Friday, June 29, 2012

Federal appeals court reverses ruling that corporations can donate to campaigns

Friday, June 29, 2012
Max Slater

[JURIST] The US Court of Appeals for the Fourth Circuit [official website] ruled [decision, PDF] Thursday that a district court erred in holding that corporations can contribute directly to political campaigns. The Fourth Circuit held that the Supreme Court's decision in Citizens United v. Federal Election Commission [opinion, PDF] does not prevent limitations on direct contributions to candidates. 

In its decision, the Fourth Circuit ruled that an earlier Supreme Court ruling, Federal Election Commission v. Beaumont [opinion, PDF], which allowed limits to direct corporate spending on campaigns, was not implicated by Citizens United:

  • The Appellees would have this Court hold that Citizens United repudiated Beaumont's entire reasoning; this we cannot do. Citizens United held that in the context of independent expenditures, the Government could not suppress political speech on the basis of the speaker's corporate identity. 

In reaching its decision, the Court did not discuss Beaumont and explicitly declined to address the constitutionality of the ban on direct contributions. ... Nor did the opinion indicate that its "corporations-are-equal-to-people" logic necessarily applies in the context of direct contributions.

It is unclear if the losing party in the case, a corporation that contributed to Hillary Clinton's 2008 presidential campaign, plans to appeal the ruling.

Campaign finance laws have been a contentious issue recently. Earlier this week, the Supreme Court struck down [JURIST report] a Montana campaign finance law that restricted the amount of money corporations can spend on campaigns, holding that Citizens United invalidated the Montana law. 

That decision, American Tradition Partnership, Inc. v. Bullock [SCOTUSblog backgrounder] reversed a decision by the Montana Supreme Court upholding the law [JURIST report]. In February, the Supreme Court blocked enforcement [JURIST report] of the Montana Supreme Court ruling.