“The Court’s ruling threatens to undermine the integrity of elected institutions across the Nation. The path it has taken to reach its outcome will, I fear, do damage to this institution.”
-Supreme Court Justice John Paul Stevens in his dissenting opinion on Citizens United v. Federal Election Commission (“Citizens United”)
“If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.”
-Supreme Court Justice Anthony Kennedy in his majority opinion on Citizens United v. Federal Election Commission (“Citizens United”)
“Money isn’t speech and corporations aren’t people”
-David Kairys (Kairys)
A Monumental Decision
On March 24, 2009, the United States Supreme Court made one of its most influential and controversial decisions ever. In this case, titled Citizens United v. Federal Election Commission, the Supreme Court ruled in a 5-4 split decision that political donations by corporations were a form of free speech, and could not be restricted by the government.
What Was The Precedent?
When deliberating a court opinion, it is essential to explore the cases that are related and have set a precedent for the issue. In 1990, the Supreme Court heard Austin v. Michigan Chamber of Commerce. The case ruled that restricting corporations from using their treasury funds to support a candidate did not violate the First Amendment. The court held that, “Although [Michigan Chamber of Commerce’s] requirements burden the Chamber’s exercise of political expression…they are justified by a compelling state interest: preventing corruption or the appearance of corruption in the political arena by reducing the threat that huge corporate treasuries, which are amassed with the aid of favorable state laws and have little or no correlation to the public’s support for the corporation’s political ideas, will be used to influence unfairly election outcomes.” (“Austin”) The court ruled that they upheld this law because it was “narrowly tailored,” and served a “compelling state interest.” (“Austin”)
The next major development related to this issue was Bipartisan Campaign Reform Act of 2002, which was sponsored by John McCain and Russ Feingold. According to the Bipartisan Campaign Reform Act of 2002, corporations were prevented from financing anything that named a candidate within 30 days of a primary or 60 days of a general election. (“Campaign”) This law was brought before the Supreme Court in 2003 in a case titled, McConnell v. Federal Election Commission. The Supreme Court ruled in a 5-4 split decision that the law was constitutional. This was strongly contested by those in the dissenting opinion, with Justice Clarence Thomas writing, “The First Amendment provides that “Congress shall make no law … abridging the freedom of speech.” Nevertheless, the Court today upholds what can only be described as the most significant abridgment of the freedoms of speech and association since the Civil War.” (“McConnell”)
Where Did It All Start?
After seeing the political impact that Michael Moore’s Fahrenheit 9/11 had in 2004, Citizens United tried to argue that the film was illegal to show because of how critical it was towards George W. Bush. When the courts ruled that Fahrenheit 9/11 wasn’t breaking any laws, Citizens United appropriated much of its budget to produce documentaries that promoted specific political ideals.
The Citizens United v. Federal Election Commission case originated when Citizens United, a conservative non-profit, tried to air a documentary about Hilary Clinton during the Democratic primaries. The Federal Election Commission soon ruled that the movie, and any commercials for it, violated the rules set up in the Bipartisan Campaign Reform Act of 2002. The case was first heard in the United States District Court of the District of Columbia. Although Citizens United tried to argue that the documentary was fact based, the judge in the District of Columbia District Court ruled that it had one sole purpose, to discredit a candidate. (“District of Columbia”) According to the lower court’s decision, “The Movie is susceptible of no other interpretation than to inform the electorate that Senator Clinton is unfit for office, that the United States would be a dangerous place in a President Hillary Clinton world, and that viewers should vote against her.” (“District of Columbia”) Under the current laws and precedent, it was ruled that the movie, and its television advertisements, were illegal.
