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  (Source: Tristar Pictures)
Lobbyist bribery goes to waste for once, as Rep. Smith is forced to "postpone" SOPA indefinitely

UPDATE: PIPA is "dead"/postponed too... details at the end of the piece.

Over the weekend U.S. President Barack Obama's (D) cabinet hinted that he might veto the pending House's "Stop Online Piracy Act" (SOPA) (H.R. 3261) and Senate's "PROTECT IP Act" (PIPA) (S.968) out of concern that the bills Orwellian takedown provisions could damage the legitimate internet economy.  

I. The Rat Returns

With the support of politically enemy-turned-friend House Oversight Chairman, Rep. Darrell Issa (R-Calif.), Rep. Eric Cantor(R-Virg.) was compelled to promise to shelve any potential vote in the Republican-controlled House in terms of passing SOPA.  It was finally over -- the months of populist protest online, media criticism, and criticism from the online industry's top innovators like Google Inc. (GOOG) had paid off.  They had won.

Or so they thought.  On Monday support SOPA rose up from the dead, after Rep. Lamar Smith (R- Tex.) -- the bill's author in the House of Representatives -- said he would bring the bill to the floor for minor revisions and a February vote.  That led to the largest online protest that America has ever seen with tens of millions of Americans taking to the internet to post protest message, email their representatives, call their representatives, and sign petitions.

The bold populist outcry seemed to work.  First some Congresspeople jumped ship.  Then more did.

But even yesterday Rep. Smith -- whose office had done its fair share of copyright infringing -- was quoted as dismissing his constituents protest as a "publicity stunt" and vowing to ignore the people and bring the bill to vote.

II. Cornered, SOPA Meets Its End (For Now)

But on Friday afternoon a weay Rep. Smith took to the internet, tail tucked and admitted defeat, agreeing for the first time to shelve the bill.  The key word is he used is "postponed".  So it's fair to say SOPA is dead, but if you've ever played Resident Evil or watched South Park SOPA is a bit like Wesker or Kenny -- it may be dead -- but it will likely return next episode.

Rep. Smith ears shut
Rep. Lamar Smith (R-Tex.) has finally listened after purposefully ignoring the criticism about SOPA for so long. [Image Source: Know Your Meme]

In his statement Rep. Smith writes:

The problem of online piracy is too big to ignore. American intellectual property industries provide 19 million high-paying jobs and account for more than 60 percent of U.S. exports. The theft of America’s intellectual property costs the U.S. economy more than $100 billion annually and results in the loss of thousands of American jobs.  Congress cannot stand by and do nothing while American innovators and job creators are under attack.

The online theft of American intellectual property is no different than the theft of products from a store.  It is illegal and the law should be enforced both in the store and online.

The Committee will continue work with copyright owners, Internet companies, financial institutions to develop proposals that combat online piracy and protect America’s intellectual property.  We welcome input from all organizations and individuals who have an honest difference of opinion about how best to address this widespread problem.  The Committee remains committed to finding a solution to the problem of online piracy that protects American intellectual property and innovation.

The numbers are debatable, but Rep. Smith is right on one key issue -- online piracy is an issue that needs to be addressed in some form.  Whether it should be big media finding easier ways to distribute content legally online, such as challenging Apple, Inc.'s (AAPL) exclusivity contracts and bullying, which limit the number of legal distribution outlets, or the government finding a way to balance the rights of intellectual property holders with the people's right to reasonable justice, there's certainly cause to look for level-handed solutions in the public and private sector.

But at the same time Rep. Smith's statement is problematic as it couples two very different issues -- domestic piracy (sharing copyrighted works illegally via torrents, P2P, streaming, etc.) and foreign piracy.  

Foreign piracy is already a vast sea to navigate on, as it includes everything from stealing proprietary chipmaking technique from American fabs or engine part design from American fighter jets to your everyday bazaar merchant selling phony DVD copies of popular American films.  These kinds of abuses needs to be addressed, but in recent years Congress and the White House have essentially meekly bowed to China -- arguably the biggest single infringer of American goods -- afraid to speak up against it.

So when Rep. Lamar Smith talks about fighting foreign piracy, that's great but SOPA and Congress's past actions have done scant little to challenge infringer nations like China.  What they have done a whole lot to impose Orwellian takedown on the internet and punitive punishment on the American people.

III. Federal Bribery Must be Stopped

All of the piracy debate also overshadows a far greater base issue -- the allowance of blatant bribery in American federal politics.

