eustellab01: Federal judge overturns ban on corporate political contributions

Yesterday, U.S. District Court Judge James Cacheris of the Eastern District of Virginia issued an opinion declaring unconstitutional the century-old ban on direct corporate contributions to federal candidates. This decision is the logical next step after Citizens United, but don't panic ... yet.

First, some background: the litigation in question involves an alleged criminal scheme through which two wealthy individuals were alleged to have recruited donors and reimbursed them for contributions to Hillary Clinton?s 2006 and 2008 Senate and Presidential campaigns, in part by using corporate dollars. The defendants moved to dismiss the indictments on various grounds, one of which being that the federal ban on direct corporate contributions to candidates was unconstitutional under Citizens United.

So let's remember what Citizens United held: that when it came to independent expenditures?speech on behalf of a candidate which was not coordinated with the candidate?there was insufficient basis to bar corporations from doing what individuals already could do, because speech done independently from candidates had no corrupting effect. But as for direct contributions, even Citizens United noted the strong precedent on point:

With regard to large direct contributions, Buckley reasoned that they could be given ?to secure a political quid pro quo ,? and that ?the scope of such pernicious practices can never be reliably ascertained.? The practices Buckley noted would be covered by bribery laws if a quid pro quo arrangement were proved. The Court, in consequence, has noted that restrictions on direct contributions are preventative, because few if any contributions to candidates will involve quid pro quo arrangements. The Buckley Court, nevertheless, sustained limits on direct contributions in order to ensure against the reality or appearance of corruption....
[This] Court in NRWC did say there is a ?sufficient? governmental interest in ?ensur[ing] that substantial aggregations of wealth amassed? by corporations would not ?be used to incur political debts from legislators who are aided by the contributions"; NCPAC, supra, at 500?501 (NRWC suggested a governmental interest in restricting ?the influence of political war chests funneled through the corporate form?). ... Citizens United has not made direct contributions to candidates, and it has not suggested that the Court should reconsider whether contribution limits should be subjected to rigorous First Amendment scrutiny.

(Never mind, of course, that the Court almost simultaneously held in Caperton that massive independent expenditures on behalf of a West Virginia judicial candidate were sufficiently corrupting that it violated due process for the judge not to recuse himself from his sponsor's case.)

There's plenty of Supreme Court precedent on this point. Rick Hasen points to FEC v Beaumont, a 2003 Supreme Court opinion which upheld the ban on corporate contributions even when it's a 501(c)(4) making the contribution. So now let's take a look at the decision, with the key parts being on pp 42-46.

The Supreme Court?s logic [in Citizens United] was that because Buckley found that independent contributions by human beings do not corrupt, and because Bellotti held that ?the First Amendment does not allow political speech restrictions based on a speaker?s corporate identity,? corporations cannot be banned from making the same independent expenditures as individuals.
That logic is inescapable here. If human beings can make direct campaign contributions within FECA?s limits without risking quid pro quo corruption or its appearance, and if, in Citizens United?s interpretation of Bellotti, corporations and human beings are entitled to equal political speech rights, then corporations must also be able to contribute within FECA?s limits.

[F]or better or worse, Citizens United held that there is no distinction between an individual and a corporation with respect to political speech. Thus, if an individual can make direct contributions within FECA?s limits, a corporation cannot be banned from doing the same thing. So because individuals can directly contribute to federal election campaigns within FECA?s limits, and because � 441b(a) does not allow corporations to do the same, � 441b(a) is unconstitutional and Count Four [of the indictment] must be dismissed

As I've noted before, such direct corporate contributions to candidates are already legal in about half the states, and the rise of "SuperPACs" already gives quite a bit of latitude for corporations to become involved in federal elections should they so choose.

So why did I say "don't panic ... yet" up top? Because the existence of contrary, direct Supreme Court precedent on point means that this decision is not going to become operable anytime soon. The existing ban will stand, for now. It's when this (or some similar case) reaches the Supreme Court in 2-3 years, calling into question government's ability to take any meaningful steps to rein in the influence of amassed corporate wealth on politics, that you should worry.

And then they'll go after disclosure laws.