"Hillary movie puts campaign finance limits at risk"
By Jesse J. Holland and Mark Sherman, Associated Press Writers, September 6, 2009
WASHINGTON --The Supreme Court appears poised to wipe away limits on campaign spending by corporations and labor unions in time for next year's congressional elections in a case that began as a dispute over a movie about Hillary Rodham Clinton.
The justices return to the bench Sept. 9 -- nearly a month early -- to consider whether to overrule two earlier decisions that restrict how and when corporations and unions can take part in federal campaigns. Laws that impose similar limits in 24 states also are threatened.
The court first heard arguments in March in the case of whether "Hillary: The Movie," a scathingly critical look at Clinton's presidential ambitions, could be regulated as a campaign ad. The emphasis has shifted away from the 90-minute film.
Now the justices could decide whether corporations and unions should be treated differently from individuals when it comes to campaign spending. Restrictions on corporations have been around for more than 100 years; limits on unions date from the 1940s.
Deep corporate and labor pockets and the potential for corruption "amply justify treating corporate and union expenditures differently from those by individuals and ideological nonprofit groups," argued Sens. John McCain, R-Ariz., and Russ Feingold, D-Wis., and other sponsors of a major campaign finance law who don't want any significant change to the restrictions.
But former Solicitor General Theodore Olson, who six years ago defended the campaign finance provision he now is challenging, said the limits are strangling corporate and union freedom to speak out.
"Why is it easier to dance naked, burn a flag or wear a T-shirt profanely opposing the draft," Olson said at a Federalist Society event in July, "than it is to advocate the election or defeat of a president? That cannot be right."
Wednesday's unusual session -- the court only rarely orders a case to be reargued -- also will be the first to include the newest justice, Sonia Sotomayor. In August, the 55-year-old New Yorker became the court's first Hispanic and third female justice ever.
It also will be the first argument for Solicitor General Elena Kagan, a finalist for the high court seat that went to Sotomayor. Yet another former solicitor general, Seth Waxman, is representing McCain and Feingold in an effort to preserve the 2003 provision that tightened limits on ads paid for by corporations and unions and broadcast close to an election.
Kagan, defending the law on the government's behalf, and Waxman will face skeptical conservative-leaning justices, who appear to hold the upper hand on this issue. The court's liberals generally have voted to uphold campaign finance laws. Sotomayor's ascension to the court did not change its ideological balance, giving opponents of the current campaign finance laws hope this court will strike them down.
The court could have decided the case narrowly following arguments on March 24. Instead, on the last day they met before their summer break, the justices said they would consider overruling part of their 2003 decision that upheld major portions of the McCain-Feingold law as well as a 1990 decision that upheld limits on corporate spending in elections.
Three justices on the court now -- Anthony Kennedy, Antonin Scalia and Clarence Thomas -- already have signed minority opinions that advocated striking down both laws as unconstitutional restrictions on speech. Since the 2003 decision, Chief Justice John Roberts and Justice Samuel Alito have joined the court. Both have questioned the validity of campaign finance laws, but have not yet gone as far as their three conservative-leaning colleagues.
Roberts and Alito made clear during the original arguments how much they worried about the control the campaign finance laws give government over political speech.
"If Wal-Mart airs an advertisement that says, `We have candidate action figures for sale, come buy them,' that counts as an electioneering communication?" Roberts asked government lawyer Malcolm Stewart.
"If it's aired in the right place at the right time, that would be covered," Stewart said.
Stewart later added that campaign finance laws could be applied to mediums such as books and e-books. "That's pretty incredible," Alito said. "You think that if a book was published, a campaign biography that was the functional equivalent of express advocacy, that could be banned?"
Olson picked up on Alito's incredulity in his brief to the court. "Enough is enough. When the government of the United States of America claims the authority to ban books because of their political speech, something has gone terribly wrong and it is as sure a sign as any that a return to first principles is in order," he said.
Olson is representing Citizens United, a conservative not-for-profit group that wanted to air ads for the anti-Clinton movie and distribute it through video-on-demand services on local cable systems during the 2008 Democratic primary campaign.
But federal courts said the movie looked and sounded like a long campaign ad, and therefore should be regulated like one.
The justices could have decided the case on narrow grounds this year, saying for example that movies aired on-demand are exempt from campaign finance laws.
The call for new arguments to address the broader limits on corporate and union spending makes supporters of those laws nervous.
"This has the potential to unleash massive corporate spending," said Democracy 21 president Fred Wertheimer, a longtime proponent of limiting money in politics. "It would be a disaster for democracy."
"Hillary: The Movie": www.hillarythemovie.com
Federal Election Commission: www.fec.gov
Background on the case: http://tinyurl.com/cfltxp
"A Test Case for Roberts"
By E.J. Dionne Jr., The Washington Post (Online), Op-Ed, Monday, September 7, 2009
President Obama's health-care speech on Wednesday will be only the second most consequential political moment of the week.
Judged by the standard of an event's potential long-term impact on our public life, the most important will be the argument before the Supreme Court (on the same day, as it happens) about a case that, if decided wrongly, could surrender control of our democracy to corporate interests.
This sounds melodramatic. It's not. The court is considering eviscerating laws that have been on the books since 1907 and 1947 -- in two separate cases -- banning direct contributions and spending by corporations in federal election campaigns. Doing so would obliterate precedents that go back two and three decades.
The full impact of what the court could do in Citizens United v. Federal Election Commission has only begun to receive the attention it deserves. Even the word "radical" does not capture the extent to which the justices could turn our political system upside down. Will it use a case originally brought on a narrow issue to bring our politics back to the corruption of the Gilded Age?
Citizens United, a conservative group, brought suit arguing that it should be exempt from the restrictions of the 2002 McCain-Feingold campaign finance law for a movie it made that was sharply critical of Hillary Clinton. The organization said it should not have to disclose who financed the film.
