Litigation

?Citizens United:? Companies Can Funnel Money Secretly

By Peter Hardin

While the Supreme Court’s Citizens United decision upheld requirements for disclosure of corporate political spending, it also left corporations a significant loophole for escaping disclosure.

That analysis is presented in a New York Times article headlined, “Decision Could Allow Anonymous Political Contributions by Businesses.” By giving money to trade associations and nonprofit civil leagues, corporations can make anonymous gifts, and the groups then can use the money for political advertising, according to the Times. Nonprofit groups can withhold the identity of donors.

?Clearly, that?s where the action?s going to be,? Kenneth A. Gross, a Washington lawyer and former associate general counsel for the Federal Election Commission, told the newspaper.

Citizens and shareholders may be left in the dark. The article reports: “It is impossible to know whether corporations or unions are taking advantage of the new freedom to funnel pro- or anti-candidate money through nonprofit organizations.”

Wide-ranging debate over the ruling continues. Linda Greenhouse wrote in an online New York Times commentary that the “real surprise” about the decision is how widely disliked it is, across ideological divides: “After more than a month, the storm set off by the Citizens United ruling is still raging.”

The Wall Street Journal’s Law blog picks up on concerns raised by Harvard law professor Lucian Bebchuk that fewer limits on corporate campaign expenditures could weaken shareholder’s rights, and in turn harm capitalism.

You can learn more about the ruling from Gavel Grab, and you can read Justice at Stake’s amicus brief in the case by clicking here.

Full post as published by The Gavel on March 01, 2010 (boomark / email).