As if the damage to fair and accountable campaigns in Citizens United was not enough, a decision this week in the Federal District Court of Virginia raises the daunting prospect that the Supreme Court’s logic in favor of corporate speech can be extended to a second, more direct, form of political participation: contributions to political candidates. The verdict of the case, United States v. William Danielczyk Jr. & Eugene Biagi, found that Virginian corporations could legally donate directly to Virginian Congressional candidates. It goes one step beyond the Citizens United verdict that permitted campaign donations from corporations to political action committees and run advertisements impacting campaigns, but not the candidates themselves. (Before Citizens United, corporations had previously been unable to financially support political candidates and had been restricted in their political spending.) This latest ruling directly challenges more than a century of settled campaign law.
That corporate contributions will now become the norm is far from certain or even likely; nevertheless, the prospect of making campaign reforms in a judicial environment that is hostile to restrictions on spending invites more focus on alternative means to promote plurality and fairness in our democracy.
In Danielczyk & Biagi, Judge James Cacheris of the Virginia District Court this week upheld his earlier ruling that “the flat ban on corporate contributions [to candidates] is unconstitutional”, while clarifying that this decision was limited to the case’s particular circumstances. However, if other judges adverse to reform embrace Cacheris’ reasoning, then their combined opinion could have widespread implications.
Central to Cacheris’ decision is his reaffirmation of Citizens United: “the First Amendment does not allow political speech restrictions based on a speaker’s corporate identity”. Current caps on individual contributions are supposedly sufficient to avoid the risk or appearance of quid pro quo arrangements, which provide a historical basis for some restrictions on speech under the landmark Buckley v. Valeo decision in 1976. Given the inability of the law to discriminate between individuals and corporations, the Danielczyk decision states that if the Buckley v. Valeo contribution limits are sufficient for individuals, then they must be equally sufficient for corporations.
The Virginian court’s argument is open to a number of challenges, particularly over its implicit assumption that allowing corporate, in addition to individual, donations to candidates will not increase the risk of quid pro quo arrangements. A more ominous possibility however remains that Citizens United has opened the floodgates against laws that prohibit indirect corporate spending or candidate contributions in elections.
There remains at least one avenue for meaningful reform available to democracy advocates: offering significant public funds matching small donations to qualifying candidates. This type of systematic reform is not subject to the same legal challenges and would do more to promote a plural and open democracy than previous reforms focused on capping spending.
An example currently before Congress is the Fair Elections Now Act, which would for Congressional race donations of $100 or less, provide $5 for every $1 raised by candidates. Participating candidates must accept limits on the size of donations they are able to receive.
Such reforms would not limit the donations that corporations can offer, but rather encourage candidates to turn down such offers in order to qualify for matching funds. It doesn’t limit free speech, but rather offers a more speech alternative.
Research by Americans for Campaign Reform suggests that such measures would allow candidates relying on small contributions to be competitive, even against those candidates backed by large corporate war chests. The relationship between money spent and votes gained is strong up until about the $1 million mark in the average House race, a level at which most candidates can establish their name and get their message out to prospective voters. After that spending threshold, there is little correlation between spending and votes.
Public funding would enable more candidates to get over this crucial threshold without requiring support, whether it is direct or indirect, from private interests. The presence of such candidates would in itself create a strong argument against politicians accepting large contributions, and so reduce the role of money in politics. Overturning the century-long ban on direct corporate contributions to candidates is indeed a worrying sign and one that directly violates the Supreme Court’s recent findings; but the avenues for meaningful reform are far from closed.
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