Instead of deciding the case before it, the court engaged in a remarkable act of overreach. On June 29, it postponed a decision and called for new briefs and a highly unusual new hearing, which is Wednesday's big event. The court chose to consider an issue only tangentially raised by the case. It threatens to overrule a 1990 decision that upheld the long-standing ban on corporate money in campaigns.
I don't have the space to cite all the precedents, dating to the 1976 Buckley campaign finance ruling, that the court would set aside if it were to throw out the prohibition on corporate money. Suffice it to say that there is one member of the court who has spoken eloquently about the dangers of ignoring precedents.
"I do think that it is a jolt to the legal system when you overrule a precedent," he said. "Precedent plays an important role in promoting stability and evenhandedness. It is not enough -- and the court has emphasized this on several occasions -- it is not enough that you may think the prior decision was wrongly decided. That really doesn't answer the question, it just poses the question."
This careful jurist continued: "And you do look at these other factors, like settled expectations, like the legitimacy of the court, like whether a particular precedent is workable or not, whether a precedent has been eroded by subsequent developments." He paraphrased Alexander Hamilton as saying in Federalist 78, "To avoid an arbitrary discretion in the judges, they need to be bound down by rules and precedents."
Chief Justice John Roberts, the likely swing vote in this case, was exactly right when he said these things during his 2005 confirmation hearings. If he uses his own standards, it is impossible to see how he can justify the use of "arbitrary discretion" to discard a well-established system whose construction began with the Tillman Act of 1907.
Were the courts that set the earlier precedents "legitimate"? This ban was upheld over many years by justices of various philosophical leanings. We are not talking about overturning a single decision by a bunch of activists in robes seizing a temporary court majority.
Are the precedents "workable"? The answer is clearly yes, which is why there is absolutely no popular demand to let corporate cash loose into our politics. Our system would be less "workable" if the court abruptly changed the law.
Has the precedent been "eroded"? Absolutely not. In case after case, no matter where particular court majorities stood on particular campaign finance provisions, the ban on corporate contributions was taken for granted. As the court stated just six years ago, Congress's power to prohibit direct corporate and union contributions "has been firmly embedded in our law." That's what you call "settled expectations."
This case is the clearest test that Roberts has faced so far as to whether he meant what he said to Congress in 2005. I truly hope he passes it. If he doesn't, he will unleash havoc in our political system and greatly undermine the legitimacy of the court he leads.
"'Hillary: The Movie' gets new airing at high court"
By Mark Sherman, Associated Press Writer, September 9, 2009
WASHINGTON – "Hillary: The Movie" is returning to the Supreme Court for a limited engagement and with the chance to overhaul laws governing federal campaigns ranging from the White House to Congress.
The justices were hearing arguments in the case Wednesday for the second time. It began as a dispute over whether a 90-minute movie attacking Hillary Rodham Clinton's presidential ambitions should be regulated as a campaign ad.
But it took on greater significance after the justices decided to use the case to consider whether to ease restrictions, established in two earlier decisions now at issue, on how corporations and labor unions may spend money to influence elections.
The public argument session will be the first for Justice Sonia Sotomayor, who was welcomed to the court Tuesday in a ceremony that was attended by President Barack Obama and Vice President Joe Biden.
The court will release an audio recording of the arguments soon after they conclude and the C-SPAN cable network has said it will air the material.
Like most campaign finance lawsuits, this case pits the court's conservatives, generally skeptical of campaign finance limits, against its liberals. Sotomayor is not expected to play a pivotal role in the case.
Instead, the focus will be on the willingness of two conservatives, Chief Justice John Roberts and Justice Samuel Alito, to overrule earlier decisions. Both justices spoke at length in their Senate confirmation hearings about the importance of abiding by precedents even if they would have voted the other way.
The other three conservative-leaning justices, Anthony Kennedy, Antonin Scalia and Clarence Thomas, are on record opposing the restrictions on corporations and unions.
The details of the anti-Clinton movie have faded in prominence now that the court is looking more broadly at campaign finance law.
A conservative not-for-profit group, Citizens United, wanted to air ads for the anti-Clinton movie and distribute it through video-on-demand services on local cable systems during the 2008 Democratic primary campaign.
But federal courts said the movie looked and sounded like a long campaign ad, and therefore should be regulated like one.
The movie was advertised on the Internet, sold on DVD and shown in a few theaters. Campaign regulations do not apply to DVDs, theaters or the Internet.
The film is filled with criticisms of the former first lady, whom Obama defeated in the primaries and then made his secretary of state. It includes Dick Morris, a former adviser to President Bill Clinton who is now a Clinton critic, saying the one-time candidate is "the closest thing we have in America to a European socialist."
It's "not a musical comedy," Justice Stephen Breyer said after watching the movie.
But the lawyer for Citizens United, Theodore Olson, said federal law is wrongly preventing corporations and unions from airing their views, no matter how strongly held.
"Why is it easier to dance naked, burn a flag or wear a T-shirt profanely opposing the draft," Olson said in July at an event sponsored by the conservative Federalist Society, "than it is to advocate the election or defeat of a president? That cannot be right."
In 2003, Olson was President George W. Bush's top Supreme Court lawyer and he defended the campaign finance provision he now is challenging.
The current solicitor general, Elena Kagan, is making her first argument at the high court in support of the laws under attack. Kagan was a finalist for the seat that went to Sotomayor.
Also involved in the case is Sen. John McCain, R-Ariz., whom Obama defeated in November. McCain, Sen. Russ Feingold, D-Wis., and other members of Congress are siding with Obama in asking that the restrictions be kept in place.
"Justices Are Pressed for a Broad Ruling in Campaign Case"
By ADAM LIPTAK, The New York Times, September 10, 2009
WASHINGTON — There seemed little question after the argument in an important campaign finance case at the Supreme Court on Wednesday that the makers of a slashing political documentary about Hillary Rodham Clinton were poised to win. The open issue was just how broad that victory would be.