On To The Supreme Court-First Oral Arguments
The case was first argued on March 24, 2009. The initial oral arguments turned out to be extremely important. Theodore Olsen argued for Citizens United, and Malcolm Stewart, the Deputy Solicitor General, argued on behalf of the Federal Election Commission. Mr. Olsen went first, laying out a number of relevant, but unconvincing points. Part of his argument was that a 90-minute film, that a consumer chooses to watch, was different from a short commercial, and that the film should be exempted from the restrictions. The judges quickly shot this down. (“Oral Arguments”) His lack of organization in conveying his argument wouldn’t matter though, because Malcolm Stewart essentially lost the case when it was his turn to take questions from the justices. Mr. Stewart, when asked about the extent to which this law should be applied, stated that the law should be seen as black and white and should be applied to additional media as well. Justice Alito responded, “That’s pretty incredible. You think that if — if a book was published, a campaign biography that was the functional equivalent of express advocacy, that could be banned?” (“Oral Arguments”) The justices continued to press on this issue for a long time. (See Exhibit 1) By the time this was over, it was clear that the judges were becoming increasingly skeptical about the current laws. On June 29, 2009, the Supreme Court told the parties that they would reargue the case on September 9, 2009, in the context of whether Austin v. Michigan Chamber of Commerce and/or McConnell v. Federal Election Commission would have to be overturned.
A Monumental Decision
When rearguing the case, the Federal Election Commission was represented by future Supreme Court Justice, Elena Kagan. Although she argued better than her predecessor, the court was clearly leaning towards overturning “Austin.”
The court took until January 21, 2010 to make their decision. In the end, they ruled that, “Although the First Amendment provides that “Congress shall make no law . . . abridging the freedom of speech,” [McConnell v. Federal Election Commission]’s prohibition on corporate independent expenditures is an outright ban on speech, backed by criminal sanctions.” (“Citizens”) Therefore, the Court ruled that the law was unconstitutional, and should be repealed. In their decision, the majority also addressed the corruption that concerned the dissenting Justices. They said that, “this Court now concludes that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption. That speakers may have influence over or access to elected officials does not mean that those officials are corrupt. And the appearance of influence or access will not cause the electorate to lose faith in this democracy.” (“Citizens”)
An important consenting opinion came from Chief Justice John Roberts. He addressed the issue of judicial restraint in his consenting opinion because of the implications of the Court overturning a decision that was made only 20 years prior. He said that if we always ruled with stare decisis, then “segregation would be legal, minimum wage laws would be unconstitutional, and the Government could wiretap ordinary criminal suspects without first obtaining warrants” (“Citizens”)
Justice John Paul Stevens wrote the dissenting opinion. In it, he claimed that large contributors have gained preferential treatment, and Americans would lose faith in democracy because of this law. He also argued that the distortion to public debate that would come with unlimited contributions from corporations would hurt free speech, push others out of prime broadcasting spots, and dominate the “marketplace of ideas.” (“Citizens”)
What Was The Reaction?
The United States, like the Supreme Court justices, were divided in their support for this ruling. According to an ABC/Washington Post poll, “Eight in 10 poll respondents say they oppose the high court’s Jan. 21 decision to allow unfettered corporate political spending, with 65 percent “strongly” opposed.” (See Exhibit 2) (“ABC”) After the ruling, President Obama said that it, “gives the special interests and their lobbyists even more power in Washington – while undermining the influence of average Americans who make small contributions to support their preferred candidates.” (“CNN”) There were also people who praised the ruling for various reasons. An article in the Wall Street Journal criticized President Obama by saying, “The landmark decision—which overturned two Supreme Court precedents—has already sent the censoring political class into orbit. President Obama was especially un-Presidential yesterday, putting on his new populist facade to call it “a major victory for big oil, Wall Street banks, health insurance companies” and other “special interests”… The reality is that free speech is no one’s special interest.” (“WSJ”) According to Nate Persily, the director of the Center for Law and Politics at Columbia Law School, the court had been moving towards this decision for some time. He said, “Most critics of the decision will suggest that the Court, with this decision, opened the floodgates to unlimited corporate and union spending in next year’s and subsequent federal elections. The truth is that this decision is the latest in a series of decisions (four, to be exact) from the Roberts Court knocking down campaign finance laws. The floodgates, such as they are, were opened three years ago in a different case, Wisconsin Right to Life v. FEC.” (Persily)
What’s The [Moral] Dilemma?
