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Blog > Issues > Property Rights > End discrimination against corporate speech

End discrimination against corporate speech

January 15, 2019 I By DEBORAH LA FETRA

Originally published in The Hill, January 15, 2019.

“All animals are equal, but some animals are more equal than others.” George Orwell’s pithy lesson from “Animal Farm” describes the hypocrisy of governments that proclaim the equality of their citizens, while granting special power and privileges to an elite group.

It’s also an apt description of how free speech is treated in America when it comes to corporations, as a recent political speech case in Massachusetts illustrates. Pacific Legal Foundation is asking the Supreme Court to review this case and make it clear that corporate speech is protected speech.

Our Constitution’s First Amendment plainly states that Congress shall make no law abridging the freedom of speech (a limitation extended to the states after the Civil War). It applies to the freedom of speech generally — not to any particular class of speakers. Yet some laws restrict speech solely on the basis of the speaker’s identity, granting some favored speakers power and privileges not shared by all. In 1A Auto, Inc. v. Sullivan, two restricted speakers are asking the Supreme Court to break down these artificial distinctions.

Massachusetts’ ban on corporate campaign contributions prohibits business corporations and other profit-making entities from contributing to state or local candidates. They cannot contribute to a candidate or to a candidate’s committee, establish or administer a political action committee (PAC), or contribute to a PAC that is not an independent expenditure PAC.

Because of this law, two small businesses — an auto shop and a storage facility — are prohibited from making political contributions they otherwise would have made. They sued Michael Sullivan, the Massachusetts Office of Campaign and Political Finance director, arguing the contribution ban violates their First Amendment right to free speech.

The businesses lost in Massachusetts state courts, largely because of the Supreme Court’s decision in Beaumont v. FEC  (2003), which upheld the federal ban on corporate contributions as justified by the government’s interest in “preventing corruption and the appearance of corruption.” The businesses are now asking the Supreme Court to review their case, and overrule Beaumont.

First Amendment law has grown more protective of political speech, even when expressed by corporations. Citizens United v. FEC (2010) rejected two of the four reasons underlying Beaumont, while accepting one of the reasons (preventing corruption) and remaining silent as to the fourth (preventing individuals from funneling contributions through corporations).

Then in 2014, McCutcheon v. Federal Election Commission held that the goal of reducing the political power of the wealthy cannot justify campaign finance restrictions. Beaumonts deteriorating rationale has prompted some courts to hold that its precedential value rests on shaky ground.

No one questions that corporate contributions have influence — as they are intended to do. But influence is not corruption. Central to Beaumont’s holding is the notion that corporate contributions to political actors have a uniquely corrupting influence on the political process and governance generally. However, there is scant evidence that corporate contributions are any different than contributions by wealthy individuals, or nonprofit or trade organizations, such as labor unions.

Massachusetts singles out corporate contributions as inherently corrupting, while declining to tar equivalent speech from other organizations with the same brush. The facts on the ground do not support this distinction.

For example, in Massachusetts, unions are fully engaged in the political process, making both cash and in-kind contributions to political aspirants who share the unions’ policy preferences — often at loggerheads with the corporate employers who employ union-represented employees. Unions and nonprofit organizations can give up to $15,000 to a single candidate in a year, which is 15 times the individual contribution limit of $1,000.

Alas, unions are not immune to the lure of corrupt campaign activity, as demonstrated by the recent resignation of the president of the union that represents Massachusetts State Police troopers because of a federal investigation into possible illegal reimbursement of campaign donations by union members. Even when engaged in legitimate activity not subject to criminal investigation, unions surely have influence comparable to — if not exceeding — that of corporate contributors.

The 1A Auto case also provides the opportunity for the Supreme Court to revisit, and discard, the amorphous “appearance of corruption” justification for contribution restrictions. “Appearance of corruption” has no defined meaning and invites regulation based on the regulators’ biases. It threatens speech based on unproven accusations of wrongdoing — and such accusations are ever-present in political campaigns. The “appearance” justification, defined subjectively and applied selectively, cannot suffice to restrict otherwise protected speech.

This case presents a strong vehicle in which to expressly overrule Beaumont, thus permitting lower courts the latitude to apply more recent speech-protective First Amendment doctrine.

Deborah J. La Fetra is a Senior Attorney with Pacific Legal Foundation (PLF), which litigates nationwide to achieve court victories enforcing the Constitution’s guarantee of individual liberty. PLF filed amicus briefs in 1A Auto, Inc. v. Sullivan, Citizens United v. FEC, and Beaumont v. FEC.

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