What are the Limits of Citizens United? The Case of Direct Corporate Contributions
The highly controversial decision in Citizens United v. FEC concluded in no uncertain terms that it was improper to prevent corporations from using their money to engage in activities that supported or opposed particular candidates for public office within 30 days of an election. The logic of the decision is that so long as individuals are allowed, as they must be under the First Amendment, to voice their views on electoral candidates, corporations must also be entitled to the same protection.
I think that this decision made perfectly good sense for the following reasons. First, it is a mistake to assume that all corporations will come out on the same side of any issue. The division of sentiment could easily lead to an increase in the total expenditures on an election, but not necessarily to a difference in the balance of wealth between the two sides. Second, it is not clear whether most corporations want to get involved in election campaigns, given that they will get more bang for their buck by targeting particular legislation and administrative rules that have a direct impact on their business. Third, there is little concrete evidence that this practice results in any corruption, and we are not likely to come by any so long as other forms of legislation that impose restrictions on bribery and direct corporation contributions to electoral campaigns remain in place.
However, it is the opinion of one District Court Judge, James C. Cacheris, that all this should change. In U.S. v. Danielczyk, Judge Cacheris concluded that "Citizens United held that there is no distinction between an individual and a corporation with respect to political speech," and therefore "if an individual can make direct contributions within [the law's] limits, a corporation cannot be banned from doing the same thing."
That lofty principle was applied to strike down the federal prosecution of Danielczyk for reimbursing employees who made direct political contributions to candidates. The particular statute at hand made it unlawful to make a gift “in the name of“ another person, and Judge Cacheris rightly held that the statute had to be read to prevent the obvious circumvention of reimbursing someone else who makes a direct contribution.
In my view, that should end the discussion. If correct, then the supposed parity principle between individuals and corporations goes beyond what the Supreme Court determined in Citizens United. The exponential risks of bribery seem pretty large, and the correct response is to uphold this statute in the absence of any clear evidence that the Supreme Court is about to change course on that larger issue. Early Supreme Court decisions, including that venerable 1976 constitutional warhorse, Buckley v. Valeo have drawn the firm line between expenditures (which are blessed) and contributions (which may be regulated). The distinction is not absurd, and may even be correct. But it is odd for a District Court judge to go out on a limb that the Supreme Court may yet saw off. A second district court came out the other way, preferring discretion to valor. My guess is that Cacheris’s decision will be unceremoniously reversed on appeal. If not, then stay tuned for a reprise of Citizens United before the Supreme Court, where the issue will be somewhat closer. Ultimately, I suspect that the government will still win, perhaps 9-0.
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Apr '11
Re: What are the Limits of Citizens United? The Case of Direct Corporate Contributions
Richard Epstein:
Second, it is not clear whether most corporations want to get involved in election campaigns, given that they will get more bang for their buck by targeting particular legislation and administrative rules that have a direct impact on their business.
Another reason for this is that politics is a highly polarized thing that's usually bad for business. If a corporation contributes in favor of a particular issue, there will always be a significant group that will hold the opposite view on said issue and likely make through protests and boycotts which lead to a lot of negative publicity. Simply put, it's usually not worth it for a corporation to take a position on an issue, especially something like gay marriage, which isn't directly tied to business, but will probably make quite a few people angry.
I was under the impression that expenditures were something a company paid directly (ex. running an ad) and contributions were money a company gives to a candidate of PAC.
Oct '10
Re: What are the Limits of Citizens United? The Case of Direct Corporate Contributions
I'm glad Richard Epstein is on our side.
May '10
Re: What are the Limits of Citizens United? The Case of Direct Corporate Contributions
I particularly enjoyed how the opinion blew past Ashwander like a Wild West cowboy exploding through the saloon doors.