Free Speech and Free Enterprise An Inseparable Link. Remarks by THOMAS J. DONOHUE President and CEO, U.S. Chamber of Commerce

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1 Free Speech and Free Enterprise An Inseparable Link Remarks by THOMAS J. DONOHUE President and CEO, U.S. Chamber of Commerce Washington, D.C. December 3, 2014 Introduction Thank you very much, Jock, and good morning everyone. I want to thank Jock and his team at the U.S. Chamber Foundation for putting together a great event. And I want to thank everyone for your interest in this important topic. It s been an interesting morning. We heard a very thoughtful speech from Sen. Cornyn and we are grateful to him for coming at a time when there are a few other things happening on Capitol Hill. We heard from experts on two panels who examined how some legislators, regulators, enforcement agencies, and shareholder activists are eroding the rights of businesses, journalists, and others to speak freely to question and challenge authority and conventional wisdom when necessary and to fully engage in the political and public affairs of our country. The Foundation plans to continue this discussion as part of an effort to educate the public, the media, and our policymakers on the importance of the issues that have been discussed today. As for the Chamber, some may wonder, why are we focusing on this? After all, today s program isn t about how to produce more energy, pass a trade bill, reform the tax system, or fix some government regulation. It s about something more fundamental. Something too often overlooked and taken for granted. It s about the fundamental liberties we have long valued in this country a basket of freedoms that together define the American dream and bring vitality to a productive, innovative, and prosperous free enterprise system. It s not only the right to speak, but the right to due process the right to take a risk, work hard, and succeed and the right to be rewarded, and not vilified, for that success. Freedom in our society also carries with it responsibilities the need to aspire to selfsufficiency, to stand on your own and pull your own weight, unless some extraordinary circumstance prevents you from doing so the need to conduct yourself with honesty, decency, and civility, and to respect the rights of others. These sound like disparate topics, but they are all connected. They all speak to the openness of American life and the fundamental freedoms that have defined our society, our economy, and our culture and have attracted millions to our shores for hundreds of years.

2 These rights are the building blocks of our free society and our free enterprise system. They are all inseparably linked. And because preserving American free enterprise is the core mission of the Chamber, we must get involved when these rights are under attack. Today, I believe these rights are being challenged and, in many instances, eroded. It s time for the American people, the press, the Congress, and the business community to wake up to this reality. These threats take many forms legislation and regulations designed to threaten the political engagement of business groups and others Outrageous fines being legally extorted from companies by prosecutorial agencies in violation of due process Abusive efforts by agencies like the IRS to single out and punish organizations that have a different view of what is right for our country Overzealous academic speech codes, restraints on journalists, and a culture of secrecy within government agencies that extends well beyond the legitimate needs of our national security And, a disturbing lack of respect for other voices and viewpoints. Remember the credo we learned in school, often attributed to Voltaire I do not agree with what you have to say, but I will defend to the death your right to say it? We need to restore that credo in America s public square well, maybe all except the part about death! Too much time is spent attacking the motives and backgrounds of participants in our politics and our policy debates. Too much time is spent demonizing and trying to silence those with opposing views, rather than debating the ideas themselves. Too much time is spent trying to regulate opposing views out of existence, to harass them into capitulation, or to pressure members of voluntary groups to quit. We need more debate on the big questions facing our government, our economy, and our society not less. We need less political correctness and more points of views in the public dialogue. Of course there are some boundaries, even when it comes to free speech. Few would argue that there is an unfettered right to say or print anything about anyone at any time. No, you can t yell fire in a crowded theater. Finding the right balance is critical. I d suggest that today we have tipped the scales too far in the direction of command and control. This is not a partisan issue. This is about the Bill of Rights and the liberties we all treasure, regardless of our politics, or religion, or background rights we all want to preserve for our children and grandchildren. So if you ll indulge me for a few more minutes, I d like to expand briefly on three fundamental liberties I believe are under challenge today: the right to speak, the right to due process, and the right to risk and succeed in a free enterprise economy. 2

