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Supreme Court rejects limits on corporate spending on political campaigns

By Robert Barnes and Dan Eggen
Washington Post Staff Writer
Friday, January 22, 2010; A01

A divided Supreme Court on Thursday swept aside decades of legislative restrictions on the role of corporations in political campaigns, ruling that companies can dip into their treasuries to spend as much as they want to support or oppose individual candidates.

The decision shakes the foundation of corporate limitations on federal and state elections that stretch back a century, and prompted sharp partisan reaction. Republican leaders, still celebrating Tuesday's Senate upset in Massachusetts, cheered the ruling as a victory for free speech and predicted a surge in corporate support for GOP candidates in November's midterm elections.

President Obama sharply criticized the ruling, however, calling it "a green light to a new stampede of special interest money," and vowed to "develop a forceful response" with congressional leaders from both parties. The court's decision was handed down on the same morning that Obama riled Wall Street by proposing tough new restrictions on the nation's largest banks.

"It is a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans," the president said in a statement.

In a 5 to 4 decision, the majority cast its ruling as a spirited defense of the First Amendment, concluding that corporations have the same rights as individuals when it comes to political speech. Corporations had been banned since 1947 from using their profits to endorse or oppose political candidates, a restriction that the justices ruled unconstitutional.

"When government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought," the court said in a decision written by Justice Anthony M. Kennedy. "This is unlawful. The First Amendment confirms the freedom to think for ourselves."

Sen. John Cornyn (Tex.), chairman of the National Republican Senatorial Committee, said the ruling will "protect the Constitution's First Amendment rights of free speech and association."

Changing court

The decision upends the court's precedent that corporations may not use their profits to support or oppose candidates, and it rejects a large portion of the McCain-Feingold campaign finance act, which the justices declared constitutional just six years ago. The ruling seems certain to apply to labor unions as well, although they are not explicitly mentioned in the majority's opinion.

Until now, companies were generally limited to raising money through political action committees, which are subject to contribution limits. Now they are free to use their profits to advertise for or against candidates, although they must still disclose their role. The decision does not address a ban on companies contributing directly to candidates.

The far-reaching ruling marks a triumph for those who have fought the McCain-Feingold provisions, including Senate Minority Leader Mitch McConnell (R-Ky.), the U.S. Chamber of Commerce, and numerous other business and conservative groups. It also overturns laws in two dozen states limiting corporate expenditures in local races.

The decision is a telling reminder of how quickly the high court has changed. Justice Sandra Day O'Connor supported the constitutionality of McCain-Feingold in 2003, but Chief Justice John G. Roberts Jr. and O'Connor's replacement, Justice Samuel A. Alito Jr., have supported each challenge to the law since joining the court. They supported the ruling announced Thursday, along with Justices Antonin Scalia and Clarence Thomas.

That the court even considered such a broad challenge to corporate spending was a surprise. The case centers on a scathing 90-minute movie about Hillary Rodham Clinton produced by the conservative group Citizens United during her 2008 run for president.

A lower court said the film ran afoul of a McCain-Feingold provision that forbids corporations, unions and special interest groups from using money from their general treasuries for "any broadcast, cable or satellite communications" that refer to a candidate for federal office during election season. The high court chose last year to broaden the scope of the case to include constitutional questions raised in a 1990 decision, which was overturned by Thursday's ruling.

Leading the court's dissenting liberal bloc, Justice John Paul Stevens called the decision "a radical change in the law" that ignores "the overwhelming majority of justices who have served on this court." Justices Sonia Sotomayor, Ruth Bader Ginsburg and Stephen G. Breyer joined in Stevens's 90-page dissent.

Sen. John McCain (R-Ariz.), who co-wrote the 2002 campaign reform law with Sen. Russell Feingold (D-Wis.), said he was "disappointed" by the decision. Feingold went further, calling it "a terrible mistake" and saying it ignored "important principles of judicial restraint and respect for precedent."

Increasing influence

Democrats and campaign-finance reform activists predicted the ruling would further increase the influence of groups such as the U.S. Chamber of Commerce, which is now free to spend an unlimited amount of money on ads explicitly attacking candidates. Even before Thursday's ruling, the Chamber had announced a "massive effort to support pro-business candidates" in the fall elections following a record year of lobbying against health-care reform, financial regulations and other Democratic proposals.

"With a stroke of the pen, five justices wiped out a century of American history devoted to preventing corporate corruption of our democracy," said Fred Wertheimer, president of Democracy 21.

Other campaign-finance experts were more cautious in their analysis, arguing that most corporations have little desire to get involved in the muck of individual elections and are happy to continue using lobbying and campaign contributions as their main tools of influence. But many experts agreed that those same corporations may now give more money to trade associations to fund campaign advertising.

Doug Pinkham, president of the Public Affairs Council, said the decision could lead to the creation of a new wave of single-issue political groups, including some formed by sitting lawmakers.

Sen. Charles E. Schumer (N.Y.) and other Democrats vowed to push for new restrictions on corporate political spending, including limits for companies with government contracts; shareholder approval of expenditures; and a proposal to make chief executives appear in ads approving their content. Another group of lawmakers is also pushing legislation to match small donations with public financing.

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