In a landmark decision with far-reaching consequences, a sharply divided Supreme Court last week struck down restrictions on campaign spending by corporations and unions, freeing them to spend a limitless amount to support or oppose a political candidate.  The case, Citizens United v. Federal Election Commission, reverses two prior Supreme Court precedents as well as overturns key aspects of the Bipartisan Campaign Reform Act of 2002 (BCRA), also known as the McCain-Feingold Act.

The underlying case arose from a 2008 movie produced by the appellant, Citizens United, which was harshly critical of then candidate Hillary Clinton. Citizens United and ‘Hillary: The Movie’ were financed by both individuals and corporations. Because the movie, titled ‘Hillary: The Movie’, advocated the defeat of Clinton, the Federal Election Commission barred any ads promoting it during the 2008 election season as well as broadcasts on cable video on demand. It cited restrictions on political ads financed by corporations as well as a provision in the BCRA that prohibits “electioneering communications” paid for by corporations 30 days before a presidential primary. The United States District Court for the District of Columbia sided with the FEC and ruled that Citizens United could not air any ads promoting the movie before the Democratic primaries.

The Supreme Court overturned the District Court and ruled that the BCRA’s restrictions on corporate funding of political broadcasts violated the First Amendment’s protection of free speech. In so doing, the Court completely overruled a prior Supreme Court decision, Austin v. Michigan Chamber of Commerce, a 1990 case which upheld Michigan’s prohibition against corporations using treasury money to support or oppose political candidates. The Court also partially overruled another prior decision, McConnell v. Federal Election Commission, a 2003 case which upheld the BCRA’s clause that restricts “electioneering communications” funded by corporate money 30 days before a presidential primary or 60 days before a general election.

Justice Kennedy, writing for the majority joined by Justices Roberts, Scalia, Thomas, and Alito, wrote that “If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.” He further wrote that “When government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought.” He added, “The First Amendment confirms the freedom to think for ourselves.”

There seem to be two underlying principles guiding the majority’s reasoning in this case:

1. First, that money equals speech. This doctrine was first promulgated by the Supreme Court in Buckley v. Valeo, a 1975 case where the Court struck down limitations on campaign expenditures, on independent expenditures by individuals and groups, and on expenditures by a candidate from his or her personal funds. The Buckley Court reasoned that such expenditures were a form of constitutionally protected speech that could not be restricted.
2. Second, that corporations have the same constitutional rights as people. This is not a new notion and the debate about “corporate personhood” has indeed been a long standing one. Of course, we all know that corporations are comprised of individuals that have constitutional rights, but the Court for the first time concludes that a corporation itself has a constitutional right to free speech when it comes to elections.

Coupling the two principles noted above, the Court ruled that corporations have the same First Amendment rights as individuals and can therefore spend an unlimited amount of money to advocate for or against a political candidate. It should be noted, however, that corporate and individual contributions made directly to a candidate can still be restricted.

As evidenced by the widespread media coverage this ruling has received, the implications of it are profound. Corporations, as well as unions, can now spend an unrestricted amount to support or oppose any candidate they view as favorable or unfavorable to their agenda. Since corporations have more money and resources than unions, many fear a corporate takeover of political debate in this country. Indeed, Justice Stevens in a dissent joined by Justices Breyer, Ginsburg and Sotomayor, wrote that “In a democratic society, the long-standing consensus on the need to limit corporate campaign spending should outweigh the wooden applications of judge-made rules” and that the 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.”

Because corporate money has for the most part favored Republicans, the response to this ruling along party lines has been predictable, with President Obama and most Democrats blasting the ruling while most Republicans praising it as a victory for free speech. (Watch President Obama criticizing the decision in the State of the Union address last night as well as Justice Alito’s reaction.) The Supreme Court itself was divided starkly between its conservative and liberal wings. (Former Justice O’Conner, the primary swing vote before retiring, has implied that she would have dissented, which would have resulted in an upholding of the prior restrictions.) In an interesting role reversal, many liberals are accusing the conservative wing of judicial activism, and hypocrisy, since a literal interpretation of the Constitution would not preclude the restrictions on corporate funding of political speech as the Constitution never expressly addressed money in relation to politics.

A couple of interesting things to watch now will be whether Congress attempts to enact laws that would make corporate or union expenditures on political advocacy subject to a shareholder or member vote. Also, the ruling potentially opens up foreign corporations trying to influence American political debate through their U.S.-based subsidiaries. Some are now even calling for a Constitutional amendment to circumvent the Supreme Court decision.

The ruling is already affecting the political calculus of campaigns for midterm elections later this year and will undoubtedly have an even deeper impact on the 2012 and future elections. Many fear that this ruling will affect the policy positions of candidates who desire or fear political cash being used on their behalf or in opposition to them.  In any event, what is certain is that both sides will flood the airwaves with broadcast “electioneering communications” and that information and misinformation will become even more pervasive and come from more sources than ever before.

Your thoughts?

Posted by Anish on January 28, 2010 at 2:52pm.