Citizens United v. F.E.C. (Part 2): The History of the Constitutionality of Campaign Finance Laws

     Until its recent decision in Citizens United v. F.E.C. (2010), the Supreme Court has consistently upheld laws restricting the flow of money to candidates in political campaigns. 

     Campaign finance legislation traces back to 1907 when the federal government enacted the Tillman Act prohibiting corporations from contributing to political campaigns.  In 1947 Congress enacted the Taft-Hartley Act which prohibited unions, as well, from making political contributions.  In 1972 the Federal Election Campaign Act was enacted requiring candidates to disclose the identity of contributors and the amounts that they contributed, and in 1974 Congress amended FECA to limit the amount of money that any single individual could contribute to a candidate or to all candidates in an election cycle. 

     FECA left two very large loopholes in place: the law allowed individuals to contribute money to political parties that was then distributed to candidates, and the law permitted individuals to make "independent expenditures"  for campaign advertisements on behalf of political candidates.  In effect, political parties were "money laundering" for wealthy individuals who wished to make additional contributions to candidates, and the "independent" advertisements supporting specific candidates or attacking their opponents were simply another means of purchasing influence with a candidate.  In 2002, the Bipartisan Campaign Reform Act closed both loopholes by requiring political parties to report the source and amount of any money funnelled to candidates, and imposing the same requirements for any campaign ads broadcast before a primary or general election.  This law, also called "McCain-Feingold," also made the individual contribution limits applicable to money that was given to candidates by political parties or that was spent on any campaign commercials that are broadcast.

   Until this year the Supreme Court had held that these laws were constitutional.  The contribution limits set forth in FECA and contained in a state law were approved in Buckley v. Valeo  (1976) and Nixon v. Shrink Missouri Government PAC (2000), a prohibition on corporate spending on campaign advertisements was upheld in Austin v. Michigan Chamber of Commerce (1990), and the provisions of BCRA eliminating the flow of "soft money" through political parties and campaign advertisements were upheld in McConnell v. F.E.C. (2003). 

Accordingly, before Citizens United, it was constitutional for law to limit the flow of money into political campaign in the following ways:

1.  Corporations and unions may not contribute money directly to candidates or spend money on campaign advertisements for candidates.  Instead, they must create "political action committees," by means of which individuals associated with the corporation or union may contribute money to a fund that is used to make contributions or purchase advertising.

2.  No individual may contribute more than $2,300 per year to any particular candidate for federal office, whether the money is donated directly to the candidate or funnelled through a political party or other advocacy organization.

3.  The source and amount of each contribution must be disclosed.

       It is also important to note what campaign finance laws may not do under the Constitution.  First, the law may not limit the amount of money that politicians spend on their campaigns.  In Buckley v. Valeo, the Supreme Court distinguished campaign contributions from campaign expenditures in two ways.  Campaign expenditures, said the Court, constitute a pure form of speech, while campaign contributions are a form of political association.  In addition, the danger of corruption is far more directly related to campaign contributions than to campaign expenditures.  Accordingly, the government is permitted to regulate campaign contributions, but may not regulate the total amount of money that a candidate spends on an election.

     Second, the campaign finance laws have never attempted to regulate what media corporations say and do, because this would probably be a straightforward violation of freedom of the press.

     Third, unions, corporations, and advocacy organizations have a constitutional right to spend money from their treasuries to run "issue advertisements" at any time – on referenda, for example – so long as these are not attempts to favor one candidate or another.

     Fourth, the limitations on spending for campaign advertising do not apply to company or union newsletters or to the internet.  These organizations are permitted to communicate with their members through normal channels.

     Finally, unions, corporations, and advocacy organizations probably have a constitutial right to form PACs, facilitating a process by means of which their members who are willing may pool their money to contribute to candidates or to purchase advertisements.  In addition, it is possible that advocacy organizations may have the power to contribute money directly to candidates, since their members presumably are willing to make their voices heard in this manner.  However, all of this spending would presumably be subject to the individual contribution limits and reporting requirements of state and federal law.

     Justice Kennedy consistently dissented from the past rulings of the Supreme Court upholding limits on campaign contributions.  In tomorrow's post I will describe the positions that he has taken in these cases.

Visit Professor Huhn's website on Constitutional Law for information and links to sources – both timely and historical – on constitutional law.

Tagged as: campaign finance reform, Citizens United, citizens united v. f.e.c., citizens united v. federal election commission, constitution, First Amendment, freedom of speech