Citizens
United
v FEC: Money, Corporations, and Politics By Douglas O.
Linder (2019) Money
has been called the mother’s milk of politics. Without
money, there can be no campaign. Money is
needed to buy advertising, to rent
halls for rallies, to pay campaign staff, and to fly
or drive candidates from
one rally to the next. Early
in our history, campaigns had expenses we might find
surprising today. James Madison probably lost his race
for a seat in the
Virginia legislature in 1777 because he refused to
provide liquor at his
rallies. Why
go listen to James when his
opponent is offering free rum? George
Washington knew better.
He won one
election after serving roughly one half gallon of
alcohol for every vote he
earned. According
to Melvin Urofsky, author of the Money and Free
Speech, it was the
campaign of Andrew Jackson that ushered in the era of
mass politicking.
And it took off from there. By 1840, the
presidential
campaign of William Henry Harrison included rallies,
parades with banners and
floats, log-cabin songbooks and log-cabin newspapers,
pictures of Harrison, and
“Tippecanoe and Tyler Too” handkerchiefs and badges. All of this,
of course, cost money.
In
1864, Abraham Lincoln worried about the influence of
corporate money in politics. Lincoln
said, “As a result of the war, corporations have
become enthroned, and an era
of corruption in high places will follow.
The money power of the country will endeavor to
prolong its rule by
preying on the prejudices of the people until all
wealth is concentrated in a
few hands and the Republic is destroyed.” But
the cost of campaigns continued to shoot up—and
wealthy
business owners were eager to help foot the bills. It
cost $125,000 to get
Lincoln re-elected in 1864. Eight years
later, the Republican Party spent twice that much to
elect Ulysses Grant.
And it took about four times that much, close
to a million dollars, to win the contested election of
1876 for Rutherford
Hayes. By
1892, campaign costs had more
than doubled again. Democrat Grover Cleveland spent
well over $2 million to win
election. William
McKinley’s campaign in 1896 rested on retaining the
gold standard, a policy favored by big industries. McKinley’s
chief fundraiser, Marcus Hanna,
told industrial leaders how much they were expected to
contribute. Banks
were to pay one-quarter of 1% of their
capital. Other
industrial leaders were
assessed flat fees.
Standard Oil chipped
in $250,000. Chicago’s
meat-packing
houses sent in $400,000.
Democratic
candidate William Jennings Bryan got his own corporate
sponsors, mainly the
owners of silver mines in the West. McKinley
won. In
response to the massive corporate funding of the
McKinley
campaign, four states enacted laws in 1897 banning all
corporate contributions
to political campaigns.
All four states
had voted for Bryan the year before. McKinley’s
successor, Theodore Roosevelt, was the first
president to call for an outright ban on corporate
contributions. Roosevelt
told Congress in 1905, quote, “All
contributions by corporations to any political
campaign or for any political
purpose should be forbidden by law.” A few
years later, Congress managed to pass the first
federal campaign finance act. It was a
toothless law called the “Publicity Act.”
It required disclosure of major donors and
limited the size of
contributions. But
the law lacked any
enforcement mechanism.
There would not
be a single prosecution in the 46 years the Publicity
Act remained on the
books. Campaign
spending kept shooting skyward. And,
increasingly, most of the money came
from a relative handful of very wealthy people.
In the 1928 Hoover-Smith race, for example,
just 1% of givers gave fully
half of the total raised. In the 1952
Eisenhower-Stevenson race, over two thirds of campaign
funding came from donors
giving more than $2500, as measured in current
dollars. In
1971 that Congress passed the first truly significant
piece of campaign reform legislation. By
then, television had changed politics.
Among other things, it made races much more
expensive. Senator
Edward Kennedy said, “Like a colossus
of the ancient world, television stands astride our
political system demanding
tribute from every candidate for public office.
Its appetite is insatiable, its impact unique.” Television
turned fund-raising into a nearly
full-time job. The
Federal Election Campaign Reform Act was signed by
President Nixon.
It created a general
taxpayer-paid fund for presidential elections, limited
expenditures for media
advertising, tightened reporting requirements, and
imposed a ceiling on what
candidates for federal office could spend on their own
campaigns. Two
years later, amendments to the law
created the Federal Election Commission. Composed of
three Republicans and
three Democrats, serving 6-year terms.
The amendments also set limits on individual
contributions to campaigns. The
Reform Act became law largely for one reason. It favored
incumbents. With
the powers of their offices and their
greater name recognition, they had an edge.
