Yesterday, the Supreme Court struck down its own precedent in order to overturn campaign finance laws prohibiting corporations and unions from making “independent expenditures” relating to political campaigns within the weeks leading up to an election. The opinion is certainly significant. For those of us of a more libertarian mindset, it is a huge blow for free speech. For those of a liberal mindset, it is a huge blow for corporate influence over our electoral process.
Needless to say, I find the majority opinion written by Justice Kennedy persuasive. Surprisingly to me, I found Justice Stevens’ dissent unusually weak and full of obvious holes, at least outside of his arguments for stare decisis. There are a couple of key issues in the case that are particularly worth discussing and that will also, hopefully, alleviate the fears that somehow this decision will mean more corporate dominance of our political process.
At the outset, let us be very clear – the existence of a free speech issue here is very clear. The laws prohibited virtually any kind of advocacy for a candidate by a corporation or union in the days and weeks leading up to an election. Corporations and unions are nothing if they are not associations of actual, real persons. Moreover, included in the concept of a “corporation” for these purposes are non-profit corporations that expressly exist as political advocacy groups. However, certain corporations are expressly excluded from the law, to wit: media corporations.
The majority argues, correctly in my view, that the distinction between media corporations and other corporations is arbitrary, and that indeed, this distinction proves that corporations in general cannot have meaningfully diminished First Amendment rights. Professor Volokh beautifully and succinctly explains this argument here. So, either corporations have something approaching full First Amendment rights, or the government has the authority to severely restrict the First Amendment rights of media corporations.
This brings me to the first example of why Citizens United decreases, rather than increases, the relative influence of large corporations over our elections. This time I’ll point to Professor Volokh’s brief follow-up post, and especially his point 2. Specifically, the result of the decision is that the longstanding monopoly of media corporations on the ability to widely disseminate editorial opinions on elections is at an end. Except for the fact that we may find ourselves annoyed by the even-higher presence of campaign ads on our TV come election season, this is an altogether good thing for democracy.
The second, and to my mind more important, result of this decision will be to make it easier for smaller businesses and non-profits to have a voice in the system. In his dissent, Justice Stevens goes to great lengths to explain how the ban on pre-election political ads by corporations isn’t really a ban because corporations and unions can just act via a Political Action Committee (PAC). He acknowledges that acting through a PAC is a burden on corporate speech, but claims that it is a burden that can easily borne by a sophisticated modern corporation (whether for-profit or non-profit). Ok, fair enough. The trouble is that he assumes that all corporations are sufficiently sophisticated and large to be able to set up a PAC, with all of the attendant regulatory and reporting requirements that entails. Not so. Indeed, as the majority points out, there are millions of corporations in the United States, but less than 2000 corporate PACs. It doesn’t take a rocket scientist to figure out the types of corporations represented by those PACs, nor does it take a genius to figure out the types of corporations that are not represented by those PACs.
In short, the existing system’s response to free speech concerns (PACs) acts only to ensure that large corporations are already able to have near-unfettered participation in the electoral process, as long as they first overcome some regulatory hurdles that are relatively minor for them but are significant for smaller, less sophisticated enterprises. Smaller corporations are effectively shut out of the system, thereby reinforcing the oligopoly of influence over elections and influence markets enjoyed by their larger, more sophisticated brethren. This changes that. Yes, it removes the bar on direct participation that large corporations had to skirt via PACs, but this was hardly an effective or meaningful bar for those corporations in the first place. In return, smaller corporations (again, including smaller advocacy organizations) have an opportunity to participate in the process on at least some level, reducing the comparative voice of the larger participants (though perhaps only marginally).
My expectation is that although this decision will certainly increase the voice of “corporations” writ large in our elections, it will do so by causing an increase in the number of corporate voices (again, remembering that this includes non-profit advocacy corporations) involved in the process beyond the usual suspects, and thus decreasing the relative voice of any one corporation or group of corporations.
ADDENDUM: Cf., Matt Welch:
When a law requires any group of two or more people who raise $5,000 for the purposes of making a political statement to adhere to a blizzard of federal regulations subject to fines, that law by definition chokes off the “voices of everyday Americans” that President Barack Obama, in his ridiculous reaction to the decision yesterday, expressed outrage on behalf of. Free-speech campaign-finance enthusiasts are willing to censor or chill those small voices for the greater purpose of attempting (and largely failing) to blunt the political activity of hated Corporations (or “Wall Street banks, health insurance companies and the other powerful interests,” in the words of a president who has been bailing out Wall Street banks and crafting legislative deals with health insurance companies and other powerful interests for a year now).
ADDENDUM II: Ilya Somin goes into a good amount of depth to explain why the inequality argument for prohibiting corporate speech would simply exacerbate the relative effects of other existing, and arguably more severe, forms of inequality. In a nutshell, eliminating corporate speech magnifies the speech of famous athletes. Somin also addresses the argument that “corporations are not people” here.