Justin ShlenskyCourtney Sommer

Public Interest Law & PolicySpring 2013

Citizens United Case Study

Introduction and Background Information

Today’s debate over campaign finance reform had its start in 1907 with the Tillman Act

which banned corporate donations to candidates.1 Further restrictions were enacted in 1972 with

the passage of the Federal Election Campaign Act (FECA), which required that federal

campaigns disclose their donors,2 and additional restrictions closely followed with the 1974

amendments to the FECA introducing statutory limits on contributions and creating the Federal

Election Commission (FEC) after the Watergate scandal.3

But the legislation that sparked the debate that led to Citizens United was the Bipartisan

Campaign Reform Act of 2002, also known as the McCain-Feingold Act.4 The same day

President George W. Bush signed McCain-Feingold into law in 2002, the National Rifle

Association (NRA) filed a lawsuit challenging its constitutionality in the United States District

Court for the District of Columbia.5 Another suit challenging the constitutionality of McCain-

Feingold was filed that day in the same court by then-Senator Mitch McConnell, and the cases

were consolidated into McConnell v. FEC.6 On December 10, 2003, the Supreme Court issued a

5-to-4 decision on McConnell upholding nearly the entire law.7 Then, during Bush’s second

term, Chief Justice Roberts and Justice Alito joined the Court, with Justice Alito replacing

1 Andy Kroll, Follow the Dark Money, Mother Jones, July 2012 at 17.2 Id.3 Id. at 18.4 Id.5 Id. at 23.6 Id. at 24.7 Id.

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Justice Sandra Day O’Connor, the key fifth vote in McConnell.8 The history of campaign

finance reform and the changes in the Court paved the way for the controversial Citizens United

v. FEC.

Citizens United is a Virginia corporation whose mission is to “restor[e] our government

to citizens’ control” by “reassert[ing] the traditional American values of limited government,

freedom of enterprise, strong families, and national sovereignty and security.”9 Formed in 1988,

the corporation produces commercials, web ads, and documentaries about political issues and

candidates in an effort to influence its audience.10

In 2008, Citizens United produced Hillary, a movie which negatively detailed then-

Senator Hillary Clinton’s political status in America and basically served as a film urging

viewers to vote against Clinton in the upcoming 2008 presidential election. Citizens United

wanted to promote Hillary via video-on-demand within 30 days of the 2008 primary elections.11

However, under 2 U.S.C. § 441b, Citizens United would have been prohibited from showing

Hillary and advertisements for Hillary because they were corporate-funded independent

expenditures.12 In anticipation of receiving civil and criminal penalties for violating § 441b for

showing and advertising for Hillary, Citizens United sought declaratory and injunctive relief.13

Citizens United argued that § 441b was unconstitutional as applied to Hillary and the

advertisements, and that the BCRA’s disclaimer, disclosure, and reporting requirements in

sections 201 and 311 were unconstitutional as applied to Hillary and the television ads.14

8 Id.9 Citizens United, http://www.citizensunited.org (last visited Feb. 17, 2013).10 Id.11 Citizens United v. Federal Election Com’n, 130 S.Ct. 886, 888 (2010).12 Id.13 Id.14 Id.

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Amir Tayrani, counsel for Citizens United, said in a telephone interview that what started

out as a narrow challenge of wanting to be able to produce DVDs and on-demand videos became

much more significant when the Court asked to hear arguments a second time in order to issue a

decision on the broader constitutional question.15 In March 2009, Citizens United won a narrow

victory when the Court held that the McCain-Feingold Act, or the BCRA, did not apply to DVDs

and on-demand videos.16 Mr. Tayrani said that overruling Austin was not the focus of the case

when his firm, Gibson, Dunn & Crutcher LLP, first brought it, and the decision they expected to

receive in June of 2009 was instead a request for a new brief so the Court could hear arguments

for overruling Austin’s restrictions.17 Mr. Tayrani said that, because attorneys at Gibson Dunn

knew the Chief Justice and Justice Alito were reluctant to overturn prior Supreme Court

precedents, they initially argued for a narrow result distinguishing precedents, and it was the