The argument was extraordinary in its timing, length and participants. It took place during the court’s summer break, almost a month before the start of the new term in October; lasted more than 90 minutes instead of the usual hour; and featured the Supreme Court debuts of Justice Sonia Sotomayor and the solicitor general, Elena Kagan.
It was, moreover, a rare re-argument. When the case was first heard in March, it centered on whether the restrictions on corporate spending in the 2002 McCain-Feingold campaign finance law applied to the documentary “Hillary: The Movie,” which was produced by a nonprofit advocacy corporation called Citizens United. In the request for re-argument, the court raised the much broader question of whether it should sweep away restrictions on political speech by corporations.
On Wednesday, Ms. Kagan all but said that a loss for the government would be acceptable, so long as it was on narrow grounds.
She suggested to the justices that Citizens United might not be the sort of corporation to which some campaign finance restrictions ought to apply. What the Supreme Court should not do, she said, is overrule two earlier decisions and thereby allow all kinds of corporations to spend money to support or oppose political candidates, principally through television advertisements.
Chief Justice John G. Roberts Jr., on hearing the government’s position, accused it of engaging in strategic behavior.
“So you want to give up this case,” Chief Justice Roberts said to Ms. Kagan, “change your position, and basically say you lose solely because of the questioning we have directed on re-argument?”
Ms. Kagan did not go that far. But she said, “If you are asking me, Mr. Chief Justice, as to whether the government has a position as to the way it loses, if it has to lose, the answer is yes.”
Chief Justice Roberts and several of the court’s more conservative justices seemed frustrated with the complex state of modern campaign finance law and appeared ready to take bold action. Justice Sotomayor, like some of the court’s more liberal members, seemed inclined to take a narrower approach.
“Wouldn’t we be doing some more harm than good,” she asked Floyd Abrams, “by a broad ruling in a case that doesn’t involve more business corporations, and actually doesn’t involve the traditional nonprofit corporation?”
“Your honor,” Mr. Abrams responded, “I don’t think you’d be doing more harm than good in vindicating the First Amendment rights here, which transcend that of Citizen United.” Mr. Abrams represented Senator Mitch McConnell of Kentucky, the Republican leader and a longtime foe of campaign finance regulation.
The order calling for re-argument in the case, Citizens United v. Federal Election Commission, No. 08-205, asked the parties to offer their views on whether the court should overrule a 1990 decision, Austin v. Michigan Chamber of Commerce, which upheld restrictions on corporate spending to support or oppose political candidates, and part of McConnell v. Federal Election Commission, the 2003 decision that upheld the central provisions of the McCain-Feingold campaign finance law.
The McCain-Feingold law bans the broadcast, cable or satellite transmission of “electioneering communications” paid for by corporations in the 30 days before a presidential primary and in the 60 days before the general election. The law requires the government, Justice Anthony M. Kennedy said, to make an array of distinctions — among speakers, what they say and when they say it — that raise serious First Amendment concerns.
The court could rule in favor of Citizens United without making fundamental changes to the political landscape. It could say that the McCain-Feingold law was not meant to address 90-minute documentaries like the one at issue. It could say that the way Citizens United wanted to distribute the documentary, on a cable video-on-demand service, was not covered by the law. Or it could, as Ms. Kagan suggested, carve out some kinds of corporations.
Justice Sotomayor asked Theodore B. Olson, a lawyer for Citizens United, whether his side had abandoned earlier arguments based on the McCain-Feingold law rather than the First Amendment rights of all corporations.
Mr. Olson indicated that he was prepared to accept any sort of victory. But he added that the court would have to confront the larger question in the case soon enough and that whatever interim lines the court drew would chill free speech in the meantime.
Mr. Abrams reminded the court that it could have decided New York Times v. Sullivan, the 1964 decision that revolutionized the law of libel, on quite narrow grounds. When First Amendment rights are in danger, Mr. Abrams said, a broad ruling can be the correct one.
“Hillary: The Movie,” a caustic critique of Mrs. Clinton, was shown in theaters in six cities, and it remains available on DVD and the Internet. A three-judge panel of the Federal District Court said last year that it could not be transmitted on cable because it had only one purpose: “to inform the electorate that Senator Clinton is unfit for office, that the United States would be a dangerous place in a President Hillary Clinton world and that viewers should vote against her.”
Ms. Kagan disavowed a statement that a government lawyer made when the case was first argued in March. The lawyer said the government could ban the distribution of books paid for by corporations before elections.
“The government’s answer has changed,” Ms. Kagan said, adding that the Federal Election Commission had never tried to regulate distribution of books.
Chief Justice Roberts bristled at that statement. “We don’t put our First Amendment rights in the hands of F.E.C. bureaucrats,” he said.
He then asked about pamphlets. “A pamphlet would be different,” Ms. Kagan said. “A pamphlet is pretty classic electioneering.”
Much of the argument was taken up by discussions of whether the speech of corporations might be treated different from that of individuals. Mr. Olson and Justice Antonin Scalia noted that most corporations were small, had limited assets and often were owned by a single shareholder. Justice Ruth Bader Ginsburg asked about “megacorporations” with foreign investors.
Changes at the court, particularly the replacement of Justice Sandra Day O’Connor by Justice Samuel A. Alito Jr. in 2006, have substantially altered its attitude to campaign finance laws. A five-justice majority of the Roberts court has been hostile to such laws, but Chief Justice Roberts and Justice Alito have so far moved in cautious increments.
Judging by the request for re-argument and the tenor of the questioning on Wednesday, that may be about to change.
"Support the Fair Elections Now Act"
The Concord Monitor, Letter, September 15, 2009
The U.S. Supreme Court is about to review McCain-Feingold and other campaign financing laws, again trying to decide if corporations are persons and, if so, do they have all the rights of a person and could they pour into our elections as much cash as they consider effective?
I hope they decide against changing our laws forbidding corporations from using their huge treasuries to influence the outcome of elections.
