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Montana's justices rebel against Citizens United decision

The Montana Supreme Court has rebelled against the U.S. Supreme Court’s Citizens United ruling that gave birth to the SuperPAC.

The Montana Supremes decided last week that, in Montana at least, corporate funds can be banned from politics.

It seems likely that the Montana ruling will be overturned. But perhaps the ruling can be the occasion for the U.S. Supremes, now that it’s clear what the Citizens United ruling has wrought, to improve the situation, especially since several key elements of the logic underpinning Citizens United have turned out to be fantasy.

Slate’s Dahlia Lithwick has a great summary. I’ll mention a few key points.

Background
The 2002 McCain-Feingold campaign finance reform law had barred corporations and labor unions from using their treasuries to pay for campaign ads. In Citizens United, the U.S. Supremes struck down that provision, thereby allowed corporations to make unlimited contributions as long as the money went to “independent” groups, not to the candidates own campaigns. That was a 5-4 ruling, written by the swing justice, Anthony Kennedy.

Kennedy ruled that while the government has a legitimate interest in preventing political corruption, that corporations spending unlimited amounts on campaign ads would not be corrupting because:

 a) they would be required to operate independently of the candidates’ own campaigns and

b) all contributions would be disclosed.

Both elements of Kennedy’s logic were almost immediately flouted. Karl Rove and others figured out how to do it and the 2012 campaign has become a demonstration project for the fully developed loophole.

The SuperPACs are not independent as earthlings would use the word. SuperPACs operating on behalf of Mitt Romney and Newt Gingrich are run by Romney’s and Gingrich’s own former political aides. The one that supports Jon Huntsman Jr. has received millions of dollars from Huntsman’s billionaire father, Jon Huntsman Sr.

Presumably, the people running these “independent” groups are smart enough not to talk directly to the candidate or the campaign from which they are independent, but give me a break.

The SuperPACs have highly informative names like “Restore Our Future” (pro-Romney), “Make Us Great Again” (Rick Perry), “Winning Our Future” (Gingrich) and “Our Destiny” (Huntsman), so the tag lines of their ads don’t even tell the viewer which candidate to associate with the message.

That’s especially true because, as the SuperPACers and the campaigns quickly figured out, SuperPACs can air the dirty ads, which attack the opponents but don’t even mention the candidate they are trying to help, freeing up the candidate to run the positive ads so that their “I approved this message” tagline isn’t associated with the nasty stuff.

As Justice Kennedy saw the future, disclosure was supposed to be the other key corruption-fighting strategy. But the Iowa caucuses are over, the New Hampshire primary is tomorrow, SuperPACs have spent many millions and have so far been able to avoid disclosing which corporations are paying for their activities.

The Montana case
In 1912, after seeing their politics polluted by mining interests buying elections and bribing office holders, the voters of Montana adopted by initiative a law banning corporate money from state politics. Other states have similar laws but, since Citizens United, those laws have been falling. The lawsuit challenging the Montana anti-corruption law was intended to bring about the same effect in Montana. But by a surprising 5-2 majority, the state Supreme Court refused. As Lithwick wrote in Slate:

 “The Montana court more or less announced it would uphold that state’s corporate spending ban because they know a lot more about political corruption than Anthony Kennedy does…

“By a 5-2 margin, Montana’s high court determined that the state law survived ‘strict scrutiny’ because Montana’s unique context and history justified the ban in ways not contemplated by Citizens United. In his majority opinion, Chief Justice Mike McGrath dove deep into that history, ranging back over the ‘tumultuous years … marked by rough contests for political and economic domination primarily in the mining center of Butte, between mining and industrial enterprises controlled by foreign trusts or corporations.’

“…McGrath lays it out this way: ‘The question then, is when in the last 99 years did Montana lose the power or interest sufficient to support the statute, if it ever did. If the statute has worked to preserve a degree of political and social autonomy is the State required to throw away its protections?’”

Two Montana justices did vote to strike down the state law, but Justice James C. Nelson, one of those two, wrote separately to express his contempt for one element of Citizens United, which relied on previous Supreme Court rulings declaring that corporations enjoy the constitutional rights of persons.

“Corporations are not persons,” Nelson wrote. “Human beings are persons, and it is an affront to the inviolable dignity of our species that courts have created a legal fiction which forces people — human beings — to share fundamental, natural rights with soulless creatures of government…

“While corporations and human beings share many of the same rights under the law, they clearly are not bound equally to the same codes of good conduct, decency, and morality, and they are not held equally accountable for their sins. Indeed, it is truly ironic that the death penalty and hell are reserved only to natural persons."

Although they are rare, there have been occasions when the U.S. Supreme Court has reversed itself. I doubt it will happen here. But it’s possible to imagine that when the Montana ruling gets to Washington, Justice Kennedy might take into account what has actually occurred under the ruling and perhaps try to find some new language that would make it a little harder for the big money to flood the airwaves with half-truths without the viewers even knowing whose messages they are receiving.

