CITIZENS UNITED v. FEC: THE CORRUPTION OF THE AMERICAN POLITICAL PROCESS THROUGH INDEPENDENT CORPORATE EXPENDITURES

1st amendment corporate law

By Brent T. Yonehara

Introduction

There are myriad reasons on how corporate special interests have decimated the American political system. Jack Abramoff traded gifts for votes and tax breaks in a scandal that rocked Congress in 2005.[1] Big Tobacco contributed $46.7 million to defeat a recent California ballot measure to tax cigarettes to fund cancer research.[2] In order to fully explore this topic, an entire treatise could be prepared. However, for brevity, this essay is limited in scope to the narrower topic of independent corporate expenditures and its corruptive influence on the political process as illustrated by the recent U.S. Supreme Court ruling in Citizens United v. FEC.[3] The following is a discussion of three reasons why the political process has not been enhanced as a result of the Citizens United ruling. Part II argues independent corporate expenditures have corrupted the political process. Part III argues free speech rights have been undermined (and not strengthened) as a result of Citizens United. Part IV argues that electoral integrity has been damaged as a result of Citizens United. Parts II-IV begin with arguments in favor of independent corporate expenditures, followed by arguments supporting the main proposition that the American political process has been corrupted by independent corporate expenditures. Part V concludes that corporate special interests do not enhance, but rather corrupt the American political process.

  1. Independent Corporate Expenditures Corrupt the Political Process

Citizens United held that a corporation may independently contribute money to a political cause as a matter of its First Amendment guaranteed right of free speech.[4] The legal theory of First Amendment free speech protection is premised on the U.S. Constitution’s guarantee that “Congress will make no law . . . abridging the freedom of speech . . . .”[5] Political speech rights are fully protected under the Constitution.[6] As such, the Citizens United court determined that the only corporate political speech (i.e., independent expenditures) which could be constitutionally limited was speech that amounted to quid pro quo corruption.[7] Corporate political speech outside of a quid pro quo context is fully protected by the First Amendment.[8] Here, Citizens United was a corporation which produced a documentary, Hillary: The Movie, highly critical of the presidential candidacy of former Senator Hillary Rodham Clinton.[9] Through its voice-over narration and critical interviews, it left little doubt that the movie was an express advocacy against a possible Hillary Clinton’s presidency.[10] The Court held that any type of speech, outside of quid pro quo corruptive speech, which interferes with the corporate free speech rights is inconsistent with the constitutional protections guaranteed by the First Amendment.[11] As the Citizens United majority wrote, it would be “stranger than fiction . . . to make political speech . . . a crime.”[12] As such, expenditures as speech should be given the highest level of constitutional protection because its denial would undermine the very tenets of the First Amendment’s guarantee of free speech.[13] Furthermore, Citizens United upheld the requirement that the funds are properly disclosed in accordance with federal law.[14] According to the Court, disclosure requirements allow the necessary transparency so informed decisions can be made during the electoral process.[15]

However, government should work vigorously to prevent corruption in the body politic because it is a compelling government interest.[16] Either by design or by coincidence, Citizens United has allowed corporate special interests to freely inject millions of dollars into the campaigning process, thus corrupting the political process.[17] American legal history is replete with Supreme Court decisions enforcing Congressional attempts to limit corruption in elections or the electoral process.[18] It is a cold, hard truth that electoral campaigns are expensive.[19] Since politicians require money in order to run a campaign, it would be expected that they raise as much money as possible. This is where corporate special interests enter the picture. Prior to Citizens United, corporate special interests could only independently contribute those amounts of money consistent with federal or state restrictions.[20] After Citizens United, corporate special interests can now contribute unlimited amounts of money for a political cause under the guise of First Amendment protection.[21] Additionally, disclosure requirements are meaningless where a large sum of money can enter the political process, but the contributor can remain hidden behind the Byzantine web of loopholes governing super political action committees (“Super PACs”).[22] Transparency means little if disclosure of these independent contributors is immediate and publicly accessible.[23] In this regard, Citizens United created an atmosphere where corporate interests can throw a tremendous amount of money into the political process.[24] This also represents a very small number of wealthy special interests with the resources to fund a well-financed campaign.[25] This, in turn, has created an aura of corruption because there is an inferred reason for the influx of money – namely, to influence political decision-making.[26] As the Supreme Court noted: “corruption is a subversion of the political process . . . and the hallmark of corruption is the financial quid pro quo: dollars for political favors.”[27] As such, independent corporate expenditures have had a corruptive effect on the political process, only amplified by the Citizens United case.

