Supreme Court Ruling Renews Fight Over Coporate Money in Politics

Depending on your point of view, Thursday’s United States Supreme Court ruling reversed somewhere between 20 and 200 years of precedent. The divided Court struck down limits on political spending by businesses, unions and other organizations. The ruling gives these groups essentially the same ability as individuals to contribute and spend money in the political arena. In short, this is a game changer. Union and corporate money may flood into the political arena and and many are rightly concerned about this. However, protecting freedom of speech cannot be done by imposing complicated rules about who speaks and when.

Political hacks, pundits and constitutional scholars will be debating, debunking, defending and decrying this ruling for many years to come. The ruling was about as fascinating a read as a legal decision can be. The majority and the minority conduct a fascinating back and forth on the some 180 pages. Clearly, passions ran high. But, I am a geek and this is a blog, so let me try to boil this down into something closer to blog bites before I lose everyone’s interest.

The Case
A political group, Citizens United, made a movie in 2008 about then-Senator Hillary Clinton. Let’s just say it did not paint a very flattering picture of the presidential candidate. Citizens United wanted to play the movie on cable pay-per-view channels and advertise the showing during the presidential primary season. Most of the contributors to Citizens United were individuals, but some were business corporations. Rules established by the Federal Election Commission (FEC) and the campaign finance law known as McCain-Feingold prohibit corporations from funding political activities in the period leading up to primary elections. Citizens United filed suit and two years later the Supreme Court finally got and ruled on the case.

The Ruling
The Supreme Court in a 5 to 4 ruling reversed the judgment of the District Court with respect to the constitutionality of restrictions on corporate expenditures on political messages. It also upheld the requirement for disclaimer and disclosure statements, the “who paid for this” ad stuff. The ruling did not address nor change limitations on corporations donating directly to a candidate. However, one could assume that this court might do so, if the right case came before them. The question of corporate to candidate contributions simply was not asked by the parties in the case.

The majority of the Court feels that free speech is impinged when some groups are restricted in participating and others are not. As of Thursday, corporations, unions and for-profit groups may fund advertisements and activities supporting candidates and issues whenever they wish. They may also donate to organizations who engage in such activity.

The Disagreement
The four Justices in the minority and many others fear this ruling gives corporations a louder and larger voice in politics. They argue that individuals were granted the constitutional right to free speech, not the corporate entities individuals form. All who like to look back to the days of our country’s founding have to admit the Framers of the Constitution clearly did not anticipate corporations as they are today, nor could they have envisioned modern communication tools, therein lies the starting point of this disagreement.

The Blank Stare and Judicial Activism
The Court Opinion focuses on stare decisis, a legal principle by which judges are obligated to obey the precedents established by prior decision. I will not dwell on this, because this is a blog after all, but let me say that both sides contend that 200 years of case law is on their side. The majority says cases ruled upon and laws passed in the last twenty years, ignored legal precedent. The minority says the majority ignored more than 100 years of precedent and, this is important, improperly overturned a second ruling that the parties involved in the case had agreed was not a part of this particular case.

The majority overturned the 20+ year old ruling, because they say it had been improper. The minority claims the majority should not have done this. I will leave this debate for the constitutional scholars. Suffice it to say that had the issue been gay marriage and a left leaning majority had reached back to overturn a previous ruling without being asked to do so by the parties involved, accusations from the right of judicial activism and legislating from the bench would be deafening.

The Good
The Court Opinion says that the complex rules, laws and regulations determining the who and how of campaign funding stifles free speech. The exchange of viewpoints is quieted out of a fear of being sued over complex rules. The Opinion states: “As additional rules are created for regulating political speech, any speech arguably within their reach is chilled. Campaign finance regulations now impose ‘unique and 18 complex rules’ on ‘71 distinct entities.’ These entities are subject to separate rules for 33 different types of political speech. The FEC has adopted 568 pages of regulations, 1,278 pages of explanations and justifications for those regulations, and 1,771 advisory opinions since 1975.” It goes on to say that after another previous Court ruling regarding political advocacy, “the FEC adopted a two-part, 11-factor balancing test to implement” the ruling.

There are too many rules and people sometimes choose not to donate or make political statements because they may be challenged on their right to do so. That is bad and the ruling makes it possible to fix this.

The Opinion makes an excellent point about corporations involved in the news business. Freedom of the press was a clear intent of the Framers. In order to restrict corporate political activity, exemptions have to be made for those corporations involved in the media. This gives one company rights another does not have and that is unfair. Laws that permit a company that owns a newspaper to promote a candidate or issue whenever and however they like, but restrict a non-media company from doing the same are inherently biased.

The Opinion also speaks to the decline of print and broadcast media and the rise of the Internet and new forms of communication. The line between the media and others who wish to comment on political and social issues has become blurred.

People were granted free speech by the Constitution. People create and control corporations as a way to pool resources to better participate in the marketplace and to coordinate their collective efforts. The complex laws limiting certain corporations from political activities intruded on free speech, not the free speech of these corporations, but of the free speech of the people who own the legal entity.

The FEC, Congress and the States need to go back to the drawing board and pass clear rules, regulations and laws about political contributions, spending and financial reporting. The Opinion is clear and correct; laws that restrict one group and create a convoluted set of tests to determine who can participate and when chill free speech. An answer may be found in limiting what corporations can do, not on who funds political activity, but I will get to that.

The Bad
Some corporations have vast resources that could be used to drown out the voices of individuals by paying to clog the airwaves, Internet, newspapers and every other forms of communication with political messages. This is concerning.

Yesterday I watched a newscast which reported how the American people have come together to donate $355 million to relief efforts in Haiti. The story was followed by another about Goldman Sachs’ announcement that it would pay nearly $17 billion in bonuses to employees this year and give $500 million to charities. All of the American people together have yet to match what this one company could do at this moment, if it so chose, for the people of Haiti in this time of need. Now, imagine the power corporate giants could unleash in an election cycle if they wanted to and their shareholders would let them.

The Path Ahead
Corporations are legal entities formed and governed by laws. Unlike an individual, they have no inalienable rights. Restricting corporate participation in politics would take a restructuring of the laws which define and give life to corporations. Government could attempt to strip certain rights from corporations and reserve them solely for individuals, but doing this will be difficult without hindering the ability of some corporations to grow and compete in the marketplace. More important, what is at stake are not the rights of corporations, but the rights of the people who form them. It is difficult, if not impossible, to separate the two.

The Supreme Court ruled that Citizens United should not have been barred from advertising and showing its political movie because it had taken some corporate money. According to the Opinion, Citizens United had been denied freedom of speech. For the last hundred years government has tried to restrict how money flows into politics. It may be time for those who wish to limit corporate money in politics to change the focus from how money enters the political realm to how and on what corporations spend their resources. The solution President Obama and those who disagree with the Supreme Court seek may lie in the legal structure and definition of corporations, not the creation of rules that interfere with the people’s right to free speech. No matter what avenue they choose, we have seen that the majority on this Court appears inclined to rule in favor of a one size-fits-all ruling for free speech.

The rules changed greatly on Thursday. The public, candidates for office and government are facing a newly unleashed political force and there will be more money in play than ever before. Above all else, the Court sent a message that numerous and complicated rules alone have the capacity to chill free speech. Lawmakers need keep two things in mind when drafting new campaign finance laws; make them easy to interpret and administer, and make it so the laws apply equally to all groups.

Note: OK, this post was three times longer than a blog should be. For those who did not nod off and stayed with me, thank you. I promise to not be so long winded again. Well, at least for a while.

This entry was first published as a Des Moines Register blog entry.