Corporations May Not Be People, After All

When the Supreme Court ruled in January that corporations and unions can spend directly on political campaigns, Justice Anthony Kennedy reasoned in the majority opinion that First Amendment rights should apply to corporations, too.

The Federal Election Commission hasn't yet issued new regulations after the Citizens United ruling, so it is yet unclear how those First Amendment rights will, exactly, be applied. The FEC's regulations still prohibit direct spending from corporations and unions on ads and other election communications, even though everyone knows that's no longer the case.

As we wait for those regulations, this may come as a surprise: corporations likely won't be able to donate directly to campaigns. The Citizens United case dealt specifically, in campaign legalese, with independent expenditures and electioneering communications (i.e., communications with voters--ads, direct mail, leaflets--that support the election of a candidate, or that reference a candidate), and it appears the FEC may choose to apply the ruling's broad legal interpretations only to those areas of campaign money.

"In 2007, [the] Wisconsin Right to Life...opinion allowed incorporated entities to use general treasury funds for electioneering communications in some cases. Because of this new court case, they still cannot give directly from their corporate entities, but now they can use the treasury funds for anything...independent expenditure or electioneering communications, so that's kind of what the whole case has allowed to happen," said a spokesperson with the FEC's press office.

If the commission--which is still working to finalize new post-Citizens United regulations--chooses to continue the ban on direct corporate donations to candidates for office, it seems another court challenge could arise.

In his majority opinion, Kennedy writes that "The Court has...rejected the argument that political speech of corporations should be treated differently under the First Amendment simply because such associations are not 'natural persons.'"

Insofar as direct campaign contributions amount to speech, it follows that the court has endorsed letting corporations make them.

Although the Roberts Court asked Citizens United for a broad argument about campaign finance, and although the lawyers came back with something beyond the specific situation of Citizens United and its film, Hillary, Citizens United did not actually ask the court to make a decision on direct contributions.

Thus, Kennedy didn't address it in his majority opinion. He acknowledged that in the 1976 Buckley v. Valeo decision, the court sustained direct-contribution restrictions based on the appearance of corruption, but he passed no judgment on that.

Moreover, the court found that independent expenditures "may be functionally equivalent to contributions," in their capacity to generate corruption and quid pro quo, and in their effect on campaigns.

And it's true: direct contributions to candidates are limited at $5,000 for political action committees, but PACs can spend as much as they want to run independent ads in support of those candidates. As a result, independent expenditures are much more powerful than direct donations.

The scope of the Citizens United opinion, and by extension the coming FEC regulations that will apply it in a strict sense (avoiding the complicaitons of how to limit potential corporate donations), may not actually follow from the broad legal interpretations the court used to justify it. So it seems another court case could be on its way.

Then again, since, as the court acknowledges, independent spending can do everything a contribution can do, except without any limit placed on it, it's questionable whether anyone will bother to challenge it.