The Citizens United ruling made clear that corporations, including certain nonprofit organizations, may make independent expenditures during an election. Independent expenditures are communications that expressly advocate for the election or defeat of a federal candidate that is not made in coordination with the candidate. What remains uncertain is precisely how far the logic underpinning the decision may extend.
On May 26, a federal judge in Virginia ruled that a law barring corporations from making contributions directly to candidates is unconstitutional. During the 2008 election, two Virginia businessmen used company funds to reimburse their employees for contributing to Hillary Clinton's presidential campaign. Their attorneys argued that corporations should be treated just like individuals when it comes to campaign contributions, based on the logic of Citizens United that corporations are like individuals for the purposes of independent expenditures. The judge agreed, writing that "there is no distinction between an individual and a corporation with respect to political speech." That is, corporations can give the same amount of money to a campaign that a person can.
The practical implications of this ruling on the 2012 election are likely to be small: on May 31, the judge requested that attorneys on both sides file additional briefs arguing whether he should reconsider his decision, based on a 2003 U.S. Supreme Court decision that upheld a ban on corporate contributions to campaigns and that had not been brought up during initial arguments. Even if the judge does not reverse himself, campaign finance experts argue that the decision would apply only to candidates and corporations in the Eastern District of Virginia for the time being.
In another state case, the Montana Supreme Court is expected to rule whether its state's ban on corporate political spending is valid. The Montana Corrupt Practices Act of 1912 was enacted in response to the "copper kings," out-of-state corporate interests that were spending millions of dollars to elect legislators of their choice. The law bars corporations from using their general funds for political purposes but allows them to establish political action committees – just like the portions of the McCain-Feingold law that were invalided by Citizens United.
Montana Attorney General Steve Bollock argues the situation in Montana is different from the one the U.S. Supreme Court confronted in Citizens United. Bollock says that the most important factor leading to the Court's decision were what Justice Anthony Kennedy called the "onerous" Federal Election Commission requirements that kept many corporations from establishing political action committees. Not only is the state's process much simpler, Bollock argued in a press release, the state's history demonstrates that corporations have already corrupted the state's politics once and should not be given a chance to do so again.
The Minnesota legislature took a slightly different tack in response to Citizens United, becoming one of the states to pass a law requiring corporations to disclose their political spending within the state. As a result of that law, Target Brands, Inc. was forced to disclose campaign contributions to a conservative group during the 2010 election – contributions that became extremely controversial and for which the corporation eventually apologized.
On May 16, the Eighth Circuit Court of Appeals upheld Minnesota's disclosure law. "Unlike outright bans on corporate independent expenditures, which are viewed with great suspicion and subjected to strict scrutiny, courts generally view corporate disclosure laws as beneficial and subject such regulations to the less-rigorous exacting-scrutiny standard," wrote the majority. While critics of disclosure had argued that Target's experience shows that disclosure laws "chill" corporate political speech, the court agreed with voter advocates that political spending transparency, in fact, has benefits for voters.
As cases like these continue to percolate through the court system, it has become increasingly clear that the Citizens United decision was only the first in what will inevitably become a number of rulings on corporate political expenditures. The tremors Citizens United sent through the political system in January 2010 will continue to rumble while state and federal courts wrestle with cases like these.
Image in teaser is in the public domain, courtesy of the General Services Administration