the companies have broken the law, he's then calling for charter revocation.

Perhaps the most surprising response to the lawsuit was that of the state's most influential paper, the Birmingham News. The paper not only ran a news story about the lawsuit, but published a very long opinion piece by Grossman, titled ''Slaying Big Tobacco.'' Mainstream readers were thus exposed to the characteristically radical Grossman style, arguing that Judge Wynn is on ''solid legal ground when he demands the state of Alabama provide its sovereign people with a proper remedy to end the corporate usurpation of the people's authority.''

Judge Wynn is optimistic about his chances. He has known David Barber, the local district attorney, for 25 years, and calls him a ''straight shooter.'' He says the chances Barber will file criminal charges against the tobacco companies are ''excellent,'' and predicts that if Barber does so, any judge hearing the case will be forced to revoke the companies' state charters. Because that would mean a daily loss of $2 million in tobacco revenues, it would force the companies to settle. Judge Wynn predicts this will happen.

If he's blowing smoke, then the movement for the corporate death penalty may be driven back underground for a time. If he's right, look for major national news coverage and perhaps a sea change in the debate over corporate governance in America.

Resources

The 127-page petition against Unocal is available on the Web at www.heed.net.

''Taking Care of Business: Citizenship and the Charter of Incorporation,'' a pamphlet by Richard Grossman and Frank Adams, first published in 1993, is an excellent introduction to the concept of corporate de-chartering. Single copies are $4.55 from the Program on Corporations, Law & Democracy at P.O. Box 806, Cambridge, MA 02140.

Professor of Law Robert Benson can be reached at Loyola Law School, Los Angeles, CA 90015. Phone 213/736-1094.

Judge William Wynn can be reached at 660 Jefferson County Courthouse, Birmingham, AL 35263. Phone 205/325-5367.

Blurbs:

''It is hardly a radical or drastic notion that some corporations should be permanently prevented from doing harm. The state permanently revokes the privilege to do business of accountants, doctors, lawyers and others licensed by the state -- hundreds of them every year.''

-- Thesis 3 from the petition to revoke Unocal's charter.

''Corporations today operate out of control as private governments, more powerful than nation- states.''

-- Thesis 6 from the petition to revoke Unocal's charter.

''Even under incorporation statutes 'liberalized' in the race for the laxest state regulation of corporations, corporate activity must be lawful and in accord with the public policy of the state.''

-- Thesis 9 from the petition to revoke Unocal's charter.

''The company's environmental devastation extends from local to global and is serious enough to describe as ecocide.''

-- From the petition to revoke Unocal's charter.

''A corporation in law is just what the incorporation act makes it. It is the creature of the law and may be moulded to any shape or for any purpose the Legislature may deem most conducive for the common good.''

-- 1834 declaration by Pennsylvania Legislature

''This is an historic event. It is the first broad-based effort of this century to use the people's sovereign authority over a corporation chartered by one of our states to terminate its privilege to do business.''

-- Ronnie Dugger, founder of Alliance for Democracy, one of 30 groups who petitioned to revoke Unocal's charter.

~~~

Charter Definition | Investopedia

http://www.investopedia.com/terms/c/charter.asp

A charter is a legal document that provides for the creation of a corporate entity. A corporation's charter is issued by a federal or regional government and effectively creates a legal entity out of the business, which existed only as a partnership, sole proprietorship or similar business before incorporating. Most charters usually include the corporation's name, the location of its head office, the date of incorporation, the amount/type of stock to be issued and any restrictions on areas of business activity or further share issuances.

BREAKING DOWN 'Charter'

A charter sets forth a corporation’s basic information, including profit/nonprofit status, purpose, name and office address of the registered agent, financial data pertaining to the company’s assets, board composition and ownership structure. The charter is filed with the secretary of state for the state in which the corporation is headquartered. A chartering fee is typically paid. Annual franchise taxes also apply.

If the application meets the jurisdiction’s standards for content and presentation, the secretary of state approves the application. The application becomes a corporate charter, confirming the corporation exists. The secretary of state signs the charter, retains a copy and issues a certificate of incorporation, confirming the company filed the charter with the state.

A corporation’s charter must be prepared and filed before legally transacting business. Failure to do so exposes owners to direct, personal liability for incurring debts and causing damages during that time.

Key Roles in Creating a Charter

The incorporator is in charge of setting up the company and prepares and files the charter along with other corporate documents. The incorporator may also select members for the board of directors or organize an initial board meeting. Otherwise the incorporator has no official duties.

The registered agent receives important documents and legal papers on the corporation’s behalf. The agent must be available during regular business hours every weekday.

A corporate charter can change for various reasons. For example, if the par value of issued shares or the focus of the business changes, the corporation submits a request to change the charter with the secretary of state. The business may also have to submit an amended charter if the number of directors on the board is changed, the people serving on the board change or the corporation changes its primary location.

Example of Creating a Charter

When setting up a nonprofit organization, having a charter gives credibility to its programs and services. The charter limits liability for the organization’s officers and directors. Organization documents and governance policies are required when applying for tax exempt status. The charter must include language stating the organization’s activities are limited to purposes set in section 501(c)(3) of the Internal Revenue Code and that upon dissolution of the organization, remaining assets will be distributed to another nonprofit, a government agency or other public purpose.

