Citizens United v. FEC: Big Money Politics Gets Even Bigger Green Light

What’s it all about?

In a nutshell, the 5-4 Citizens United decision allowed corporations (including certain nonprofit corporations) and labor unions to expand their role in political campaigns.

The case did not affect contributions to a candidate’s actual campaign. It is still illegal for companies and labor unions to give money directly to candidates for federal office.

What changed: many outside, non-candidate organizations could now raise and spend unlimited amounts of money to support or oppose a candidate.

The high court reasoned that as long as these unlimited funds aren’t spent in coordination (a crucial and controversial distinction) with the actual campaign, they do not “give rise to corruption or the appearance of corruption.” Thus, they would be legal from that point forward.

Also in 2010, a separate, lower court case — SpeechNow.org v. FEC — made possible the entities known as super PACs. With Citizens United as a precedent, the U.S. Court of Appeals for the D.C. Circuit ruled that theoretically independent spending groups could accept unlimited amounts of money from corporations, unions and even individuals with fat bankrolls.

Flash ahead to the 2016 presidential election. The legal seeds sewn in 2010 have germinated into super PACs such as Right to Rise USA, which former Florida Gov. Jeb Bush helped create and ultimately raised more than $100 million to support one person: Bush. But Right to Rise USA asserted it was not “coordinating” with the Bush campaign.

The Citizens United decision also paved the way for the creation of so-called “dark money” groups.

As tax-advantaged “social welfare” organizations or business leagues, these nonprofits can function the same way as super PACs do as long as election activity is not their primary activity.

Deciding whether these groups are really primarily about promoting social welfare, rather than politics, has been the source of considerable controversy.

This distinction is important — unlike super PACs, these “social welfare” groups do not have to report who funds them, allowing donors to avoid publicity. And both the Internal Revenue Service and Federal Election Commission, which have some jurisdiction over politically active nonprofits, have all but declined to pursue groups that might be playing politics too much.

What does it all mean for our political system?

“We now live in a world with unlimited money,” laments Paul S. Ryan, deputy executive director and attorney with the Campaign Legal Center, which is working to undo the effects of the decision. “And we do have corruption, and we don’t have disclosure.”

Amending the Constitution

Don’t look for much change anytime soon. Passing a constitutional amendment is a daunting assignment. A two-thirds vote of approval would be required in both the U.S. House and U.S. Senate, which often can’t achieve simple majorities on seemingly perfunctory matters. And then, three-fourths (38) of the nation’s states would have to ratify an amendment.

The last time this occurred it took 203 years. The 27th Amendment, which was introduced in 1789, wasn’t approved until 1992. It prohibits raises for members of Congress from going into effect until the start of the next term.

“It is the one thing that Americans agree on left, right and center,” he said. “That this is one of the worst Supreme Court decisions in history and it will be overturned. What we need is a Congress that will send it to the states.”

Ryan, however, is skeptical.

“We’re not advocates of the amendment approach for a number of reasons,” he said.

In addition to the political challenges, there’s the wording of the amendment itself. The concern is that it would be too strongly worded or not strongly worded enough.

To date, the proposed “Democracy for All Amendment” achieved the most support among anti-Citizens United amendment proposals.

The joint resolution would give state and federal government the power to “regulate and set limits on the raising and spending of money by candidates and others to influence elections.” It also would empower the government to prohibit corporations “or other artificial entities created by law” from spending money to influence elections.

It received 54 votes in the Senate in 2014, but needed 60 to move forward.

“It’s really tough to draft,” Ryan said of an amendment. “The purpose, in effect, is to regulate and restrict private behavior. That’s only happened once, with the Prohibition amendment. You know how that worked out.”

But there are those who say an amendment is the better way to go, like Jeff Clements, author of “Corporations are Not People: Reclaiming Democracy from Big Money and Global Corporations.”

“Constitutional amendments — not new Supreme Court justices — ended slavery, guaranteed equal protection and voting rights regardless of race, won the vote for women, enabled a progressive income tax, ended the poll tax barrier to voting and prevented states from depriving Americans over 18 years old the right to vote based on age,” he wrote in The Hill newspaper last month.

Reversal

Others support the other option — getting another case to the Supreme Court that might prompt a reversal of Citizens United.

An amendment, says law professor and campaign finance expert Rick Hasen of the University of California at Irvine, isn’t realistic, at least not in the current environment.

“It’s a political non-starter,” he said, pointing to the Democracy for All Amendment, which did not receive a single Republican vote. “If you really want to get rid of super PACs, we would need to somehow change the understanding of the First Amendment.”

To do that, the 1976 decision Buckley v. Valeo, in which the Supreme Court basically said political spending is akin to free speech, would need revisiting.

