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Surprise: Dems Citizens United Disclosure Law Has Different Rules for Corporations and Unions

1:15 PM, Jun 2, 2010 • By MARY KATHARINE HAM
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The laws being contested in Citizens United treated unions and corporations the same. The Citizens United decision treats unions and corporations the same. In fact, campaign finance law has attempted to treat unions and corporations the same for 43 years.

Democrats aren't having that anymore. Former FEC commissioner Bradley Smith, once again blowing up the myth of campaign-finance reform as trans-partisan crusade for societal goodness, examines the Dems' DISCLOSE law:

DISCLOSE is the first major campaign-finance bill that has not taken this approach. For example, it prohibits corporations with government contracts of as little as $50,000 from making independent expenditures in elections or engaging in “electioneering communications.” This very low threshold would bar not only large contractors such as Boeing but also thousands of small businessesfrom exercising the rights recognized in Citizens United. Yet no parallel provision exists for unions that bargain with the government for multimillion-dollar benefit packages. Corporations that received TARP funds are prohibited from spending, but unions at those companies — which in many cases benefited far more from the bailouts than shareholders — are not.

The law is similarly problematic in the way it treats companies with partial foreign ownership:

Similarly, DISCLOSE prohibits U.S. corporations with as little as 20 percent foreign ownership from spending on elections, without placing parallel restrictions on unions (and despite the fact that a part of the Federal Election Campaign Act that was unaffected by Citizens United already prohibits spending in U.S. elections by foreign nationals and truly foreign companies). Thus Verizon Wireless, a New Jersey corporation with over 80,000 U.S. employees, is prohibited from making expenditures because the English corporation Vodafone has a minority stake in it. But the Service Employees International Union and the International Brotherhood of Electrical Workers are free to spend to their hearts’ content, even though they have foreign members and directors. (That’s what “International” stands for: SEIU has had members in Canada since 1943. IBEW has been organized in Canada since 1899, and is also in Panama and several Caribbean nations. Both have Canadians on their international executive committees.) Thus the provision not only discriminates against foreign nationals (in violation of the Constitution and countless federal statutes) — something few liberals would support in other contexts, such as limiting the right of foreign nationals to march in protest of government policies, write letters to the editor, or speak out on radio and television — but limits the rights of American shareholders to participate in the political system merely because they own property in association with foreign nationals. 

As Smith is one of about 12 people who actually understands the ridiculous, complex web of speech limits, incentives, PACs, 527s, and the many strange creatures and instruments born of speech's attempts to escape it, this is worth a read. 

It's also always worth reminding your liberal friends appalled by the flood of uninhibited free speech about to enter the election cycle because of Citizens United that the reason the Supreme Court had the case reargued and ultimately came to a sweeping instead of a small decision is because the government's lawyer Malcolm Stewart admitted that, yep, campaign finance reform law meant the government could ban books. Bradley Smith again, writing in National Affairs:

[I]n the course of the argument, Justice Samuel Alito interrupted Stewart and inquired: "What's your answer to [the] point that there isn't any constitutional difference between the distribution of this movie on video [on] demand and providing access on the internet, providing DVDs, either through a commercial service or maybe in a public library, [or] providing the same thing in a book? Would the Constitution permit the restriction of all of those as well?" Stewart, an experienced litigator who had represented the government in campaign-finance cases at the Supreme Court before, responded that the provisions of McCain-Feingold could in fact be constitutionally applied to limit all those forms of speech. The law, he contended, would even require banning a book that made the same points as the Citizens United video.

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