When a decision splits the Supreme Court, politicians, and citizens in the way that Citizens United v. Federal Election Commission has, there are almost always underlying moral dilemmas that should be addressed. I think that there are two theories that are important to this case. First, I want to look at the theory of utilitarianism from the Supreme Court Justice’s point of view during the trial. Although the Justices have a set of rules that they must follow, they also have some flexibility to interpret those rules in a way that is most beneficial to this country. Next, I will look at stakeholder theory from the perspective of two philosophers. I will explore how both Milton Friedman and Edward Freeman would react to campaign contributions by corporations, and if it is beneficial for the company and it’s stakeholders to do this.
Utilitarianism states that one should always pick the course of action that maximizes the amount of utility, or “net happiness,” that one will gain from that choice. Utilitarianism looks at the net amount of utility gained, or lost, from all courses of action. The resulting amount of utility that an action provides is its net utility minus the net utility of the next best course of action. In this Supreme Court ruling, like all other decisions, there are many of factors that need to be taken into account. The judges must recognize that they have boundaries, some of which are strict and some of which are not strict, which were set up by its predecessors. A majority of these judges ultimately decided that it was not in the public’s best interest to push against those boundaries, in this case the First Amendment, and restrict campaign contributions. This, like most policy decisions, was a judgment call based on inexact information and assumptions. Having said that, I think it would be in the public’s best interest to wait for more information on the matter to be found.
There is another equally interesting moral dilemma that results from this ruling. Now that the ruling has been made, do these corporations actually take advantage of the rule changes? According to Milton Friedman, “The social responsibility of business is to increase its profits.” This ruling gives business another vehicle in which to increase those profits. It is up to each individual firm to figure out if they should use company funds to do this though. There are a couple of important questions to ask about this. Would the money result in a higher return on investment somewhere else? Would our competitors donate to the same cause? Would the public record of us donating result in negative public perception and decrease profits? The questions become even more complicated when in the context of Edward Freeman’s Stakeholder Theory. Freeman argues that the responsibility of business is to increase the utility of all of the company’s stakeholders. These include players such as suppliers, customers, and the local community. When taking all of these people into account, I think that companies would realize that each dollar that they invest would increase the utility of only a small number of stakeholders. Because of this, I believe that it is not in a company’s best interest to use money for political speech expect for rare circumstances. Although I disagree with the ruling, the Supreme Court clearly felt stronger about upholding the constitution than it did making a judgment call on what decision was best for the public’s best interests.
Exhibit 1- Selected Text From The First Oral Arguments
MR. STEWART: I think the — the Constitution would have permitted Congress to apply the electioneering communication restrictions to the extent that they were otherwise constitutional under Wisconsin Right to Life. Those could have been applied to additional media as well. And it’s worth remembering that the preexisting Federal Election Campaign Act restrictions on corporate electioneering which have been limited by this Court’s decisions to express advocacy.
JUSTICE ALITO: That’s pretty incredible. You think that if — if a book was published, a campaign biography that was the functional equivalent of express advocacy, that could be banned?
MR. STEWART: I’m not saying it could be banned. I’m saying that Congress could prohibit the use of corporate treasury funds and could require a corporation to publish it using its —
JUSTICE ALITO: Well, most publishers are corporations. And a publisher that is a corporation could be prohibited from selling a book?
MR. STEWART: Well, of course the statute contains its own media exemption or media —
JUSTICE ALITO: I’m not asking what the statute says. The government’s position is that the First Amendment allows the banning of a book if it’s published by a corporation?
MR. STEWART: Because the First Amendment refers both to freedom of speech and of the press, there would be a potential argument that media corporations, the institutional press, would have a greater First Amendment right. That question is obviously not presented here. But the other two things —
JUSTICE KENNEDY: Well, suppose it were an advocacy organization that had a book. Your position is that under the Constitution, the advertising for this book or the sale for the book itself could be prohibited within the 60 — 90-day period — the 60 — the 30-day period?
MR. STEWART: If the book contained the functional equivalent of express advocacy. That is, if it was subject to no reasonable interpretation —
JUSTICE KENNEDY: And I suppose it could even, is it the Kindle where you can read a book? I take it that’s from a satellite. So the existing statute would probably prohibit that under your view?