Citizens United Undermines, Not Strengthens, Free Speech Rights

Citizens United solidified the proposition that a corporation’s political speech cannot be suppressed.[28] Citizens United reinforced the idea that corporations are “persons,” and as such, have the same rights under the U.S. Constitution.[29] By extension, a corporation, as “a person,” may exercise its free speech rights by using independent expenditures for advocating for or against various issues in which it feels compelled to do so.[30] The Citizens United court built its rationale around the decision in Buckley v. Valeo,[31] where the Court held limitations on expenditures to one’s own campaign violated the First Amendment.[32] Prohibiting independent corporate expenditures would be a ban on free speech itself.[33] Furthermore, the Citizens United Court postulated that the Constitution never explicitly denied free speech rights to an association of persons – i.e., a corporation.[34] The Court compared the Frank Capra classic Mr. Smith Goes to Washington to Hillary.[35] Both films were produced by corporations with a clear, critical political message.[36] The only difference between the films was that the former was a work of fiction and the latter was not.[37] The Court opined that if corporate political speech, in the form of independent campaign expenditures, was suppressed, Mr. Smith would have been banned from distribution.[38] Therefore, the Court decided independent corporate expenditures were fully guaranteed by the First Amendment.[39]

However, the First Amendment’s right to free speech has never been absolute under all circumstances; on the contrary, there are many limitations to free speech given the context and the players involved.[40] Moreover, speech, either spoken or symbolic, is stated by a living person. Corporations are not people.[41] Of course, corporations are necessary for living persons to transact business in their daily lives.[42] Nevertheless, the Constitution was not written by a group of corporations; on the contrary, it was written by a group of living, breathing natural persons – people with thoughts, feelings, and beliefs.[43] A corporation is a legal fiction borne out of the necessity to assist people in their economic interests or pursuits of happiness.[44] As such, “corporate speech is [] derivative speech . . . [or] speech by proxy.”[45] A corporation cannot burn a flag in protest of national politics.[46] A corporation cannot wear a jacket embroidered with a profanity and walk into a public square to protest an unjust war.[47] Only a natural person can do these things.[48] But because corporations are allowed to the same political speech as those of the common person, independent corporate expenditures have overwhelmed the political forum.[49] These huge amounts of expenditures may appear to be legitimate political speech, but in practice, it works to drown out all other political campaigning speech.[50] In this respect, the free speech of corporate special interests undermines the free speech rights of those individuals who do not have the ability to contribute vast amounts of money.[51] Those with the ability to spend the most money can speak the loudest when it comes to free speech – and this arguably would violate the Constitution’s Equal Protections Clause in that the laws are to be evenly applied to all “persons.”[52]

Corporate Special Interests Have Damaged Electoral Integrity

Justice Antonin Scalia, who voted with the Citizens United majority, made two observations when discussing the landmark case.[53] First, if people are dismayed by the political speech in political advertisements they should just simply “turn off the TV.”[54] Continuing his argument, most voters are savvy enough to shut out campaign ads which they do not agree with.[55] Scalia further postulated that protecting the electoral process cannot be combatted by placing limitations on political speech.[56] Attacks on speech are still a restriction on speech regardless of who the speaker is.[57] Should the Democratic Party or Republican Party be banned from advertising on behalf of each party’s candidates in each election simply because each is a corporation?[58] Scalia believes not, and further surmises that speech cannot be limited based on speakers because the First Amendment was not written directed toward speakers, but rather the speech.[59] Scalia’s second point was that if there was any criticism of the Citizens United case it should not be directed toward the Supreme Court but rather Congress, whose members are constitutionally vested with making laws to directly combat the issue of special interest money in elections.[60] The Supreme Court can only interpret the case in light of the Constitution and cannot legislate.[61] Therefore, Congress should enact a law to change the current electoral system – incidentally, the same system which Congress created.[62] In other words, the electoral process is created by Congressional authority and not by Supreme Court opinion.[63] As such, its integrity is dictated by the laws enacted by Congress.

