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Is Fighting Corporate Corruption a Crack in the Supreme Court's Citizens United Ruling?
Montana’s Supreme Court has issued a stunning rebuke to the U.S. Supreme Court’s Citizens United decision in 2010 that infamously decreed corporations had constitutional rights to directly spend money on ‘independent expenditures’ in campaigns. The Montana Court vigorously upheld the state’s right to regulate how corporations can raise and spend money after a secretive Colorado corporation, Western Tradition Partnership, and a Montana sportsman’s group and local businessman sued to overturn a 1912 state law banning direct corporate spending on electoral campaigns.
Is Fighting Corporate Corruption a Crack in the Supreme Court's Citizens United Ruling?
By Steven Rosenfeld, AlterNet
Posted on January 24, 2012, Printed on January 25, 2012

Preventing corruption -- of political candidates by campaign donations, and of electoral debate by relentless advertising barrages -- may be emerging as a crack in the Supreme Court's deregulation of campaign finance, including its controversial Citizens United ruling unleashing corporations.

In the past month, two important court decisions have seen judges cite fighting corruption as a basis to uphold bans on corporate political activity. The first was a Montana Supreme Court ruling that upheld the state's century-old ban on all corporate electioneering. The second decision came just last week in San Diego, where a U.S. District Court upheld that city's decades-old ban on direct corporate contributions to candidates.

While the losing sides in these rulings are likely to appeal to higher federal courts, it is noteworthy that two separate courts have taken nuanced views of political campaigns and have found leeway under other Supreme Court rulings to bar corporate activity.

"I guess that was the point, wasn't it? Is it an uncrackable wall or not," said Elizabeth Griffling, who wrote the Montana ACLU brief, speaking of the Citizens United ruling. "Two justices on the Montana Supreme Court felt it was impermeable and uncrackable. And the rest of the justices thought there was a little bit of giveaway there.

"And I argued in my brief that there was a little bit of room for exception to Citizens United in the context of a state who could show absolute evidence of corruption, who had adopted a statute in the face of such actual corruption."

Montana's ACLU broke from the national ACLU by arguing that there was a basis in other Supreme Court rulings to regulate corporate money to prevent corruption. When Citizens United was before the Supreme Court, the ACLU's national litigation office filed a brief saying that restricting independent corporate electioneering was unconstitutional. The national ACLU did not raise the corruption issue; it favored increasing corporate political speech.

"National ACLU has a pretty rigid policy: All speech is speech," Griffing said. "And I don't want to put words in national ACLU's mouth, but frequently they have taken an absolute policy -- kind of like what the U.S. Supreme Court has opted for in Citizens United, that the identity of the speaker doesn't really matter. Speech is speech."

But the recent rulings in Montana and San Diego disagreed by taking a more nuanced stance, holding that corporate political activities could be regulated under other Supreme Court rulings to prevent corruption of candidates and the overall political debate.

In Citizens United, the Supreme Court focused on a narrow issue: the speech rights of political committees that were not officially tied to candidates. But in Montana and San Diego, the courts ruled that direct corporate donations to candidates, as well as corporate-sponsored electioneering including advertising barrages that end up dominating debate, were potentially corrupting and thus could be regulated.

These different corporate-backed political activities are treated differently under the law. In other words, as damaging as the Citizens United ruling has been -- unleashing the super PAC-funded media wars in 2012's first primaries -- it appears that other Supreme Court rulings still would allow other forms of corporate electioneering to be regulated.

"Citizens United does not preclude the finding of a compelling state interest based on a record of actual corporate corruption," Montana's ACLU argued in its brief. "Corporate corruption can be found when the evidence indicates that the democratic process has been undermined through intentionally overwhelming the citizenry's voice and undermining the individual voter's confidence in the political process."

And in the San Diego ruling last week, Chief U.S. District Court Judge Irma E. Gonzales essentially agreed in the context of that case, which concerned corporate contributions to candidates. Her explanation quoted other prior Supreme Court rulings.

"According to the Supreme Court, the prohibition on direct corporate contributions was justified by 'the special characteristics of the corporate structure' that threaten the integrity of the political process," she wrote. "It was necessary to 'prevent corruption or the appearance of corruption.' Moreover, it was necessary to prevent the use of corporations 'as conduits for circumvention of valid contribution limits.'"

Drawing Lines Around Citizens United

The Montana ACLU, backed by its board of directors, thought that Montana law and history fighting political corruption raised wider issues than the Citizens United case. It also pointed to a 1978 Supreme Court ruling that held that corporate political spending should be examined if it undermined public confidence in elections.

The Montana Supreme Court decision will be appealed. It is not yet clear how the state and national ACLU will participate, said Scott Crichton, Montana ACLU executive director. However, the ACLU has had other instances where state and national branches have disagreed. "It's got your attention and it has ours too."

The Montana ACLU will be holding a meeting in March and will hear presentations on the Montana case and next legal steps. "I can't guess and say this is the position we are going to take," Crichton said. "We may just let it go, I don't know."

