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Analysis: Supreme Court decision opens door to more corporate, union cash in elections

This article first appeared in the St. Louis Beacon, Jan. 21, 2010 - In a major decision rejecting its precedents and a century of history, the U.S. Supreme Court opened the door to corporate funding of independent expenditures supporting the election of political candidates. The ruling could lead to huge infusions of corporate and union money into the election process.

The 5-4 decision found that a key provision of the McCain-Feingold law violated the First Amendment by barring corporations from paying for independent political ads advocating the election of a candidate. Justice Anthony M. Kennedy wrote for the court: "Government may not suppress political speech on the basis of the speaker's corporate identity. No sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations."

While opening the door to corporate and union money for political expenditures, the court upheld a requirement that corporations publicly disclose the identity of donors.

Rejecting a 'century of history'

The court explicitly overruled a 1990 precedent and a portion of the 2003 decision that upheld the McCain-Feingold law. Kennedy wrote that the 1990 decision, Austin vs. Michigan Chamber of Commerce, had been wrong in deciding that a corporation's speech could be limited to avoid "distortion" of the political process by the infusion large amounts of corporate funds.

The main thing that has changed since the 2003 decision upholding the McCain-Feingold law is the composition of the court. Justice Samuel A. Alito Jr. replaced Justice Sandra Day O'Connor. Alito was in today's majority permitting corporate expenditures, while O'Connor had been in the the majority of the 2003 decision. The court's newest member, Justice Sonia Sotomayor, joined the court's liberals in dissent.

Justice John Paul Stevens, who read from his long dissent from the bench, wrote that the court was blithely rejecting a "century of history" in coming to a ruling that "threatens to undermine the integrity of elected institutions across the nation."

Charles Burson, a Washington University law professor who has argued election law before the Supreme Court, said in an interview that the court's rationale is "pretty broad" and opens the door to corporate and union money. "This is a strong case to buttress those who think that the best way to deal with money in elections is simply disclosure."

"What is so ironic," Burson continued, "is that at a time when populism is so strong relating to large corporate interests, the court comes out and says we aren't going to buy it and we're going to open the doors to corporate money. The Massachusetts election looks like a manifestation of populism and the failure to deal with powerful banking interests, yet the court opens the door here. It is the court being out of step with the passion of the time, whether that's a good or a bad thing." Burson was chief of staff to Vice President Al Gore.

Bruce La Pierre, another Washington University law professor, has argued against campaign contribution limits in the Supreme Court. He wondered, in an email, about all of the "hand-wringing" among campaign finance supporters "about adverse effects" of the decision.

"If the foundations of our democracy are about to crumble," he wrote, "why isn't there some evidence of those problems from the 26 states that do not restrict independent expenditures by for-profit corporations?" he wrote. Kennedy noted in his decision that more than half the states already permit corporate political expenditures.

La Pierre added, "Balancing interests in unfettered political speech and government regulatory interests may be difficult in some cases, but here it would appear there is nothing on the regulatory side of the scale."

The court's decision did not disturb a century-old law prohibiting corporations from giving treasury funds directly to candidates. Nor did it disturb Buckley vs. Valeo, the post-Watergate decision that permits limits on direct campaign contributions to candidates. Thursday's decision permits, for the first time, the use of corporate money to pay for independent ads advocating the election or defeat of candidates for office.

'Hillary' and 'Mr. Smith'

The decision is Citizens United vs. Federal Election Commission. Citizens United is a nonprofit corporation that funded a 90-minute "documentary" called "Hillary: The Movie" that attacked Hillary Clinton. The conservative group sought to distribute the movie on cable as video-on-demand and wanted to promote it with broadcast ads during the period leading up to the primary elections for president. The lower courts ruled that the movie and the ads would violate the McCain-Feingold law because they were illegal electioneering communications paid for by corporate funds.

Kennedy analogized the Hillary movie to the classic Jimmy Stewart film, "Mr. Smith Goes to Washington." People in Washington were upset by that film too, he recalled. If Congress can bar the Hillary movie it could bar the fictional film because it was made by a corporation and was critical of members of Congress.

One aspect of the decision that will be closely scrutinized is the ease with which the majority finessed decades of precedent. Stevens, in his dissent, wrote that Kennedy had pieced together dissenting opinions from previous decisions as he "blazes through our precedents, overruling or disavowing a body of case law" that included five precedents.

