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HAWAII JUST FOUND A WAY TO KEEP CORPORATIONS OUT OF POLITICS  
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Harold Meyerson
May 18, 2026
The American Prospect
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_ A new law makes clear that corporations derive their powers from
states, and they don’t necessarily include the right to spend on
elections. _

Palm trees frame the Hawaii State Capitol, April 23, 2025, in
Honolulu, Hawaii., Credit: Mengshin Lin/AP Photo

 

At a time when giant tech companies and other corporate behemoths loom
over our economic, social, and political life, the state of Hawaii has
just found a way to limit their hold.

Last Thursday, Gov. Josh Green signed into law the first piece of
American legislation that curtails corporations’ ability to engage
in electoral politics. It doesn’t—because it couldn’t—undo the
U.S. Supreme Court’s ruling in _Citizens United_, which holds that
corporations have the right to spend their resources on political
campaigns. That would require another Court ruling striking down
_Citizens United_, or a constitutional amendment banning such
spending.

Rather, the Hawaiian law is based on the fact that in the United
States, corporations are created and given their powers by the
charters of the individual states. Indeed, corporations simply are a
legal creation of the state, everywhere they exist, by definition. The
new law simply states that corporations doing business in Hawaii do
not have the power to engage in local, state, or federal political
campaigns, that that was not one of the powers enumerated in the
state’s corporate charter. It further specifies a range of
penalties—including losing the right to conduct any business in the
state at all—if they do.

Corporations’ rights to free speech are not addressed by the new
law. “Two hundred and fifty years ago, Jefferson said that
people’s rights are self-evident, endowed by their creator,
preceding the establishment of governments,” says state Sen. Jarrett
Keohokalole, who chairs the Senate Commerce and Consumer Protection
Committee that first considered the bill, which was introduced by
longtime Sen. Karl Rhoads.

“But corporations were, and continue to be, created by state law, as
were their powers,” Keohokalole continues. “They are not
irrevocable. State charters give corporations limited liability for
their founders and owners; they make them eligible for specific kinds
of tax breaks, and so on. This legislation clarifies that the powers
and privileges granted under Hawaiian law to corporations do not
include electioneering.”

Polling has made clear that a supermajority of the American people
loathe _Citizens United_, with some polls showing that fully 75
percent of the public would like it reversed. Fears of growing
corporate and oligarchic dominance aren’t limited to Democrats, as
both the polling and the bipartisan majorities in the Hawaiian
statehouse have demonstrated. Rhoads’s SB 2471 cleared the Senate
with a 25-to-0 vote, and the lower house by a 41-to-9 margin.

The idea that states can use their corporate-creating powers to
curtail the corporate domination of politics is something new under
the American jurisprudential sun—at least, it hasn’t been floated
before. It originated with Tom Moore, a former counsel and chief of
staff to a member of the Federal Election Commission who is currently
a senior fellow at the Center for American Progress. In a paper that
CAP published
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last September, Moore wrote that the states’ “underlying authority
to define and limit corporate powers never disappeared. It simply went
quiet: unused, untested, and unmentioned—until now.” Moore roots
his argument in 200 years of law and practice. He cities Chief Justice
John Marshall’s 1819 opinion in _Dartmouth v. Woodward_, in which
Marshall wrote:

A corporation is an artificial being, invisible, intangible, and
existing only in contemplation of law. Being the mere creature of law,
it possesses only those properties which the charter of its creation
confers upon it, either expressly, or as incidental to its very
existence … The objects for which a corporation is created are
universally such as the government wishes to promote. They are deemed
beneficial to the country; and this benefit constitutes the
consideration, and, in most cases, the sole consideration of the
grant.

He cites Samuel Alito’s opinion in the _Hobby Lobby_ case, which
asserts that “the objectives that may properly be pursued by the
companies in these cases are governed by the laws of the States in
which they were incorporated.” He cites the example of Texas, which
changed its charter in the 19th century to strip banks of the power to
issue bills of credit, and New Jersey, which changed its charter in
the 20th century to limit the power and scope of holding companies.
And crucially, he cites an 1869 Supreme Court ruling that requires
corporations to comport with the corporate charter laws of every state
in which they do business. That means a corporation chartered in
Delaware, which has long been the state that has chartered most
corporations, would have to comport—nationwide, in every
state—with Hawaii’s laws on corporate powers if and when it sought
to sell its products or engage in any kind of business activity in
Hawaii. (Ponder for a moment the effect on corporations if such
statutes are enacted in states as populous as California and New
York.) For good measure, Moore also references the Constitution’s
Tenth Amendment, which states that powers not listed in the
Constitution—such as the power to create corporations—are reserved
to the states.

Pro-business courts (which is to say, the great majority of courts
throughout American history) have long regarded corporations as
people; it’s the courts that have been the creators endowing
corporations with presumably unalienable rights. The Supreme Court
granted them 14th Amendment protections in 1886 in _Santa Clara County
v. Southern Pacific Railroad Co._ without even explaining their
reasoning.

Moore’s argument compels these courts to grapple with the very
substantial body of law that defines corporations and their powers as
creations of the states. The Alitos and Thomases will doubtless find a
way, however implausible, to wriggle around that, but even if the
usual suspects on the federal bench proceed in customary pro-business
lockstep, actions like Hawaii’s will fuel in many ways the growing
populist and popular revolt against oligarchy and corporatocracy.

Hawaii’s new law will come into effect on July 1, 2027. It gives the
state’s attorney general a range of penalties he can impose on
corporate violators, ranging from removing tax privileges, to banning
the sale of its products to the state government, to suspending its
ability to do business in the state, to ordering its dissolution.
While it doesn’t repeal the legality of super PACs, corporations’
ability to contribute to such PACs falls under the ban on their
electoral activity. Of course, the new law doesn’t and cannot keep
individuals from spending on elections. Elon Musk and his ilk, not
being the creations of state governments, can continue to make a
mockery of American democracy. It would require a high-court reversal
of _Buckley v. Valeo_ to free our country from their usurpations of
power.

Since Moore’s paper appeared, CAP has seen bills like Hawaii’s
introduced in 14 states, while Montanans—who have a heroic history
of forbidding corporate campaign spending for a full century until
_Citizens United_ negated their law—have placed an initiative
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on their 2026 ballot to curtail corporate election spending along the
lines that Moore’s proposal and now the new Hawaiian law lay out.
Invoking states’ creation and withdrawals of the powers granted
corporations is a new concept, and Moore was pleasantly surprised that
Hawaii took to it so speedily. It will likely begin to move in other
blue states, too, over the next couple of years, as it is one of the
lamentably few proposals to address the American people’s completely
justified revulsion at corporations’ growing dominion over public
and private life.

_Harold Meyerson is editor at large of The American Prospect._

* Hawaii
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* corporate power
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* Citizens United
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* restrictions
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