Anti-streaming lobbyists paid an estimated 10 percent of all active U.S. Senators' combined election costs ($86M USD) and an unspecified amount (like in the high tens to low hundreds of millions of dollars) to the U.S. Congress, according to extensive research.  It's nice to see this kind of blatant bribery attempt fail for once.

But the real issue here is that if the bribery was smaller and the "bought" legislation didn't involve dramatic erosions of rights and free enterprise that SOPA did, the American people probably would have ignored it -- in fact that's what they been doing for a good couple decades now, as lobbying has grown into a flourishing mega-industry in the capital.

bribery pays
It's hard to get anything done in Washington these days without a bribe.
[Image Source: Google Images]

The end result is that while the American taxpayer and small business labor slavishly to pay their tax debt, the corporations with well-heeled lobbyists enjoy "tax holidays" and government grants.  These are kickbacks for bribes, plain as day, but politicians pretty them up with softer speak.

A recent peer-reviewed research study by the University of Kansas' business school showed that for every $1 spent bribing politicians in Washington D.C., corporate donors get an estimated $222 USD in tax exemptions and other financial kickbacks.  This bribery must be recognized and must be put to an end.  It is anti-innovation.  It is anti-freedom.  It is anti-American.

It is a huge problem that Americans must address, as they look back on their victory over SOPA and big media special interests.


PIPA, written by Sen. Harry Reid (D-Nev.) (very similar to the House's Republican-written SOPA) is also dead or delayed ("postponed").  In a press release Sen. Reid echoes the words of his Republican colleague, Rep. Smith, writing:

In light of recent events, I have decided to postpone Tuesday’s vote on the PROTECT I.P. Act.

There is no reason that the legitimate issues raised by many about this bill cannot be resolved. Counterfeiting and piracy cost the American economy billions of dollars and thousands of jobs each year, with the movie industry alone supporting over 2.2 million jobs. We must take action to stop these illegal practices. We live in a country where people rightfully expect to be fairly compensated for a day’s work, whether that person is a miner in the high desert of Nevada, an independent band in New York City, or a union worker on the back lots of a California movie studio.

I admire the work that Chairman Leahy has put into this bill. I encourage him to continue engaging with all stakeholders to forge a balance between protecting Americans’ intellectual property, and maintaining openness and innovation on the internet. We made good progress through the discussions we’ve held in recent days, and I am optimistic that we can reach a compromise in the coming weeks.

The only major difference between Sen. Reid's and Sen. Smith's commentary seems to be little tidbits of party-appropriate rhetoric, designed to pander to their base's sensibilities.

Sen. Reid's uses a "union" analogy, in an effort to sway Democrat voters, while Sen. Smith's focus on "foreign" threats and his vow to "work with... financial institutions" buzz words he clearly hopes will please his voters.

Sources: Lamar Smith, Harry Reid, NPR [$1 lobbyist = $222 tax breaks]

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RE: Here here
By Ryrod on 1/23/2012 3:02:43 AM , Rating: 2
I would like you to quantify the statement that there is no "right" to form a corporation. Because, to me, this is an anti-American statement. We have the right to voluntary association, that much is certain. I can't find a single Supreme Court ruling, or legal document for that matter, that validates your assertion. Not ONE. Can you provide something tangible so that I may further understand your position?

This goes back to my earlier statement about semantics. We do have a voluntary right to associate, but this applies specifically to organizations focused on political speech or advocacy of an issue. The Supreme Court has never weighed in on a "right to incorporate" as a 1st Amendment right and likely never will.

This is because the corporation is a creature of state statute. The legitimacy of a corporation exists at the state level and not at the Federal level. There are no federal incorporation laws, only state incorporation laws and states play by different rules than the Federal government because states have plenary power while the Federal government has enumerated powers.

The 14th Amendment has only incorporated a select number of Amendments that are applied to the states. These traditionally are the 1st, 2nd, 4th, 5th, 6th, 7th, 8th, 13th, and the 15th. So in theory, the 3rd Amendment does not apply to any states and they may require a homeowner to "quarter" a national guard member in his home, but the Federal government may not do the same for the national army because it would run afoul of the 3rd Amendment. This, of course, is assuming that the Supreme Court does not later rule that the 3rd Amendment is incorporated by the 14th Amendment.

