BILL ANALYSIS �
AJR 22
Page 1
Date of Hearing: March 20, 2012
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AJR 22 (Wieckowski and Allen) - As Amended: March 14, 2012
SUBJECT : Campaign Finance Reform: CItizens United
KEY ISSUE : Should the California Legislature memorialize its
opposition to Citizens United and call upon Congress to propose
a constitutional amendment to overturn the decision?
FISCAL EFFECT : As currently in print this resolution in
non-fiscal.
SYNOPSIS
This joint resolution calls upon the U.S. Congress to propose a
constitutional amendment that will overturn Citizens United, the
U.S. Supreme Court's controversial decision in 2010. That
decision struck down key provisions of the federal
McCain-Feingold campaign finance reform law and, in the process,
overturned several prior decisions upholding the right of
Congress and the states to impose limits on campaign
contributions and expenditures. Controversy over the Court's
ruling has not abated over the past two years. Indeed, national
concern about the Court's ruling has substantially intensified
now that we have entered a presidential election year with
reports of "super PACS" collecting unprecedented millions of
dollars from secret individual donors - sums reportedly far
exceeding what the candidates themselves are raising. This
resolution is part of a national movement calling upon Congress
to overturn Citizens United. At the time of this writing, more
than a dozen resolutions proposing a constitutional amendment
had been introduced in the U.S. House or the U.S. Senate. Two
states, New Mexico and Hawaii, have already passed resolutions
calling upon Congress to propose and send to the states a
resolution overturning Citizens United, and at least eight other
states (not including California) have resolutions pending.
Several cities within California, including Los Angeles and
Oakland, have passed resolutions to the same effect, and dozens
of organizations nationwide have circulated petitions in support
of a constitutional amendment. According to the authors, more
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than one million people have signed these petitions. This
resolution is supported by several public interest, consumer,
and labor groups. There is no registered opposition.
SUMMARY : Memorializes the Legislature's disagreement with the
decision of the United States Supreme Court in Citizens United
v. Federal Election Commission and calls upon the United States
Congress to propose and send to the states for ratification a
constitutional amendment that would overturn Citizens United.
Specifically, this resolution :
1)Makes various declarations as to the unprecedented nature of
Citizens United and the potential that corporations will
misuse the First Amendment to unleash a torrent of money into
political campaigns.
2)Notes the duty of legislators to protect democracy and guard
against the potentially detrimental effects of corporate
spending in local, state, and federal elections, and as such,
resolves the following:
a) The Legislature of the state of California
respectfully disagrees with the majority opinion and
decision of the United States Supreme Court in Citizens
United v. Federal Elections Commission.
b) The Legislature of the State of California calls
upon the United States Congress to propose and send to
the states for ratification a constitutional amendment to
overturn Citizens United v. Federal Election Commission
and to restore constitutional rights and fair elections
to the people.
c) That the Chief Clerk of the Assembly transmit copies
of this resolution to the President and Vice-President of
the United States, the Speaker of the House of
Representatives, the Minority Leader of the House of
Representatives, the Majority Leader of the United States
Senate, the Minority Leader of the United States Senate,
and to each Senator and Representative from California in
the Congress of the United States.
EXISTING LAW :
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1)Holds that limitations on political campaign financing
implicate the free speech rights protected by the First
Amendment; therefore, any government attempt to regulate the
financing of political campaigns must serve a compelling
government interest and be narrowly tailored to serve that
interest. (See e.g. McConnell v. FEC (2003) 540 U.S. 93, 136;
Davis v. FEC (2008) 128 S. Ct. 2759, 2772 n.7.)
2)Recognizes, as to restrictions on campaign financing, only one
interest sufficiently compelling to outweigh the First
Amendment right of free speech: preventing corruption or the
appearance of corruption. (Citizens United v. FEC 2010 U.S.
LEXIS 766; SpeechNow.org v. FEC (2010) 599 F. 3d. 686.)
3)Holds that both "contributions" to a candidate and
"expenditures" on behalf of a candidate are forms of speech
protected by the First Amendment; however, holds that
government only has a "compelling interest" in regulating
contributions, as opposed to expenditures, because only
contributions can reasonably give rise to corruption or the
appearance of corruption. (Citizens United v. FEC 2010 U.S.
