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.

Guest Column: Supreme Court Unleashes Legal Beast To Trouble Colorado's 2nd District

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

I have never liked campaign finance reform laws. The notion that one can take the influence of money completely out of politics seems, at best, woefully naive and, at worst, ridiculously absurd. Nonetheless, in so many ways our lawmakers and activists continue to try. After they finish attempting to put all sorts of fetters on the evil beast of our political system, the Supreme Court inevitably comes by and proceeds to cut about half the restraints. Of course, this simply creates a very angry beast that has to lurch clumsily about using only one leg and one arm. And people wonder why campaign regulations are always such a disaster. Well, the Supreme Court has, yet again, taken its judicial scissors to the latest Congressional fetter: the Millionaire Amendment of the Bipartisan Campaign Reform Act (BCRA). And yes, the beast is already crashing about angrily.

Let me try to sum up the bizarre laws at issue in very brief terms. Between the meddling of Congress and the stilted reasoning of the Court, the government may impose limits on how much money people may contribute to any given campaign, but not on how much money the campaigns can spend. Also, there is no limit to how much an individual candidate can contribute to his campaign. The reason for this is that money is speech. Contributions may be limited because they still express the message of support for a candidate but, in being limited, also prevent corruption or the appearance thereof. However, the candidate is free to use as much of his own speech/money to promote his cause as he wants. To limit that would be to limit his speech too directly.

Naturally, this creates an advantage for rich candidates. They can spend their own money without limit while a poorer candidate, who may have rich friends, cannot get as much money out of those friends because of the campaign contribution limits. Thus, Congress passed the so called Millionaire Amendment so that if a rich candidate used enough of his own money, the contribution limits for the poorer candidate would be near tripled while the contribution limits for the richer candidate would remain the same. This would continue until the two candidates had eliminated the financial difference between them.

Now, though, Justice Alito, writing for the majority, has declared in Davis v. Federal Election Commission that this balancing scheme is unconstitutional. Apparently, this imbalance does not directly limit speech, but creates a substantial penalty for a rich candidate who chooses to exercise his right to speech robustly (i.e. spend a lot of his own money and trigger the provisions of the amendment). Thus, the Court has declared that the law must go.

Naturally, the government has objected that this means that rich candidates will once again have a huge advantage in elections given the contribution limits. The Court is aware of this. However, Justice Alito reminds us all that it was Congress who created this problem in the first place with its bizarre attempts to regulate campaign contributions. Congress also has the power to fix this situation. He recommends:

If the normally applicable limits on individual contributions and coordi nated party contributions are seriously distorting the electoral process, if they are feeding a “public perception that wealthy people can buy seats in Congress,” Brief for Appellee 34, and if those limits are not needed in order to combat corruption, then the obvious remedy is to raise or eliminate those limits. But the unprecedented step of imposing different contribution and coordinated party expenditure limits on candidates vying for the same seat is antithetical to the First Amendment.

In my own humble opinion, Congress would be well advised to adopt Justice Kennedy’s recommendations from his dissenting opinion in Nixon v. Shrink Missouri Government PAC, 528 U.S. 377 (2000). He pointed out that all of these attempts to limit the flow of money just serve to create problems or push it underground where there is virtually no accountability or transparency (such as 527 groups). Thus, he suggests that, rather than limiting contributions or expenditures, Congress should simply require that all contributions be reported and made public. Certainly, the internet is more than capable of providing instant access to this information for anyone who wants to know. In that way, the public could judge for themselves whether a candidate was too beholden to any particular donor or interest group and vote accordingly. Now there is a novel thought: trusting the voters to make decisions themselves.

For those of you interested in what the dissent had to say, Justice Stevens seems to think there is nothing at all wrong with this imbalanced scheme. Indeed, he goes so far as to contend that Congress should limit both contributions and expenditures. It seems he feels that if the campaigns were forced to spend less, then the quality of their message would be forced to improve and he would not have to ensure watching so many of these annoying and repetitious political advertisements on television any longer. It is rare that a Justice so plainly expresses his personal opinions and tastes as a matter of law. Preventing the Court from being populated by others who feel at liberty to do so may be the single most important reason to elect John McCain as our next president—despite the fact that he is partially responsible for saddling us with these nightmarish campaign laws in the first place.

In the meantime, we shall watch the beast of our current system flail about in the 2nd Congressional district where the millionaire idiot author of Colorado’s ethics debacle, Jared Polis, just triggered the now unconstitutional amendment and his opponents, Joan Fitz-Gerald and Will Shafroth, are left without the benefit of the increased contribution limits it would have provided them.

