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International Law

: Freedom to Differ

Recap of Citizens United v. Federal Election Commission

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Last week, in Citizens United v. Federal Election Commission, the Supreme Court of the United States struck down a provision of US federal election law that forbids corporations and unions from spending their general treasury funds to support or oppose candidates for federal office. Although the Court split 5-4, with Justice Kennedy writing the majority opinion, it is nonetheless a very significant First Amendment and campaign finance decision, that has the potential to reshape political campaigning in the United States.

The Court reasoned that the government can't discriminate against speakers based on their corporate identities, and that "All speakers, including individuals and the media, use money amassed from the economic marketplace to fund their speech, and the First Amendment protects the resulting speech." Here are some important extracts:

Although the First Amendment provides that "Congress shall make no law . . . abridging the freedom of speech," §441b's prohibitionon corporate independent expenditures is an outright ban on speech, backed by criminal sanctions. It is a ban notwithstanding the factthat a PAC created by a corporation can still speak, for a PAC is aseparate association from the corporation. Because speech is an essential mechanism of democracy--it is the means to hold officials accountable to the people--political speech must prevail against lawsthat would suppress it by design or inadvertence.

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Laws burdening such speech are subject to strict scrutiny, which requires the Government to prove that the restriction "furthers a compelling interest and is narrowly tailored to achieve that interest." WRTL, 551 U. S., at 464. This language provides a sufficient framework for protecting the interests in this case. Premised on mistrust of governmentalpower, the First Amendment stands against attempts to disfavor certain subjects or viewpoints or to distinguish among different speakers, which may be a means to control content. The Government may also commit a constitutional wrong when by law it identifies certain preferred speakers. There is no basis for the proposition that, in thepolitical speech context, the Government may impose restrictions oncertain disfavored speakers. Both history and logic lead to this conclusion.

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It is irrelevant for First Amendment purposes that corporate funds may "have little or no correlation to the public's support for the corporation's political ideas." Austin, supra, at 660. All speakers, including individuals and the media, use money amassed from the economic marketplace to fund their speech, and the First Amendment protects the resulting speech. Under the antidistortion rationale, Congress could also ban political speech of media corporations. Although currently exempt from §441b, they accumulate wealth withthe help of their corporate form, may have aggregations of wealth,and may express views "hav[ing] little or no correlation to the public'ssupport" for those views. Differential treatment of media corporations and other corporations cannot be squared with the First Amendment, and there is no support for the view that the Amendment's original meaning would permit suppressing media corporations' political speech

Michael Dorf has a good summary of the Court's reasoning here. He also makes some comments about the likely impact of the decision:

Good-government groups have already condemned the decision in Citizens United as being likely to open a new era of corporate control of American politics. Whether the decision will have a large impact remains to be seen. Even prior to the Court's ruling, campaign finance regulation was so shot through with loopholes that individuals and corporations seeking to buy influence in Washington had little difficulty doing so.

Meanwhile, there are reasons why many corporations that sell to mass markets would be reluctant to support or oppose particular candidates for office. Michael Jordan
—whose fortune was partly built on Nike endorsements—once explained why he declined to endorse a Democratic candidate for office in this way: "Republicans buy sneakers too." A company that is too closely aligned with a political party or position risks alienating potential customers. Thus, it would not be especially surprising if Citizens United has only a modest effect on the political landscape.

The decision's effect on the Court is another story. Ironically, the majority's failure to acknowledge the importance of the government's interest in avoiding the appearance of corruption could lead to just that appearance—except that the government institution that will appear to many Americans to have been corrupted is the Supreme Court itself.

Michael Dorf also makes come comments on the "remarkable concurrence" of Justice Thomas.

The reaction to the decision, regardless of what impact it will, has generally been negative. From the Washington Post's editorial on the decision:

FOR MORE THAN a century, Congress has recognized the danger of letting corporations use their wealth to wield undue influence in political campaigns. The Supreme Court had upheld these efforts. But Thursday, making a mockery of some justices' pretensions to judicial restraint, the Supreme Court unnecessarily and wrongly ruled 5 to 4 that the constitutional guarantee of free speech means that corporations can spend unlimited sums to help elect favored candidates or defeat those they oppose. This, as the dissenting justices wrote, "threatens to undermine the integrity of elected institutions across the nation."

This result was unnecessary because the court's conservative majority -- including supposed exemplars of judicial modesty -- lunged to make a broad constitutional ruling when narrower grounds were available. It was wrong because nothing in the First Amendment dictates that corporations must be treated identically to people. And it was dangerous because corporate money, never lacking in the American political process, may now overwhelm both the contributions of individuals and the faith they may harbor in their democracy.

The Opinionator blog of the New York Times also has a good summary of the early reaction to the decision, most of it critical.