Court that signaled it wanted to reconsider the entire constitutional issue.18 After that point, the

firm advocated for, and welcomed the result of, overturning Austin.19

Citizens United Supreme Court Decision

Citizens United predominantly involves three issues, all dealing with electioneering

communications and speech protected by the First Amendment. First, the Court addressed

whether the government could suppress political speech based upon a speaker’s corporate

identity. Second, whether a federal statute could constitutionally bar independent corporate

expenditures for electioneering communications. Third, whether the disclaimer and disclosure

requirements of the Bipartisan Campaign Reform Act of 2002 (BCRA) violated the First

15 Telephone Interview with Tayrani, Amir, attorney, Gibson, Dunn & Crutcher LLP, Washington, D.C. (Feb. 13, 2013).16 Id.17 Id.18 Id.19 Id.

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Amendment, as applied to Citizens United’s film, Hillary, and three advertisements for the film.

The Court held, respectively, that: (1) the government could not suppress political speech based

upon a speaker’s corporate identity; (2) a federal statute could not bar independent corporate

expenditures for electioneering communications; and (3) the disclaimer and disclosure

requirements of the BCRA, as applied to Citizens United’s film, Hillary, and their three

advertisements for the film did not violate the First Amendment. Below, we will address each

issue much more thoroughly.

The first major issue that the Court addressed in Citizens United was whether, under the

First Amendment, the government could suppress political speech based upon a speaker’s

corporate identity, overruling Austin. A 5 - 4 majority of the Justices held that it could not,

overruling Austin.20 Austin held that when in comes to political speech, limits on a corporation’s

independent expenditures are constitutional under the First Amendment.21 In Austin, Justices

Kennedy, Scalia, and O’Connor argued in a dissenting opinion that the corporate identity should

not prohibit corporations from exercising their independent expenditures.22 As mentioned

earlier, Citizens United’s initial claim against the FEC did not ask any court to reconsider and

overrule Austin’s holding regarding corporate expenditures; it was not until the claim reached the

Supreme Court that the reconsideration of Austin was brought up. To further this confusion, it

was the Court itself that asked for a reconsideration of Austin.

The five-Justice majority in Citizens United found Austin’s antidistortion rationale

unconvincing and unconstitutional. The antidistortion rationale is as such: since corporations

have the ability to spend massive amounts of money on political expenditures, such “immense

aggregations of wealth” possess the ability to distort the electorate by influencing candidate

20 Citizens United, 130 S.Ct. at 913. 21 Austin, 494 U.S. at 669.22 Id. at 713 (Kennedy, J., dissenting).

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elections.23 Austin reiterated that the government’s interest in preventing corruption is strong

enough to prohibit corporations from influencing political candidate elections with their war

chests.24 However, the Court in Citizens United argued that the government’s interest in

preventing corruption by placing restrictions on corporations “from obtaining “‘an unfair

advantage in the political marketplace’” by using “‘resources amassed in the economic

marketplace.’””25 The majority of the Court explained that all speakers, whether individuals,

media, unions, or corporations, use money gained in the economic marketplace to fund their

speech, and nevertheless, the First Amendment protects such speech.26

Kennedy’s majority opinion relied on Buckley and Bellotti to show that throughout the

years, the Court has held that First Amendment protections apply to corporations just as they do

to individuals, and that Austin “interferes with the ‘open marketplace’ of ideas protected by the

First Amendment.”27 The Court basically equated the corporate identity with individual identity,

and strived to conclude that Austin was unconstitutional because of its unfair treatment of

corporations. However, this is not how the four Justices who dissented viewed Austin.

Justice Stevens, joined by Justices Ginsburg, Breyer, and Sotomayor argued in dissent

that Citizens United inappropriately handed Austin. Stevens, toward the beginning of his dissent,

boldly claimed that, “[e]ssentially, five Justices were unhappy with the limited nature of [Austin],

so they changed the case to give themselves an opportunity to change the law.”28 Stevens further

contended that the majority merely trumps stare decisis because they did not like Austin.29 The

dissenting Justices were critical of the majority’s claims that Austin “banned” corporate speech;

23 Id. at 659-60.24 Id. at 659.25 Citizens United, 130 S.Ct. at 883, referencing and quoting Austin, 494 U.S. at 659.26 Id. at 884. 27 Id. at 906.28 Id. at 932 (Stevens, J., dissent).29 Id. at 938.