~~~

Corporate Charter Definition | Investopedia

http://www.investopedia.com/terms/c/corporatecharter.asp

What is a 'Corporate Charter'

A corporate charter — simply referred to as "charter" or "articles of incorporation" — is a written document filed with a U.S. state by the founders of a corporation detailing the major components of a company such as its objectives, its structure and its planned operations. If the charter is approved by the state government, the company becomes a legal corporation. It's referred to as "charter" and "articles of incorporation."

BREAKING DOWN 'Corporate Charter'

The creation of corporate charters is basically the start of a new building a new corporation. Corporate charters signal the birth of a new company. Once filed and approved, a corporation becomes legitimate and legal. The document must be created and filed before the corporation starts business transactions. If the corporate charter is not created before the business starts business transactions, the owners of the corporation expose themselves to risk, including being personally liable for all the possible damages and debts created by the business during the period that the corporation transacted business without a legitimate corporate charter.

Parts of the Corporate Charter

At the most basic level, the corporate charter includes the corporation's name, its purpose, whether the corporation is a for-profit or nonprofit institution, the location of the corporation, the number of shares that are authorized to be issued, and the names of the parties involved in the formation. Companies' corporate charters are filed with the state secretary in which the corporation is located. Typically, the creation of corporate charters has no fees.

Some government websites provide templates for corporate charters. However, some businesses still opt to consult and hire business lawyers when creating and filing corporate charters to provide more legitimate and favorable legal business documents and environments.

The state in which the corporation is headquartered in has particular requirements pertaining to the parts of the corporate charter. Some states require the inclusion of "Inc." or "Incorporated," depending on the specific type of corporation. It also includes the name of the authorized agent. No matter where the business is located, a corporation must have a designated registered agent who serves as the authorized receiver of important legal documents for the corporation.

Corporations must provide the reasons why they were built. This part includes what the corporation does, what industry they are in and what type of products and services they provide.

Aside from providing a designated registered agent, the corporate charter must also include the names and addresses of the corporations founders, corporate officers and initial directors.

In addition, corporations that are designated as stock corporations must provide the specific number of stock shares and stock prices for its initial public offering.

~~~

Articles Of Incorporation Definition | Investopedia

http://www.investopedia.com/terms/a/articlesofincorporation.asp

What are 'Articles Of Incorporation'

A set of formal documents filed with a government body to legally document the creation of a corporation. Articles of incorporation must contain pertinent information such as the firm’s name, street address, agent for service of process, and the amount and type of stock to be issued. Articles of incorporation are also referred to as the "corporate charter," "articles of association" or "certificate of incorporation."

BREAKING DOWN 'Articles Of Incorporation'

Most states also require the articles to state the firm’s purpose, though the corporation may define its purpose very broadly to maintain flexibility in its operations. Amazon’s certificate of incorporation, for example, states that the corporation’s purpose is “to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.” Other provisions outlined in a company’s articles of incorporation may include limitation of directors’ liability, actions by stockholders without a meeting and authority to call special meetings of stockholders. Each state has certain mandatory provisions that must be contained in the articles of incorporation and other optional provisions that the company can decide whether to include. The corporation also must pay the state a fee to incorporate and may have to pay a corporate franchise tax as well.

In the United States, articles of incorporation are filed with the secretary of state in the state where the business chooses to incorporate. Some states offer more favorable regulatory and tax environments and, as a result, attract a greater proportion of firms seeking incorporation. For example, Delaware and Nevada attract about half of public corporations, in part because of the tax advantages they offer, and also because shareholders, directors and officers aren’t required to be residents in these states.

Another key corporate document is the bylaws, which outlines how the organization is to be run. Bylaws work in conjunction with the articles of incorporation to form the legal backbone of the business.