Americans for Campaign Reform supports two bills known as The Fair Elections Now Act. I am asking those who've cared about my effort for a working democracy to make two telephone calls of singular importance: The numbers are: 877-851-6437 or 800-828-0498. Both are for the Capitol. With the first number, ask for the offices of your senators; with the second number, ask for the office of your U.S. representative.
Say something like this: "I would like Sen. Jeanne Shaheen (or Sen. Judd Gregg or Rep. Paul Hodes or Rep. Carol Shea-Porter) to know that I do not believe that a corporation is a person. I would like my senator to co-sponsor the Fair Elections Now Act, SB 752." Shea-Porter and Hodes are co-sponsors of HR 1826, so thank each for that.
Doris "Granny D" Haddock
Dublin, New Hampshire
"Campaign finance rules overturned"
By Associated Press, September 19, 2009
WASHINGTON - Independent advocacy groups will be able to spend more money to try to influence federal elections under a decision yesterday from a federal appeals court that overturned rules limiting nonprofit groups’ campaign spending.
Three judges of the US Court of Appeals in Washington agreed with EMILY’s List, a nonprofit that backs female Democrats who support abortion rights, that the regulations limited free speech rights.
The Federal Election Commission enacted the rules in 2005, after concerns were raised about the amount of unlimited “soft money’’ contributions used to fund attacks in the 2004 election.
The FEC said nonprofits would have to pay for political activities involving federal candidates using limited “hard money’’ contributions. Individuals are allowed to donate up to $5,000 annually to a nonprofit that indicates it plans to use the money to support or oppose a federal candidate.
“The First Amendment, as interpreted by the Supreme Court, protects the right of individual citizens to spend unlimited amounts to express their views about policy issues and candidates for public office,’’ the court ruling said. The First Amendment also “safeguards the right of citizens to band together and pool their resources as an unincorporated group or nonprofit organization in order to express their views about policy issues and candidates for public office.’’
FEC spokeswoman Judith Ingram said the agency was studying the opinion and had not decided whether to appeal.
Richard L. Hasen, a professor specializing in election law at Loyola Law School in Los Angeles, said the opinion follows the lead in recent years of the Supreme Court, which has repeatedly struck down campaign finance limits as unconstitutional. He said the opinion would put political parties at a disadvantage because they are still bound by the fund-raising limits.
WASHINGTON (Reuters) - Corporations can spend freely to support or oppose candidates for president and Congress, the Supreme Court ruled on Thursday in a landmark decision that allows massive sums to be spent to influence future elections.
"Supreme Court ruling a landmark for corporate political cash"
reuters.com - January 21, 2010
The 5-4 ruling split the high court along conservative and liberal lines. It was a defeat for the Obama administration and supporters of campaign finance laws who said that ending the limits would unleash a flood of corporate money into the political system.
The ruling will transform the political landscape and the rules on how money can be spent in this year's congressional election and the 2012 presidential contest.
Writing for the majority, Justice Anthony Kennedy said the limits violated constitutional free-speech rights.
"We find no basis for the proposition that, in the context of political speech, the government may impose restrictions on certain disfavored speakers," he wrote.
In his sharply worded dissent, Justice John Paul Stevens wrote, "The court's ruling threatens to undermine the integrity of elected institutions across the nation."
The justices overturned Supreme Court precedents from 2003 and 1990 that upheld federal and state limits on independent expenditures by corporate treasuries to support or oppose candidates.
"This decision allows Wall Street to tap its vast corporate profits to drown out the voice of the public in our democracy," said Common Cause President Bob Edgar, a group that supports campaign finance limits.
LABOR UNIONS TOO
In the 2008 election cycle, nearly $6 billion was spent on all federal campaigns, including more than $1 billion from corporate political action committees, trade associations, executives and lobbyists.
The ruling will almost certainly allow labor unions to spend more freely in political campaigns also and it posed a threat to similar limits that had been imposed in about half of the country's 50 states.
The top court struck down the part of the federal law that restricted broadcast advertisements for or against political candidates right before elections that are paid for by corporations, labor unions and advocacy groups.
The 2002 campaign finance law at issue was named after Senator John McCain, the unsuccessful Republican presidential nominee in 2008, and Democratic Senator Russell Feingold.
The justices appeared at a special Thursday session to summarize the ruling and issued a total of five separate opinions exceeding 175 pages.
The decision was a victory for a conservative advocacy group's challenge to the campaign finance law as part of its efforts to broadcast and promote a 2008 movie critical of then-presidential candidate Hillary Clinton. She later became President Barack Obama's secretary of state.
The Obama administration defended the law and its restrictions on election-related spending by corporations, unions and interest groups. It said corporations for more than 100 years have been subject to special limits on spending in federal political campaign.
The court's conservative majority, with the addition of Chief Justice John Roberts and Justice Samuel Alito, both Bush appointees, previously voted to limit or strike down parts of the law designed to regulate the role of money in politics and prevent corruption.
The court's four liberals, including its newest member, Justice Sonia Sotomayor, who was appointed by Obama, dissented.
A BOSTON GLOBE EDITORIAL
"Corporations aren’t people, don’t merit special protections"
January 23, 2010
WHEN FIVE US Supreme Court justices struck down vital restrictions on spending by corporations in political races this week, they were reacting, to some degree, to the evident flaws in existing campaign-finance regulation. Yes, special-interest money will find its way into the political system, as Justice Anthony Kennedy’s majority opinion points out. Yes, the Federal Election Commission has to make fine, subjective judgments, such as whether an ideologically motivated documentary film counts as a campaign ad. And yes, limits on corporate campaign activity necessarily mean that businesses, nonprofits, and labor unions cannot always throw their weight behind candidates to the extent that their leaders might like.
Still, these complications hardly justify the far-reaching conclusion that corporations should enjoy the same free-speech rights as real human beings.
Joined by the court’s four most conservative justices, Kennedy ruled that the group Citizens United should have been allowed, during the 2008 Democratic primary season, to spend money from its general treasury to advertise its film “Hillary: The Movie’’ and distribute it on video-on-demand service. In reaching that decision, though, the court went well out of its way to invalidate laws prohibiting corporations from making independent expenditures for or against candidates for federal office. The ruling will likely sweep away state campaign-finance restrictions as well.