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the dissent argued that the statutes upheld in Austin did not impose an ‘absolute’ ban on

corporate political spending.30 Stevens also explained that Austin’s treatment of corporate

speakers was not incorrect because “[c]ampaign finance distinctions based on corporate identity

tend to be less worrisome . . . because the ‘speakers’ are not natural persons, much less members

of our political community, and the governmental interests are of the highest order.”31

The second major issue addressed in Citizens United was whether a federal statute could

constitutionally bar independent corporate expenditures for electioneering communications. The

majority found that such a bar was unconstitutional, with Kennedy calling it “an outright ban,

backed by criminal sanctions.”32 According to the Bipartisan Campaign Reform Act of 2002

(BCRA), an “electioneering communication” is “‘any broadcast, cable, or satellite

communication’ that ‘refers to a clearly identified candidate for Federal office’ and is made

within 30 days of a primary or 60 days of a general election.”33 Corporations and unions, under

the BCRA, were barred from using funds from their general treasury for express advocacy or

electioneering communications, but they could establish a “‘separate segregated fund,’” or PAC,

for such purposes.34 This bar on corporate contribution was upheld in McConnell because of the

availability of PACs that allow corporations to still speak even if it is through funds outside of

their general treasury.35

In the District Court decision, the court would not overrule McConnell in deciding in

favor of Citizens United on the issue of the facial validity of §441b, but it “‘pas[sed] upon’ the

issue,” allowing the Supreme Court to address the facial validity of the statute and Citizens

30 Id. at 942.31 Id. at 947.32 Id. at 897.33 Id. at 887, quoting Bipartisan Campaign Reform Act of 2002.34 Id. at 887.35 Id. at 897.

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United’s challenge to Austin.36 The Court, determining it necessary to consider Citizens United’s

challenge to Austin, held that Citizens United was not introducing a “‘new claim’” but was

introducing “‘a new argument to support what has been [a] consistent claim: that [the FEC] did

not accord [Citizens United] the rights it was obliged to provide by the First Amendment.’”37

The Court decided it could not address the narrow issue originally presented by Citizens United

without assuming the validity of restricting corporate political speech altogether.38 Because

Citizens United’s original claim implied Austin, and therefore §441b, were invalid, the Court

assumed an obligation to make a broader decision on the issue than what Citizens United

requested.39

The Court gave another justification for overturning Austin when it had upheld Austin’s

restrictions in prior cases: four members of the McConnell Court were ready to overrule Austin

and the majority in McConnell considered the validity of §441b.40 Additionally, the decision in

Wisconsin Right to Life, Inc. v. Federal Election Comm’n paved the way for the Citizens United

Court by allowing a challenge to the statute to be maintained.41 In its stare decisis argument, the

Court decided that the factors used to determine whether precedent should be upheld or

overturned pointed to rejecting Austin for its “offensive[ness] to the First Amendment.”42 The

Court deemed Austin “not well reasoned,” holding that it “abandoned First Amendment

principles” and relied on flawed reasoning from prior decisions.43

36 Id. at 893.37 Id.38 Id. 39 Id. 40 Id. at 894.41 Id. 42 Id. at 911-912.43 Id. at 912.

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The third major issue addressed in Citizens United was whether the disclaimer and

disclosure requirements of the Bipartisan Campaign Reform Act of 2002 (BCRA) violated the

First Amendment, as applied to Citizens United’s film, Hillary, and three advertisements for the

film. Eight Supreme Court Justices held that the BCRA’s disclaimer and disclosure

requirements did not violate the First Amendment, as applied to Citizens United, and only Justice

Thomas dissented in that respect.44 The disclaimer requirement, BCRA § 311, requires an

advertiser, other than a candidate, of a televised electronic communication to include a

disclaimer that ““‘____________ is responsible for the content of this advertising.’””45

