BILL ANALYSIS �
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AJR 22 (Wieckowski & Allen)
As Amended March 14, 2012
Hearing Date: June 12, 2012
Fiscal: No
Urgency: No
RD
SUBJECT
Campaign Finance Reform
DESCRIPTION
This measure would memorialize the California State
Legislature's disagreement with the decision of the United
States Supreme Court in Citizens United v. Federal Election
Commission (2010) 130 S.Ct. 876 and would state, among other
things, that California calls upon Congress to propose and send
to the states for ratification a constitutional amendment to
overturn that decision and restore constitutional rights and
fair elections to the people.
BACKGROUND
Political speech is considered to lie at the core of the First
Amendment and to receive the highest form of protection. The
United States Supreme Court has considered (however
controversially) the First Amendment to the U.S. Constitution to
protect the right to make contributions and expenditures to
support or oppose candidates or issues, as well as to use such
moneys by a candidate or committee to promote his or her
viewpoint and election. (See e.g. Buckley v. Valeo (1976) 424
U.S. 1.) Such activities have been equated to speech (or,
speech by proxy) or, alternatively, been protected under the
right of association or assembly, insofar as making
contributions or expenditures in connection with elections is
analogous to aligning oneself with certain persons or
viewpoints.
The ability of government to regulate or restrict such political
(more)
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speech or campaign spending of natural persons, groups,
corporations, unions, or otherwise, has been tested repeatedly.
In reviewing the various legislative attempts, for many years,
the U.S. Supreme Court has drawn a distinction between
"contributions" or "in kind contributions" to candidates or
their committees, and "expenditures" by or at the behest of
candidates or committees or "independent expenditures" by
individuals or committees to expressly support or oppose an
issue or a candidate without any coordination with the candidate
or his or her committee, but the test for reviewing restrictions
on any of these has been the same: whether the specific
regulation is narrowly tailored to a compelling governmental
interest.
Most recently, in 2010, and the subject of this measure, the
Supreme Court decided Citizens United v. Federal Elections
Commission (2010) 130 S.Ct. 876, 913. In that case, the Court
struck down limitations placed on a corporation's ability to
make political independent expenditures, holding that they
violate a corporation's right to free speech and stating that
the "�g]overnment may not suppress political speech based on the
speaker's corporate identity." (Id. at 885.) In doing so, the
Court explicitly overruled its prior holding in Austin v.
Michigan Chamber of Commerce (1990) 494 U.S. 692 and part of
McConnell v. Federal Elections Communication (2003) 540 U.S. 93.
The following year, relying upon on the Citizens United
rationale, a federal district court, in Speechnow.org v. FEC
(2011) 599 F.3d 686 held that limits on the use of the corporate
treasury to make independent expenditures are unconstitutional.
Since then, a great amount of national focus has been given to
the rise of independent expenditure-only political action
committees, also known as Super PACs. Corporate treasuries can
now be used to give unlimited amounts of money to Super PACs of
a corporation's choosing, either directly or indirectly through
a 501(c)(4) (which then gives to the Super PAC without having to
disclose its donors; in turn, the Super PAC discloses the
501(c)(4) as its donor, not the actual persons or entities
donating to the 501(c)(4)). The impact of these PACs, and of
Citizens United itself, however, has yet to be fully realized by
experts.
This measure, sponsored by Public Citizen, is part of a national
grassroots movement to urge Congress to overturn Citizens
United. According to the proponents, three states have already
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passed similar resolutions, seven other states have introduced
resolutions and 13 federal resolutions have been introduced.
Additionally, numerous California localities, including the
cities and town councils in Los Angeles, Oakland, Fort Bragg,
Richmond, Marina, and Fairfax have called for such a resolution
or passed their own. This resolution would, on behalf of
California, call upon 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 and memorialize the Legislature's disagreement with
that decision.
