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Stephen Keim
6 April, 2010  
Corporates' election spending off the leash

Citizens United v Federal Election Commission could well make it onto the list of the worst judicial decisions ever made … Precedents turn slippery … The US Supremes open the tap on corporate election spending … Stephen Keim reports on how to get the best government money can buy


Any list of the worst court decisions ever will express the results of considerable subjectivity.

Geoffrey Robertson may well include the trial of barrister John Cooke and the other regicides in 1659.

Many might rue the influence of Dodge v Ford Motor Co, a 1919 decision of the Michigan Supreme Court that is often cited for the proposition that the duty of directors is to maximise the profits of shareholders and to eschew more noble motives.

The recent decision of the United States Supreme Court, Citizens United v Federal Election Commission is likely to be on the list of anyone interested in having effective election funding laws that can control the influence of corporate wealth in US elections – state and federal.

imageThe decision was five/four, with conservative justices forming the bulk of the majority and more liberal judges composing the four person minority.

The lead judgment was delivered by the traditional swinger, Justice Anthony Kennedy (seen here).

He was joined by conservatives Chief Justice John Roberts, and Justices Antonin Scalia, Samuel Alito and Clarence Thomas.

Justice John Paul Stevens, who turns 90 on April 20, wrote a ringing dissent and was joined by other liberal Justices, Ruth Bader Ginsburg, Stephen Breyer and Obama appointee, Sonia Sotomayor.

The effect of the court’s decision was to rule s.203 of the Bipartisan Campaign Reform Act of 2002 (the BCRA) to be invalid for breaching the First Amendment of the US Constitution.

Relevantly, the amendment provides that “Congress shall make no law … abridging the freedom of speech”.

Section 203 of the BCRA places restrictions on the independent election expenditure of unions and corporations.

The restrictions, by no means, amount to a complete ban.

To be affected, the expenditure must be on an electioneering communication, which is any broadcast, cable or satellite communication that refers to a clearly identified candidate for public office.

The communication has to be publicly distributed (which requires a minimum number of people receiving it) and made within 30 days of the election.

It is independent election expenditure in that it is neither spending by a candidate or a contribution to a candidate’s funds.

That it is independent in this sense does not prevent tacit links between the spender of the funds and the candidate(s) who benefit from the advertisements.

The ban is not absolute in another way.

Corporations and unions may operate Political Action Committees (PACs), which are funds consisting of contributions by executives or members of the corporation or union for the purpose of electoral expenditure and do not include the corporations’ or unions’ core funds earned through their normal business activities.

The plaintiff, Citizens United, was a non-profit company and one of the most active bodies of a conservative bent taking part in political debate in the United States.

imageCitizens United has an active PAC holding large sums of money.

The expenditure in question was a documentary video called Hillary: The Movie, which was critical of Senator Hillary Clinton (seen here in earlier times) in the context of her competing in the primaries for the presidential nomination.

Citizens United sought to make the documentary available on cable access as video on demand.

The prohibitions in the 10 amendments which comprise the Bill of Rights in the US Constitution are not regarded, not even by those lawyers who place great emphasis on the text of the Constitution, as intended to be given absolute effect.

The jurisprudence, which has been developed, recognises there are interests of government that can justify departure from the strict terms of the prohibitions.

Construing the Constitution becomes a process of balancing identifiable state interests against the interests represented by the restricting words of the Constitution.

Accordingly, the debate in Citizens United did not at any time concern a simple question whether s.203 was a “law abridging freedom of speech”.

The opinion of Justice Kennedy was concerned to establish that two previous decisions, Austin v Michigan Chamber of Commerce and McConnell v Federal Election Commission, which had upheld the type of expenditure ban in issue in Citizens United, were unsound and could properly be departed from.

In establishing this point, Justice Kennedy sought to show that it was not in accord with principle to treat corporations differently to ordinary people.

He also sought to show that the government interest in preventing the corruption of election by the expenditure of stockpiled corporate funds, which was relied on to justify the restriction, was not sufficient in fact to justify the legislative restraint.

Kennedy also argued that PACs were not an adequate means of protecting the interest of corporations in speech concerning elections because they were administratively unwieldy and slow to put in place.

The dissenting opinion of Justice Stevens is scathing of the majority at every level.

He attacked the court for deciding the case on broad grounds when it could have relied on more specific narrow grounds to read down the legislation so that it did not apply to a movie length documentary or to cable subscription broadcasts or even so that it did not apply to Citizens United because of its non-profit nature and because most of its funding came from individual contributions.

imageJustice Stevens (pic) was also critical that questions were decided that were not properly before the court.

Constitutional challenges can be divided into types.

One is an “as applied challenge”. This involves an argument that the legislation would be in breach of the Constitution and invalid if it were held to extend to the factual situation in this case.