LEXIS 766 Buckley v. Valeo (1976) 424 U.S. 1, 19-27, 48-49.)
4)Provides that neither Congress nor the states shall enact any
law respecting the establishment of religion, or prohibiting
the free exercise thereof; or abridging the freedom of speech,
or of the press; or the right of the people peaceably to
assemble, and to petition the Government for a redress of
grievances. (Amendment I of the United States Constitution;
applied to the states by Amendment XIV of the United States
Constitution.)
COMMENTS : In Citizens United v. Federal Elections Commission
(2010), the U.S. Supreme Court considered a provision of the
federal Bipartisan Campaign Reform Act (BCRA) of 2002, also
known as "McCain-Feingold" for its joint Senate authors. The
provision in question prohibited corporations and unions from
using general treasury funds to make "independent expenditures"
for "electioneering communications" within 60 days of a general
election or within 30 days of a primary election. At issue in
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Citizens United was a controversial documentary entitled,
Hillary, which was highly critical of then-Senator Hillary
Rodham Clinton, a candidate in the 2008 Democratic presidential
primary. Citizen's United, a non-profit corporation, wanted to
make the documentary available by "video-on-demand" within the
30 days of the primary election. Concerned that the broadcast
might be prohibited by BCRA, Citizens United sought declaratory
and injunctive relief that the BCRA did not apply to the
documentary and, indeed, would be unconstitutional if applied to
the showing of Hillary. A district court denied the request.
Citizens United appealed to the United States Supreme Court.
Citizens United originally only asked the Court to find that
BCRA did not apply to the Hillary broadcast, and would therefore
be unconstitutional as applied in its case. For example,
Citizens United argued that, as a matter of statutory
interpretation, the film was not an "electioneering
communication" as defined in BCRA. Most notably, Citizens
United argued that the film was only available to viewers who
subscribed to "video-on-demand" and had purposefully elected to
watch it; therefore, Citizens United contended, it was not
"publicly broadcast" within the meaning of the BCRA.
Additionally, Citizens United pointed to other facts that
allegedly made BCRA inapplicable: for example, Citizens United
argued that BCRA did not apply to nonprofit corporations and
that the content of the film, while critical, fell short of the
kind of "express advocacy" that the law targeted.
Despite these much narrower grounds upon which the Supreme Court
could have decided the case in favor of Citizens United, the
Court instead asked the parties to submit supplemental briefs on
the constitutionality of the BCRA provisions in question, and
whether the Court should overturn parts of earlier opinions
(discussed below) that had upheld the right of Congress and the
states to impose limits on corporate campaign expenditures.
After reframing the question in this way, the Court then
proceeded not only to strike down the provisions of the BCRA,
but to overturn long-standing precedents upholding the
constitutionality of federal and state efforts to regulate
campaign financing. In order to fully appreciate the degree to
which Citizens United departed from past Supreme Court holdings
it is necessary to briefly consider some of the initial cases
that treated campaign contributions and expenditures as forms of
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"speech" protected under the First Amendment.
Background: Buckley and its Progeny . Although the courts have
consistently held that both campaign contributions and campaign
expenditures are forms of protected speech, the courts have held
that only limitations on "contributions" can be justified by a
compelling state interest. In the seminal case of Buckley v.
Valeo (1976) 424 U.S. 1, the U.S. Supreme Court considered a
challenge to the Federal Election Campaign Act (FECA) as amended
in 1974. The 1974 amendments imposed caps on both the amount of
the contribution that an individual or committee could give to a
federal candidate, as well as a cap on the expenditures that an
individual or committee could make on behalf of a candidate. In
addition, the 1974 amendments limited the amount of expenditures
that a candidate could make from personal funds. (2 USC Section
441 (1994); 18 USC Section 608 (e) (1) (subsequently repealed.)
Buckley's Strict Scrutiny Standard : In considering the validity
of the FECA amendments, the Court in Buckley made a distinction
between "contributions" and "expenditures." Buckley reasoned
that both contributions and expenditures were forms of speech
protected by the First Amendment and, therefore, Congress could
only prohibit that speech if it served a "compelling
governmental interest" and used means "narrowly tailored" to
serve that interest. In short, because the First Amendment
entails a fundamental right, the Court will apply "strict
scrutiny."
