1 Running head: CORPORATIONS SHOULD HAVE THE SAME RIGHTS AS INDIVIDUALS TO FUND AND ENGAGE IN POLITICAL SPEECH: CITIZENS

UNITED V. FEC

Corporations Should Have the Same Rights as Individuals to Fund and Engage in Political Speech: Citizens United V. FEC

Kevin Mulcahey BUS200-05 Professor Monseau 11/13/11

2 CORPORATIONS SHOULD HAVE THE SAME RIGHTS AS INDIVIDUALS TO FUND AND ENGAGE IN POLITICAL SPEECH: CITIZENS UNITED V. FEC For decades, Congress and the Supreme Court have mulled over the issue of corporate political speech in regard to the First Amendment. In 1971, Congress enacted the Federal Election Act (FECA), which restricted the ways corporations could contribute money toward federal elections. It also established the Federal Election Commission, or FEC, to uphold acts limiting corporate campaign finance (Jost 2010). Opposition to such legislation has argued that corporate First Amendment rights have been violated. The First amendment of our Constitution addresses the rights to freedom of speech, press, assembly, and petition, as well as the implied rights of association and belief. More recently, the Bi Partisan Campaign Act of 2002, or the BCRA, sought further restrictions against the influence of corporations on our electorate system (Jost 2010). This paper will show that statutes and case law restricting the rights of corporations to fund and engage in political speech are necessary to protect the ideals of our democracy. Three main issues on the topic of corporate campaign finance reform and the First Amendment will be considered in this paper through citing politicians, judges, and other experts. The first paragraph of each issue will consist of an argument made by experts opposing corporate campaign finance reform. Subsequently, two paragraphs will consist of experts that support corporate campaign finance reform. In considering the opposing view first, the lengthy evidence supporting campaign finance reform will make a stronger case by directly disputing claims by the opposing experts. Before debating these issues, I will begin with the description of one of the more recent cases heard on the topic of corporate campaign finance. In 2010, the Supreme Court revisited the question of corporate campaign financing in Citizens United v. FEC. In this case, the FEC fined Citizens United, a nonprofit corporation intended to further the elections of particular candidates, for airing the film Hilary: The Movie on

3 CORPORATIONS SHOULD HAVE THE SAME RIGHTS AS INDIVIDUALS TO FUND AND ENGAGE IN POLITICAL SPEECH: CITIZENS UNITED V. FEC cable video-on-demand. The FEC had two main reasons for cracking down on Citizens United. First, Citizens United used general corporate treasury funds that were donated from for-profit corporations, which is barred by the BCRA. Citizens United could have avoided this stipulation by using a Political Action Committee treasury (PAC) for the funding of its film, which is legal under the BCRA. Secondly, Citizens United aired what the FEC considered to be an electioneering communication, which is any cable, broadcast, or satellite communication, within 30 to 60 days of a primary or election. This was also illegal under BCRA. The Supreme Court ruled most of BCRA unconstitutional on the basis that corporations could not be limited from the, funding of independent political broadcasts in candidate elections, under the First Amendment (oyez citizens). Citizens United v. FEC was hardly the first Supreme Court case that sought to resolve the issue over campaign finance reform. By ruling in favor of Citizens United in 2010, the Supreme Court overturned decades of case law. Republican Senator Mitch McConnell of Kentucky said that the BCRA, disparage[s] governing Supreme Court case law (Jost 2002). In his defense, the Supreme Court stated in the 1976 case of Buckley v. Valeo that political speech and political spending were so closely related that First Amendment rights must be considered (Witt). Furthermore, as Justice Kennedy mentioned in his majority opinion of the Citizens United case, it is unlawful for the government to restrict, the freedom to think for ourselves, and if the First Amendment is ever violated in this manner, legislation must be overturned. However, the idea that previous case law has given corporations the freedom to support or oppose any candidate with any type of funding is false.

4 CORPORATIONS SHOULD HAVE THE SAME RIGHTS AS INDIVIDUALS TO FUND AND ENGAGE IN POLITICAL SPEECH: CITIZENS UNITED V. FEC Despite finding money and speech related in Buckley v. Valeo, the Supreme Court chose to restrict the ways in which corporations could contribute. It decided that, limitations of the FECA enhance the integrity of our system of representative democracy (Oyez Buckley). Regardless of whether or not a corporation is corrupt, restricting corporate campaign financing prevents disillusionment with the electoral process. Again, in the 1989 decision of Austin v. Michigan State Chamber of Commerce, the Supreme Court ruled that corporations could not use general treasury funds supplied by for-profit corporations to finance campaigns. Its ruling sought to dispel corruption or perceived corruption witnessed by voters. Clearly, the Supreme Court has had a history of restricting some corporate speech to protect our political process. In the 2002 case of McConnell v. FEC, with Senator McConnell as the plaintiff, the Supreme Court again ruled in favor of restricting corporate campaign finance. The BCRA sought to restrict soft-money, or implicit advocacy of politicians through corporate funding, and the court found that this was constitutional. In the majority opinion, OConnor and Stevens reasoned that express advocacy of a candidate would deem more First Amendment protection, because it reflects direct political views. Soft-money corporate contributions attempt to circumvent the law through vagueness because "money, like water, will always find an outlet, as stated by Justice OConnor (oyez mcconnell). To the contrary of McConnells assertion that the Supreme Court has definitively protected corporate speech, case law appears to be in favor of restricting the role of corporations in campaign funding. Another argument posed by experts who oppose restrictions on corporate campaign financing is that real political speech is not possible without money. As Sean Parnell of the Center of Competitive Politics states, Limiting money spent on politics infringes on the First

