by Adam Winkler
Pipefitters included a curious phrasing of the dominant concern behind the ban: “to protect the dissenting shareholder or union member.” There were, however, no shareholders or corporations involved in the case, which dealt with a labor union. Nevertheless, the court suggested that corporations could form PACs too. Even without any effort whatsoever, corporations had gained new legal rights to influence democratic elections.
Unlike unions, however, corporations showed little interest in forming PACs prior to the Powell Memorandum of 1971. A handful of companies, mostly California-based aerospace firms looking for government contracts, formed “good government” or “civic action” committees, but the funds contributed remained small. Corporations tended to avoid partisan politics, fearing the taint of partisanship. Moreover, the uncertain legal basis for PACs dissuaded risk-averse corporate executives who feared being prosecuted.
In 1972, executives at Goodyear Tire & Rubber, Phillips Petroleum, and a dozen other corporations were not as risk-averse as most of their peers and simply broke the law banning corporate contributions in order to help President Richard Nixon’s reelection campaign. Revealed in the Watergate investigation, this illicit corporate giving was one of the inspirations for Congress to overhaul the campaign finance system in 1974 and 1976. The Federal Election Campaign Act amendments of those years imposed strict new limits on money in politics. At the heart of the reforms were limits on contributions to candidates and limits on expenditures by candidates. Although supporters expected the law to minimize the pressure to raise money, it was never very effective. Part of the blame, as we have seen, can be ascribed to the Supreme Court, which in Buckley v. Valeo (1976) upheld the limits on contributions but struck down those on expenditures. The result, ironically, was that candidates had to spend even more time raising ever more money, as the contributions they could accept were capped but expenditures were unlimited. Labor unions also shared the blame for the law’s ultimate ineffectiveness in limiting money in politics. Due to a strong push by organized labor, Congress inserted into the amendments clear rules explicitly allowing PACs.15
Unions wanted the PAC rules but corporations exploited the legal reforms with remarkable effectiveness. Once PACs were given the imprimatur of Congress and the clarity of federal legislation, the number of corporate PACs surged. By 2002, when Congress enacted the Bipartisan Campaign Reform Act and adopted new limits on corporate and union money in elections, there were over 1,670 PACs affiliated with corporations, compared to just over 325 affiliated with labor unions. The union effort to avoid the contribution ban served ultimately to legitimate, for the first time, corporate spending to influence the election of candidates.16
* * *
ALTHOUGH THE BIPARTISAN CAMPAIGN Reform Act allowed a corporation to fund election ads if the money were raised through a PAC, Hillary: The Movie had been partially financed with ordinary, general treasury funds from business. David Bossie, certain that the FEC would crack down on his documentary, began interviewing lawyers. He met with some of the leading attorneys in Washington, but Bossie recalled that “nobody showed a passion.” “When you’re dealing with a cause-oriented outcome, you want whoever you hire to be passionate about it,” Bossie explained. You want a lawyer who will “go hammer and tong for us, who is going to fight every step, every half step.”
Ted Olson did not appear to be that lawyer.17 “I don’t think he took me seriously,” recalled Bossie after their meeting. One reason Olson might have been skeptical is that the Supreme Court had consistently upheld laws prohibiting corporations from using general treasury funds to influence candidate races. Although the court had accorded corporations free speech rights to spend in ballot measure campaigns in First National Bank of Boston v. Bellotti and had permitted corporations to form PACs like unions, the justices had drawn the line at attempts to influence candidate elections with general treasury funds. The two most important rulings were Austin v. Michigan Chamber of Commerce, decided in 1990, and McConnell v. Federal Election Commission, decided in 2003.
