Further Court RulingsFurther information: Campaign finance evolution in 2010
SpeechNow is a nonprofit, unincorporated association organized as a section 527 entity under the U.S. Internal Revenue Code. The organization was formed by individuals who seek to pool their resources to make independent expenditures expressly advocating the election or defeat of federal candidates. SpeechNow planned to accept contributions only from individuals, not corporations or other sources prohibited under the Federal Election Campaign Act. On February 14, 2008, SpeechNow and several individual plaintiffs, filed a complaint in the U.S. District Court for the District of Columbia challenging the constitutionality of the Federal Election Campaign Act provisions governing political committee registration, contribution limits and disclosure. The plaintiffs contended that the Act unconstitutionally restricts their association guaranteed under the First Amendment. By requiring registration as a political committee and limiting the monetary amount that an individual may contribute to a political committee, SpeechNow and the other plaintiffs asserted that the Act unconstitutionally restricted the individuals’ freedom of speech by limiting the amount that an individual can contribute to SpeechNow and thus the amount the organization may spend. SpeechNow also argued that the reporting required of political committees is unconstitutionally burdensome.
On March 26, 2010, the U.S. Court of Appeals for the District of Columbia Circuit ruled in SpeechNow.org. v. FEC that the contribution limits of 2 U.S.C. §441a were unconstitutional as applied to individuals’ contributions to SpeechNow. The court also ruled that the reporting requirements of 2 U.S.C. §§432, 433 and 434(a) and the organizational requirements of 2 U.S.C. §431(4) and §431(8) can be constitutionally applied to SpeechNow. A unanimous nine-judge panel of the United States Court of Appeals struck down the federal limits on contributions to federal political committees that make only independent expenditures and do not contribute to candidates or political parties. This type of "independent expenditure committee" is inherently non-corruptive, the Court reasoned, and therefore contributions to such a committee can not be limited based on the government’s interest in preventing political corruption. In light of the Supreme Court’s decision in Citizens United v. FEC, in which the Supreme Court held that the government has no anti-corruption interest in limiting independent expenditures, the appeals court ruled that “contributions to groups that make only independent expenditures cannot corrupt or create the appearance of corruption.” As a result, the court of appeals held that the government has no anti-corruption interest in limiting contributions to an independent group such as SpeechNow. Contribution limits as applied to SpeechNow “violate the First Amendment by preventing from donating to SpeechNow in excess of the limits and by prohibiting SpeechNow from accepting donations in excess of the limits.” The court noted that its holding does not affect direct contributions to candidates, but rather contributions to a group that makes only independent expenditures. The appeals court held that, while disclosure and reporting requirements do impose a burden on First Amendment interests, they “‘impose no ceiling on campaign related activities’” and “‘do not prevent anyone from speaking.’” Furthermore, the court held that the additional reporting requirements that the Commission would impose on SpeechNow if it were organized as a political committee are minimal, “given the relative simplicity with which SpeechNow intends to operate.” Since SpeechNow already had a number of “planned contributions” from individuals, the court ruled that SpeechNow could not compare itself to “ad hoc groups that want to create themselves on the spur of the moment.” Since the public has an interest in knowing who is speaking about a candidate and who is funding that speech, the court held that requiring such disclosure and organization as a political committee are sufficiently important governmental interests to justify the additional reporting and registration burdens on SpeechNow.
On June 27, 2011, ruling in the consolidated cases Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett (No. 10-238) and McComish v. Bennett (No. 10-239), the Supreme Court deemed unconstitutional an Arizona law that provided extra taxpayer-funded support for office seekers who have been outspent by privately funded opponents or by independent political groups. A conservative 5-4 majority of justices said the law violated free speech, concluding the state was impermissibly trying to "level the playing field" through a public finance system. Arizona lawmakers had argued there was a compelling state interest in equalizing resources among competing candidates and interest groups. Opponents said the law violated free-speech rights of the privately financed candidates and their contributors, inhibiting fundraising and spending, discouraging participation in campaigns and limiting what voters hear about politics. Chief Justice John Roberts said in the court's majority opinion that the law substantially burdened political speech and was not sufficiently justified to survive First Amendment scrutiny.
As a consequence of the decision, states and municipalities are blocked from using a method of public financing that is simultaneously likely to attract candidates fearful that they will be vastly outspent and sensitive to avoiding needless government expense. “The government can still use taxpayer funds to subsidize political campaigns, but it can only do that in a manner that provides an alternative to private financing” said William R. Maurer, a lawyer with the Institute for Justice, which represented several challengers of the law. “It cannot create disincentives.” The ruling meant the end of similar matching-fund programs in Connecticut, Maine and a few other places according to David Primo, a political science professor at the University of Rochester who was an expert witness for the law's challengers.
Despite the Citizens United ruling, In December 2011, the Montana Supreme Court, in Western Tradition Partnership, Inc. v. Attorney General of Montana, upheld that state's law limiting corporate contributions. Examining the history of corporate interference in Montana government that led to the Corrupt Practices Law, the majority decided that the state still had a compelling reason to maintain the restrictions. It ruled that these restrictions on speech were narrowly tailored and withstood strict scrutiny and thus did not contradict Citizens United v. Federal Election Commission.
While granting permission to file a Certiorari petition, the US Supreme Court agreed to stay the Montana ruling, although Justices Ginsburg and Breyer wrote a short statement urging the Court "to consider whether, in light of the huge sums of money currently deployed to buy candidate's allegiance, Citizens United should continue to hold sway". In June 2012, over the dissent of the same four judges who dissented in Citizens United, the Court simultaneously granted certiorari and summarily reversed the decision in Bullock. The Supreme Court majority rejected the Montana Supreme Court arguments in a two paragraph, twenty line per curiam opinion, stating that these arguments “either were already rejected in Citizens United, or fail to meaningfully distinguish that case." The ruling makes clear that states cannot bar corporate and union political expenditures in state elections.
Read more about this topic: Citizens United V. Federal Election Commission
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