A Big Victory for Free Speech

http://www.futureofcapitalism.com/2010/01/a-big-victory-for-free-speech

The Supreme Court today issued a decision (pdf) that may, in the long run, be an even bigger victory for individual freedom and defeat for government power than Scott Brown's victory in the Massachusetts U.S. Senate election. In the case, Citizens United v. Federal Election Commission, a 5-4 majority consisting of Justices Roberts, Scalia, Thomas, Kennedy, and Alito struck down a ban on electioneering communications by corporations, saying the restriction was a violation of the First Amendment guarantee of free speech. In doing so, the court overturned a 1990 precedent, Austin v. Michigan Chamber of Commerce, in which a 6-3 majority led by Justice Thurgood Marshall found that the public interest in fighting corruption justified such restrictions on corporate political expenditures.

The opinions by the justices aired sharply differing views between the majority and the minority not only on questions of free speech, but on the place of corporations in law and in society. The decision also highlighted ideological shifts on the court over time. In 1990, Justices Scalia and Kennedy were among the dissenters, while in today's decision, they were part of the majority. In 1990, Justice Stevens was part of the majority, while today, he joined Justices Sotomayor, Ginsburg, and Breyer in the minority.

The case also highlighted the way both Republican and Democratic politicians trample the Constitution, at least as defined by today's Supreme Court majority. The law the court struck down in today's ruling was the Bipartisan Campaign Reform Act of 2002. It was known as McCain-Feingold after the 2008 Republican presidential candidate, Senator McCain, who was one of its prime champions. It was signed into law by President Bush, a Republican. And it was defended before the court by the Obama Administration. Justices appointed to the high court by Democrats were the ones who backed the law, and President Obama today issued a statement denouncing the Supreme Court majority for a decision that he said gives "a green light to a new stampede of special interest money in our politics. It is a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans."

"The Government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether," the majority opinion by Justice Kennedy said. "As additional rules are created for regulating political speech, any speech arguably within their reach is chilled."

The majority said that "Campaign finance regulations now impose 'unique and complex rules' on '71 distinct entities.' These entities are subject to separate rules for 33 differenttypes of political speech. The FEC has adopted 568 pages of regulations, 1,278 pages of explanations and justifications for those regulations, and 1,771 advisory opinions since 1975. In fact, after this Court in WRTL adopted an objective 'appeal to vote' test for determining whether a communication was the functional equivalent of express advocacy, the FEC adopted a two-part, 11-factor balancing test to implement WRTL's ruling."

The majority said all these rules amount to an unconsitutional restraint on free speech: "This regulatory scheme may not be a prior restraint onspeech in the strict sense of that term, for prospectivespeakers are not compelled by law to seek an advisory opinion from the FEC before the speech takes place. As a practical matter, however, given the complexity of the regulations and the deference courts show toadministrative determinations, a speaker who wants toavoid threats of criminal liability and the heavy costs of defending against FEC enforcement must ask a governmental agency for prior permission to speak. These onerous restrictions thus function as the equivalent of prior restraint by givingthe FEC power analogous to licensing laws implemented in 16th- and 17th-century England, laws and governmental practices of the sort that the First Amendment was drawn to prohibit."

Said the majority: "the FEC has created a regime that allows it to select what political speech is safe for public consumption by applying ambiguous tests. If parties want to avoid litigation and the possibility of civil and criminal penalties, theymust either refrain from speaking or ask the FEC to issue an advisory opinion approving of the political speech in question. Government officials pore over each word of a text to see if, in their judgment, it accords with the 11 factor test they have promulgated. This is an unprecedented governmental intervention into the realm of speech."

The opinion went on: "The law before us is an outright ban, backed by criminalsanctions. Section 441b makes it a felony for all corporations—including nonprofit advocacy corporations—eitherto expressly advocate the election or defeat of candidates or to broadcast electioneering communications within 30days of a primary election and 60 days of a general election. Thus, the following acts would all be felonies under §441b: The Sierra Club runs an ad, within the crucial phase of 60 days before the general election, that exhorts the public to disapprove of a Congressman who favors logging in national forests; the National Rifle Association publishes a book urging the public to vote for the challenger because the incumbent U. S. Senator supports a handgun ban; and the American Civil Liberties Union creates a Web site telling the public to vote for a Presidential candidate in light of that candidate's defense of free speech. These prohibitions are classic examples of censorship.

The court noted that independent election expenditures weren't banned by Congress until 1947, which, in so doing, overrode the veto of President Truman, who warned that the expenditure ban was a "dangerous intrusion on free speech."

It also complained of differing treatment under the law of businesses that onw news organizations and those that don't. "This differential treatment cannot be squared with the First Amendment," the opinion said.

