09 September 2009

Corporate Spending Limits Dead?

It looks likely that federal campaign finance limitations on corporate spending, except through political action committees, will soon be declared invalid by the U.S. Supreme Court, overruling two prior precedents: Austin v. Michigan Chamber of Commerce (1990) and McConnell v. FEC (2003). The case in question, Citizens United v. Federal Election Commission was given a second round of oral argument on that question today.

The Citizens United case involves a movie produced by a corporation which was treated as an electioneering expense regulated by campaign finance laws due to its overt political message related to a candidate held close to the election. The specific limitation will probably be found invalid unanimously, but the court's four liberal leaning justices (including Justice Sotomayor) appeared to favor a ruling on narrower grounds than simply overruling the entire line of jurisprudence that made it constitutional for Congress to enact the McCain-Feingold campaign finance reform law.

It was also Justice Sotomayor's first day of public participation in the work of the U.S. Supreme Court at oral arguments, and was also Obama's U.S. Solicitor General Kagan's first appearance in oral arguments.

The ruling has the potential to deeply influence not only federal campaign finance laws, but state ones, including those in Colorado which limit political activity by corporations and unions. If U.S. Supreme Court campaign finance precedents being considered are overruled as expected, the reasoning of this case brought on First Amendment free speech grounds will apply with equal force to state laws and state constitutional provisions.

Colorado voters adopted comprehensive campaign finance reform in 2002 through Amendment 27. The limitations on electioneering spending in Amendment 27 which is parallel to the federal limitations at issue in Citizens United is found at Section 6 of the Amendment, which states:

Section 6. Electioneering communications. (1) ANY PERSON WHO EXPENDS ONE THOUSAND DOLLARS OR MORE PER CALENDAR YEAR ON ELECTIONEERING COMMUNICATIONS SHALL SUBMIT REPORTS TO THE SECRETARY OF STATE IN ACCORDANCE WITH THE SCHEDULE CURRENTLY SET FORTH IN 1-45-108 (2), C.R.S., OR ANY SUCCESSOR SECTION. SUCH REPORTS SHALL INCLUDE SPENDING ON SUCH ELECTIONEERING COMMUNICATIONS, AND THE NAME, AND ADDRESS, OF ANY PERSON THAT CONTRIBUTES MORE THAN TWO HUNDRED AND FIFTY DOLLARS PER YEAR TO SUCH PERSON DESCRIBED IN THIS SECTION FOR AN ELECTIONEERING COMMUNICATION. IN THE CASE WHERE THE PERSON IS A NATURAL PERSON, SUCH REPORTS SHALL ALSO INCLUDE THE OCCUPATION AND EMPLOYER OF SUCH NATURAL PERSON. THE LAST SUCH REPORT SHALL BE FILED THIRTY DAYS AFTER THE APPLICABLE ELECTION.
(2) NOTWITHSTANDING ANY SECTION TO THE CONTRARY, IT SHALL BE UNLAWFUL FOR A CORPORATION OR LABOR ORGANIZATION TO PROVIDE FUNDING FOR AN ELECTIONEERING COMMUNICATION; EXCEPT THAT ANY POLITICAL COMMITTEE OR SMALL DONOR COMMITTEE ESTABLISHED BY SUCH CORPORATION OR LABOR ORGANIZATION MAY PROVIDE FUNDING FOR AN ELECTIONEERING COMMUNICATION.


Also possibly implicated are parts of Section 3 on Contributions of Amendment 27 which read as follows:

(4) (a) IT SHALL BE UNLAWFUL FOR A CORPORATION OR LABOR ORGANIZATION TO MAKE CONTRIBUTIONS TO A CANDIDATE COMMITTEE OR A POLITICAL PARTY, AND TO MAKE EXPENDITURES EXPRESSLY ADVOCATING THE ELECTION OR DEFEAT OF A CANDIDATE; EXCEPT THAT A CORPORATION OR LABOR ORGANIZATION MAY ESTABLISH A POLITICAL COMMITTEE OR SMALL DONOR COMMITTEE WHICH MAY ACCEPT CONTRIBUTIONS OR DUES FROM EMPLOYEES,OFFICEHOLDERS, SHAREHOLDERS, OR MEMBERS.
(b)THE PROHIBITION CONTAINED IN PARAGRAPH (a) OF THIS SUBSECTION (4) SHALL NOT APPLY TO A CORPORATION THAT:
(I) IS FORMED FOR THE PURPOSE OF PROMOTING POLITICAL IDEAS AND CANNOT ENGAGE IN BUSINESS ACTIVITIES; AND
(II) HAS NO SHAREHOLDERS OR OTHER PERSONS WITH A CLAIM ON ITS ASSETS OR INCOME; AND
(III) WAS NOT ESTABLISHED BY AND DOES NOT ACCEPT CONTRIBUTIONS FROM BUSINESS CORPORATIONS OR LABOR ORGANIZATIONS.


Oral argument discussed whether limits on foreign persons in U.S. elections would be possible through a U.S. corporation, and there were also hints that "soft money" restrictions on political party spending would necessarily fall if "hard money" limitations on political action committees of corporations fell.

3 comments:

Dave Barnes said...

How about a law that states that all laws written IN ALL CAPS shall be null and void.
What part about readability do these people not understand?

Andrew Oh-Willeke said...

This practice, I can defend and explain. I cut and paste from the Amendment 27 text, rather than the state constitutional language of codified after this addition was made by the voters (because it takes a few less clicks to get to the information that way). In the codified state constitution, the language appears in normal capitalization.

Why was the proposed amendment language in all caps?

Because, in bills (i.e. proposed statutory changes) and in proposed constitutional amendments, additions appear in ALL CAPS, removals appear in strikeout, and existing text appears in ordinary text. Bill text that won't be codified (like effective date language) also appears in plain text. Usually, this is helpful, because the most bills and proposed constitutional amendments are only adding a word or phrase here and there, so calling attention to the changes is important.

The formating conventions also facilitate using automated means to turn an amended final text into proposed bill language which is written in terms of what changes are made to the provision changed. You do the redline version first. The conversion to bill language, which is exceedingly tedious and easy to make mistakes in drafting, is then either automated or delegated to someone with less subject-matter knowledge, who gets paid less, freeing up time for scarce subject-matter experts. Bill drafting from a redline is harder to do without strong visual cues.

Alternatives, like underlining inserted language in bills, could be used, but don't provide such a strong visual cue.

Dave Barnes said...

I still think ALL CAPS are stupid.

But, I will change my statement.
How about "all current laws are null and void" and we have to start over?

The Colorado Constitution and associated laws are a mess.