Essentially, it is an argument that the particular law should be read down so as not to apply to these facts or that the law is invalid to the extent that it applies to the facts, but not otherwise.

The second kind of challenge is a “facial challenge”. This is an argument that the law is invalid on its face. That is, the legislation is clearly invalid and one does not have to go into the intricacies of a particular set of facts to determine the invalidity of the provision.

Justice Stevens pointed out that the plaintiff, Citizens United, had abandoned any facial challenge before the hearing in the District Court took place.

That is, the matter that the parties had brought before the court was only about narrow questions concerning the way in which the legislation impacted this plaintiff in this particular set of facts.

There were several means available to the court to determine the issue before it without proceeding to a ruling on the statute as a whole.

Justice Stevens pointed out that this was not just an academic procedural question that could be solved by (as occurred in this case) adjourning the case for further argument on the broader question.

The fact that the question of facial invalidity was not litigated at the earlier stages meant that the record before the Supreme Court had been developed only for the narrow questions.

It lacked the sort of detailed evidence that went to the questions of the state interest, which were said to justify legislative restriction upon independent expenditure on campaigning by corporations and unions.

The FEC had not had the opportunity to set out the studies that evidenced examples of inappropriate influence having been obtained by running a strong negative campaign against one candidate to ensure the election of another.

According to Justice Stevens when the majority said that there was no evidence of a need for s.203 to prevent corruption, they were able to do so only because the process prevented the FEC from compiling such evidence.

Justice Stevens was also critical of the majority’s representation of the previous case law.

Justice Kennedy had to acknowledge in his opinion that he was overruling Austin and McConnell.

To get there he argued that Austin was out of step with the case law that preceded it.

Stevens refuted this assertion.

Rather than being an outlier, he said, Austin represented mainstream jurisprudence that went back to legislation passed to control the corrupting of elections in the first decade of the twentieth century.

The majority, he said, had woven their argument that Austin was an outlier out of a series of minority opinions and individual opinions.

This was, he said, a hitherto unknown way of following established precedent.

Most ironically, Justice Stevens argued that the majority arguments were out of kilter with the understandings of the authors of the text of the First Amendment.

A key argument of the majority was that it was inappropriate to treat corporations and unions differently to natural persons.

It was wrong, they said, to make different provision in regulating speech depending on the identity of the speaker.

Justices Thomas and Scalia and Chief Justice Roberts follow originalist theory in interpreting the Constitution.

For example, Justice Scalia would argue that, if capital punishment was not considered a cruel and unusual punishment in December 1791, when the Eighth Amendment was enacted, it can never be cruel and unusual punishment.

Well, said Justice Stevens, it is hardly likely that corporations were intended to benefit from the First Amendment protections of free speech in the same way as natural persons.

When the First Amendment was adopted in December 1791 the framers of the Constitution were suspicious of corporations, which were few in number, not well regarded, and often the holder of monopolies as a result of Royal Charters.

The originalists’ chosen approach to construction argued strongly against the majority’s finding as to s.203 in this case.

Judicial writing by the justices of the Supreme Court has a level of oratory and forceful advocacy normally eschewed by judges in the Australian and UK tradition.

The writing in Citizens United is no exception.

Justice Stevens’ advanced years have only added to the colour and fluency of his arguments and the prose by which they are communicated.

He leaves no doubt as to the destructive impacts that will flow from the Court’s decision or the unjustified foundations on which the decision is premised.

imageJustice Kennedy’s writing is less aggressive and, perhaps by necessity, somewhat defensive about the decision to decide issues that were not litigated by the parties and to overrule Austin’s case.

However, the Chief Justice and Justice Scalia weighed in with forceful oratory to defend aspects of the court’s decision and Justice Thomas (pic) wrote his own opinion suggesting that his colleagues in the majority were strongly mistaken for not also ruling invalid further sections of the legislation that required public disclosure of the now unlimited independent campaign expenditure by corporations.

Citizen’s United has been strongly criticised since it was handed down.

Much thought is being given to ways in which campaign spending can be controlled that are consistent with the court’s decision.

The decision has shaken the electoral system in the United States to its foundations.

It may be too early to say whether Citizens United deserves to be in a list of worst decisions ever.

We will know after the mid-term elections, this year, if the airwaves are flooded with partisan advertising from so-called “independent” corporations.

Maybe, a decade of elections won by the weight of money will confirm the decision’s position on the list.

What we can say is that the flow on effects have begun.

On March 26, the Appeals Circuit for the District of Columbia ruled invalid legislation that restricted contributions to independent political organisations.

The decision expressly drew upon the Supreme Court’s decision in Citizens United.

Accordingly, not only can large corporations spend unlimited amounts trying to defeat political candidates who have opposed granting them legislative privileges.

They can donate unlimited amounts of money to right wing outfits like Citizens United to do the campaigning for them.

Stephen Keim
Eagle Junction