Taking a Hard Line on Soft Money: Corporate Campaign Finance Reform from Buckley to Hillary

Hiroki Ogawa, Staff Writer

          On the 9th of September, the Supreme Court heard rearguments on Citizens United v. Federal Election Commission,[1] a case involving entrenched campaign finance policies.[2]  It is unsurprising if the case or the movie at its heart, Hillary: The Movie, do not sound familiar; the Federal Election Commission (“FEC”) swiftly silenced advertising attempts for the movie[3] pursuant to the Bipartisan Campaign Reform Act of 2002, also known as the McCain-Feingold Act.[4] 

           Citizens United, the producer of the movie, is a non-profit organization advocating “traditional American values of limited government, freedom of enterprise, strong families, and national sovereignty and security.”[5]  It aims to restor[e] [the] government to citizens’ control . . . [t]hrough a combination of education, advocacy, and grass roots organization . . . .”[6]  Citizens United (hoped to) achieve this by producing Hillary: The Movie, which criticized Hillary Clinton’s background and policies.[7]  It might have produced the movie unfettered were it not funded with corporate donations.  Because the movie was effectively a political advertisement funded partially by corporate donations, it met the definition for “electioneering communications.”[8]  The McCain-Feingold Act specifically restricts release of electioneering communications shortly before elections.[9]  Consequently, Citizens United was left with a film it could not advertise over traditional channels.

          Regulation of electioneering communications, inter alia, is a response to the increased use of “soft money” support for campaign finance.[10]  Contemporarily, political money is divided into two types—hard money, and soft money.[11]  The difference between hard money and soft money is twofold.  First, hard money and soft money differ on how they may be used to support candidates.  Hard money may be used for direct support of a candidate, while soft money can only be used for indirect support, e.g. “party building” activities.  Second, hard and soft money differ in by whom the money can be donated.  Hard money may not be donated by corporations or labor unions, while soft money can.  In practice, these distinctions affect how political money is spent for advertising, which is why campaign finance issues frequently boil down to balancing potential corruption and infringement on free speech.

              Based on case precedent alone, it seems like the Supreme Court may rule either way.  The Court supported regulation of campaign finance in the past.[12]  The court has also been sensitive to infringement of First Amendments rights as well, and narrowed certain campaign finance laws accordingly.[13]  Other factors also warrant consideration.  For instance, there seems to be a trend towards relaxing campaign finance regulations.[14]  If the composition of today’s Supreme Court is also considered, it seems likely that the Court will continue to ease the restrictions on campaign finance restrictions.  Compelling arguments have been made in support of less regulation—especially with respect to corporation funding.  Justice Anthony Kennedy voiced one of these arguments, saying “‘[c]orporations have lots of knowledge about environment, transportation issues, and you are silencing them during the election.’”[15]  Apparently, such arguments have swayed the conservative wing of the Supreme Court, and they “appear[] [to be] in favor of easing the historic restrictions . . . that bar corporations . . . from spending money to help their favored candidates.”[16] 

          Conversely, there are compelling arguments in support of stricter corporate campaign finance regulation as well.[17]  Elena Kagan, President Obama’s newly elected Solicitor General warned of potential corruption, arguing that corporations are motivated by different goals than the general populace.[18]  Hopefully, the Supreme Court will exercise its power of judicial review with caution, and remain conscious of judicial activism.

          This decision has other widespread implications.  The Supreme Court’s willingness to overturn some of its older decisions, and ease the restrictions on corporate funding of campaign finance indicates that the Supreme Court of contemporary times may be becoming more and more comfortable with exercising its power of judicial review.  Remember how much difficulty the Supreme Court had with reviewing Roe v. Wade?  The Court may be moving away from that kind of indecisiveness.  If the Supreme Court decides to ease restrictions on campaign finance, this may hint at a future metamorphosis of government in the United States, as well.  In the view of this author, easing the restrictions is small, potential step (albeit a dangerous step) towards formation of a corporatocracy—a system of governance where corporations use their power to influence the will of nations.[19] It paints an interesting hypothetical picture of the future: people drinking Coca-Cola or Pepsi based on the political leanings of the parent company.


 Edited by Stephen Dushko and Marisa Floriani

[1] Citizens United v. Federal Election Comm’n, 530 F. Supp. 2d 274, 274 (D.C. 2008).  For the subsequent rehearing, see Citizens United v. Federal Election Comm’n, 129 S. Ct. 2893, 2893 (2009).