The Austin case involved the same law first challenged by the Lansing Brewing Company during the debates over Prohibition, Michigan’s ban on corporate money in political campaigns. Although the beer maker had lost that early challenge, the Michigan branch of the Chamber of Commerce decided to try again seventy years later, following the advice of the Powell Memorandum to become more assertive in defending its rights. The Supreme Court, however, upheld Michigan’s law, pointing to the “unique legal and economic characteristics” of the corporate entity: “special advantages—such as limited liability, perpetual life, and favorable treatment of the accumulation and distribution of assets.” These benefits were designed to enable corporations to raise capital, yet they also enabled corporations to use “resources amassed in the economic marketplace to obtain an unfair advantage in the political marketplace.” Because of their special advantages in raising capital and their diverse group of stockholders, corporations had more limited rights to spend money on electoral politics than ordinary people.18
Austin was difficult, if not impossible, to square with Justice Powell’s opinion in Bellotti. Although the two decisions could be distinguished superficially—with Bellotti applying to ballot measure campaigns and Austin to candidate races—the two decisions were otherwise at loggerheads. Powell had insisted the identity of the speaker was irrelevant; the court in Austin relied explicitly on the distinctive characteristics of the corporate speaker. Powell had suggested that dissenting shareholders were irrelevant; Austin declared that fact essential. Powell had written that corporations contribute meaningfully to public debate; Austin said they distort democratic deliberation. Yet Austin did not purport to overturn Bellotti, so both precedents remained on the books, their seeming tension papered over by the flimsy distinction between ballot measure campaigns and candidate races.
The second case, McConnell, took its name from Kentucky senator Mitch McConnell, who led a sweeping legal challenge to the Bipartisan Campaign Reform Act in 2003, just after the law was signed. A divided Supreme Court upheld most of the law, including the restrictions on corporate financing of electioneering communications. The court’s opinion was jointly authored by Justice John Paul Stevens, a Gerald Ford appointee who had voted with Powell in Bellotti but had become steadily more liberal over his tenure, and Justice Sandra Day O’Connor, who was chosen by Ronald Reagan to be the first woman on the Supreme Court. Stevens and O’Connor pointed to the long history of special restrictions on corporations in campaign finance, dating back to the Great Wall Street Scandal of 1905 and “President Theodore Roosevelt’s call for legislation forbidding all contributions by corporations.” Relying heavily on Austin, the McConnell majority explained, “We have repeatedly sustained legislation aimed at ‘the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public’s support for the corporation’s political ideas.’ ”19
Even though McConnell had been decided only four years prior to Citizens United’s movie, Jim Bopp was more than willing to take the case. Bopp subscribed to a libertarian theory of campaign finance law that was growing increasingly popular in conservative circles at the turn of the twenty-first century. The libertarian theory held that government regulation of money in politics distorted the free operation of the marketplace of ideas and therefore violated the First Amendment. This view of campaign finance law was first deployed in campaign finance cases in the 1970s by liberals, namely the American Civil Liberties Union, which led the challenge to the Watergate era reforms in Buckley v. Valeo. The libertarian theory of campaign finance law was nonetheless attractive to conservatives who opposed government regulation generally—and to those who thought the Republican Party would be the primary beneficiary of fewer restrictions. Bopp, who had become one of the leading proponents of the libertarian theory in the Supreme Court, rarely passed on an opportunity to challenge a campaign
finance law.
Moreover, Bopp thought that the relevant circumstances had changed drastically since 2003—that is, the personnel on the court had changed drastically. In 2005, O’Connor retired and Chief Justice William Rehnquist, the longtime critic of corporate rights who dissented in Bellotti, passed away. President Bush replaced them with Sam Alito and John Roberts, respectively. Although the two new justices’ views on restrictions on corporate money in politics were unclear, Bopp was sure that both would share his libertarian view that campaign finance law had gone too far and needed to be reined in.
