Direct corporate campaign contributions to candidates is a bridge too far for U.S. Supreme Court

Posted by AzBlueMeanie:

A petition for certiorari that I have been following is Danielczyk v. United States (12-579):


GavelIssue:

(1) Whether the ban on campaign contributions by corporations in the
Federal Election Campaign Act, 2 U.S.C. §441b, violates the First
Amendment; and (2) whether restrictions or bans on the right to make
campaign contributions should be reviewed under strict scrutiny, as
other restrictions on political expression are, or instead under a less
protective standard.

The U.S. Supreme Court this morning denied certiorari, upholding the 4th Circuit Court of Appeals Decision.

Background:

Danielezyk and Biagi were indicted on seven counts for [an illegal campaign contribution reimbursement scheme]. Count four and paragraph 10(b) respectively charged the Appellees
with knowingly and willfully causing contributions of corporate money to a
candidate for federal office, aggregating $25,000 or more, in violation of §
441b(a)
and 2 U.S.C. § 437g(d)(1)(A)(i), and conspiring to do so. On April
6, 2011, Danielezyk and Biagi moved to dismiss count four, contending that §
441b(a)
is unconstitutional as applied to them in light of Citizens United.

* * *

Relying on Citizens United, the district court held that § 441b(a)'s ban
on direct corporate contributions as applied to Galen is unconstitutional
because it impermissibly treats corporations and individuals un-equally for
purposes of political speech. The district court rejected the Government's
contention [**3]that the differential treatment of corporations in the context of
direct contributions fulfills legitimate governmental interests, such as the
prevention of quid pro quo corruption. It concluded that the interest in
preventing quid pro quo corruption could be fulfilled by requiring
corporations to comply with the act's contribution limits for individual
donors.

Five days after it granted the motion to dismiss, the district court sua
sponte
ordered the parties to file briefs on whether, in light of Agostini
v. Felton, 521 U.S. 203, 117 S.Ct. 1997, 138 L.Ed.2d 391 (1997), and Federal
Election Commission v. Beaumont, 539 U.S. 146, 123 S.Ct. 2200,
156 L.Ed.2d 179 (2003), the court should reconsider its decision. In
Beaumont, the Supreme Court rejected an as-applied challenge to § 441b(a)'s
ban on direct corporate contributions
. 539 U.S. at 163, 123 S.Ct. 2200. The
Government argued that Beaumont directly controlled the case and must be
applied even if Citizens United may have eroded Beaumont's reasoning. This
is because the Agostini principle requires lower courts to apply Supreme
Court precedent that directly controls the case before it despite subsequent
Supreme Court case law that may have affected the precedent by implication.
521 U.S. at 237, 117 S.Ct. 1997.

After considering the briefs, the district court denied reconsideration of
its dismissal. . . The district court further
affirmed the rationale in its earlier ruling that § 441b(a) violated
Citizens United by treating corporations and individuals unequally.
Accordingly, it concluded that count four and paragraph 10(b) remained
dismissed.

The 4th Circuit Court of Appeals held "that § 441b(a) is not unconstitutional
as applied to the Appellees. Beaumont clearly supports the constitutionality
of § 441b(a) and Citizens United, a case that addresses corporate
independent expenditures, does not undermine Beaumont's reasoning on this
point. The district court erred when it granted the Appellees' motion to
dismiss."

In Beaumont, the Supreme Court addressed a First Amendment challenge to §
441b(a)
as it applied to nonprofit advocacy corporations. Federal Election
Commission v. Beaumont, 539 U.S. 146, 156, 123 S.Ct. 2200, 156 L.Ed.2d 179
(2003).

* * *

In a 7-2 decision, the Supreme Court reversed this Circuit's opinion.
539 U.S. at 163, 123 S.Ct. 2200. In doing so, the Supreme Court thoroughly
explained its longstanding jurisprudence upholding Congress's "original,
core prohibition on direct corporate contributions" and warned that this
jurisprudence "would discourage any broadside attack on corporate campaign
finance regulation of corporate contributions."
Id. at 153, 156,
123 S.Ct. 2200. It remarked that it had previously held that § 441b(a) had
"broad applicability" to both corporations and labor unions regardless of
their financial disposition and rejected NCRL's various arguments to limit
this applicability, including that the ban did not adequately consider the
variations between corporations with respect to affluence and diversity of
corporate form. Id. at 157, 123 S.Ct. 2200. It then recognized four
government interests that supported the ban on direct corporate
contributions:
anti-corruption, anti-distortion, dissenting-shareholder, and
anti-circumvention (preventing the evasion of valid individual contribution
limits). Id. at 153-55, 123 S.Ct. 2200. The Supreme Court rejected NCRL's
position that these government interests are implicated only by for-profit
corporations, reasoning that non-profits, just like for-profits, benefit
from state-created advantages, can amass political war chests, and are
susceptible to corruption and misuse as conduits for circumventing
individual contribution limits. Id. at 160, 123 S.Ct. 2200. Thus, in
addressing § 441b(a)'s applicability to a nonprofit advocacy corporation,
the Court based its conclusion on a century of law that has supported bans
on direct contributions
against for-profit corporations. Id. at 157,
123 S.Ct. 2200. Overall, Beaumont makes clear that § 441b(a)'s ban on direct
corporate contributions is constitutional as applied to all corporations
.

So the U.S. Supreme Court is fine with corporations secretly contributing unlimited amounts of money to political PACs and 501(c) organizations, Citizens United v. FEC, but direct corporate campaign contributions to candidates is a bridge too far for the Court. I would read this denial of cert as an affirmation that Beaumont makes clear that § 441b(a)'s ban on direct
corporate contributions is constitutional as applied to all corporations.

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