Citizens United Is Headed for the California Ballot: Here’s What You Need to Know
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This is the first of a two-part series on the Supreme Court’s Citizens United decision and efforts to counter its impact on political campaign spending.
Within the next 90 days, the California Supreme Court will decide if a referendum should be placed on the November 2016 ballot asking voters whether they want to amend the federal Constitution to overturn the U.S. Supreme Court’s dreaded Citizens United ruling. The state panel heard oral arguments on the issue Oct. 6 and, according to press reports, is poised to green-light the measure, formally known as Proposition 49, just in time for the presidential election.
Drafted and sponsored by Democrats in the state’s Senate and Assembly, the proposition was slated to appear on the midterm 2014 ballot but was delayed as a result of a lawsuit filed by the Howard Jarvis Taxpayers Association. Now, with the litigation all but complete, it’s back on track.
Proposition 49 poses a lengthy but ultimately straightforward question:
“Shall the Congress of the United States propose, and the California Legislature ratify, an amendment or amendments to the United States Constitution to overturn Citizens United v. Federal Election Commission (2010) 558 U.S. 310, and other applicable judicial precedents, to allow the full regulation or limitation of campaign contributions and spending, to ensure that all citizens, regardless of wealth, may express their views to one another, and to make clear that the rights protected by the United States Constitution are the rights of natural persons only?”
The proposition is, of course, only advisory in nature. California voters can no more nullify the U.S. Supreme Court’s seminal opinion on campaign finance than Rowan County, Ky., Clerk Kim Davis can overturn the high tribunal’s landmark opinion on same-sex marriage. Still, the referendum will serve to galvanize protests and further action against a broken political process that Fred Wertheimer, the president of the public policy organization Democracy 21, has called a “system of legalized bribery.”
In 2012, two other states—Colorado and Montana—ratified similar resolutions by overwhelming majorities. But the California plebiscite promises to dwarf each of those previous efforts—in publicity, intensity of debate, national focus and, above all, money spent by interest groups far and wide.
Here’s a sampling of what you’ll need to know to join the fray:1. The Citizens United case began as a modest election law challenge that the Supreme Court dramatically expanded.
Citizens United is a conservative, nonprofit “social welfare” corporation organized under Section 501(c)(4) of the Internal Revenue Code. It was founded in 1988 with seed money from the Koch brothers’ financial network to promote the goals of “limited government, freedom of enterprise” … and to “restore the founding fathers’ vision of a free nation.”
In December 2007, the company sued the Federal Election Commission in district court in Washington, D.C., after the FEC blocked it from airing “Hillary: the Movie,” a documentary on cable video on-demand that it had produced about Hillary Clinton. The stumbling block to the group’s cinematic ambitions was Section 203 of the Bipartisan Campaign Reform Act of 2002 (also known as the McCain-Feingold law), which prohibited corporations from funding “electioneering communications”—basically, politically oriented radio and TV ads and broadcasts—to be shown within 30 days of a primary election and 60 days in advance of a general election if the broadcasts mentioned or referred to candidates for federal office by name.
Even before the passage of McCain-Feingold, corporations were precluded by laws dating back to the Progressive-era Tillman Act of 1907 from contributing money directly to federal candidates or making “independent expenditures” (spending not directly coordinated with candidates) from their general treasury funds to expressly advocate election outcomes. Section 203’s electioneering blackout provisions were enacted to close perceived loopholes in earlier campaign finance laws as an extra safeguard against undue corporate influence. The section applied equally to labor unions but exempted media companies’ news stories, commentaries and editorials.
In making its case to a three-judge district panel that was assigned to adjudicate the lawsuit, Citizens United didn’t ask to have Section 203 declared unconstitutional on its face. Rather, it sought an injunction to stop the FEC from applying the section to its film. It also asked for a judicial declaration that the TV ads promoting “Hillary: The Movie” weren’t really electioneering communications because the movie itself was a fact-based work concerned with vital legislative matters.
The lawsuit failed miserably. The district court ruled in favor of the FEC, finding that “Hillary: The Movie” was “susceptible to no other interpretation than to inform the electorate that Senator Clinton is unfit for office. …”
Undeterred by the setback, Citizens United appealed to the Supreme Court, which heard oral arguments on March 24, 2009. There, the inquiry focused on the same narrow questions dealing with the application of Section 203 to “Hillary,” not with the section’s basic constitutionality. Most observers at the time expected an important but by no means transformational decision.