Steven Shapiro, who was the counsel of record on the national ACLU's brief filed in Citizens United, did not return a request to comment.

The ACLU's national board last year modified its policy on campaign finance reform by reaffirming that the ACLU opposed any limit on political spending with a lone exception: taxpayer money given to any publicly financed candidate. However, it does not appear that the national ACLU will be adopting the anti-Citizens United stance taken by the Montana ACLU anytime soon.

Still, the larger significance here is there may be cracks in the Supreme Court's ongoing doctrine of deregulating campaign finance laws, and the Court's own anti-corruption rulings may be the basis for restricting corporate political activity.

Steven Rosenfeld covers democracy issues for AlterNet and is the author of "Count My Vote: A Citizen's Guide to Voting" (AlterNet Books, 2008).

Montana High Court Says 'Citizens United' Does Not Apply In Big Sky State
By Steven Rosenfeld, AlterNet, Posted on January 1, 2012, Printed on January 25, 2012

Montana’s Supreme Court has issued a stunning rebuke to the U.S. Supreme Court’s Citizens United decision in 2010 that infamously decreed corporations had constitutional rights to directly spend money on ‘independent expenditures’ in campaigns.

The Montana Court vigorously upheld the state’s right to regulate how corporations can raise and spend money after a secretive Colorado corporation, Western Tradition Partnership, and a Montana sportsman’s group and local businessman sued to overturn a 1912 state law banning direct corporate spending on electoral campaigns.

“Organizations like WTP that act as a conduit for anonymously spending by others represent a threat to the political marketplace,” wrote Mike McGrath, Chief Justice of the Montana Supreme Court, for the majority. “Clearly the impact of unlimited corporate donations creates a dominating impact on the political process and inevitably minimizes the impact of individual citizens.”

The 80-page ruling is remarkable in many respects. Throughout, including in a lengthy dissent by a state Supreme Court justice who felt Montana was dutibound to abide by the U.S. Supreme Court ruling, the Montana Court attacked the thinking behind the Citizens United decision and the impact of big money in political culture, including the notion that corporations are deserving of the same political speech rights as citizens.

“While, as a member of this Court, I am bound to follow Citizens United, I do not have to agree with the [U.S.] Supreme Court’s decision,” wrote Justice James C. Nelson, in his dissent. “And, to be absolutely clear, I do not agree with it. For starters, the notion that corporations are disadvantaged in the political realm is unbelievable. Indeed, it has astounded most Americans. The truth is that corporations wield enormous power in Congress and in state legislatures. It is hard to tell where government ends and corporate America begins: the transition is seamless and overlapping.”

“It should be noted that the Montana Corrupt Practices Act was adopted in 1912 at a time when the country’s focus was on preventing political corruption, not on protecting corporate influence,” wrote Nelson, later in his dissent.

Western Tradition Partnership
The lead group that sued to overturn the Montana ban on direct corporate spending in campaigns followed a very deliberate course of clashing with virtually every aspect of Montana campaign finance law. The lawyers behind the litigation believe that they should face no limits or accountabililty for any political fund-raising or spending.

The Montana Supreme Court’s majority opinion described why Western Tradition Partnership was as slippery an organization as one finds in modern politics. They noted how the groups lawyers claimed that they should be allowed to spend freely because the group would have to disclose that activity under Montana law, when as the state’s Chief Justice noted in his opinion, the same group, using another name, actually had sued the state to overturn those very disclosure laws.

Moreover, the ruling quoted a fund-raising brochure that said, “If you decide to support this program, no politician, no bureaucrat, and no radical environmentalist will ever know you made this program possible.” The group also is involved in a third suit challenging the state’s campaign spending disclosure law.

“We take note that Western Tradition appears to be engaged in a multi-front attack on both contribution restrictions and the transparency that accompanies campaign disclosure requirements,” the Court said, adding in a footnote that the Montana Commissioner of Political Practices called the group a “sham” because it failed to register with the state, and refused to disclose the sources of its funds or its spending—as required by law.

Rebutting Citizens United
Lawyers attacking the Montana ban on direct corporate spending said the U.S. Supreme Court in its 2010 Citizens United ruling removed any barrier to corporate spending. But the Montana Supreme Court disagreed and took a more nuanced view.

The U.S. Supreme Court in Citizens United found there was no compelling reason why a non-profit corporation that produced an anti-Hillary Clinton video should be prevented from showing that video in the weeks before Election Day—as a new federal campaign law had banned. But the Citizens United ruling did not remove all bans on corporate speech, the Montana Court said. “The Supreme Court held that laws that burden political speech are subject to strict scrutiny, which requires the government to prove that the law furthers a compelling state interest and is narrowly tailored to that interest.”

