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Supreme Court OKs Corporate Campaign Contributions

January 21, 2010 at 12:00 AM EDT
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The U.S. Supreme Court reversed 20 years of restrictions on corporate campaign contributions. Marcia Coyle of the National Law Journal explains the controversial ruling and how it will likely affect future political campaigns.
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JEFFREY BROWN: It was a 5-4 decision to wipe away limits on corporate and labor union spending in campaigns for president and Congress.

Justice Anthony Kennedy wrote the majority opinion, joined by Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia, and Clarence Thomas. They threw out key provisions of campaign finance laws dating back to 1907, plus two of the high court’s own decisions from 1990 and 2003.

Specifically, the justices overturned a ban on letting companies and unions use their own funds to produce their own campaign ads. The decision also eliminated the so-called McCain-Feingold ban on issue-oriented ads within 30 days of a primary and 60 days of a general election. A strong dissent was written by Justice John Paul Stevens, joined by Ruth Bader Ginsburg, Stephen Breyer, and Sonia Sotomayor.

The case stemmed from a 90-minute film attacking Hillary Clinton during her 2008 run for president.

NARRATOR: Hillary Clinton has undoubtedly become one of the most divisive figures in America.

JEFFREY BROWN: The conservative group Citizens United produced the film and wanted to run ads for it on television and distribute it through on-demand cable. Instead, federal courts ruled it was akin to a long campaign ad and should be regulated like one. Ultimately, the Supreme Court disagreed.

But today’s decision did leave in place other restrictions, including a century-old ban on donations by companies directly to candidates for federal office. Direct contributions from political action committees created by corporations, unions and individuals will still be allowed. The decision is expected to leave candidates, parties and contributors scrambling to adjust to the new reality, with crucial congressional elections now 10 months away.

Marcia Coyle of “The National Law Journal” was, of course, at the court this morning, and is now here with us.

Welcome back.

MARCIA COYLE: Thanks, Jeff.

JEFFREY BROWN: I say “of course” because this was called a special sitting of the court. It was understood that something historic might be under way, right?

MARCIA COYLE: We knew something was afoot. This was an argument week at the court, and the court generally sits Mondays through Wednesdays.

We weren’t expecting any decisions or orders from the court until next Monday. At the end of yesterday’s oral arguments, the chief announced that there would be a special sitting. All speculation surrounded the Citizens United case, which has been outstanding.

JEFFREY BROWN: And much-anticipated.

MARCIA COYLE: Yes, since last September.

JEFFREY BROWN: All right. So, let’s go to what happened today.

Justice Kennedy, writing for the majority, he — he went right to the First Amendment.

We have a quote from his ruling: “If the First Amendment has any force,” he wrote, “it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.”

MARCIA COYLE: Justice Kennedy feels that the ban on corporate spending, he said, interferes with what he called the open marketplace of ideas, which is protected by the First Amendment.

This particular ban, he said, was censorship, and its reach was vast. It suppressed speech by non-profit and for-profit corporations, big and small. He also said that federal campaign finance regulation today is so complex and so burdensome — burdensome that it actually chills speech before the laws are even applied.

JEFFREY BROWN: Now, I said that this stemmed from this political film with Hillary Clinton. And legal experts, as I understood, thought that it could have been — it could have been narrowly decide then. But then there was an unusual twist, right? The court asked for a second hearing.

MARCIA COYLE: That’s right, Jeff. At the end of last term, in June, the court ordered the parties in the case, on its own initiative, to argue whether the court should overturn a 1990 campaign finance precedent that imposed and upheld the ban on corporate spending, and also whether it should overturn a 2003 decision involving a provision of what we call the McCain Finance — McCain-Feingold Campaign Finance Act, which put restrictions on the use of general treasury funds by corporations and unions when they wanted to do election advertising.

JEFFREY BROWN: And they — and they took this on their own initiative, so they heard it…

MARCIA COYLE: Absolutely.

JEFFREY BROWN: … and decided to broaden it out. And that clearly went to the heart of what annoyed the dissent, clearly, right?

MARCIA COYLE: Yes.

JEFFREY BROWN: And we have a — we have a quote here from Justice Stevens: “The court operates with a sledgehammer, rather than a scalpel,” he writes, and later: “The court has it exactly backwards. It is today’s holding that is the radical departure from what had been settled First Amendment law.”

MARCIA COYLE: Justice Stevens said, basically, that the court was elevating its own agenda over what the litigants in this case originally sought, also over the history of congressional regulation of corporations and elections.

He — he also said that he believed that corporations were not human beings, and that this was a distinction that was significant in the context of elections, that corporations, their interests may have fundamental conflicts with the interests of the electorate.

JEFFREY BROWN: The ruling impacts a number of state laws as well?

MARCIA COYLE: It does. I believe there — that roughly half the states have similar bans on corporate spending. And they’re likely to be invalidated now, because this was a ruling under the First Amendment, and it will apply to the states.

JEFFREY BROWN: Now, given this is — that this is an undoing of a decision as recently as 2003, you said…

MARCIA COYLE: Yes.

JEFFREY BROWN: … the makeup of the court, right, the change of the makeup must have played some role, presumably.

MARCIA COYLE: Well, I think it definitely did.

With Justice O’Connor’s departure from the court and the addition of Chief Justice Roberts and Justice Alito, the court’s campaign finance rulings have swung from deference to congressional regulation to basically deregulation.

And Justice Alito, his substitution for Justice O’Connor on the bench, made the difference here. He was the decisive vote. She in the past had been deferent to congressional regulation of campaign finance.

JEFFREY BROWN: All right, Marcia Coyle, as always, thanks very much.

MARCIA COYLE: My pleasure, Jeff.