Is Fighting Corporate Corruption a Crack in the Supreme Court's Citizens United Ruling?

Election '16

Preventing corruption -- of political candidates by campaign donations, and of electoral debate by relentless advertising barrages -- may be emerging as a crack in the Supreme Court's deregulation of campaign finance, including its controversial Citizens United ruling unleashing corporations.

In the past month, two important court decisions have seen judges cite fighting corruption as a basis to uphold bans on corporate political activity. The first was a Montana Supreme Court ruling that upheld the state's century-old ban on all corporate electioneering. The second decision came just last week in San Diego, where a U.S. District Court upheld that city's decades-old ban on direct corporate contributions to candidates.

While the losing sides in these rulings are likely to appeal to higher federal courts, it is noteworthy that two separate courts have taken nuanced views of political campaigns and have found leeway under other Supreme Court rulings to bar corporate activity.

"I guess that was the point, wasn't it? Is it an uncrackable wall or not," said Elizabeth Griffling, who wrote the Montana ACLU brief, speaking of the Citizens United ruling. "Two justices on the Montana Supreme Court felt it was impermeable and uncrackable. And the rest of the justices thought there was a little bit of giveaway there.

"And I argued in my brief that there was a little bit of room for exception to Citizens United in the context of a state who could show absolute evidence of corruption, who had adopted a statute in the face of such actual corruption."

Montana's ACLU broke from the national ACLU by arguing that there was a basis in other Supreme Court rulings to regulate corporate money to prevent corruption. When Citizens United was before the Supreme Court, the ACLU's national litigation office filed a brief saying that restricting independent corporate electioneering was unconstitutional. The national ACLU did not raise the corruption issue; it favored increasing corporate political speech.

"National ACLU has a pretty rigid policy: All speech is speech," Griffing said. "And I don't want to put words in national ACLU's mouth, but frequently they have taken an absolute policy -- kind of like what the U.S. Supreme Court has opted for in Citizens United, that the identity of the speaker doesn't really matter. Speech is speech."

But the recent rulings in Montana and San Diego disagreed by taking a more nuanced stance, holding that corporate political activities could be regulated under other Supreme Court rulings to prevent corruption of candidates and the overall political debate.

In Citizens United, the Supreme Court focused on a narrow issue: the speech rights of political committees that were not officially tied to candidates. But in Montana and San Diego, the courts ruled that direct corporate donations to candidates, as well as corporate-sponsored electioneering including advertising barrages that end up dominating debate, were potentially corrupting and thus could be regulated.

These different corporate-backed political activities are treated differently under the law. In other words, as damaging as the Citizens United ruling has been -- unleashing the super PAC-funded media wars in 2012's first primaries -- it appears that other Supreme Court rulings still would allow other forms of corporate electioneering to be regulated. 

"Citizens United does not preclude the finding of a compelling state interest based on a record of actual corporate corruption," Montana's ACLU argued in its brief. "Corporate corruption can be found when the evidence indicates that the democratic process has been undermined through intentionally overwhelming the citizenry's voice and undermining the individual voter's confidence in the political process."

And in the San Diego ruling last week, Chief U.S. District Court Judge Irma E. Gonzales essentially agreed in the context of that case, which concerned corporate contributions to candidates. Her explanation quoted other prior Supreme Court rulings.

"According to the Supreme Court, the prohibition on direct corporate contributions was justified by 'the special characteristics of the corporate structure' that threaten the integrity of the political process," she wrote. "It was necessary to 'prevent corruption or the appearance of corruption.' Moreover, it was necessary to prevent the use of corporations 'as conduits for circumvention of valid contribution limits.'"

Drawing Lines Around Citizens United

The Montana ACLU, backed by its board of directors, thought that Montana law and history fighting political corruption raised wider issues than the Citizens United case. It also pointed to a 1978 Supreme Court ruling that held that corporate political spending should be examined if it undermined public confidence in elections.

The Montana Supreme Court decision will be appealed. It is not yet clear how the state and national ACLU will participate, said Scott Crichton, Montana ACLU executive director. However, the ACLU has had other instances where state and national branches have disagreed. "It's got your attention and it has ours too."

The Montana ACLU will be holding a meeting in March and will hear presentations on the Montana case and next legal steps. "I can't guess and say this is the position we are going to take," Crichton said. "We may just let it go, I don't know."

Steven Shapiro, who was the counsel of record on the national ACLU's brief filed in Citizens United, did not return a request to comment.

The ACLU's national board last year modified its policy on campaign finance reform by reaffirming that the ACLU opposed any limit on political spending with a lone exception: taxpayer money given to any publicly financed candidate. However, it does not appear that the national ACLU will be adopting the anti-Citizens United stance taken by the Montana ACLU anytime soon.

Still, the larger significance here is there may be cracks in the Supreme Court's ongoing doctrine of deregulating campaign finance laws, and the Court's own anti-corruption rulings may be the basis for restricting corporate political activity.

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