This statement “must be made in a ‘clearly spoken manner,’ for at least for four seconds [,] must

state that the communication ‘is not authorized by any candidate or candidate’s committee’” [,

and] must also display the name and address (or Web site address) of the person or group that

funded the advertisement.”46 The disclosure requirement, BCRA § 201, states that “any person

who spends more than $10,000 on electioneering communications within a calendar year must

file a disclosure statement with the FEC.”47 The disclosure statement “must identify the person

making the expenditure, the amount of the expenditure, the election to which the communication

was directed, and the names of certain contributors.”48

Citizens United challenged both requirements, as applied to their film, Hillary, and their

three advertisements. Citizens United unsuccessfully argued that the disclaimer requirement of

BCRA § 311 does not justify the government’s “interest in providing information to the

electorate.”49 The Court found that since Citizens United’s ads fell within the BCRA’s definition

44 Id. at 916, 979-982. 45 Id. at 914, quoting 2 U.S.C. § 441d(d)(2).46 Id. at 914, referencing and quoting 2 U.S.C. § 441d(a)(3).47 Id. at 914, referencing 2 U.S.C. § 434(f)(1).48 Id. at 914, referencing 2 U.S.C. § 434(f)(2).49 Id. at 914.

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of “electioneering communication” because the ads referenced “then-Senator Clinton by name

shortly before a primary and contained pejorative references to her candidacy[,]” the disclaimers

would avoid confusion by clarifying that the ads were funded by neither a candidate nor a

political party.50 In reaching its decision, regarding § 311, the Court referenced its holdings and

reasoning in Buckley and McConnell, and explained that the disclaimer provisions were upheld

in those cases to insure that the electorate would not think that such advertisements were funded

by a candidate or political party and because the Court wants American citizens to make

informed political decisions.

Citizens United also unsuccessfully challenged § 201’s disclosure requirements, as

applied to their advertisements. Citizens United argued that the disclosure requirements would

not aid the electorate to make informed political decisions and that the disclosure requirements

should be limited to “speech that is the functional equivalent of express advocacy.”51 The Court

rejected both of Citizens United’s argument because “the public has an interest in knowing who

is speaking about a candidate shortly before an election” and the disclosure requirements

accomplish such interests.52 Citizens United made another argument, that the disclosure

requirements could “chill donations to an organization by exposing donors to retaliation.”53 The

Court rejected that argument because Citizens United failed to produce any evidence of its

members facing threats or reprisals and then pointed out that Citizens United’s donors’ have had

their identities disclosed for years and none have claimed to have been harassed or retaliated

against due to their donations.54

50 Id. at 915.51 Id. 52 Id. 53 Id. at 916. 54 Id.

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As stated above, Justice Thomas was the only Justice to argue that BCRA §§ 201 and 311

were unconstitutional.55 Thomas argued that there have been certain times in the recent past

when donors to certain political causes were harassed or threatened and blamed §§ 201 and 311

for the ability to harass and/or threaten such donors.56 Thomas also claimed that such disclosure

and disclaimer requirements would chill First Amendment protected speech.57

In summation, Citizens United involved three main issues, all stemming from Hillary, a

movie that Citizens United produced in 2008, just before the January primary elections. First,

the Court held that the government could not suppress political speech based upon a speaker’s

corporate identity. The Court also determined that a federal statute, 2 U.S.C. § 441b, could not

bar independent corporate expenditures for electioneering communications. Lastly, the Court

held that BCRA §§ 201 and 311, the disclosure and disclaimer requirements, did not violate the

First Amendment, as applied Hillary and its ads.

Issues and Obstacles Faced by Litigants and Lawyers in Citizens United

Peter Ferrara, General Counsel for The American Civil Rights Union (ACRU), filed

numerous amicus briefs in support of Citizens United. He claimed that ACRU faced no

obstacles arguing in support of Citizens United and that it was an easy and righteous claim to

become involved in given the political correctness and First Amendment issues that Citizens

United stood for.58

For Mr. Tayrani of Gibson Dunn, the firm who represented Citizens United, it was a

challenge to ask the Supreme Court to overturn its own decisions on the issue of campaign

55 Id. at 980 (Thomas, J., dissenting).56 Id. at 980-81. 57 Id. at 982.58 Telephone Interview with Ferrara, Peter, General Counsel, The American Civil Rights Union, Alexandria, VA (Feb. 6, 2013).

