The Floodgates Were Already Open

What will the Supreme Court’s campaign finance ruling really change?

Chief Justice John Roberts

Citizens United, the fourth in a series of decisions from the Roberts Court that has narrowed or struck down campaign finance regulations, has garnered headlines of shock and awe. But the writing for it has been on the wall since the court’s 2007 decision in FEC v. Wisconsin Right to Life. That case, which interpreted the same provision of the same law as Citizens United, held that corporate and union ads were constitutionally protected so long as they did not explicitly endorse or oppose candidates. The difference now is that corporations and unions can tell you directly who to vote for. In other words, before Citizens United, a corporation or union could sponsor ads with its treasury funds that said “Tell Congressman Smith to stop destroying America.” After Citizens United, they can add at the end “and, by the way, don’t vote for him.”

The difference is an important one for constitutional theorists. But blaming this decision for opening the floodgates to corporate cash simply ignores recent history. The gates were already wide open. Any flood that swamps candidates in the 2010 election could have been unleashed even before the court’s most recent decision. The harder question is what this all means for Democrats, Republicans, and everyone else.

In campaign finance, more than in any other area of constitutional law, the replacement of William Rehnquist and Sandra Day O’Connor with John Roberts and Samuel Alito has been deeply felt. The meaning of the First Amendment has been changing for the past few years, and the Roberts court’s first revolution has taken place on the terrain of political money. In 2006 in Randall v. Sorrell, the court struck down Vermont’s contribution limits as too low. The next year in Wisconsin Right to Life, it wounded the federal regulation on corporate electioneering that it has now killed. And in FEC v. Davis in 2008, it struck down the “millionaire’s amendment,” which attempted to target the electoral advantages enjoyed by self-funded candidates.

So, who has benefited from this revolution? Given the apoplexy of Democrats and the euphoria of Republicans in the wake of the new decision, it seems easy to identify the political coalitions favored by the new constitutional rule. Easy doesn’t necessarily mean wrong. Perhaps corporate money will now flow in great amounts toward ads supporting Republican candidates. Union money will flow as well, but not as much, so Democrats and their causes might be at a disadvantage. As a consequence, policy may skew toward protecting corporate interests in Washington and the many states with similar (and now unconstitutional) bans on such spending. Or so the argument goes.

Predicting winners and losers from either a new decision or new legislation governing campaign finance has proven to be a tricky business, however. A vocal minority thought the McCain-Feingold law might actually hurt Democrats, for example, because historically they had been better able to raise money in larger chunks from fewer donors (especially unions) rather than Republicans, who had a comparative advantage in a broad base of small contributors. Of course, the Obama election, with its unprecedented success among small donors over the Internet, seemed to redefine our collective assumptions as to who could raise how much money from whom.

Similarly, many (including some of the justices) viewed McCain-Feingold as pro-incumbent, because it muted the voices of the political parties, unions, and corporations, which are best positioned to spend money to buy the name recognition and exposure for challengers that incumbents get for free. However, it is just as plausible that, under the new regime, corporations and unions will feel the need to ingratiate themselves with current incumbents who have incredible power to craft regulations and to allocate money in ways that could literally define their existence. If that is so, perhaps the Democrats, as the party currently in control, will prove to be short-term beneficiaries of the ruling.

The political parties as institutions were probably the losers. Their power is now diminished relative to that of outside groups funded (now in unlimited amounts) by corporations and unions. Perhaps this is a good thing: The extreme cohesiveness and polarization of the political parties might be countered by independent, nonparty bases of support that influence candidates. At the same time, and I’d argue more likely, the decision might polarize the parties even further, because independent spenders tend to advocate extreme positions.

But will the corporations in fact spend all the new millions being predicted? Remember that in the wake of McCain-Feingold, the assumption was that corporations would simply funnel their money into shadowy interest groups, such as 527s. In fact, although such groups blossomed, they did so mainly with contributions from individuals, not companies. Rather than consistently trying to buy influence through TV ads, corporations may more often be on the receiving end when politicians shake them down for campaign cash. Perhaps the stimulus, TARP, and a new age of increased government regulation of industry have restruck the balance. Or perhaps, as was historically the case, corporations will continue to spend much more on lobbying, which has often proved a more efficient means of influencing policy. If so, then the world of corporate influence in the immediate aftermath of Citizens United may not look much different than the world that preceded it.

The future is also uncertain because this will not be the Roberts Court’s last word on campaign finance. By treating corporations as a mere species of individual associations, the court has cast doubt on campaign finance regulations that treat corporations as posing a special threat. Most notably, the ban on soft money, which prevents corporate and union contributions to political parties and candidates, might be the next restriction to fall. If corporations are like individuals, how can Congress completely ban soft-money contributions from one while letting the other give within limits? The case RNC v. FEC, now working its way up to the court, poses a very similar question. Given the tone of Citizens United, we should expect a bold response.

For now, though the contribution limits that are ubiquitous in both state and federal law remain untouched by Thursday’s decision, it has become more difficult to justify them. As my colleague Heather Gerken has argued at greater length, the court significantly narrowed the interests states can argue underlie such laws. In particular, Citizens United changed the very definition of corruption. In the case it overruled, Austin v. Michigan Chamber of Commerce, corruption included “the corrosive and distorting effects of immense aggregations of wealth [amassed] through the corporate form.” No longer. Even the garden variety definition of corruption as signaling “undue influence on officeholders’ judgment” or special access is under attack. As the court said in Citizens United, “The fact that speakers may have influence over or access to elected officials does not mean that these officials are corrupt. … Ingratiation and access, in any event, are not corruption.”

Because corruption of the quid pro quo variety is notoriously difficult to prove (after all, how many politicians admit they voted a particular way because of a campaign donation?), defendants historically relied on assurances from the court that states could target the appearance of corruption. Although still standing, that concept also teeters from the decision, as the court reinforced that “[t]he appearance of influence or access, furthermore, will not cause the electorate to lose faith in our democracy.”

In the short term, the president and several members of Congress are promising reform, each version of which raises its own constitutional questions. To target corporations, some urge that shareholders be required to vote to have treasury funds used for campaign expenditures. Or, given the presumed ability of the federal government to prohibit foreigners from spending money in campaigns, perhaps the government could ban expenditures by corporations substantially owned by foreigners. Or, perhaps it could change the tax code so as to reduce the incentives of corporations to spend money on political campaigns. Or, given the tremendous dependency of the financial industry and others on federal funds of late, the government could make eschewing electioneering expenditures a condition of its largesse. Or, in the same vein, states could condition the granting of a corporate charter on a promise to disengage from campaigns. Public funding of various sorts may be the constitutionally safest option, but in an age where the public has become suspicious of both bailouts and politicians, they are likely to be hesitant to use one for the other.

Several of these proposals raise questions of unconstitutional conditions. Some may also be seen as too clever by half. More than any area of election law, campaign finance had been characterized by the tug of war between the court and the political branches in the slippery mud of politics. Each law leads to its own loophole, either discovered by political entrepreneurs or poked by a court or agency. The political branches respond and the Supreme Court reins them in.

Five members of the court now hold those reins. The replacement of any one of them could lead to yet another redefinition of the First Amendment. Indeed, when the court regulates politics, it helps determine, in part, its own fate and the consequent meaning of the Constitution. As elections determine presidents and presidents choose justices, the court’s pronouncements on election law, however well-meaning, can never be purely disinterested. Any justices who see themselves as constitutional umpires learn all too quickly that they are All-Star players in the game.

A version of this piece is cross-posted at Balkinization.