High Court Weighs Rules On Campaign Finance Supreme Court justices returned from their summer recess early to hear arguments Wednesday in a case involving an anti-Hillary Clinton movie. At issue is a century of campaign finance laws and whether free speech rights extend to corporations and unions.


High Court Weighs Rules On Campaign Finance

High Court Weighs Rules On Campaign Finance

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Sonia Sotomayor joins her fellow justices on the U.S. Supreme Court for the first time on Tuesday, accompanied by President Obama and Vice President Biden. Her first case as a justice involves free speech protections for corporations. Steve Petteway/Collection of the Supreme Court of the United States hide caption

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Steve Petteway/Collection of the Supreme Court of the United States

The justices of the U.S. Supreme Court have returned early from their summer recess to hear arguments in a case that could rip apart the legal underpinnings of the nation's campaign finance laws. For more than a century, for all practical purposes, those laws have barred corporations from spending money on candidate elections.

High Court Weighs Rules On Campaign Finance

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Wednesday's argument is a double first: The first argument to be heard by Justice Sonia Sotomayor, and the first time new U.S. Solicitor General Elena Kagan will argue a case before the Supreme Court.

The justices view the case as so important that they are hearing it three weeks before the official opening of the new term, and they have taken the unusual step of allowing same-day broadcast of the audio.

So what's the hoopla about? Plenty.

Campaign Safeguards Vs. Free Speech

The nation's campaign finance laws date back to the early 1900s, an era of freewheeling corporate monopolies and uninhibited corporate influence in politics.

President Theodore Roosevelt, elected on a campaign pledge of reform, was embarrassed when he learned that his own campaign had received secret corporate contributions from insurance companies, and he promptly persuaded Congress to pass legislation banning corporate campaign contributions altogether.

Sotomayor is escorted by Chief Justice John Roberts following her investiture ceremony at the Supreme Court on Tuesday. J. Scott Applewhite/AP hide caption

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J. Scott Applewhite/AP

Sotomayor is escorted by Chief Justice John Roberts following her investiture ceremony at the Supreme Court on Tuesday.

J. Scott Applewhite/AP

Forty years later, Congress extended the ban to union contributions and to spending by both corporations and unions. The Watergate scandal prompted more restrictions. And in 2002, Sens. John McCain and Russ Feingold won passage of a law that sought to plug loopholes that had made these bans into legal Swiss cheese.

One major provision of the McCain-Feingold law banned the broadcast of independent political advertisements about candidates within 30 days of an election if the ads were financed by corporate or union funds. The Supreme Court upheld this provision six years ago, but since then, conservative groups have repeatedly brought new challenges, including a relatively minor challenge that was heard by the court in March.

The argument went badly for campaign finance reform advocates when a government lawyer was asked whether Congress could also pass a law banning the publication of a corporate-funded campaign book just before an election. Yes, said the lawyer, adding that no such law exists. At the prospect of book-banning, Justice Samuel Alito blurted "that's pretty incredible," and other justices openly gaped.

In June, the justices ordered the case re-argued, only this time, they said they wanted the lawyers to focus on whether the Constitution permits any ban on corporate spending in candidate elections. In short, the court said it is considering whether to reverse decades of its own decisions.

Hillary: The Movie

At the center of the case is a slashing, 90-minute critique of Hillary Clinton called simply Hillary: The Movie. The film was produced by Citizens United, a conservative group that wanted to buy cable access to air its film during the 2008 presidential primary season. The group also wanted to broadcast ads for the movie. The message was not subtle. As one trailer put it, with quick bites from speakers in the movie: "She's no Richard Nixon, she's worse ... vindictive ... venal ... sneaky ... scares the hell out of me."

The justices of the U.S. Supreme Court have reconvened early to examine a corporate campaign finance case involving an anti-Hillary Clinton movie. Courtesy of Citizens United hide caption

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Courtesy of Citizens United

The justices of the U.S. Supreme Court have reconvened early to examine a corporate campaign finance case involving an anti-Hillary Clinton movie.

Courtesy of Citizens United

When the Federal Election Commission ruled the movie and its advertisements could not air within 30 days of a presidential primary, producer David Bossie went to court.

"People should be able to articulate ideas and visions of candidates without any repercussions," Bossie says.

A three-judge federal court panel ruled that the film could be understood as only one thing: a campaign ad telling voters that Hillary Clinton was "unfit for office."