~~~

Chartering a New Course Revoking Corporations' Right to Exist

http://www.thirdworldtraveler.com/Controlling_Corporations/NewCourse_CorpsRights.html

by Charlie Cray
Multinational Monitor magazine, October/November 2002

When they hear the proposal to "revoke corporate charters," most people probably think that means banning the use of company jets by top executives like Ken Lay, who used Enron's planes to fly his daughter and her bed to southern France and shuttle political allies including George W. Bush to campaign events. And to most people, banning that kind of corporate perk abuse wouldn't be a bad idea.

But to a growing number of activists, lawyers and scholars, "revoking corporate charters" means doing something much more significant: dismantling harm-inducing corporations by revoking their right to exist.

"There's an almost an instantaneously favorable gut response from people when you explain that they can revoke a company's charter, distribute their assets and put them out of business," says attorney Robert Benson, who petitioned California's attorney general to revoke Unocal's charter on behalf of 150 organizations and prominent individuals in 1998. "After Enron, people want something that's simple and powerful-not just jiggling around with accounting rules or prosecuting a few executives-and this idea gets a good response."

Corporate charters are the legal instruments by which state governments incorporate businesses and grant them special privileges and rights (such as limited liability) as defined in the state's corporate laws.

Although state and federal courts have consistently recognized the authority of attorneys general to revoke corporate charters, attorneys general have rarely chosen to exercise this option against large corporations. And no attorney general has even raised the possibility of using charter revocation as a remedy during the recent corporate crime wave.

Observers attribute this reluctance to the strong influence corporations have come to wield over state governments, as well as the severe nature of the penalty.

THE ENFORCER

Groups like the California chapter of the National Lawyer's Guild (of which Benson is a member) and POCLAD (Program on Corporations, Law and Democracy) have made educating the public and law enforcement officials about the need to assert their right to govern corporations through tactics such as charter revocation a primary goal in recent years.

Building broad public awareness of charter revocation as a legitimate enforcement tool is key, corporate activists say, since top law enforcement officials already know about charter revocation but ignore it for political reasons.

"Legal publishers routinely describe it in their manuals that keep lawyers up to date on the law," Benson explains. "In California, the very same statutory words that authorize revocation of corporate charters also authorize revocation of governmental power unlawfully usurped, and those words have been used for the latter purpose scores of times over the years."

While charter revocation statutes haven't been applied to multinational corporate lawbreakers, state governments commonly use them to go after the charters or licenses of small companies:

* In the late 1990s, a number of Florida-based corporations involved in stock brokerage "pump-and-dump" schemes alleged to have cost investors $81 million had their corporate charters revoked or dissolved for failure to file annual reports. (In a "pump-and-dump" scheme the stock price is artificially inflated by market manipulation before the shares are dumped, or sold, at a higher price to their brokerage customers).

In 2000, after a protest by the New York State Building and Construction Trades Council, the State of New York canceled a $790,000 welfare-to-work contract with Construction Force Services, a New York-based temporary employment services, citing, among other reasons, a state Department of Labor determination that the company no longer had a valid corporate charter, since the company failed to comply with state tax law.
* In 2001, the Texas Secretary of State revoked the charter of Lionheart Newspapers Inc. (a publisher of over 70 publications) for non-payment of franchise taxes.

