Supreme Court Decision Changes the Rules for Campaign Finance Regulations

By Kristen Friend, staff U.S. Supreme Court writer – February 3, 2010

Citizens United v. Federal Election Commission opens the door for corporate cash in political campaigns.

On January 21, the Supreme Court handed down its decision in Citizens United v. Federal Election Commission, a case concerning corporate expenditures in elections. The 5-4 ruling, split solidly along ideological lines, states that the government may not ban any political spending by labor unions or corporations, thus striking down key provisions of the Bipartisan Campaign Reform Act of 2002 (BCRA, commonly known as McCain-Feingold). [1] The ruling also overturns two prior Court decisions and has created an outpouring of debate about corporate influence in elections, free speech, stare decisis, and the shape that any future attempts at campaign finance reform may take.

The case originated when Citizens United, a non-profit corporation, attempted to air their film Hillary: the Movie, on cable. The film had already been released in theaters and on DVD and was be aired via video on demand in January of 2008, immediately before the Democratic primaries and while Senator Clinton was still a candidate for her party’s presidential nomination. The film, a prime example of acrimonious political messaging with a healthy dose of advocacy journalism, is openly critical of Senator Clinton, portraying her as not much more than a power-hungry liar. [2] [3] Broadcasting such a film on cable so close to the primary elections subjected Citizens United to fines and prison time according to campaign finance laws. In response, Citizens United brought action against the FEC, declaring that the Bipartisan Campaign Reform Act was unconstitutional as applied to Hillary: the Movie and that the film should be given air time. [2] [3] [4]

Specifically, the provision of McCain-Feingold in question, § 441b, prohibited unions and corporations from spending funds on “speech” that is an “electioneering communication” and/or “speech” intended to promote a specific candidate for public office. [5] The United States District Court for the District of Columbia ruled that the film portrayed a clear partisan opposition to Senator Clinton and, since it was to be aired within 30 days of a primary, did constitute “electioneering communication.” The lower court did not address free speech issues. [6]

The Supreme Court initially heard arguments on the narrow basis that McCain-Feingold was unconstitutional only with respect to Hillary on March 24, 2009, and most Court watchers expected a decision some time in the summer of 2009. However, in June of 2009, the Court ordered the parties to reargue the case on broader First Amendment grounds. The second hearing of the case resulted in the controversial January 2010 decision. [3] [4]

The decision strikes down the provision of McCain-Feingold that prevented corporations and unions from using general funds in support of or in opposition to political candidates. In addition, the ruling overturned the 1990 case Austin v. Michigan Chamber of Commerce and partially overruled the 2003 case McConnell v. Federal Election Commission. [1] In Austin, the Court had originally held that government regulation prohibiting corporations from spending money to promote or oppose candidates did not violate that corporation’s First or Fourteenth Amendment rights. McConnell also upheld campaign finance laws by reaffirming the McCain-Feingold’s restrictions on corporate expenditures. [3]

In essence, the Court’s decision found that the restrictions placed on corporate and union expenditures were unconstitutional in that they violate the entities’ right to free speech under the First Amendment. Writing for the majority, Justice Kennedy stated, “We agree with that conclusion and hold that stare decisis does not compel the continued acceptance of Austin. The government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether… the Court cannot resolve this case on a narrower ground without chilling political speech, speech that is central to the meaning and purpose of the First Amendment.” [1] The ruling repeals all restrictions on how much corporations and unions can spend to promote or oppose a candidate for political office. It does not change the law with regard to limiting contributions made directly to political candidates. [7]

While Supreme Court decisions are welcome fodder for heated discussions among policy wonks, they are often met with fleeting attention from news outlets and the public at large. That however, has not been the case with Citizens United v. FEC.