The panel decided the film could not be broadcast right before an election because of the way it was financed. Under the 2002 McCain-Feingold law, if you want to air a movie that is the functional equivalent of an ad, just before a primary, you cannot use corporate or union general-treasury funds, and you have to disclose who paid for it.

Since Citizens United failed on both counts, the federal court judges said, neither the film nor ads for it could be aired. In making their decision, the judges pointed repeatedly to the fact that the U.S. Supreme Court had upheld the McCain-Feingold law in 2003.

The composition of the high court today, however, is far different than it was six years ago. Two new Bush appointees now sit on the court, and it is entirely possible that with three other justices long opposed to campaign funding restrictions, there is now a narrow court majority to undo nearly a century of campaign finance law.

A Question Of Funding

Election law in the United States has been built for decades on the notion that corporations and unions cannot use their general treasury funds to elect or defeat a candidate, because shareholders and union members may disagree with how the money is being spent, and because the amount of money at stake would corrupt and unbalance the system.

McCain and Feingold say there is nothing in the law that inherently prevents Bossie from airing his movie on television.

"There's no prohibition on running any kind of political advertising. It's just a question of how it's funded," says Scott Nelson, an attorney who represents McCain and Feingold.

Citizens United could have aired the movie if it didn't accept corporate contributions, Nelson observes, or if it had paid for the film with money from a political action committee, known as a PAC.

A PAC is a group of individuals who contribute their own money to fund campaign efforts. By law, their names must be disclosed. Citizens United has a PAC but didn't want to use it for the film. As producer Bossie puts it, "I shouldn't be forced to use some sort of mechanism because somebody in some building here in Washington tells me I have to."

Bossie, like other opponents of the McCain-Feingold law, sees campaign spending and disclosure restrictions as interfering with the First Amendment guarantee of free speech.

Should Corporations Have The Same Free Speech Rights As People?

"The most important right we have in a democracy is the right to participate in the electoral process. We've smothered that right with the most incomprehensible, burdensome, unintelligible set of regulations and laws, some of which are criminal laws, surrounding that freedom. That's intolerable," says Ted Olson, who argued in support of the McCain-Feingold law as solicitor general for the Bush administration. On Wednesday, he will be arguing against it.

Olson maintains that corporations are individuals, in a constitutional sense, and should be able to express their views. Money, he says, is speech.

"You can't speak without money," Olson says. "In this day and age, you need resources to reach people. And that's part of the right to speak." He adds: "There's nothing more important under the First Amendment than to talk about elections."

The question always is: Who does the First Amendment apply to? Do only individuals have the right of free speech? Or does this right extend to corporations and unions as well?

The answer has profound consequences, says Trevor Potter, former chairman of the Federal Election Commission and a longtime McCain adviser.

"Does it apply to foreign nationals? Does it apply to the government of China or Russia or Iran in this country? Does it apply to corporations? Those are all different players who are not individuals, not voters, not citizens," Potter says

Corporations, he notes, are creations of the state established, in essence, to enable businesses to amass wealth. Corporations, unlike individuals, can live forever, and they have special privileges. Their owners, for instance, are insulated from liability in lawsuits and from responsibility for corporate debt.

A Decision With Potentially Profound Impact

Campaign reform advocates say that if the court strikes down limits on corporate campaign spending, the whole electoral system will be distorted. Corporations, with billions of dollars in profits each year, will be able to swamp the system, and they will do it using front groups so that voters won't know who is sponsoring the ads they see.

"It's a disaster for democracy," says campaign reform advocate Fred Wertheimer. "It puts corporate money in the driver's seat. It will unleash amounts of money in campaigns that we have never seen before."

The Supreme Court is closely divided on this issue. At the March argument, five justices, including Chief Justice John Roberts, appeared hostile to the existing law. For the court, though, the larger question is whether conservatives — Roberts in particular — are prepared to reverse decades of election-law decisions.

At his Senate confirmation hearing in 2005, Roberts said this about reversing precedent: "I do think that it is a jolt to the legal system when you overrule a precedent. Precedent plays an important role in promoting stability and even-handedness. It is not enough that you may think the prior decision was wrongly decided."

The question, said Roberts, is whether society has settled expectations based on the court's previous rulings, whether the precedent is workable and whether reversal would undermine the legitimacy of the court. His answer to those questions will have a profound impact on the way elections in this country are conducted.