A federal judge has ruled a section of the Federal Election Campaign Act of 1971 [FECA] prohibiting direct corporate contributions to federal candidates is unconstitutional. In United States v. Danielczyk, a criminal case being heard in the US District Court for the Eastern District of Virginia, Judge James C. Cacheris found corporations have an equal right to make political contributions under federal law as do human beings.

In the decision dismissing one of the counts against the defendants, the judge writes, “But for better or worse, Citizens United held that there is no distinction between an individual and a corporation with respect to political speech. Thus, if an individual can make direct contributions within FECA’s limits, a corporation cannot be banned from doing the same thing. So because individuals can directly contribute to federal election campaigns within FECA’s limits, and because [2 U.S.C.]§ 441b(a) does not allow corporations to do the same, § 441b(a) is unconstitutional and Count Four must be dismissed.”

Currently, during an election cycle, individuals may contribute $2,500 for a federal candidate’s primary election and an additional $2,500 for the general election.

The 8^th Circuit Court of Appeals has affirmed a decision of the District Court which upheld a new Minnesota law that revealed political donations from several corporations. The law was enacted in May of 2010 after the U.S. Supreme Court ruling in Citizens United freed businesses to spend corporate money on elections, overturning restrictions on corporate political spending in about half the states, including Minnesota. Minnesota lawmakers responded by enacting disclosure requirements to publicize corporate campaign spending.

In affirming the decision, the 8th Circuit Court of Appeals disagreed with claims that Minnesota’s disclosure requirements effectively prohibit corporate independent expenditures and impose burdensome regulations that inhibit free speech.  The Court continued that Minnesota’s regulations are similar to laws upheld by the Supreme Court and the regulations on corporate independent expenditures are less burdensome than federal regulations on PACs.

While attending the 35^th Annual Public Affairs Council PAC Conference in Miami last week, there were many questions about the impact of Citizens United in the states.

Last year, State and Federal Communications prepared a report, and we continue to update it, for our clients to understand how it has been applied.

Follow this link for the report. If you have any further questions, don’t hesitate to send an email to our Research Manager John Cozine.

The state legislature has introduced a bill to bring Wyoming’s state campaign finance law into compliance with the United States Supreme Court’s ruling in the “Citizens United” lawsuit. Senate File 0003 sets forth reporting requirements for corporations and others making independent expenditures.

Currently, Wyoming law prohibits corporations from making these expenditures. Under the bill, direct corporate contributions to campaigns would remain illegal.

This image is a segment from the Flag of Wyoming by Dbenbenn on Wikipedia.

The Federal Election Commission has issued Advisory Opinion AO2010-30 Citizens United, allowing Citizens United to rent its email subscriber mailing list to federal candidates, political party committees, and political committees.

The commission concluded the rental is not a coordinated expenditure or a coordinated communication. Citizens United plans to rent its list at fair market prices using a commercial list brokerage firm.

The commission did not have enough votes to approve a response as to whether using the list to solicit contributions or invite recipients to a fundraiser violates the prohibition against corporate facilitation of contributions to candidates or political committees.

In their application, the plaintiffs, represented by James Bopp, Jr., the Indiana attorney who helped launch the landmark Citizens United v. FEC litigation, requested an order blocking portions of Maine’s campaign finance law which provides matching for candidates as well as the part of Maine law capping contributions to gubernatorial candidates at $750. By the time the plaintiff’s motion reached the high court for the second time, it had been denied three times: by Associate Justice Stephen Breyer, Circuit Justice for the First Circuit, by the First Circuit Court of Appeals, and by the Maine District Court where the litigation originated.

The plaintiff’s last resort to enjoin the law prior to the November 2nd election was the emergency writ of injunction to the Supreme Court which was presented to Associate Justice Anthony Kennedy who then referred it to the Supreme Court for consideration. The writ’s denial was not unexpected as the Supreme Court has not granted such a motion for two decades.

Photo of the Supreme Court by UpstateNYer on Wikipedia.

A Montana district judge will rule on a challenge to Montana’s nearly century-old, voter-passed restriction on direct corporate spending to support or oppose political parties or candidates.  The Montana law is being challenged based upon the U.S. Supreme Court’s January ruling in Citizens United v. Federal Election Commission, which overturned a federal ban on corporate spending in political campaigns.

Attorneys for the State of Montana defended the law stating that a law enacted in 1912 should not be lumped with a law Congress enacted 90 years later under a one-size-fits-all federal rule.   They added that corporations do speak freely in Montana elections under current law with nearly 200 political action committees active in state politics in the past decade and warned unlimited corporate campaign spending would drastically alter Montana’s current campaigns that rely on person-to-person contact.

The National Organization for Marriage (NOM) has filed a federal lawsuit against the Rhode Island Board of Elections seeking to strike down Rhode Island’s campaign finance law. Citing extensively to the recent U.S. Supreme Court decision in Citizens United v. FEC, the plaintiffs allege Rhode Island law’s definition of a political action committee, its expenditure ban, and its expenditure reporting requirements are all unconstitutional.

The plaintiffs are asking U.S. District Judge Mary Lisi for declaratory judgments clarifying the extent to which state law’s $1,000 contribution limits on contributions by political action committees apply to them. NOM also seeks a declaratory judgment stating they are not subject to the extensive reporting requirements imposed by state law upon entities which make independent expenditures. An in-chambers conference regarding the lawsuit has been scheduled for Thursday, September 30th, 2010.