[2]  See Robert Barnes, ‘Hillary: The Movie’ to Get Supreme Court Screening, Wash. Post, Mar. 15, 2009, at A04, available at http://www.washingtonpost.com/wp-dyn/content/article/2009/03/14/AR2009031401603.html.  See also Mark Sherman, Court Signals It May Loosen Campaign Spending, FindLaw, Sept. 9, 2009, http://news.lp.findlaw.com/ap_stories/a/w/1154/09-09-2009/20090909165010_43.html (last visited Sept. 24, 2009); Los Angeles Times Editorials, Looking at ‘Hillary: The Movie’, L.A. Times, Mar. 25, 2009, available at http://www.latimes.com/news/opinion/editorials/la-ed-advert25-2009mar25,0,6069696.story; Posting of Andrew Cohen to CBSNews Blogs, http://www.cbsnews.com/blogs/2009/09/07/courtwatch/entry5291771.shtml (last visited Sept. 7, 2009).

[3]  See Barnes, supra note 2, at A04.

[4]  Bipartisan Campaign Reform Act of 2002, Pub. L. No. 107-155, § 1, 116 Stat. 81 (Mar. 27, 2002) (codified in scattered sections of 2 U.S.C.).

[5]  Citizens United :: About, http://www.citizensunited.org/about.aspx, (last visited Sept. 17, 2009).

[6]  Id.

[7]  See Barnes, supra note 2, at A04.

[8]  See L.A. Times, supra note 2.

[9]  Bipartisan Campaign Reform Act §§ 201-14.

[10]  Because soft money is not regulated as strictly as hard money, there has been a tendency to provide indirect support through “electioneering communications.”  These are issue-based advertisements that reveal a candidate’s position on an important issue in order to encourage or discourage support for the candidate.

[11]  See Stephen Ansolabehere & James M. Snyder, Jr., Soft Money, Hard Money, Strong Parties100 Columbia L. Rev. 598, 604-07 (2000).

[12]  See Buckley v. Valeo, 424 U.S. 1, 3, 2138 (1976); see generally McConnell v. Federal Election Comm’n, 540 U.S. 93, 132-223 (2003) (discussing, inter alia, government interests supporting campaign finance restrictions) .

[13] Compare Buckley, 424 U.S. at 636-44, and McConnell, 540 U.S. at 132-223, with Federal Election Comm’n v. Wisconsin Right to Life, 551 U.S. 449 (2007), and Davis v. Federal Election Comm’n, 2008 U.S. LEXIS 5267 (2008) (striking down provision limiting the amount that private individuals may donate).

[14] Compare Buckley 424 U.S. at 636-44, and McConnell 540 U.S. at 132-223, with Federal Election Comm’n, 551 U.S. at 450, and Davis v. Federal Election Comm’n, 2008 U.S. LEXIS 5267 (2008) (striking down provision limiting the amount that private individuals may donate).  See also posting of David Stout to The Caucus: The Politics and Government Blog of the Times, http://thecaucus.blogs.nytimes.com/2009/09/18/court-voids-campaign-spending-limits-for-nonprofits/ (last visited Sept. 18, 2009).

[15] Transcript of Oral Argument at 52, Citizens United v. Federal Election Comm’n, 129 S. Ct. 2893 (2009) (No. 08-205), available at http://www.supremecourtus.gov/oral_arguments/argument_transcripts/08-205%5BReargued%5D.pdf.

[16] Yahoo! News: Politics, US Supreme Court May Loosen Election Cash Rules, Yahoo! News, Sept. 10, 2009, http://news.yahoo.com/s/afp/20090910/pl_afp/uspoliticscourt_20090910074742.

[17] Transcript, supra note 15, at 45-46, 48.

[18] Id.

[19] OpenDemocracy, Corporatocracy – Ethical Politics, http://resurgence.opendemocracy.net/index.php/Corporatocracy, (last visited Sept. 17, 2009).


1 Comment

Filed under Constitutional Law, Finance, Uncategorized

One response to “Taking a Hard Line on Soft Money: Corporate Campaign Finance Reform from Buckley to Hillary

  1. Leah McCrady

    Thank you for this article! I had no idea the Supereme Court was hearing these arguments! I believe in less government and more liberty, but I often wonder what our founders would have proposed for the rules of the game, had they known where we are today in terms of communications, 527s, the internet, you tube, and all that comes with it.

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