Supreme Court Eases Campaign Finance Curbs

In a sweeping decision, the Supreme Court struck down Thursday the ban on corporate spending on federal and state elections. The much-anticipated opinion opens the way potentially for hundreds of millions of dollars to be spent on this year's midterm elections.

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MADELEINE BRAND, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Madeleine Brand in California.

MELISSA BLOCK, host:

And I'm Melissa Block in Washington, where today, the Supreme Court issued a major and long-awaited ruling on campaign finance. By a five-to-four vote, the court swept aside the century-old ban on corporate spending in elections. The decision potentially transforms the influence of big money in government.

BRAND: It leaves corporations free to spend unlimited amounts of shareholder money to influence elections. And it leaves unions free to do the same with their members' money.

NPR legal affairs correspondent Nina Totenberg reports.

NINA TOTENBERG: Since 1907, the nation's campaigning finance laws have, for all practical purposes, banned corporate spending on candidate elections. In 1947, the ban was extended to unions and in 2002, Congress passed the McCain-Feingold Law to plug loopholes that had emerged over the years. One provision banned broadcasting a candidate ad 30 days before an election if it was financed with corporate funds. The Supreme Court upheld the law seven years ago citing earlier rulings on corporate spending, but today a decidedly more conservative court with two new Bush appointees now in the mix reversed that ruling.

The decision came in a case brought by a conservative nonprofit group that made a film attacking Hillary Clinton and wanted to run it in a day shortly before the presidential primary campaign. The court agreed today that the film was an attack ad, not an issue ad. But it says that the group should have been able to run the ad as it wished. Writing for the five-justice majority, Justice Anthony Kennedy acknowledged the longtime ban on corporate spending, but said it is censorship that is vast in its reach and that it should not have been upheld by the court previously.

When government seeks to use its full power to command where a person may get his or her information, said Kennedy, it uses censorship to control thought. The First Amendment right of free speech confirms the freedom to think for ourselves. Joining Kennedy in the majority were Chief Justice John Roberts and Justices Scalia, Alito and Thomas. Thomas was the lone dissenter from the second part of Kennedy's opinion upholding laws that mandate disclosure of information about who pays for political ads.

Writing for the four dissenters, Justice John Paul Stevens called the court's decision a radical departure from 100 years of law. Speaking from the bench in a halting voice, the 89-year-old Stevens accused the majority of ignoring thousands of pages of congressionally compiled evidence about the corruptive influence of corporate money in politics. And he blasted the majority for imposing what he called its own agenda on public policy while ignoring the branch of government charged with making such policy choices: Congress. Nothing in the current law, he insisted, bans corporations from expressing an opinion.

In this case, the nonprofit organization that wanted to use corporate money to fund its ad campaign already had a political action committee of regulated and legal donor funds that could have been used right up to Election Day to fund TV ads. Instead, it wanted to use corporate general treasury funds and for the first time today, the Supreme Court said it could. Joining Stevens in dissent were Justices Ginsburg, Breyer and Sotomayor. Reaction to the decision was fast and furious. President Obama, in a statement, condemned it as a victory for Wall Street, big banks, big oil, health insurance companies and other powerful interests.

But Senate Republican Leader Mitch McConnell praised the court for quote "restoring the First Amendment rights of corporations and unions." Whether they loved it or hated it, campaign law experts called the decision an earthquake in First Amendment law. Here's Rick Hasen of Loyola Law School, who writes a blog on campaign law.

Professor RICK HASEN (Law, Loyola Law School): It is transformative. It's going to have major effects not only on federal elections, but in state and local elections, including judicial elections across the country. Much more money is going to flow into those elections. That raises concerns about both corruption and inequality.

TOTENBERG: Indeed, 24 states also have corporate spending bans that likely now will be struck down. Hasen, like many other critics of today's ruling, accused the court majority of substituting its judgment for that of Congress.

Prof. HASEN: This is an activist court. It reached out and grabbed this case and used it as a vehicle for transforming First Amendment law.

TOTENBERG: For campaign reformers, today's ruling was a doomsday. Fred Wertheimer has helped craft campaign reform legislation since Watergate.

Mr. FRED WERTHEIMER (Campaign Reform Advocate): This is a disaster for the American people. It's going to unleash unprecedented amounts of corporate influence seeking money on elections. It's going to create unprecedented opportunities for corporate corruption of government decisions. It is a change in the character of our elections and our democracy.

