Piercing the Corporate Veil
By Michael Boyajian
Corporations are a creation of the people through the government that serves the people. Corporations were given certain privileges that would allow them to raise capital to build things that would benefit the public good. They are designed to shield their directors and officers from liability so they can effectively raise money.
Now however, our corporations are swallowing us whole like something out of a science fiction movie where the machines created by humans are taking over the world. Corporations have outlived their usefulness if they have crossed a line whereas they now begin to fight people not for the benefit of the people but for the benefit of the corporate entity.
What to do? Well corporations are empowered by the state and if they side against the people then they have violated the Lockean compact that exists between the people and their government and the entities created by that government.
The shareholders cannot be blamed but the officers and directors can be and the so called corporate veil can be pierced so the liability is brought to bear upon them for any adverse action they have taken. So if you find that a corporation was saving money by using untrained captains for their tankers and there is an oil spill you just don’t fine the corporations you go after the corporate officers and directors. You pierce the veil.
I am not saying we should shut down the corporations I am merely saying that we must bring liability to officers and directors. They must face the consequences of their actions when say they even lobby against universal healthcare by dropping in millions of dollars in the fight against it. This hurts the health of the people so that the corporation may benefit.
You don’t need legislation to pierce the veil, courts have the power already through the common law because legal logic dictates an equitable outcome in favor of the people over the corporation if the corporation operates at the expense of the public good. Why after all would we grant powers to an entity that brings harm to us? It just doesn’t make sense. For a judge to do otherwise would represent some sort of collusion in the illegal act.
So liability must be found against directors and officers and they must face either or both criminal and civil penalties in accordance with the magnitude of their wrongdoings. Then they must be replaced by a responsible board of directors and officers that will serve the people and bring profits to shareholders so long as there is no adverse impact on that public.
So it is not time to pull the plug on these machines that we call corporations but instead pull the plug on those that control them, officers and directors, at the expense of the public. So these health insurance corporations that dropped millions of dollars in the battle against universal healthcare are in violation of their corporate charter and their directors and officers have violated the public trust and must face the full force of the law. That is a real life example of an abuse of the corporate law.
And I repeat the common law will do because judges take an oath to serve the people, they do not take an oath to serve an entity called a corporation. And by the way, a few years ago when the big oil corporations testified before Congress and they came away from it and exclaimed we have done nothing wrong because we are in the business of making money. Well that is only partially true, you are in the business of making money to the benefit of the public not the corporate entity.
End.