Supreme Court Throws Out Ban On Corporate Funding Of TV And Radio Spots

5-4 decision potentially frees up more money for broadcast and cable political spots

By John Eggerton -- Broadcasting & Cable, 1/21/2010 11:15:44 AM

In a close 5-4 decision that included a host of partial dissents and concurrences, the Supreme Court has thrown out the prohibition on corporate use of treasury funds for political speech, taking a big bite out of campaign finance reform law. "No sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations," said the court in an opinion authored by Justice Anthony Kennedy and joined in part by Chief Justice John Roberts and Justices Antonin Scalia, Samuel Alito and Clarence Thomas.

The Bipartisan Campaign Finance Reform Act of 2002 prevented corporations and unions from using treasury funds to pay for broadcast, cable or satellite-delivered "electioneering communications" within 30 days of a federal election. And law going back over 50 years had prohibited those same treasury funds from being used for express advocacy spots that advocated the election or defeat of specific candidates.

But the court majority held Thursday (Jan. 21) that those prohibitions were a ban on speech.

That money had to come from PACs.  Although the First Amendment provides that "Congress shall make no law . . . abridging the freedom of speech," said the court, "prohibition on corporate independent expenditures is an outright ban on speech, backed by criminal sanctions.

And the fact that PAC money could be used to pay for the broadcast and cable ads did not protect the prohibition.

"It is a ban notwithstanding the fact that a PAC created by a corporation can still speak, for a PAC is a separate association from the corporation," wrote the court. "Because speech is an essential mechanism of democracy-it is the means to hold officials ac-countable to the people-political speech must prevail against laws that would suppress it by design or inadvertence."

Somewhat ironically, the court actually ruled against Citizens United, which brought the appeal, on the narrower issue of whether broadcast and cable spots it wanted to run promoting a documentary of then candidate Hillary Clinton were subject to discloser requirements under BCRA. The court held that they were, but said it could not stop there and needed to rule on the constitutionality of the ban on corporate and union treasury funding.

"Viewed from a First Amendment perspective, McCain-Feingold was perhaps the worst legislation ever enacted and subsequently upheld as constitutional by the Supreme Court," said Media Institute President Patrick Maines. "It is welcome news for those who believe in free speech that the court agrees that there is no justification for imposing limits on political speech." 

The institute is a Washington-based, media-backed First Amendment think tank.

Paul S. Ryan, FEC program director and associate legal counsel for the Campaign Legal Center, slammed the decision. "Today the Supreme Court majority declared that corporate speech trumps the rights of American voters to government free of corporate corruption. The courts opinion is the most radical in the Supreme Court's history in the area of campaign finance law. The Roberts court has abandoned all judicial restraint and respect for precedent by overturning more than 50 years of settled law.

Ryan said the court showed its "true activist colors" by expanding the case to law not challenged by either side in the case and overturning the court's own 1992 decision upholding the campaign finance law.