Earlier this year, news agencies reported that Hightec and S.I.N.C.L.A.R.E. Group are considered defunct entities whose corporate charters have been revoked by order of the Securities and Exchange Commission. Both companies were run by Larry Stocket, who the commission described as a "recidivist securities violator."

* Officials from the state of California's Franchise Tax Board say they suspended 58,000 corporations in fiscal year 2001-2002 and 68,000 the previous year for failure to pay taxes or failure to file proper statements.

Perhaps the boldest use of the charter revocation enforcement tool against multinational corporate interests in recent years came in 1998, when New York's then-attorney general Dennis Vacco announced his intention to snuff out two tobacco industry front groups-the Council for Tobacco Research and the Tobacco Institute, Inc. -by revoking their charters.

The two non-profit front groups were ostensibly created decades before, when public health campaigns began to get the public to see the link between tobacco smoking and cancer. The official mission of the groups was "to provide truthful information about the effects of smoking on public health," Vacco explained. "Instead ... these entities fed the public a pack of lies in an underhanded effort to promote smoking and to addict America's kids."

Before the industry agreed to dissolve the two groups as part of a multi-state settlement with state attorneys general of a lawsuit related to the public health costs of smoking, Vacco successfully petitioned the state's courts to appoint a receiver for both groups and dissolve the Council for Tobacco Research based on the assertion that they had violated their non-profit corporate charters and abused their tax-exempt status. The judge hearing the charter revocation suit approved a plan in which CTR agreed to donate its assets to two independent cancer research institutes.

State attorneys general "don't hesitate to draw this particular arrow from their quivers when the target is some small, unpopular or socially marginal enterprise," says Benson. But when it comes to Enron and other multinationals "they don't even want you to know about it because they don't want to appear to be soft on corporate crime."

"We have to revive charter revocation as an enforcement tool across the country," he says, "retrieve it from American history and reinject it into our political discourse."

A U.S. TRADITION

In understanding of the history of how citizens have used charters to govern corporations is critical to assessing how citizens and elected officials can effectively rein in giant multinationals today, charter revocation advocates say. The point is not only to argue for the viability of corporate charter revocation, but to emphasize that it is citizens who give corporations their right to exist, and that they retain the right to define and even remove the powers given to corporations.
"For one hundred years after the American Revolution, citizens and legislators fashioned the nation's economy by directing the chartering process," POCLAD co-founder Richard Grossman and co-author Frank Adams wrote in "Taking Care of Business," a Tom Paine-style pamphlet published nearly a decade ago.

Once they had thrown off the shackles of British colonial rule, early post-colonial state legislatures chartered only a limited number of profit-making corporations. Only 355 corporations were incorporated in the United States before 1800, most with "public or near public" purposes such as to build canals, bridges or toll roads.

Early state legislators also used corporate charters to place limits on the corporations' behavior, size and reach. Strict rules limited the issuance of stock, shareholder voting, recordkeeping and disclosure of corporate information. Limits on corporate size and power were placed through rules on capitalization, debt, land holdings and sometimes profits. And states also limited corporate charters to a set number of years, forcing their review and renewal.

By the end of the nineteenth century, however, corporations had been transformed from tightly ruled enterprises which often served the public interest, to a group of industrial-era businesses dominated by giant private trusts that effectively stomped all over states' ability to control them.

How they became so powerful is a long, complicated story. But during the period of industrialization, corporations used their rapidly growing economic power to bore into state constitutions, hiring early-day lobbyists to surreptitiously alter state corporate laws and promote new legal doctrines such as limited liability (originally rationalized by the need to attract investment into risky ventures that benefit the broad public) to challenge the legislatures' ability to regulate their behavior through the corporate charter.

One of the first such decisions came in the 1819 landmark case of Trustees of Dartmouth College v. Woodward. In that case, the Supreme Court held that a corporate charter "is a contract" protected by the Contracts Clause of the U.S. Constitution, thereby weakening the ability of legislatures to revise charters once they were granted.

The corporate quest to escape from interference by state governments (and thus convert the chartering process to a rote administrative procedure) was continuously bolstered by the addition of other constitutional protections and rights originally intended for natural persons.

