Supreme Court Overturns Ban on Direct Corporate Spending on Elections

In a 5-4 decision that strikes down a 1907 law, the justices say the 1st Amendment gives corporations, just like individuals, a right to spend their own money on political ads for federal candidates

by David G. Savage

WASHINGTON The Supreme Court today overturned a century-old restriction on corporations using their money to sway federal elections and ruled that companies have a free-speech right to spend as much as they wish to persuade voters to elect or defeat candidates for Congress and the White House.

In a 5-4 decision, the court's conservative bloc said corporations have the same 1st Amendment rights as individuals and, for that reason, the government may not stop corporations from spending freely to influence the outcome of federal elections.

The decision is probably the most sweeping and consequential handed down under Chief Justice John G. Roberts Jr. And the outcome may well have an immediate impact on this year's mid-term elections to Congress.

Until now, corporations and unions have been barred from spending their own treasury funds on broadcast ads or billboards that urge the election or defeat of a federal candidate. This restriction dates back to 1907, when President Theodore Roosevelt called on Congress to forbid corporations, railroads and national banks from using their money in federal election campaigns. After World War II, Congress extended this ban to labor unions.

In today's decision, the high court struck down that restriction and said the 1st Amendment gives corporations, just like individuals, a right to spend their own money on political ads.

"The 1st Amendment does not permit Congress to make these categorical distinctions based on the corporate identity of the speaker and the content of the political speech," said Justice Anthony M. Kennedy for the court.

Two significant prohibitions on corporations were left standing. Corporations, and presumably unions, cannot give money directly to the campaigns of federal candidates. These "contribution" restrictions were not challenged in the case decided today. And secondly, the court affirmed current federal rules which require the sponsors of political ads to disclose who paid for them.

Most election-law expert have predicted a court decision freeing corporations will send millions of extra dollars flooding into this fall's contests for Congress. And they predict Republicans will be the main beneficiaries.

Today's decision was supported by five justices who were Republican nominees. They include Kennedy and Roberts along with Justices Antonin Scalia, Clarence Thomas and Samuel A. Alito Jr.

The dissenters included the three Democratic appointees: Justices Ruth Bader Ginsburg, Stephen G. Breyer and Sonia Sotomayor. They joined a dissent written by 89-year old Justice John Paul Stevens. Speaking from the bench, he called today's decision "a radical change in the law ... that dramatically enhances the role of corporations and unions -- and the narrow interests they represent -- in determining who will hold public office."

The decision today, though long forecast, displayed a deep division of opinion on the court about the meaning of the 1st Amendment and freedom of speech. The majority said the Constitution broadly protected discussion and debate on politics, regardless of who was paying for the speech. Roberts said he was not prepared to "embrace a theory of the 1st Amendment that would allow censorship not only of television and radio broadcasts, but of pamphlets, posters, the Internet and virtually any other medium that corporations and unions might find useful in expressing their views on matters of public concern."

But Stevens and the dissenters said the majority was ignoring the long-understood rule that the government could limit election money from corporations, unions and others, such as foreign governments. "Under today's decision, multinational corporations controlled by foreign governments" would have the same rights as Americans to spend money to tilt U.S. elections. "Corporations are not human beings. They can't vote and can't run for office," Stevens said, and should be subject to restrictions under the election laws.

Today's opinion dealt only with corporations, but its logic would suggest that unions will also have the same right in the future to spend unions funds on ad campaigns for federal candidates.

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© 2010 Los Angeles Times