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Nov-26-2019 15:18printcomments

Political Campaign Finance Law After Citizens United

The Citizens United decision means that corporations are natural persons within the meaning of Section 1 of the Fourteenth Amendment of the Constitution and, therefore, have First Amendment rights.

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(SAN FRANCISCO, Calif.) - According to campaign finance watchdog Open Secrets, the final cost for the 2016 election was $6.5 billion for the presidential and congressional elections combined. The cost of the presidential race, including campaign committee and outside spending, was $2.4 billion. Congressional races totaling more than $4 billion.

President Donald Trump’s campaign cost almost $398 million, whereas candidate Hillary Clinton’s’s was more than $768 million. But as Trump was a constant focus of media attention, from July 2015 through October 2016, Trump received free media worth more than $5.9 billion. Clinton received less than half that figure, a little under $2.8 billion.

To curb these obscene campaign costs, in 2002, the Bipartisan Campaign Reform Act (“McCain-Feingold Act”) was passed to regulate the financing of political campaigns by prohibiting soft money contributions to national political parties, and limited campaign financing to hard money.

Soft money is unlimited funding collected by political parties intended for party strengthening, while hard money is donations directly made to a candidate’s campaign.

In addition, political parties could no longer directly fund election campaign advertisements with soft money contributions; they had to be paid for with hard money. The law also called for candidates to “stand by their ad.” This means a candidate, at the end of a campaign ad, must approve the message.

On January 10, 2010, the Supreme Court in Citizens United v. Federal Election Commission invalidated the McLain-Feingold Act, and later in 2014 the Supreme Court in McCutcheon v. Federal Elections Commission struck down limits on overall federal campaign contributions.

In the Citizens United case, the Supreme Court ruled that the "government may not suppress political speech on the basis of the speaker’s corporate identity." According to the Supreme Court, its ruling is a logical extension of a long line of decisions affording First Amendment rights to corporations, but was clearly a set back for campaign finance law.

The Citizens United and McCutcheon cases cleared the way for super PACs, which allowed individuals and corporations to make unlimited amounts of contributions, as long as they are not directly working with campaigns and political parties.

What is assumed in the Citizens United decision is that corporations are natural persons within the meaning of Section 1 of the Fourteenth Amendment of the Constitution and, therefore, have First Amendment rights.

The Fourteenth Amendment states:

"All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws."

The corporate personhood legal concept has been codified: "In determining the meaning of any Act of Congress, unless the context indicates otherwise-- the words "person" and "whoever" include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals."

How did a corporation become a natural person? Initially, the privilege of incorporation was granted selectively to enable activities that benefited the public, such as construction of roads or canals. Corporate status enabled shareholders to profit and gave limited liability to directors, officers, and shareholders for the corporation's debts and obligations. For over 100 years after the American Revolution, legislators maintained tight control over corporate chartering.

Then came the controversial 1886 Supreme Court decision in Santa Clara County v. Southern Pacific Railroad. Although the Supreme Court supposedly did not make a direct ruling on the question of "corporate personhood," the misleading notes of a clerk finding corporate personhood were incorporated in the Court's decision. Whether this is myth or reality doesn't matter at this point because the Supreme Court has often cited this case for the proposition that a corporation is a "natural person." Thus, a precedent was set.

The Santa Clara case became the basis for a long line of court cases giving a corporation personhood. It is now firmly embedded in the law and neither the Supreme Court nor Congress is likely to overturn 133 years of precedent. The corporate personhood debate now centers on what subset of rights of natural persons should also be afforded to corporations.

Rep. Adam Schiff (D-CA) introduced a Constitutional amendment to overturn Citizens United that would allow Congress to set reasonable limits on campaign contributions and independent expenditures and would allow – but not require – states to enact their own public financing laws. The chances of passage this polarized political climate is unlikely and outrageous amounts will continue to be required to run and win public office.

Imagine how different the economic and political landscape of the United States would be without the Santa Clara County decision and its progeny.


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