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.
NPR's Nina Totenberg On The Ruling's Implications
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 ruling.
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