A quarterly magazine of urban affairs, published by the Manhattan Institute, edited by Brian C. Anderson.
• • • • • • • • • • • • • • •
The Citizens United Fallout
Democrats plan to redouble their efforts to stifle corporate free speech.
25 January 2010
The White House, still reeling from last weeks populist backlash in Massachusetts, issued a call to arms following Thursdays 54 Supreme Court decision in Citizens United v. Federal Election Commission (FEC) that the government cannot censor the voices of people associated in corporations, unions, and nonprofit advocacy groups. The ruling allows such organizations to make advertisements that advocate for or against candidates. The Supreme Court has given a green light to a new stampede of special interest money in our politics, President Barack Obama said in a statement. 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.
Other Democrats echoed the president. Senator Chuck Schumer, just a regular guy from New York, warned that the Court had predetermined the winners of next Novembers elections. It wont be Republicans. It wont be Democrats. It will be corporate America. No matter that Schumer is the top Senate recipient of contributions from political action committees (PACs) and employees associated with the real estate, securities, finance, and insurance industries, according to the Center for Responsive Politics; this decision threatens democracy, he seems to feel.
In truth, the Courts ruling will have little impact on the typical Fortune 500 company, which can already afford to spend millions of dollars on lobbying and on building PACs with enough employees to fund them and campaign-finance lawyers to operate them. These corporations, especially massively unpopular Wall Street institutions, are unlikely to make independent expenditures directly from their treasuries in the 2010 campaign cycle because the ads, whose funding must be disclosed, could enrage an already restive public, unhappy with the status quo in Washington.
What Citizens United actually does is empower small and midsize corporationsand every incorporated mom-and-pop falafel joint, local firefighters union, and environmental groupto make its voice heard in campaigns without hiring an army of lawyers or asking the FEC how it may speak.
Who could be afraid of more political free speech, one might ask. But its clear that incumbent politicians, shocked by the apparent tectonic shift in politics of late, are keen to maintain a chokehold on such speech. Democratic congressman Leonard Boswell of Iowa, for instance, introduced a resolution Thursday to begin the process of amending the First Amendment to ban corporations from engaging in free speech. The speech teetotalers also introduced several bills that would prevent corporations from actually spending money on independent speech: Democrat Alan Grayson of Florida even introduced legislation imposing a 500 percent excise tax on corporate political expenditures and prohibiting any company from trading on a stock exchange unless it abided by the preCitizens United provisions.
Other congressional leaders, spurred on by self-styled reform groups like U.S. PIRG, have demanded shareholder protection laws with onerous and impossible requirements, like forcing shareholders (even mutual-fund holders) to approve each individual expenditure that their companies make on politicsincluding Web ads, mail, e-mail, and other forms of communication, on top of television ads. Shareholders, though, already have corporate-governance procedures if they are unhappy with management. They can vote it out or introduce shareholder resolutions. But they are not required to approve each corporate charitable donation (say, to the opera or to the Boy Scouts), production decision (say, one that will reduce profits slightly but also reduce the companys carbon footprint), or commercial ad. The Citizens United ruling merely gives them the choice to engage in political speech if they wish, in the same fashion as other corporate decisions, rather than stifling them with a blanket ban.
Another piece of legislation reformers are buzzing about on Capitol Hill is the misnamed Fair Elections Now Act, which would compel taxpayers to fund congressional campaigns. President Obama will have a hard time, though, getting Americans to understand why he rejected public financing in his presidential run, raised nearly $750 million in private funds, and yet now insists that everyone else ought to accept government campaign funding for the good of the public interest.
With partisan tensions running high in Washington, its an easy political shot to scapegoat pariah multinationals like AIG. The Courts language, though, rejects such efforts to silence unpopular voices in the corporate form. We find no basis for the proposition that, in the context of political speech, the government may impose restrictions on certain disfavored speakers, Justice Anthony Kennedy wrote for the majority.
Instead of attempting to throw a futile legislative wrench into Citizens United, Congress should lift some arbitrary restrictions on candidates and political parties. Contribution limits should be raised, coordination between candidates and parties should be allowed in order to respond to independent speech, and the tax credit for contributions should be restored in order to incentivize small donors.
Americans have a long tradition of evaluating political messages and making their own decisions. To suggest that citizens can be led like lemmings by the noise of campaign ads treats voters like fools. Its time for Congress to realize that in a free and democratic process, it cannot silence speech with which it disagrees.
Bradley A. Smith is the Blackmore/Nault Designated Professor of Law at Capital University Law School, the chairman of the Center for Competitive Politics, and a former chairman of the Federal Election Commission.