Court To Rule On Supreme Amounts of Corporate Cash

The Supreme Court’s early return on Wednesday had all the elements of great drama: A new justice, a new solicitor general and arguments in a case that has the potential to reshape the way campaigns are waged.
The high court cut its recess a month short to hear re-arguments for Citizens United v. Federal Election Commission. The case centers on a documentary, “Hillary: The Movie,” that Citizens United, a nonprofit conservative advocacy group, sought to distribute on a video on demand service during the 2008 campaign. The FEC intervened saying the film amounted to a lengthy political ad advocating for the defeat of a candidate and, therefore, could not be aired by a 501(c)(4) group like Citizens United.
When it was originally heard by the Supreme Court in March, the case broadened into a debate on whether corporations deserve the same rights as individuals under campaign finance laws. In particular, the court is considering whether to overturn previous rulings in McConnell v. FEC (2003), which upheld the Bipartisan Campaign Reform Act of 2002 (commonly referred to as McCain-Feingold), and Austin v. Michigan Chamber of Commerce (1990), which held that corporate spending on elections has “distorting and corrosive effects.”
Because of the court’s shift to the right and because the justices called for a re-argument, many have speculated that the court may drastically reduce limitations on corporate political spending—a move that has the potential to be a game changer in elections. After Wednesday’s argument, it appeared that Citizens United will win the case. What remains to be seen, though, is how far the court will go on the broader issue of corporate money in elections.
The scene at the Supreme Court was more frenzied than usual, another sign of the importance of the case. The courtroom was packed, as was the press gallery. Justice Sonia Sotomayor, hearing her first arguments since being confirmed, entered wearing the traditional black robe with a white collar.
Former Solicitor General Ted Olson, representing Citizens United, argued first and was quick to frame the case as a debate over whether corporations and individuals deserve equal rights. He called having a “robust debate” and communicating during an election a “fundamental value” of American democracy and alleged that the FEC’s corporate restrictions represented a “prohibition.” A “heavy burden” should be placed on the government, he went on, to prove that corporate communications taint elections. If that is proven, the remedy should be “narrowly tailored” to the problem.
Olson’s opening remarks were cut off by Justice Ruth Bader Ginsburg, a member of the liberal wing of the court, who asked whether corporations deserved the same “inalienable rights” that individuals are granted by the Constitution—a theme that came up repeatedly throughout the arguments. (Justice Antonin Scalia later countered: “Most corporations are indistinguishable from the individuals that own them.”) Ginsburg also pressed Olson on whether corporations with a significant number of foreign shareholders deserve the same rights as individual American citizens. Foreigners are prohibited from contributing individually to American political candidates.
It didn’t take long for Sotomayor to pose her first questions as a Supreme Court justice. Most pointedly, she noted how broad the scope of the case had become. Citizens United, a public advocacy group, is not the type of mega-corporation discussed in the arguments. (Solicitor General Elena Kagan, representing the FEC, would later call Citizens United an “atypical” corporation for this type of case.) Consequently, Sotomayor asked, if the court rules on these arguments, isn’t it reaching too far?
Another framework developed over the course of the hearing that may be indicative of how the court will rule. Justice Anthony Kennedy asked early on whether there was a difference between an office holder asking a corporation for money and a corporation deciding to air ads on its own. Simply put, is there a difference between corporate contributions and corporate expenditures?
In past cases, Kennedy has signed minority opinions calling for overturning the restrictions on corporate advertising—siding with the more conservative justices. In the present case, Kennedy, who sits at the court’s ideological center, again appeared on the conservative side when it came to corporate expenditures. With Kennedy on board, the court could rule in favor of lifting restrictions on corporate expenditures but not discuss corporate contributions to individual politicians.
Kagan was ready for Kennedy’s line of argument and noted that before 1947 expenditures were considered the same as contributions. When the difference arose in elections, Congress quickly acted to close that loophole.
Appearing for the first Supreme Court argument of her career, Kagan was grilled by the conservative wing of the court, particularly Chief Justice John Roberts. Roberts asked Kagan whether FEC regulations were in place to protect shareholders who do not monitor the political activity of companies in which they invest. Roberts asked: Do “we, the government, big brother, have to protect you naive shareholders?”
In his rebuttal to Kagan’s argument, Olson said “the government’s position has changed,” and charged that he was now unclear about what type of corporations are subject to FEC restrictions and what, exactly, the FEC restricts.
In the end, the court appeared more receptive to Olson’s arguments and, at one point, Kagan appeared to concede defeat, as long as it was on narrow grounds. The question now is how far the court will go. Will the court focus narrowly on Citizens United and “Hillary: The Movie”? The court could rule that documentaries such as “Hillary: The Movie” are not prohibited under McCain-Feingold.
Or will the court reach farther? The court could fundamentally reshape how corporations influence elections by lifting restrictions on corporate expenditure and/or contributions.
Today’s hearing made it seem like the court was ready to tackle the broader issue.Jeremy P. Jacobs is a staff writer at Politics. He can be reached at jjacobs@politicsmagazine.com