However, while Justice Scalia has a compelling argument in favor of the Citizens United ruling, simply turning off a television does not comport with the reality of how today’s voter obtains information. One cannot simply turn off the television especially when political speech can be viewed from a variety of technological media, including a computer, smartphone, or tablet, as well as more traditional media like a radio or magazine.[64] The ecosystem in which political speech exists will be reduced to nothing more than an auction, where the bidder who speaks with the most amount money wins.[65] Additionally, regulating electoral integrity is not predicated on deoxygenating a vibrant and thriving First Amendment heritage.[66] An even-handed restriction on speech has been deemed necessary if to protect the integrity of the electoral process.[67] Justice John Paul Stevens, the lead dissenter in Citizens United, wrote in his concurring opinion in Austin v. Michigan Chamber of Commerce that regulatory electoral laws are designed as such to prevent the creation of so-called “political debts.”[68] Government has a compelling interest in ensuring that there is no undue influence upon politicians from outside interests.[69] In doing so, Government, in its role as regulator of the political process, can achieve equilibrium by narrowly tailoring a restriction on speech in order to uphold electoral integrity.[70] Independent corporate expenditures do not have to be completely banned; nay, this itself would be a violation of free speech.[71] Yet, expenditures can be limited in amount or by the speaker in a manner that would not obstruct the First Amendment and still protect electoral virtue at the same time.[72]

Conclusion

Let it be clearly stated: this essay does not advocate for burdensome regulation on the freedom of free speech.[73] Free speech, as both a commonly understood principle and a well-analyzed corpus of legal jurisprudence, is a constitutionally-protected right. As a matter of constitutional law, it is an area which the Supreme Court must aggressively safeguard against unnecessary regulation, as opposed to another area of law, say, for example, torts or contracts which can rely on market forces to dictate legal behavior.[74] However, corporate special interests should not be allowed free reign to expend unlimited amounts of expenditures in the name of political speech.[75] Citizens United created an electoral Berlin Wall with permissible free speech on one side and protection of the electoral process on the other. In practice, a new Cold War has emerged with the advent of Super PACs and unlimited money from special interests. In 2008, $37 million was spent on independent expenditures.[76] In 2012, two years after the Citizens United ruling was issued, more than $181 million has been spent so far, and there are still more than three months left in the presidential campaign season.[77] Free speech is one thing; however, a tsunami of speech from one player which drowns out speech from all others does little to promote a dynamic forum for the First Amendment except for those few wealthy corporate special interests.[78] In fact, it reduces electoral integrity as the influx of money into the political process will cause voters to lose faith in our electoral system.[79] Exemplifying this concept is the U.S. Senate’s failure to pass the DISCLOSE Act just earlier this month.[80] When the 1st Baron Acton proclaimed that “power tends to corrupt but absolute power corrupts absolutely,” he meant it in the context of an ecclesiastical debate.[81] However, one-hundred fifteen years later, his oft-mentioned quote still holds relevancy today. Substitute “power” with “money” and it encapsulates the debate surrounding campaign finance reform. However, given the nature of American politics today, it is certain that the American political process has been severely damaged by the proliferation of independent corporate expenditures, and sadly, there does not appear to be a near-term resolution to the matter.

* B.A., Political Science, University of California, Santa Barbara, 1993; J.D., California Western School of Law, 2000.   Originally published in yonaxis.blogspot.com, http://yonaxis.blogspot.com/2013/05/this-has-nothing-to-do-with.html (May 15, 2013).

[1] See Jack Abramoff: The Lobbyist’s Playbook, CBS News, at http://www.cbsnews.com/8301-18560_162-57319075/jack-abramoff-the-lobbyists-playbook/?tag=contentMain;contentBody (publ’d Nov. 6, 2011, orig. aired on 60 Minutes on Nov. 6, 2011).

[2] See Stephen Stock, et al., The Investigative Unit Follows Prop 29 Money Trail, NBC Bay Area News, at http://www.nbcbayarea.com/investigations/The-Investigative-Unit-Follows-Prop-29-Money-Trail–156450895.html (publ’d Jun. 4, 2012).

[3] Citizens United v. Fed. Elections Comm’n, 558 U.S. ___, 130 S. Ct. 876 (2010) [hereinafter Citizens United].

[4] Citizens United, 558 U.S. at 53-54.

[5] U.S. Const. amend. I (“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for redress of grievances”).

[6] Citizens United, 558 U.S. at 76, citing First Nat’l Bank of Boston v. Bellotti, 435 U.S. 765, 784 (1978).

[7] Id., 558 U.S. at 93. Quid pro quo corruption is defined as corruption where campaign money is traded for political favors. Id. at 29.

[8] Id. at 43.

[9] Citizens United, 558 U.S. at 2.