Senate Bill 3628, known as the DISCLOSE Act, was reintroduced in the US Senate a second time but failed to garner the 60 votes necessary to be debated on the floor. The motion of cloture vote of 59 to 39 fell along party lines.

A reaction to Citizens United v SEC, the bill includes measures such as requiring organizations to disclose to shareholders, members, or donors information detailing how disbursements were made for campaign-related activity.

The new law requires groups like The Iowa Right-to-Life Committee, which is organized as a corporation, to form a PAC if they wish to make independent expenditures. The group claims this requirement and the new disclosure requirements are an unconstitutional burden on their First Amendment rights.

Supporters of the law are calling this suit a “political stunt.”

Photo of the Iowa Capitol by Cburnett on Wikipedia.

The Chamber filed for, and was granted, a preliminary injunction against Land’s initial interpretation of Michigan’s campaign finance laws in the wake of the U.S. Supreme Court’s “Citizens United” decision. Land ruled the Chamber may make independent expenditures but could not set up a PAC to make them. Under the stipulated ruling, corporations, organization, and unions are still prohibited from making direct corporate contributions or using a PAC to do so.

Register to view our Citizens United Update and read how other states are reacting to the Citizens United decision, here.

Per the terms of a settlement reached Tuesday, the G.A.B. will not enforce regulations requiring groups who run issue ads to disclose their financing if the ads they paid for aired 30 days before a primary or 60 days before a general election. Now, only advertisements advocating the defeat or election of identified candidates will be regulated in Wisconsin.

U.S. District Judge William M. Conley is expected to approve the settlement ending the litigation on August 11, 2010.

Here is the statement from the G.A.B. Web site.

You can read the Wisconsin Department of Justice stipulation letter to Judge Conley, and the Stipulation and Proposed Order.

For more news: “State agrees to drop new campaign ad rules,” by Patrick Marley in the Milwaukee Journal Sentinel.

Photograph taken by Dori

Van Hollen explains, per Citizens United, any ban on corporate independent expenditures found in Wisconsin law violates the free speech and association guarantees of the First Amendment. The current prohibition found in Wisconsin law, however, banning the making and acceptance of corporate contributions was not reached by the Supreme Court and so it remains standing. Van Hollen goes on to explain Citizens United did not exclude issue advocacy from the scope of permissible reporting, disclosure, and disclaimer regulations which may be imposed by states like Wisconsin.

Finally, Van Hollen concurred with the recent efforts by the Government Accountability Board to suspend its enforcement of the corporate expenditure prohibition found in state law at Wisconsin Statutes § 11.38 (1)(a)(1) as those provision were clearly reached by the Citizens United decision. Attorney General Van Hollen’s opinion may be found at the Wisconsin Department of Justice’s Web site.

Photo of J.B. Van Hollen by WisPolitics.com on Wikipedia.

For the twelfth consecutive year, State and Federal Communications, Inc. exhibited at the National Conference of State Legislature’s Annual Legislative Summit. This year the conference was held in Louisville, Kentucky. We always find that our attendance at the conference is enriching and productive, even when some days start with a 7:30 a.m. team breakfast meeting and end with the SGAC Late Night event [which, by the way, is never a disappointment]!

However, this year stands apart from the rest in that I was invited to moderate one of the continuing legal education sessions.  Entitled Citizens United v. FEC:  Political Blockbuster?, the panel addressed the ruling in January by the United States Supreme Court that it is unconstitutional to bar corporations and labor unions from making either independent expenditures or electioneering communications.  At NCSL’s 2010 Spring Forum held in Washington, D.C., in April, the group immediately saw the importance of including a session at the annual Legislative Summit to address the impact the Court decision will undoubtedly have on the states.

The panel was comprised of Ken Gross, a partner at Skadden, Arps, Slate, Meagher & Flom in Washington, D.C.; Jason Torchinsky, a partner at Holtzman Vogel PLLC, in Virginia; and Maryland Delegate Jon S. Cardin, who represents Maryland’s 11th District in Northwest Baltimore County. Disclosure requirements in light of the post-Citizens United political landscape were perhaps the most lively debated issue by the panel, and it could not have been more timely given the fact that within the hour after our panel adjourned, Senate Democrats failed to gather the 60 votes needed to overcome an expected filibuster of The DISCLOSE Act, Congress’ legislative response to the ruling in Citizens United.

Here is Nola Werren moderating the Citizens United Panel discussion at NCSL:

No recap of this year’s NCSL Legislative Summit would be complete without mentioning Ohio Night. The venue for the event was the LeRoy Neiman Gallery at the Muhammad Ali Center. Having grown up watching a lot of Sunday afternoon sports with my dad, I was quite familiar with LeRoy Neiman and his signature artistic style. He would usually start with a blank canvass at the beginning of, let’s say, a golf tournament, and by the end of the tournament, his abstract was complete and captured the essence of the event in all its vivid glory. Well, the gallery at the Muhammad Ali Center did not disappoint. Especially impressive were his renderings of the two Ali versus Liston fights for boxing’s world heavyweight championships.

Every year since 1999, our experience at the annual NCSL Legislative Summit seems to outdo the previous year. Next year’s summit in San Antonio will undoubtedly live up to that expectation….and who knows what “political blockbuster” might occur between now and then.