3 Attacks on Free Speech Let me start with free speech, which has been the focus of much of today s program. The attacks on free speech in this country have been growing steadily in recent years across many institutions, but it s business free speech that has been the number one target for legislators, regulators, and activists. Some politicians and business opponents have determined that if they can t beat us on the merits in the public square, they ll simply work to silence our voice to cut us out of the debate altogether so they can have a one-sided conversation with the American people. There s only one problem such efforts are unconstitutional! They have no place in this free country. Last fall, the Senate took a run at passing a measure that would have eliminated First Amendment protections and permitted the government to target the speech of certain organizations based solely on their political viewpoint. It was defeated and never should have been brought up for a vote. Here s another example: In 2010, some in Congress tried to sway the midterm elections in their favor through the DISCLOSE Act, legislation that would have chilled political participation by the business community but not by labor unions. This bill was also defeated. But business opponents still want to see its principles enacted, and some lawmakers haven t given up on enacting similar legislation. A group of labor unions, shareholder activists, and anti-business policymakers have asked the Securities and Exchange Commission to make a rule that would compel public companies to disclose their spending on independent political speech. The idea here is to bring these companies political spending which is free speech out into the open so they can be targeted for harassment and boycotts. They say it s about transparency, but that s a laugh. Their ultimate goal is a ban on all corporate political and lobbying spending... and at a time when Washington is more deeply involved in regulating business than at any time in history. Now, I understand there are plenty of people who disagree with the positions of the business community. And that s fine. They should fight us on the battleground of ideas. Tell the American people we re dead wrong. But don t shut down and choke off our right or the right of any other American citizen or institution to speak up and speak out. Attacks on Due Process Turning to my next topic, we should also be very concerned about the erosion of the right to due process. 3

4 The most prominent example is the abuse of our enforcement system. The Economist magazine recently wrote that America s enforcement system is the world s most lucrative shakedown operation. We ve seen an explosion of enforcement actions at the federal, state, and local levels, with follow-on lawsuits by plaintiff s lawyers. You don t have to look far to find coercion and political grandstanding. We see it in the slew of multi-million and multi-billion dollar settlements where the alleged wrongdoing is unclear, the fine is arbitrary, the process is opaque, and companies are being forced to negotiate with the threat of losing everything hanging over their heads. Regulators are setting themselves up as the investigator, prosecutor, judge, jury, and tax collector. This has serious consequences. What happens when businesses face the constant threat of enforcement through intimidation? When they are tried in the media? When they have to take the deal regardless of wrongdoing because the alternative is to be frozen out of government contracts or see their reputation ruined with investors? The answer is they are less willing to invest and take reasonable risks, which means fewer jobs and less growth. And they become afraid to criticize the government and fearful of crossing the all-powerful officials who could wreck their companies. This shouldn t happen in America. We need an enforcement system that catches and stops genuine wrongdoing but which is rules-based, transparent, and respects due process. These principles are at the heart of true justice in a free society. And we must protect them. That s why the U.S. Chamber and our Institute for Legal Reform are leading an effort to restore justice and due process rights by reforming our enforcement system. Attacks on the Right to Risk and Fail The third fundamental right that s under challenge is the right to take a risk and then to be rewarded for its success. We need a society and a government that is willing to let people try and fail and then try again. Failure can be a critical ingredient of success. We need to remind ourselves, the Congress, the White House, and the American people what made this a great country why people came from all over the world at great hardship to come here. Because this is a land of opportunity, where you could develop an idea, pursue a dream, and succeed beyond your wildest expectations. And through your success, you could help others achieve their success. It s shocking how little many of our political leaders seem to understand the business system of this country how capital is formed and multiplied and how jobs are really created and paychecks are expanded. This ignorance, willful or not, can be found on both the right and left, but it s those who call themselves progressives who seem to revel in their disparagement of business and the role of the private sector. 4