[10] Id. at 57-58.

[11] Id. at 89-90.

[12] Id. at 56.

[13] Id.

[14] Id. at 55.

[15] Id. (Kennedy, J.) (“This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages”).

[16] See Davis v. Fed. Elections Comm’n, 554 U.S. 724, 741 (2008); see also Citizens United, 558 U.S. at 75 (Stevens, J., dissenting) (“Corruption operates along a spectrum, and the majority’s apparent belief that quid pro quo arrangements can be neatly demarcated from other improper influences does not accord with the theory or reality of politics.”).

[17] Lawrence Lessig, Democracy After Citizens United, Boston Review, at http://bostonreview.net/BR35.5/lessig.php (publ’d Sept./Oct. 2010) (arguing special interest funding of public campaigns has corrupted the integrity of Congress as an institution).

[18] See Calif. Med. Assn. v. Fed. Elec. Comm’n, 453 U.S. 182 (1981) (affirming law that limits corporate campaign contributions to a political committee); Fed. Elec. Comm’n v. Nat’l Right to Work Comm., 459 U.S. 197 (1982) (holding that a corporate interests are outweighed by Congressional legislation designed to root out corruption in the electoral process); Fed. Elec. Comm’n v. Mass. Cit. for Life, Inc., 479 U.S. 138 (1986) (upholding state law prohibiting independent corporate expenditures in primary elections); Fed. Elec. Comm’n v. Beaumont, 539 U.S. 146 (2003) (upholding federal law prohibiting nonprofit advocacy corporations’ independent expenditures to campaigns); McConnell v. Fed. Elec. Comm’n, 540 U.S. 93 (2003), partially overruled by Citizens United, 558 U.S. at 50 (Kennedy, J.) (upholding McCain-Feingold Act restrictions on “soft money” – expenditures used to increase voter turnout or registration); Fed. Elec. Comm’n v. Wisc. Right to Life, Inc., 551 U.S. 449 (2007) (upholding McCain-Feingold Act to ban issue ads 30 days of a federal election as long as the ad advocated election or defeat of a candidate).

[19] See Arthur Delaney, 2010 Midterm Elections To Be Most Expensive Ever: Analysis, Huffington Post, at http://www.huffingtonpost.com/2010/02/23/2010-midterm-elections-to_n_473131.html (publ’d Apr. 25, 2010; updated May 25, 2011).

[20] See Austin v. Mich. Chamber of Commerce 494 U.S. 652, 660 (1990), overruled by Citizens United, 558 U.S. at 53.

[21] See Lessig, supra note 4.

[22] See Sam Stein, Super PAC Disclosure Requirements Hot Topic of Conversation Among GOP Candidates, Huffington Post, at http://www.huffingtonpost.com/2012/01/05/2012-election-new-hampshire-primary-super-pac_n_1186413.html (publ’d Jan. 5, 2012).

[23] Id.

[24] Id.

[25] See Alan Simpson, Special Interests Distort Elections, Politico, at http://www.politico.com/news/stories/0411/53597.html (publ’d Apr. 25, 2011 4:41 AM EDT). Alan Simpson is a former Republican senator from Wyoming who co-chairs the Americans for Campaign Reform, along with former Senators Bill Bradley of New Jersey, Bob Kerrey of Nebraska, both Democrats, and Warren Rudman of New Hampshire, a Republican. Id.

[26] Id. But cf. Citizens United at 45 (Kennedy, J.) (holding that independent expenditures do not amount to quid pro quo corruption).

[27] See Fed. Elections Comm’n v. Nat’l Conservative Political Action Comm., 470 U.S. 480, 497 (1985). See also Lessig, supra note 4 (querying whether the Court should have made a dividing line between quid pro quo corruption and all other types of corruptions).

[28] Citizens United, 558 U.S. at 50.

[29] Id. at 25, citing Bellotti, 435 U.S. at 778, n. 14.

[30] Id. at 55-6.

[31] 424 U.S. 1 (1976).

[32] Id. at 58.

[33] Citizens United, 558 U.S. at 22.

[34] Citizens United at 1 (Scalia, J., concurring).

[35] Id. at 56.

[36] Id.

[37] Id.

[38] Id.

[39] Id. at 57.

