Citizens United Explained

Jonas Kron

“The Court’s blinkered and aphoristic approach to the First Amendment may well promote corporate power at the cost of the individual and collective self-expression the Amendment was meant to serve.”

~Justice John Paul Stevens, writing for the minority in Citizens United v. Federal Election Commission¹

In January, the U.S. Supreme Court held in Citizens United v. Federal Election Commission that the First Amendment protects the use of corporate funds to advocate the election or defeat of a candidate for public office. The 5–4 majority reasoned that because corporations are simply groups of individuals with First Amendment rights, those rights exist whether employed by individuals or the group.
The majority went out of its way to issue a broad and far reaching decision, contrary to its self-professed value of “judicial restraint.” The case originally centered on a narrow question about the application of a portion of the 2002 Bipartisan Campaign Reform Act (BCRA, also known as “McCain-Feingold”), but on its own initiative the court called everyone back for a second hearing last summer to consider the entire constitutionality of BCRA.
Having changed the question of the case to their liking, the five justices proceeded with their troubling view of the First Amendment, corporations and the nature of political spending to rule BCRA unconstitutional.
The decision means that companies may spend unlimited funds from their own treasuries² on independent expenditures to support or oppose a candidate as long as they do not coordinate their efforts with the candidates. It also means that third-party groups – trade associations being the most visible example – are also allowed to use unlimited general funds for the same purpose.
While there is a great deal of doctrinal and historical argument in the decision, for our purposes, the court’s decision is based on two central premises that (1) First Amendment protections extend to corporations, and (2) the government’s only legitimate interest is in preventing quid pro quo style corruption.
This first premise arises from the debate as to whether corporations should be treated any different than actual people. The majority took what would appear to be a position of First Amendment absolutism – that political speech must be protected regardless of its source and that democracy flourishes if ideas and opinions are unobstructed. But this appealingly simple position ignores the many ways in which the Supreme Court has allowed restrictions on the basis of institution or class. For example, it has been legal for years to put certain restrictions on the political speech rights of students, prisoners, members of the Armed Forces, foreigners, and government employees. For decades before this decision, it had been well established in the Court’s precedents that corporations did not have the same free speech rights as human beings.
The court’s conclusion is also perplexing given that the court has treated corporations differently than actual persons in other contexts. For example, in court proceedings, corporations do not have any Fifth Amendment rights against self-incrimination.
The second premise – that the only form of political spending corruption that the government can seek to protect against is quid pro quo corruption – completely overlooks the insidious nature of money in democracy, as Justice Stevens explained in his dissenting opinion:
Corruption can take many forms. Bribery may be the paradigm case. But the difference between selling a vote and selling access is a matter of degree, not kind. And selling access is not qualitatively different from giving special preference to those who spent money on one’s behalf.
Justice Stevens’ opinion demonstrates at length the exceedingly weak reasoning behind the majority opinion. He summarizes the Court’s failure perhaps best in his conclusion:
At bottom, the Court’s opinion is thus a rejection of the common sense of the American people, who have recognized a need to prevent corporations from undermining self government since the founding, and who have fought against the distinctive corrupting potential of corporate electioneering since the days of Theodore Roosevelt. It is a strange time to repudiate that common sense. While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics.
Some inside the beltway, notably of the political consulting class, have concluded that it can’t get any worse as money pervades every aspect of Washington. But most are not so sure.
President Obama very quickly railed against the decision as “devastating,” asserting that it “strikes at our democracy itself.” In his State of the Union address, the President said that Citizens United will “open the floodgates for special interests – including foreign corporations – to spend without limit in our elections.” The majority’s position may well turn out to be the final straw that destroys citizens’ confidence in elected institutions.
The ruling will add to the flood of corporate speech that drowns out citizen voices. This flood can only leave people with the belief that corporations dominate the debate and that they have little if any ability to have their voices heard and influence decision makers in Washington. It undermines the confidence of Americans in their power and right to advocate for what is right and good for their communities and the nation as a whole. This is the kind of cynicism that risks the integrity of our democracy and the willingness of voters to hold their representatives accountable. Again in the words of Justice Stevens, “A democracy cannot function effectively when its constituent members believe laws are being bought and sold.”
These are not just academic concerns. Testifying before Congress about the decision, pioneering shareholder advocate Nell Minow of the Corporate Library reflected that “the $600 million spent by the financial services industry on lobbying in the decade before the financial meltdown led to the loosening and elimination of regulatory protections that could have mitigated that damage or prevented it entirely.”³
One likely result of this decision is that companies will feel increasingly liberated to launder political spending through conduits such as the U.S. Chamber of Commerce. In the recent political battle over healthcare reform, health insurance companies, gave millions of dollars to the trade group America’s Health Insurance Plans (AHIP). AHIP passed on those dollars to the U.S. Chamber of Commerce, which turned the money into attack ads on health care reform. It is estimated that Aetna, Humana, Cigna, Kaiser Foundation Health Plans, UnitedHealth Group and Wellpoint gave somewhere between $10 million and $20 million to the AHIP.⁴ Citizen’s United will likely bolster the Chamber’s impact on the November 2010 elections.
What is clear, however, is that a majority on the Supreme Court have a very clear vision of a limited role for government in campaign finance regulations. Any effort to remedy the situation, shy of a constitutional amendment, will unfortunately have to accommodate that vision so long as the current majority of Roberts, Alito, Scalia, Thomas, and Kennedy remains in place. And even if the balance is tipped in the other direction, future justices may feel compelled, unlike the majority, to adhere to the Citizens United precedent. And as Justice Stevens put it, that majority may well have a significant cost for citizen democracy and expression.
1. No. 08-205, slip op. (U.S. January 21, 2010).
2. Funds from the corporate treasury are those which pay for business operations (including shareholder dividends), as distinct from political action committees,
whose administrative costs may be covered by companies but which are funded by employee contributions.
3. Hearing on Corporate Governance after the Citizens United Decision, House Committee on Financial Services, Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, March 11, 2010.
4. “Health Insurers Funded Chamber Attack Ads,” “Under the Influence” blog entry, January 12, 2010, http://undertheinfluence.nationaljournal.com/