“Certain but not all spending limits have the potential to be upheld as constitutional and strike the right balance with a liberal Supreme Court,” Hasen said.

Theodore Olson, the attorney who represented Citizens United, second from right, arguing before the Supreme Court in 2009.

With Scalia’s death in February 2016, there’s a chance the ideological balance of the court may shift. The conservative justice voted in the majority in the Citizens United case, and was not a friend of the campaign finance reform community, though he was bullish on disclosure of donors.

So the selection of the next justice is crucial. If the Senate confirms someone who opposes Citizens United — either a nominee from Obama or his White House successor — there’s a real possibility the high court might reverse itself.

How might that happen?

First, it would require a lawsuit of some sort that would need to wind its way through the legal system.

A state or even a city could pass a new law banning corporate contributions to outside groups outright. Or enforce such a law that’s already on the books. Or pass a ballot initiative.

In the current atmosphere, such a law would inevitably be challenged — and such a challenge could eventually make its way to the U.S. Supreme Court. But even if this were to happen, say campaign finance experts, the process would still take years.

Nick Penniman, executive director of campaign finance reform group Issue One, says there is “nothing in the pipeline” as far as cases but that there could be a reversal “within five or six years.”

Short of a reversal, there are incremental reforms that could make a difference. Advocates are, for example, pushing for public financing of campaigns and more robust disclosure of contributions.

Even if Citizens United is reversed, however, that won’t magically create a system that everyone is happy with, says David Donnelly of Every Voice, a campaign finance reform advocate. The nation still ends up with the system that existed in 2009, which was “not working very well.”

“There’s no silver bullet,” Donnelly said.

John Dunbar is political editor and deputy executive editor for the Center for Public Integrity. This story is part of a collaboration with Reveal and was co-published with Public Radio International (PRI).

Citizens United and the IRS Teaparty Scandal

In Charles Johnson’s thrilling book, The Truth About the IRS Scandal, we learn that, Lois Lerner, the woman at the center of the congressional probe into the targeting of conservative groups, called the Tea Party “very dangerous” and hoped it could be used to roll back a court case, Citizens United v. Federal Election Commission (2010). Lerner conspired with her old colleagues at the FEC to leak confidential tax information. She even acted to retroactively award tax exempt status to politically connected charities while targeting for destruction those committed to truth.

Forbes details events leading up to the scandal:

July 2008: In the run-up to the presidential election, Citizens United, a conservative lobbying group, wants to air a series of commercials promoting a film targeting Hillary Clinton, who was seeking the 2008 Democratic presidential nomination. The United States District Court for the District of Columbia ruled that they couldn’t, finding that it was a violation of the Bipartisan Campaign Reform Act of 2002 (also known as the McCain–Feingold Act). The group appealed. (Forbes)
March 24, 2009: The Supreme Court agrees to hear the case (now that the election was over), and oral arguments begin in Citizens United v. Federal Election Commission. Theodore B. Olson, who successfully represented former President George W. Bush in Bush v. Gore, represents Citizens United. Malcolm L. Stewart of the Department of Justice represents the government. More than 40 briefs amicus curiae were filed, including those from Sen. John McCain (R-AZ), Sen. Mitch McConnell (R-KY), the Institute for Justice and the NRA. (Forbes)
January 21, 2010: The Supreme Court issues an opinion reversing the original decision in part, affirming the matter in part and remanding it back to the lower court. The Court finds that it is unconstitutional to ban all free speech by corporations, unions, and other organizations – even as it applied to political campaigns. As a result of the ruling, the number of nonprofit organizations applying for tax-exempt status under section 501(c)(4) of the Tax Code increases dramatically. (Forbes)
August 2010: To deal with the increase, the IRS distributes its first formal BOLO (Be on the Lookout) listing for purposes of reviewing applications. Initially limited to Tea Party organizations applying for tax-exempt status, it widens over the next year to include more groups, and specific policy positions such as government spending and taxes. By 2011, acting Director of Exempt Organizations, Lois Lerner, is advised of the practice. The use of BOLO lists continues until June 12, 2013. (Forbes)
October 26, 2010: Determinations Unit personnel emailed concerns about the additional review process for tea party applications to the Technical Unit. This individual follows up in November when response to concern about consistency yields no change. (Infowars.com)
June 29, 2011: IRS director of exempt organizations Lois Lerner learns at a meeting that the agency flagged group titles with “tea party,” “patriot,” or “9/12 Project” for supplementary review. She told those involved to alter this practice “immediately,” according to a draft of the report from the TIGTA, who audits the IRS. (Infowars.com)
Hillary runs in 2016, collecting tens of millions of dollars from the super PACs

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