Chief Justice Roberts stressed the essential point in his concurring opinion: "Congress violates the First Amendment when it decrees that some speakers may not engage in political speech at election time, when it matters most."

The minority opinion, by Justice Stevens, rejected the idea that the laws against electioneering communications by corporations amount to an outright ban, pointing out that corporations can create political action committees, air issue advertisements, and communicate with their shareholders. It also said that the First Amendment is not unlimited, pointing out that "The Government routinely places special restrictions on the speech rights of students, prisoners, members of the Armed Forces, foreigners, and its own employees. When such restrictions are justified by a legitimate governmental interest, they do not necessarily raise constitutional problems."

As interesting, or more so, than the debate over free speech was that over the status of corporations. Justice Scalia took an essentially benevolent view of them in his concurring opinion: "Despite the corporation-hating quotations the dissent has dredged up, it is far from clear that by the end of the 18th century corporations were despised. If so, how came there to be so many of them? The dissent's statement that there were few business corporations during the eighteenth century—"only a few hundred during all of the 18thcentury"—is misleading. There were approximately 335 charters issued to business corporations in the United States by the end of the 18th century… to exclude or impede corporate speech is to muzzle the principal agents of the modern free economy. We should celebrate rather than condemn the addition of this speech to the public debate."

The minority of Justices Stevens, Ginsburg, Breyer, and Sotomayor, however, seemed to see corporate speech as a threat to democracy, and emphasized that corporations are different from people and have different rights.

"The conceit that corporations must be treated identically to natural persons in the political sphere is not only inaccurate but also inadequate to justify the Court's disposition of this case," the minority said. "In the context of election to public office, the distinction between corporate and human speakers is significant. Although they make enormous contributions to our society, corporations are not actually members of it. They cannot vote or run for office. Because they may be managed and controlled by nonresidents, their interests mayconflict in fundamental respects with the interests of eligible voters. The financial resources, legal structure,and instrumental orientation of corporations raise legitimate concerns about their role in the electoral process. Our lawmakers have a compelling constitutional basis, if not also a democratic duty, to take measures designed to guard against the potentially deleterious effects of corporate spending in local and national races. … The Court's ruling threatens to undermine the integrity of elected institutions across the Nation."

The minority was particularly concerned about what it depicted as the threat of foreign owned corporations influencing American elections. "The majority never uses a multinationalbusiness corporation in its hypotheticals," it said, warning, "it is gutting campaign finance laws across the country, as the Court does today, that will be destabilizing."

Wrote Justice Stevens for the minority, "Under the majority's view, I suppose it may be a First Amendment problem that corporations are not permitted to vote, given that voting is, among other things, a form of speech."

Justice Stevens quoted Thomas Jefferson: "I hope weshall . . . crush in [its] birth the aristocracy of our monied corporations which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country."

The minority opinion said, "corporations have no consciences, no beliefs, no feelings, no thoughts, no desires. Corporations help structure and facilitate the activities of human beings, to be sure, and their "personhood" often serves as a useful legal fiction. But they are not themselves members of 'We the People' by whom and for whom our Constitution was established."

The minority went on, "corporations differ from natural persons in fundamental ways... a legislature might therefore need to regulate them differently if it is human welfare that is the object of its concern."

The minority even raised the question of "'who' is even speaking when a business corporation places an advertisement that endorses or attacks a particular candidate. Presumably it is not the customers or employees, who typically have no say in such matters. It cannot realistically be said to be the shareholders, who tend to be far removed from the day-to-day decisions of the firm and whose political preferences may be opaque to management. Perhaps the officers or directors of the corporation have the best claim to be the ones speaking, except their fiduciary duties generally prohibit them from using corporate funds for personal ends."

Justice Stevens and the minority included some final shots at "The distinctive threat to democratic integrity posed by corporate domination of politics."

"When citizens turn on their televisions and radios before an election and hear only corporate electioneering, they may lose faith in their capacity, as citizens, to influence public policy. A Government captured by corporate interests, they may come to believe, will be neither responsive to their needs nor willing to give their views a fair hearing. The predictable result is cynicism and disenchantment," the minority opinion said, accusing the majority of "a rejection of the common sense of the American people, who have recognized a need to prevent corporations from undermining self-government."

All the justices except for Justice Thomas agreed that the requirements of disclosure of the identities of donors or of who had paid for an ad did not amount to an abridgement of free speech; Justice Thomas, dwelling on the consequences for those whose opposition to gay marriage in California had been disclosed, dissented from that portion of the majority opinion.

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by Editor  |  Jan 21, 2010 at 4:14 pm Related Topics:  Campaign Finance, Non-Profits receive the latest by email: subscribe to the free futureofcapitalism.com mailing list