A Stunner from the Supreme Court

For six decades, big businesses and unions have been forbidden by federal law from contributing money to political campaigns. The law has prevented special interests from dominating our politics.

But perhaps no more.

The U.S. Supreme Court this morning undermined the federal ban on corporate and union contributions to political campaigns. It’s a 5-4 decision—with Justice Anthony Kennedy siding with the four conservative justices—that may fundamentally alter the way political campaigns are run in this country.

The federal government and many states have bans on corporate contributions to campaigns (Texas’ corporate prohibition is more than a century old). The laws prevent big companies like Wal-Mart or AT&T or Citigroup (or large unions like the AFL-CIO) from giving their own money to candidates. They also prevent corporations from airing ads that support or oppose specific candidates.

Instead, they have to form political action committees that raise funds from individuals. The company can’t donate its own money. So when AT&T gives money to a candidate, that cash must come from the AT&T PAC, which has raised it from hundreds of people.

That may seem like a distinction without a difference, but it’s not.

AT&T can write huge checks from its corporate account — much more money than could be raised from individuals. Moreover, the company can’t pay for sham “issue” ads that support or attack specific candidates. If the corporate prohibition is overturned in a state like Texas, a company like Wal-Mart or AT&T could spend many millions on ads in political races.

In other words, they could have enormous influence on elections.

In states like New York or New Jersey, big unions could similarly corrupt politics.

The Washington Post story about the ruling is here. Under the ruling, corporations still would be forbidden from contributing directly to candidates. But they could conceivably run unlimited amounts of corporate-funded advertising that supports or attacks candidates.

These are the so-called “issue” ads in which corporations attack candidates under the veil of informing the public. You’ve seen these ads before. They say things like, “Candidate X opposes school vouchers. He clearly hates children. Keep candidate X from harming your children.”

If corporations are allowed to air these advertisements, then the corporate prohibition has little value. Because special interests—even if they can’t contribute to candidates directly—could spend millions on advertising to affect the outcome of an election.

The court’s majority opinion today said the corporate ban violated free speech rights. That’s an old argument. I would argue that there’s a balance between allowing free speech and allowing special interests to flood elections with money.

Liberal justice John Paul Stevens wrote in his dissenting opinion that:

The court’s ruling threatens to undermine the integrity of elected institutions around the nation.”

Craig McDonald with the watchdog group Texans for Public Justice said in a statement:

This is a banner ruling for corporate special interests that dream of getting their hooks deeper into the body politic.  Unleashing corporations to fill the airwaves with political ads further dilutes the power of citizens in elections.

The question now is what does this ruling mean for Texas’ corporate ban. Some political junkies may remember the disputed 2002 election, when Tom DeLay allegedly used illegal corporate money to fund issue ads that helped win key Texas legislative races. That scheme helped elect the GOP majority that passed DeLay’s redistricting plan in 2003. (Read about the 2002 election here.)

I suspect you’ll see a lot more of that before too long.

And I fear today’s decision has ushered in a new era of corporate influence in politics. If you think special interests have power now, you ain’t seen nothing yet.