July 3, 2012
It’s often said that politics makes for strange bedfellows.
A slight variation of the phrase – “the battle over corporate political expenditures makes for strange bedfellows” – could apply to U.S. v. Danielczyk.
The case, decided by the U.S. Court of Appeals for the Fourth Circuit last Thursday, involves two corporate officers (William P. Danielczyk, Jr. and Eugene R. Biagi) indicted for secretly funneling corporate funds to Hillary Clinton’s 2006 Senate and 2008 presidential campaigns.
With whom are these defendants “strange bedfellows?”
The Republican National Committee (RNC) and the Center for Competitive Politics (CCP), a conservative advocacy group that opposes campaign finance regulations.
Both of these organizations filed amicus briefs in support of the defendants.
Your first question may be, “Why?”
The statute, 2 U.S.C. § 441b(a) of the Federal Election Campaign Act of 1971 (“FECA”), forbids any corporations or corporate officers from making direct expenditures to political candidates.
Contrary to popular belief, Citizens United didn’t strike down this prohibition.
Instead, although the 2010 ruling did indeed affect § 441b(a), it struck down the section’s prohibition on independent political expenditures.
What’s the difference between direct and independent political expenditures?
Direct expenditures are contributions made “directly” to a political candidate; independent expenditures are funds spent to expressly advocate for or against the election or defeat of a candidate.
Also, prohibitions on the former are constitutional, but those on the latter aren’t – at least, according to the Danielczyk ruling.
Actually, Citizens United didn’t expressly uphold § 441b(a)’s ban of direct political expenditures because the prohibition’s constitutionality wasn’t at issue before the Court.
This is where the Danielczyk defendants’ challenge of this ban arises.
Citing the broad First Amendment rights extended to corporations under Citizens United, the Danielczyk defendants – along with their strange bedfellow amici – argued that corporations and individuals must be treated equally for the purposes of political speech.
As alluded to earlier, the appeals court didn’t buy this argument.
Rather, it cited the 2003 Supreme Court decision FEC v. Beaumont as support for the ban’s constitutionality.
Specifically, Beaumont held that the government’s interest in preventing quid pro quo corruption was sufficient justification to overcome the First Amendment intrusions.
The appeals court’s conclusion may be based on sound legal reasoning, but, if this case were to reach the Supreme Court, it’s very possible that the high court would still strike down § 441b(a)’s ban of direct political expenditures.
After all, the Supreme Court seemed unconcerned with the government’s interest in preventing corruption in 2010, and, with the Court’s recent summary reversal of American Tradition Partnership v. Bullock, it seems that little has changed.
And the difference between direct and independent expenditures isn’t nearly as stark as the Danielczyk ruling would have you believe.
Let me break down the difference very simply:
An independent expenditure is spending money to say, “Vote for Candidate X.”
A direct expenditure is giving money directly to Candidate X so that he can say, “Vote for me.”
Like night and day, right?
So why even bother with trying to overturn any bans on direct expenditures?
Such bans create quite a bit of legal and administrative expenses (since they force corporations to use Super PACs to make expenditures – more on that here), which explains why organizations like the RNC and the CCP pushing for the ban’s invalidation.
Although such proponents of unfettered corporate political spending may view the Danielczyk ruling as a setback, it’s only a temporary one.
Citizens United made sure that corporations are to be treated as equally as individuals in the eyes of the First Amendment – a rationale that threatens the existence of any campaign finance regulations.