Delay in ‘Hillary’ case scares campaign reformists

Tuesday, June 30, 2009

WASHINGTON — By putting off a decision yesterday on a key campaign-finance case, the Supreme Court may have set the stage for a dramatic First Amendment ruling in the next term that would loosen restrictions on corporate funding of political campaigns.

The Court ordered that Citizens United v. Federal Election Commission be reargued Sept. 9, with briefing beforehand on the question of whether the 1990 precedent Austin v. Michigan Chamber of Commerce and a section of the 2003 ruling in McConnell v. FEC should be overturned. Both rulings upheld longstanding limits on direct corporate spending on elections.

Reading the tea leaves from the Court’s unusual action, scholars and campaign-reform advocates by yesterday afternoon were already fearing the worst, in their view — that the Supreme Court would turn back the clock more than a century and allow corporations to drown out small contributors with a flood of previously illegal contributions.

“The Supreme Court Gets Ready to Turn On the Corporate Fundraising Spigot,” was the headline on Election Law blogger Rick Hasen’s dispatch yesterday afternoon on the online magazine Slate.

“If after reargument in September, corporate limits fall — and limits on the money labor unions can spend on campaigns, with them,” wrote Hasen, “we may well look back on the 2008 election as a quaint time when the amounts spent on elections were relatively modest. Expect the floodgates to open, and the money to flow freely, as early as next year.”

Fred Wertheimer of Democracy 21, a longtime campaign-reform strategist, said yesterday that if Austin was overturned, “banks like Citigroup, investments firms like Merrill Lynch, insurance companies like AIG, and corporations like General Motors and Chrysler would be free to spend hundreds of millions of dollars of their corporate wealth to directly support the election of federal officeholders who did their legislative bidding and to directly oppose federal officeholders who refused to carry out their wishes.”

Currently, corporations may participate in campaigns only through political action committees, which are regulated with contribution limits and disclosure requirements.

Trevor Potter, president of the Campaign Legal Center, called the Court’s decision to re-hear Citizens United “deeply troubling,” and said that if it resulted in overturning Austin, the Court would show “a disturbing lack of judicial restraint. The only thing that has changed since the McConnell decision is the arrival on the Court of two new justices, each of whom spoke about of the importance of stare decisis (upholding precedent) and judicial modesty at their confirmation hearings.”

So how did the Court’s delay of a decision that was expected yesterday, the final day before the Court’s recess, lead to such a conclusion?

The case, you’ll recall, asked whether a movie critical of then-presidential candidate Hillary Clinton amounted to a campaign communication that cannot be funded directly by money from a corporate treasury. Citizens United, which produced “Hillary: The Movie,” is a nonprofit corporation that received direct corporate funding.

As the case came to the high court, lawyers for Citizens United urged the justices, among other arguments, to overturn the Austin precedent. But the brief for the Federal Election Commission argued that the issue of overturning Austin was “not properly before the Court” because it had not been dealt with fully in the court below and occupied only two pages of Citizens United’s brief.

At oral argument in March, however, the broad issue of the constitutionality of banning corporate participation in campaigns seemed to loom large. During questioning from the justices, the government’s lawyer, Deputy Solicitor General Malcolm Stewart, seemed to acknowledge that under the government’s theory, books funded by corporate donations could be restricted. “That’s pretty incredible,” Justice Samuel Alito Jr. responded.

Justices Anthony Kennedy, Antonin Scalia and Clarence Thomas have previously indicated they would overturn Austin, and the Roberts Court overall has been hostile to campaign restrictions. But, as the Court’s order yesterday indicated, the justices were not yet ready to pull the trigger to kill off the ban on corporate spending on campaigns.

They may have felt that before reversing a major precedent and policy that has roots in the Tillman Act of 1907, the issue should be more fully briefed and argued by both sides. Hasen suggested the Court might also have delayed such a dramatic ruling out of deference to retiring Justice David Souter, a strong supporter of campaign regulation.

As far as the timing of the reargument is concerned, it may be that the justices wanted to hear the case in September — rather than next term, which begins Oct. 5 — to honor the Court’s tradition of disposing of all pending cases in the term in which they were heard. Also, they might have wanted to resolve the issue before congressional campaigns of 2010 get under way.

The September arguments also may indirectly affect the nomination of Sonia Sotomayor to the Supreme Court to replace Souter. Sen. Charles Schumer, D-N.Y., said yesterday that Sotomayor should be confirmed and seated on the high court in time to participate in the Citizens United arguments. Sotomayor’s record, like Souter’s, suggests strong support for campaign-finance regulations. Without her, the eight-member Court would be dominated by critics of campaign-finance regulation.

Not everyone was unhappy about yesterday’s turn of events.

At the Institute for Justice, attorney Steve Simpson said the ban on corporate funding of campaigns had muzzled political speech nationwide. “The Court will now squarely confront the inevitable consequences of regulating political speech: If the government can ban ads, it can ban movies and books as well,” Simpson said.

“But we don’t ban books in America,” Simpson said. “Once you start regulating political speech, there is no place to stop. This is exactly why the First Amendment forbids government from controlling and limiting speech in the first place.”

The Center for Competitive Politics was also happy that the Austin precedent might be destined for the scrap heap. “Overruling Austin would strengthen First Amendment rights and allow Americans to more fully participate in our political system,” said Stephen Hoersting, the groups’s vice president. “Independent speech by any speaker cannot corrupt our democracy, it enriches it.”

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