United States Supreme Court Lifts Restrictions On Corporate Political Campaign Financing

Jan 21, 2010

A 5-4 United States Supreme Court ruling issued today, January 21, 2010, has lifted longstanding corporate restrictions on political campaign financing.  

As reported in the Business Week article reprinted below, the ruling may affect labor unions. 

To view the U.S. Supreme Court ruling, click here.


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Corporate Campaign Spending Backed by U.S. High Court

BusinessWeek–January 21, 2010

By Greg Stohr

Jan. 21 (Bloomberg) — A divided U.S. Supreme Court struck down decades-old restrictions on corporate campaign spending, reversing two of its precedents and freeing companies to conduct advertising campaigns that explicitly try to sway voters.

The 5-4 ruling went beyond the circumstances in the case before the justices, a dispute over a documentary film attacking then-presidential candidate Hillary Clinton.

The majority, invoking the Constitution’s free-speech clause, said the government lacks a legitimate basis to restrict independent campaign expenditures by companies.

“The government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether,” Justice Anthony Kennedy wrote for the majority.

The ruling divided the court along ideological lines, with the newest justice, Sonia Sotomayor, joining the liberal wing in dissent. Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas and Samuel Alito joined Kennedy.

Companies, which had been barred since 1947 from spending money in support or opposition to a candidate, potentially now will pump millions of dollars into campaigns. Companies, and possibly labor unions as well, will be able to use their general-treasury dollars to punish or reward lawmakers for their votes on legislation.

The decision may boost Republicans as they aim to recapture congressional seats in the November election. Senate Republican leader Mitch McConnell of Kentucky was among those urging the court to lift the corporate spending restrictions, while the Democratic National Committee backed the limits.

Roberts and Alito

The ruling marks the boldest step yet for Roberts and fellow George W. Bush appointee Alito, who previously had shied away from explicitly reversing precedents. The majority overturned a 1990 Supreme Court decision that said corporations can be barred from using general treasury funds to pay for campaign advertisements.

The court also reversed part of a 2003 decision upholding the McCain-Feingold overhaul of federal campaign finance regulations. The 2002 law barred corporate and union campaign spending in the weeks leading up to an election, even if the advertisements didn’t explicitly take a stance on a ballot issue. The high court today said that so-called electioneering provision is unconstitutional.

The 2002 law was named after its Senate sponsors, Republican John McCain of Arizona and Democrat Russ Feingold of Wisconsin.

The ruling is a victory for Washington-based Citizens United, the corporation that created “Hillary: The Movie.” The 90-minute film, which creators sought to air on a video-on- demand channel during Clinton’s 2008 presidential campaign, features interviews with a number of prominent critics of the New York senator, including Ann Coulter and Newt Gingrich.

The case is Citizens United v. Federal Election Commission, 08-205.


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