Democrats Follow Obama's Lead On Finance Ruling

President Obama had sharp words in his State of the Union address for a recent Supreme Court decision. The court said long-standing campaign finance limits violated the constitutional free-speech rights of corporations.

In the audience, Justice Samuel Alito was visibly annoyed. The tiff was part of a larger controversy over the court's impact on foreign corporations.

In the long run, the prospect of corporate politicking is bad news for Democrats. But in the here-and-now, they're using the Citizens United case to rally their base.

That was the context as Obama came to that section of the speech: "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."

Alito sat with five other justices, just in front of some Democratic lawmakers. As the president hit the line "including foreign corporations," the Democrats all started a standing ovation.

Alito shook his head and seemed to mouth the words "not true."

Alito was one of the five conservatives in the majority on Citizens United v. Federal Election Commission. It's not clear whether he spoke out loud. Justice Sonia Sotomayor was sitting beside him, and she gave no sign that she heard what he said.

MoveOn.org said Thursday that 10,000 of its members rated that passage of the speech their second favorite.

And Senate Judiciary Committee Chairman Patrick Leahy gave a floor speech on Citizens United: "Can the Chinese come in and decide, in effect, American elections? It's hard to envision that this is what the founding fathers meant to enshrine in the Constitution."

There is already a law against foreign money in American politics. The justices didn't touch it in Citizens United.

"They have opened a loophole here that did not exist prior to the decision," says Fred Wertheimer of the group Democracy 21.

He and other advocates of regulating political money say foreign investors can get into American politics by buying into U.S. companies.

Their analysis says the legal language preventing such political activity exists only in the enforcement regulations.

And without language specifically in the statute itself, Wertheimer says, even the sovereign funds of other countries' governments could invest here and start playing politics.

"That's the worst-case scenario, and that door is open now, by this decision," Wertheimer adds.

But it doesn't look that way to some of Washington's top campaign finance lawyers.

Robert Lenhard, a former Democratic chairman of the Federal Election Commission, says if there's a legal loophole now, it was always there.

"What Citizens United has done is created the potential that the volume of money that could travel these rivers could grow," Lenhard says.

Ken Gross, who mainly represents corporations, says critics have simply misread Citizens United.

"That is not what this case says," Gross says. "And the law prohibiting foreign involvement stands untouched."

But whatever legal limits are untouched or carved with loopholes, Democrats on Capitol Hill are drafting legislation to fix them.

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