Candidates and Political Parties Are Losers in Campaign Finance Case

A little known nonprofit organization just radically altered the political landscape for the 2010 elections and beyond. Citizens United, a nonprofit organization and the plaintiff in Citizens United v. Federal Election Commission, produced a documentary film critical of then-presidential candidate Hillary Clinton. The group intended to distribute the documentary on cable television and video-on-demand, and also produced television commercials promoting the documentary.

At the time, McCain-Feingold, the campaign finance reform law that bears the names of its chief sponsors, prohibited corporations, including nonprofit corporations, from airing television or radio advertisements referencing a federal candidate within thirty-days of a primary election or sixty-days of a general election in a jurisdiction where the candidate is on the ballot.  Citizens United was concerned about the civil and potential criminal penalties for violating McCain-Feingold and filed a lawsuit in federal court requesting a declaratory judgment that the law runs afoul of the First Amendment’s free speech guarantees.  Yesterday, the United States Supreme Court released its decision ruling in favor of Citizens United.

This landmark Supreme Court removes the barriers to corporate political speech and ensures that independent speech will play a major role in the 2010 elections.  Individuals and corporations are now permitted to sponsor independent expenditures advocating the election or defeat of a federal candidate, or advertisements criticizing or praising incumbents for their policy positions in more pointed terms and in close proximity to elections. While the Court held that the ban on corporate political speech is unconstitutional, it did uphold the disclaimer and disclosure requirements.  Also, corporate contributions to candidates, national party committees, and the hard money accounts of state and local party committee are still prohibited.

Winners and Losers

Listed below are my initial thoughts on who benefits and who is harmed by this decision.

Winners -- Trade associations, corporations, unions and individuals with the means to sponsor independent expenditures.  These groups will be able to raise funds in amounts and from sources that will eclipse the hard-money restrictions for candidates and party committees.

Losers -- Federal candidates and political party committees. The hard-money limits have the potential to force candidates and political party committees to a lesser role in the election process. The pro-regulation groups’ war on political parties just dealt them another blow.  The Republican National Committee v. Federal Election Commission case seeking to overturn the soft-money ban for national party committees will move to the front of the line in terms of cases to follow. There will also be pressure on Congress to fashion a legislative fix relaxing the funding restrictions for party committees and candidates.

Other factors -- The enthusiasm gap will be the single largest factor determining which side benefits from this decision. Simply because the Court opened a new playing field for corporations and unions does not mean one side benefits more than the other.  Political actors must be motivated to speak and willing to engage in the rough-and-tumble political game to take advantage of this decision. Right now the business community and conservatives are motivated to act and fight what they believe are misguided policies pushed by the Democratic Party in Washington. On the other side, unions have not been shy in the past about engaging in political activities. We’ll have to wait and see.