Applying this reasoning to FECA, the Court held in Buckley that
Congress could properly limit "contributions" to candidates
because such limits served a compelling governmental interest in
preventing the actuality or appearance of quid pro quo
corruption. However, the Court stated that "expenditures" by
the candidate - or "independent expenditures" made on behalf of,
but not directly to, the candidate - did not, in its collective
judgment, create the same likelihood of actual or apparent quid
pro quo corruption. Therefore the Court found in Buckley that
Congress' action to limit such campaign expenditures did not
meet the "compelling interest" requirement. (Buckley, supra, at
19-27, 48-49.) Although Buckley struck down a federal law
pertaining to federal elections, the same reasoning would apply
to state efforts to limit campaign expenditures. For example,
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in First National Bank of Boston v. Belotti (1978) 435 U.S. 765,
the Court struck down a state law limiting campaign
expenditures.
It is important to stress that Buckley did not say that state or
federal law could never restrict campaign expenditures. Rather,
it said that any laws restricting either contributions or
expenditures could only be justified by a "compelling interest"
that was narrowly tailored to serve that interest. The Buckley
Court found, to the chagrin of many commentators then and now,
that the nexus between "expenditures" and quid pro quo
corruption was not strong enough to create a "compelling"
governmental interest for regulation of campaign expenditures in
the facts of that case. In other words: if a state could show
that it had a compelling interest in limiting expenditures, and
used narrowly tailored means to achieve that interest, then a
limitation on expenditures could, in theory, pass constitutional
muster.
Austin v. Michigan Chamber: Several years later, the Supreme
Court recognized just such a compelling interest in limiting
expenditures as well as contributions. In Austin v. Michigan
Chamber of Commerce (1990) the Court upheld a state law that
prohibited corporations from using corporate treasury funds for
independent expenditures to support or oppose any candidate for
state office. The law, however, still allowed a corporation to
use "segregated funds" (e.g. voluntary donations by shareholders
to a separate fund) to fund political action committees. The
Court upheld the statute against a First Amendment challenge on
the grounds that the law served a "compelling governmental
interest" in preventing the "distortion" that is created when a
corporation can create large aggregations of wealth that bear no
relationship to the public's support of its political ideas.
The Enactment of McCain-Feingold : Although decisions like
Austin permitted certain narrow regulations of independent
campaign expenditures, it was not long before candidates,
corporations, and political parties found creative ways around
the proscriptions. These efforts to circumvent regulations
produced landmark legislation in Congress that sought to counter
the most troublesome types of campaign financing techniques.
The most notable legislative achievement was the BCRA of 2002,
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known as "McCain-Feingold." Although the McCain-Feingold
primarily sought to regulate so-called "soft money" (i.e.
channeling contributions to candidates through parties), it also
enacted provisions banning corporate and union financing of
"electioneering communications" in designated periods
immediately preceding a primary or general election.
McConnell v. FEC : The Supreme Court first considered the
constitutionality of McCain-Feingold in McConnell v. FEC (2003)
540 U.S. 93. The complicated McConnell ruling - with the 5-4
decision producing eight different opinions - upheld most of the
provisions of the law, including the exact provision struck down
by Citizens United only seven years later. Specifically, the
Court in McConnell upheld limitations on the use of corporate
and union treasury funds to finance campaign advertisements that
were the "functional equivalent" of express advocacy. Although
the many opinions issued in McConnell are almost impossible to
summarize, the majority clearly held that regulations of the
source, content, and timing of political advertising - so long
as those regulations do not amount to a complete ban - do not
violate the First Amendment. Importantly, the lead opinion by
Justices O'Connor and Stevens reasoned that government had a
legitimate interest in preventing "both the actual corruption
threatened by large financial contributions . . . and the
appearance of corruption." O'Connor and Stevens noted that
"money, like water, will always find an outlet," and Congress
can surely respond when groups devise schemes to circumvent
contribution limits.
Campaign Spending On Steroids?" The Reaction to Citizens
United : In overturning both its Austin and McConnell decisions,
the Supreme Court in Citizens United rejected its earlier idea
that "distortion" constitutes a compelling governmental interest
and held that corporations and unions are now free to spend
unlimited amounts on "independent expenditures" -- even for
advertisements that expressly mention the candidate by name.