Rocky Mountain News Endorses The Blogger Protection Act Of 2008, And You Should Too

Freedom of speech may cost you dearly if you blog--you could find yourself subject to campaign finance law regulating "public communications."

Fortunately, in a surprising editorial from an MSM source, the Rocky Mountain News endorses the forthcoming Blogger Protection Act and addresses why, with the First Amendment, it should even be needed:

Maybe you're thinking of setting up your own blog to comment on the affairs of the day. By all means, join the fray. But please make sure you don't run afoul of a judge who considers your opinions a political contribution that should be regulated by federal campaign law.

We're not joking. This nation that so enshrines free expression still hasn't decided for certain whether bloggers should have the same leeway that, ahem, newspaper editorials and other traditional forms of opinion enjoy. Fortunately, Congress will soon have an opportunity to give Web blogs more durable First Amendment protection.

In the coming days, Rep. Jeb Hensarling, R-Tex., is set to introduce The Blogger Protection Act of 2008. The bill would enact in law regulations that were handed down two years ago by the Federal Election Commission regarding bloggers and campaign finance laws.

The FEC has twice attempted to protect Internet users from the strictures of campaign law, as it has exempted newspapers, broadcasters and other more traditional media outlets. But because these rules have been reversed once by a federal judge and could be overturned in another legal challenge or by a future FEC, a statute is needed. We hope the Blogger Protection Act becomes law.

The reason the FEC got involved to begin with was - you guessed it - the deeply flawed McCain-Feingold campaign finance law. That act regulates "anything of value used to influence an election," including "public communications." This lets the government determine whether a particular form of communication is either a contribution or an expenditure and subject to the limits of the finance law.

So does that mean a blogger who posts some snarky comment about John McCain's age or Hillary Clinton's hairdo is making a contribution to an opponent's campaign? How would such a message be valued in monetary terms? By the number of hits the page receives? By the number of comments posted by readers?

It shouldn't be. And in 2002, the FEC seemed to resolve the problem when it exempted from the law pretty much any information transmitted over the Internet.

The fact that the issue remains unresolved is most troubling, but since this has effects for all corners of the blogosphere, both left and right, it should be easy to build momentum for the bill.

What is amazing is that we need to debate this at all. The FEC and the courts have no place in regulating politically-related speech on blogs. We applaud the RMN's lead in bringing awareness of the issue, at least for Colorado's political community and especially its bloggers.

CO Rep. Mark Udall Donates Hsu Contribution To The Colorado National Guard

In order to thwart attempts to say "gotcha" by his opponents, Rep. Mark Udall dumped the $1000 contribution made by fugitive fundraiser and Hillary Clinton backer Norman Hsu (h/t PPH), donating it to the Colorado National Guard Foundation:

Congressman Mark Udall's U.S. Senate campaign committee is among dozens of mostly Democratic political organizations to have received a large financial contribution from a New York fundraiser who has been wanted by authorities in California.

Federal Election Commission records indicate that Norman Hsu, listed as a resident of New York, gave $1,000 to "Udall for Colorado Inc." on June 25.

Hsu has a lengthy record of gathering large contributions for prominent Democratic campaigns, including those of presidential hopefuls Sen. Hillary Clinton, of New York, and Illinois Sen. Barack Obama. FEC records show that since 1999, Hsu has contributed more than $200,000 to political committees.

The Los Angeles Times reported Wednesday that Hsu in 1991 accepted a deal with California prosecutors that was supposed to have sent him to jail for three years for allegedly scamming investors out of $1 million related to a plan to resell latex gloves.

Hsu, however, disappeared after the sentencing and never reported to jail, the paper reported.

"The issue has just been brought to our attention," Udall campaign manager Mike Melanson said Wednesday evening.

He said that once a campaign attorney confirmed that Hsu was listed by authorities as a fugitive from justice, Udall, D-Eldorado Springs, ordered that the money he gave the campaign be given to charity. He said $1,000 will be donated today to the Colorado National Guard Foundation.

Melanson said "it's just been Mark's policy" not to accept campaign contributions from convicted criminals that campaign officials become aware of. The campaign does not, however, have the resources to conduct criminal background checks on every person who contributes money, he said.

With all the concentration on candidate's donors these days, Udall (and all candidates for that matter) might want to invest a little in investigating their donations, especially from larger donors, lest they be "tainted" by "dirty money" from wealthy donors.