Citizens United Decided: An upheaval of Campaign Finance Law

The long awaited decision in Citizens United v. the Federal Election Commission was issued today. [1] With a 5-4 vote, the Supreme Court overturned a 20-year ruling that corporations can be prohibited from using money from their general treasuries to pay for their own campaign advertisements. Justices also struck down parts of the Bipartisan Campaign Reform Act that prohibited unions and corporations from running issue ads before primary and general elections.

OMB Watch is disappointed in today's Court decision and fears it will only drown out the voice of citizens and advocacy organizations. Currently, it is uncertain what this ruling means for nonprofit corporations. We may see an influx of money being channeled through tax-exempt, 501(c)(4) or 501(c)(6) nonprofit corporations.

The opinion applies only to independent expenditures, and leaves in place a prohibition on direct contributions to candidates. Justice Anthony Kennedy wrote in the majority opinion; "The censorship we now confront is vast in its reach." However, prior to today's decision corporations were not stripped from political speech entirely during campaigns. Rather, corporations and unions could pay for federal election spending through political action committees. The ruling will certainly alter corporate and union spending on elections in future campaign seasons.

Dissenting, Justice John Paul Stevens said, "The court's ruling threatens to undermine the integrity of elected institutions around the nation."

Importantly, the ruling upheld the disclosure and disclaimer requirements. In addition, it does not affect bans on direct contributions from corporations to federal candidates or national party committees.

As a result of the Court's ruling, corporations could now fund independent broadcasts messages (radio, tv, internet, mail) expressly advocating the election or defeat of candidates. However, corporate sponsorship of the messages must be disclosed.

For more, the Washington Post online has a page aggregating [2] media coverage. The New York Times [3] calls the decision "a doctrinal earthquake."

Observers fear that now the cost of winning a seat in Congress will drastically increase. Organizations are working hard to pass legislation to provide public financing for congressional candidates, specifically the Fair Elections Now Act. [4]

Clearly, rewriting campaign finance law, as it applies to corporate (including nonprofit corporations) and union independent expenditures will cause some upheaval of future campaigns. We are currently reviewing the 176-page opinion.