One of the few remaining limits on corporations’ power to buy and sell American elections is that corporations are not allowed to give money directly to federal candidates. Citizens United frees them to spend billions of dollars running ads or otherwise trying to change the result of an election to suit their interests, but corporations cutting checks directly to candidates or to political committees such as the Republican National Committee is one of the few things the Supreme Court’s conservatives have not yet imposed upon the country.
If the RNC gets its way, however, that will soon change. In a brief filed yesterday in the Fourth Circuit, the RNC argues that the federal ban on corporate donations is unconstitutional in large part because it applies across the board to all corporations:
Most corporations are not large entities waiting to flood the political system with contributions to curry influence. Most corporations are small businesses. As the Court noted in Citizens United, “more than 75% of corporations whose income is taxed under federal law have less than $1 million in receipts per year,” while “96% of the 3 million businesses that belong to the U.S. Chamber of Commerce have fewer than 100 employees.” While the concept of corporate contributions evokes images of organizations like Exxon or Halliburton, with large numbers of shareholders and large corporate treasuries, the reality is that most corporations in the United States are small businesses more akin to a neighborhood store. Yet § 441b does not distinguish between these different types of entities; under § 441b, a corporation is a corporation. As such, it is over-inclusive.
This attempt to make mom and pop stores — as opposed to Halliburton — the face of the RNC’s argument is clever, but it does not change the implications of their argument. If a court accepted the RNC’s argument, it would have to strike down the entire federal ban on corporate donations — leaving Exxon and Halliburton free to give money to any candidate they’d like. Congress might be able to restore part of this ban by enacting legislation. But, of course, that would require any such bill disadvantaging corporations to survive John Boehner’s House and Mitch McConnell’s filibuster.
Moreover, if the court accepts the RNC’s argument, it will effectively destroy any limits on the amount of money wealthy individuals or corporation can give to candidates. In most states, all that is necessary to form a new corporation is to file the right paperwork in the appropriate government office. Moreover, nothing prevents one corporation from owning another corporation. For this reason, a Wall Street tycoon who wanted to give as much as a billion dollars to fund a campaign could do so simply by creating a series of shell corporations that exist for the sole purpose of evading the ban on massive dollar donations to candidates.