Tuesday, March 23, 2010

Elimination of Federal Restrictions on Corporate Spending in Politics: Corporations Can Have a Voice!

On January 21, 2010, the United States Supreme Court held in a landmark decision, Citizens United v. Federal Election Commission, that corporate funding of independent broadcasts in political campaigning is not limited under the First Amendment. The case initially started in 2008 when a conservative non-profit organization wanted to run ads to promote its critical documentary on Hillary Clinton on the eve of the democratic primaries. The Federal Election Commission asserted a restriction on electioneering communications 30 days before the primaries.

In a bitterly divided 5-4 decision, Justice Kennedy delivered the majority opinion, stating that 2 U.S.C. § 441b’s prohibition of all independent expenditures by corporations and unions are invalid because such restrictions would allow Congress to suppress political speech in newspapers, books, televisions, and blogs. The majority further held that corporations should be treated as “persons” who have constitutional rights and should not be restricted in their political speech. In the 90-page dissent, Justice Stevens argued that unlimited corporate spending would corrupt democracy.

Citizens United overruled 19-year old precedent, determining that Austin v. Michigan Chamber of Commerce (which held that laws prohibiting corporations from using treasury money in political campaigning did not violate the First and Fourteenth Amendments) provided no basis for allowing the Government to limit corporate independent expenditures. Citizens United also overruled part of McConnell v. Federal Election Commission, which upheld restrictions on corporate political spending under the Bipartisan Campaign Reform Act of 2002.

Perhaps not surprisingly, Citizens United has proven to be highly contentious. For First Amendment enthusiasts, the decision is hailed as a victory. However, the New York Times reported that due to the ruling, 24 states with laws prohibiting independent political expenditures by unions and corporations will have to alter their campaign finance laws. President Obama, believing the Supreme Court’s ruling to inequitably favor deep-pocket corporations, immediately released a statement on January 21, 2010 asserting that Citizens United “gives the special interests and their lobbyists even more power in Washington-while undermining the influence of average Americans who make small contributions to support their preferred candidates.” Thereafter, President Obama ordered his Administration to develop a forceful response to the decision, declaring that “the public interest requires nothing less.” Three weeks later, members of Congress outlined legislation to curb corporate spending on political advertising.

While the future of limitations placed on corporate finance campaign laws remains uncertain, for the time being, Democrats and Republican candidates now have the ability to raise money from more sources. Will this corrupt democracy? Stay tuned.

15 comments:

  1. In Citizens United v. Federal Election Commission, Justice Kennedy said, “[d]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way.” I wonder if he meant, “candidates should wear jumpsuits, like the NASCAR drivers, with the logos of all their corporate sponso[r]s emblazoned on them. That way we can vote for the candidate that is sponsored by our favorite corporations”! The quote comes from Dave Tucson’s response on a NY Times’ comment board. Regardless of how we anecdotally interpret the meaning of disclosure, states ostensibly have an incentive to improve the disclosure rules regulating the expenditures corporations and other groups make in local races.

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  2. In Citizens United v. Federal Election Commission, Justice Kennedy said, “[d]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way.” I wonder if he meant, “candidates should wear jumpsuits, like the NASCAR drivers, with the logos of all their corporate sponso[r]s emblazoned on them. That way we can vote for the candidate that is sponsored by our favorite corporations”! The quote comes from Dave Tucson’s response on a NY Times’ comment board. Regardless of how we anecdotally interpret the meaning of disclosure, states ostensibly have an incentive to improve the disclosure rules regulating the expenditures corporations and other groups make in local races.

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  3. Citizens United over-ruled the 19-year-old McConnell decision and thereby relaxed the campaigning standards of corporations. In McConnell, the justices wrote, “Just as troubling to a functioning democracy as classic quid pro quo corruption is the danger that officeholders will decide issues not on the merits or the desires of their constituencies, but according to the wishes of those who have made large financial contributions valued by the office holder. Even if it occurs only occasionally, the potential for such undue influence is manifest. And unlike straight cash-for-votes transactions, such corruption is neither easily detected nor practical to criminalize. The best means to prevention is to identify and remove the temptation.”