Although most immediately the decision only struck down a
provision of federal law, by implication, Citizens United
arguably renders unenforceable laws in 24 states (California is
not one of them) that impose limits on independent expenditures
similar to the BCRA provision that the Court struck down.
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Citizens United has been roundly criticized by many political
and legal commentators because it removes virtually all limits
on corporation and union expenditures. In addition, it has also
been condemned as an unabashed and some say ironic example of
profound judicial activism by the very justices who usually laud
judicial restraint. Professor Erwin Chemerinsky, for example,
describes the opinion as "a stunning example of judicial
activism," insofar as it not only failed to show any deference
to Congress, but also because it overturned years of precedent.
(Chemerinsky, "Who are the Judicial Activists Now?" Los Angeles
Times, January 22, 2010.) What makes this activism all the more
remarkable, many others have noted, is that the Court could have
decided the case on much narrower grounds. Indeed, Justice
Stevens, quoting a prior appeals court opinion by Chief Justice
Roberts, noted that the "cardinal" principle of the judicial
process is, "if it is not necessary to decide more, it is
necessary not to decide more" - yet that is precisely what the
Court's conservative majority proceeded to do. �Citizens
United, supra at 164, Stevens, J. dissenting.)] As Professor
Richard Hasen of Loyola Law School put it "in Citizens United
the Supreme Court ignored the well-established doctrine of
'constitutional avoidance,' by which it avoids deciding tough
constitutional questions when there is a plausible way to make a
narrower ruling based on a plain old statute." (Quoted in David
Kirkpatrick, "Lobbyists Get Potent Weapon in Campaign Ruling,"
New York Times, January 21, 2010.)
According to Republican campaign strategist Benjamin Ginsberg,
the decision may also take more campaign control away from the
candidates and parties, as independent groups seek to shape the
issues whether the candidates or parties agree with the
characterizations or not. According to Ginsberg, the decision
"will put on steroids the trend that outside groups are
increasingly dominating campaigns. Candidates lose control of
the message �and] . . . parties will sort of shrink in the
relative importance of things." (Quoted in Kirkpartrick,
supra.) Writing in the Christian Science Monitor, Common Cause
President Bob Edgar flatly asserted that the decision was "bad
for democracy," and he called upon Congress to "respond swiftly
and forcefully to ensure that corporations do not take over our
political process." (Bod Edgar, Supreme Court's Campaign
Ruling: A Bad Day for Democracy," Christian Science Monitor,
January 22, 2010.) Indeed, members of Congress tried to respond
with various legislative fixes, but the ruling appears to leave
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a very limited range of options, such as enhancing existing
disclosure requirements or requiring corporations to get some
form of approval from shareholders. (David Kirkpatrick,
"Democrats Try to Rebuild Campaign-Spending Barriers," New York
Times, February 12, 2010.) It is precisely because of these
legislative constraints that Congress, and many others, are now
looking to amend the Constitution in order to undo the effects
of Citizens United.
The Less-Noted SpeechNow.org v. FEC Decision and the Rise of the
"Super PAC": Although it received much less attention than
Citizens United, a decision by the United States Circuit Court
of Appeal for the Second District, a week after Citizens United,
has arguably had an even greater impact than Citizens United.
Some commentators contend that this decision, coupled with
Citizens United, opened the door for the so-called "Super PACS"
that have been much discussed during the presidential primary.
In SpeechNow.org v FEC (2010) 599 F. 3d 686, a suit was brought
against the FEC by an unincorporated nonprofit association
registered as a "political organization" under Section 527 of
the Internal Revenue Code. The organization, known as
SpeechNow, claims that it is dedicated to the protection of free
speech and supports political candidates who share its views.
SpeechNow apparently only takes money from individuals and only
uses the funds collected for independent expenditures. That is,
it does not make contributions directly candidates, but instead
independently runs ads on a candidate's behalf without
coordinating with the candidate. After failing to get an
advisory opinion from the FEC, SpeechNow filed a complaint in
federal district court seeking declaratory relief against
federal law limiting contributions to political committees to
$5000. When the district court denied the request for
declaratory relief, SpeechNow appealed to the Circuit Court.