The Montana Court then launched into detailed explanations of sufficiently compelling state interests to merit sustaining the century-old law. The majority opinion read like a history lesson that recounting how the state, especially in the decades following its founding in 1889, struggled to restrict the power and influence of mining corporations. In 1906, the citizenry amended the state Constitution to allow for ballot initiatives. Six years later it passed the ban on corporate spending, specifically to curb mining companies based in Butte. The Court noted that the state—then and now—was beset with corporate players whose money, power and influence easily overshadow individuals.

“What was true a century ago is as true today: distant corporate interests mean that corporate dominated campaigns will only work ‘in the essential interest of outsiders with local interests a very secondary consideration,’” the opinion said, quoting a historian’s testimony from a lower state court that reviewed the case. “While specific corporate interests come and go in Montana, they are always present.”

The Court said Montana had a political tradition that has emerged in intervening decades and they wanted Montana to remain a state where candidates run low-budget, personal campaigns and do not rely on anonymous, well-financed messaging from outsiders.

The Court pointed out that judicial elections were particularly vulnerable to anonymous spending by large corporations. Montana’s 2008 Chief Justice race had advertising from all candidates costing about $60,000, it noted. “It is clear that an entity like Massey Coal, willing to spend even hundreds of thousands of dollars, much less millions, on a Montana judicial election could effectively drown out all other voices.”

These various factors—a history of citizenry fighting corporate corruption, political traditions of low-budget campaigning, and the vulnerability of judicial elections to corporate spending—were sufficiently compelling, the Court said, to preserve the century-old ban on corporate spending in the face of the Citizens United ruling.

“The question then, is when in the last 99 years did Montana lose the power or interest sufficient to support the statute, if it ever did,” the majority said. “We think not. Issues of corporate influence, sparse population, dependence upon agriculture and extractive resource development, location as a transportation corridor, and low campaign costs make Montana especially vulnerable to continued efforts of corporate control to the detriment of democracy and the republican form of government.”

Concluding, the Court said that the sportsman’s group and businessman who sued to overturn the law were not prohibited from participating in politics by the ban on direct corporate spending. And it said Western Tradition Partnership could follow the same rules as anyone else. “WTP can still speak through its own political committee/PAC as hundreds of organizations in Montana do on an ongoing basis,” the Court said. “The difference then is that under Montana law the PAC has to comply with Montana’s disclosure and reporting laws.”

There is little doubt that the anonymous money behind Western Tradition Partnership will appeal the Montana Supreme Court ruling in federal court—and even seek to take the case to the U.S. Supreme Court. However, even it it does that, the ruling issued Friday by Montana’s Supreme Court will endure as a monumental defense of a state’s right to curb political corruption and the excesses of big-money politics.

Corruption and Corporate Personhood
Justice Nelson, who dissented because he believed that the state had to follow the U.S. Supreme Court’s ruling, concluded by fervently disagreeing with the assumptions behind the Citizens United ruling, starting with the Roberts Court’s assumption that spending large sums in campaigns was not inherently corrupting.

Nelson said independent expenditures by corporations in political campaigns—where political players are not supposed to coordinate their actions with candidate campaigns—absolutely were noticed and influenced the lawmaking process. “In the real world of politics,” he wrote, “the “quid pro quo” of both direct contributions to candidates and independent expenditures on their behalf is loyalty. And, in practical effect, experience teaches us that money corrupts, and enough of it corrupts absolutely.”

Nelson closed by slamming the legal theory of corporate personhood—that corporations, because they are run and owned by people, should have the same constitutional freedoms as individuals under the Bill of Rights. Corporatist judges, such as the Roberts Court, believe that corporations and people are indistinguishable under the law. In contrast, constitutional conservatives know very well that the framers of the U.S. Constitution distrusted large economic enterprises and drafted a document to protect individual businessmen, farmers and tradespeople from economic exploitation.

“While I recognize that this doctrine is firmly entrenched in law,” Nelson began, “I find the concept entirely offensive. Corporations are artificial creatures of law. As such, they should enjoy only those powers—not constitutional rights, but legislatively-conferred powers—that are concomitant with their legitimate function, that being limited liability investment vehicles for business. Corporations are not persons. Human beings are persons, and it is an affront to the inviolable dignity of our species that courts have created a legal fiction which forces people—human beings—to share fundamental natural rights with soulless creations of government. Worse still, while corporations and human beings share many of the same rights under the law, they clearly are not bound equally to the same codes of good conduct, decency, and morality, and they are not held equally accountable for their sins. Indeed, it is truly ironic that the death penalty and hell are reserved only to natural persons.”

As Nelson said, ending his dissent, “the (U.S.) Supreme Court has spoken. It has interpreted the protections of the First Amendment vis-a-vis corporate political speech. Agree with its decision or not, Montana’s judiciary and elected officers are bound to accept and enforce the (U.S.) Supreme Court’s ruling…”

But the Montana Supreme Court has also spoken—and with a clarity that is rare to behold.

Steven Rosenfeld covers democracy issues for AlterNet and is the author of "Count My Vote: A Citizen's Guide to Voting" (AlterNet Books, 2008).

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