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Censorship or Protection? Corporate Political Speech - Legal Case Series - Citizens United v. FEC


Is money speech? Are corporations with large amounts of money able to spend as they please to influence elections? How does the First Amendment and the freedom of speech apply to large corporations?


Money is a tool to achieve many things. Throughout its history, America has experienced money being used to build and create, but also to buy control over others. America has experienced politicians being bribed, bought out, or controlled by their desire for money. As humans are fallible, it would be naïve to believe that such things would never happen.


Compounding the issues that surround money being used to buy votes or politicians is the fact that the same politicians are the ones being entrusted to do something about the issues. If money can influence votes and politicians, why wouldn’t money influence the proposed solutions to the issues?


It is within this backdrop that the case of Citizens United v. FEC arose in 2010. Citizens United was a group opposed to Hillary Clinton’s bid for President. Citizens United produced a 90-minute documentary on Hillary that highlighted many reasons, in the opinion of Citizens United and others they interviewed, to not vote for Hillary.


Citizens United wanted to run ads to promote its documentary, but the laws at the time banned such expenditures from a corporation within 30 or 60 days of an election. Due to this, Citizens United sued, arguing for the right to run the ads. It was not until long after the election passed that the Supreme Court ruled in Citizens United’s favor.


The U.S. government had, for many years, banned corporations, unions, and associations from using their general treasury funds to advocate for or against candidates within certain timeframes of an election. If a corporation, union, or association wanted to advocate for or against candidates, they would have to create a Political Action Committee (“PAC”) and then run all such speech through the PAC they created.


PAC’s are, and were, subject to extensive disclosure requirements associated with the funds and how they are spent. Individuals in charge of the PAC can be held criminally liable for not fully complying with all PAC reporting requirements. At the time of the Citizens United case, of the over five million corporations in the U.S., less than two thousand of them had formed a PAC (which is less than 0.04% of corporations in America).


At the time of Citizens United, 5.8 million corporations had filed tax returns in 2006, 96% of the 3 million businesses that belonged to the U.S. Chamber of Commerce had fewer than 100 employees, and more than 75% of the corporations filing tax returns reported less than $1 million in gross receipts (not even a net profit) in the given tax year. Citizens United v. Fed. Election Comm'n, 558 U.S. 310, 354 (2010). In other words, very few of the corporations had the funds or ability to form a PAC and comply with the PAC requirements. As the Supreme Court outlined:


“PACs are burdensome alternatives; they are expensive to administer and subject to extensive regulations. For example, every PAC must appoint a treasurer, forward donations to the treasurer promptly, keep detailed records of the identities of the persons making donations, preserve receipts for three years, and file an organization statement and report changes to this information within 10 days.


“And that is just the beginning. PACs must file detailed monthly reports with the FEC, which are due at different times depending on the type of election that is about to occur:


“‘These reports must contain information regarding the amount of cash on hand; the total amount of receipts, detailed by 10 different categories; the identification of each political committee and candidate's authorized or affiliated committee making contributions, and any persons making loans, providing rebates, refunds, dividends, or interest or any other offset to operating expenditures in an aggregate amount over $200; the total amount of all disbursements, detailed by 12 different categories; the names of all authorized or affiliated committees to whom expenditures aggregating over $200 have been made; persons to whom loan repayments or refunds have been made; the total sum of all contributions, operating expenses, outstanding debts and obligations, and the settlement terms of the retirement of any debt or obligation.’ ” Citizens United v. Fed. Election Comm'n, 558 U.S. 310, 337-38 (2010).

The Supreme Court reviewed various rationales for the regulations that required a corporation form a PAC in order to speak at certain times on political matters with candidates. Ultimately, the Supreme Court classified the PAC requirements as an outright ban on corporate speech as the regulations related to disclosure had too high a compliance burden for most companies.


Additionally, the bans on speech about candidates, except for through a PAC, did not apply to large media corporations. The Supreme Court felt that it was not proper for the government to pick and choose which large corporations could speak and which ones could not speak on such political matters.


Due to this, the Supreme Court held it was unconstitutional to restrict independent corporate speech. In doing so, the Supreme Court overturned a precedent from 1990 where they had expressly allowed these types of restrictions on corporate speech to be in place. The Supreme Court noted that there were two lines of precedent in the country, one that protected corporate speech and one that did not, and the Supreme Court elected to follow the line of precedent that protected corporate speech.