CHANGES TO EXISTING LAW
This measure would make the following legislative statements:
the First Amendment to the U.S. Constitution was designed to
protect the free speech rights of people, not corporations;
corporations are not people but, instead, are entities created
by the laws of the states and nations;
for the last three decades, a divided U.S. Supreme Court has
transformed the First Amendment into a powerful tool for
corporations seeking to evade and invalidate democratically
enacted reforms;
this corporate misuse of the First Amendment and the U.S.
Constitution reached an extreme conclusion in the U.S. Supreme
Court case of Citizens United v. Federal Election Commission
(2010) 130 S.Ct. 876, which overturned longstanding precedent
prohibiting corporations from spending general treasury funds
in elections;
the opinion of the four dissenting justices in Citizens United
noted that corporations have special advantages not enjoyed by
natural persons, such as limited liability, perpetual life,
and favorable treatment of the accumulation and distribution
of assets, that allow them to spend prodigious sums on
campaign messages that have little or no correlation with the
beliefs held by natural persons;
Citizens United will unleash a torrent of corporate money in
the political process unmatched by any campaign expenditure
totals in U.S. history and purports to invalidate state laws
and state constitutional provisions separating corporate money
from elections and represents a serious and direct threat to
our democracy;
the general public and political leaders. have recognized
that, since the founding of our country, the interests of
corporations do not always correspond with the public interest
and, therefore, the political influence of corporations should
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be limited;
in 1816, Thomas Jefferson wrote, "I hope we shall . . . crush
in �its] birth the aristocracy of our monied corporations
which dare already to challenge our government to a trial of
strength and bid defiance to the laws of our country";
Article V of the U.S. Constitution empowers and obligates the
people and states of the U.S. to use the constitutional
amendment process to correct those egregiously wrong decisions
of the U.S. Supreme Court that go to the heart of our
democracy and republic form of self-government; and
notwithstanding the decision in Citizens United, legislators
have a duty to protect democracy and guard against the
potentially detrimental effects of corporate spending in
local, state, and federal elections.
This measure would declare that the California Legislature
respectfully disagrees with the majority opinion and decision of
the U.S. Supreme Court in Citizens United.
This measure would call upon the U.S. Congress to propose and
send to the states for ratification a constitutional amendment
to overturn Citizens United and to restore constitutional rights
and fair elections to the people.
COMMENT
1. Stated need for the bill
According to the author:
The U.S. Supreme Court's ruling in Citizens United v. Federal
Election Commission �(2010) 130 S.Ct. 876] ignored precedent
and opened the door for unlimited corporate donations
advocating for and against candidates. . . . AJR 22 is part
of a national grassroots movement to urge Congress to overturn
Citizens United . . . . Three states, Hawaii, New Mexico and
Vermont, and several cities from New York to Los Angeles have
passed similar resolutions. As the most populous state in the
country, with the largest congressional delegation, California
must take a stand in opposition to this misguided ruling.
At a time when the people's trust in their government is at an
all-time low, Citizens United further erodes the public's
faith that the people's interests will come before those of
wealthy special interests. By allowing unlimited
contributions from the general treasuries of corporations, the
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decision gives nonstop TV airtime for corporate-backed
campaign ads while the general public must compete with a
bullhorn.
. . . �Quoting Justice Stevens:] "Our lawmakers have a
compelling constitutional basis, if not a democratic duty, to
take measures designed to guard against the potentially
deleterious effects of corporate spending in local and
national elections." AJR 22 sends the message that we want
Congress to perform that democratic duty.
2. Campaign finance reforms and the shift in U.S. Supreme
Court jurisprudence
This measure is in direct response to the most recent of the
long line of United States Supreme Court jurisprudence, Citizens
United v. Federal Election Commission (2010) 130 S.Ct. 876,
which arguably deviated from many of the Court's prior
precedents. As noted in the Background, political speech is
considered to lie at the core of the First Amendment and to
receive the highest form of protection. The Supreme Court has
interpreted this right to encompass the acts of making
contributions and expenditures in relation to the elections of
candidates or issues. Nonetheless, the area of campaign finance
law is no stranger to federal and state attempts to regulate the
spending of money in elections. Unsurprisingly, many of these
regulations have been challenged to and reviewed by the Supreme
Court as to their constitutionality.
