The Influence Industry

States try to adapt to Supreme Court's campaign finance ruling

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By Dan Eggen
Washington Post Staff Writer
Thursday, March 25, 2010

Many states are scrambling to react to the Supreme Court's landmark ruling this year that loosened restrictions on corporate and union spending in elections.

But rather than simply accepting the ruling, some states are looking for ways to increase public oversight of political ads run by corporations -- or are defying the high court altogether.

The machinations have become a little-noticed repercussion from the January ruling in Citizens United v. Federal Election Commission, which found that corporations and unions have a First Amendment right to use their general treasuries and profits to spend freely on political ads for and against specific candidates.

The case has drawn attention -- not to mention sharp criticism from President Obama and other Democrats -- for its potential impact on federal elections. But in addition to the federal law, two dozen states also had statutes on their books limiting political spending by corporations. The ruling set off a rush by state legislatures over the past two months to adapt in time for this fall's elections.

Some of those states are simply working to remove language in their statutes that might run afoul of the Supreme Court's decision. Nearly a dozen, however, are also debating whether to require companies to disclose their spending on political ads or, in some cases, to seek approval from corporate boards or even shareholders.

The 5 to 4 ruling explicitly acknowledged that corporations could be required to disclose their spending on political ads and to take responsibility for approving them, much like politicians must do. (Companies remain banned from contributing directly to candidates, though they can provide such support through political action committees that raise money independently.)

States considering new disclosure laws include Alaska, Arizona, Connecticut, Maryland, Minnesota, New Hampshire, Ohio, South Dakota, Tennessee and West Virginia, according to the National Conference of State Legislatures. The Iowa legislature has approved a bill requiring company directors to approve of political spending.

"There are still people out there who think that corporate activity in campaigns is a bad thing, and so there are a lot of efforts to push back on the ruling," said Jennifer Bowser of the state legislatures group.

Colorado's Supreme Court ruled this week that several provisions of the state's campaign finance law were unconstitutional under the Citizens United decision. State officials are preparing legislation in response that would impose disclosure requirements on companies or unions that fund political ads.

"It's the one thing we can do to keep voters informed, if nothing else," said Jenny Flanagan, executive director of Common Cause of Colorado, which supports campaign finance regulations. "What we're looking to see is more than just who's doing it, but going after the shell corporations that companies have set up in the past to hide their activities. We want to make the disclosures meaningful."

One state has taken a more defiant approach. Montana Attorney General Steve Bullock essentially dared opponents to sue the state, vowing to continue enforcing restrictions on corporate political spending that date back to scandals involving mining interests nearly a century ago. Testifying before Congress in February, Bullock said the state's corporate spending limit "has served us well and never been challenged."

A Denver-based conservative group took up Bullock's challenge this month. The Western Tradition Partnership joined with a Montana paint company owner in filing a lawsuit in state court challenging Montana's limits on corporate expenditures as an unconstitutional ban on political speech.

Jeff Patch, a spokesman for the Center for Competitive Politics, which supports the Citizens United ruling, said states need to be careful in crafting new disclosure rules, arguing that some requirements could be viewed by the courts as an attempt to quash free speech.

"Campaign finance laws should allow citizens to monitor their government, not empower politicians and activists to become modern McCarthys," Patch said. "Legislatures should consider the costs of allowing people to monitor the political activity of their neighbors, colleagues and friends, especially since the Supreme Court has recognized that independent political speech -- as opposed to candidate contributions -- does not pose a risk of corruption."


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