Businesses, unions freed to spend big on elections

[January 22, 2010]  WASHINGTON (AP) -- A bitterly divided Supreme Court vastly increased the power of big business and unions to influence government decisions Thursday by freeing them to spend their millions directly to sway elections for president and Congress.

The ruling reversed a century-long trend to limit the political muscle of corporations, organized labor and their massive war chests. It also recast the political landscape just as crucial midterm election campaigns are getting under way.

In its sweeping 5-4 ruling, the court set the stage for a wave of likely repercussions -- from new pressures on lawmakers to heed special interest demands to increasingly boisterous campaigns featuring highly charged ads that drown out candidate voices.

The election-season blizzard of ads on Americans TV screens is bound to increase.

While the full consequences of the decision were hard to measure, politicians made clear whom they believed benefited. Democrats, led by President Barack Obama, condemned the decision while Republicans cheered it.

Still, more labor and corporate money in the political system could dilute the role of both political parties.

And the decision seeded the ground for further challenges to an already weakened system of campaign finance regulations.

The justices weighed two fundamental political forces -- the power of the central government and the concentration of corporate wealth -- and tilted decidedly in favor of the latter. The opinion by Justice Anthony Kennedy made a vigorous argument based on the Constitution for the right of the public to be exposed to a multitude of ideas and against the ability of government to limit political speech, even in the interest of fighting corruption.

"The censorship we now confront is vast in its reach," Kennedy wrote.

Strongly dissenting, Justice John Paul Stevens said, "The court's ruling threatens to undermine the integrity of elected institutions around the nation."

Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia and Clarence Thomas joined Kennedy to form the majority in the main part of the case. Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor joined Stevens' dissent, parts of which he read aloud in the courtroom.

The court overturned two earlier decisions and threw out parts of a 63-year-old law that said companies and unions can be prohibited from using money from their general treasuries to produce and run their own campaign ads urging the election or defeat of particular candidates by name. The decision, which applies to independent spending that is not coordinated with candidates, threatens similar limits imposed by 24 states.

The justices also struck down part of the landmark McCain-Feingold campaign finance bill that barred union- and corporate-paid issue ads in the closing days of election campaigns.

It leaves in place a prohibition on direct contributions to candidates from corporations and unions and didn't touch the McCain-Feingold ban on unlimited corporate and union donations to political parties. Nor did it disturb companies' right to solicit voluntary contributions to political action committees that can donate directly to candidates.

Corporations and unions would still have to identify the sources of money for their political activity -- a provision of current law that the court upheld in an 8-1 vote.

Obama called the decision a victory for big oil, Wall Street banks, health insurance companies and other powerful interests.

The ruling will lead to a "stampede of special interest money in our politics," Obama said. He pledged to work with Democrats and Republicans in Congress to come up with a "forceful response" to the high court's action.

But Sen. Mitch McConnell of Kentucky, the Senate Republican leader who filed the first lawsuit challenging the McCain-Feingold law, praised the court for "restoring the First Amendment rights" of corporations and unions. "By previously denying this right, the government was picking winners and losers," McConnell said.

Kennedy's opinion goes to the heart of laws dating back to the Gilded Age when Congress passed the Tillman Act in 1907 banning corporations from donating money directly to federal candidates. Though that prohibition still stands, the same can't be said for much of the century-long effort that followed to separate politics from corporate money.

Campaign lawyers and political operatives immediately began contemplating the consequences of the decision.

Its most immediate effect is to permit corporate and union-sponsored political ads to run right up to the moment of an election, and to allow them to call explicitly for the election or defeat of a candidate. In presidential elections and in close congressional contests, that could substantially increase the television advertising competing for the public attention's with the candidates' own ads.

"It's going to be the Wild Wild West," said Ben Ginsberg, a Republican attorney who has represented several GOP presidential campaigns. "If corporations and unions can give unlimited amounts ... it means that the public debate is significantly changed with a lot more voices and it means that the loudest voices are going to be corporations and unions."

The legal community was split over whether corporations or unions would be the biggest beneficiaries.

"I'd be surprised if it opens new express advocacy by big publicly traded corporations," said Joseph Birkenstock, a former chief counsel for the Democratic National Committee.

Big firms, sensitive to the feelings of many shareholders and customers, not to mention Congress, would be less inclined to affix their name to a hard-hitting negative ad calling for a candidate's defeat.

Instead, corporations, large or small, may be more likely to funnel their cash to broad industry groups, and let them mount political campaigns that keep individual corporate fingerprints off the effort. Indeed, trade associations already weigh in politically; the court's decision will simply empower them to be more explicit closer to election day.

But unions would also benefit. The AFL-CIO filed a friend of the court brief calling for more freedom to run political ads. Labor organizations have a long history of political activity. In last year's presidential election, they ran millions of dollars in ads that stopped short of calling for a candidate's election or defeat. But their intent was clear.

"Given how extensively many unions are involved in various aspects of the election process, such as get-out-the-vote drives and the like, there seems little doubt that these same unions will have strong motivation to now engage in election-related independent spending," said Richard Pildes, a constitutional law professor at the New York University.

Emboldened by the ruling, critics of campaign finance regulation may now challenge the ban on direct corporate donations to candidates.

"If all speakers are going to be treated the same, why wouldn't a corporation be able to make a contribution to a candidate just like a PAC or an unincorporated association or an individual?" said James Bopp Jr., a campaign finance lawyer who has fought limits on political money.

The decision also may strengthen political party groups that seek to end the McCain-Feingold ban on unlimited contributions to parties from labor and corporations.

Stevens, in a 90-page opinion that dwarfed Kennedy's, complained that the court majority overreached by throwing out earlier Supreme Court decisions that had not been at issue when this case first came to the court.

"Essentially, five justices were unhappy with the limited nature of the case before us, so they changed the case to give themselves an opportunity to change the law," Stevens said.

The case began when a conservative group, Citizens United, made a 90-minute movie critical of Hillary Rodham Clinton as she sought the Democratic presidential nomination. Citizens United wanted to air ads for the movie and distribute it through video-on-demand services on local cable systems during the 2008 Democratic primary campaign.

But federal courts said the movie looked and sounded like a long campaign ad, and therefore should be regulated like one.

[Associated Press; By MARK SHERMAN and JIM KUHNHENN]

Associated Press writers Jesse J. Holland, Sharon Theimer, Liz Sidoti and Sam Hananel contributed to this report.

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