Congressional regulations placed on money used in political
campaigns or elections (also known as campaign finance reform)
were seen as early as 1883 with the Pendleton Civil Service
Reform Act. That Act prohibited the solicitation of campaign
donations on federal property and put an end to the practice of
awarding government jobs on the basis of whether the individual
contributed a portion of his or her salary to the political
party. Further reforms followed in 1907 with the enactment of
the Tillman Act (banning corporate contributions for political
purposes), in 1910 with the Publicity of Political Contributions
Act (requiring post-election disclosure of donations to
candidates for the House of Representatives), in 1925 with
Federal Corrupt Practices Act (extending the Tillman Act's ban
on corporate contributions to in-kind contributions), in 1939
with the Hatch Act (banning contributions and participation in
campaigns by all government employees), in 1943 with the
Smith-Connally Act (prohibiting labor unions from contributing
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to campaigns during the ongoing World War), and in 1947 with the
Taft-Hartley Act (prohibiting all corporate and union political
expenditures). (See Thaler, Note: Citizens United and Forced
Speech: Why Protecting the Dissenting Shareholder Necessitates
Disclosure of Corporate Political Expenditures After Citizens
United v. FEC (Spring 2011), 17 Wash. & Lee J. Civ. Rts. & Soc.
Just. 591, 603-610.)
The more recent framework of federal campaign finance reform is
reflected primarily in the Federal Election Campaign Act (FECA)
and Bipartisan Campaign Reform Act (BCRA). In 1971, the United
States Congress first passed the FECA, which sought primarily to
equalize the playing field among candidates, and in 1974 amended
it to place limits on various campaign contributions and
expenditures. The FECA also significantly strengthened
requirements to disclose political contributions and
expenditures. Then in 2002, Congress passed the BCRA (also
known as the McCain-Feingold Act), which amended the FECA and
addressed two issues: (1) the increased role of soft money in
elections (unlimited money that could be given to political
parties and often used for candidate-related "issue ads"); and
(2) the proliferation of issue advocacy advertisements
(independent expenditure ads), and specifically what it named as
"electioneering communications" (those broadcast ads that
specifically named a candidate within a specified number of days
before an election).
The history of U.S. Supreme Court jurisprudence on the issue of
permissible versus non-permissible forms of such regulations of
political speech by various speakers (natural persons, groups,
corporations, unions, and others) is as extensive as the history
of the federal and state regulations themselves, and Citizens
United represents the Court's most recent, and arguably its most
controversial, opinion.
a. The U.S. Supreme Court and campaign finance regulations
pre-Citizens United
This measure would memorialize the California State
Legislature's disagreement with the decision of the U.S.
Supreme Court in Citizens United. In doing so, the resolution
states that for the last three decades, a divided U.S. Supreme
Court has transformed the First Amendment into a powerful tool
for corporations seeking to evade and invalidate
democratically enacted reforms. It further states that
corporate misuse of the First Amendment and the U.S.
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Constitution reached an extreme conclusion in Citizens United
when the Court's ruling overturned longstanding precedent
prohibiting corporations from spending their general treasury
funds in our elections.
While some might argue that this problem did not necessarily
start with Citizens United, but culminated with it as those
statements suggest, others, like Justice Stevens in his
dissenting opinion in Citizens United, might mark that
decision as a major diversion from prior Supreme Court
jurisprudence, undermining decades worth of holdings in
campaign finance reform cases. (See Comment 2b.)
In general, the Supreme Court has applied strict scrutiny to
laws placing limits on contributions and expenditures. At the
same time, the Court has recognized in reviewing such laws
that "�p]reserving the integrity of the electoral process,
preventing corruption, and '�sustaining] the active, alert
responsibility of the individual citizen in a democracy for
the wise conduct of government' are interests of the highest
importance" and that "�p]reservation of the individual
citizen's confidence in government is equally important."