[40] See, e.g., Brandenburg v. U.S., 395 U.S. 444 (1969) (limiting speech where one openly speaks of violent action against the government); Hazelwood v. Kuhlmeier, 484 U.S. 260 (1988) (limiting speech of school newspapers because school newspapers enjoy fewer First Amendment protections); N.Y. Times v. Sullivan, 376 U.S. 254 (1964) (limiting speech where a person defames another if the statement contained “actual malice”); Cent. Hudson Gas & Elec. Corp. v. Pub. Service Comm’n, 447 U.S. 557 (1980) (limiting commercial speech found constitutional as long as analysis of regulation is performed); Miller v. Calif., 413 U.S. 15 (1973) (limiting free speech protections for obscene materials based on a three-pronged test).

[41] Citizens United, 558 at 76 (Stevens, J., dissenting) (“…corporations have no conscience, no beliefs, no feelings, no thoughts, no dislikes….”).

[42] Id.

[43] Id.

[44] Id.

[45] Id. at 77.

[46] See Texas v. Johnson, 491 U.S. 397 (1989).

[47] See Cohen v. California, 403 U.S. 15 (1971), but see Snyder v. Phelps, 562 U.S.___, 131 S. Ct. 1207 (2011) (upholding an organization’s right to have its members protest on a public sidewalk as protected free speech under the First Amendment).

[48] Citizens United at 77 (Stevens, J., dissenting) (positing the question of “who” actually speaks when a corporation “speaks,” as there are a number of different actors involved in the operation of a corporation versus that of an individual).

[49] See Jessica Levinson, Citizens United Gives Free Speech a High Price, Politico, at http://www.politico.com/news/stories/0612/77647.html (publ’d Jun. 20, 2012).

[50] Id.

[51] Id.

[52] See Santa Clara County v. S. Pac. R.R. Co., 118 U.S. 394, 410 (1886) (holding that a corporation can claim the same Fourteenth Amendment equal protections as a natural person).

[53] See Jeffrey Collins, Justice Scalia on Unlimited Political Ads: Turn Off the TV, Huffington Post, at http://www.huffingtonpost.com/2012/01/21/justice-scalia-on-unlimit_n_1221080.html (publ’d Jan. 21, 2012, 3:41 PM ET).

[54] Id.

[55] Id.

[56] Citizens United at 7 (Scalia, J., concurring).

[57] Id.

[58] Id. at 9.

[59] Id. at 8.

[60] See Collins, supra note 47.

[61] Id.

[62] Id.

[63] Citizens United at 8 (Scalia, J., concurring).

[64] See Lauren Finney, The Internet vs. Citizens United, Bill Moyers, at http://billmoyers.com/2012/06/07/the-internet-v-citizens-united/ (publ’d Jun. 7, 2012).

[65] See CBS News, Ex-Justice John Paul Stevens Keeps Doubts on Supreme Court’s Citizens United ruling, CBSNews.com, at http://www.cbsnews.com/8301-250_162-57444175/ex-justice-john-paul-stevens-keeps-doubts-on-supreme-courts-citizens-united-ruling/, (publ’d May 30, 2012, 10:38 PM).

[66] See Lessig, supra note 4.

[67] See Crawford v. Marion County Elec. Board, 553 U.S. 181, 187 (2008).

[68] See Austin, 494 U.S. at 678 (Stevens, J., concurring) (“The overriding concern behind the enactment of statutes . . . was the problem of corruption of elected representatives through the creation of political debts.”)

[69] Id.

[70] Id. at 669 (Marshall, J.).

[71] See Lessig, supra note 4.

[72] Id.

[73] Id.

[74] Id.

[75] Id.

[76] See Center for Responsive Politics, Total Outside Spending by Election Cycle, Excluding Party Committees, OpenSecrets.org, at http://www.opensecrets.org/outsidespending/cycle_tots.php?cycle=2012&view=Y&chart=N#viewpt (viewed Jul. 21, 2012).

[77] Id.

[78] See Lessig, supra note 4.

[79] Id.

[80] See Dan Froomkin, Disclose Act Vote Railroaded by Mitch McConnell, Senate Dems Claim, Huffington Post, at http://www.huffingtonpost.com/2012/07/18/disclose-act_n_1683573.html (publ’d Jul. 18, 2012). The DISCLOSE Act would have required disclosure of a donor of $10,000 or more by any independent groups which spends a minimum of $10,000 on campaign ads. Id.

[81] See, e.g., John Dalberg-Acton, 1st Baron Acton, Wikipedia, at http://en.wikipedia.org/wiki/John_Dalberg-Acton,_1st_Baron_Acton (last updated Jun. 13, 2012).