Lawrence Lessig is one of the many critics of the decision:

Whatever else one believes about the Supreme Court's decision striking down limits on corporate speech in the context of political campaigns, there's one thing no credible commentator could assert: That money bought this result. We can disagree with the Court's view of the Framers (and I do); we can criticize its application of stare decisis (as any honest lawyer should); and we can stand dumbfounded by its tone-deaf understanding of the nature of corruption (as anyone living in the real world of politics must). But we cannot say that somehow, the influence of money has produced this extraordinary result. The Court jealously guards its own institutional integrity. Two hundred years of careful doctrine, defining the economy of influence under which it does its work, has produced an institution whose decisions we can disagree with strongly, but whose integrity we can't fairly doubt. Maybe liberal or conservative politics sometimes gets too much mixed with constitutional law. But money is no where even close.

Thursday's decision by the Supreme Court denies to Congress the same institutional integrity enjoyed by the Court. The vast majority of Americans already believe that money buys results in Congress. This Court's decision will only make that worse. The Wall Street bailouts, the caving to insurance and pharmaceutical interests in health care reform, the ability of coal companies to stop Congress from addressing even profoundly important questions like global warming leads most to the view that it isn't reason or even constituent politics that determines what Congress does or doesn't do. It is instead the siren of campaign funding. Now a second siren walks onto that stage, promising, ever so indirectly, more campaign support from corporate treasuries. Who could doubt that this will further distract Members of Congress from what their constituents want? And who could believe it won't make Americans even more cynical about what Congress does?

The institutional integrity of Congress is already at a historical low. Less than one quarter of Americans have faith in this institution. Three times that have faith in the Supreme Court. If there's such a thing as political bankruptcy, then Congress is bankrupt. More Americans likely supported the British Crown at the time of the revolution than support our Congress today.

Yet despite the Court's decision, there is still one possible way that Congress could redeem itself. Following the examples of Arizona, Maine and Connecticut, Congress could enact a voluntary, opt-in system of Citizen Funded Elections that would give Members the chance to run for office without this integrity-destroying dependency on private campaign cash. One bill currently introduced in Congress would give candidates a grubstake to fund their campaigns, plus the freedom to raise unlimited amounts of money in $100 contributions or less. In exchange, Members would give up the bundling of large contributions by the buyers of influence.

This change alone might not be enough to restore faith in this failing institution. The rumblings in favor of a constitutional amendment, or even a convention to consider a range of amendments, are growing. The fears that private money will overwhelm even an adequately funded public system are fair.

But fear of failure is no reason not to act, quickly and forcefully, to restore the integrity that this central institution of American democracy has lost. For whatever else the Framers were trying to do, they were not trying to establish a comedy at the core of their democracy. Nor the tragedy that this Congress has become.

Visit change-congress.org to learn more.

(It's worth noting that Jack Balkin doesn't agree with Larry Lessig's premise.)

In a piece for Slate, David Kairys looks at "the misguided theories behind the Supreme Court's ruling on campaign finance reform":

Go back almost a century, to the time when the modern corporation was created, and you'll find laws that prohibit or limit the use of corporate money in elections. And yet this week, a 5-4 Supreme Court struck down the limits that Congress passed in 2002 in this tradition in the case Citizens United v. FEC.

The majority's ruling unleashes a new wave of campaign cash and adds to the already considerable power of corporations. The court's main rationale is that limits on using corporate treasuries for campaigns are a "classic example of censorship," as Justice Anthony Kennedy wrote for the majority. To get there, Kennedy depends on two legal theories that blossomed as constitutional principles in the mid-1970s: money is speech and corporations are people. Both theories are strange, if not simply wrongheaded—why, according to the Constitution or common sense, would money be speech or corporations be people? The court has also employed theories not uniformly but, rather, as constitutional cover for dominance of the electoral system by corporations and by the wealthy.

Also in Slate, Barry Friedman and Dahlia Lithwick suggests that the Roberts Court misjudged the public mood on campaign finance reform with this decision:

One of the defining features of the John Roberts Court is how rarely it's accused of being tone-deaf. With a handful of exceptions, the conservative majority on the court has chipped, sanded, and whittled away at the law without need of a drop cloth. With a toolbox that includes judicial minimalism and constitutional avoidance, a penchant for overruling old cases without explicitly saying so, and an uncanny sense of just how much activism the public will tolerate, the Roberts Court has done a remarkable job of conforming its behavior to the prevailing public mood, resisting the impulse to go too far.

That's what makes last week's bombshell of a decision in Citizens United v. FEC so riveting: The timing was terrible. How could a conservative majority that was unwilling to strike down the Voting Rights Act last June, or do away with the disparate impact test for affirmative-action claims, strike a death blow for the unfettered rights of corporate America during a recession? After a financial meltdown and the firestorm about bankers' bonuses? Did the five justices in the majority really think the mood of the American public was right for a ruling that could allow massive energy and pharmaceutical companies to spend millions on campaign attack ads?

Eugene Volokh, however, is not so critical. Rather, he has an interesting perspective on what the decision means for the mainstream media:

Three thoughts on Citizens United and the mainstream media:

1. The decision better secures the liberty of the mainstream media. Most mainstream media is organized as corporations, and as the Court pointed out the argument for lesser protection for corporate speech would equally apply to speech by media corporations. So far, Congress has exempted the media from bans on corporate advocacy for or against candidates; but now it's clear that the media corporations (alongside other corporations) are constitutionally entitled to so editorialize.

