Tag: Citizens United v. FEC

Federal Contractors Shouldn’t Lose First Amendment Rights

From the Boston Tea Party of 1773 to today’s Tea Party movement, from suffragettes to Occupiers, freedom of political association has always been this country’s hallmark. Importantly, this First Amendment freedom extends to campaign contributions. As the Supreme Court affirmed in the 1976 case Buckley v. Valeo,“the right of association is a basic constitutional freedom that is closely allied to freedom of speech and a right which, like free speech, lies at the foundation of a free society.”

The Buckley ruling has since survived many assaults—including, most notably, Citizens United v. FEC—though Citizens United exposed certain instabilities in Buckley’s frameworkIn any event, challenges continue to arise at the intersection of campaign finance law, political association rights, and the freedom of speech.

An important one comes from three individuals who have business contracts with the federal government. Under the Federal Election Campaign Act’s section 441c(a), “any person who is negotiating for, or performing under, a contract with the federal government is banned from making a contribution to a political party, committee, or candidate for federal officer.” Accordingly, the three plaintiffs are prohibited from making their intended campaign contributions and thus from an important form of political participation. This rule applies even to someone like name plaintiff Professor Wendy E. Wagner, who derives only a fraction of her income from the federal contract.

Together with the Center for Competitive Politics, Cato last week filed an amicus brief with the U.S. Court of Appeals for the D.C. Circuit, arguing that the plaintiffs should be able to exercise their right to political association and speech by contributing to political campaigns. Specifically, we argue that section 441(c) is unique in that it entirely bans contributions by a class of individual citizens. 

In McConnell v. FEC,the only case where the Supreme Court addressed an outright ban on contributions by a class of individuals—the ban on campaign contributions by minors originally in the McCain-Feingold campaign finance “reform,” which McConnell otherwise substantially upheld—the Court struck it down as overly broad and because the government didn’t give sufficient justification. What’s clear from that ruling is that for a ban on political speech and association to be constitutional, the government must show that its targeted class of people is somehow too dangerous to be allowed to participate in the political process, and also that the ban applies only to that set of uniquely dangerous people. Section 441(c) doesn’t meet this test.

If the government wants to ban her from this important form of political participation, then it must give more than bare assertions of the specter of potential corruption.

The D.C. Circuit will hear argument in Wagner v. FEC on September 30.

New Evidence on the Costs of Mandating Disclosure

Over the next few years, most arguments about campaign finance regulation will be about extending mandated disclosure to some of the independent spending freed up by the Citizens United decision.

Writing in the Wall Street Journal, James L. Huffman offers a unique perspective on mandated disclosure: he was a candidate for the U.S. Senate last year. He argues that mandated disclosure means incumbents know who funded the campaigns of their challengers.  Incumbents do not have to actually threaten anyone; disclosure plus circumstances means a cautious businessperson will stay clear of electoral participation. Huffman also claims that some people who might have contributed to his campaign heard from associates of his opponent who said contributing to Huffman might be a bad idea.

We have heard such testimony before about the malign effects of disclosure. George Soros said some potential contributors to his efforts to unseat former President George W. Bush stayed on the sidelines because of concerns about publicity (see James V. Grimaldi and Thomas B. Edsall, “Super Rich Step Into Political Vacuum; McCain-Feingold Paved Way for 527s” The Washington Post, October 17, 2004).  Now we have a Senate candidate citing “dozens” of examples of a similar chilling of political speech.

Some might think incumbent protection is no longer a problem since 69 House seats changed hands in 2010 (and a similar number in the two previous House elections). If you think that, please recall that the House has 435 seats, all of which could potentially change hands. Yes, the advantages of incumbency have become somewhat smaller in recent years. But those advantages remain significant, and disclosure does increase the risk of contributing to a challenger, especially when the odds are overwhelming that those now in office will win re-election.

What should be done? Huffman notes that many Americans consider mandated disclosure to be all benefits and no costs. We might begin by gaining a more realistic view of the disclosure calculus. That more realistic view should include the costs of disclosure including lower participation and the ways mandated disclosure make public debates more irrational. At a minimum, existing disclosure thresholds should be dramatically raised. Forcing disclosure of the names of those who contribute less than $1,000 serves no public purpose.

We also should not mandate disclosure of the names of those who support speech independently of candidates and the parties. The only justification for such a mandate would be educating the voters. In other words, voters are thought to look for cues about who to vote for by considering who spends money on speech favoring a candidate. Does that seem plausible? If not, forced disclosure of independent spenders would not be constitutional. If Congress nonetheless enacts disclosure for independent spending, the U.S. Supreme Court should rigorously consider both the end served by such laws and the relationship between the means of disclosure to that end. Does disclosure of independent spending really educate any voters? If so, what about the costs to free speech identified by Professor Huffman? Once we set aside conventional pieties, does forcing people to tell government officials about their political activities really offer much to nation? Or does such coercion do little more than indulge those who equate politics with the pleasures of preaching hatred of those they despise?

Last year I wrote a Cato policy analysis of the justifications for disclosure after Citizens United.

Corporations Aren’t People But They Are (Legal) Persons

Recently, activist and filmmaker Annie Leonard released a video titled “The Story of Citizens United v. FEC,” an eight-and-a-half-minute criticism of last year’s Supreme Court case of the same name.

Well, sort of.

Competitive Enterprise Institute’s Lee Doren made his own video critique in response to Ms. Leonard’s offering, and points out quite clearly that Ms. Leonard doesn’t really deal with any actual constitutional problems in her position—essentially ignoring the decision and its rationale—and instead spends most of her time corporation bashing.

Lee was kind enough to cite, inter alia, a blogpost I wrote last year about what “corporate personhood” does and does not mean. If Ms. Leonard was going to ignore the decision, it may have at least served her well to read that post before producing her video. As I pointed out, under the logic she puts forth, “individuals acting through corporations should be denied their freedom of speech because corporations are ‘state-created entities.’ The theory goes that if a state has the power to create corporations, then it has the power to define those entities’ rights.” Ms Leonard’s video was made by (or coordination with) Free Range Studios—a corporation—and thus she’s making the argument that Congress should be able to keep her from or punish her for making that video because Free Range Studios shouldn’t have rights.

Despite the misinformation in Ms. Leonard’s video, we believe she and Free Range Studios have every right to be wrong as publicly as they see fit, even if she doesn’t.

Please watch Lee’s full video below, and look for the Cato shout-out around the 12:20 mark. If you’re in the Chicagoland area, I’ll be speaking about corporate rights and corporate personhood at John Marshall Law School tomorrow at 10:15AM local time. Feel free to stop by and please introduce yourself.