Private: Danielczyk: Overreaching or Prophecy?

By Rick Hasen, Visiting Professor, University of California, Irvine School of Law and the author of Election Law Blog.

When President Obama in his 2010 State of the Union speech criticized the Supreme Court’s decision in Citizens United, he got a lot of conservative flak. The President had said, among other things, that the 5-4 decision recognizing that corporations have a First Amendment right to spend money in federal elections overturned a 100-year-old campaign finance law.

Thus, Bill Maurer, writing in the Weekly Standard, said:

President Obama has been the most notable proponent of this myth. In the State of the Union he said that Citizens United “reversed a century of law that I believe will open the floodgates for special interests .  .  . to spend without limit in our elections.” In response, Justice Alito was seen shaking his head and mouthing the words “not true.” Alito was right. 

While federal law has indeed prohibited corporations from directly contributing to federal candidates since 1907, that portion of the law was not at issue in Citizens United. It remains the law of the land. Direct corporate contributions to candidates are still banned. 

It was a fair point, though there is some uncertainty as to how the 1907 law was interpreted before the 1940s, when it expressly banned not just corporate contributions to candidates but corporate and labor union independent spending as well. But now a federal district judge has overturned the direct contribution ban too, and done so against controlling Supreme Court precedent to the contrary.

In United States v. Danielczyk, a federal district court in Virginia held that the ban on direct contributions to candidates is unconstitutional. The judge ruled twice.  The first time the judge ruled, he ignored controlling Supreme Court precedent to the contrary, FEC v. Beaumont  (2003). In Beaumont the Supreme Court held that even non-profit ideological corporations could be barred from contributing to candidates.

The district court did not mention Beaumont, perhaps because the government failed to cite it in its briefs. After I and others pointed out the omission, the court ordered reconsideration in light of Beaumont but reached the same conclusion: the ban on direct corporate contributions is unconstitutional under the Constitution.

In reaching this conclusion, the judge finds himself against the contrary opinion of the Second, Eighth and (today) Ninth Circuits. [Disclosure: I am one of the lawyers defending the City of San Diego’s similar law in the Ninth Circuit case]. All of those courts held that they are bound by the Supreme Court’s Beaumont decision, and that the later Citizens United case did not silently overrule Beaumont. 

The Ninth Circuit explained that the law is justified by a valid “anti-circumvention” interest in preventing the evasion of individual contribution limits. I can only give $2,500 per election to a federal candidate, but if I could set up additional sham corporations which could contribute, I could easily evade these limitations.  Under the logic of the judge’s opinion in Danielczyk, a rule which would attribute the corporation’s spending to me would violate the corporation’s First Amendment “rights.” As the Ninth Circuit wrote: “there is nothing in the explicit holdings or broad reasoning of Citizens United that invalidates the anti-circumvention interest in the context of limitations on direct candidate contributions."

The opinion in Danielczyk throws the entire federal corporate contribution ban into question, just as we enter the 2012 campaign season. The government can and should appeal it, and have this outlier precedent overturned.  Otherwise at next year’s state of the union address, Justice Alito won’t have the chance to say “not true.”  And our democracy will be threatened by the circumvention of valid contribution limits.

Campaign Finance, Constitutional Interpretation, Democracy and Elections, First Amendment, Supreme Court