A Drop in the Bucket

Conventional wisdom says the campaign finance decision rendered in Citizens United v. Federal Election Commission is destined to change the world—or at the very least elections as we know them. Corporations equated to humans! Elections overrun by foreign money and influence! Democracy hijacked! Perhaps a closer look is in order.

By Adam Liptak

Fall 2010

Two hours before the Supreme Court released its most important decision of the last term, Citizens United v. Federal Election Commission, Professor Nathaniel Persily posted an essay on an influential law blog accurately predicting not only what the decision would say, but also countering some of the misconceptions that would follow it.

Less than two months later, Professor John C. Coffee Jr. testified before Congress, providing legislators with practical options to counter the decision, even as he cautioned lawmakers not to overreact.

Other faculty members, too, analyzed the 183-page decision in short order and produced something distinctly other than sound bites in response.

Citizens United, which allowed unlimited corporate and union spending in candidate elections, was undoubtedly a big deal. It struck down part of the leading campaign finance law and reversed two important precedents. It demonstrated, for the fourth time, that the replacement of Justice Sandra Day O’Connor with Justice Samuel A. Alito Jr. has netted profound consequences for campaign finance law. And it unsettled First Amendment doctrine in the area, powerfully limiting the justifications the government can offer to support regulation.

“It tells us we have a very interventionist Supreme Court, at least in the area of campaign finance,” says Richard Briffault, the Joseph P. Chamberlain Professor of Legislation. “The Court has said, ‘This is an area where we know better than everyone else’—better than the voters and better than the legislators who adopt these restrictions.”

Professor Gillian E. Metzger, an authority on the separation of powers, says the Court has gone too far, both in its lack of deference to Congress and in its failure to ensure that some voices do not drown out others in election campaigns. “The Court takes too narrow a view,” she says, “of what are legitimate interests in this area.”

Still, more than a few faculty members say the decision has been unfairly caricatured and may not have the dire consequences many predict.

Whatever the importance of the case as a symbol, and whatever it tells us about the Roberts Court and where it is heading, Citizens United was in line with much of the Supreme Court’s campaign finance jurisprudence since at least Buckley v. Valeo in 1976. That means the central holding of the decision was neither as revolutionary nor as consequential as some critics claimed.

Corporations were already free to spend vast sums in candidate elections before the decision, and there is reason to doubt they will spend more in its aftermath.

Citizens United is very far from a radical departure from existing precedent or an act of judicial usurpation,” says Henry Paul Monaghan, the Harlan Fiske Stone Professor of Constitutional Law. “The Court has been unfairly excoriated by the media, and members of the Court treated rather poorly by Mr. Obama during his State of the Union address.”

Monaghan is referring, of course, to the president’s very public criticism of the then–six-day-old Citizens United decision—a rebuke spoken literally in the direction of six Supreme Court justices attending the address.

“Last week, the Supreme Court reversed a century of law that I believe will open the floodgates for special interests,” President Obama said. “I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities.”

That statement raised questions about etiquette and protocol, and Justice Samuel A. Alito Jr. issued a real-time critique of the president’s analysis, seeming to mouth the words “not true.” Chief Justice John G. Roberts, Jr. later said the address had turned into an unseemly “political pep rally.”

There were, indeed, reasons to think the president’s response a product of political calculation as much as careful analysis of the context and consequences of the decision.

Citizens United, decided by a 5-to-4 vote, was issued on January 21, 2010. The case concerned a polemical documentary about Hillary Clinton that an advocacy corporation sought to distribute on a cable television system’s video-on-demand service during the 2008 Democratic presidential primaries. But part of the Bipartisan Campaign Reform Act of 2002, usually referred to as the McCain-Feingold law, made it a crime to broadcast “electioneering communications” financed by corporations shortly before elections.

It would thus have been possible for the Supreme Court to rule narrowly, critics suggest, by distinguishing long-form documentaries from television ads, or by distinguishing the corporation in question from purely commercial ones, or by distinguishing video-on-demand technology from broadcast ads.

Instead, the Court struck down the provision and, in the process, overruled part of McConnell v. Federal Election Commission and Austin v. Michigan Chamber of Commerce.

A common misunderstanding about Citizens United is that it introduced a novel idea: that corporate speech is entitled to First Amendment protection. But corporations have long been able to spend money on referendum campaigns, under the 1978 case First National Bank of Boston v. Bellotti.

“It is far too late in the day to argue that corporations lack First Amendment rights,” Monaghan says.

And while it is true that the Austin decision in 1990 did uphold regulation of corporate spending in candidate elections, “Austin was a clear outlier in election law case law,” Monaghan adds.

The justification for regulation accepted by the Austin Court, moreover, was that the government has a role to play in leveling the playing field among speakers. That notion, known as anti-distortion, has been viewed skeptically in other Supreme Court decisions. (Indeed, the rationale supporting Austin was expressly disavowed by one Elena Kagan, the newest member of the Court and then solicitor general, while making the government’s case at oral argument in Citizens United last September.)

A second misunderstanding is that Citizens United allows direct corporate contributions to candidates. In reality, the decision addressed only “independent expenditures,” and “contributions” remain banned.

The Supreme Court has long treated contributions to politicians differently from independent spending to support them. The theory behind the distinction is that contributions can give rise to corruption, while spending on things like television ads is free speech directed at voters and protected by the First Amendment. Whatever one thinks of the logic of that distinction, Citizens United did not disturb it.

The problem, Professor Richard Briffault says, is that this is a distinction without
a difference.

“For the last 35 years, we have operated on the fiction that independent expenditures are fundamentally different from contributions,” Briffault says. “The Court just hardened this distinction. It’s an illusion.”