Campaign finance activists immediately attacked the decision, claiming that it would open the doors for corporations to pour untold amounts into supporting or defeating pet issues or even pet politicians, often pointing to the recent influx of corporate money into the health care debate. [8] [10] President Obama responded quickly to the decision, saying in his weekly radio address on January 23 that he could not “think of anything more devastating to the public interest” [12] and calling for a “forceful” response to the decision. [9] The president repeated this sentiment in his Sate of the Union Address, saying:

“With all due deference to separation of powers, last week the Supreme Court reversed a century of law to open the floodgates for special interests — including foreign corporations — to spend without limit in our elections. Well I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities.” [11]

In a more staid response than the infamous “You Lie!” outburst by Representative Joe Wilson during a prior presidential speech, Justice Alito was caught on camera shaking his head and mouthing the words “Not true…” during this part of the address. (Depending on which news outlet is reporting the event, either the President or Justice Alito acted outrageously). However, regardless of Alito’s obvious support for the majority opinion, the decision has fostered criticism on a number of grounds.

Retired Supreme Court Justice Sandra Day O’Connor expressed concerns that the ruling would have a negative effect on judicial elections. Ms O’Connor told CNN that her fear of corporate money and corporate influence becoming involved in judicial elections was one for her reasons for voting with the majority in the McConnell case upholding McCain-Feingold. She also expressed her hope that judges not become “politically-elected figures in arms races.” [13]

Pundits have, when expressing their distaste for the decision, often stated that the ruling flies in the face of over 100 years of national policy. The “100 years” number has been repeated all over the media scene, from cable TV interviews to blogs to the pages of the New York Times. [14] [16] This critique of the last century of American national policy is referring to the Tillman Act of 1907. The Act, supported by Theodore Roosevelt, banned corporate contributions for political purposes. The intent of the law was to limit the influence of special interest groups and wealthy individuals on the political process. Since then, policy with regard to corporate “influence-peddlers” has remained in line with the idea, espoused by the Tillman Act, that democracy flourishes when a few wealthy individuals or corporations do not have undue influence on the process. [15]

Others have criticized the act on the basis that it overturns two cases and two decades of precedent with no new compelling interest introduced to prompt such action. Fred Wertheimer, Founder and President of Democracy 21, has been vocal in his derision of the decision, saying “The only real change that has occurred between the Court’s 2003 decision in McConnell and now is a change in the makeup of the Court – which, in and of itself, has never been considered sufficient legal grounds for overturning past precedents.” [17] Since no new compelling interests have been brought forward, stare decisis should have forced the Court to uphold precedent in this case.

Much criticism has also been leveled at the decision because of its perceived activism and its implications to the democratic process. No First Amendment issue was raised in the original arguments before the lower court. The Supreme Court chose to decide the case on broad constitutional grounds, which critics argue was an unnecessary overstepping of its authority. [18] [19]

In deciding the case on broader Constitutional grounds, the Court ruled that the First Amendment makes no distinction between different types of people. Although prior courts have held that corporations are “citizens” or “people” under the law, the distinction has always been made between natural citizens, or individuals, and artificial citizens, or corporations. Justice Stevens, in his dissent, noted the potential negative ramifications of this interpretation, saying that the First Amendment “would appear to afford the same protection to multinational corporations controlled by foreigners as to individual Americans.” [1] [20] Since the majority decision was silent on the issue of foreign corporations, this area of law will likely be debated heatedly in the future.

Although much of the reaction to the Court’s decision has been negative, focusing on the dangers of allowing too much undue influence into the democratic process, some politicians and activists see the decision as an overwhelming victory for the First Amendment and for the rights of citizens. Senate Republican leader, Mitch McConnell, immediately expressed his approval of the decision. In an opinion piece in the Atlanta Journal Constitution, he wrote, “But criticism of candidates running for office, like criticism of politicians in office, has always been viewed as what the First Amendment protects most obviously and most importantly. Why should that not be true of speech of corporations? Or unions?” [21]

