The Magazine

Campaign Finance Myths

Lots of untruths are being spread by the president.

Nov 29, 2010, Vol. 16, No. 11 • By WILLIAM R. MAURER
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The restriction on corporate and union independent expenditures, moreover, had been around only since 1947. Although this is a pretty good vintage, it is not a century. And the Supreme Court had never ruled on the constitutionality of such a ban until 1990, when it decided Austin. In that case, the Court upheld Michigan’s ban on independent expenditures by corporations and concluded that the government could make it a felony for a corporation to publish a book, pamphlet, or newspaper ad urging the election or defeat of a candidate. 

The Court’s reasoning in Austin, however, was simply bizarre. The Court held that because of the “corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public’s support for the corporation’s political ideas,” the government could effectively remove these entities from the political field. The reasoning in Austin was so amorphous and subjective, however, that by the time the Supreme Court heard arguments in Citizens United, the government had simply stopped relying on the decision. 

President Obama’s “century of law” thus referred to a 63-year-old law whose constitutional validity was determined 20 years ago in a case the reasoning of which even his own Justice Department rejected. Thus the president’s statement that Citizens United “reversed a century of law” is not even remotely accurate.

Myth 2: Prior to ‘Citizens United,’ it was settled law that government bans on corporate and union independent expenditures were constitutional.

President Obama’s statement also implies that the constitutionality of such a ban was well established. That is not true. The constitutionality of the ban on independent expenditures was disputed from its very inception, and it was only through convoluted efforts by the Supreme Court to avoid directly ruling on the issue that the law was able to survive for as long as it did.

During congressional debate over the law, labor union supporters, viewing the bill’s ban on union expenditures as an attempt to drive them from politics, expressed concern about how the provision would affect labor newspapers. Echoing that concern, President Truman vetoed the bill and declared it “a dangerous intrusion on free speech, unwarranted by any demonstration of need, and quite foreign to the stated purpose of this bill.” Congress overrode his veto. Nonetheless, after a string of setbacks in court, the Justice Department stopped prosecuting union political expenditures during the 1950s because it did not believe that a court would find the expenditure ban constitutional.

The law made its way to the Supreme Court in U.S. v. Auto Workers  in 1957. Unfortunately, the Court’s majority went out of its way to avoid reaching the issue of the law’s constitutionality. Justice Douglas, joined by Chief Justice Warren and Justice Black, filed a dissent that argued that not only should the Court hear the case, it should strike down the ban as an obvious violation of the First Amendment:

Some may think that one group or another should not express its views in an election because it is too powerful, because it advocates unpopular ideas, or because it has a record of lawless action. But these are not justifications for withholding First Amendment rights from any group—labor or corporate. First Amendment rights are part of the heritage of all persons and groups in this country. They are not to be dispensed with or withheld because we or Congress thinks the person or group is worthy or unworthy.

Justice Douglas concluded by calling the ban “a broadside assault on the freedom of political expression guaranteed by the First Amendment.” Likewise, the majority opinions in Austin and McConnell both attracted vigorous dissents from a number of justices. 

In short, the idea that the government could ban independent expenditures by groups it did not like had been vigorously resisted since it was proposed. President Obama’s “century of law” was far from settled.

Myth 3: Corporations cannot have free speech rights because the First Amendment protects only individuals.

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