Monday, April 18, 2011

Limitless Corporate and Union Spending for Political Candidates

By: Abby Rosier

The 2010 United States Supreme Court case, Citizens United v. Federal Election Commissions 08-205, held that corporations of independent political broadcasts are permitted to spend and use unlimited amounts of money to support or oppose political candidates. The Supreme Court found banning corporation’s political spending in candidate elections violated two important precedents of corporation’s First Amendments rights. In a 5 – 4 decision in favor of Citizens United, the Supreme Court ruled that Government does not have the right to ban free political speech for corporations and unions.

The Court’s decision resulted from a dispute with Citizens United, a non-profit organization, in January 2008. Appellant Citizens United released a film showing a critical image of Hillary Clinton in a documentary called Hillary: The Movie. During this time, Hillary Clinton was Senator and candidate for the Democratic Party’s Presidential nomination. Advertisements for the documentary were shown on cable and broadcast stations and were to be released within 30 days of the Democratic Presidential primaries in 2008. The film was shown in theaters in six cities. Court documents show the organization also made plans to make it available on an on-demand service and broadcast ads for it.

This action directly violated that of case McConnell v. Federal Election Commission 540 U.S. 93 (2003), which upheld part of the Bipartisan Campaign Reform Act of 2002 – §319(a). The Bipartisan Campaign Reform Act (BCRA) restricted corporation and union spending on campaign elections. Also known as McCain-Feingold, the law restricted broadcasting, cable, or satellite transmission of “electioneering communications” by corporations or labor unions within 30 days of the presidential primary elections and 60 days of general elections. Citizens United also violated that of case Austin v. Michigan Chamber of Commerce 494 U.S. 652 (1990), which restricted corporate spending for or against political candidates.

Citizens United was concerned that its film Hillary: the Movie would violate the BCRA for civil and criminal penalties (Liptak 2010). In January of 2008, Citizens United sued the Federal Election Commission in the District Court for the District Court of Columbia (Citizens United v. Federal Election Commission 552 U.S. 1240). Citizens United claimed that banning “corporate independent expenditures for electioneering communications” is unconstitutional under 2. U.S.C.S. §441b and that the “disclaimer and disclosure requirements” are unconstitutional under 2 U.S.C.S. §§ 434 and 441d. The Court denied the plaintiff’s request for a preliminary injunction.

However, in January 2010, the case was appealed from the United States District Court of Columbia with appellant Citizens United again suing the Federal Elections Commission and claiming the ban on corporate independent expenditures and the disclaimer and disclosure requirements unconstitutional.

In addition, Citizens United argued that the film was not an “electioneering communication” under §441b because it was to be shown on cable television through an on-demand service. The organization also argued that the speech did not “express advocacy or its function equivalent” to vote for or against a candidate under §441b.

The Court found that Hillary: The Movie offered no interpretation other than to vote against Senator Clinton and expresses advocacy, which was used in the McConnell case.

The U.S. Supreme Court on appeal from the January 2008 decision overruled portions of the McConnell v. Federal Election Commission (2003) that allowed restrictions on corporate independent expenditures. The decision also overruled Austin v. Michigan Chamber of Commerce (1990) ruling that the government is not allowed to limit political speech because of the speaker’s “corporate identity,” according to court documents.

Although the First Amendment states “Congress shall make no law…abridging the freedom of speech,” The Courts found that §441b restricts corporations First Amendment rights to freedom of speech. Justice Kennedy affirmed that “Political speech does not lose First Amendment protection simply because its source is a corporation… The United States Supreme Court has thus rejected the argument that political speech of corporations or other associations should be treated differently under the First Amendment simply because such associations are not "natural persons" (Citizens United v. Federal Election Commissions 2010).

The majority of Congress did agree that Corporations have to disclose their spending and to run disclaimers with their advertisements, court documents show. The Court found that the disclosure and disclaimer provisions under §§ 434 and 441d were Constitutional, given the Government’s interest in providing information to the electorate.

The final 5 – 4 Supreme Court decision was divided with the majority opinion delivered by Justice Kennedy, and with concurrences from Chief Justice Roberts and Justice Alito. Citizens United v. Federal Elections Commission also upheld reactions from politicians. President Obama commented stating, “a major victory for big oil, Wall Street banks, health insurance companies and other powerful interests that marshal their power every day in Washington to drown out the voice of everyday Americans” (Liptak 2010). Further, Retiring Justice John Paul Stevens wrote that this type of limitless spending given to corporations, and the decision made by the Supreme Court, was a “grave mistake treating corporate speech the same as that from individuals” (Communication and the Law 2011, 39).

However, the legal distinction between corporate speech and individual speech is notwithstanding the fact that a corporation can still speak. As Justice Kennedy and others found, prohibiting independent expenditures by corporation and union spending violated their First Amendment rights to freedom of speech. The court documents explain that a critical documentary of a political candidate is political speech protected by the First Amendment, whether given by a corporation or individual.


Austin v. Michigan Chamber of Commerce 494 U.S. 652 (1990).

Citizens United v. Federal Election Commissions 130 S. Ct. 876 No. 08-205 (2010).

Communication and the Law, 2011 Edition. W. Wat Communication and the Law, ed. Northport, AL Vision Press.

Liptak, Adam. “Justices, 5 – 4, Reject Corporate Spending Limit.” NY Times. 2010.

McConnell v. Federal Election Commissions 540 U.S. 93 (2003).

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