Sunday, September 4, 2011

Court Lets Corporations Give to Candidates

Sunday, September 4, 2011

Corporations would be permitted to donate directly to political candidates for the first time in more than a century under a ruling issued late Thursday by a federal district judge in Virginia.

The ruling is almost certain to be appealed, and it isn't expected to have a big impact on the 2012 elections for president and Congress. But it is the latest in a string of court decisions that loosen restrictions on spending by companies and unions in elections.

The Virginia court decision draws from a 2010 Supreme Court ruling that allows companies to fund campaign commercials. In the ruling, known as Citizens United, the Supreme Court said corporations and unions should have the same right as individuals to pay for election ads and other electioneering.

At the time, the court didn't directly address whether corporations also have the same right as individuals to donate money directly to candidates for Congress or the White House.

In the latest decision, Judge James C. Cacheris of the Eastern District of Virginia said he was applying the high court's logic in the Citizens United case. "[F]or better or worse, Citizens United held that there is no distinction between an individual and a corporation with respect to political speech," Judge Cacheris wrote. "Thus, if an individual can make direct contributions within [campaign-finance] limits, a corporation cannot be banned from doing the same thing."

"This ruling is a huge deal if it stands," said Richard Hasen, a campaign-finance professor at the University of California, Irvine.

A Justice Department spokeswoman said the department is reviewing the ruling and declined to comment further.

Currently, federal law caps an individual's donations to a particular candidate at $2,500 per election. Corporations are barred from making any direct donations to candidates. However, they can donate $5,000 per election to candidates through their political action committees, which are funded by voluntary donations from employees.

The decision isn't likely to have a major impact in 2012. It could be put on hold during the appeals process and could ultimately be overturned. Also, for the moment it only applies to entities in Judge Cacheris's district, according to Robert Kelner, a campaign-finance lawyer with Covington & Burling.

Even if the ruling were ultimately affirmed, companies would still face the same limits as individuals on donations to candidates, so a single corporation couldn't give a particular candidate more than $2,500 per election.

In a separate case in Minnesota, the U.S. Court of Appeals for the 8th Circuit recently upheld the ban on direct donations, saying the Supreme Court recognized that Congress could enact such restrictions as a way of deterring corruption.

If lower courts continue to produce contradictory rulings over the implications of Citizens United, the Supreme Court would be more likely to take up the matter and re-examine whether the donation limits on corporations are constitutional.

"From a legal standpoint, [Judge Cacheris's] decision is interesting and dramatic and it might take us down the road to something that really would matter, such as striking down the limits on all contributions," Mr. Kelner said.

The district court ruling came in a criminal case involving a Virginia man accused of violating campaign-finance laws by giving his employees money to donate to the political campaigns of former Sen. Hillary Clinton of New York. Individuals and companies aren't allowed to get around campaign-finance limits by routing donations through other people.

William Danielczyk and about a dozen of his employees and their spouses donated about $100,000 to Mrs. Clinton's 2008 presidential campaign.

Mr. Danielczyk is fighting the charges, and part of his defense rests on the contention that the Supreme Court's decision in Citizens United undermines the prosecutors' case.

The Wall Street Journal reported in 2007 that many of the people who made the donations were registered Republicans. One donor told the Journal: "I don't even like Hillary."

Write to Brody Mullins at and Brent Kendall at

Powered By | Full Text RSS Feed | Amazon Plugin | Settlement Statement | WordPress Tutorials

View the original article here


Post a Comment