    The opponents of Citizens United have argued that the Founding Fathers sought to protect our national from internal corruption and that participation of the citizens in the democratic electoral process has been undermined by an unfair advantage to corporations. There is certainly strength to their argument. But one wonders, "but for the First Amendment.... ?"

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  4. The majority in Citizens United stated the following §441b’s prohibition on corporate independent expenditures is an outright ban on speech, backed by criminal sanctions. Citizens over ruled a long standing decision to ban these corporate expenditures. This is a big change in the electioneering process that our country will face. This is a hard decision to make.

    On the one hand, in so many rules of law the corporation is treated legally as it's own person... so should we change that precedent now? On the other hand, as the president so strongly suggested... this ruling takes away from everyday average American's contributions. This ruling will certainly undermine the contributions of the average Joe's who are committed to supporting the people they wish to be represented by. Nonetheless, the supreme law of the land took the victory here. I cannot help but wonder... what would the founders have to say now....?

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  5. I believe that Citizens United was done with good intentions by the 5 justices who voted in its favor when you try to simplify the constitutional process to a mundane and logical procedure. The majority felt that there is law establishing freedom of association for individuals. There are other laws establishing that corporations are to be individual entities.
    Since corporations are to be individual entities, they must inherently have rights based in the Constitution. How they arrived to this conclusion makes sense. The practical truth is that this "logical reasoning" is flawed.
    First, if the Supreme Court ends up with such a simple ruling, they should have based their conclusion on either the original intent of the Framers or the text of the Constitution itself. The original intent is clear that the Framers in the 18th century could not have possibly thought that they were giving rights to corporations to roam around the country freely. That would go against all basic federalist and anti-federalist notions of states' rights and federalism at the time so it wasn't based on original intent.
    If the Court believes it is based on the text of the Constitution, they should really apply a heightened level of scrutiny since they are claiming that an individual's (a corporation = individual in this judicial world) fundamental rights are being infringed upon. There is no specific text with even rationalizes how the court should apply their levels of scrutiny test so the Court could not use that either.
    This would only leave Stare Decisis for the Supreme Court to follow. They did not do so and actually found a way to overturn 1 case in its entirety and another part of another case. This Citizens case was essentially wrong for not adhering to the judicial principles the Court always points to as its authority.
    In summation, this was an awful decision in which Congress on both sides has taken action to limit the Court's role as judicial activists and restore the legislature's power as the sole creators of law in this land.

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  6. I don't have a problem with judges overruling precedent. Our system presupposes that they will. Still, I stand by my comment on the "Future Bailouts of America" post. In my view, Citizens United is a reckless decision. Corporations, partnerships, and limited liability companies should have the right to own property and be sued, just as "persons" in the traditional meaning of the word, because corporations exist for "business purposes." To that end, those entities' participation in the political process is valid, but it is manifestly unrealistic to think that those valid "business purposes" will not leverage the people right out of the process. If a corporation wants to vote, then the corporation should be able to inform its agents and employees and hope it works out - not hijack the process from the beginning with money the candidates can't afford not to take. The American public is being hung out to dry one branch of government at a time.

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  7. I agree that it is valid for corporations to be treated as "persons" in certain situations. However, I do not think that corporations should have free reign in terms of corporate spending on political campaigns. I think that it is important that President Obama keeps pushing for legislation to curb corporate spending in political campaigns. I think that it is unfair for corporations to sponsor candidates with their unlimited resources. As stated above in the article, this decision is going to require 24 states to have to change their laws which currently prohibit independent political expenditures by unions and corporations. I believe that those campaign finance laws were put in place for a reason and to require these states to alter the laws isn't a great decision. I think that it is important to limit the influence of corporations on the campaigning process. I strongly agree with Justice Stevens opinion that unlimited corporate spending will corrupt democracy.

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  8. One of the NY Times articles linked above, "Democrats Try to Rebuild Campaign- Spending Barriers," states that some members of Congress are attempting to pass a bill that will place limits on the corporations spending and create disclosure requirements. This sounds like the perfect way to deal with what is now "the law of the land." If corporations are allowed to make contributions and commercials endorsing their candidates of choice, the public should be made aware.

