Nexus: Chapman's Journal of Law and Public Policy

On January 27, 2010, the cameras caught Justice Samuel Alito’s apparent utterance of the phrase “not true,” in response to allegations that the Court had overturned nearly 100 years of precedent. The public exchange between President Barack Obama and Justice Alito during the President’s State of the Union address has stirred a flurry of debate regarding such issues as the separation of powers, the politicization of the Supreme Court, and the merits of the Court’s decision in Citizens United v. FEC.

I am interested today in the third controversy – the merits of the holding in Citizens United. The decision, penned by Justice Anthony Kennedy, focuses on statutory limitations of corporate speech, specifically regarding the documentary about Hillary Clinton (Hillary: The Movie) and the ads which were to run on cable television. The opinion initially goes into depth about the case’s justiciability, and upon finding a justiciable claim, delves into the issue of corporate speech and the propriety of disclaimer and disclosure restrictions.

The statute that the Court was reviewing “makes it a felony for all corporations … either to expressly advocate the election or defeat of candidates or to broadcast electioneering communications within 30 days of a primary election and 60 days of a general election.” In order to make sure that speech does not conflict with the statute, parties may ask the Federal Election Commission (FEC) for an advisory opinion regarding the speech. The Court explains that the FEC’s advisory opinions that prohibit speech have the consequence that “[m]any persons … will choose simply to abstain from protected speech – harming not only themselves but society as a whole, which is deprived of an uninhibited marketplace of ideas.” Further, the Court explains that “[s]peech is an essential mechanism of democracy, for it is the means to hold officials accountable to the People.” The 11-factor test promulgated by the FEC to approve political speech is, in the Court’s terms, “an unprecedented governmental intervention into the realm of speech.”

The Court’s prior holding in Austin v. Michigan Chamber of Commerce (overturned in Citizens United) stated that the way to distinguish wealthy individuals from corporations was to look to the business form. Corporations have “special advantages – such as limited liability, perpetual life, and favorable treatment of the accumulation and distribution of assets.” The Court in Citizens United rejects this rationale saying that the distinction “does not suffice … to allow laws prohibiting speech.” The Court explains, in part, that the distinction does not suffice because media corporations and other non-corporate associations have all of the same characterizations, but are exempt from the statute.

The idea that corporations have the right to speech is hard to grasp initially. However, the problem with arguing against corporate speech is in trying to find a logical foundation upon which to stage the argument. One could first argue that corporations have huge sums of money and because money translates into influence, only the needs of corporations would be served if allowed to finance campaigns. This ignores the fact that people and associations which are not corporations are free to pool their money together and support lobbyists and special interests in an attempt to have their voices heard. Individuals who are affluent have a greater chance of being heard than individuals who are poor, but this has not created prohibitions against wealthy individuals in having the right to speak. Money has not been the decisive factor.

Another argument is that allowing corporations to campaign for politicians will cause corruption. The rationale being that if a corporation pays the way for a politician, then that politician will feel a sense of obligation to make policy and enforce laws in favor of the corporation’s interests. The harm is further compounded by the fear that once corporate-sponsored politicians are in office, they will remain there in perpetuity. This is because, once elected, the politicians whose campaigns were financed by corporations will distribute kickbacks to the corporation and will implement favorable policy allowing the corporation to grow more powerful and less susceptible to overtaking by the corporate-supported politicians who lost the election. This seems like a valid argument, but again, why do we vote in the first place? It is to elect representatives that will support our particular viewpoints. We expect that the money we spend and the support we raise will result in the election of the politician who represents our views. This is not corruption, but representation. As the Court puts it, quoting its decision in McConnell v. Federal Election Comm’n, “Democracy is premised on responsiveness.”

Another potential argument against protecting corporate speech is that by giving corporations the right to speak allows them to be heard twice. In other words, because the Board members can contribute money individually, why allow them to be heard again through the conduit of a corporate form? But other organizations, including media corporations and non-corporate forms already enjoy the ability to be heard twice. To eliminate the double voice would require an even more perverse ban on political speech. As Justice Roberts puts it in his concurrence, “The First Amendment protects more than just the individual on a soapbox and the lonely pamphleteer.”

What about the fact that the law protects “dissenting shareholders from being compelled to fund corporate speech”? The Court again argues that there is no meaningful distinction between the ban on corporate speech generally and the exemption for media corporations. Dissenting shareholders can always sell their shares.

It is important to understand that the Supreme Court’s decision does set some limits on corporate speech. Fears against rampant, unaccountable, corporate speech should be slightly tempered by the Court’s second holding that the disclaimer requirements (which require identification of the person or group responsible for the content of the advertisement to be clearly displayed for several seconds) are constitutional because they “do not prevent anyone from speaking.” This will give some accountability to the corporations that sponsor political speech by providing for transparency.

Further, those that fear the Court’s decision will lead to runaway campaign financing may find solace in a few specific realities. First, Congress has the ability to pass campaign finance reform in the face of this Constitutional decision, and in fact, legislation to that effect is already being proposed by Sen. Al Franken (D-Minn). Second, if legislation is not passed, and campaigns become flooded with billions of dollars from corporate sponsorship, the American people and shareholders of corporations have the ability to make change by voting or selling shares. The truth remains, there are more people than corporations, and if people feel oppressed, change will come. A cynical reading of Citizens United supports an argument that the Court is in effect saying to corporations, “Bring it on!” Perhaps the Court wants to invigorate Congress to pass campaign reform, and this decision will be a wakeup call. Perhaps the Court envisions that if campaigns are swamped by corporate overspending, the effect may be to nullify any prospective gain corporations may have acquired in light of the new decision. Whatever the underlying rationale for the Court’s holding, apocalyptic predictions about the end of democracy in America are unwarranted.

Even if campaign spending turns into a bloody melee, the Court has the ability to “realize the error of its ways” and overturn its decision based on some new, more poignant rationale than that articulated in Austin. The dissent offers a glimpse of a possible ground for a different future holding based on the argument that corporations are not human speakers. “Although they make enormous contributions to our society, corporations are not actually members of it. They cannot vote or run for office. Because they may be managed and controlled by nonresidents, their interests may conflict in fundamental respects with the interests of eligible voters.” In essence, the dissenters are saying that by granting corporations the ability to speak, the Court could be granting noncitizens significant rights and influence which upsets the fundamental institution of citizenship.

The fact remains that, although the Supreme Court offers justifiable arguments as to why restrictions on corporate independent expenditures are unconstitutional, there is still a sense of uneasiness which arises from the uncertainty of new precedent (or rather, invigorated old precedent). We should watch with bated breath to see whether the runaway campaign finance train rolls off the cliff, or clears the way for more robust political speech.