We the Corporations?

By Associate Clinical Professor Jessica Levinson

This op-ed originally appeared in the April 4, 2012 edition of the Daily Journal.

We the Corporations?

While the Republican presidential nominee and the ultimate victors of contests throughout the nation may be unknown, one thing is clear: the 2012 election will break campaign fundraising records. This is the first presidential election since the Supreme Court's fateful decision in Citizens United v. FEC. Since that decision, there has been a proliferation of campaign spending, most notably by so-called "Super PAC" organizations. These are independent-expenditure only political committees. Republican-backed Super PACs have already raised $81 million to date this election cycle. (Interestingly, only 17 individuals account for contributing nearly half of that amount to Super PACs.) Because of regulations promulgated under the internal revenue service, contributions by certain non-profit organizations to these Super PACs can remain undisclosed, and therefore hidden from public view.

So how did we get to this place of largely anonymous, largely unlimited campaign spending? The Court's decision in Citizens United, while surprisingly incremental in some ways, opened the doors for the record-breaking spending we are now seeing. In Citizens United, the Court essentially came to two conclusions. First, the Court said that speaker-based identity restrictions are impermissible. This means that if a restriction cannot be validly imposed on an individual, then it similarly cannot be imposed on a corporation. Second, the Court found that independent expenditures are not corrupting. So go ahead and spend $100 million in support of your favorite candidate (or against that candidate's opponent). As long as your expenditure is "independent" it cannot corrupt, according to our nation's highest court.

Although it may seem abundantly obvious, there are a number of reasons why for-profit corporations - artificial entities made up of individuals - should not be treated as the same as individuals in the campaign finance context. While certain non-profit corporations are essentially voluntary political associations, and therefore restricting their speech raises important political expression and association concerns, the same is not true of for-profit corporations.

Most campaign finance restrictions present First Amendment questions that ask the Court to analyze the speaker's interest in spending money, the public's interest in hearing campaign speech, and the government's interest in restricting the speaker from spending that money. In the case of corporate electoral speech, the interests of each of these groups weigh in favor of restrictions. In addition, the interests of another group, which the Court routinely discounts - those who speak but not by spending money - also favors regulation.

First, as to the speakers' interests, neither the First Amendment rights of the corporation itself, nor the members of that corporation are promoted when for-profit corporations speak in the electoral marketplace. As artificial entities, corporations themselves do not possess an interest in self-realization, self-fulfillment, or self-actualization. An artificial entity cannot learn some ultimate truth about itself by spending money to promote or oppose political candidates. Further, the speech interests of individual members of for-profit corporations are not furthered by corporate electoral speech. Shareholders and directors and officers join for-profit corporations to maximize their wealth, not to promote political or ideological viewpoints. This is one of the primary reasons why some non-profit corporations should be treated as distinct from for-profit corporations when it comes to electoral speech. While many people do band together in organizations adopting the non-profit corporate form to further causes and ideas, that is simply not the reason why individuals buy stock in for-profit corporations.

Second, because corporations and members of for-profit corporations have little First Amendment interest in corporate electoral speech, the Court has slung much of the weight of its dubious rationale on the listeners' interest in hearing corporate electoral speech. However, restricting unlimited corporate electoral spending hardly harms the rights of listeners. Listeners can still hear a corporation's message. Corporations are free to disseminate the same communication through a corporate PAC. Moreover, each individual member of that corporation is free to speak as much as she wishes. Unlimited for-profit corporate electoral spending, therefore, does not add to the breath and depth of political debates. Instead, unlimited for-profit corporate electoral speech can distort the marketplace. Such spending only increases the volume of corporate speech and can drown out other, less well-funded voices.

This potential drowning out affect hurts not only the rights of listeners, but also those who speak by spending comparatively little, or no, money. Our current system prizes those who use deep pockets to blast their messages to both willing and unwitting listeners.

Third, as to the government's interest, in the past the Court rightly embraced a broader definition of corruption, which included the "corrosive and distorting" affects of corporate spending. In Citizens United, however, a bare majority of the Court significantly restricted the definition of corruption, finding that corruption means only quid pro quo corruption. Limiting the definition of corruption in this way severely restricts the number of campaign finance regulations that can withstand First Amendment scrutiny.

In sum, when looking at the interests implicated by unlimited for-profit corporate electoral speech the interest of speakers (those who speak with and without spending money), the interest of listeners, and the interest of the government all favor restrictions. Sadly, the Supreme Court adopted a different tact. As a result the floodgates are open and the public is hearing overwhelmingly from well-funded interests, including Super PACs. It turns out that is not so super after all.