In deciding the case, the five justices assumed that campaign-finance rules are keeping business and union interests out of the political marketplace, when experience suggests the opposite. The justices also ignored the possibility that a vast influx of corporate money into elections will promote corruption. Never mind that, as recently as June of last year, Kennedy himself acknowledged that corporate campaign spending can cloud an official’s judgment, when he wrote an opinion ordering West Virginia Supreme Court Justice Brent Benjamin to recuse himself in a case involving a company whose CEO had spent $3 million to get Benjamin elected.
It simply isn’t true that federal law gives corporations no voice in politics, since they can set up political-action committees that take donations from their employees and shareholders. What corporations haven’t been able to do is pay for political activity out of their treasuries. And with good reason: Even a small corporation can bring far more money to bear on a candidate than all but the wealthiest individuals.
At least the ruling upholds requirements that the source of political spending be disclosed. (Justice Clarence Thomas would have uprooted even that.) Yet disclosure rules alone may not be enough to keep corporate spending from overwhelming the election process - or devoting more money to currying favor with politicians rather than improving their own businesses. Minimally, Congress should require corporations to seek shareholders’ permission before spending money in political campaigns, coupled with a similar restriction on unions.
The full impact of this week’s decision is hard to predict, for changes in the campaign-finance system play out in unpredictable ways. What’s clear now is that the Supreme Court had a choice between protecting the influence of real individuals and maximizing the influence of abstract entities created by legal fiat. And five justices chose the latter.
"A campaign funding mess"
By Kent Greenfield, The Boston Globe, Op-Ed, January 23, 2010
THE SUPREME Court’s sharply divided decision to strike down limits on political campaign expenditures by corporations is judicial activism at its worst. The Court disembowled carefully crafted election regulations adopted by a bipartisan Congress. To do so, it overruled two of its own precedents.
In Citizens vs. Federal Election Committee, the Court freed corporations from electioneering constraints. Now, for-profit corporations may spend unlimited amounts to influence elections at all levels of government. The danger is real: if ExxonMobil had spent just 2 percent of its 2008 profits in the last presidential election, it would have outspent McCain and Obama combined.
The fundamental problem with Justice Anthony Kennedy’s majority opinion is not his view of the First Amendment. Rather, it is his misguided view of the nature of corporations. To Kennedy, there is no difference between humans and corporations for purposes of the free speech analysis.
But he forgets that corporations are not natural beings - they are artificial institutions. When people start businesses, states award them corporate charters as a kind of public subsidy. The corporate form provides the protection of limited liability, protecting shareholders from personal liability for debts of the company. The charter also bestows the corporation with a legal “personality’’ separate from its investors, so that it can sue and be sued without the participation of each shareholder. What’s more, charters also give corporations an unlimited life span, allowing them to outlast their founders.
Corporations are legal fictions, so no one thinks that corporations should be able to vote, serve on juries, or until the Court’s ruling this week, be allowed to use their considerable resources to influence election campaigns especially since those resources come as a result of state-conferred benefits.
The response to the ruling has been pointed, with calls to amend the Constitution to make it clear that corporations are not “persons’’ under the First Amendment. The problem is the difficulty in winning the required two-thirds vote of both houses of Congress, plus favorable votes in three-quarters of the states - especially since by the time the amendments make it through the process most of the elected officials who vote on the amendment will owe their jobs to corporate benefactors.
Still, there is a way out of this mess.
Instead of using the tools of constitutional law, we need to use the tools of corporate law. Such a change could be put in place tomorrow, by a simple majority vote in both houses of Congress followed by the President’s signature.
Corporations are chartered “for any lawful purpose.’’ To address the mistake of Citizens United, the only change required would be for charters to include: “except that any entity created by this charter shall not have the power to expend money to influence the outcome of any local, state, or federal election.’’
This change would simply condition the benefit of incorporation itself on the waiver of the “right’’ of corporations to participate in political campaigns. The Court has often upheld the ability of government to condition benefits on the waiver of rights. The Court has not always been clear in all the nuances, but the basic rule is that if the government gives you something, it can limit the uses you make of it. It makes sense to assert that prerogative here: if the government creates corporations, it can pick and choose what powers those corporations embody.
The real obstacle is the state of Delaware. Most big corporations go there for charters, primarily because Delaware doggedly protects managers from shareholder lawsuits. And Delaware has no interest in limiting corporate speech.
So real change would have to come at the federal level. Congress could simply say that as a condition of being listed on a national securities exchange, corporations would have to be chartered at the federal level. And federally chartered corporations would be limited to doing what corporations are intended to do: create wealth by producing products and services and prohibited from trying to skew the democratic process.
That way, corporations would stay where they belong, in the marketplace. The “marketplace of ideas’’ will be left to the rest of us.
Kent Greenfield is a professor of constitutional law and corporate law at Boston College Law School.
My Daily Work
Posted by Dan Wasserman (The Boston Globe)
January 23, 2010
"Will corporate ads buy 2010 voters?"
By Sharon Theimer, Associated Press, January 24, 2010
WASHINGTON -- The Supreme Court has opened the door to a new era of big and possibly shadowy election spending, rolled back anti-corruption laws and emboldened critics of fundraising limits to press on. In the middle of it all will be voters, trying to figure out who's telling the truth.
The court's ruling Thursday lets corporate America start advertising candidates much as they market products and tell viewers to vote for or against them. While it almost certainly will lead to a barrage of hard-hitting TV ads in the 2010 elections, its implications reach far beyond that.
The ruling was a victory for the U.S. Chamber of Commerce, the AFL-CIO, the National Rifle Association and other interest groups most likely to run ads with money from their treasuries. It's unlikely major corporations would want their name on an ad, but they can avoid that by giving money to interest groups, who would then run ads and disclose the spending under the groups' names. It also presents a new option to wealthy individuals who were allowed to spend millions on their own to run election-time candidate ads before, but now can join forces to do so and get more bang for their bucks.
