Nahmod Law

This is the first of two posts on the Supreme Court‘s controversial First Amendment corporate expenditure decision dealing with campaign financing of federal elections, Citizens United v. FEC, No. 08-205 (1-21-10). This post, by way of background, sets out the important Supreme Court campaign finance decisions that led up to Citizens United,  a 5-4 decision whose majority opinion was authored by Justice Kennedy (over 50 pages) and whose dissenting opinion was authored by Justice Stevens (over 80 pages).

The next post will directly address Citizens United.

Buckley.  The story begins in 1976 with Buckley v. Valeo, 424 U.S. 1 (1976), a case involving the constitutionality under the First Amendment of various provisions of the Federal Election Campaign Act of 1971, together with related provisions of the Internal Revenue Code of 1954, as amended in 1974. These campaign finance reform provisions were enacted largely in response to the Watergate era campaign scandals of the Nixon administration. What is of primary concern for our purposes are those provisions limiting individual political contributions and expenditures relative to a clearly identified candidate for federal office, as well as those limiting campaign spending by candidates for federal office. The Act set out an individual contribution cap of $1,000 per candidate, an individual expenditure cap of $1,000 per candidate and an overall individual contribution cap of $25,000 in a single year. Expenditures coordinated with candidates counted as contributions. Other provisions restricted a candidate’s use of personal and family resources and limited the overall amount that a candidate could spend in campaigning for federal office.

In a bifurcated decision, the Court upheld the contribution limits but invalidated the expenditure limits. Applying strict scrutiny or something very close to it, the Court found that the contribution limits were constitutional. On the free speech side, there were associational and symbolic speech considerations, albeit with the mitigating factor that the contributor was not speaking directly so much as giving money to a “mouthpiece.” On the government side, there was the powerful interest in avoiding quid pro quo corruption and the appearance of corruption, and the danger of public loss of faith in the political process. This interest outweighed the free speech interest.

However, the expenditure limits violated the First Amendment because they directly limited the quantity of high value political speech of  individuals and candidates. The government interest in avoiding corruption and its appearance was inadequate to justify the expenditure caps, particularly in light of the expenditure coordination rules and the fact that individuals and groups could avoid expenditure caps simply by not referring to a specific candidate. “[T]he concept that government may restrict the speech of some [in] order to enhance the relative voice of others is wholly foreign to the First Amendment.”

Bellotti.  Two years later, in 1978, came First National Bank of Boston v. Bellotti, 435 U.S. 765 (978), where the Court struck down a state statute prohibiting contributions and expenditures by corporations for the purpose of affecting referendum votes unless the referendum materially affected the property, business or assets of the corporation. The Court declared that the issue was not whether corporations had First Amendment rights, but rather that the statute was directed at speech indispensable to democratic decision-making.  The First Amendment rights of the potential audience to receive information were also adversely affected. The Court rejected the arguments that the statute was necessary to protect the integrity of the electoral process, to avoid unduly influencing the outcome and to avoid adversely affecting confidence in democracy. It also disagreed with the contention that corporations would otherwise drown out differing points of view.

The dissenters (White, Brennan and Marshall) maintained that the self-fulfillment rationale of the First Amendment was clearly not pertinent. Also, even though corporations were governed by the statute, individuals, shareholders, officers and customers could still express their views. The statute was not directed at equalizing voices but instead was designed to prevent advantaged corporations, permitted by the state to amass wealth for certain economic purposes, from using their wealth unfairly in the political process. “[The] State need not permit its own creation to consume it.” Read the rest of this entry »