A Storm’s Coming On Campaign Finance

Yesterday’s high-profile decision in the Ricci firefighters case obscures another, equally important development which could usher in a new era of corporate money in politics. Traditionally, the Supreme Court decides every single case it heard during a particular term before adjourning for the summer recess. This Term, however, the Court announced that it will leave one case, a campaign finance case called Citizens United v. FEC, undecided. Moreover, in a brief order explaining why this decision will be delayed, the Court ordered the parties to brief whether a landmark precedent limiting the influence of corporate money in politics should be overruled.

Nineteen years ago, in Austin v. Michigan Chamber of Commerce, the Court upheld a ban on independent political expenditures by corporate donors. As the Court explained in Austin, “the unique state-conferred corporate structure that facilitates the amassing of large treasuries warrants the limit on independent expenditures.” Corporations are designed to amass massive amounts of money, and they can use their enormous wealth to drown out individual voices, all while spending only a fraction of their treasuries.

Should the Court toss out Austin, it could be the end of any meaningful restrictions on campaign finance. 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. Without Austin, even a cap on overall contributions becomes meaningless, because corporate donors can simply create a series of shell-corporations for the purpose of evading such caps.

Admittedly, Austin dealt only with independent expenditures, not direct corporate donations to candidates and their campaigns, but the Roberts Court’s apparent willingness to take on Austin directly is its boldest assault on campaign finance reform yet. By 2012, President Obama may not only need to run against the Republican candidate; he may also be in a no-holds-barred political fight with Blue Cross/Blue Shield, the Chamber of Commerce and Wal-Mart.