This sentiment is widely shared by supporters of the decision. If money equals speech and we all have a right to free speech, how could the First Amendment possibly allow for regulation of corporate expenditures? In addition those who see the ruling as a positive development argue that opening the national discourse up to unlimited corporate and union financial contributions will even the playing field and give more middle class citizens the means to run for higher office. [22]

It is still too early to tell what effect the decision will ultimately have on American political discourse and on our particular form of democracy? Will corporate cash flow in to elections, buy politicians and make voices of “average” constituents harder and harder to hear? Or will removing limits on corporate and union spending in elections usher in a new era of equality in which anyone can afford to run for higher office? Barring the passing of a Constitutional Amendment addressing the decision, it seems as though we are about to find out.

For a list of proposed legislation in response to the Citizens United decision, including a proposed Constitutional Amendment, see the list at Sunlightfoundation.com. [23]

Sources:

  1. http://www.supremecourtus.gov/opinions/09pdf/08-205.pdf – Decision of the Supreme Court
  2. http://topics.law.cornell.edu/supct/cert/08-205 – Cornell University Law School summary of Citizens United v. Federal Election Commission
  3. http://en.wikipedia.org/wiki/Citizens_United_v._Federal_Election_Commission
  4. http://www.nytimes.com/2010/01/22/us/politics/22scotus.htmlNew York Times
  5. http://www.nationalcenter.org/McCainFeingold.html – Text of Bipartisan Campaign Reform Act
  6. http://www.firstamendmentcenter.org/news.aspx?id=21767 – firstamendmentcenter.org
  7. http://www.examiner.com/x-34784-NY-Public-Policy-Examiner~y2010m1d23-What-does-the-Citizens-United-v-Federal-Election-Commission-ruling-mean-for-New-Yorkers New York Policy Examiner
  8. http://democracy21.org/index.asp?Type=B_PR&SEC={EEB4E4AC-6B24-4DBB-9730-468057B230E2} – democracy21.org
  9. http://news.yahoo.com/s/nm/20100121/pl_nm/us_usa_court_politics – Reuters
  10. http://www.boston.com/bostonglobe/editorial_opinion/letters/articles/2010/01/31/voices_will_be_drowned_out/ – Boston Globe
  11. http://www.nytimes.com/2010/01/28/us/politics/28obama.text.html – Text of State of the Union, New York Times
  12. http://www.huffingtonpost.com/2010/01/23/obama-weekly-address-vide_n_434082.html – huffingtonpost.com
  13. http://politicalticker.blogs.cnn.com/2010/01/26/oconnor-talks-politics-judicial-independence/?fbid=b_50QmGSJkH – CNN Political Ticker
  14. http://www.nytimes.com/2010/01/22/us/politics/22donate.htmlNew York Times
  15. http://en.wikipedia.org/wiki/Campaign_finance_reform
  16. http://roomfordebate.blogs.nytimes.com/2010/01/21/how-corporate-money-will-reshape-politics/New York Times Room for Debate Blog
  17. http://roomfordebate.blogs.nytimes.com/2009/09/08/free-speech-and-hillary-the-movie/?pagemode=print New York Times Room for Debate Blog
  18. http://www.mailtribune.com/apps/pbcs.dll/article?AID=/20100124/OPINION/1240301/-1/NEWSMAPMedford Mail Tribune
  19. http://www.pressdemocrat.com/article/20100124/OPINION/100129788/1042 – Santa Rosa Press Democrat
  20. http://www.huffingtonpost.com/doug-kendall/but-it-is-true-justice-al_b_440385.html – huffingtonpost.com
  21. http://www.ajc.com/opinion/pro-con-is-the-285259.html – Atlanta Journal Constitution
  22. http://blog.heritage.org/2010/01/21/citizens-united-v-fec-a-landmark-decision-in-favor-of-free-speech/Heritage Foundation
  23. http://blog.sunlightfoundation.com/2010/01/27/legislation-intended-to-respond-to-citizens-united/

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