Bar News - August 13, 2010
Constitutional Law: “Money Is Speech”: Citizens United Revisited
By: William L. Chapman
Along with President Obama, many citizens recoiled at the Supreme Court’s decision in January permitting corporations to engage in unrestricted political speech in support of or against candidates for federal office. In Citizens United v. Federal Election Commission, 103 S.Ct. 876 (2010), Justice Kennedy, writing for a 5-4 majority, struck down, on First Amendment grounds, the ban on corporations and unions using their general funds to engage in independent (not coordinated) candidate advocacy.
|William L. Chapman
The decision immediately led to a round of criticism,[i] not least that the court could have decided the case on non-constitutional grounds, and dire predictions that corporate America would dominate elections through their immense war chests. Time will tell whether the critics are right. The question I consider is whether the decision fits within the court’s campaign finance jurisprudence.
“Money is speech”
Because the law at issue in Citizens United, section 441b of Title 2, regulated money, not speech, one can fairly ask why the First Amendment is even involved. The notion that “money is speech” was first announced in 1976 in Buckley v. Valeo, 424 U.S. 1 (1976) (per curiam). There, the court upheld individual contribution limits for federal candidates because large contributions pose “the danger of actual quid pro quo arrangements” and create “the appearance of improper influence” that could erode “‘confidence in the system of representative Government.’” Id. at 27. But the court invalidated, as a violation of the First Amendment, limits on individual independent expenditures because limiting money spent “on political communication during a campaign … necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached.” Id. at 19.[ii]
Corporate political speech
Two years after Buckley, the court, in First Nat. Bank of Boston v. Bellotti, 435 U.S. 765 (1978), struck down a state referendum law that prohibited corporate expenditures on issues that did not “materially affect” the corporation. Drawing on its commercial speech jurisprudence, the court explained that advertising is “constitutionally protected not so much because it pertains to the seller's business as because it furthers the societal interest in the ‘free flow of commercial information.’” If corporations may engage in commercial speech, how, consistent with the First Amendment, could they be prohibited from engaging in core political speech that is central to the First Amendment? “In the realm of protected speech, the legislature is constitutionally disqualified from dictating the subjects about which persons may speak and the speakers who may address a public issue.”
But Bellotti did not address “the problem of corruption of elected representatives through the creation of political debts,” and the court stated that because corporations have the “right to speak on issues of general public interest implies no comparable right in the quite different context of participation in a political campaign for election to public office.” 435 U.S. at 788 n.26.
Regulating the corporate treasury
In FEC v. Massachusetts Citizens for Life, Inc., 479 U.S 238 (1986)(MCFL), the court held that section 441b’s PAC option could not be constitutionally applied to a nonprofit organization established to promote political ideas, not engage in business. But all members of the court agreed on the need to regulate the expenditure of corporate general funds to avoid corruption and the appearance of corruption in the political process.[iii] Restricting “‘the influence of political war chests funneled through the corporate form’ …protect[s] the integrity of the marketplace of political ideas.’” Id. at 257. Integrity did not mean all participants must have equal resources because the “availability of funds is after all a rough barometer of public support.” Id. at 258. In contrast, expenditures from corporate general funds are no measure of the “popular support for the corporation's political ideas;” banning such funds prevents “the potential for unfair deployment of wealth for political purposes” and ensures that competition “in the political arena is truly a competition among ideas.” Id. at 259.
MCFL’s concern for integrity in the political marketplace informed the decision in Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990).[iv] There, the court upheld a state law that barred corporations from using the general funds to make independent expenditures to support or oppose candidates for state office. The aim of the law was to avoid the “real or apparent danger of corruption.” Id. at 659. The corruption was not the quid pro quo corruption of Buckley, but what MCFL discussed: “the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public’s support for the corporation’s political ideas.” Id. at 660.
Finally, as recently as 2003, the court’s view that corporations and unions could not use general funds for candidate advocacy seemed fixed. That year, in McConnell v. Federal Election Commission, 540 U.S. 93, 203 (2003), it observed: “Since Buckley, Congress' power to prohibit corporations and unions from using funds in their treasuries to finance advertisements expressly advocating the election or defeat of candidates in federal elections has been firmly embedded in our law,” and that it “has been this Court's unanimous view” that section 441b’s option to speak through PACs “has provided corporations and unions with a constitutionally sufficient opportunity to engage in express advocacy” (emphasis added).