With the law in place, they need not worry
about millionaire opponents
funding their own campaigns. Nor about
opponents with unique fund-raising appeal. The
campaign reform act was challenged in court in January
1975. The
challenge was brought by some
odd political bedfellows. They
included the
liberal senator from Minnesota Eugene McCarthy and
conservative senator James
Buckley from New York.
The ACLU and the
American Conservative Union. Litigants
from across the political spectrum. They
argued, first off, that money was speech. At least
money donated to a political
campaign or spent to further a campaign.
Money spent, to say, buy a ticket to a play or
football game would be
conduct, not speech.
Money for a
campaign, they argued, is a form of political
association protected by the First
Amendment. Without
money, no modern day
campaign would be possible. The
government argued that even if the law restricted
speech, it should be upheld. The law
served to “level the playing field” and reduce the
likelihood of
corruption. The
Court gave both sides half a loaf. In Buckley
v Valeo, the Court upheld the limit on
individual contributions because a
contributor’s money does not directly support the
contributor’s free
expression. It
is the candidate, the
recipient of the money, whose speech reaches the
public. On
the other hand, the law restricting the
amount of money a rich candidate could spend on his or
her own behalf was
struck down. The
candidate’s own
expression was directly restricted. And
besides, the Court said, a rich person can’t be
corrupted by money that comes
from himself. Billionaires
were freed to spend their billions. Good news
for later self-funded candidates like Ross Perot. From
the 1980s on, donors increasingly exploited a large
loophole in the campaign finance laws. The exclusion
on limitations of so-called
“soft money.” That
is, not “hard money” given
directly to a candidate for her campaign, but rather
money given to a private
entity—a “political action committee” or “PAC”—to
spend in its own ways.
PACs are required, theoretically, to spend
their money in ways not coordinated with the
candidate’s own campaign. Soft
money became the new thing. The new
(some believed) corrupting influence
in American politics.
By the mid-1990s,
the amount of soft money being spent on elections
almost matched that of the
campaigns themselves.
PACs took many
forms. There
were labor union PACs,
interest group PACs like the Sierra Club or NRA, and
there were corporate PACs. Scandals,
fund-raising abuses, massive campaign expenditures—all
of these led to another attempt at campaign finance
reform. The result, in 2002,
was a law formally known as the Bipartisan Campaign
Reform Act. It
is more commonly known by the name of two
Senate sponsors, John McCain and Russ Feingold.
The
McCain-Feingold Act did many things. It banned
soft money contributions made
directly to political parties. It
imposed new limits on individual contributions of both
soft money and hard
money. Most
importantly for our
purposes, the law prohibited corporations and labor
organizations from paying
for any “electioneering communications” within 60 days
of an election or 30
days of a primary. President
Bush put his signature on the legislation. But he did
so reluctantly. There
was no signing ceremony, no press conference
in the Rose Garden. On
the day of the signing, Senator Mitch McConnell filed
a
suit challenging the new law’s constitutionality.
Meanwhile, he worked to
undermine the law.
He did so largely by
controlling the process of nominations to the Federal
Election Commission.
According to former commission Brad Smith,
McConnell
said, “We need to put Republicans on the FEC who favor
our point of view on
regulation.'” The new appointees essentially refused
to enforce the law.
The result was a number of 3 to 3 deadlocks
on enforcement actions. McConnell’s
behind-the-scenes maneuvering paid off. But his
legal challenge to McCain-Feingold didn’t
fare so well. By a 5-to-4 vote in 2003, the Court
upheld nearly the entire law. It was the
high-water mark for campaign
reform efforts. A
day of sunshine for
reformers. But
the precedent of McConnell
v FEC did not last long. The Court
soon decided to reconsider the Act’s key requirement
prohibiting corporate
“electioneering communications” around election time. The case was
Citizens United v the Federal Election
Commission.
It became one of the most hotly debated cases
of our time. The
case was heard by a newly remade Supreme Court. John
Roberts and Samuel Alito joined the Court in President
George W. Bush’s second
term. The loss of Justice Sandra Day O’Connor, and her
replacement by Justice
Alito, made all the difference. When a case is decided
5 to 4, it only takes
one vote to change it. And
here we make a brief digression. You might
well be asking—and many people
still are—how is it possible for a corporation to have
First Amendment
rights? It
turns out the Supreme Court decided long ago
corporations
were “persons” entitled to certain constitutional
rights. In
the 1888 case of Pembina Consolidated Silver Mining Co. v.
Pennsylvania, the Court
said, quote, "Under the designation of 'person' there
is no doubt that a
private corporation is included. Such corporations are
merely associations of
individuals united for a special purpose and permitted
to do business under a
particular name.”