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finance, especially because of the Chief Justice and Justice Alito’s hesitance to do so.59 But, Mr.

Tayrani found many more strengths to their position and the timing of the case than he did

challenges, an understandable view given the outcome of the case.60

Impact of Citizens United on the Litigants and Lawyers

Mr. Tayrani found being involved in Citizens United after only being six or seven years

out of law school extremely rewarding.61 He believes the case changed the way the election

process works and it allowed Citizens United to continue participating in political campaigns in a

way it could not do until the decision of the case was issued.62 Mr. Tayrani said the outcome of

Citizens United transcended the litigants’ expectations, and he is proud that, because of the

Court’s holding, individuals are able to band together as corporations or non-profits to get their

voices heard in the political process.63 In a surprising statement, Peter Ferrara of ACRU claimed

that the impact had very little effect on ACRU, if any effect at all.64

Impact of Citizens United on the Public

Alex Polikoff, who has written on Citizens United65, stated “By enabling corporations to

buy more election influence I suspect that public policy has been and is being influenced in pro-

corporate ways. I do fear that one result of CU will be to increase distrust of the electoral

59 Telephone Interview with Tayrani, Amir, attorney, Gibson, Dunn & Crutcher LLP, Washington, D.C. (Feb. 13, 2013).60 Id. 61 Id.62 Id. 63 Id. 64 Telephone Interview with Ferrara, Peter (Feb. 6, 2013).65 Alexander Polikoff, So How Did We Get Into This Mess? Observations on the Legitimacy of Citizens United, 105 Nw. U. L. Rev. Colloquy 203 (2011), http://www.law.northwestern.edu/lawreview/colloquy/ 2011/4/LRColl2011n4Polikoff.pdf.

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process. I don't know whether the public is now worse-informed but I fear that campaigning,

thanks in part to CU, is moving away from reasoned discussion of issues and toward "attack"

ads.”66 He also believes that Citizens United has made corporations more powerful that their

charters initially envisaged, and that the decision, given time, will likely erode Congress’s power

to regulate congressional elections.67 Mr. Polikoff, an individual who does not hide his true

feelings toward the Citizens United majority decision, from both legal and personal, value-based

judgments, postulates that “[b]y giving corporations virtually unlimited powers of election

spending, I think corporate wealth has been enabled to "unfairly" influence elections . . . namely,

that given the realities of corporate wealth and power in American society[,] the CU result is

more harmful to the American democratic system than the opposite result would have been.”

In a disappointing phone interview, Peter Ferrara of ACRU claimed that Citizens United

did not have much of an effect in public policy. However, he did say “Citizens United

reaffirmed that the corporate point of view is a way for the public to hear opinions and that the

First Amendment protects corporate speech and individual speech; it doesn’t discriminate.”68

Mr. Tayrani believed that the case had a much more significant impact than he ever

thought possible.69 He stated that no other case has had a more profound impact on the political

process, and thus the American public, than Citizens United did.70 Prior to the Supreme Court

overturning Austin and the restrictions that came with it, Mr. Tayrani thought that it was difficult

for individuals to get their voices heard on their own.71 But since Citizens United, individuals are

66 Written Interview with Polikoff, Alexander, Director of Public Housing Program, Business and Professional People for the Public Interest, Chicago, IL (Feb. 13, 2013).67 Id.68 Telephone Interview with Ferrara, Peter (Feb. 6, 2013).69 Telephone Interview with Tayrani, Amir, attorney, Gibson, Dunn & Crutcher LLP, Washington, D.C. (Feb. 13, 2013).70 Id.71 Id.