There was a striking difference between Kennedy's relatively brief discussion of stare decisis -- adherence to precedent -- and the detailed discussion of the same issue in the 1992 Casey decision that reaffirmed constitutional protection for a woman's right to choose an abortion. Roger Goldman, a professor at Saint Louis University law school, pointed out that Justice David H. Souter wrote Casey's detailed analysis of precedent. Souter no longer is on the court. (Kennedy joined Casey but wrote a different portion of it.)

Even though Kennedy does not explicitly call into question Buckley's ruling in favor of campaign contribution limits, some legal scholars wondered whether Buckley's distinction between contributions and expenditures could withstand the Hillary decision.

La Pierre put it this way: "The line between independent expenditures and contributions is, to say the least, very thin. When a Republican runs to replace (Sen. Christopher S.) Bond, any corporation or individual can figure out the Democratic candidate's line of attack and jump on board with a me-too campaign without ever sitting down with the Democratic candidate or his/her committee. Independent expenditures may be a problem for a candidate if the ads are way over the top, but for the most part independent expenditures tend to track the candidate's line."

In the Hillary case, Kennedy said that the McCain-Feingold law censored important political and campaign speech. He gave these examples, which demonstrate that both liberal and conservative speech could be censored.

"The following acts all would be felonies," he wrote. "The Sierra Club runs an ad, within the crucial phase of 60 days before the general election, that exhorts the public to disapprove of a congressman who favors logging in national forests; the National Rifle Association publishes a book urging the public to vote for the challenger because the incumbent U.S. senator supports a handgun ban; and the American Civil Liberties Union creates a website telling the public to vote for a presidential candidate in light of that candidate's defense of free speech. These prohibitions are classic examples of censorship."

The forces arguing in favor of permitting corporate contributions included political opposites, including Floyd Abrams, the well-known First Amendment lawyer as well as the NRA.

Kennedy and Stevens disagreed as to whether the law had actually barred corporations from supporting the election of political candidates. Stevens said that corporations simply had to set up political action committees, PACs, to make contributions. But Kennedy said that a corporation's PAC is different from the corporation, so the corporation itself is barred from making a contribution. "The law before us is an outright ban, backed by criminal sanctions," he wrote.

Kennedy also pointed out that PACs were expensive and burdensome to administer, which is why there are only about 2,000 PACs even though there are millions of corporations.

Kennedy argued that it is impossible to distinguish the free speech rights of media corporations from other corporations. If Congress can prohibit the use of corporate funds for political expenditures by Exxon, it could prohibit endorsement editorials by newspapers, such as the New York Times.

"All speakers, including individuals and the media, use money amassed from the economic marketplace to fund their speech," he wrote. "The First Amendment protects the resulting speech, even if it was enabled by economic transactions."

Is all corporate speech equal?

The media revolution makes it even more futile to try to distinguish media corporations from other corporations, Kennedy argued. "With the advent of the internet and the decline of print and broadcast media ... the line between the media and others who wish to comment on political and social issues becomes far more blurred," he wrote.

Kennedy rejected the governmental interests advanced in support of the law. He said that use of corporate funds to support independent political expenditures did not create an "appearance of corruption," as the government claimed. Because there is no coordination between the corporation and the candidate, there is no appearance of a quid pro quo. Nor does it appear that that independent corporate expenditures ingratiate the corporation to the candidate, he wrote.

The court noted that there was no evidence in the record of an independent corporate contribution creating a quid pro quo.

The court left for another day the question of whether Congress can ban the use of corporate contributions by foreign corporations.

A different alignment of justices upheld the requirement that corporations publicly disclose their donors. The liberals joined Kennedy on this point, but Justice Clarence Thomas dissented. Kennedy wrote that "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."

Stevens, in a 90-page dissent, argued that the Founding Fathers never intended to protect corporate speech, an argument that Justice Antonin Scalia spend some pages trying to rebut.

Stevens also disagreed with the court's willingness to see corporations as equivalent to people. "In the context of election to public office, the distinction between corporate and human speakers is significant," he wrote. "Although they make enormous contributions to our society, corporations are not actually members of it. They cannot vote or run for office. Because they may be managed and controlled by nonresidents, their interests may conflict in fundamental respects with the interests of eligible voters. The financial resources, legal structure, and instrumental orientation of corporations raise legitimate concerns about their role in the electoral process."

William H. Freivogel is director of the School of Journalism at Southern Illinois University Carbondale and a professor at the Paul Simon Public Policy Institute. Previously, he worked for the St. Louis Post-Dispatch for 34 years, serving as assistant Washington Bureau Chief and deputy editorial editor. He covered the U.S. Supreme Court while in Washington. He is a graduate of Kirkwood High School, Stanford University and Washington University Law School. He is a member of the Missouri Bar.

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