Skip Global Navigation to Main Content

Legal Rulings Give Corporations a Greater Voice in U.S. Elections

By Stephen Kaufman | Staff Writer | 20 October 2010
Artist's rendering of lawyer addressing the Supreme Court (AP Images)

Was the January 21 Supreme Court ruling a victory for free speech or a victory for powerful and wealthy interests at the expense of the public?

Washington— Election season in the United States means the airwaves are now saturated with political ads, including those from independent advocacy groups attacking or defending a candidate’s position or voting record. But as the result of a January U.S. Supreme Court ruling, entities such as companies and labor unions now can spend as much they want in the 2010 midterm election to promote their political views, and even launch new ads in the closing days of the campaign, leaving no time for an effective opposition response.

The January 21 ruling on the case between the nonprofit Citizens United and the Federal Election Commission invoked the clause in the First Amendment to the U.S. Constitution that guarantees free speech. Although corporations and unions cannot make direct contributions to U.S. politicians, a slim majority of justices (5–4) decided that, like people, those types of entities should still have the right to unlimited expression of their political views.

The decision overturned previous legal rulings that upheld restrictions on corporate and union spending in support of or in opposition to political candidates, as well as the section in the 2002 McCain-Feingold campaign finance reform law that banned corporations and unions from paying for political ads within 30 days of a primary election and within 60 days of a general election. In other words, with less than a month before the November 2 midterm election, some of the political ads that may be influencing American voters now might have been prohibited less than a year ago.

In the wake of the Supreme Court ruling, as well as a March decision by the U.S. Court of Appeals for the District of Columbia Circuit to allow the organization SpeechNow to raise unlimited and unrestricted political funds, some Americans may have noticed that there are many more political ads in the 2010 election season, especially when compared to the 2006 midterm election, according to Dave Levinthal. Levinthal is communications director and OpenSecrets blog editor at the Washington-based Center for Responsive Politics, a nonpartisan, nonprofit research organization that monitors the role of money and elite influence in U.S. politics.

“Certainly, nationwide, we’re seeing an influx of messages, particularly in very competitive races,” he told America.gov. “So if you live in a district or live in a state that has a particularly competitive race, it’s likely that you’re seeing many more TV ads and listening to many more radio ads and reading many more newspaper ads than you have in previous election cycles.”

In fact, organizations outside of the political parties and individual candidates have poured $211.5 million into various 2010 federal contests as of October 20. This figure, Levinthal said, “will continue to go up, without question,” and stands in stark comparison to the $68.8 million that was spent for the entire 2006 election cycle.

“We’re looking at exponentially more outside money flowing into congressional elections, and certainly much of that can be attributed to the federal court decisions that have taken place this year affecting campaign finance,” he said.

In addition to allowing unlimited spending, current U.S. election laws stipulate that nonprofit groups can raise money from corporations, labor unions and other sources inside the United States for their own political ads and activities and do not need to disclose the sources of their money. There is no limit on spending such funds. The exception to the disclosure law is nonprofit 527 groups, which were created solely for political purposes.

“The Supreme Court decision just opened up a very broad new avenue for pouring money into political elections so long as they are independent expenditures or messages that are not coordinated with campaigns,” Levinthal explained.

This means that, in the case of some of these ads, the average American voter cannot even tell who is providing the money behind the political message.

In his January 23 weekly radio address, President Obama said the Supreme Court ruling “opens the floodgates for an unlimited amount of special interest money into our democracy,” including money from foreign corporations that could be opposed to such initiatives as increased U.S. energy independence.

More recently, campaigning for Democratic Representative Chris Carney in Pennsylvania October 18, Vice President Biden said, “We don’t need to give any more voice to the powerful interests that already drown out the voices of everyday Americans.” Biden challenged Republican fundraisers and interest groups to explain exactly where their money is coming from, including “how much of the money they’re investing is from foreign sources.”

But Senate Minority Leader Mitch McConnell (Republican from Kentucky) argued January 28 that Democratic leaders are “completely wrong” in warning that the Supreme Court ruling allows foreign companies to influence U.S. election campaigns and praised the court for having “ended the suppression of corporate and union speech.”

Twenty-six U.S. states had already been allowing corporations and unions to exercise unlimited political expression, he argued, and those contributions have “had no discernable adverse impact.”

Levinthal said that in the current debate over the possibility of non-U.S. funding in American campaigns, it is indeed still the case that foreign corporations “cannot and should not be able to make contributions to political candidates or engage in political messaging.”

The problem, he explained, is that U.S. laws do not force nonprofit organizations to disclose the identity of their donors. Are some groups affiliated with Republicans and Democrats using foreign money? “We just simply don’t know in any empirical way because that information is not available to us. We simply can’t see it,” Levinthal said.

Behind the question over the ability of corporations, unions and other groups to use their wealth to influence elections is the notion, legally upheld by U.S. courts for nearly 200 years, that groups of people and shareholders enjoy all of the same rights that they would have if they were acting on their own.

But as American democracy has evolved, this right has been challenged by those who say that an average person cannot wield the same amount of resources or influence that a corporation can. The current discussion over disclosure adds another element to the long debate on U.S. campaign finance reform: does a voter’s right to know who is influencing election materials outweigh a donor’s right to privacy?

(This is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://iipdigital.usembassy.gov)