Court opens door to possibility of corporate political spending

Campaign finance watchdogs are concerned that a little-seen order issued on the Supreme Court’s final day could lead to tens of millions of corporate dollars being spent on television advertising — an ad blitz candidates would have difficulty countering.

On Monday, instead of ruling in Citizens United v. Federal Election Commission, the court issued a rare order for further arguments on the case. The suit sought to test whether corporate contributions to a documentary slamming then-presidential candidate Hillary Rodham Clinton should have kept it from being distributed during the campaign.

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The case will be expanded, with lawyers for both parties asked to file briefs answering whether the court should overturn two other landmark suits.

One of those suits was Austin v. Michigan Chamber of Commerce, the 1990 decision in which the Supreme Court upheld Michigan’s right to prohibit corporations from using money to support or oppose candidates. The other, McConnell v. FEC, upheld the constitutionality of the Bipartisan Campaign Reform Act (BCRA) over the objection of petitioner Sen. Mitch McConnell (R-Ky.).

By seeking new arguments on those cases, campaign finance watchdogs said, the court is poised to make a substantial ruling that could have wide-reaching consequences.

“The court, at the very least, is considering reversing more than 100 years of campaign finance precedent prohibiting corporate spending,” said Paul Ryan, associate legal counsel at the Campaign Legal Center. “It would be a pretty large step, and remarkable step, for the court to overturn a century of public policy.”

Specifically, the high court is seeking new arguments on Section 203 of BCRA, which regulates electioneering communications and prohibits corporations from running so-called issue advertisements.

“The court is seeking to address a fundamental issue in campaign finance law, and that is whether corporate money can be used for certain types of political advertising,” said Jan Baran, a partner at Wiley Rein LLP who published a guidebook for corporations on election law. Baran called the court’s move “a significant order.”

Overturning that ban would presumably allow corporations to begin spending money on political campaigns, either in support of or opposition to a candidate. It would be the first time since Congress banned corporate political expenditures in 1947.

If the Supreme Court does overturn either case, the effects on political campaigns will be dramatic, said Marc Elias, a partner at Perkins Coie who served as general counsel on Sen. John Kerry’s (D-Mass.) 2004 presidential campaign and who is heading legal efforts for Democrat Al Franken in the disputed Minnesota Senate contest.

“The ban on corporate spending on federal elections is at the center of our current campaign finance system,” he said. “If that were to change it would radically alter the system that we have.”

The court is substantially different today than it was even in 2003, when McConnell was decided. With the retirement of former Associate Justice Sandra Day O’Connor, who voted with the five-justice majority to uphold BCRA, the court may have shifted against reformers.

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“It was thought that Justice O’Connor was the deciding vote who tilted the court in favor of campaign finance reform, and once she left and Chief Justice [John] Roberts joined the court, there’s been some expectation that the balance of power was going to shift against campaign finance reformers,” said Rob Kelner, who heads Covington & Burling’s Election and Political Law division.

“This new order seems to point in that same direction,” added Kelner, who has argued against BCRA before the court.

The court’s order asks both parties to specifically address whether justices should overrule either or both Austin and McConnell, and election law experts are torn as they try to read the tea leaves.

“I don’t think the court would have ordered this type of argument if there wasn’t a chance, if not a likelihood, of at least five justices thinking these cases should be overruled,” said Baran, who has argued against some finance measures before the Supreme Court. Still, said Baran: “They’ve been flip-flopping all over the place.”

“You could see the glass half-empty or half-full,” Elias said. “If there were five justices ready to [overturn Austin and McConnell], they would have done so.”

But even hearing the case is an unusual step that worries Ryan, the prominent campaign finance reform backer.

“We have a long line of precedents, Supreme Court decisions upholding these restrictions,” he said. “I’m hopeful that there are still some open minds on the court.”

Those on both sides see Justice Anthony Kennedy, long the swing vote on controversial cases, as the fulcrum on which the cases will rest. And that, in the end, could be the tipping point against reformers: Unlike O’Connor, who joined the majority in the McConnell decision, Kennedy dissented from majority opinions upholding bans in both earlier cases.

The re-argument is scheduled to take place Wednesday, Sept. 9. That could have an impact on the confirmation process of Sonia Sotomayor, President Obama’s nominee to fill a vacant seat on the high court.

Sotomayor’s confirmation hearings are scheduled to begin July 13, and Democrats in the Senate could push for a final vote on her nomination before they leave for August recess in order to have a full complement of justices. Given her past experience on the New York City Campaign Finance Board, Sotomayor is likely to have something to say on the case.