January 3, 2012 •
The Montana Supreme Court has held the state law prohibiting independent political expenditures by a corporation related to a candidate is constitutional.
Finding Citizens United v. FEC did not compel invalidating the state’s 1912 Corrupt Practices Act, the majority opinion of the Montana Supreme Court in Western Tradition Partnership, Inc. v. Attorney General of the State of Montana states, “The corporate power that can be exerted with unlimited political spending is still a vital interest to the people of Montana.”
The Court concludes the state, because of its history and the history of the Act, has a compelling interest to impose statutory restrictions, emphasizing the Citizens United decision allows restrictions to be upheld if the government demonstrates a sufficiently strong interest.
In making its argument, the decision asserts that a “material factual distinction between the present case and Citizens United is the extent of the regulatory burden imposed by the challenged law.” The Court found in contrast to the “complexity and ambiguity” of restrictions for federal PACs, PACs formed and maintained in the state are “easily implemented” by the filing of “simple and straight-forward forms or reports.”
December 12, 2011 •
Federal House and Senate resolutions meant to blunt the Supreme Court’s Citizens United v. FEC decision have recently been submitted to Congress.
Senate Joint Resolution 33, introduced by Senator Bernie Sanders, and House Joint Resolution 90, introduced by Representative Theodore E. Deutch, both expressly exclude for-profit corporations from “the rights given to natural persons” and prohibit corporation spending in all elections, including ballot issues.
Additionally, the resolutions allow the government “to regulate and set limits on all election contributions and expenditures, including a candidate’s own spending, and to authorize the establishment of political committees to receive, spend, and publicly disclose the sources of those contributions and expenditures.’’
The amendment proposed reads as follows:
Section 1. The rights protected by the Constitution of the United States are the rights of natural persons and do not extend to for-profit corporations, limited liability companies, or other private entities established for business purposes or to promote business interests under the laws of any state, the United States, or any foreign state.
Section 2. Such corporate and other private entities established under law are subject to regulation by the people through the legislative process so long as such regulations are consistent with the powers of Congress and the States and do not limit the freedom of the press.
Section 3. Such corporate and other private entities shall be prohibited from making contributions or expenditures in any election of any candidate for public office or the vote upon any ballot measure submitted to the people.
Section 4. Congress and the States shall have the power to regulate and set limits on all election contributions and expenditures, including a candidate’s own spending, and to authorize the establishment of political committees to receive, spend, and publicly disclose the sources of those contributions and expenditures.
Other constitutional amendments introduced related to campaign finance can be found in our prior blog posts, including Constitutional Amendment to Control Campaign Financing and Constitutional Amendment to Reverse Citizens United.
November 30, 2011 •
Here is your chance to “Ask the Experts” at State and Federal Communications, Inc.
Q: I want to make political contributions to a candidate for state assembly. The limits are per election. How do I make certain the contribution is attributed to the correct election [primary or general]? Does it matter when I give the contribution in relation to the election?
A: In this situation it is important to have a “meeting of the minds” between the contributor and the candidate. The contributor’s intent should be made clear by either indicating the name of the election on the memo line of the check [e.g., 2012 Primary Election], or including a cover letter with the check, or both. The cover letter can contain language specifically earmarking the contribution for the intended election. Using these precautions should prevent the candidate from allocating the contribution to an election different from the one intended by the contributor, thereby resulting in a violation of the per election contribution limits. It is not unusual for a candidate to file his pre- or post- election reports disclosing aggregate contributions from a donor in violation of the per election limit. The candidate allocated two or more checks to one election, but the contributor intended one check for the primary and one for the general.
Furthermore, a contributor must be aware of the timing of the contribution. For instance, in New Jersey, you only have 17 days after an election to make a contribution for that particular election; otherwise the contribution is automatically applied toward the next election, regardless of the contributor’s intent.
You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: email@example.com.
(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.