5 I m tired of hearing politicians say that businesses don t really create jobs or that they didn t really build their business or that if a business person happens to be successful and wealthy, then by definition, he or she must have ripped off a lot of people to get there. There are bad apples in every bushel, and that s true in the business community as it is for every other institution in our society. But if you consistently demonize success and punish investors, guess what? You will soon get less success and less investment, which means less prosperity for all Americans. The system of capital formation we have in our country is not a yoke around America s neck it is a blessing that has produced historic wealth and prosperity that is widely, though not perfectly, shared. It is open to participation by all from the small saver and individual investor to groups of everyday Americans, including union members, who have banded together through their pension funds and IRAs to wealthy investment funds that rescue failing companies and incubate new products, new services, and life-saving drugs. As capital is formed and expanded through this broad participation by the American people, it is used to help other Americans gain a foothold in life through the business expansions and jobs it creates to the small business loans and home mortgages it provides. No, it s not perfect, not by a long shot. But if we continue to undermine that system in word and deed if we continue to over-regulate it and disparage it we re going to strangle the goose that lays the golden eggs. Successful businesses are a good thing. Businesses that do well almost always do a lot of good like giving folks the dignity of a job, or bettering their communities, or giving to charities. America needs successful entrepreneurs and businesspeople. It s what drives stronger economic growth and creates more jobs. It s what keeps the American Dream alive and energizes our free enterprise system. It s why we remain the envy of the world. So the challenge is to preserve a free and open culture where entrepreneurial risk-taking is encouraged and where success is rewarded. The bottom line is that when Americans are free to innovate and are rewarded for risk and success, great things happen for the economy and our country. And it s something we will lose if government seeks to regulate every economic activity, every idea, every innovation, and every product and service from the top down. The Inseparable Link to Free Enterprise Combined, these three rights the right to speak, the right to due process, and the right to risk and succeed are essential to our free enterprise economy. 5

6 You can t have successful free enterprise without the free flow of information, the ability to test ideas in the market, and to share thoughts with others, even unorthodox ones. You can t have prosperity without competition and the best ideas, products, and services winning out that s what drives growth and a higher standard of living. You can t have sound and effective economic policies when businesses can t speak freely to elected officials, regulators, shareholders, customers, and other businesses. Too many of our public officials see business as the problem when they should see business as part of the solution. Understanding that doesn t mean business is perfect or that business is always right. What we need and must maintain is an open society where all people are encouraged to pursue their dreams, share their thoughts and ideas, and challenge the conventional wisdom. This is how you create an innovation culture and an economy filled with opportunities it s how you attract the creative people, the young, energetic, and adventuresome who question and challenge and who are always in a hurry. Conclusion So let me conclude. America needs more debate, not less. It needs more ideas, not fewer. As a nation, we need to restore respect for the right of everyone to speak. It doesn t mean all ideas are created equal. But whether an idea is smart or dumb we all have an equal right to give voice to it. I know we are all very busy. At the Chamber, we have big policy items we ve got to deliver for business and our member companies. You have your own challenges to tackle. So I appreciate your being here. The Chamber believes we have a responsibility to preserve, protect, and defend the rights and freedoms that make this the greatest country on earth. We are disturbed by what s happening to some of our fundamental freedoms, but not depressed. The American people won t go quietly into the night. The biggest thing Americans have to watch for is not the foreign or homegrown dictator who somehow takes over and snatches away our rights and freedoms. What we must guard against is the more subtle piece-by-piece stripping away of our freedoms and replacing them with rules, regulations, codes, and other discouragements that put either government or the thought police in charge of our economy and our daily activities. 6

7 The Chamber will continue to fight to ensure all Americans have the right to petition our government without fear, intimidation, or undue regulation We re going to continue to fight for due process under the law, free of abusive tactics by federal and state agencies and prosecutors who have the entire resources of the government amassed behind them We re going to fight for everyone s right to speak and even to voice controversial opinions without being tarred and feathered in the public square And we re going to fight to preserve the spirit of enterprise in America that begins with the right to risk, to fail, to try again, and to succeed. Thanks again to the Foundation for convening this forum and thank you all for being part of this important discussion. # # # 7

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