2. The decision diminishes the relative power of the mainstream media. Until now, media corporations and some ideological advocacy corporations were the only groups that had a truly free hand in editorializing for or against candidates. Now business corporations and unions will also have this freedom, and the relative importance of the media's views will diminish.

3. But the decision will likely increase the income of the mainstream media, especially broadcasters: Now that unions and business corporations are free to speak for and against candidates, presumably many of them will do so, often by buying advertising. And who'll sell them the time or space for the advertising? Mostly broadcasters, though perhaps some newspapers and magazines as well.

Also at The Volokh Conspiracy Ilya Somin explains "Why Restrictions on Corporate Speech Reduce Political Equality".

Quite a bit has also been written about what will happen now to campaign finance reform. The Atlantic's Marc Ambinder says there are three scenarios being discussed by the Democrats:

Go back into the law and ban expenditures from corporations based on fact that they retain lobbyists or have contracts with governments. The Court would probably reject this, but Dems could pass it and the president could sign it. A modest political victory with no real effect.

Another avenue would be to impose a requirement that shareholders have to approve of expenditures from a corporation's general treasury. This might serve as a deterrent. I don't know whether this proposal would get 60 votes, nor do I know whether it would sustain a legal challenge.

A third idea: make the "Stand by Your Ad" requirement apply to all campaign ads. The head of an insurance company would be forced to say, "I'm Honus Wagner, the CEO of Acme, and I stand by this ad." This can pass Congress and will pass muster with the courts. The hope is that it would deter corporations by subjecting them to scrutiny they do not want.

And then -- new disclosure laws. Which don't have much of a deterrent effect.

There is also the issue of what happens to States' campaign finance laws as well foreign corporations. Ultimately, however, this is unlikely to be the end of Supreme Court intervention in this space:

The future is also uncertain because this will not be the Roberts Court's last word on campaign finance. By treating corporations as a mere species of individual associations, the court has cast doubt on campaign finance regulations that treat corporations as posing a special threat. Most notably, the ban on soft money, which prevents corporate and union contributions to political parties and candidates, might be the next restriction to fall. If corporations are like individuals, how can Congress completely ban soft-money contributions from one while letting the other give within limits? The case RNC v. FEC, now working its way up to the court, poses a very similar question. Given the tone of Citizens United, we should expect a bold response.

For now, though the contribution limits that are ubiquitous in both state and federal law remain untouched by Thursday's decision, it has become more difficult to justify them. As my colleague Heather Gerken has argued at greater length, the court significantly narrowed the interests states can argue underlie such laws. In particular, Citizens United changed the very definition of corruption. In the case it overruled, Austin v. Michigan Chamber of Commerce, corruption included "the corrosive and distorting effects of immense aggregations of wealth [amassed] through the corporate form." No longer. Even the garden variety definition of corruption as signaling "undue influence on officeholders' judgment" or special access is under attack. As the court said in Citizens United, "The fact that speakers may have influence over or access to elected officials does not mean that these officials are corrupt. ... Ingratiation and access, in any event, are not corruption."

Because corruption of the quid pro quo variety is notoriously difficult to prove (after all, how many politicians admit they voted a particular way because of a campaign donation?), defendants historically relied on assurances from the court that states could target the appearance of corruption. Although still standing, that concept also teeters from the decision, as the court reinforced that "[t]he appearance of influence or access, furthermore, will not cause the electorate to lose faith in our democracy."

In the short term, the president and several members of Congress are promising reform, each version of which raises its own constitutional questions. To target corporations, some urge that shareholders be required to vote to have treasury funds used for campaign expenditures. Or, given the presumed ability of the federal government to prohibit foreigners from spending money in campaigns, perhaps the government could ban expenditures by corporations substantially owned by foreigners. Or, perhaps it could change the tax code so as to reduce the incentives of corporations to spend money on political campaigns. Or, given the tremendous dependency of the financial industry and others on federal funds of late, the government could make eschewing electioneering expenditures a condition of its largesse. Or, in the same vein, states could condition the granting of a corporate charter on a promise to disengage from campaigns. Public funding of various sorts may be the constitutionally safest option, but in an age where the public has become suspicious of both bailouts and politicians, they are likely to be hesitant to use one for the other.

Several of these proposals raise questions of unconstitutional conditions. Some may also be seen as too clever by half. More than any area of election law, campaign finance had been characterized by the tug of war between the court and the political branches in the slippery mud of politics. Each law leads to its own loophole, either discovered by political entrepreneurs or poked by a court or agency. The political branches respond and the Supreme Court reins them in.

Five members of the court now hold those reins. The replacement of any one of them could lead to yet another redefinition of the First Amendment. Indeed, when the court regulates politics, it helps determine, in part, its own fate and the consequent meaning of the Constitution. As elections determine presidents and presidents choose justices, the court's pronouncements on election law, however well-meaning, can never be purely disinterested. Any justices who see themselves as constitutional umpires learn all too quickly that they are All-Star players in the game.

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Full post as published by Freedom to Differ on January 26, 2010 (boomark / email).