(First Nat'l Bank v. Belotti (1978) 435 U.S. 765, 788-789,
citations omitted.)
Significantly, in 1976, in the seminal case of Buckley v.
Valeo (1976) 424 U.S. 1, the U.S. Supreme Court, addressed
various challenges made to the FECA, including limits on
contributions, expenditures and independent expenditures.
With respect to limits placed on contributions and in-kind
contributions, because the money was being given directly to
the candidate or a candidate committee, the Buckley Court
found that the government interest in addressing the concern
of actual or apparent "quid pro quo" corruption and in
preserving confidence of citizens in their government, was
sufficiently compelling enough to justify the regulations of
these otherwise protected activities.
In contrast, the Court found that personal expenditures made
by a candidate facilitated the expression of the candidate's
viewpoints and were effectively his or her political speech.
In describing the regulations as substantial and direct
restrictions on the ability of candidates, citizens, and
associations to engage in political expression protected by
the First Amendment, the Court held that the limitations did
not pass constitutional muster. As to the FECA's limitations
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on independent expenditures made by individuals or groups, the
majority of the Court found they did not surpass strict
scrutiny and were unconstitutional, for either a lack of a
similarly sufficient nexus between such spending and
corruption, or a sufficient governmental interest in
equalizing the resources of candidates. The Court did not
reach, however, the question of whether there could be
limitations on such expenditures that would surpass strict
scrutiny, if sufficiently narrowly tailored to a compelling
governmental interest.
Two years later, in First National Bank v. Bellotti (1978) 435
U.S. 765, 795 the Supreme Court invalidated a state's
restriction on corporate spending to advocate for or against
ballot referenda not materially related to the corporation's
business. The Court in that case relied heavily on the
principle that the corporate identity of the speaker did not
change the First Amendment analysis of permissible versus
impermissible government regulations and re-emphasized that
"the risk of corruption perceived in cases involving candidate
elections . . . simply is not present in a popular vote on a
public issue. To be sure, corporate advertising may influence
the outcome of the vote; this would be its purpose. But the
fact that advocacy may persuade the electorate is hardly a
reason to suppress it: The Constitution 'protects expression
which is eloquent no less than that which is unconvincing.'"
(Id. at 790, footnote and internal citations omitted.) With
that, the Court rejected the premise that a corporation's
ability to engage in issues could be limited to those that
were materially related to their business only.
In contrast, however, in the case of Austin v. Michigan
Chamber of Commerce (1990) 494 U.S. 692, 660, the Court upheld
a ban on the use of corporate treasury funds for independent
expenditures in support of or in opposition to candidates in
elections, based on the governmental interest in preventing
"the corrosive and distorting effects of immense aggregations
of �corporate] wealth ? that have little or no correlation to
the public's support for the corporation's political ideas."
In 2003, in the case of McConnell v. Federal Elections
Communication (2003) 540 U.S. 93, the Court, among other
things, affirmed the holding in Austin and reviewed the first
significant challenges to the BCRA. The McConnell Court
ultimately upheld the BCRA's key restrictions on corporate
independent expenditures, including its prohibition on the use
of treasury funds for electioneering communications (made
within a certain number of days of an election) that "refe�r]
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to a clearly identified candidate." That same year, in
Federal Elections Committee v. Beaumont (2003) 539 U.S. 146,
the Supreme Court upheld, among other things, the
constitutionality of law banning direct corporate
contributions to candidates or candidate committees, as
applied to a nonprofit advocacy corporation.
As a result of these and other Supreme Court cases upholding
various campaign finance laws, before 2010, corporations were
effectively limited to creating segregated political action
committees (PACs) in order to make contributions or
expenditures in connection with elections. Under that scheme,
certain members of the corporation could be solicited to
voluntarily donate to the corporate PAC for political
expenditures, rather than making such contributions or
expenditures through the corporate treasury. In turn, PACs,
just like individual persons, were limited in the amount that
they could make a contribution to a candidate or an in-kind
contribution to candidate committee, and had to disclose their
contributions and expenditures as prescribed under federal
campaign finance law, as well as state campaign finance laws.
