Bloomberg Law
Jan. 13, 2022, 9:00 AM

Policing Misinformation From Elected Officials

Gina Stassi
Gina Stassi
Morris Kandinov LLP

Former federal prosecutor Shan Wu, in his op-ed on Rep. Marjorie Taylor Greene’s (R-Ga.) Twitter suspension, argues that federal prosecutors “need to stop taking such a timid approach to their interpretation of existing laws like making false statements, honest services fraud, obstruction of Congress and campaign finance fraud and look to expand the definitions as needed.” Surely.

But perhaps another legal framework is more apt: the standards to which public company shareholders hold accountable their fiduciaries—the executive officers, and members of corporate boards of directors.

Duty of Corporate Officers and Directors

While both officers and directors owe the corporation (and its shareholders) a duty of care—i.e., the duty to become reasonably informed in connection with their decision-making on behalf of the corporation—in most cases, this only implicates the officers. That is because directors can generally reasonably rely on their day-to-day management and decision-making on behalf of the company.

The directors, however, also owe the corporation a duty of loyalty—and are held to the highest standards of making reasonably informed decisions, and of also acting in good faith—i.e., by putting the corporation’s interests above their own personal and financial interests.

Creating Fiduciary Duty for Public Officials

This requirement that the representatives elected to oversee management of the corporation act in “good faith,” and put the corporation’s best interests above their own, seems a particularly appropriate standard by which to hold the publicly elected representatives of our country. Why should they owe anything less than we expect of the leaders of our public corporations?

They shouldn’t. Indeed, as Wu states, “there can be no debate that Americans should expect their public officials to serve them in a fiduciary capacity.”

Moreover, publicly elected officials like Greene raise enormous amounts of money from the public based on their statements and other “conduct like engaging in racist speech and lying to the public about a health crisis or the legitimacy of our elections” that Wu notes are potentially criminal, just as public companies are sometimes held liable. When their officers and directors make false and misleading statements for such fundraising purposes, or engage in criminal or other conduct that exposes the company to liability or harm, these individuals can be held personally liable for damages suffered by investors, and by the corporation as a whole.

Publicly elected officials should be held to the same account. Specifically, publicly elected officials should not be allowed to say things that are not: (1) reasonably informed and (2) in good faith. Anything less would be a violation of their fiduciary duties owed to the American people.

Questions to Ask

How would this work in practice? To continue using Greene as an example, one would ask the following.

What data did she review prior to tweeting that “there was MASS voter fraud on a scale that should terrify every American regardless of political party”? Was this information obtained from a reliable source? Did she take into account former Attorney General William Barr’s denial of same, or any other competing information?

These are the type of questions that a fact finder would consider when determining whether this particular statement was made in good faith based on a reasonable inquiry.

One could ask essentially the same questions regarding the basis for her tweet suggesting that the 2018 California wildfires were caused by Jewish space lasers. Here, in addition, perhaps her reference to a specific religious/ethnic group would become relevant to the fact finder’s overall inquiry of whether she acted in good faith, i.e., in the best interests of the country (or at least of her entire electorate, not just the members of her own party).

Furthermore, to the extent that her fundraising efforts were tied to such statements, or were positively affected in her favor, this could also be a relevant fact in determining whether she fulfilled her duty of loyalty, i.e., by putting the best interests of the country above her own personal and financial interests.

Of course, policing misinformation by elected officials would not be an easy task, or perhaps even one that is feasible given its magnitude. Evaluating each of these tweets would involve fact-intensive inquiries and damages that must be evaluated on a case-by-case basis—with appropriate remedies that still are yet to be determined by Congress and must be imposed by an impartial judge.

Certainly, that is a lot of work for the Justice Department (or perhaps another agency that may tasked with policing such misinformation). But if America deems our public company officials worthy of such oversight, surely our elected officials should be worthy of the same scrutiny, no? When their misinformation (or outright lies) led to the events of the Jan. 6 attack on the U.S. Capitol, it is clear they must be held to at least the same high standards.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Author Information

Gina Stassi is an attorney with over a decade of experience in shareholder litigation. She is currently counsel at Morris Kandinov LLP.

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