    The article also states, "[f]ive current Republican senators — led at the time by Senator John McCain of Arizona — voted for the spending rules that the court chipped away, but not one has yet embraced the Democrats’ proposals." I know elections are approaching and no one wants to jeopardize their position, but we have to elect people that are willing to stand up for what they and we believe in.

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  9. I believe the entire notion that corporations may spend an unlimited amount of dollars on political campaigns is a dangerous thing. While I understand that the law treats corporations as "individuals," I also recognize the ability of the court to make exceptions. First amendment right enthusiasts, rightfully so, hailed this ruling as a victory. By no means do I believe that an individual should be striped on their freedom of speech rights. However, the amount of money a corporation, rather than a true individual, is able to spend on a campaign should be limited. It will certainly be interesting to see how this matter plays out in the upcoming election season.

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  10. The dissent makes valid points however; people may be smarted than expected and will see the coporation advertisements and politcal campaigning for what they are. In fact I think the american people will become highly participant in elections hwere coporations throw mudd becasue of their dislikes for those corporations. Political campaigns may now be based on the good wills of those companies.
    -STU

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  11. Colleen Kerins St. Thomas UniversityApril 5, 2010 at 7:28 PM

    In the 2008 Presidential election, over $3.7 billion was spent on advertising, even before Citizens United v. Federal Election Commission was decided. Although I think it is necessary to educate the voters about the issues and candidates, one can't help but wonder what this court decision will do to shareholder protection within corporations. I think it is logical that by classifying a corporation as a "person" the corporations also receive 1st amendment rights to participate in political campaigns, but corporations need to be wary of how they are spending their political monies and how the shareholders may be indirectly supporting a political agenda that they may not want spread.

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  12. Precedence is often overruled. Times change and with that the law must also change. As an esteemed professor of mine has said time and time again, "Reason is the soul of the law; if the reason changes, then the law should also change." It is ordinary and sometimes necessary for a prior decision to be overturned. We must realize that and accept that, but unfortunately we sometimes are not susceptible to change.

    In any other instances, corporations are generally treated as "persons" for lawful purposes. However, this becomes an extremely powerful person because of the availability of funds and influence. This poses an unfair advantage leading me to agree with Arien that there should be a cap limiting the funds offered to political candidates. However, this cap should not be limited to corporations, but should be imposed on individuals, specifically wealthy individuals, as well, to further guarantee a level playing field.

    I can't help but wonder how much influence, if any, the shareholders have in endorsing the candidates. They should have a great deal of say so considering shareholders are owners and the corporation's decision is a reflection on the owners.

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  13. I think this decision was a huge mistake. Corporations should not be able to spend as much money as they like in order to influence elections. Corporations have so much money that they can ensure that either candidate who is elected will assist them in preferential treatment. People, not "people" should be allowed to vote in elections. The same should be true for campaign contributions. This was a big mistake, and hopefully the Supreme Court will revisit this issue with a new member on the bench.

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  14. I think this decision was a huge mistake. Corporations should not be able to spend as much money as they like in order to influence elections. Corporations have so much money that they can ensure that either candidate who is elected will assist them in preferential treatment. People, not "people" should be allowed to vote in elections. The same should be true for campaign contributions. This was a big mistake, and hopefully the Supreme Court will revisit this issue with a new member on the bench.

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  15. Kyle Sheehan

    As discussed in cases in class, the corporate world is not how it used to be. Over a century ago, small businesses ran the communities, owned and operated by families who were able to commit their funds to campaigns and influence them that way... that is not the way the world is now and the law must adapt its principles to the way that society now conducts itself. Those small businesses have been replaced by much larger corporations, who collectively wield power of what would be the power of many small businesses back in the day. But because a business is profitable and able to expand because of the expertise of their directors and employees they should suddenly be given less rights? There seems to be a flaw in that reasoning. Society changes and laws must adapt with it, and this court's decision is a plausible solution.

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