TOTENBERG: Wertheimer said that corporations may now spend $5 or $10 million, for example, to defeat just one or two members of Congress hostile to their interest, and that that will be enough to send a message to the others.

Mr. WERTHEIMER: Now what that does is create fear among all members and it would not take more than a couple of examples of corporations spending enormous amounts to defeat a member who voted wrong to affect the entire psyche of the congressional decision-making process.

TOTENBERG: Jan Baran, who has brought many of the cases challenging campaign regulations in recent decades, says campaign reformers are hyperventilating.

Mr. JAN BARAN (Election Lawyer): It is true that unions and corporations under this opinion will be able to pool their money or spend their money and it could affect an election, but the way it's going to affect election is that it's going to express certain opinions about candidates. And as the court noted today, that's what the First Amendment protects.

TOTENBERG: Brad Smith, another critic of campaign restrictions, agrees.

Mr. BRAD SMITH: At a federal level, I think there is no reason to believe that we're going to see the kind of outpouring that some of the more histrionic horror stories have set. We expect to see more speech. We think that's a good thing, but the idea that corporations are going to devote 10 percent of their profits or something like that to make independent political expenditures is just absurd.

TOTENBERG: So, in terms of the political landscape, who benefits from today's ruling? Most experts including those who applaud the ruling say Republicans will benefit most. Again, Jan Baran.

Mr. BARAN: The potential beneficiary here would be the party or the candidates who are perceived as being more beneficial to free enterprise and business.

TOTENBERG: And Loyola Law School's Rick Hasen.

Prof. HASEN: Republicans are going to benefit on the presidential level because I'm sure they were scratching their heads about how they could match the Obama $745 million campaign fundraising juggernaut that he had in 2008. So now they've got one way to try and equalize things.

Nina Totenberg, NPR News, Washington.

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Supreme Court Rips Up Campaign Finance Laws

A Century Of U.S. Campaign Finance Law

The decades-old system of rules that govern the financing of the nation's political campaigns was partially upended by a U.S. Supreme Court ruling issued just ahead of the pivotal 2010 midterm congressional election season.

Thursday's landmark decision, approved by a 5-4 margin, could unleash a torrent of corporate and union cash into the political realm and transform how campaigns for president and Congress are fought in the coming years.

Republicans and Democrats scrambled to untangle the full implications of the decision to overturn a 20-year-old Supreme Court ruling that barred corporations from spending freely to support or oppose candidates.

"It's the most major Supreme Court decision in the area of campaign finance in decades — and a significant First Amendment decision," says Nathaniel Persily, a political scientist and law professor at Columbia University. "We don't know its practical impact yet, and I don't think it's the last word from the court," he said.

The new ruling blurs the lines between corporate and individual contributions in political campaigns. It also strikes down part of the 2002 McCain-Feingold campaign finance law that banned unions and corporations from paying for political ads in the waning days of campaigns.

Even before the court's decision, national political campaigns had been growing increasingly expensive. Watchdog groups worry that by removing limits on expenditures by corporations that are not coordinated with candidates' campaigns, the court will boost the role of special interests in politics.

"As long as they do it independently, they can spend whatever they want," notes NPR's Nina Totenberg. "It will undoubtedly help Republican candidates since corporations have generally supported Republican candidates more."

Some important limits do remain intact: Corporations still cannot give money directly to federal candidates or national party committees. That ban dates to 1907. The justices also upheld some other restrictions, including disclosure requirements for nonprofit groups that advocate for political candidates.

Persily says the ruling is just the latest in a series of decisions by a conservative court that has already whittled away at campaign finance laws.

"On its own, it will not be responsible to opening the floodgates to corporate money ... because the floodgates were pretty wide open to begin with," Persily says.

In terms of the 2010 midyear elections, Persily predicts there will be some advertisements run by corporations and unions that wouldn't have been run otherwise; however, the previous standard was fairly permissive.

NPR's Peter Overby says that while the impact on national elections may not be fully clear yet, the decision is likely to be felt in judicial elections at the state level.

"There's a national trend of increasing spending in judicial elections, and the players who have the biggest stake in these elections are lawyers, unions and corporations," Overby says. "The corporations and unions have been trying to find ways to get in, and this decision seems to erase the restrictions that were there."

