Court signals it may loosen campaign spending

11/09/2009 05:12 am ET | Updated May 25, 2011

WASHINGTON — The Supreme Court signaled Wednesday it may let businesses and unions spend freely to help their favored candidates in time for next year's elections. Such a step could roll back a century of attempts to restrain the power of corporate treasuries in American politics.

The justices cut short their summer recess for a lively special argument that indicated the court's conservative skeptics of campaign finance laws have the upper hand over its liberals, including new Justice Sonia Sotomayor.

Justice Anthony Kennedy, often the high court's swing vote, but a firm opponent of many campaign restrictions, at one point told the government's lawyer, "Corporations have lots of knowledge about environment, transportation issues, and you are silencing them during the election."

Sotomayor jumped into the fray at her first argument – with questions that strongly hinted she would keep campaign spending limits in place. "Wouldn't we be doing some more harm than good by a broad ruling?" she asked.

The court heard arguments for the second time in a case that began as a dispute over whether a conservative group's 90-minute movie that harshly criticized Hillary Rodham Clinton's presidential campaign should be regulated as a campaign ad. The court's request for a new argument on broader questions turned the case into a test of whether two earlier high court decisions should be reversed.

One is a 19-year-old ruling that buttresses federal and 24 state laws that bar corporations, and in some cases unions, from dipping into their general funds to call directly for the election or defeat of a candidate. Regulation of such independent expenditures – made separately and without being coordinated by any candidate's campaign committee – is distinct from other limits on contributions to candidates themselves and political parties, which are unaffected by the case.

The case also does not affect political action committees, which mushroomed after post-Watergate laws set the first limits on contributions by individuals to candidates. Corporations, unions and others may create PACs to directly contribute to candidates, but they must be funded with voluntary contributions from employees, members and other individuals, not by corporate or union treasuries.

The justices also are weighing whether to jettison part of their 2003 decision upholding the McCain-Feingold law and its limits on when businesses and labor may pay for ads that mention candidates but don't tell people how to vote. Congress included limits on these so-called issue ads in the belief that they were campaign ads in disguise.

The prime sponsors of the law, Sens. John McCain, R-Ariz., and Russ Feingold, D-Wis., were in the courtroom Wednesday, along with their chief congressional opponent, Sen. Mitch McConnell of Kentucky, the Senate's top Republican.

At times, it seemed as though the two sides were arguing different cases.

"Robust debate about candidates for elective office is the most fundamental value protected by the First Amendment's guarantee of free speech," argued Theodore Olson, the attorney representing Citizens United, the group that made the movie.

Citizens United wanted to air ads for the anti-Clinton 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.

The movie was advertised on the Internet, sold on DVD and shown in a few theaters. Campaign regulations do not apply to DVDs, theaters or the Internet.

Olson said Citizen United's status as a not-for-profit corporation should have no bearing on its freedom to speak because the court has repeatedly held that corporations are like people when it comes to the First Amendment. Lawyer Floyd Abrams, a longtime First Amendment advocate, argued on behalf of McConnell.

Solicitor General Elena Kagan, making her first high court argument, and a former Solicitor General, Seth Waxman, representing McCain and Feingold, stressed the long history of federal laws that sought to rein in corporate and later union influence on elections, beginning with President Theodore Roosevelt's trust-busting push early in the 20th century.

"For over 100 years Congress has made a judgment that corporations must be subject to special rules when they participate in elections and this Court has never questioned that judgment," Kagan said.

The major issue, at least in terms of counting votes, is whether two conservatives, Chief Justice John Roberts and Justice Samuel Alito, are willing to overrule the earlier decisions.

Both justices spoke at length in their Senate confirmation hearings about the importance of abiding by precedents – even if they would have voted the other way had they been involved in an earlier decision.

But on Wednesday neither displayed any reluctance to join the other three conservatives, Justices Antonin Scalia, Clarence Thomas and Kennedy, who are on record opposing the restrictions on corporate and union spending.

Alito pointed out that more than half the states, including California, allow corporations to campaign for and against candidates.

"Have they all been overwhelmed by corruption?" he asked.

Roberts, explaining why the court and not the Federal Election Commission should determine whether a federal campaign law is valid, said, "We don't put our First Amendment rights in the hands of FEC bureaucrats."

Justice John Paul Stevens, the wily leader of the court's liberals, appeared to be searching for a narrow way out of the case that would preserve most limits on corporations and unions. But no one on the conservative side seemed interested.

Kagan, too, acknowledged that the government was unlikely to win the case outright and that the best it could do was hope for a ruling that might apply only to ideological groups like Citizens United.

"If you are asking me, Mr. Chief Justice, as to whether the government has a preference as to the way in which it loses, if it has to lose, the answer is yes," she said.