Unlike Citizens United, the SpeechNo.org v. FEC did not involve
a limitation on expenditures, as such, but involved a
contribution to a political committee that only made independent
expenditures. Nonetheless, in reaching its opinion the Circuit
Court of Appeal relied upon Citizens United, and in particular
its reasoning that limits on independent expenditures were
unconstitutional because expenditures, unlike direct
contributions to candidates, did not create a danger or
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perception of quid pro quo corruption, and therefore could not
serve a compelling government interest that could justify
restriction of First Amendment rights. Following this
reasoning, the Court held that the government could not restrict
contributions, whether by individuals or by corporations, to
political committees that were only used for independent
expenditures. The FEC had tried to argue Citizens United upheld
limits on contributions, but the court in SpeechNow.org reasoned
that if independent expenditures do not create a danger or
appearance of corruption, then contributions to a committee that
only makes independent expenditures do not create a danger or
appearance of corruption. Specifically, the Court held that "in
light of the Court's holding �in Citizens United] it is a matter
of law that independent expenditures do not corrupt or create
the appearance of quid pro quo corruption, �therefore]
contributions to groups that make only independent expenditures
also cannot corrupt or create the appearance of corruption."
Accordingly, the court ruled in favor of SpeechNow.org and held
contribution limitations in FECA cannot be constitutionally
applied against persons who wish to contribute more than $5000
to "expenditure only" political action committee. Therefore,
while many commentators opined that one possible bright spot in
Citizens United was that it preserved limitations on
"contributions," the SpeechNow.org decision suggests that this
may only apply to limitations on contributions directly to
candidates or the candidate's campaign, but not to limitations
on contributions to committees that only make independent
expenditures. This decision, therefore, opened the door to
so-called "Super PACS" or "expenditure only" political action
committees. The traditional political action committee
typically used its funds both to make direct contributions to
candidates and to make independent expenditures for political
advertisements on behalf of a candidate (albeit not done in
coordination with the candidate.) So long as a political action
committee used funds for both purposes, federal law limited
contributions to the committee to $5000 per year per individual.
But the new super PACs which have been created in the wake of
the SpeechNow.org decision, so long as they designate themselves
as "expenditure only," are not subject to any limitations on the
contributions that they can receive. (On "super PACs" and their
relationship to the SpeechNow.org ruling see the website of the
Center for Responsive Politics at
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http://www.opensecrets.org/pacs/superpacs.php?cycle=2012 .) As
noted numerous press reports, the super PACS have played an
extremely important role in the Republican primaries thus far
and are expected to play an even greater role in the general
election. (See, e.g., "Obama Fears Uphill Climb in Raising
'Super PAC' Money," New York Times, March 13, 2012.)
National, State, and Local Calls for Constitutional Amendment .
At the time of this writing, at least 13 resolutions seeking to
overturn Citizens United had been introduced in either the U.S.
House of Representatives or the U.S. Senate. Although all seek
to overturn Citizens United, they do so in different ways. Some
of the resolutions simply call for overturning Citizens United
without stating which of the Court's several holdings would be
overturned. (See e.g. H.J. Res. 86, introduced by Rep. Sutton;
S.J. Res. 29, introduced by Senators Harkin et.al.) Some of the
resolutions introduced thus far proclaim, in one way or another,
that corporations are not "natural persons" and thereby not
protected by any of the rights protected by the United States
Constitution. (See e.g. H.J. Res. 90, introduced by Rep.
Deutch; S.F. Res. 33, introduced by Senator Sanders; and H.J. 88
by Rep. McGovern.) Still others would overturn Citizens United
more narrowly by merely affirming Congress' power to regulate
campaign contributions and expenditures. (See e.g. H.J. Res.
72, introduced by Rep. Schrader; H.J. Res. 8, introduced by Rep.
Kaptur.) State and local resolutions calling upon Congress to
propose and submit a constitutional amendment similarly vary in
terms of which aspects of Citizens United should be overturned.
How Much of Citizens United should be overturned ? While all of
the resolutions proposed thus far have called for overturning
Citizens United, the question of which of its many holdings
should be overturned is a highly significant one. For example,
AJR 22 declares that the First Amendment was designed to
"protect the speech of free people, not corporations," and much
of the popular reaction to the decision has expressed concern
over the underlying premises that corporations are "persons" and
that spending money is "speech." Thus far however, as noted
above, the courts have held that corporate bodies are indeed
protected by the First Amendment, and by many other
Constitutional provisions as well.