The court's 5-4 opinion represents the latest development in the cycle of scandal-law-loopholes that has typified the United States' approach to campaign finance regulation.
From the corporate titans of the early 20th century bribing candidates, to Watergate in the 1970s, Democratic fundraising scandals during the Clinton years in the 1990s and most recently, the Jack Abramoff influence-peddling case, Congress has periodically tried to rein in political spending only to have loopholes emerge or political players mount successful constitutional challenges to the rules.
The court seemed to sweep those concerns aside, saying that it doubted election-time ads could lead to the corruption of lawmakers and that in any case, proponents of the ban hadn't provided any proof of corruption.
Campaign finance watchdogs predict members of Congress now will cast their votes on controversial legislation with an eye to whether their position on it risks inviting a barrage of special-interest ads against them before the election, or on the flip side, could draw outside spending favorable to them.
"I just think the court got it dead wrong if it thinks that a $10 million expenditure in a campaign can't buy influence of a corrupting nature the same way that a $10 million contribution can," said Fred Wertheimer, president of Democracy 21, who pressed for the ban on election-season corporate- and union-financed ads that the court swept away.
For those like Wertheimer who believe the threat of corruption justifies restrictions on campaign money, it could get even worse.
Heartened by the court's view that corporations have the same free-speech rights as citizens, opponents of campaign finance restrictions think the time is ripe to press the justices to go still further and do something not allowed since the robber-baron bribery scandals of a century ago: let corporations and unions give money directly to candidates.
"If all speakers are going to be treated the same, why wouldn't a corporation be able to make a contribution to a candidate" just as individuals and political action committees can? asked Jim Bopp, a conservative lawyer involved in several lawsuits that have scaled back campaign finance rules over the past few years, including the one decided Thursday.
Bopp thinks the conservative-leaning court might even go for a case arguing that donors should be able to give as much money as they want to a candidate: "You certainly have some justices who say that the contribution limits cannot be imposed at all."
The ruling could bring more than office politics to the workplace. Bopp reads it to permit corporations and unions to speak freely about elections to employees and authorize partisan politicking on their property, rather than stop at simply encouraging workers to vote, as they've had to do until now.
Just as opponents of campaign finance regulation are considering further challenges, campaign finance watchdogs and their allies in Congress plan to pursue legislation to try to deal with Wednes-day's ruling. What they could do to restrict corporate and union campaign ads after the nation's highest court called a ban unconstitutional is unclear.
And in the middle of it all are voters, the people whose opinions the new spending will seek to influence.
The court seemed to agree with the U.S. Chamber of Commerce's contention that voters want more election ads and that they are craving the viewpoints and information that will be presented in them.
But if the country's experience in the years before the McCain-Feingold law, when corporations and unions poured millions of dollars into election-time ads that targeted candidates but stopped short of calling for their election or defeat, is any indication, much of the new ad spending will likely be aimed at turning voters against a particular candidate, rather than urging them to vote for one.
That may please voters who do not like the candidate anyway, but it could turn off some voters so much they tune out. Getting key voting blocs to stay home on Election Day can be as important as getting voters to turn out.
The basics of the Supreme Court's landmark decision on campaign finance:
. A 63-year-old law, and two of its own decisions, that barred corporations and unions from spending money directly from their treasuries on ads that advocate electing or defeating candidates for president or Congress but are produced independently and not coordinated with the candidate's campaign.
. The prohibition in the McCain-Feingold Act that since 2002 had barred issue-oriented ads paid for by corporations or unions 30 days before a primary and 60 days before a general election.
LEFT IN PLACE
. The century-old ban on donations by corporations from their treasuries directly to candidates.
. The ability of corporations, unions or individuals to set up political action committees that can contribute directly to candidates but can only accept voluntary contributions from employees, members and others and cannot use money directly from corporate or union treasuries.
. The McCain-Feingold provision that anyone spending money on political ads must disclose the names of contributors.
- By The Associated Press
"Ironically, a group like ours, Catholic Democrats, benefits from the decision." -- Patrick Whelan, President of Catholic Democrats (Michele McDonald for The Boston Globe)
"Campaign financing shift may aid critics: Cash could go to interest groups"
By Jeremy Herb, Boston Globe Correspondent, February 24, 2010
WASHINGTON - The Supreme Court’s watershed decision on campaign finance, lamented by critics who say it gives undue influence to corporations, could strengthen the very advocacy groups that oppose the ruling.
In a nod to free speech, the court last month gave businesses and unions the power to spend as much money as they wish on political advertisements that endorse or oppose candidates. Under the ruling, the spenders can’t give directly to a candidate, but they can give to an advocacy group that in turn produces such advertisements - providing a potential source of money for groups that have traditionally survived on individual donations.
But one question lingers: Will those organizations, particularly liberal ones openly critical of the court ruling, seek money from corporate sources? Or will they sit on the sidelines and risk losing influence?
“My hunch is most people at first will say, ‘I’m not going to take that, that’s tainted money,’ ’’ said Shaun Casey, a professor of Christian ethics at Wesley Theological Seminary in Washington and an adviser on faith to Barack Obama when he was running for president. “Then they’re going to find themselves in a ground war where they’re being outspent. At that point, somebody’s going to knuckle up and say, ‘Heck yeah, we’re going to take the cash,’ particularly if the midterm elections turn out to be a bloodbath.’’
For corporations, liberal nonprofits might seem to be an unlikely political ally. But corporations, as a matter of strategy, often throw their support behind the party in power, or play both sides of a campaign, said Adam Winkler, a professor at the University of California Los Angeles School of Law.
It’s still unclear how corporations will respond to the ruling, but their track record on Capitol Hill lobbying suggests tens of millions of dollars could be in play annually.