Then, something extraordinary happened. On June 29, 2009, the Supreme Court on its own motion restored the case to its October 2008 term calendar for re-argument. It also set a new hearing for Sept. 9, 2009, more than two months after the current court term had ended and three weeks before the next term was set to commence.
Even more extraordinarily, in a breathtaking act of judicial activism, the court dramatically expanded the scope of the case, requesting the parties to address the question of whether McCain-Feingold’s electioneering provisions and the decades-old bans on corporate campaign expenditures were indeed unconstitutional.
Four months later, on Jan. 21, 2010, in a bitterly contested 5-4 majority decision written by Justice Anthony Kennedy, the court announced its historic decree. Section 203 was overturned, and the court held that corporations have a First Amendment right to make unlimited “independent expenditures” on political campaigns.
2. Citizens United didn’t create the doctrine of corporate personhood, but the decision applied the concept to political speech.
Citizens United is often criticized by progressives for creating the doctrine of “corporate personhood.” This is the idea that, as Mitt Romney so ham-fistedly put it during the last presidential season, “corporations are people,” entitled to the same rights and privileges as humans.
Actually, the doctrine of corporate personhood has been around since the 19th century. Over the years, courts have extended it to recognize some corporate rights—for example, the right to own property, the capacity to sue and be sued, and more recently the right to be free from unreasonable searches and seizures under the Fourth Amendment—but not others, such as the right against self-incrimination under the Fifth Amendment. The doctrine is based on a legal fiction, and, as always, the Supreme Court remains the ultimate arbiter of the doctrine on constitutional issues.
In his majority opinion in Citizens United, Justice Kennedy never specifically used the word “personhood.” Instead, he wrote that the First Amendment precludes government from discriminating against political speakers on the basis of their “corporate identity.” Relying heavily on the 1976 case of Buckley v. Valeo—in which an earlier iteration of the court invoked the First Amendment to strike down monetary ceilings on independent expenditures made by individuals—Kennedy concluded that corporations were entitled to the same constitutional deference.
Former Justice John Paul Stevens, dissenting for himself and Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor, explicitly took the majority to task over the personhood doctrine. In a stinging 90-page rebuke, Stevens reminded the majority that corporations aren’t really human beings. Unlike natural persons, he charged, corporations “are not themselves members of ‘We the People’ by whom and for whom our Constitution was established.” There was no compelling reason, in his view, to accord such nonpersons First Amendment status in the critical arena of campaign spending.
Four years after Citizens United, in 2014, the same five-justice majority disregarded Stevens’ admonitions yet again in the Hobby Lobby case, recognizing the religious personhood of closely held corporations and upholding their faith-based right to deny female employees health insurance for contraception.
3. The Citizens United decision wasn’t needed to prevent government censorship of speech.
Having embraced the fiction of corporations as people, Kennedy and the Citizens United majority segued easily to the next stage in their analysis—that lifting the prohibitions on corporate expenditures was needed to prevent censorship and bans on speech.
Nothing, of course, could have been further from the truth. Corporations have no messages, political or otherwise, to convey apart from the messages of the people who run them.
Notwithstanding the strictures of McCain-Feingold, wealthy individuals were free then, as now, to fund electioneering communications at any point in an election cycle, limited only by the size of their wallets. Corporations were also permitted to establish political action committees for such purposes. At the time it launched its lawsuit, Citizens United operated its own PAC—the Citizens United Political Victory Fund—which was, and remains, registered with the FEC. But corporate PACs are pesky and sometimes inconvenient vehicles, subject to regulations that restrict their ability to solicit funds to management-level employees, shareholders and their families. In addition, contributions to PACs must be voluntary, and federal law limits the amount of money an individual can donate to a PAC as well as the amount a PAC can contribute to any single candidate. PACs are also required to keep detailed financial records and disclose the identities of their major donors.
The Kennedy majority found the inconvenience argument persuasive. Rather than require Citizens United to use its PAC to broadcast “Hillary” or carve out an exception to Section 203 for nonprofits (as the Stevens dissenters also suggested), the majority chose to alter the long-established political rules for all corporations, large and small.