Over the decades that
have followed, the Supreme Court has reaffirmed this
holding many times. And
free press fans should be happy that corporations do
have at least some First Amendment rights.
After all, the New York Times is a corporation. The
Washington Post is a corporation. Now,
that doesn’t mean corporations necessarily have
exactly
the same First Amendment rights as individuals.
McConnell
v FEC proved that. But
to get back to our story. David Bosse
watched Michael Moore’s political
documentary “Farenheit 9-11” in 2004. It
seems an unlikely choice for a conservative activist. But Bosse
didn’t watch the movie for entertainment. He was doing
research for Citizens
United. Citizens
United proclaims its
mission to be to “reassert the traditional American
values of limited
government, freedom of enterprise, strong families,
and national sovereignty
and security.” Citizens
United receives
some of its donations from corporations. Although
Bosse disagreed with just about everything in
Michael Moore’s movie, he came away impressed.
He said, “I saw its ability to drive
discussion.” He
began to think about making movies for
Citizens United that pushed a conservative agenda. “I
wanted to counterpunch,”
he said. He
began by calling, he said, “Every friend in the
conservative movement I knew.” Some were
openly skeptical, others encouraging.
Bosse said, “I’m just going to do it.”
Even though, “I didn’t know the front of a
camera from the back of a
camera.” Bosse’s
first production was a movie called “Celsius
41.11.” It
was a response to Moore’s
film, both a tribute to George W. Bush’s war on
terrorism and an attack on the
2004 Democratic candidate for president, John Kerry. The movie
questioned Kerry’s anti-war record
and attacked his qualifications for president.
Celsius 41.11, by the way, according to film’s
tagline, is "The
Temperature at Which the Brain Begins to Die." The
movie was put together in record time. It opened in
Washington DC in late December
and was shown in 116 theaters across the country for a
three-week run. Bossie
had hoped to take out television ads promoting his
movie. But
there was a problem.
The ads would run during the 60-day period
before the general election. The
McCain-Feingold law prohibited outside organizations
and corporations from
purchasing political ads on radio and television in
the two months before
elections. Bosse’s
film won a lot of praise from movement
conservatives. His
political friends called
and said, “Wow, you need to do more like that.”
Bosse didn’t need convincing. He
saw the medium of film as a potentially powerful force
for political change.
You can put a movie on television and deliver
it right into people’s living rooms. You
can have 90 solid minutes or more to persuade and
energize voters. Two
years after the success of “Celsius 41.11,” Bosse
began
thinking about making a movie about Hillary Clinton. At the time,
she was considered the odds-on
favorite to win the 2008 Democratic nomination for
president. Bosse
had worked in the 1990s for a House
Committee that looked into the financial affairs of
the Clintions. Bosse
said, “Who knows more about Hillary
Clinton than me? Very few people.” Bossie
recruited a “who’s-who” list of conservative
commentators to appear as interview subjects in his
film called “Hillary: The
Movie.” People
like Ann Coulter, Dick
Morris, Robert Novak, Larry Kudlow, and Newt Gingrich. Kathleen
Willey appeared to discuss attacks
by the Clintons that resulted from her alleging a
sexual assault by Bill
Clinton. None
of the commentators had anything good to say about
Hillary Clinton.
The Clintons were
described as “power hungry.” “They’ll stop at
nothing,” one said.
They were accused of covering up evidence of
wrong-doing. One
commentator described
Clinton’s Presidential Library as “Little Rock’s Fort
Knox.” Dick
Morris said, “Hillary Clinton is the
closest thing we have in this country to a European
socialist.” The
movie ends darkly with Morris saying, “We
must never forget the fundamental danger that this
woman poses to every value
we hold dear. You
see, I know her.” The
movie cost over one million dollars to produce. But Citizens
United was worried.
It suddenly appeared that the wheels were
coming off Clinton’s campaign. She
unexpectedly lost the caucuses in Iowa to Barrack
Obama. If
the movie didn’t come out soon, and
Clinton’s campaign continued to fall apart, who would
pay money to see the movie? Bosse
decided to release the movie as soon as possible—well
ahead of when he originally intended. He
quickly put together television ads promoting the
movie’s release.
Citizens
United knew full well that the ads would run afoul
of restrictions in the McCain-Feingold campaign
finance law. In
fact, that was probably the point. Part of a
strategy to undo McCain-Feingold. Bosse
and Citizens United argued they had a First Amendment
right to advertise their movie anytime they wanted to,
even during a campaign.
Bosse objected to the FEC’s insistence that ads for
the movie contain an
explicit disclaimer.
Bosse complained
that the disclaimer would turn the spot into a
political ad and detract from
its effectiveness.