5 CORPORATIONS SHOULD HAVE THE SAME RIGHTS AS INDIVIDUALS TO FUND AND ENGAGE IN POLITICAL SPEECH: CITIZENS UNITED V. FEC Amendment because effective political speech requires money. This principle applies whether a citizen-activist copies a flyer for distribution, a candidate purchases radio ads or an interest group reserves TV time to promote its agenda (Jost). Jay Mandel, an economics professor at Colgate University also argues that other means of campaign funding such as public financing are, underfunded as elections, have become much more expensive (Billitteri). Evidence given by justices and other experts will prove that corporate spending is not completely restricted, and that public financing is more relevant than the opposition asserts. Rather than prohibiting corporate political speech entirely, campaign finance law mostly focuses on the types of funds and the time frame in which they are used. Citizens United was confronted by the FEC because they chose to fund the film Hilary from general treasury funds that were formed by for-profit corporate funds. Had Citizens United taken funds from its PAC treasury or a separate political treasury, there would not have been a contribution issue. Justice Stevens, upon reviewing previous case law, believes that, the ability to form political action committees provides corporations with a constitutionally sufficient opportunity to finance electioneering (oyez citizens). Also, as the term electioneering communication stipulates in the Bipartisan Campaign Reform Act, other mediums can be used for speech. The internet, for example, does not count as an electioneering communication (oyez stevens dissent). The time frame in which corporations can spend their money toward speech is quite lenient as well. As long as the ad is not within 30 to 60 days of an election, depending on what kind, the ad will be allowed regardless of the type of funding. Therefore, there is more evidence that the restriction placed upon free speech is much narrower than opposing lawmakers like McConnell assert.

6 CORPORATIONS SHOULD HAVE THE SAME RIGHTS AS INDIVIDUALS TO FUND AND ENGAGE IN POLITICAL SPEECH: CITIZENS UNITED V. FEC Public financing is another option that does not limit political discussion. When a politician opts for public financing, the government supplies the candidate an initial sum, and then matching funds for the amount of private contributions their opponent receives (oyez Arizona). The Supreme Court found in 1976 that public financing is an effort not to, censor speech, but rather to use public money to facilitate and enlarge public discussion and participation in the electoral process (jost). Thus, candidates that have less funding from special interest corporations have an even playing field during an election to inform the electorate of their platforms (cooper 2000). Under current provisions, politicians can choose to deny publicly financed contributions in favor of private money, which is what makes matching schemes so expensive (cooper 2000). Additionally, the idea that public financing is underfunded, as stated earlier by Mandel, is contradicted by the $67.5 million Bush and Gore received in public financing during the 2000 election (cooper 2000). A final assertion made by opposing experts, as well as the majority decision in Citizens United v. FEC, is that corporations have the same rights as human beings (Oyez citizens). Senator Mitch McConnell states in another CQ Researcher review that, soft money, issue advocacy, express advocacy, PACs and all the rest are nothing more than euphemisms for First Amendment-protected, political-speech-and-association means of amplifying one's voice in this vast nation of 270 million people (cooper 2000). It is assumed by restricting corporate campaign financing that businesses want to corrupt officeholders, when corporations are donating because they simply want voice their First Amendment rights for better government (jost 2010). The dissenting opinion of the Citizens United case directly refutes these claims by stating that corporations do not receive the same First Amendment guarantees as people.