4. Citizens United extended the equation of money and speech and radically restricted the concept of political corruption.
Just as Citizens United did not create the doctrine of corporate personhood, the decision was not the first Supreme Court ruling to equate money with political speech. That honor, once again, goes to Buckley v. Valeo, in which the court held that a “restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached.” Citizens United, however, expanded the domain of political money from individuals to corporations.
Citizens United also drew on Buckley to gut the meaning of political corruption as a permissible basis for campaign finance regulation.
As in Buckley, the Citizens United majority distinguished between campaign contributions made directly to candidates and independent expenditures. Contribution limits, Kennedy declared, could be justified to prevent quid pro quo bribery of candidates. Expenditures, however, posed no such dangers. Nor could regulations in either category be warranted by the goal of leveling the political playing field or countering the distorting effects of wealth or income inequality in politics.
Last year, the court used the same reasoning in McCutcheon v. FEC, striking down the aggregate biennial limits on money individuals can contribute directly to federal candidates, parties and PACs. McCutcheon left intact—at least for the time being—limits on the amount of money people can give to any single candidate.
5. Citizens United didn’t establish super PACs but it gave rise to them and opened the door to dark money.
Contrary to popular lore, Citizens United didn’t explicitly authorize the creation of super PACs, the expenditure-only entities that cannot give money directly to candidates but can raise unlimited sums from individuals, corporations and unions to spend “independently” on behalf of candidates.
Super PACs were actually authorized by the D.C. Circuit Court of Appeals in its March2010 opinion in the case of Speechnow.org v. FEC. The circuit court, however, based its decision squarely on the legal framework set out by Citizens United.
Whatever their genesis, super PACs have proliferated since 2010, and their influence has soared. According to the Center for Responsive Politics, they raised more than $828 million in the 2012 election cycle. And while well over half of super PAC donations in the cycle came from a tiny subset of wealthy individuals and families, for-profit businesses accounted for more than 17 percent of the aggregate super PAC haul. Thus far this cycle, which is still in its formative stage, super PACs have amassed more than $300 million.
If anything, the totals on direct corporate political giving are understated, as businesses are now allowed to donate to 501(c)(4) nonprofit groups that, unlike super PACs,are not required to publicly identify their benefactors. Political spending by such “dark money” organizations skyrocketed from less than $5.2 million in 2006 to more than $300 million in 2012.
Nor, as an article published last March by the Harvard Law Review contends, is there any commonsense reason to believe that either super PAC or dark money expenditures truly are made “independently” of political candidates. Just ask Stephen Colbert and Jon Stewart, who in 2011 and 2012 famously mocked the independent expenditure system in a hilarious set of late-night comedy sketches.
Or better still, if you can stomach it, listen to Donald Trump, the self-financed billionaire Republican presidential front-runner, who insists that every other candidate in the race has been bought and paid for by political donors.
6. The Supreme Court has established double standards for corporations and unions.
On the surface, the court’s central holding in Citizens United applies equally to corporations and unions, permitting both under the First Amendment to spend unlimited general treasury funds on political campaigns. In other recent decisions, however, the court has dealt a body blow to public employee unions, the last bastion of organized labor in America, making it harder for unions to collect “fair-share” fees from government workers who elect on First Amendment grounds not to become full dues-paying members but nonetheless benefit from union contracts.
As I’ve written before in this column, a new Supreme Court case that will be argued this term—Friedrichs v. California Teachers Association—threatens to end the fair-share system once and for all, depleting union treasuries and turning the nation’s entire public sector into one enormous “right-to-work” jurisdiction.
Corporations face no parallel obstacles or threats from the court.
7. Can anything be done?
In a Bloomberg Politics national poll released last month, “78 percent of those responding said the Citizens United ruling should be overturned, compared with 17 percent who called it a good decision.”
The American people may be tired, confused and beaten down, but they aren’t stupid when it comes to the role of money in politics. They know the system is corrupt and rigged on both sides of the political aisle, and they want the system changed. The critical question is how. Apart from symbolic gestures like Proposition 49, what else can we do?
I’ll try to provide some answers in part two of this series.