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Comments (22)

I feel your pain, Eric. But I wonder why we haven't heard you complain about groups like "Alliance for a Better Minnesota".

It was formed, as you may recall, to get Dayton elected Governor and largely funded by Dayton's ex-wife Alida Messinger as well as other Dayton family members (they succeeded).

Now I'm sure they are smart enough not to discuss campaign tactics around the dinner table, but give me a break.

You'll forgive me, I hope, but I just can't shake the feeling that all this leftist angst is occasioned by Democrats floating down the union cash river suddenly noticing GOP boats being floated along just as smoothly.

I'd say that Montana's "unique" history lies only in the fact that its abusive corporations were from the mining industry rather than oil or nuclear. The financial services system or the really-for-profit insurance industry, for instance, have as-great influence in other, and sometimes all, states.

The cities of New York, Los Angeles, Oakland, Albany and Boulder (so far) have approved resolutions calling for a constitutional amendment that would kill the Citizens United decision.

Senators Bernie Sanders (I-VT) and Mark Begich (D-AK) have offered a joint resolution named the Saving American Democracy Amendment." It reads:

--Corporations are not persons with constitutional rights equal to real people

--Corporations are subject to regulation by the people

--Corporations may not make campaign contributions or any election expenditures

--Congress and the states have the power to regulate campaign financies

So far, 17l,656 Americans have signed the petition in support of this resolution returning power to The People from the corporations who hold it now with raw money-built power rather than having any wish to serve democracy (see "sign petition" at Senator Sanders' web site).

As a Gingrich supporter, it irks me to no end that Romney and Ron Paul SuperPACs spent millions in Iowa to take down Newt's campaign. But neither I nor Newt Gingrich, I would guess, would use that experience to change our view that Citizens United was a correct and fair decision by SCOTUS.

For one thing, it reaffirmed the presumption that limiting campaign spending is tantamount to limiting political speech and would be no different than to allow government to impose limits on the number and length of political debates or the number of pages of newsprint to report on those debates. "Congress shall pass no law ..."

Secondly, it gave private companies (corporations) the same degree of free speech as has been given to labor unions, which are nothing more than a corporation of a different type.

And contrary to Montana Justice James C. Nelson, who wrote “While corporations and human beings share many of the same rights under the law, they clearly are not bound equally to the same codes of good conduct, decency, and morality, and they are not held equally accountable for their sins." Nonsense. Corporations have to tell the truth about their products in advertising, they can't lie about their competitors' products, they can't sell unsafe products, they have to pay taxes and live under strict regulations just as everyone does.

But most importantly, they exercise their right to free speech when they extoll the virtues of their products in TV and radio advertisements, and government can't tell them how big their advertising (free speech) budget can be.

But at the same time, I don't quarrel with Montana's decision to have its own rules regarding campaign contributions in federal elections. States have their own election rules in a number of areas from what type of ballot they use, what form of absentee balloting they allow, same-day voting registration or not, etc. It should be a state's rights issue decided by the people of that state, just as other election rules are.

Dennis

"Corporations have to tell the truth about their products in advertising, they can't lie about their competitors' products, they can't sell unsafe products..."

First of all, Citizens United has nothing to do with product advertising or unsafe products. Nor are they required to "tell the truth" by Citizens United. It allows them to spend money on political advertising with whatever level (or lack thereof) of truthfulness they desire. They can take things out of context, be mindlessly self-serving, exaggerate and yes, even lie.

This isn't original with me, but I like it:

If corporations are people, where do they register to vote?

Bernice, name another "non-human" entity that is required to pay taxes.

Thomas: The Montana supreme court justice was comparing corporations and people in general to make a point about why they are different. But he failed.

Dennis: If a foreign entity, like say the Chinese government, were to own an office building in New York, they would owe taxes on any profits earned, real estate taxes, etc. Are you saying that this gives them a right to be involved in the political process?

People pay taxes
Corporations pay taxes
Therefore, corporations are people. Brilliant!

cats are pets
Dogs are pets
Cats are dogs! eureka.

Dennis--
That's why we have separate categories of individual and corporate income taxes.

How far should one push the idea that companies have the same rights as ordinary people?

In Citizens United (2010) the court ruled that the constitution’s first amendment guarantees companies the same right to free speech as flesh-and-blood people. This means they have the same right as individuals to try to influence political campaigns through advertisements. But in a case involving AT&T the court ruled (March 2011) that the company has no right to personal privacy.

What would help is if the Supreme Court (and corporate law in general) adopted a clear principle when it comes to the analogy between artificial persons and real ones: that companies should be treated as people only in so far as it is expedient.