This difference in rules means that a state may deny incorporation to all individuals without Constitutional repercussions because incorporation is not considered a Federal Constitutional right, as the 1st Amendment is currently interpreted. Now once a state allows any individual to incorporate, then they must allow all individuals to incorporate if they so choose. Once a state gives a right, it must be applied equally, but unless provided by the Federal Constitution, a state is not required to even give such a right to its citizens.

Again, legally they are. Corporations have the same First Amendment rights as individuals. I don't know why you can't wrap your head around this concept. This has been upheld by the Supreme Court numerous times. Corporate person-hood is why you can sue a corporation for damages or harm, by the way. Or do you like the idea of a CEO or group of shareholders being personally sued for every action of a person or persons in the corp? Or other legal pitfalls.

I guess I should have been more specific. I meant that Corporations are not equivalent to people in the First Amendment context. I am aware that you can sue a corporations for damages. That I am not contesting, but I believe that the Citizens United decision was wrongly decided. I've read all 183 pages of the decision, including the dissents and concurrences, and I think the reasoning is sound, but that the Court took it in a direction that I feel does not comport with the people-centric nature of the Constitution itself. I know that you will probably reply that 5 Supreme Court Justices disagree with me, but I know there are 7 current and former Justices that would agree with me. If Sandra Day O'Connor was still on the Court and Alito was not, I could be saying that 5 Justices agree with me. Consider that prior to Citizens United, the Supreme Court upheld McConnell v. FEC which dealt with similar issues.

As for the idea whether I like a CEO or group of shareholders being personally sued for every action of a person or persons in the corp, yes and no. I think shareholders are, in all but in maybe a few instances, innocent of any actions illegal or ethically questionable that are committed by the corporation. Holding them responsible would be wrong.

However, I think that for CEOs, they should be held liable for actions they take on behalf of the corporation. The Standard & Poor's CEO, as well as the Bear Stearns, Lehman Brothers, Goldman Sachs, etc. CEOs, should all be personally liable for misleading the public in the sale of their junk derivative mortgages. It is wrong for the blame to fall on the companies themselves and for these CEOs to get away scot-free when they caused such damage to their own companies and the public at large. I know this would cause some CEOs to shy away from taking the job, but it would create an incentive for CEOs to act appropriately as opposed to "robber barons".

As for actions of employees under the CEO, a theory of respondeat superior should apply to the CEO and he should be held liable for actions taken by subordinates that harm individuals or the public, but only for those actions which he did or should have known about. For example, suppose we are talking about a grocery store courtesy clerk that retrieves shopping carts. If he accidentally loses one which travels into the road and causes an automobile accident, the CEO should not be held personally liable for such an incident. Now compare that to a situation where the CEO orders a subordinate to cease maintenance on brakes for the shipping vehicles the company uses to transport goods. If the brakes fail driving downhill and an 18 wheeler strikes a row of cars killing all of the drivers/passengers in the cars, then the CEO should be held liable directly, along with the company, for such an incident.

I'm actually confused about which you would rather do. Banning corporations en' total, or overturning the legal interpretation of "corporate person-hood"?

I don't think I would ever advocate banning corporations completely. I think modifying the rules for corporations would be ideal, but I even question whether people would be on board with such an idea. If people were not, then I would love to see the Federal government even the playing field between Corporations and Partnerships/Sole Proprietorships. Part of my desire in leveling the playing field is to actually help small business, as opposed to these hypocrites who claim to want to help small business, but in fact, all they do is provide more benefits for corporations because the corporations give more money.

As for overturning the legal interpretation of "corporate person-hood", I am suggesting that we eliminate corporate speech in elections through an Amendment to the Constitution. I am saying that we get rid of the corporate PACs and limit corporations to the contribution limits set for individuals in FECA and BCRA ($2,500 to candidates, $30,800 to national committees, $10,00 to state, locoal, or district committees, and $5,00 to any other political committee). Once elected, corporations should be allowed to lobby as much as they want, without bribing to legislators.

I look at it as leveling the playing field. Either the corporations should get the legal and economic benefits of incorporation and stay out of elections, or they should lose all of the legal and economic benefits, but retain the right to advocate during the election cycle. I don't think corporations should have the ability to "have their cake and eat it too" while individual people don't have that same luxury.

Reclaimer, if you feel confused about something I've said, please feel free to ask to explain it. I was told in the past by many of my professors that I, at times, fail to explain things clearly and I would like to avoid any misunderstandings, or eventual frustrations, that may result from my inadequate explanations.

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