The quandary over corporate cash affects a wide range of liberal organizations, from the advocacy group Healthcare-NOW! to Boston-based Catholic Democrats to the League of Conservation Voters, an advocate for the environment.
“We’ve never taken money from corporations or unions,’’ said Mike Palamuso, communications director for the League of Conservation Voters. “It’s a whole new world for us, and we’re certainly looking at what it means now.’’
One of the organizations struggling with whether to solicit corporate or union funds is Catholic Democrats.
“I think it’s a terrible decision,’’ Patrick Whelan, president of the nonprofit group, said of the court’s ruling. “Ironically, a group like ours, Catholic Democrats, benefits from the decision.’’
One risk for groups such as the Catholic Democrats, which opposes the decision on moral grounds, is that they might appear to be pandering to politics if they change their tactics. Whelan said the group is still digesting the decision’s meaning and proceeding cautiously: “We don’t want to come out as a loud opponent of the decision, then turn right around and raise a lot of money and take advantage of it.’’
Many conservative groups, citing free speech, favor the decision, which also eliminated blackout dates that have barred corporate campaign ads before a primary or general election. A few liberal groups have also supported easing finance rules: The AFL-CIO had submitted a brief in support of the plaintiffs seeking to overturn the restrictions, although the labor group disagreed with the court’s final ruling.
Legal analysts say advocacy groups face another potential problem: If corporations and unions choose to attack candidates, they could use these groups to mask their activities. A corporation would funnel money to an advocacy group, Winkler said, but the attack ad would bear the name of the group.
Democratic lawmakers are seeking to prevent such stealth funding as part of an effort to limit the ruling’s impact.
Earlier this month, Senator Charles E. Schumer of New York and US Representative Chris Van Hollen of Maryland said they plan to introduce legislation requiring strict guidelines on corporate disclosure of political spending. Also, US Representative Michael E. Capuano, Democrat of Somerville, introduced a bill requiring that corporate shareholders approve election spending of more than $10,000.
For Catholic Democrats, a national group, the debate over corporate cash comes as it attempts to boost its coffers and its profile through a fund-raising effort that targets individuals. Founded as Catholics for Kerry, the group supported Senator John F. Kerry’s presidential campaign in 2004 and then expanded its mission.
After President Obama’s election, membership in Catholic Democrats ballooned to 15,000, with organizers in 35 states. The group has a modest budget of about $60,000, which was used during the 2008 presidential campaign for activities including a radio ad featuring actor Martin Sheen and a book titled “The Catholic Case for Obama.’’
When Obama embraced health care overhaul legislation last year, liberal religious groups had a signature cause to rally around. But Obama’s health plan is now on life support, and the court decision has opened the door for more spending by insurance companies. In a January fund-raising letter, Catholic Democrats warned that corporate interests are being placed above human needs.
“This decision tilts the playing field significantly to the corporate person over the human person,’’ said Steven Krueger, the group’s national director. “A key pillar of Catholic social teaching is the principle of participation. If people believe their voice doesn’t count, we know they’re less likely to be engaged in the political process.’’
Janice Kenneally, a member of the Catholic Democrats and a parishioner at Holy Name in West Roxbury, said she does not want to see corporations use their profits to influence elections.
“I know that Catholic organizations certainly have very basic points of view against this,’’ Kenneally said. “When you’re a person always looking at social justice, trying to find some measure of equality, and then this kind of thing comes along, it just tips the scale so heavily.’’
For now, Catholic Democrats will continue to rely exclusively on contributions from individual donors. But with the primary season heating up, even overwhelming opposition from advocacy groups and new laws from congressional Democrats are unlikely to wipe out the court’s decision.
“Certain things can be done on the margins,’’ said Richard L. Hasen, a professor at Loyola Law School Los Angeles, who specializes in election law. “But there’s nothing that can be done to strike a major hole in this.’’
"Corporate money in politics"
The Washington Post, Editorial; A16; May 9, 2010
THE SUPREME COURT'S ruling in the Citizens United campaign finance case opened a dangerous pathway for corporations to spend money in direct support of -- or in opposition to -- candidates for federal office. Under the decision, corporations -- and labor unions -- still can't give money directly to federal candidates, but they can spend unlimited sums in independent expenditures for or against them. Even more dangerous, because of preexisting gaps in campaign disclosure laws, the money can be spent, in effect, anonymously. The entity spending the money -- say, Americans for Really Good Government (ARGG) -- would have to register with the Federal Election Commission and report its activities, but ARGG would not have to disclose its donors. So Corporation A or Labor Union B could give unlimited sums to ARGG to run ads going after Candidate C -- and the public would have no clue. This troubling situation should be fixed in time for the next election.
Congressional Democrats, joined by two brave House Republicans -- Michael N. Castle (Del.) and Walter B. Jones (N.C.) -- introduced measures to blunt the impact of the Citizens United ruling. The legislation, crafted by Sen. Charles E. Schumer (D-N.Y.) and Rep. Chris Van Hollen (D-Md.), addresses the Citizens United ruling in two ways: first, by imposing limits on the kind of corporations that are allowed to try to influence elections, and second, by expanding disclosure rules. We have some concerns about the first part of the effort but enthusiastically support the second.
One piece of the legislation would prohibit companies that do business with the federal government from making campaign expenditures. This so-called "pay-to-play" provision goes too far; any company with a government contract or sales worth more than $50,000 would be barred from such spending. We would prefer a world in which no corporation or labor union could spend money advocating the election or defeat of federal candidates, but that is not the world that the Supreme Court has said is constitutionally permitted. However, it makes sense to protect against influence by foreign corporations. The measure would do that by prohibiting even U.S.-based corporations from making campaign expenditures if foreign ownership exceeds 20 percent or if "one or more foreign nationals have the power to control the decision-making process of the company" in its U.S. operations.
The most important provision, however, is disclosure. Here, the proposal would go beyond addressing the particular problems created by the Citizens United ruling and improve on existing law. It would require disclosure of the underlying donors in independent expenditures and broaden disclosure requirements for what are termed "electioneering communications" -- broadcast ads that mention particular candidates but do not advocate their election or defeat.