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Citizens United therefore did not depart from precedent when it
held that corporate campaign spending is speech protected by the
First Amendment. Where the case did depart from precedent was
in its finding that limiting independent expenditures was never
a sufficiently compelling justification for restricting speech
because, unlike direct contributions to candidates, it did not
create the danger or appearance of quid pro quo corruption.
Thus, general resolutions to "overturn" Citizens United could
mean many things. Most narrowly, they could mean restoring the
McConnell ruling thereby reaffirming Congress' power to regulate
campaign expenditures in the manner of McCain-Feingold.
Somewhat more broadly, they could mean restoring Austin and
recognizing that prevention of "distortion" as a sufficiently
"compelling" justification for government restrictions on
corporate campaign contributions and expenditures. More broadly
still, they could expressly advocate declaring that corporations
are not "natural persons" and therefore not protected by the
First Amendment.
ARGUMENTS IN SUPPORT : According to the authors, the "U.S.
Supreme Court's ruling in Citizens United v. Federal Election
Commission ignored precedent and opened the door for unlimited
corporate donations advocating for and against candidates. AJR
22 would put California's legislature on record in opposition to
this ruling and would call upon the U.S. Congress to propose and
send to the states for ratification a constitutional amendment
to overturn Citizens United and restore constitutional rights
and fair elections to the people." The authors contend that AJR
22 is part of a "national grassroots movement" that believes
that "�c]orporations are not people and money is not speech."
The authors also contend that people's trust of government is at
an all-time low, and that decisions like Citizens United only
"further erode the public's faith that the people's interest
will come before those of wealthy special interests." Quoting
Justice Stevens' dissent in Citizens United, the authors contend
"legislators have a compelling constitutional basis, if not also
a democratic duty, to take measures designed to guard against
the potentially deleterious effects of corporate spending in
local and national elections." The authors believe that AJR 22
will "send a message that we want Congress to perform that
democratic duty."
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Consumer Watchdog supports this measure because it believes that
"�n]o single factor does more damage to democracy than the
corrosive influence of corporate money in politics. The public
interest is repeatedly and effectively overwhelmed by the flood
of corporate spending in political campaigns." Similarly,
Common Cause contends that Citizens United has "allowed a
torrent of unlimited special interest funds into our federal
elections" and "allow special interests to influence politics
through their general treasuries and would ultimately sway
government policies towards the needs of the interests and not
the needs of the voters."
Public Citizen contends that the "vast majority of the American
people are outraged by the Court's decision" in Citizens United,
citing a recent poll purportedly showing that across the
political spectrum Republicans, Democrats, and Independents
opposed the ruling by a margin of almost four-to-one. Public
Citizen also claims that we are already seeing the negative
consequences of the decision, citing reports indicating a 427%
increase in the 2010 election cycle. �Note: It is not clear
what the 2010 election figure was compared to reach this
staggering percentage increase.] Finally, Public Citizen argued
that there is "a powerful and fast-growing movement" calling for
a constitutional amendment, and it urges the Judiciary Committee
members "to be part of this historical moment and pass AJR 22."
Finally, Move to Amend, supports this resolution but asks that
it be amended "to include the phrases 'money isn't speech' and
'corporations are not persons.' This language is critical
because illegitimate corporate power didn't begin with Citizens
United-indeed, for over 120 years, the Supreme Court has granted
corporations more and more of the rights enshrined by the
Founders for We the People-and fixing Citizens United won't end
corporate domination of our communities, economy, and polity."
Move to Amend contends that overturning Citizens United will
only bring us part of the way. Instead, Move to Amend believes
that "we need to end the fiction of corporate personhood itself.
Let's amend the Constitution in a way that abolishes all rights
wrongly granted to corporations during the last two centuries".
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REGISTERED SUPPORT / OPPOSITION :
Support
California Church Impact
California Labor Federation
California League of Conservation Votes
California Nurses Associations
California Public Interest Research Group (CALPIRG)
Common Cause
Consumer Watchdog
Davis City Council
International Forum on Globalization
Move to Amend (If amended)
Public Citizen
More than 10,000 individuals who signed a Public Citizen
petition in support of AJR 22
Opposition
None on file
Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334