For nearly 75 years, federal election laws and the laws of many states have distinquished flesh-and-blood persons from the "persons" who are corporations. Human persons, the laws, say, may contribute money to political campaigns but corporations may not, under pain of possible criminal prosecution.
Now, what is believed to be the first head-on constitutional challenge to the federal law barring direct corporate contributions has begun an unheralded journey to the Supreme Court and could reach it in 1982, possibly before the November baloting.
Critics of economic power in electoral politics have long predicted -- and feared -- just such a challenge. This one, however, comes not from a large corporation, but from a smll, obscure family-owned enterprise, the Athens Lumber Co. Inc. of Athens, Ga. The firm has three dozen employes and annual sales of about $1 million.
The core of the lawsuit's claim is that a corporation and a natural person both are affected by federal policies and have an equal right under the First Amendment to contribute directly to candidates or to advocate their election or defeat in campaign advertisements and mailings.
Is a would-be buyer of a new home hurt by federally induced double-digit inflation and high interest rates? So is the would-be supplier of building materials, argues Athens Lumber. By its logic, a law that lets the human buyer give a sympathetic candidate up to $1,000 while forbidding the corporate seller from giving the same candidate a single penny is "null and void on its face."
The suit was the brainchild of Atlanta lawyer Emmet J. Bondurant, an expert on election law (he was defense counsel in two cases initiated by the Federal Election Commission) and one of the five family members who own all of the stock of Athens Lumber and constitute its board of directors.
Last July 23, the board unanimously adopted a resolution directing company president John P. Bondurant, the lawyer's father, to spend up to $10,000 of corporate funds for the election or defeat of specific presidential and congressional candidates. Direct contributions as well as "independent expenditures" made without candidates' knowledge were authorized, both being "in the best interest of the company, its employes, shareholders and customers." Both violate federal law.
In the suit, filed four days later in U.S. District Court in Athens, Emmet Bondurant said that the plaintiffs-the company and his father-are "afraid" to implement, the resolution lest the law be enforced by the defendants, the FEC and Attorney General William French Smith.
The suit denounces the law as "a prior restraint on political speech and association" and "a form of government censorship" that "discriminates arbitrarily" between, on the one hand, corporations, national banks, and unions, and, on the other hand, natural persons and other organizations.
In addition, the suit complains, the law allows media corporations to publish or broadcast an editorial endorsing a candidate but forbids Athens Lumber "to reprint the same editorial."
Under other election laws, which call for expediting litigation of this kind, the issue before Judge Wilbur D. Owens Jr. is a narrow one: simply whether he will certify the case to the full 5th U.S. Circuit Court of Appeals for a declaratory judgment on the constitutional question.
There has been only preliminary legal aparring to date, but Owens has requested written briefs in a few weeks. One government response is expcted to be that Athens Lumber is free to spend its funds to set up and operate a political action committee, as in any other corporation. PAC is allowed to solicit contributions from stockholders, officers, and middle management, but not from the corporation itself.
It was the potential of big-business money to dominate the political process that led Congress, in the Corrupt Practices Act of 1907, to forbid corporate contributions. Numerous states followed by enacting similar bans.
In a 1948 Supreme Court case in which the law was not directly at issue, however, four of the nine justices commented that it violated the First Amendment; in a 1957 case three justices did the same.
Then, in a 5-to-4 decision in a 1978 case involving a state referendum (First National Bank of Boston vs. Bellotti), the Supreme Court held that a state cannot, under the First Amendment, deny corporate officers the right to spend company funds to circulate fact and opinion that are irrelevant to the businesses they manage and possibly opposed to the views of some stockholders.
Justice Byron R. White, in the principal dissenting opinion, said the decision "clearly raises great doubt" whether the bans on corporate campaign contributions to candidates would withstand a constitutional challenge. And last year, in an interview about the "over-riding issue" in election financing, Fred Wertheimer, president of Common Cause, told The Washington Post that the court, ultimately will be asked to extend the Bellotti decision to candidates.
In the dissent, however, White wrote that after chartering a corporation for certain economic purposes, a state "need not permit its own creation to consume it" by letting the corporation use its wealth "to acquire an unfair advantage in the political process."
He also said that "corporate expenditures designed to further political causes lack the connection with individual self-expression which is one of the principal justification for the constitutional protection of speech."