Citizens United: Supreme Court Gives Corporations, Unions Power to Spend Unlimited Sums on Political Messaging

Reference: Open Secrets / Center for Responsive Politics

January 21, 2010 

By Michael Beckel

Corporations, trade associations, unions and nonprofit groups still aren’t allowed to make direct contributions to federal politicians, but today, the U.S. Supreme Court ruled that such groups may now spend unlimited amounts of money advocating for or against politicians.

In doing do, the Supreme Court, led by Justice Anthony Kennedy, tossed out the distinction between individuals and corporations and their ilk when it comes to independent expenditures.

“This Court now concludes that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption,” Kennedy wrote in the majority opinion in Citizens United v. Federal Election Commission. “That speakers may have influence over or access to elected officials does not mean that those officials are corrupt. And the appearance of influence or access will not cause the electorate to lose faith in this democracy.”

Chief Justice John Roberts, Samuel Alito, Clarence Thomas and Antonin Scalia joined Kennedy today in overturning Supreme Court precedent that relates to these restrictions. They were not persuaded by the rational for distinguishing between the wealth of individuals and corporations. Nor were they sympathetic to the anti-corruption argument.

The court’s more liberal bloc — Justices John Paul Stevens, Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor — disagreed.

“The Court’s ruling threatens to undermine the integrity of elected institutions across the nation,” Stevens wrote for the minority. “The financial resources, legal structure and instrumental orientation of corporations raise legitimate concerns about their role in the electoral process. Our lawmakers have a compelling constitutional basis, if not also a democratic duty, to take measures designed to guard against the potentially deleterious effects of corporate spending in local and national races.”

The Bipartisan Campaign Reform Act of 2002, which was championed by Republican Sen. John McCain (R-Ariz.) and Democratic Sen. Russ Feingold (D-Wis.), restricted independent expenditures made by corporations, trade associations, unions and nonprofits in the run-up to elections. These groups could not spend money on advertisements in the 30 days prior to a primary election and within 60 days before the general election. Independent expenditures bankrolled by individuals were not subject to the same prohibition.

In 2003, the Supreme Court upheld the validity of these “electioneering communication” rules for corporations and unions in the case McConnell v. Federal Election Commission. This ruling relied on a 1990 decision known as Austin v. Michigan Chamber of Commerce. In that case, the high Court declared, “Corporate wealth can unfairly influence elections when it is deployed in the form of independent expenditures.”

The McCain-Feingold campaign finance rules also banned direct “soft money” contributions from the treasuries of corporations, unions and other groups. The legislation required these groups to use political action committees, should they choose to make federal political donations. It also established campaign contributions for PACs and for individuals. Today’s decision by the Supreme Court did not affect these regulations.

Many groups now warn of a flood of corporate money in elections.

“Now the spigot has been opened even further for corporations, trade groups and unions to use as much money as their hefty bank accounts can muster to aid or attack a federal candidate,” said Sheila Krumholz, the Center for Responsive Politics’ executive director. “Such action could potentially come in the eleventh hour of a campaign when the target may not be capable of an effective response, for want of time, funds or both.”

“The decision will unleash unprecedented amounts of corporate ‘influence-seeking’ money on our elections and create unprecedented opportunities for corporate ‘influence-buying’ corruption,” Fred Wertheimer, president of Democracy 21, said in a statement. “In a stark choice between the right of American citizens to a government free from ‘influence-buying’ corruption and the economic and political interests of American corporations, five Supreme Court Justices today came down in favor of American corporations.”

Others are more cautious.

“Corporations and unions already had a lot of ways to participate in the political process,” Thomas Mann, a senior fellow at the Brookings Institution, told Capital Eye.

“I don’t think you’re going to see an immediate flood,” Mann continued. “I think there’s a wariness [on the part of corporations] about getting a bad name.”

Those on the side of the plaintiffs eagerly welcomed the ruling as a victory for free speech, and pledged to fight on against restrictions on political speech this case did not address.

“For too long, some in this country have been deprived of full participation in the political process,” said Senate Minority Leader Mitch McConnell (R-Ky.), the namesake of the 2003 challenge against the McCain-Feingold campaign finance rules. “With today’s monumental decision, the Supreme Court took an important step in the direction of restoring the First Amendment rights of these groups by ruling that the Constitution protects their right to express themselves about political candidates and issues up until Election Day.”

“By overruling Austin v. Michigan Chamber of Commerce and striking down McCain-Feingold’s ban on so-called electioneering communications, the Supreme Court has made possible the participation in our political process that is the right of every American citizen — a right that had been severely curtailed under McCain-Feingold,” said David Bossie, president of Citizens United.

“There’s still more to do,” attorney James Bopp told Capital Eye. “The court hasn’t addressed the inequalities between political parties and everyone else, and the constitutionality of contribution limits has been drawn further into question.”

But President Barack Obama today said he envisions legislative action to address the post-Citizens United world.

Obama called the ruling a “major victory for big oil, Wall Street banks, health insurance companies and other powerful interests” and promised his administration would work with Congress to “develop a forceful response to this decision.”

  1.  Leonard Boswell (D-Iowa) has also already introduced a constitutional amendment to bar corporations and labor unions from funds from their treasuries to pay for advertisements in connection with federal campaigns.

Citizens United’s challenge began over the question of whether the Federal Election Commission properly regulated as electioneering communications the group’s 2008 movie (and related advertisements) critical of Democrat Hillary Clinton. During the 2008 presidential primaries, the FEC ruled that Citizens United could not air the movie or ads for the movie within the 30-day period before elections. It also required Citizens United to feature disclosure information about who paid for the ads.

The case was first argued before the Supreme Court in March, and in June, the court called for a rare, expanded second hearing to tackle the large constitutional questions regarding Austin and McConnell. The second round of arguments was made in September.

In today’s ruling, the conservative majority argued that Citizens United case could not be resolved a narrower fashion “without chilling political speech.”

In an 8-1 ruling, the court also affirmed the FEC’s disclosure requirements, and it denied Citizens United’s claim that these rules would “chill donations by exposing donors to retaliation.” Thomas was the sole dissenting vote.

“The government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether,” writes Kennedy for the majority.

Kennedy’s majority opinion continues, “Citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests …and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

While the validity of disclosure rules is welcomed as a silver lining, some observers are skeptical of the power of disclosure rules alone.

“Given the history of money and elections, why should we think that disclosure alone will be enough to deal with the problems of corruption and inequality that threaten our government?” wrote Loyola Law School professor Rick Hasen for Slate. “I have my doubts. But I’m sure this is a bad day for American democracy.”