A third misconception, says Professor Nathaniel Persily, the Charles Keller Beekman Professor of Law and Professor of Political Science, is that, as Obama put it, Citizens United opens the floodgates of corporate spending.

The floodgates, Persily says, were already open.

Even in candidate elections, the McCain-Feingold law had allowed significant corporate spending outside of quite narrow time windows just before elections. And even within those windows, Persily wrote in his prescient post on the law blog Balkinization, “The truth is that the gates to corporate and union spending were opened much of the way by the Court’s decision three years ago in Wisconsin Right to Life v. FEC.” That decision protected all advertisements except those susceptible to no other interpretation than an admonition to vote for or against a candidate. As a result, ads urging people to, for instance, “call Congressman Smith and tell him to stop protecting child molesters” were already protected—even if paid for by a corporation, and even if broadcast the day before an election.

Citizens United only expanded that protection to ads that expressed support or opposition in so many words. That was a relatively small step, Briffault says.
“I’ve been less of an alarmist on its immediate consequences,” he says of the decision, “mostly because corporations could already spend as much money as they wanted to.”

Nor was there much evidence that corporations were spending money in the broad areas available to them before Citizens United. About half of the states, for instance, have allowed spending of the sort endorsed in the Citizens United decision, but political scientists have not been able to identify differences in corporate influence in the two sets of states. “There is absolutely no distinction between those states that have bans on corporate electioneering and those that do not,” Persily says.

And there is reason to think that corporations are not eager to spend their money on campaign ads, even as a matter of pure economics. “I tend to think corporations find campaign ads to be an inefficient way of influencing politics, and that much of corporations’ historic participation in elections was more the result of politicians shaking them down, rather than attempts to influence outcomes,” Persily says. Corporate money, he notes, is more efficiently spent on lobbying.

“[Corporations] have always spent five times or more on lobbying than on campaign spending,” he says.

Monaghan adds another reason to think that the impact of the decision may be limited. “Large corporations cannot afford to alienate customers by overt election campaigning,” he says.

There is no question that Citizens United has seized the public imagination, providing liberals with a symbol, and a kind of shorthand for the proposition that the Roberts Court is activist and favors corporations at the expense of ordinary people. But it is hardly clear that the case will have anything like the dire consequences its critics predict.

The elections in November will provide the first real data on whether the decision makes a practical difference in the conduct of elections. Professor Nathaniel Persily, for one, says he expects corporate spending to “represent a tiny slice” of total spending in the 2010 elections. But that does not preclude its potential effectiveness in particular races. (Recall, Persily says, the $3 million spent by a coal executive to help elect a friendly West Virginia Supreme Court justice, events that formed the basis of last year’s judicial recusal decision, Caperton v. A.T. Massey Coal Co, Inc.)

Still, the larger message of Citizens United, Professor Richard Briffault says, was that the Court had overridden the popular will about a central area of self-governance.

“Whatever the public concerns about campaign finance regulation, we’re not going to get much in the way of limits,” he says. “Whatever the popular support for contribution and expenditure limits, that’s just not in the cards for the near future.”

The vote on the main holding in Citizens United saw justices arrayed in the usual pattern: The conservatives on one side, here joined by Justice Anthony M. Kennedy’s swing vote, and the liberals on the other. The dissent was written by Justice John Paul Stevens, who announced his retirement a few months later. But there was a second aspect to the decision dealing with part of the McCain-Feingold law that required identification of the funders of covered campaign commercials and other communications. Here, the vote was 8-to-1, with every member of the Court except for Justice Clarence Thomas endorsing disclosure requirements.

In his testimony before a subcommittee of the House Financial Services Committee on March 11, Professor John Coffee, the Adolf A. Berle Professor of Law, focused on that second holding.

He was asked a rambling question by Representative Paul E. Kanjorski, Democrat of Pennsylvania, who said: “[T]he path we’re really going on” is “to establish the United Corporations of America” because “we’re trying to make corporations and other entities like that so human as to be true, complete citizens of the United States.”
Coffee politely urged caution.

“I would suggest we approach this by looking for the least restrictive alternative, and I think that’s enabling self-regulation,” he said.

“We’re told corporations have speech,” Coffee went on, “but the Supreme Court is also telling us that shareholders have full control over limiting, curbing, and focusing that speech, and I think that should play out for a bit. I think you should think about a range of options for shareholders, whether it’s an annual vote, whether it’s bylaw votes, whether it’s referendums—giving them all the possible mechanisms to control their own organization.”

In a March article in the New York Law Journal, Coffee criticized the existing disclosure regime as inadequate, particularly where conduits are involved. He cited a 2008 study by the Center for Political Accountability showing that six large trade associations—such as the U.S. Chamber of Commerce and the American Tort Reform Association—spent more than $100 million on political activities in 2004, while their corporate donors largely escaped disclosure.

Legislative responses to Citizens United that would have required disclosure of who was paying for political commercials have so far failed. In any event, Briffault says he is “somewhat cautious about what disclosure accomplishes.

“I don’t think disclosure is a panacea,” he says, though “it may be useful to see who is behind an ad.”

In his congressional testimony, Coffee said shareholder-rights measures are certainly worth pursuing.

“After Citizens United, the prospect of material corporate payments for political purposes increases exponentially,” he said, “and the need for disclosure is enhanced. Disclosure deters abuse, and in the light of Citizens United, the potential for low-visibility abuse has just grown.”

But Coffee did see at least one benefit of the decision.

“On the positive side,” he wrote in the New York Law Journal, “law review note writers will now have topics that they can debate endlessly, and this will keep them out of trouble.”

Adam Liptak is the Supreme Court correspondent for The New York Times.

Illustration by Justin Renteria