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Corporate Personhood Was Key, Ironically, To New Court Ruling Requiring Donor Disclosure

Posted: 04/ 3/2012 1:25 pm Updated: 04/ 3/2012 1:30 pm

WASHINGTON -- Progressive activists angered by the Supreme Court's 2010 ruling in Citizens United v. Federal Election Commission allowing corporations to spend freely in elections often point the finger of blame at the legal doctrine that corporations have certain protections as legal persons. Ironically, that same concept of corporate personhood was just applied by a district court judge in reversing an FEC rule that had permitted the non-disclosure of donors to groups spending money on certain political ads. Many such secret donors are believed to be corporations.

The March 30 ruling in Van Hollen v. FEC held that the FEC may not issue rules, as it had done in 2007, that narrow a disclosure provision in the McCain-Feingold campaign finance law requiring groups to reveal donors paying for "electioneering communications" -- ads that mention, but do not call for the election or defeat of, a candidate. The ruling, handed down by U.S. District Judge Amy Berman Jackson in Washington, D.C., said that an administrative agency like the FEC has no authority to reinterpret a congressional law that, as in this case, is clear in its intent.

The McCain-Feingold provision states that any "person" -- meaning both real persons and legal persons -- spending $10,000 in aggregate on electioneering communications must disclose the spending and that the person must also disclose all donors giving $1,000 or more to either the person or a segregated bank account set up exclusively for electioneering communications. The FEC rule invalidated by the court undermined the latter measure.

The FEC rule said that only contributions that were specifically earmarked for use in electioneering communications need be disclosed. As donors rarely, if ever, earmarked their contributions in this way, there was essentially no disclosure.

Key to the court's ruling was that all sides agreed that Congress had intended the word "person" to include corporations, both for-profit and nonprofit, and unions, even though McCain-Feingold had also banned corporations from making certain electioneering communications. The latter ban was overturned by the Supreme Court's 2007 ruling in FEC v. Wisconsin Right to Life, which led to the FEC rule that has now been found unacceptable.

But in that same case, the Supreme Court did not invalidate the McCain-Feingold provisions that rely on the word "person" to denote the individual or group spending the money. The FEC followed suit by then reinterpreting its disclosure rule to apply to corporations and unions. And that opened the door to Judge Jackson's ruling that significant donations by corporations that fund electioneering communications cannot be kept secret.

The concept of corporate personhood has come under increasing scrutiny since the Supreme Court relied on it in ruling in Citizens United v. FEC that corporations and unions could spend freely in elections so long as they kept their spending independent of political parties and candidates. The issue became a rallying cry for Occupy Wall Street and has provided the tinder for a number of proposed constitutional amendments to end corporate personhood rights.

As explained by HuffPost's Mike Sacks and Ryan Grim, corporate personhood has its roots in the Gilded Age fear of a Paris Commune-style uprising. One of those terrified by the Paris Commune threat was Supreme Court Justice Stephen Field, who also had holdings in railroads and other industries. Field used his position to slowly and purposefully re-interpret the 14th Amendment protection of individual persons' rights to apply to corporate entities.

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