However, the Citizens United case had two parts to it. In the first, the Court overturned the requirement that corporations form PAC’s in order to speak on certain political matters. In the second part though, and in a somewhat ironic fashion, the Supreme Court upheld requirements that all people and corporations have to file disclosures about their political speech.


The Supreme Court felt that it was important for Americans to know who was behind certain political speech, and thus felt that laws that required reports, disclosures on paid advertisements, or the like were permissible forms of regulation as they did not outright ban political speech.


The irony present is that the Supreme Court expressly noted that PAC’s were burdensome to administer due to all of their reporting and disclosure requirements. The Supreme Court struck down the requirements that corporations form PAC’s as violating the First Amendment due to the burdensome nature of the disclosure and compliance requirements with PAC’s, yet it upheld the requirement that all political speech be subject to disclosure and reporting requirements as such did not unduly burden speech.


Due to this, when various PAC requirements were challenged in courts after Citizens United, many state governments defended their PAC requirements as being a form of “disclosure” requirements, and many of the PAC requirements remain in force, even after the Citizens United case. As it stands currently, whether a corporation forms a PAC or not, they are still subject to disclosure requirements where the corporation has to file ongoing reports with the government that are public about the extent of their electioneering expenditures.


These disclosure laws are becoming fairly complex in many locations, and even well-meaning companies or groups find that they unintentionally run afoul of these regulations at times. Also, many smaller groups and corporations simply avoid speaking out on federal candidate issues, as they are afraid of running afoul of such laws since they cannot afford an attorney to help with compliance with all required reporting.


Due to this, it becomes important to review what such laws are really doing for America. As the Supreme Court noted in Citizens United, a previous case (the McConnell case) had a court record that was over 100,000 pages long. In all of that information and evidence, there was no evidence of a vote being bought. Additionally, at the time of Citizens United, 26 states did not ban corporate speech but allowed corporations to speak in state election matters. No proof had been offered at any stage of the legal proceedings that there was any corruption or vote buying occurring in these states. Citizens United v. Fed. Election Comm'n, 558 U.S. 310, 357, 360 (2010).


Granted, such matters are hard to detect and do not often occur in the open. However, all of the regulations that have been put in place, including even the requirement that corporations form a PAC to speak on certain political items, have always allowed the wealthiest corporations to still have a voice. All of the regulations make it much more difficult though for smaller groups or individuals to be as actively involved.


In other words, in all of the regulations that have been passed to address corruption or bribery, the wealthiest groups still get to speak and be involved, while those that cannot afford attorneys and compliance with complex disclosure laws do not get to speak or be involved. Why is it that our purported “solution” to addressing corruption and bribery still allows the wealthiest to be involved but effectively shuts out the smaller groups that do not have the type of money that could actually buy a vote or corrupt a politician?


There are many complex issues surrounding money, politics, and speech. Ultimately, though, we must face the real question of whether this is a problem that will be solved by more and more regulations that foreclose speech by the average citizen, or if there are other ways to address these issues, ways, perhaps, that do not still allow those with money to pay attorneys to continue to be involved as they wish while shutting out others without the same amount of money.


If you read other reviews of Citizens United, many authors decry the decision as a terrible decision as it respected the freedom of speech of corporations. While there are concerns about corporations that are worth billions or trillions of dollars and their potential impact on the political process, the vast majority of corporations are small business owners, working hard to make a living and trying to do something with their still limited resources. If America supports a ban on corporate speech, it is supporting a ban on the ability of individuals to form groups and amplify their voices through their associations with others.


In other words, the actual issues present still need to be addressed. America is stronger when all of its citizens, not just the rich, have the ability to speak and be involved in the political process. While Citizens United recognized some of the problems inherent in banning all corporate speech, it left open a large loophole with supporting disclosure requirements on speech that still allow for significant burdens and regulations to be placed on all political speech.

 

At Believe, we are promoting the Constitution through education and discussing the relevant issues. These small highlights are part of a bigger monthly discussion, with discussions that may take place in person and/or online. The discussions are free and are aimed at empowering through education. You can view the relevant and upcoming discussions at our page on The Law under the "Constitution Series".

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