"Corporations aren't just cooking the books," says Virginia Rasmussen, a member of POCLAD and the Women's International League for Peace and Freedom. "They've long been cooking the Constitution."

But at least until the end of the nineteenth century, "contests over charters and the chartering process were not abstractions," Grossman and Adams say. "They were battles to control labor, resources, community rights and political sovereignty." And by the turn of the century, giant corporate trusts had essentially won the game.

"THE FIRST STATE"

As the U.S. national economy became more integrated, corporations saw they could escape charter revocation efforts-or even state efforts to impose some social duties on them-simply by changing their state of incorporation. Standard Oil, for instance, was able to dodge attempts by two Ohio Republican attorneys general to revoke the company's charter by moving to New Jersey, which had begun to rewrite its laws to effectively legalize giant corporate trusts. New Jersey officials saw an opportunity to raise the state's revenues through the collection of incorporation fees and annual "franchise" taxes, thus pioneering a new charter-mongering business.

New Jersey's initiative kicked off a "race to the bottom" in state corporate laws, with states competing to offer the most friendly environment to corporations. The ultimate winner in this contest was Delaware.

By I932, more than a third of the industrial corporations listed on the New York Stock Exchange were incorporated in Delaware.
To keep other states from poaching their hoard, the state's legislature revised the General Corporation Law in 1963 to "[declare] it to be the public policy of the State to maintain a favorable business climate and to encourage corporations to make Delaware their domicile."

That policy led to the establishment of sophisticated chancery courts and corporate-friendly laws regarding everything from managerial compensation and self-dealing transactions (i.e. rules regarding business dealings between corporations and outside entities connected to company officials) to business judgment rules which limit directors' potential liability and protect managers from lawsuits.

As a result of Delaware's efforts, today over 308,000 companies, including 60 percent of the Fortune 500 and 50 percent of the companies listed on the New York Stock Exchange, are incorporated in Delaware. And for its success in dominating the corporate charter business, Delaware reaps nearly $500 million in corporate franchise fees each year.

MANDATORY REVOCATION

Among the problems faced by charter revocation advocates is that enforcement power resides with state attorneys general. Any attorney general commencing a charter revocation action against a major multinational would face enormous political pressure, so it is no surprise that none have taken up the cause.

Some lawyers and activists have argued that the possibility of the abuse of prosecutorial discretion in failing to bring suits is a strong argument for judicial review, and for a right for citizens to bring de-chartering cases. But even in the unlikely event that the courts grant citizens the right to proceed, they would still face a corporation with a large battery of lawyers and consultants.

"In the case of our Unocal petition, we were in fact invited by the former California attorney general to ask his permission to proceed on our own, but we refused on the ground that only the state attorney general has the resources to fight a huge corporation," explains Benson.

He says a better tactical alternative may be to enact legislation to force the attorney general's hand, requiring the commencement of revocation proceedings in certain instances.
Working with a California chapter of the Alliance for Democracy, Benson has drafted an amendment to the state corporate code called the "Corporate 3 Strikes Act." The bill would require the state's attorney general to go to court and take steps to revoke the charter of any corporation that commits three major violations in 10 years. It is the focus of a new post-Enron campaign, which will try to either convert it into a ballot initiative or introduce it as legislation.

Ultimately, Benson and other long-term advocates of charter revocation say the strategy may be as important for helping build a corporate accountability movement as for dismantling particular corporations.

"I never saw the biggest payoff of filing charter revocation suits as being able to get rid of Unocal or any specific company," Benson reflects. "I saw the payoff as the changing the climate of public opinion against corporate malfeasance, and I think we helped do that with Unocal."

"If there were more of these charter initiatives, it would continue to raise the public expectation that we need to be tougher on corporations and not put up with any of this kind of behavior," he adds. R



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Articles In This Thread

Not Good Enough: We are Beyond Apologies, Pull CNN's Charter, Sell Off Their Assets & Give the Money to The Population
Swami -- Thursday, 18-Aug-2016 12:08:49
Reader K responds & I add a little more info
Swami -- Friday, 19-Aug-2016 11:57:51
Reader Anonymous says..
Swami -- Friday, 19-Aug-2016 15:37:51

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