7 CORPORATIONS SHOULD HAVE THE SAME RIGHTS AS INDIVIDUALS TO FUND AND ENGAGE IN POLITICAL SPEECH: CITIZENS UNITED V. FEC Justice John Paul Stevens states in his dissent that, the distinction between corporate and human speakers is significant (oyez citizens). There are a number of reasons why corporations should not be viewed as people in the electoral process. According to Stevens, the interests of eligible voters may conflict directly with the interests of non-resident corporations (oyez citizens). Because corporations are organized with the goal of maximizing shareholder value, corporations must engage in the electoral process with their shareholders in mind, which undermines our political process (oyez citizens). An individual human being does not have to appease shareholders, and votes for the candidate who will benefit society the most. Furthermore, voters believe that they have less of a voice in the political process when corporations can spend unlimited amounts of money toward a particular candidate. When corruption is perceived by the voter, they may decide that voting is meaningless (mccain Jost 02). Acts like the BCRA assure voters, that unregulated contributions [will not] pose a serious threat to our democracy (jost mccain 02). Another point that Stevens makes is that the First Amendment can be partially restricted based on the speaker or institution when there is a, legitimate governmental interest (oyez citizens). Students, members of the armed forces, and government employees are routinely restricted from absolute free speech (oyez citizens). The First Amendment does not absolutely guarantee speech free of any regulation (oyez citizens). In fact, a danger that is associated with allowing a corporation completely unrestricted and unregulated free speech is that not all corporations that influence our political process are American (oyez citizens). Multinational corporations would have the same rights to political speech as individual American citizens according to the majority opinion of Citizens United v. FEC (oyez citizens). Although it is

8 CORPORATIONS SHOULD HAVE THE SAME RIGHTS AS INDIVIDUALS TO FUND AND ENGAGE IN POLITICAL SPEECH: CITIZENS UNITED V. FEC slightly more obvious, it is a pertinent example of why corporations are very different from human beings and have vested interests at heart (oyez citizens). The decision in Citizens United v. FEC shocked and outraged a majority of citizens, regardless of their political affiliation (jost). General sentiment by the public against the decision of Citizens United v. FEC proves a general consensus among the public that corporations are not human beings, and do not have the same rights to political speech (jost). Voters believe that they have less of a voice in the political process when corporations can spend unlimited amounts of money toward a particular candidate. Because corporations have shareholder and profit goals in mind, regulation is necessary to curb vested interests from outweighing the voice of constituents. Additionally, decades of case law and statutes dating back to the 1970s and 1980s have generally accepted the idea that placing contribution limits on corporations does not unduly restrict First Amendment rights. Generally, campaign finance reform, such as the BCRA, does not restrict the message of political speech, but rather how it is funded. Campaign finance reform holds a rightful place in U.S. legislation in order to protect the sanctity of our democracy, and does not place the heavy burden on corporate speech that some experts believe.

9 CORPORATIONS SHOULD HAVE THE SAME RIGHTS AS INDIVIDUALS TO FUND AND ENGAGE IN POLITICAL SPEECH: CITIZENS UNITED V. FEC

10 CORPORATIONS SHOULD HAVE THE SAME RIGHTS AS INDIVIDUALS TO FUND AND ENGAGE IN POLITICAL SPEECH: CITIZENS UNITED V. FEC

11 CORPORATIONS SHOULD HAVE THE SAME RIGHTS AS INDIVIDUALS TO FUND AND ENGAGE IN POLITICAL SPEECH: CITIZENS UNITED V. FEC

Works Cited Jost, K. (2010, May 28). Campaign finance debates. CQ Researcher, 20, 457-480. Retrieved from http://library.cqpress.com/cqresearcher/ Witt, E. (1985). The Modern First Amendment. Editorial research reports 1985 (Vol. I). Washington, DC: CQ Press. Retrieved from http://library.cqpress.com/cqresearcher/cqresrre1985010400 Jost, K. (2002, November 22). Campaign finance showdown. CQ Researcher, 12, 969-992. Retrieved from http://library.cqpress.com/cqresearcher/ AUSTIN v. MICHIGAN CHAMBER OF COMMERCE. The Oyez Project at IIT Chicago-Kent College of Law. 10 November 2011. <http://www.oyez.org/cases/19801989/1989/1989_88_1569>.

12 CORPORATIONS SHOULD HAVE THE SAME RIGHTS AS INDIVIDUALS TO FUND AND ENGAGE IN POLITICAL SPEECH: CITIZENS UNITED V. FEC MCCONNELL v. FEDERAL ELECTION COMMISSION. The Oyez Project at IIT Chicago-Kent College of Law. 12 November 2011. <http://www.oyez.org/cases/20002009/2003/2003_02_1674>.

Billitteri, T. J. (2008, June 13). Campaign finance reform. CQ Researcher, 18, 505-528. Retrieved from http://library.cqpress.com/cqresearcher/

Cooper, M. H. (2000, March 31). Campaign finance reform. CQ Researcher, 10, 257-280. Retrieved from http://library.cqpress.com/cqresearcher/

CITIZENS UNITED v. FEDERAL ELECTION COMMISSION. The Oyez Project at IIT ChicagoKent College of Law. 15 November 2011. <http://www.oyez.org/cases/20002009/2008/2008_08_205>.