“All I’m trying to do
is make people pick up a movie ticket,” he said. The
FEC also said it would be an illegal campaign
contribution for Citizens United to pay a cable
company to make the movie
available on video and demand. Moreover,
if the combined gifts funding the movie exceeded
$3000, all the donors’ names
would have to be disclosed. In the view
of the FEC, what Citizens United did was no different
than if General Motors or
Google made a movie favoring a particular candidate. Citizens
United filed suit against the Federal Election
Commission. Bosse
saw the FEC’s
restrictions as a blatant First Amendment violation. “It’s the
First Amendment,” he said. “The first
one!” The
case was first heard by a panel of three federal
district court judges.
The court sided
with the FEC. In
the court’s view the
movie was a 90-minute campaign ad arguing that Senator
Clinton is unfit for
office and that viewers should vote against her. The court
held that the FEC correctly applied
the McCain-Feingold law and that the law was
constitutional. Bossie
and his legal team appealed directly to the Supreme
Court. They hired a Dream Team of lawyers.
Chief among them was Ted Olson, former
solicitor general of the United
States. He was joined by Citizens United counsel,
Michael Boos, and Floyd
Abrams, a highly respected First Amendment lawyer who
worked on the Pentagon
Papers case. For
Olson, the case was special. Citizens
United had dedicated the movie
“Hillary” to his wife, Barbara Olson.
Barbara Olson was a conservative commentator
who was a passenger on
American Airlines Flight 77 when it crashed into the
Pentagon on Sept. 11,
2001. She
was also a Clinton critic and
author of the book, "Hell to Pay: The Unfolding Story
of Hillary Rodham
Clinton." In
Bossie’s view, Ted Olson was "singularly responsible
for our winning this case." Olson decided to transform
the case from a
narrow one challenging a few specific provisions of
McCain-Feingold into an all-out
assault on the law's constitutionality. He
argued that there McCain-Feingold law created a
slippery
slope that could lead to an evisceration of protection
for crore political
speech. He
urged the Court to overturn
the 2003 McConnell decision and free corporations to
make whatever political
pitches they chose to make. Concern
about the slippery slope was evident when the Supreme
Court heard oral arguments. The attorney
for the FEC, Deputy Solicitor General Malcolm Stewart,
was asked if the government
could ban the publication of a book if it mentioned a
candidate for office
within the election time frame. Stewart
said that it could. "That's pretty
incredible," Justice Samuel Alito said. Then
came questions about electronic devices such as the
Kindle. "If it has one name, one use of the
candidate's name, it would be
covered, correct?" Chief Justice John G. Roberts Jr.
asked. "That's
correct," Stewart replied. "It's
a 500-page book, and at the end it says, 'And so
vote for X,' the government could ban that?" Roberts
asked. This
was too much for the Court’s conservatives. The
government’s answers to the hypotheticals sent a chill
down the Supreme
Court," Bossie said.
Bossie said
the slippery slope argument turned justices against
the FEC and in favor of
Citizens United. Stewart
tried to argue for the FEC that the case should be
decided on narrow grounds. There was no
need to reconsider the large First Amendment question
about the limitations on
corporate speech.
But it they did go
there, the law should be upheld. Even
direct regulation of political speech is permissible
if the government can show
a “compelling need” for the regulation.
And preventing corruption and the appearance of
corruption was a
compelling justification. But
the majority was skeptical. Why should
speech from corporations be more
corrupting than speech from individuals?
Can’t we trust citizens to decide the value of
speech for themselves? Citizens
United had its five votes. The
opinion for the majority was written by Justice
Anthony
Kennedy. He
invalidated
McCain-Feingold’s most contested provision.
The provision that barred corporations from
using their general treasury
funds for express advocacy or electioneering
communications. The
law applied to broadcast electioneering
communications within 30 days of a primary election
and 60 days of a general
election. Kennedy
said that under the law, many forms of political
speech became felonies.
He gave some
examples: “The
Sierra Club runs an ad,
within the crucial phase of 60 days before the general
election, that exhorts
the public to disapprove of a Congressman who favors
logging in national forests;
the National Rifle Association publishes a book urging
the public to vote for
the challenger because the incumbent U. S. Senator
supports a handgun ban; and
the American Civil Liberties Union creates a Web site
telling the public to
vote for a Presidential candidate in light of that
candidate’s defense of free
speech.” Justice
Kennedy began his analysis by noting, “The First
Amendment has its fullest and most urgent application
to speech uttered during
a campaign for political office.” He
said it was well established that “political speech of
corporations or other associations should not be
treated differently simply
because such associations are not ‘natural persons.’”
