The New World of Campaign Finance

Content provided by DDC Advocacy

The year 2010 has ushered in a period of great change for the
campaign finance legal sector.  From the US Supreme Court’s Citizens United ruling and other related legal action, those who raise political money suddenly find themselves playing in new surroundings.  In summary, the legal authorities have better defined and expanded 1st Amendment protections for individuals, corporations, and labor unions with regard to political speech. 


The Citizens United decision, responding to the Citizens United v. Federal Election Commission case, began as a typical FEC action against a non-profit organization.  The case featured arguments concerning DVDs, Pay-Per-Views, and a movie about Hillary Clinton, but ended with the high Court issuing a landmark ruling.  Though widely discussed and debated, the ruling is actually quite simple.  The Court bestowed upon all corporate and labor union entities the same rights, heretofore, granted to corporations that own media properties.  Therefore, the Supreme Court made clear that all corporate and labor entities have the same political free speech rights as does the New York Times and CBS News, or any other media outlet.  Before the ruling, corporate and labor entities could not directly tell people to vote for or against a candidate with their treasury funds.  Now, they can.


The ruling applies, however, only to independent expenditure activity.  Today, a corporation and labor union can run ads that encourage the viewer to vote for or against a certain candidate, for example, with their corporate or union treasury funds instead of being limited to only spending dollars voluntarily donated to the entity’s political action committee (PAC).  They cannot coordinate any particular message with the candidate or campaign, nor can they communicate directly, except through their company PAC.


It is important to remember that, despite the new rulings, the laws governing candidates and campaign committees remained unchanged.  Political Action Committees still play a highly important role in modern American democracy.  Corporate or labor direct support of individual candidates via their campaign committees can only be given through a PAC, meaning such organizations remain every bit as critical to the contemporary political scene as they did when the Federal Election Campaign Act created them back in 1971.


Though it is hard to imagine corporations running support or opposition television and radio ads for or against individual candidates – after all, consumers of all political persuasions generally buy a particular company’s products and any company would be loathe to anger a patron over politics -- it is still possible that many will increase their political activity.  Financing voter registration and turnout programs is just the type of good government activity with which many companies would want to become associated.  Furthermore, the Court leaving all of the disclosure and coordination requirements in tact means that the transparency aspects of executing political transactions were verified and actually strengthened by this decision. 


The aforementioned new rulings and decisions will again change the way American politics operates.  It is premature, however, to ascertain what specific ramifications will be forthcoming.  But, it is fair to speculate that we will know soon, since the most active campaign period of this election cycle is only about to begin.


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