Virginia Federal Court Rules That Corporations May Contribute to Campaigns Directly and the Dubious Logic of Buckley v. Valeo Exposed
[Guest post by Aaron Worthing; if you have tips, please send them here. Or by Twitter @AaronWorthing.]
From the AP:
A judge has ruled that the campaign-finance law banning corporations from making contributions to federal candidates is unconstitutional, citing the Supreme Court’s landmark Citizens United decision last year in his analysis.
In a ruling issued late Thursday, U.S. District Judge James Cacheris tossed out part of an indictment against two men accused of illegally reimbursing donors to Hillary Clinton’s Senate and presidential campaigns.
You see, since it is illegal for a corporation to give money to a political candidate, it is equally illegal to reimburse employees for such donations as they are seen as a method of funneling corporate money to a candidate. I mean if you pay $1,000 dollars to Barack Obama, and then reimburses your $1,000, the law views it as you just laundering that corporate cash into private cash.
Cacheris says that under the Citizens United decision, corporations enjoy the same rights as individuals to contribute to campaigns.
Well, actually that wasn’t necessarily what they said in Citizens United. It was a possible extension of the decision, but it was far from guaranteed.
The interesting thing about the decision (here) is how the court arrives at it. The Court did not rule that corporations had a right to give endless money to specific candidates. Instead the Court merely ruled that the corporations had to be treated the same as real human beings in that respect. You cannot completely prohibit a human from making any contributions to candidates, the judge reasoned, and therefore the complete ban on corporate contributions is unlawful. But the court heavily implied that if Congress wanted to put limitations on such donations (which, according to Eugene Volokh, is $2,500), then that would be Constitutional.
If upheld that means that there might be several months—maybe even years—where because there are no constitutional contribution limits on corporations, that the corporations will be allowed to give unlimited cash to presidential candidates. I suppose then that renders the limit on contributions by humans to be unconstitutional, because the effect of that would be to discriminate against real people in favor of corporations. So I suppose that until there are contribution limits applying to both humans and corporations equally, none of the limitations are constitutional.
And even if the Fourth Circuit reverses Judge Cacheris, the decision still might do damage in another way. If you look through the decision, you see a special word there, “willfully.” And you know I have talked about what that term means before: it generally means that you are acting with knowledge that certain conduct is illegal. Indeed Judge Cacheris has an extended discussion on when the apply that standard and when to apply a weaker or stronger standard.
So suppose you live in Michigan and you read this decision and you decide that Judge Cacheris is right. So then you start a program at your company where all political contributions are reimbursable regardless of who gets the money (and yes, that is not only possible, I have seen it) and the FBI comes and arrests everyone. Guess what? Even if the law in your circuit is crystal clear on the subject, you might still get out of trouble by saying that you believed that the law was defunct and thus you did not believe what you did was illegal and therefore did not willfully violate the statute. Thus the confusion that Judge Cacheris has sown might end up positively creating a defense to enforcing the law if it is upeld.
(Of course as usual this is not legal advice so much as a prediction of future events. You should seek out an attorney’s advice before you even think of trying that kind of scheme.)
But I don’t think this decision will be upheld. I think Professor Volokh is right to say that the distinction between a corporate “person” and a real person justifies a complete ban. After all, let us suppose that Congress passed a $2,500 limit on corporate donations. Now let us suppose a man wanted to give a candidate $100,000, well above that amount. So that person could then create 40 companies on paper only, and donate $2,500 per company in order to reach his goal. It is that ability to create sham companies that makes any attempt to merely limit corporate donations pointless, or so Volokh’s argument goes. And I frankly find that persuasive.
But in reading this, it made me think a little more deeply about the landmark campaign finance case of Buckley v. Valeo. In that case they said that limitations on contributions directly implicated first amendment freedoms. Such fundamental freedoms can only be limited by laws that are 1) narrowly tailored to serve 2) a compelling purpose. In Buckley, the Court found that the compelling purpose is “to limit the actuality and appearance of corruption resulting from large individual financial contributions[.]” Now let’s assume for the sake of argument that this purpose is compelling.
Well, okay, then is it narrowly tailored? I mean the premise of the argument is that when a contribution is sufficiently large that it starts to create, at the very least, the “appearance of corruption.” Fair enough, but how large does that have to be, to be large? In the 1970’s, Congress said that a $1,000 contribution was not large. How about $1,000.01? How about $5,000? How about $10,000? By upholding that contribution limit, wasn’t the Supreme Court implicitly arguing that Congress somehow magically hit exactly the right number, down to the penny?
And that is in 1976 money. According to the Bureau of Labor Statistics, $1,000 in 1976 has the same buying power as over $4,000 today. But as I just noted, today the limit is merely $2,500. So even if a $1,000 limit was narrowly tailored in 1976, surely a $2,500 limit is overly broad today, right?
The whole thing lays bare the absurdity of the courts believing that there is any way to properly delineate between the large and small contributions. We might agree that $20K is large and $1K is small, but how can we pretend that the Constitution tells us exactly where the line is dividing the two categories? And if we cannot agree on what constitutes a large or small donation, how can a law limiting the latter ever be considered narrowly tailored?
No, and bluntly, the Court was doing what it claimed it would never do in regard to freedom of expression: it was deferring to the determination of Congress.
[Posted and authored by Aaron Worthing.]