The Supreme Court decision on corporate spending in political campaigns overturns a 20-year-old rule

The Supreme Court decision on corporate spending in political campaigns overturns a 20-year-old ruling. Michael McCloskey hide caption

itoggle caption Michael McCloskey

President Obama swiftly blasted the court's decision, calling on Congress to devise a "forceful response" as quickly as possible.

"The Supreme Court has given a green light to a new stampede of special interest money in our politics," Obama said in a statement. "It is a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans."

On Capitol Hill, reaction was deeply divided between supporters of the campaign finance rules that were rejected and those who defended the court's ruling.

Rep. Chris Van Hollen, a Democrat from Maryland, said lawmakers have to use the decision to help voters understand how broken the system is.

"This has got to be a wakeup call to every citizen that they cannot allow the big corporations to call the shots on these elections," he said.

House Republican Leader John Boehner of Ohio called the decision "a big win for the First Amendment" as long as donors disclose every dollar they spend on campaigns.

"Let the American people decide how much money is enough," he said.

Senate Democratic Whip Dick Durbin said lawmakers must now focus on creating a system where campaigns can be financed fairly. "It is the only way [we] can ensure that our candidates and elected officials focus on addressing the nation's problems and not on the limited interests of the wealthy and powerful few," he said.

One potential vehicle for Democrats to try to limit the impact of the ruling is through a bill Durbin is co-sponsoring called the Fair Elections Now Act. It aims to allow candidates to choose to run for congressional office without relying on large contributions, big money bundlers, or donations from lobbyists.

But with Thursday's decision, the Supreme Court came down with a sweeping free-speech justification that could restrict Congress's flexibility to re-establish new regulations.

"We find no basis for the proposition that, in the context of political speech, the government may impose restrictions on certain disfavored speakers," Justice Anthony Kennedy wrote for the majority. "The court has recognized that First Amendment protection extends to corporations."

In a powerfully worded, lengthy dissent, Justice John Paul Stevens lamented the decision and called the majority "profoundly misguided." He said, "The court's ruling threatens to undermine the integrity of elected institutions around the nation." Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor joined Stevens' dissent, parts of which he read aloud in the courtroom.

The original case before the court seemed an improbable vehicle for such a dramatic re-examination of campaign funding regulations.

Brought by Citizens United, a nonprofit group, against the Federal Election Commission, the case presented a seemingly straightforward question: Do campaign finance restrictions on corporate spending apply to Citizen United's plan to run advertisements for an anti-Hillary Clinton documentary at the peak of her 2008 presidential run?

But the high court ended up in a much broader examination of constitutional issues that questioned the entire system that has been built up over decades to regulate the role of corporate money in politics.

Ever since justices first heard arguments on the Citizens United case last March, they have gone to unusual lengths before rendering a decision.

The court scheduled a rare re-argument in September — a month before the fall term officially began. And justices ordered lawyers from both sides to expand their scope to address not just the corporate electioneering issue at play in Citizens United but the constitutionality of all limits to corporate political speech.

Thursday's decision was even issued on a day the court does not normally deal with such issues.

At the center of the court's inquiry is the McCain-Feingold Act, which prohibited "electioneering communications" paid for by corporations or unions from being broadcast or transmitted 30 days before a presidential primary and 60 days before the general election. Opponents of the law say it allows the Federal Election Commission to in effect restrict free speech.

But the court also reached even further back to re-examine a 1990 precedent that upheld restrictions on corporate spending to support or oppose political candidates.

Citizens United, which filed the suit in 2008, is a nonprofit group that advocates for conservative ideals and candidates.

Citizens United wanted to air a 90-minute documentary chronicling Clinton's more than 30 years in public life from a conservative perspective through news clips, interviews with acquaintances and other material. Citizens United spokesman Will Holley said the film was sold online and through retailers for $19.95 and was in limited distribution at select movie theaters during 2008.

But questions arose when Citizens United sought to advertise Hillary The Movie on television in January 2008 — the same month as major Democratic primaries — without running any disclaimers or disclosures of donors.

The FEC barred the ads from running without the disclaimers. Citizens United claimed that the advertisements were commercial speech more akin to a documentary, rather than opposition to candidate Clinton.

NPR's Andrea Seabrook and Liz Halloran contributed to this report

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