Tuesday, June 7, 2011

Ban on corporate donations to candidates declared unconstitutional (again)

June 7, 2011 ~3:40 PM

After reconsideration, Judge Cacheris has upheld his ruling that pursuant to the holding in Citizens United v. FEC, 130 U.S. 876 (2010), the Defendants in U.S. v. Danielczyk, Case No. 1:11cr85 can not be held criminally liable for alleged violations of Federal campaign finance laws banning direct contributions to candidates from corporations.

The 15 page opinion can be found here.

Primary holding on this issue: A law that bans a corporation from giving contributions directly to a federal political candidate, when natural person can still give money is unconstitutional under the First Amendment.  In short, for campaign finance purposes corporations and people must be treated the same.

The ruling

In finding 2 U.S.C. § 441b unconstitutional Judge Cacheris stated as follows:

" . . .following Citizens United, individuals and corporations must have equal rights to engage in both independent expenditures and direct contributions. They must have the same rights to both the “apple” and the “orange.”

And later:

"Even if applied to all corporations, this Court’s holding hardly gives corporations a blank check (so to speak) to directly contribute unlimited amounts of money to Federal campaigns. Rather, corporations would be immediately subject to the same contribution limits as individuals, under 2 U.S.C. §441a(a), which sets limits on contributions from a “person,” and2 U.S.C. § 431(11), which defines the term “person” as it isused [sic] in FECA as “includ[ing] an individual, partnership, committee, association, corporation, labor organization, or any other organization or group of persons.”

But what about concerns about other binding precedent?

Judge Cacheris reconsidered his motion in light of two opinions not previously addressed in briefing: FEC v. Beaumont, 539 U.S. 146 (2003), and Agostini v. Felton, 521 U.S. 203 (1997).  On these subjects Judge Cacheris stated as follows:

"First, Beaumont relies significantly on Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990), which the Supreme Court explicitly overruled in Citizens United, 130 S.Ct. at 913. Second, Beaumont cites Congress’s concern for preventing corruption and its appearance, 539 U.S. at 154-55, a worry again foreclosed here by Citizens United’s ruling that corporations have equal political speech rights to individuals, who can directly contribute within FECA’s limits without risking corruption or its appearance. Third, though Beaumont notes that the ban protects individuals who have paid money into a corporation from having that money used to support candidates they may oppose, id. at 154, Citizens United dismisses this problem too, stating that shareholders can address it “through the procedures of corporate democracy,” 130 S. Ct. at 911."

Caveat to the ruling:

Judge Cacheris makes a point to note that the statute is declared unconstitutional as applied in this case.  This is not a blanket declaration of unconstitutionality.

For the fallout of this ruling my previous posts provide background on both the practical and legal implications of the ruling

Additional resource:
Professor Richard Hasen has been covering this as well and will likely have timely and probing insight into the decision at the Election Law Blog.

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