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able to pool their money and speak through a corporation or non-profit as one larger voice, rather

than a multitude of smaller voices.72 That the individuals who are behind the corporations and

non-profits are able to speak through groups with shared interests is a good outcome, he

believes.73

Another benefit of the outcome of Citizens United that Mr. Tayrani has seen is the public

debate that has been started.74 He stated the case sparked public debate about the way elections

should be funded, and he believed anything that is able to spark public debate is a good thing.75

Mr. Tayrani concluded that, since Citizens United, there is a difference in the way campaigns

are funded, but the voices that are heard remain the same.76 He sees corporations as still being

limited because of the restriction on direct contributions, but “corporations and non-profits can

now speak freely” and “individuals have their voices heard in a way they otherwise could not

before 2010.”77 He sees individuals as having a “greater voice in the political process” because

of the outcome of Citizens United.78

Fred Wertheimer, the former president of the advocacy group Common Cause and

current head of Democracy 21, two organizations with missions to keep corruption out of

government and make the political process more transparent, has helped lead the movement for

campaign finance reform.79 After the Citizens United decision was issued, he called it “‘a disaster

for the American people’ and ‘the most radical and destructive campaign finance decision in

Supreme Court history.”80 Others involved in the campaign finance debate have compared the

72 Id. 73 Id. 74 Id. 75 Id. 76 Id. 77 Id. 78 Id. 79 Kroll, supra note 1, at 18.80 Id. at 26.

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decision to the 1857 Dred Scott decision in how misguided it was.81 Even President Obama has

expressed a concern for the impact Citizens United will have, stating in his 2010 State of the

Union address that the Court “‘reversed a century of law that [he] believe[s] will open the

floodgates for special interests.’”82 A recent poll has shown that 6 in 10 people say they disagree

with Citizens United and 8 in 10 say there is too much “‘big money’” in politics.83 Some people

have even begun considering fighting for a constitutional amendment to reverse Citizens

United’s impact.84 But what has become possibly the most public criticism of Citizens United

has come from the Occupy movement, with activists all over the country lobbying and rallying to

make campaign finance a top political issue.85

The Supreme Court’s Reaffirmation of Citizens United

In 2012, the Supreme Court reaffirmed its Citizens United decision in American

Tradition Partnership, Inc. v. Bullock, 132 S. Ct. 2490 (2012). The plaintiffs in this case,

corporations wishing to make independent expenditures on behalf of 2012 candidates, sought

declaratory judgment against Montana’s ban on corporate expenditures “in connection with a

candidate or political committee that supports or opposes a candidate or political party.”86 In an

extremely short, two paragraph opinion by the same five Justices that made up the Citizens

United majority, the Court held that Montana’s arguments defending its corporate expenditure

ban were already rejected in Citizens United and that Citizens United’s rationale holds here as

81 Id. 82 Id. 83 Id. 84 Id. 85 Id. 86 American Tradition Partnership, Inc. v. Bullock, 132 S. Ct. at 2491 (2012), citing Mont. Code Ann. § 13-35-227(1) (2011).

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well.87 Justice Breyer’s four-Justice dissent, joined by Justices Ginsburg, Sotomayor, and Kagan,

argued that not only did Montana’s law correctly address the appearance of corruption with

corporate expenditures, but also that Citizens United deserves to be reconsidered.88

Two More Campaign Finance Cases

McCutcheon v. FEC - Individual Campaign Contributions

On Tuesday, Feb. 19, 2013, SCOTUS agreed to hear McCutcheon v. FEC.89 This is a

campaign finance case, and will likely be considered the most important campaign finance case

that the Court has heard since Citizens United. McCutcheon involves the federal aggregate limit

on the amount of money that an individual can contribute overall during a two-year election

cycle.

Shaun McCutcheon, a wealthy Alabamian, donated copious amounts of money to

Republican and conservative candidates and political party committees throughout the 2011-

2012 election cycle.90 He filed suit, challenging the Federal Elections Campaigns Act’s (FECA)

individual aggregate contribution limits to candidates and political party committees, because he

wished to donate more money to Republican and conservative candidates and committees.91

McCutcheon’s claim was that FECA’s aggregate limits were unconstitutionally low and

unconstitutionally overbroad.92 The Republican National Committee (RNC), another plaintiff in

this case, also challenged FECA’s individual contribution limits because it would have liked to

receive contributions from such wealthy individuals.93

87 Id.88 Id. at 2491-2492.89 Paul Blumenthal, Supreme Court Takes Campaign Finance Case, Will Rule on Contribution Limits, http:// www.huffingtonpost.com/2013/02/19/supreme-court-campaign-finance_n_2717527.html (accessed Feb. 20, 2013).90 McCutcheon v. Federal Elections Com’n, 2012 WL 4466482 at 2 (D.D.C. 2012).91 Id.92 Id.93 Id.