Even before the Citizens United case, Bopp had already won a telling victory in the Roberts court in another campaign finance case dealing with the Bipartisan Campaign Reform Act’s restrictions on corporate spending. In June of 2007, as the Citizens United organization was completing its documentary about Clinton, Bopp represented an antiabortion group in Federal Election Commission v. Wisconsin Right to Life. In that case, Bopp argued that, under the First Amendment, the FEC could only enforce the law against corporate-financed ads that unambiguously endorsed or opposed a candidate; merely mentioning a candidate by name was not enough. The Supreme Court, in a 5–4 opinion written by Chief Justice Roberts and joined by Justice Alito, agreed. Without calling into question the constitutionality of the basic provisions of the Bipartisan Campaign Reform Act restricting corporate money, the justices nonetheless opened up a significant loophole in the law. Now corporations could finance ads that featured candidates if the ads could be plausibly said to be about issues. So long as the ad did not expressly advocate for or against particular candidates, it would not be deemed an “electioneering communication” subject to the legal limits on corporate cash.20
CITIZENS UNITED’S ORIGINAL ATTORNEY, JIM BOPP, FOUGHT TO SCALE BACK CAMPAIGN FINANCE LAW, INCLUDING RESTRICTIONS ON CORPORATE POLITICAL SPENDING.
The advocacy group Citizens United, however, did not benefit immediately from the court’s new approach to the Bipartisan Campaign Reform Act. A few months after the court’s decision in Wisconsin Right to Life, the FEC determined that Hillary: The Movie was an “electioneering communication.” The film, the FEC said, “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.” The movie, the FEC ruled, was not about issues. As the film’s title suggested, it was about a candidate.21
* * *
JIM BOPP HAD HIS own ideas about how the law should work and was not one to back down easily. It was that character trait that had led to the rivalry with Ted Olson over who deserved credit for Bush v. Gore. The disputed presidential election of 2000, which pitted George W. Bush against Al Gore, turned on the vote count in Florida. Although Florida election officials declared Bush the winner by a narrow margin of less than 2,000 votes—giving the Republican a majority in the Electoral College—Gore challenged the results. The Florida Supreme Court ruled largely in Gore’s favor, and ordered a statewide recount. The Florida court, however, did not set out clear standards for how to determine whether a questionable vote, such as one with a hanging chad, should count. Each county was to make its own determinations.
Bopp, like many politically active lawyers, sought to lend his services to the cause of his preferred candidate—in this case, Bush. After discussing with his small team of lawyers in Indiana potential ways to challenge the Florida court’s ruling, Bopp hit upon an innovative legal theory: the Florida recount violated the Fourteenth Amendment’s guarantee of equal protection of the laws. This was the same provision Roscoe Conkling and the Southern Pacific Railroad had invoked back in the Gilded Age in seeking to immunize corporations from discriminatory taxation. Bopp’s argument was that the recount violated equal protection because of the lack of uniform, statewide standards. A voter whose ballot had two hanging chads might have her vote counted in one county, but another voter with the same ballot might have her vote rejected in a different county. When Bopp first suggested this argument to Bush’s lawyers, however, they dismissed it out of hand. Bush’s team was skeptical of the equal protection argument, perhaps because the courts had never before required strict equality for how different counties tabulate votes. Some counties might use one type of voting machine that has a higher error rate than the machines used in another county, and yet no court had ever called into question such disparities, which were commonplace. Bopp was told that “under no circumstances” would his equal protection theory be the basis of Bush’s lawsuit.22
Instead of equal protection, Ted Olson focused on another provision of the Constitution, Article II, which required that presidential electors be appointed “in such Manner as the Legislature” of a state directed. This provision was violated, Olson claimed, because the Florida Supreme Court, not the state’s legislature, had ordered and managed the recount. Bopp was rebuffed but not deterred. Certain that the Bush legal team was making “tactical and strategic errors,” Bopp pursued his own independent challenge to the Florida recount on behalf of a group of Florida voters. Days before Olson’s argument in the Supreme Court, a federal court of appeals endorsed Bopp’s equal protection argument and issued the first injunction against the recount. That last-minute victory for Bopp was hard for Olson, who favored the Article II theory, to ignore, and Olson included a short discussion of Bopp’s equal protection theory in the final pages of his brief to the Supreme Court, almost as a throwaway. During the hearing at the Supreme Court, Olson emphasized the Article II theory and did not even mention equal protection at all in his main argument, addressing it only on rebuttal.23
