U.S. Supreme Court Overturns Corporate Political Spending Ban

By Julian Dunraven, J.D., M.P.A.

Honorable Friends:

Do you believe the government should determine what the media can broadcast? Do you believe the government should decide which businesses constitute “media” and which do not? This is exactly what the Supreme Court ruled on yesterday in Citizens United v. Federal Election Commission. As Justice Kennedy wrote for the conservative majority:

“The law before us is an outright ban, backed by criminal sanctions. Section 441b makes it a felony for all corporations-- including nonprofit advocacy corporations-- either to expressly advocate the election or defeat of candidates or to broadcast electioneering communications within 30 days of a primary election and 60 days of a general election. Thus, the following acts would all be felonies under §441b: 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 Web site 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.” 558 U.S. ___ (2010) at 20.

This law, according to the majority opinion, gives rise to “the dangerous, and unacceptable, consequence that Congress could ban political speech of media corporations,” on a whim. Even the People’s Press Collective, as private corporation not classified as traditional media, could have incurred criminal liability for advocating for or against any candidate within the statute’s time frame. Does this frighten you? It should.

The reason for this oppressive law is that it supposedly protects shareholders from being forced to fund political causes with which they disagree. It also prevents the appearance of corruption and quid pro quo arrangements between politicians and corporate interests. Finally, and most importantly, it allegedly prevents the distortion of the election process by the large accumulations of wealth held by corporations.

The Court swiftly dismissed the first two concerns. Corporate shareholders have the option of divesting if they do not like the actions of any particular company. However, even if this were not the case, limiting political speech only in the days immediately prior to an election but at no other time hardly shows a serious concern for shareholder interests. As to quid pro quo arrangements, we already have anti-bribery laws in force. Attempting to go further and prevent mere access or influence is not only impossible, it is an impediment to representative democracy itself. As it is, the law would continue to permit lobbying by those companies wealthy enough to engage in it, but prohibit other companies from engaging in fundamental political advocacy; hardly an equitable arrangement.

In his dissent, Justice Stevens argued passionately, if not plausibly, that the government has a strong interest in preventing the appearance of corruption corporate wealth can create. He further maintained that, as the First Amendment never mentions corporate entities, they should not be entitled to full speech and press protections. In fact, he maintains that corporate speech is adequately protected in the lengthy procedures set up to create 527 groups, PACs, and the cumbersome and expensive filing, reporting, and maintenance requirements such affiliations entail.

The Court maintains, however, that:

“The First Amendment does not permit laws that force speakers to retain a campaign finance attorney, conduct demographic marketing research, or seek declaratory rulings before discussing the most salient political issues of our day. Prolix laws chill speech for the same reason that vague laws chill speech: People ‘of common intelligence must necessarily guess at [the law’s] meaning and differ as to its application.’ The Government may not render a ban on political speech constitutional by carving out a limited exemption through an amorphous regulatory interpretation.” Id. at 7 (internal citation omitted).

The Court goes on to point out that corporations, as affiliations of individuals, have long enjoyed First Amendment protections. Moreover, the text of the First Amendment itself is not limited to individuals, but protects the freedoms of speech and the press in general. The Court, “rejected the premise that the Government has an interest in equalizing the relative ability of individuals and groups to influence the outcome of elections,” and stated that, “The First Amendment’s protections do not depend on the speaker’s financial ability to engage in public discussion.” Id. at 37 (internal citation omitted).

In short, the First Amendment exists to protect the political speech of citizens, as individuals, groups, or corporations. “By taking the right to speak from some and giving it to others, the Government deprives the disadvantaged person or class of the right to use speech to strive to establish worth, standing, and respect for the speaker’s voice. The Government may not by these means deprive the public of the right and privilege to determine for itself what speech and speakers are worthy of consideration. The First Amendment protects speech and speaker, and the ideas that flow from each.” Id. at 24.

“The censorship we now confront is vast in its reach. The Government has muffle[d] the voices that best represent the most significant segments of the economy. And the electorate [has been] deprived of information, knowledge and opinion vital to its function. By suppressing the speech of manifold corporations, both for-profit and non-profit, the Government prevents their voices and viewpoints from reaching the public and advising voters on which persons or entities are hostile to their interests. Factions will necessarily form in our Republic, but the remedy of destroying the liberty of some factions is worse than the disease. Factions should be checked by permitting them all to speak, and by entrusting the people to judge what is true and what is false.” Id. at 38 (internal citation omitted).

This is as it should be. Despite this, though, the Court still upheld requirements for disclosing donors and issuing disclaimers as to who funds political advertisements. Only Justice Thomas objected to this. He points out the possible chilling effects on speech when activists target political donors with violence and intimidation, saying, “I cannot endorse a view of the First Amendment that subjects citizens of this Nation to death threats, ruined careers, damaged or defaced property, or pre-emptive and threatening warning letters as the price for engaging in core political speech, the primary object of First Amendment protection.” Id at 6 (Thomas, J., concurring) (internal citation omitted). Thus, he maintains we have still one further step to take on the road to truly free political speech.

As it stands, the Supreme Court has overturned the ban on direct corporate political advocacy. Corporations are still subject to contribution limits in candidate campaigns, as are individuals, and they must still disclose their donors and take credit for any political advertisement they produce. Nonetheless, this decision should be celebrated by anyone who still believes in the First Amendment. Here in Colorado, I am certain some enterprising company will use this decision to overturn our own state ban on direct corporate advocacy, which so closely mirrors federal law. I look forward to that day.