High court shoots down business election-spending law

The Supreme Court threw out a 63-year-old law designed to restrain the influence of big business and unions on elections
Thursday, ruling that corporations may spend as freely as they like to support or oppose candidates for president and Congress.
The decision could drastically alter who gives and gets hundreds of millions of dollars in this year’s crucial midterm elections.

By a 5-4 vote, the court overturned two of its own decisions as well as the decades-old law that said companies and
labor unions can be prohibited from using money from their general treasuries to produce and run their own campaign ads. The
decision threatens similar limits imposed by 24 states.

It leaves in place a prohibition on direct contributions
to candidates from corporations and unions.

Critics of the stricter limits have argued that they amount to an unconstitutional
restraint of free speech, and the court majority agreed.

"The censorship we now confront is vast in its reach,"
Justice Anthony Kennedy said in his majority opinion, joined by his four more conservative colleagues.

Strongly
disagreeing, Justice John Paul Stevens said in his dissent, "The court’s ruling threatens to undermine the integrity
of elected institutions around the nation."

Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor
joined Stevens’ dissent, parts of which he read aloud in the courtroom.

The justices also struck down part of the
landmark McCain-Feingold campaign finance bill that barred union- and corporate-paid issue ads in the closing days of election
campaigns.

Advocates of strong campaign finance regulations have predicted that a court ruling against the limits
would lead to a flood of corporate and union money in federal campaigns as early as this year’s midterm congressional elections.

"It’s the Super Bowl of bad decisions," said Common Cause president Bob Edgar, a former congressman from
Pennsylvania.

The opinion goes to the heart of laws dating back to the Gilded Age when Congress passed the Tillman
Act in 1907 banning corporations from donating money directly to federal candidates. Though that prohibition still stands,
the same can’t be said for much of the century-long effort that followed to separate politics from corporate money.

The decision’s most immediate effect is to permit corporate and union-sponsored political ads to run right up to the moment
of an election, and to allow them to call for the election or defeat of a candidate. In presidential elections and in highly
contested congressional contests, that could mean a dramatic increase in television advertising competing for time and public
attention.

In the long term, corporations, their industry associations and labor unions are free to tap their treasuries
to assist candidates, although the spending may not be coordinated with the candidates.

"It’s going to be
the Wild Wild West," said Ben Ginsberg, a Republican attorney who has represented several GOP presidential campaigns.
"If corporations and unions can give unlimited amounts … it means that the public debate is significantly changed with
a lot more voices and it means that the loudest voices are going to be corporations and unions."

The case
does not affect political action committees, which mushroomed after post-Watergate laws set the first limits on contributions
by individuals to candidates. Corporations, unions and others may create PACs to contribute directly to candidates, but they
must be funded with voluntary contributions from employees, members and other individuals, not by corporate or union treasuries.

Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia and Clarence Thomas joined Kennedy to form the
majority in the main part of the case.

Roberts, in a separate opinion, said that upholding the limits would have
restrained "the vibrant public discourse that is at the foundation of our democracy."

Stevens complained
that those justices overreached by throwing out earlier Supreme Court decisions that had not been at issue when this case
first came to the court.

"Essentially, five justices were unhappy with the limited nature of the case before
us, so they changed the case to give themselves an opportunity to change the law," Stevens said.

The case
began when a conservative group, Citizens United, made a 90-minute movie that was very critical of Hillary Rodham Clinton
as she sought the Democratic presidential nomination. 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 court first heard arguments in March, then asked for another round of arguments about
whether corporations and unions should be treated differently from individuals when it comes to campaign spending.

The justices convened in a special argument session in September, Sotomayor’s first. The conservative justices gave every
indication then that they were prepared to take the steps they did on Thursday.

The justices, with only Thomas
in dissent, did uphold McCain-Feingold requirements that anyone spending money on political ads must disclose the names of
contributors.

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets on
{{ count_down }}