September 21, 2011 •
Congress and the States
Congressman John Conyers and Congresswoman Donna F. Edwards, co-sponsors of House Joint Resolution 78, want to give Congress and the states specific authority to regulate corporate expenditures on political activity. The amendment reads “nothing in this Constitution shall prohibit Congress and the States from imposing content-neutral regulations and restrictions on the expenditure of funds for political activity by any corporation, limited liability company, or other corporate entity, including but not limited to contributions in support of, or in opposition to, a candidate for public office.”
In Congresswoman Donna F. Edward’s press release she states, “Justice John Paul Stevens warned that the Supreme Court’s ruling in Citizens United threatened ‘to undermine the integrity of elected institutions around the nation’ and how right he was. Since that flawed ruling was issued, campaign spending by outside groups including corporations surged more than four-fold to reach nearly $300 million in the 2010 election cycle.”
The amendment also reads “nothing contained in this Article shall be construed to abridge the freedom of the press.”
August 25, 2011 •
100 other CEOs follow suit
The Wall Street Journal reported last night that Starbucks CEO Howard Schultz will not give a penny in campaign contributions to incumbents until Congress comes up with a long-term solution to the debt problem. According to the article, 100 other heads of corporations have joined him in that pledge.
Schultz also made a plea to business leaders to start hiring again.
In “Starbucks CEO: Pledge to Halt Campaign Donations Gains Steam,” Julie Jargon names a few of the other CEOs following Schultz in the promise.
Could a movement be brewing?
June 8, 2011 •
Limits To Case Before Him
Yesterday, the judge who ruled corporations may contribute directly to federal candidates reaffirmed his decision, but held it only applies in the criminal case before him. Federal District Judge James C. Cacheris continues to find the “logic remains inescapable” that the Supreme Court’s ruling in Citizens United dictates corporations have the same contribution rights as human beings.
The judge writes: “Again, for better or worse, Citizens United held that the First Amendment treats corporations and individuals equally for the purposes of political speech. This leaves no logical room for an individual to be able to donate $2,500 to a campaign while a corporation … cannot donate a cent.” However, his decision states the “flat ban on direct corporate contributions to political campaigns is unconstitutional as applied to this case, as opposed to being unconstitutional as applied to all corporate donations.”
After reviewing the possible impact of his decision in US v Danielczyk, and the unaddressed political contribution issues since the Citizens United decision, the judge characterizes his ruling by concluding it “adds a small drop to what is already a very large bucket.”
This blog post updates a previous article, “Corporate Contribution Ban Found Unconstitutional” by George Ticoras on May 27.
June 2, 2011 •
Contribution Limits Increased
Tennessee Governor Bill Haslam has signed Senate Bill 1915 (companion to House Bill 1003) into law.
The bill allows corporations to contribute to candidates by removing the previous statutory prohibition. The bill also adjusts contribution limits to reflect change in the Consumer Price Index.
The new law is effective immediately.
May 3, 2011 •
Increased Contribution Limits Also Included
Bills legalizing direct corporate contributions and increasing contribution limits have moved one step closer to becoming law.
The bills would allow direct corporate contributions to candidates and would increase contribution limits by nearly 40 percent.
Photo of the Tennessee State Capitol by Ichabod on Wikipedia.
April 20, 2011 •
A bill to tighten restrictions on political contributions has been introduced in the California legislature.
Assembly Bill 860 would prohibit corporations or labor unions from making contributions to a candidate for elected office. Additionally, this legislation would strengthen the state pay-to-play laws.
The bill would prohibit government contractors from making contributions to an official or candidate who is or would be elected to a position responsible for awarding a government contract to the contributor.
Finally, this bill would also prohibit any employer from using payroll deduction to fund any political activity.
Photo of the California State Capitol by Nikopoley on Wikipedia.
February 18, 2011 •
A campaign finance bill has been introduced in the state senate to allow corporate contributions to PACs.
Currently, corporations are prohibited from any campaign activity other than those contributions allowed by the U.S. Supreme Court in its “Citizens United” decision.
Corporations would still be forbidden from contributing to a candidate committee or political party committee.
South Dakota seal from an image of the state flag by Denelson83 on Wikipedia.