Is There a Constitutional Right for Corporations to Influence Elections?

The New York Times described the case of Citizens United v. FEC, which was recently re-argued before the Supreme Court, as "a momentous case that could transform the way political campaigns are conducted."  As the NYT reports:

The case involves “Hillary: The Movie,” a mix of advocacy journalism and political commentary that is a relentlessly negative look at Mrs. Clinton’s character and career.  The documentary was made by a conservative advocacy group called Citizens United, which lost a lawsuit against the Federal Election Commission seeking permission to distribute it on a video-on-demand service.  The film is available on the Internet and on DVD.  The issue was that the McCain-Feingold law bans corporate money being used for electioneering.

The Times article goes on to note that:

[T]he relevant law, the Bipartisan Campaign Reform Act of 2002, more commonly called McCain-Feingold, applies only to broadcast, satellite or cable transmissions. That leaves out old technologies, like newspapers and books, and new ones, like the Internet. . . . The McCain-Feingold law [also] does contain an exception for broadcast news reports, commentaries and editorials.

One possible way of describing the tension here is as follows:  On the one hand, owners and managers of corporations consider the corporation to be their property and believe they should be protected by the First Amendment in the use of that property for political speech.  On the other hand, one can argue that the corporation is a "creature of the state" uniquely designed to facilitate wealth accumulation for the benefit of society as a whole and that the use of that wealth to influence elections may be regulated by the state.  As I wrote in an article a few years ago:

It is important to note here (and should be obvious upon reflection) that the State did not grant limited liability to shareholders or immortality to the corporate entity merely out of a benevolent desire solely to increase the wealth of shareholders.  Rather, the State saw that its interests as sovereign, whether building specific pieces of infrastructure or promoting economic growth generally, could be furthered via the corporate form.

But somewhere along the way the corporation was granted personhood under the Constitution and now we are arguing about the free speech rights of a fictional entity.  In the oral arguments last week, newly-appointed Justice Sotomayor questioned this fundamental attribute of the corporation.  The Wall Street Journal reported it this way:

During arguments in [Citizens United], the court's majority conservatives seemed persuaded that corporations have broad First Amendment rights and that recent precedents upholding limits on corporate political spending should be overruled.  But Justice Sotomayor suggested the majority might have it all wrong — and that instead the court should reconsider the 19th century rulings that first afforded corporations the same rights flesh-and-blood people have.  Judges "created corporations as persons, gave birth to corporations as persons," she said.  "There could be an argument made that that was the court's error to start with…[imbuing] a creature of state law with human characteristics."

This made me think back to some of the warnings regarding the abuses of corporate power that I wrote about in another recent article:

Almost from the time of the birth of the modern corporation there have been many voices loudly proclaiming that the accumulation of power that the corporate vehicle promised posed a threat to the people. . . .  These voices include U.S. Presidents like Thomas Jefferson, who urged citizens to "crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country"; Abraham Lincoln, who wrote that "corporations have been enthroned and an era of corruption in high places will follow," and predicted that "the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed"; and Dwight D. Eisenhower, who warned us to "guard against the acquisition of unwarranted influence . . . by the military industrial complex."  President Ruthord B. Hayes went so far as to assert that, "This is a government of the people, by the people and for the people no longer. It is a government of corporations, by corporations and for corporations."

However, it does not seem like these warnings will be heeded by the Court in Citizens United.  As SCOTUSBLOG noted in reviewing the oral argument:

If supporters of federal curbs on political campaign spending by corporations were counting on Chief Justice John G. Roberts, Jr., and Justice Samuel A. Alito, Jr., to hesitate to strike down such restrictions, they could take no comfort from the Supreme Court’s 93-minute hearing Wednesday on that historic question. Despite the best efforts of four other Justices to argue for ruling only very narrowly, the strongest impression was that they had not convinced the two members of the Court thought to be still open to that approach. At least the immediate prospect was for a sweeping declaration of independence in politics for companies and advocacy groups formed as corporations.

PS–Former Akron Law Jurist-in-Residence Judge Rakoff has been making quite a bit of news lately with his refusal to approve the proposed settlement between the SEC and B0fA over allegations of impropriety in connection with the failure to fully disclose Merrill bonuses before the BofA-Merrill merger.  I plan on blogging on this story next week.

PPS–I have been listening to William Cohan's "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street", and I can highly recommend it.  It's all about how rational and efficient markets can solve everything

Tagged as: Citizens United