Political speech is no
less valuable, Kennedy said, when it “comes from a
corporation rather than an
individual.” Kennedy
described the censorship presented by the case as
“vast
in its reach.” He
wrote, “The Government
has muffled the voices that best represent the most
significant segments of the
economy.” And “the electorate [has been] deprived of
information, knowledge and
opinion vital to its function.” Kennedy
said what the government was doing through the
McCain-Feingold law amounted to nothing less than
“thought control.”
Kennedy wrote, “The First Amendment confirms
the freedom to think for ourselves.” Whether
the movie “Hillary” was fair or not was beside the
point. The
Court opinion notes, “Some
members of the public might consider Hillary to be
insightful and instructive;
some might find it to be neither high art nor a fair
discussion on how to set
the Nation’s course; still others simply might suspend
judgment on these points
but decide to think more about issues and candidates.
Those choices and
assessments, however, are not for the Government to
make.” Kennedy
concluded, “The First Amendment underwrites the
freedom to experiment and to create in the realm of
thought and speech.
Citizens must be free to use new forms, and new
forums, for the expression of
ideas. The civic discourse belongs to the people, and
the Government may not
prescribe the means used to conduct it.”
The
decision was ironical in one sense. Citizen
United’s original objections to the
law were the only part of the law that survived. The Court
upheld McCain-Feingold’s disclaimer
and donor disclosure requirements. Justice
Stevens wrote for the Court’s four dissenters. He called
the decision “profoundly
misguided.” He
said he “emphatically
dissented” from the Court’ principal holding.
It threatened, he said, to undermine the
integrity of elected institutions
across the Nation and damage the Supreme Court as an
institution. Stevens
called the decision “backwards in many senses.” He
wrote,
“It elevates the majority’s agenda over the litigants’
submissions, facial
attacks over as-applied claims, broad constitutional
theories over narrow
statutory grounds, individual dissenting opinions over
precedential holdings,
assertion over tradition, absolutism over empiricism,
rhetoric over reality.”
In
the minds of the four dissenters, the strong “societal
interest
in avoiding corruption and the appearance of
corruption” provided more than
enough justification for regulating corporate
expenditures on candidate
elections. Stevens
concluded by calling the decision “a rejection of
the common sense of the American people.”
He noted that the need to prevent corporations
from undermining
self-government has been recognized since the nation’s
founding. And
that the corrupting potential of
corporate electioneering has been a major concern
“since the days of Theodore
Roosevelt.” Stevens
wrote, “While
American democracy is imperfect, few outside the
majority of this Court would
have thought its flaws included a dearth of corporate
money in politics.” The
conservative activists at Citizens United were
thrilled
with the ruling.
Citizens United spent
about $1.25 million in legal fees on the case -- so
much, Bossie said, that it
"makes you cry." But, he said, it was worth every
dollar. Just
days after the Citizens United decision, a new
president gave his first State of the Union speech. Near the end
of the speech, President Barrack
Obama had a few things to say about the decision. He said,
“With all due deference to
separation of powers, last week the Supreme Court
reversed a century of law
that, I believe, will open the floodgates for special
interests, including
foreign corporations, to spend without limit in our
elections." Obama
added, “I don't think American elections should be
bankrolled by America's most
powerful interests or, worse, by foreign entities.
They should be decided by
the American people.” Democratic
lawmakers stood to cheer and applaud. In the
second row of the House chamber, a
justice of the Supreme Court had a different reaction.
"Not true, not
true," Justice Alito appeared to say, as he shook his
head and furrowed
his brow. Spending
soared in the first election after Citizens
United. Spending
in congressional races jumped
46 percent from the election before. Fred
Wertheimer had worked long and hard on the issue of
campaign reform.
Wertheimer called Citizens United
“a disaster for the
American people” and “the most radical and destructive
campaign finance
decision in Supreme Court history.” The American
Enterprise Institute’s Norman
Ornstein compared the case to the infamous 1857 Dred
Scott decision. Ornstein
said, “The Roberts court is going to go down in
history in the same way Chief
Justice Roger Taney and his court went down in history
with Dred Scott.” Senator
John McCain had a warning. “I promise
you, there will be huge scandals,”
he said. “There’s too much money washing around, too
much of it we don’t know
who’s behind it, and too much corruption associated
with that kind of money.” Polls
showed that over two-thirds of Americans supported a
constitutional amendment overturning Citizens United. Is that
likely to happen?
Constitutional amendments are hard. They are
almost impossible without the broad
support of both parties.
Citizens
United is likely to remain the
law, whatever most of the public might think about it. |