Portal:Corporate Rights/Lower courts interpret Citizens United decision

SPEECHNOW.ORG v FEC

In a March 26, 2010 opinion, SpeechNow.org v. FEC, the U.S. Court of Appeals for the D.C. Circuit held that the Supreme Court's Citizens United decision not only prevented the government from restricting corporate contributions to political campaigns, but also prohibits lawmakers from limiting donations to the political lobbying groups. The "D.C. Circuit is an intermediate appellate court that has been captured by right-wing judicial appointees of President George W. Bush and his predecessors (three of the five justices in the majority served briefly on that court before being promoted to the U.S. Supreme Court).

The SpeechNow.org v. FEC decision made it possible for corporations to obfuscate their political spending by funneling their money through the cleverly-named outside interest groups that have populated the 2010 election landscape, such as the “American Action Network” and “American Crossroads.” Thanks to SpeechNow.org v. FEC, corporations have been allowed to hide behind these groups rather than directly and transparently spending money on campaign advertising.

Corporations Can Now Hide Behind a PAC, but Still Avoid Limits on Political Spending?

While Citizens United permitted Political Action Committees (and corporations) to spend unlimited amounts of money on political campaigns, SpeechNow.org has now lifted the amount of money that can flow INTO these PACs. This is especially problematic because a major justification in Citizens United for treating corporate political spending as "speech" was the belief that shareholders could monitor where CEOs were directing a corporation's political expenditures. Under the D.C. Circuit's interpretation of Citizens United, a corporation can obfuscate its expenditures by filtering them through a PAC, but still enjoy the freedom to spend unlimited amounts supporting political campaigns.

Facts of SpeechNow.org v FEC

The suit was brought by the SpeechNow.org, an "independent speech group" formed by Club for Growth Executive Director David Keating to challenge campaign finance laws. SpeechNow sought to challenge a Federal Elections Committee (FEC) determination that the group would have to register as a Political Action Committee (PAC) and adhere to contribution limits established by federal law. In particular, the group took issue with a federal law limiting an individual's contribution to a PAC at $5000 per year.

The D.C. Circuit Court found that, under Citizens United, the federal law's limitations on an individual's contributions to a PAC violates the First Amendment right to free speech. Further, the D.C. Circuit noted, the Supreme Court's Citizens United decision suggested that the only governmental interest sufficient to overcome the First Amendment "right" to spend is to prevent corruption; but in the immediate case, the government has no anti-corruption interest with respect to individual expenditures.

Despite its victory, Speech Now took issue with the ruling that it would still have to comply with the disclosure requirements that apply to 527 Political Action Committees (527 PACs must disclose their donors, unlike groups formed under the 501(c) section of the tax code). Speech Now appealed this sub-part of the decision, but the Supreme Court denied cert.