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The DC Circuit court upheld FECA’s limits and found for the FEC.94 The court relied

heavily on Buckley, indicating that the government can justify its limits on individual

contributions to candidates and party committees as a means of preventing corruption or the

appearance of corruption.95 The court made it quite clear that “[i]t is not the judicial role to parse

legislative judgment about what limits to impose.”96 The court also noted that, “[p]laintiffs raise

the troubling possibility that Citizens United undermined the entire contribution limits scheme,

but whether that case will ultimately spur a new evaluation of Buckley is a question for the

Supreme Court, not us.”97 Thus, while the DC Circuit court would uphold Buckley and FECA’s

individual contribution limits, it does set up the Supreme Court to possibly reevaluate Buckley.

As we have seen, the five-Justice conservative bloc of the Supreme Court is quite willing

to rip apart campaign finance laws; just look at Citizens United. Since the Court has agreed to

hear McCutcheon, the same five Justices that made up the majority in Citizens United could also

decimate Buckley, as they did to Austin in 2010. However, the Court did not explicitly state that

it would reconsider Buckley when it hears McCutcheon.98

U.S. v. Danielczyk – Direct Corporate Contributions

Another recent campaign finance case making its rounds through the courts is U.S. v.

Danielczyk, 683 F.3d 611 (4th Cir. 2012). This case deals with individuals conspiring to and

facilitating direct contributions to Hillary Clinton’s 2008 presidential campaign, violating 2

U.S.C. § 441b(a) of FECA and 18 U.S.C. § 2.99 As the facts of the case show, Danielczyk (and

another plaintiff, Biagi) hosted a fundraiser for then-Senator Hillary Clinton and asked

94 Id at 7.95 Id at 4.96 Id at 6.97 Id at 7. 98 Lyle Denniston, Campaign Donation Issue Reopened, http://www.scotusblog.com/2013/02/campaign- donation-issue-reopened/ (accessed Feb. 20, 2013).99 U.S. v. Danielczyk, 683 F.3d 611, 613 (4th Cir. 2012).

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individuals to contribute to Clinton’s presidential campaign, with the promise that such donors

would be reimbursed by Danielczyk’s LLC, Galen.100 Danielczyk attempted to conceal such

promised reimbursements “by writing “consulting fees” on the reimbursement checks’

memorandum lines, by issuing checks for amounts larger than the actual contributions, and by

creating creating false back-dated letters to the individual donors that characterized the

reimbursement payments as “consulting fees.””101 From this scheme, Danielczyk was indicted

with “knowingly and willfully causing contributions of corporate money to a candidate for

federal office, aggregation $25,000 or more, in violation of § 441b(a).”102 Danielczyk moved to

dismiss that count, arguing that under Citizens United, § 441b(a) is unconstitutional as applied to

him.103

The district court, relying on Citizens United, held that § 441b(a)’s ban on direct

corporate contributions was unconstitutional, as applied to Galen, because the ban treats

individuals and corporations unequally.104 The district court rejected the Government’s argument

that Federal Election Commission v. Beaumont, 539 U.S. 146 (2003), where the Supreme Court

rejected an as-applied challenge to § 441b(a)’s ban on direct corporate contributions, directly

controlled the present case.105 The Court of Appeals, however, reversed and held that Citizens

United does not undermine Beaumont’s holding that § 441b(a)’s ban on direct corporate

contributions was constitutional.106

This is another case that the Supreme Court will likely hear in the near future. Because

of its direct question of whether Citizens United can undermine yet another aspect of campaign

100 Id. at 614.101 Id.102 Id.103 Id. 104 Id.105 Id. at 615.106 Id.

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finance, the five-Justice majority that made up Citizens United will likely anticipate hearing

Danielczyk. Danielczyk may prove to be crucially important regarding how the Constitution

treats corporations, even more than in strictly a campaign finance role, as a holding that strikes

down § 441b(a)’s ban on direct corporate contributions may further push the envelope toward

complete corporate personhood.

