Citizens United Aftermath

Almost a week has passed since the Supreme Court issued the very significant ruling in the Citizens United case. There has been nonstop commentary and discussion of the possible ramifications. During a news conference [1], Senator Chuck Schumer (D-NY) and Rep. Chris Van Hollen (D-MD) announced plans to hold hearings and introduce legislation to curtail the effects of the decision. One suggestion from the lawmakers would require shareholders to vote before a corporation could spend money in elections.

Another option would prohibit corporations that do business with the federal government from using corporate funds to make independent expenditures. For example, contributions or expenditures could be limited for companies that have contracts or subcontracts with the government, or government grantees, and their affiliates. Congress may try to ban corporate contributions to nonprofits that engage in election communications, or corporations could be required to disclose contributions made to another incorporated entity (such as a 501(c)(4)) for the purposes of making a political expenditure. Other options include strengthening disclaimer and disclosure rules, requiring companies to more clearly identify themselves in the ads.

In addition to those already introduced, such as legislation to create an optional public financing system for congressional elections (the Fair Elections Now Act), more legislative responses to the ruling are still being formulated.

In the House HR 4522 [2] has been introduced to, "apply the ban on contributions and expenditures by foreign nationals to domestic corporations which are owned or controlled by foreign principals." Under current law, election spending by non-U.S. persons and entities is prohibited and is unaffected by the ruling. However, some suggest that the prohibition on campaign expenditures by foreign nationals could be vulnerable. According to Politico [3], President Obama will urge Congress during the State of the Union address to pass legislation restricting foreign corporations from getting involved in federal elections.

Politico [4], also reports that, "the White House doesn't appear to consider the FEC or the public financing overhauls as immediate priorities. Nor does it appear likely to embrace a public financing system for congressional campaigns."

A more problematic legislative prospect would tighten rules prohibiting outside groups from coordinating ads with candidates. Corporations may now directly advocate for the election or defeat of federal candidates, as long as they do not coordinate their efforts with campaigns or political parties. However, the Federal Election Commission (FEC) has not yet finalized a definition of coordinated expenditures. The FEC is currently undertaking a rulemaking [5] to reconsider what precisely constitutes coordination.

Before the Court even issued its ruling Rep. Alan Grayson (D-FL) introduced five bills in anticipation of an unfavorable decision. For example, the Corporate Propaganda Sunshine Act, H.R. 4432 [6], would require public companies to tell the Securities and Exchange Commission when they spend to influence public opinion on any matter other than the promotion of their services. The Ending Corporate Collusion Act, H.R. 4433 [7], would apply antitrust laws to a political committee established and run by a corporation.

For more on what nonprofits and political leaders are doing to address the Court decision, read this latest Watcher article [8].