MR. STEWART: Well, the statute applies to cable, satellite, and broadcast communications. And the Court in McConnell has addressed the —
JUSTICE KENNEDY: Just to make it clear, it’s the government’s position that under the statute, if this kindle device where you can read a book which is campaign advocacy, within the 60-30 day period, if it comes from a satellite, it’s under — it can be prohibited under the Constitution and perhaps under this statute?
MR. STEWART: It — it can’t be prohibited, but a corporation could be barred from using its general treasury funds to publish the book and could be required to use — to raise funds to publish the book using its PAC.
CHIEF JUSTICE ROBERTS: If it has one name, one use of the candidate’s name, it would be covered, correct?
MR. STEWART: That’s correct.
CHIEF JUSTICE ROBERTS: It’s a 500-page book, and at the end it says, and so vote for X, the government could ban that?
MR. STEWART: Well, if it says vote for X, it would be express advocacy and it would be covered by the pre-existing Federal Election Campaign Act provision.
Exhibit 2-ABC News/Washing Post “Citizens United” Poll
This ABC News/Washington Post poll was conducted by telephone February 4-8, 2010, among a random national sample of 1,004 adults (landline and cell-only respondents). The results from the full survey have a 3.5-point error margin.
Sampling, data collection and tabulation by TNS of Horsham, PA.
*= less than 0.5 percent
1-33 previously released.
34. Changing topics, do you support or oppose the recent ruling by the Supreme Court that says corporations and unions can spend as much money as they want to help political candidates win elections? Do you feel that way strongly or somewhat?
35. Would you support or oppose an effort by Congress to reinstate limits on corporate and union spending on election campaigns? Do you feel that way strongly or somewhat?
- Kairys, David. The Slate Group. Money Isn’t Speech and Corporations aren’t People. 1/22/2010. Viewed on 4/1/2012. http://www.slate.com/articles/news_and_politics/jurisprudence/2010/01/money_isnt_speech_and_corporations_arent_people.html
- Citizens United v. Federal Election Commission. Supreme Court. 21 Jan. 2010. Supremecourt.gov. Web. http://www.supremecourt.gov/opinions/09pdf/08-205.pdf.
- Campaign Finance Law Quick Reference for Reporters. Fec.gov. http://www.fec.gov/press/bkgnd/bcra_overview.shtml
- Citizens United v. Federal Election Commission. United States District Court for the District of Columbia. https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2007cv2240-39
- McConnell v. Federal Election Commission. Supreme Court. December 10, 2003. Law.Cornell.edu. http://www.law.cornell.edu/supct/html/02-1674.ZX1.html
- Austin v. Michigan Chamber of Commerce. Supreme Court. Findlaw.com. March 27, 1990. http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=us&vol=494&invol=652
- Citizens United v. Federal Election Commission Oral Arguments. March 24, 2010. Supremecourt.gov. http://www.supremecourt.gov/oral_arguments/argument_transcripts/08-205.pdf
- ABC Opinion Poll. In Supreme Court Ruling on Campaign Finance, the Public Dissents. 2/17/10. Viewed on 4/2/10. http://abcnews.go.com/blogs/politics/2010/02/in-supreme-court-ruling-on-campaign-finance-the-public-dissents/
- CNN. Obama criticizes campaign finance ruling. 1/21/10. Viewed 4/2/12. http://politicalticker.blogs.cnn.com/2010/01/21/obama-criticizes-campaign-finance-ruling/
- Wall Street Journal. A Free Speech Landmark. 1/22/10. Viewed 4/2/12. http://online.wsj.com/article/SB10001424052748703699204575016843479815072.html
- Persily, Nate. TheTakeAway.com. Implications of the Supreme Court’s Decision in Citizen’s United. 1/21/10. Viewed 4/2/12. http://www.thetakeaway.org/blogs/takeaway/2010/jan/21/implications-supreme-courts-decision-citizens-united/
- Freeman, Edward. Stakeholder Theory of the Modern Corporation.
- Friedman, Milton. The Social Responsibility of Business is to Increase its Profits.