“Corporations have neither bodies to be punished, nor souls to be concerned, they therefore do as they like” — Edward Thurlow, Lord Chancellor, 1731-1806

Mr. Tester could not be more wrong. Moreover, he'd like to have his political cake and eat it, too, by suggesting that there be no restrictions on what a "person" can spend on an election, thus guaranteeing that elections will be the provenance of the wealthy, whether individuals or corporations, for whom the rest of us, Mr. Tester included, will be serfs. There's plenty of research to show that when a group – any group, left, right, center, pro-military, anti-military, etc., ad nauseum – has the ability to make or write rules, it will make or write rules to benefit itself. Sometimes not exclusively, but always predominantly.

At the same time, Mr. Tester suggests that it's a "states' rights issue," and that Montana ought to be able to make up its own rules for elections, even if they're dramatically and fundamentally different from the rules of other states.

To phrase it as politely as I can, and using Mr. Tester's own language: nonsense.

Falling back on the “labor union” shibboleth doesn’t cut it any more. There was a time in America’s history when labor unions really *did* have a lot of political clout, but fewer than 20 percent of American workers are unionized nowadays, and unions have only a small fraction of the political clout that was evident a couple generations ago.

Meanwhile, the one percent and the corporations they own are drowning in cash, and can spend millions on any election, or any group of elections, they choose. *Citizens United* tilts the political playing field rather dramatically in favor of whoever has the most money, and unless you’ve been living in a cave without electricity for the past decade, you know that the “people of money” are the one percent, and their share of national wealth and annual income has risen just as precipitously as the share of the rest of us has fallen.

Politics has always involved money, but never before – at least in this society – to this degree. When elections *can* be bought, they *will* be bought, and when that becomes routine, talk of “democracy” in the United States will be the stuff of delusion. The operative term will be “oligarchy,” and there are those, of course, who would argue that we’ve already reached that stage.

Thanks again Eric.
I do not see how the supreme can argue against Montana's court. State's rights are at play here. To come up with an argument they can live with to overturn Montana will require some intense bizzarness that will give plenty of ammunition to all comedians. The case should be pushed to the top now with the writ so this years election will be affected.

Bill: No, because even though they pay taxes to obey the tax laws, they are prevented from being involved in the political process because of the Federal Election Campaign Act (FECA) of 1966.

It prohibits any foreign national, including foreign governments, from contributing, donating or spending funds in connection with any federal, state, or local election in the United States, either directly or indirectly.

And although Barack Obama's 2008 campaign is alleged to have received hundreds of millions of dollars in foreign contributions, it is also unlawful to help foreign nationals violate that ban or to solicit, receive or accept contributions or donations from them. Persons who knowingly and willfully engage in these activities may be subject to fines and/or imprisonment.

But Paul, as a small business owner, I pay my income taxes at the corporate rate. So not only am I a corporation, but my corporation is a person.

Dennis

That's funny, I thought he succeeded. When was the last time a corporation was executed? Can a corporation get a conceal/carry permit? Register to vote? Go to communion?

If corporations are people, surely separate income tax schedules are discriminatory. And since inter-corporate marriage would be unnatural with no biological possibility of offspring, clearly their filings should be done as single people with no dependents.

Corporations are legally created persons; they are not natural persons. They have some, but not all, rights of natural person. They do have the right to due process of law, but not to vote, get married, hold public office, and others of importance to natural persons. Corporations are not independent entities; they are ultimately owned by natural persons who control them through boards of directors. Corporations have many legal duties and limitations imposed on them that are not required of natural persons. They have to file annual reports; in some states they cannot operate farming operations, and they are subject to a plethora of laws and regulations that do not apply to natural persons. So, to assert, as some do, that "corporations should not have the same rights as people" is meaningless, because they don't and have never had.

I would bet that a great many of those who attack corporations themselves do business in the corporate form because there are solid business reasons for doing so. Can anyone seriously imagine a large company, McDonalds or GM being operated as a partnership? I would also bet many who attack corporations get their pay from them and are happy to work for them instead of working for sole proprietors.

I agree there are abuses that may need some correction in various laws, but simply to condemn "corporations" is meaningless, because in the final analysis they are extensions of the will of natural persons who own them

You can argue semantics till you're blue in the face, but the SCOTUS ruling remains the law of the land.

I guess if the product of human conception isn't a baby, corporations can be people too.

The Montana decision points out the basic conflict that exists between at least 150 years of jurisprudence that respected the status of a corporation as a juristic person subject to the control of the States and the Citizens United decision. If the case is taken for review, I hope it will force at least Justice Kennedy to come to his senses and see what a mistake he made in Citizens United.

The Koch brothers and friends will NEVER allow this ruling to be overturned. While the justices in Montana are to be commended for trying to maintain the state law as it now stands, I'm afraid they're tilting at windmills. And I really admire Judge Nelson for his clear statement of the differences between corporations and humans.

Thomas--
A baby rat is still a baby, but it does not have the rights of an autonomous human being.
The question is not when life begins (that began billions of years ago); it's when an
autonomous human individual
can be said to exist. American jurisprudence has placed that point at quickening. Like any legal precedent that can be changed, but so far that's the law of the land.