The Supreme Court, of course, ruled in Bush’s favor, putting a halt to the Florida recount. A majority of justices, seven of the nine, held the recount violated the Constitution’s equal protection clause because each county used its own, potentially divergent, standards to count votes. Only three justices adopted Olson’s Article II theory. If Bopp had not stubbornly pursued his own lawsuit to stop the Florida recount, the Supreme Court might not have had the winning equal protection argument even presented to it. Nonetheless, Olson was the one praised in the press as Bush’s savior and appointed by the new president to be solicitor general.24
It was in Olson’s role as solicitor general that he first became involved with the Bipartisan Campaign Reform Act’s corporate spending restrictions. As the federal government’s main advocate before the Supreme Court, Olson was responsible for defending laws passed by Congress. So when Senator McConnell challenged the Bipartisan Campaign Reform Act in 2003, Olson successfully argued that the law was constitutional. Although Olson could not have known it then, he would eventually find himself back in the Supreme Court arguing to overturn the very same provisions of the law—arguing, in essence, against himself—in the Citizens United case.
* * *
JIM BOPP SAID THAT THE Citizens United lawsuit was inspired by another landmark Supreme Court case that changed America, Brown v. Board of Education. “The strategy that was used to overturn ‘separate but equal’ was not to challenge [it] directly,” Bopp explained, “but to demonstrate that it was not workable by raising extreme applications of it.” Thurgood Marshall and the NAACP exposed the fallacy of segregation by bringing cases challenging egregiously unequal facilities. In Sweatt v. Painter, for example, a 1950 case decided four years prior to Brown, the NAACP challenged the separate law school established by the University of Texas, which was little more than a roped-off area of the state capitol building. Only after showing the absurdity of separate but equal in practice did the NAACP ask the court to declare an end to all state-sponsored racial segregation.25
Bopp employed a similar strategy in his libertarian quest to tear down campaign finance law. He had not challenged the constitutionality of bans on corporate money in Wisconsin Right to Life but instead sought to undermine such bans incrementally. In the Citizens United case, he would use Hillary: The Movie to highli
ght the outrageousness and impracticality of the Bipartisan Campaign Reform Act’s restrictions, and make the loophole created in Wisconsin Right to Life even bigger.
There were two unusual features of the Citizens United organization’s documentary that made application of the Bipartisan Campaign Reform Act seem extreme. First, it was a feature-length movie, not the kind of commonplace campaign advertisement that members of Congress had in mind when they voted for the law. Although the statute’s language could plausibly be read to cover Hillary: The Movie, as the Federal Election Commission had done, the documentary, which was slated to air by video-on-demand, was by all accounts an unusual, borderline case.
Second, Citizens United was a nonprofit political advocacy group, not a business corporation. Typically, such organizations are recognized to have political speech rights and are allowed to engage in explicit political advocacy; that is, after all, their essential purpose. As the Supreme Court explained in the Austin case, nonprofit advocacy groups, in contrast to business corporations, do not have huge aggregations of capital raised in the economic marketplace. They are also unlikely to have any dissenting shareholders, as anyone who contributes to an explicitly political group presumably supports that group’s politics. Nonetheless, David Bossie’s organization had received some small contributions from business corporations and used that money to help finance the movie. Had Citizens United not used any corporate money, or used only corporate PAC money, the organization would have had no legal problem airing the documentary. Nevertheless, the FEC ruled that because Bossie had used some corporate money, Hillary: The Movie could not be shown in the weeks before an election under the Bipartisan Campaign Reform Act.