Campaign Finance: The U.S. Supreme Court, Citizens United and corporate election spending
Few U.S. Supreme Court decisions of the past 20 years have opened the door for sweeping change in the basics of our democracy as the Citizens United decision handed down in January 2010.
In Citizens United, the Court cleared the way for corporations to engage in independent spending to support or oppose candidates in elections at all levels – from the town council to the U.S. Presidency.
In their decision on Citizens United, eight of the nine Supreme Court Justices supported the idea that states and Congress can require disclosure in these campaigns. After all, voters cannot make informed judgments about what they see in campaign advertisements and literature without knowing who paid for them.
The Wyoming Legislature passed Senate File 3–Campaign finance-organizations in the 2011 General session. The new law amends state statutes to comply with the Supreme Court’s decision. In testimony to the Senate’s Corporations, Elections and Political Subdivisions Committee in January, the Equality State Policy Center provided a brief analysis of the decision and its implications for state elections. The ESPC also suggested a series of amendments to the bill to require expansive disclosure of independent expenditures by corporations, unions, and other professional organizations. Ultimately, the Legislature adopted an amendment that will require corporations and others mounting independent expenditure campaigns to register with the Wyoming Secretary of State and report their contributions and spending on campaign advertising.
Nevertheless, the disclosure that will be required by Wyoming law does not mitigate the potential for the biggest corporations, with their deep treasuries, to dominate the voices heard in state campaigns in Wyoming and elsewhere around the country. Many of these financial dreadnaughts operate in the state. Some extract coal and other energy and mineral resources. The railroads have invested billions to haul coal from Wyoming mines to distant markets and carry millions of tons of other freight through the state on its way to market.
Some argue the Citizens United decision will prove beneficial to national and state politics. These proponents aver that it serves free speech and the First Amendment by telling government it cannot constitutionally regulate corporate speech in elections.
The ESPC and others contend the decision opens the floodgates for the world’s biggest corporations to pour money into elections, swamping the campaigns of candidates they oppose while lifting the candidates who pronounce their support for corporate interests. Restrictions against foreign influence in U.S. elections have been swept away by the Court in a narrow 5-4 vote that gives entities that exist only on paper the same rights as citizens who breathe and bleed. Democracy will suffer.
The Court’s reasoning relied mainly on an argument that a corporation is an “association of citizens” and therefore entitled to the free speech rights that would attach to a human. (See the U.S. Supreme Court arguments on the case here.)
The Equality State Policy Center (ESPC) respectfully disagrees with this reasoning because:
- (1) shareholders can be foreign nationals;
- (2) shareholders may also be other corporations, pension funds, and other investment vehicles as opposed to individuals;
- (3) a corporation separates and distances itself from the association of persons through a number of protections granted by government for the convenience of doing business, mainly the limitation on personal liability.
Under Citizens United, corporations get to have their cake and eat it too. When it comes to free speech, corporations are just associations of humans; but when it comes to liability, the individuals are nowhere to be seen.
To assist Wyoming residents to develop a better understanding of the decision and its implications, the ESPC offers these resources. We’re happy to add others that readers find helpful. Please email Dan Neal at dneal [at] equalitystate [dot] org if you have suggestions.
- U.S. Supreme Court decision, Citizens United v. FEC
- The New York Times article announcing the decision
- The ESPC issue briefing on the decision
- SF 3 Campaign finance-elections
- The ESPC proposed amendments to SF 3 and press release
- Campaign finance bill – final version of law passed in 2011. Read the LSO summary.
- The ESPC opening statement in its debate of the decision Jan. 10 in Laramie at the UW Law College
Links to the videos of the debate posted on YouTube:
- Beyond Citizens United v. FEC: Re-Examining Corporate Rights, by Jeffrey D. Clements, published by the American Constitution Society for Law and Policy.
- Issue brief from Lawrence Tribe talking about what Congress should do in the wake of the Citizens United decision
- “Let Freedom Ka-Ching“
- Shareholder Protection Act — amends the Securities Exchange Act of 1934 to require shareholder authorization before a public company may make certain political expenditures, and for other purposes.