“Democracy is premised on responsiveness”
In Citizens United, the court considered section 441b to be an “outright ban” on candidate advocacy even contained the PAC option. The law imposed restrictions on “certain disfavored speakers” – corporations and unions. So viewed, the court cited Bellotti for the proposition that the First Amendment prohibits the government from “restrict[ing] political speech based on the speaker’s corporate identity.” 130 S.Ct. at 903. That was Bellotti’s “central principle,” and it teaches that a “ban on corporate independent expenditures to support candidates” is unconstitutional. Id. Reliance on Bellotti, however, is problematic. As discussed, the Bellotti court made clear that its holding did not imply that corporations have a First Amendment right to engage in advocacy “in the quite different context of … election to public office.” 435 U.S. at 788 n.26.
The court also rejected the “antidistortion” concern discussed in MCFL and Austin. Citing Buckley, it ruled that the First Amendment prohibits the government from attempting to “‘equaliz[e] the relative ability of individuals and groups to influence the outcome of elections.’” 130 S.Ct. at 904. Nor does the First Amendment require corporate expenditures to reflect public support for the corporation's political ideas: “All speakers …use money amassed from the economic marketplace to fund their speech.” Id. at 905. And, noting that section 441b’s ban did not apply to “media corporations,” the court stated the exemption was “all but an admission of the invalidity of the antidistortion rationale” since media corporations have the same need as non-media corporations to engage in campaign advocacy. Id. at 906.
Turning to the “anticorruption” concern discussed in Buckley, the court adopted Buckley’s reasoning that the lack of coordination with the candidate “‘not only undermines the value of the expenditure to the candidate, but also alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate.’” Id. at 908. Section 441b, thus, had “a chilling effect extending well beyond the Government's interest in preventing quid pro quo corruption.” Id.[v]
But at the heart of the decision is the court’s belief, which critics have questioned, about the hardiness of representative democracy:
“It is well understood that a substantial and legitimate reason, if not the only reason …to make a contribution … is that the candidate will respond by producing those political outcomes the supporter favors. Democracy is premised on responsiveness (emphasis added).
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“The appearance of influence or access, furthermore, will not cause the electorate to lose faith in our democracy … The fact that a corporation, or any other speaker, is willing to spend money to try to persuade voters presupposes that the people have the ultimate influence over elected officials. This is inconsistent with any suggestion that the electorate will refuse ‘to take part in democratic governance’ because of additional political speech made by a corporation or any other speaker.”
Id. at 910.[vi]
Central to the First Amendment is the “marketplace of ideas.” As Justice Holmes first observed, “the ultimate good desired is better reached by the free trade in ideas – that the best test of truth is the power of thought to get itself accepted in the competition of the market.” Abrams v. United States, 250 U.S. 616, 630 (Holmes, J., dissenting). What the Citizens United court does not accept is the concern stated in Austin for “the corrosive and distorting effects” of corporate wealth that “can unfairly influence elections when it is deployed in the form of independent expenditures.” 494 U.S. at 660. As the MCFL court stated: this antidistortion concern “reflects the conviction that it is important to protect the integrity of the marketplace for political ideas.” 479 U.S. at 257.
Whether Citizens United has undercut that integrity by opening the political marketplace to corporate and union general funds remains to be seen.
[i] See, for example, Ronald Dworkin, “The Decision That Threatens Democracy,” The New York Review of Books (Feb. 13, 2010).
[ii] The proposition that “money is speech” has not gone unchallenged since Buckley. In Nixon v. Shrink Missouri Government PAC, 528 U.S. 377, 399 (2000), Justice Stevens, concurring, stated: “Money is property; it is not speech.” And the proposition has been ardently defended: “It should be obvious, then, that a law limiting the amount a person can spend to broadcast his political views is a direct restriction on speech.” McConnell v. Federal Election Commission, 540 U.S. 93, 254 (2003)(Scalia, J., dissenting in part).
[iii] Justice Brennan wrote for four other members of the court; Chief Justice Rehnquist wrote separately for the remaining members, noting that the court had “unanimously endorsed the ‘legislative judgment that the special characteristics of the corporate structure require particularly careful regulation.’” Id. at 267.
[iv] After the first oral argument in Citizens United, the court asked the parties to brief the constitutionality of section 441b, including whether it should overrule Austin.
[v] The court also pointed to the fact that “26 States do not restrict independent expenditures by for-profit corporations [and] [t]he Government does not claim that these expenditures have corrupted the political process in those States;” further, the legislative record exceeded 100,000 pages but did “not have any direct examples of votes being exchanged for … expenditures.” Id. at 910.
[vi] The government also defended section 441b on the ground of “protecting dissenting shareholders from being compelled to fund corporate political speech.” 130 S.Ct. at 911. The court dismissed this argument because “[t]his asserted interest, like Austin's antidistortion rationale, would allow the Government to ban the political speech even of media corporations … furthermore, little evidence of abuse that cannot be corrected by shareholders “‘through the procedures of corporate democracy.’” Id.
William L. Chapman is with Orr & Reno in Concord.