Citizens United and Corporate Personhood

Many opponents of Citizens United have called for restricting Citizens United to apply

strictly to First Amendment speech, thus limiting the possibility for extending corporation’s

rights and abilities as “persons.” However, it seems evident that the five-Justice majority of

Citizens United may want to extend corporations’ rights, including treatment as “person” under

the law. Justice Scalia’s concurrence can be read as feverishly favoring corporations as having

more rights, powers, and abilities than their charters originally intended. His concurrence

heavily focuses on the First Amendment only regulating “speech” and not “speakers.”107 Thus,

should Scalia’s rationale be accepted, then corporations may enjoy further constitutional

protections than previously thought.

The Future of Political Speech and Campaign Finance Limitations

Among the challenges that have been brought regarding political speech and campaign

finance, what seems to be one of the most crucial questions for many opponents of restrictions

and limitations is whether it is even constitutional for Congress to restrict or limit speech. The

District Court in McCutcheon left the question for Congress to decide, stating that “[i]t is not the

judicial role to parse legislative judgment about what limits to impose.”108 So far, the Court has

upheld Congress’s restrictions on contribution limitations as constitutional because they concern

107 Citizens United, 130 S.Ct. at 929.108 McCutcheon, 2012 WL 4466482.

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the First Amendment freedom of association rather than freedom of speech, and thus are subject

to a lower standard of scrutiny when challenged.109

Some attorneys and other professionals well-versed in campaign finance have expressed

some worry, though, about the Court’s potential attempt to legislate an area that should be left

for Congress. In a Washington Post article, Tara Malloy, senior counsel for the Campaign Legal

Center, stated that there are some justices “who are willing to usurp Congress’s role as legislator

when it comes to matter of campaign finance.”110 And in a Slate article on the Court’s decision

to hear McCutcheon, author David Weigel wrote that it is possible Kennedy will find

McCutcheon’s argument compelling, even as “baseless as it is.”111 Weigel also wrote, however,

that based on the political lean of the judge who decided McCutcheon in the District Court, the

outlook for the case once it hits the Supreme Court might fair better for proponents of campaign

finance restrictions. He called Judge Janice Rogers Brown, who decided the case, a “libertarian-

minded judge” and stated that “even she decided that ‘the aggregate limits are justified’” and that

McCutcheon’s argument challenging the provision “was flimsy.”112

Until the Supreme Court hears the case and issues a decision, it is unclear whether the

role of deciding restrictions and limitations for campaign contributions will be one for the

judiciary or for Congress. It is also unclear how narrowly the Court will decide the challenge.

But depending on how the Court rules, McCutcheon might not be the last challenge to campaign

finance the Court will face.

109 Id., referencing Buckley v. Valeo, 424 U.S. 1, 22 (1976).110 Robert Barnes, Supreme Court to consider limits on individual political contributions, Wash. Post (Feb. 19, 2013).111 David Weigel, Will McCutcheon v. FEC Allow Billionaires to Buy Elections? I Mean, More Than They Currently Do?, Slate, (Feb. 19, 2013).112 Id.

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There are two sets of contribution limits: base limits and aggregate limits. Base limits

regulate how much the contributor may give to specified categories of recipients, and aggregate

limits regulate the total amount an individual may contribute in any two-year election cycle.113

Because McCutcheon is only challenging the aggregate limits rather than both sets of

contribution limits, it is possible that another challenge could be made in the future on the base

limitations aspect of contribution limits. If the Court decides to uphold the aggregate limits in

the same way the District Court did, it is unlikely that a challenge to the base limits would be

successful. But if the Court overturns Buckley v. Valeo and finds that aggregate limitations are

unconstitutional, and the Court issues a narrow holding, it would make challenging the base

contribution limitations all that more appealing to opponents of campaign finance.

The Court could also revisit its Citizen United holding by hearing Danielczyk and make a

final determination of whether § 441b(a)’s ban on direct corporate contributions is constitutional.

Of course, this case should also signal a shift to support the case for complete corporate

personhood. Only time will tell where the Supreme Court will have its next great impact in the

realm of campaign finance, but it is extremely likely that somehow, corporations will be

involved.

113 McCutcheon, 2012 WL 4466482,

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