A changed legal landscape in campaign finance

Thursday, January 21, 2010

The U.S. Supreme Court’s long-awaited decision in Citizens United v. Federal Election Commission invalidated limits on corporate spending, overturning past decisions and seemingly significantly changing the legal landscape in federal campaign-finance regulation.

The Court ruled 5-4 that limitations on corporate spending in elections, including political ads or so-called “electioneering communications” made within 30 days of primary elections, violate First Amendment political free-speech rights. Justice Anthony Kennedy, in his majority opinion, wrote that there was “no basis for the proposition that, in the context of political speech, the Government may impose restrictions on certain disfavored speakers.”

The ruling means that corporations can spend unlimited amounts of money in support of a candidate without running afoul of the law. Direct contributions by corporations are still prohibited and were not challenged in the lawsuit.

The case concerned Citizens United, a nonprofit corporation that sought to release a documentary very critical of then-presidential candidate Hillary Clinton, within 30 days of the election.

Kennedy noted that historically there have been much greater restrictions on corporations’ direct contributions to candidates, as opposed to regulations on “independent expenditures” (spending) by corporations. He noted that restrictions on corporate contributions have existed since the 19th century, while Congress’ first restriction on corporate campaign spending occurred in 1947 with a provision in the Labor Management Relations Act that was passed in an override of the strong veto of President Harry Truman.

In his opinion today, Kennedy took direct aim at Austin v. Michigan (1990), in which the Court prohibited the Michigan Chamber of Commerce from using its general treasury funds to run a newspaper ad supporting a particular candidate. Kennedy dissented in Austin, writing that the Court had supported “a direct restriction on the independent expenditure of funds for political speech for the first time in history.”

In his Citizens United opinion, Kennedy also invalidated portions of the Bipartisan Campaign Reform Act of 2002 — the bulk of which the Court had upheld in its 2003 ruling in McConnell v. FEC.

Justice John Paul Stevens wrote a lengthy 90-page dissent that was joined by Justices Stephen Breyer, Ruth Bader Ginsburg and Sonia Sotomayor. Stevens wrote that “the Court’s ruling threatens to undermine the integrity of elected institutions across the Nation. The path it has taken to reach its outcome will, I fear, do damage to this institution.”

The Court did rule 8-1 to uphold disclaimer and disclosure requirements imposed in the Bipartisan Campaign Reform Act. Kennedy noted that disclosure requirements do not restrict First Amendment freedoms nearly as much as outright bans on speech. Only Justice Clarence Thomas dissented, writing that “the Court’s constitutional analysis does not go far enough” and that disclosure requirements infringe on the right to anonymous speech.

David N. Bossie, president of Citizens United, said in a news release: “As our case amply demonstrates, campaign finance legislation over the last two decades has imposed, as Justice Kennedy put it, a ‘censorship … vast in its reach.’ 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.”

“This is the most significant First Amendment decision from the Supreme Court in more than a decade,” said Steve Simpson, an Institute for Justice senior attorney who authored an amicus brief in support of Citizens United on behalf of the Institute for Justice. “The Court has finally struck down blatant censorship that masquerades as campaign finance reform. Slowly but surely, the Court is prying Americans’ free speech rights away from the hands of government bureaucrats.”

The Federal Election Commission said in a news release: “The Commission is considering the impact of the opinion on its existing regulations, as well as its ongoing enforcement processes, and will be providing guidance to the public as soon as possible regarding what steps will be taken to comply fully with the opinion.”

Others were more outspoken in their opposition to the decision. Sen. Russ Feingold, D-Wis. — who with Arizona Republican Sen. John McCain was a chief sponsor of what became the Bipartisan Campaign Finance Reform Act — said on his Web site: “It is important to note that the decision does not affect McCain-Feingold’s soft money ban, which will continue to prevent corporate contributions to the political parties from corrupting the political process. But this decision was a terrible mistake. Presented with a relatively narrow legal issue, the Supreme Court chose to roll back laws that have limited the role of corporate money in federal elections since Teddy Roosevelt was president. Ignoring important principles of judicial restraint and respect for precedent, the Court has given corporate money a breathtaking new role in federal campaigns.”

The Brennan Center for Justice stated on its home page that the decision “hands unprecedented power to big business, and may provoke the most drastic shift in American politics in more than a decade.”

Rick Hasen, who runs the popular Election Law blog, told the First Amendment Center Online: “This is transformative, and I expect it is not the last we will hear from the Roberts Court in its project to deregulate campaign financing.”

How much the Court’s decision will change the landscape will remain to be seen. Elections in 2010 should provide the answer. Meanwhile, there is always the possibility that Congress will go back to the drawing board and pass new laws in the campaign-finance area.

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