The Senate version of the bill would require disclosure of donors if the advertising mentioning the candidate is run at any time from 90 days before the primary through the general Election Day; in addition, groups such as trade associations, which are now exempt from reporting donors, would be covered. (The House time frame is shorter.) There are legitimate free-speech concerns involved, but the proposal addresses those by letting donors keep their identities private if they specify that their money is not to be used for campaign spending; organizations can further protect donors' identities by establishing a separate "campaign-related activities account" and only reporting the identities of donors to that fund. This strikes an eminently reasonable balance.
Corporate money in politics is bad enough. Secret corporate money is intolerable.
"Campaign finance back before high court"
Washington Post, March 28, 2011
WASHINGTON — A Supreme Court that is increasingly skeptical of campaign finance restrictions will return to the issue for the first time since last year’s game-changing ruling that corporations and unions may spend whatever they like on behalf of candidates.
The only thing certain about Round 2, which begins today, is that those who favor government restrictions are far more nervous than their opponents about what comes next. A scant majority of the court under Chief Justice John Roberts has consistently sided with challengers to campaign finance restrictions. It has systematically cut back provisions of the McCain-Feingold campaign finance law.
And its decision in Citizens United v. Federal Elections Commission, which liberated corporate and union spending, prompted an outpouring of criticism from President Obama and Democrats and recast the 2010 elections.
Campaign finance restriction advocates such as Gerald Hebert and Tara Malloy of the Campaign Legal Center warn that the court once again is “poised to issue a ruling that could make it harder for ordinary citizens to compete with big money in our democracy.’’
The case to be heard today concerns a provision in Arizona’s public campaign financing law that increases funding for those facing big-spending opponents or interest groups.
It is the first time the court has considered a public finance system since its landmark decision in 1976 that the presidential public funding system was constitutional.
In a memo to supporters, Hebert and Malloy wrote that an adverse ruling from the court “could undermine public financing systems across the country and increase still further the grossly disproportionate voice given to corporations and unions in our elections.’’
Those on the other side are encouraged by the recent actions of the court, saying the justices are asserting that the First Amendment’s protection of political speech sets a high hurdle for the government to restrict campaign spending.
The Arizona case could provide another signal about how willing the justices are to advance the cause.
“I think they have a healthy and realistic skepticism about the government trying to influence’’ campaign spending, said William Maurer, a lawyer for the Institute for Justice, one of the groups objecting to the Arizona law.
"When Other Voices Are Drowned Out"
The New York Times, Editorial, March 25, 2012
The Supreme Court’s 5-to-4 ruling in Citizens United in 2010 was shaped by an extreme view of the First Amendment: money equals speech, and independent spending by wealthy organizations and individuals poses no problem to the political system. The court cavalierly dismissed worries that those with big bank accounts — and big megaphones — have an unfair advantage in exerting political power. It simply asserted that “the people have the ultimate influence over elected officials” — as if campaigns were not in the business of influencing and manipulating voters.
The flood of money unleashed this election season is a direct consequence of this naïve, damaging view, which has allowed wealthy organizations and individuals to drown out other voices in the campaign. The decision created a controlling precedent for other legal decisions that made so-called super PACs the primary vehicles for unlimited spending from wealthy organizations and individuals. In theory, they operate independently of candidates. In reality, candidates are outsourcing their attack ads to PACs, so financing a PAC is equivalent to financing a campaign.
In SpeechNow.org v. Federal Election Commission, the federal appeals court for the District of Columbia ruled that as a result of Citizens United, contributions by individuals to advocacy groups called 527s could not be limited. The Federal Election Commission further confirmed in 2010 that an “independent” political committee can accept unlimited contributions for unlimited spending from just about any kind of group or individual.
So far in this election cycle, outside spending by super PACs, corporations, unions and others totals $92.2 million, about two and a half times as much as in the same period in 2008 and six times as much as in the period in 2004.
Both the SpeechNow case and the F.E.C. ruling relied on the rationale for unlimited spending enunciated in Citizens United. Justice Anthony Kennedy, in the majority opinion, narrowed the court’s definition of political corruption to mean quid pro quo corruption, or bribery. Independent spending, he wrote, does “not give rise to corruption or the appearance of corruption” and “influence over or access to elected officials does not mean that these officials are corrupt.”
This narrow focus on bribery is intellectually dishonest. The corrupting influence of money is not limited to bribery — the broader problem is the ability of moneyed interests to put into office those who support their political agendas or financial interests.
The Roberts court did great damage by abandoning the idea that corporate treasuries can have “corrosive and distorting effects” on the political process if “used to influence unfairly election outcomes” in ways that create “the appearance of corruption in the political arena” — crucial language in a 1990 Supreme Court case that upheld limits on independent spending by corporations and was overturned by Citizens United.
In Citizens United, Justice Kennedy cited James Madison in The Federalist in noting that “factions” in American democracy can be “checked” by ensuring that all of them can speak freely and “by entrusting the people to judge what is true and what is false.” But when outside spending is unlimited, and political speech depends heavily on access to costly technology and ads, the wealthy can distort this fundamental element of democracy by drowning out those who lack financial resources.
Voters are left to judge well-financed spin, rather than truth and falsehood. Super PACs demonstrate that almost daily. Until 2010, the court wisely held that these effects were a form of corruption in politics.
- Jonathan Melle
- Amherst, NH, United States
- I am a citizen defending the people against corrupt Pols who only serve their Corporate Elite masters, not the people! / My 2 political enemies are Andrea F. Nuciforo, Jr., nicknamed "Luciforo" and former Berkshire County Sheriff Carmen C. Massimiano, Jr. / I have also pasted many of my political essays on "The Berkshire Blog": berkshireeagle.blogspot.com / I AM THE ANTI-FRANK GUINTA! / Please contact me at email@example.com
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