(See discussion of PACs in Beaumont, 539 U.S. at 149.)
Thus, while neither Congress, nor the states could limit
independent expenditures of individuals, groups, or PACs,
corporations themselves could not directly engage in such
campaign spending from their corporate treasuries.
b. The U.S. Supreme Court and campaign finance regulations
today post-Citizens United
In 2010, the landscape described above changed significantly
with the Supreme Court's holding in the case of Citizens
United. This resolution seeks to encourage Congress to
overturn that decision.
In Citizens United, the Court reviewed a section of the BCRA
which prohibited corporations and unions from using their
general treasury funds to make independent expenditures for
speech that is an "electioneering communication" or for speech
that expressly advocates the election or defeat of a
candidate. (Electioneering communications are "any broadcast,
cable, or satellite communication" that "refers to a clearly
identified candidate for Federal office" and is made within 30
days of a primary election and that is "publicly distributed,"
as otherwise defined under federal law and regulations; 2
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U.S.C. Sec. 441b.)
At issue in the case was a documentary called Hillary: the
Movie (Hillary), released by Citizens United, a nonprofit
corporation, critical of then-Senator Hillary Clinton, a
candidate for the Democratic Party's Presidential nomination.
Anticipating that it would make Hillary available on cable
television through video-on-demand within 30 days of primary
elections, Citizens United produced television ads to run on
broadcast and cable television. Concerned about possible
civil and criminal penalties for violating the federal law on
electioneering communications, the corporation sought
declaratory and injunctive relief, arguing that: (1) that
section is unconstitutional as applied to Hillary under a
prior Supreme Court case; and (2) the BCRA's disclaimer,
disclosure, and reporting requirements were unconstitutional
as applied to Hillary and the ads. Citizens United's first
argument was that the film did not qualify as "express
advocacy or its functional equivalent" that "is susceptible of
no reasonable interpretation other than as an appeal to vote
for or against a specific candidate." (130 S.Ct. 876, 881,
citations omitted; it is interesting to note that even the
Court's majority opinion labeled the movie as "pejorative.")
Moreover, Citizens United argued that there was a lower risk
of distorting the political process with videos-on-demand than
with television ads and that there should be an exception to
Section 441b's ban for nonprofit corporate political speech
funded overwhelmingly by individuals. (Id.)
In deciding the case, however, the Court framed the issue much
more broadly so as to reconsider the 1990 case of Austin, and
relied heavily on the principle noted in the earlier case of
Bellotti that "�g]overnment may not suppress political speech
based on the speaker's corporate identity." (Id. at 885.)
Accordingly, while it otherwise upheld the disclaimer and
disclosure requirements of the BCRA, the Court held that any
limits on a corporation's ability to make political
independent expenditures were both overbroad and too narrow to
achieve the stated governmental interests in protecting
shareholder interests and the confidence of citizens in their
government, and that these limits violated a corporation's
right to free speech. Moreover, the Court outright rejected
the premise that independent expenditures could ever lead to
corruption or the appearance of corruption in the way a
contribution could, putting finality to the issue in a way
that the Buckley Court did not. In doing so, the Court
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overruled its holding in Austin and part of McConnell. (Id.
at 913.)
The dissenting opinion vehemently argued that the impact of
the Court's ruling was much broader than the stated holding
and arguably "threatens to undermine the integrity of elected
institutions across the Nation." (Id. at 931.) As noted by
Justice Stevens, not only did the Court in an "unusual and
inadvisable" manner reframe the issue for itself, but "�t]he
majority's approach to corporate electioneering marks a
dramatic break from our past. Congress has placed special
limitations on campaign spending by corporations ever since
the passage of the Tillman Act in 1907 . . . . We have
unanimously concluded that this 'reflects a permissible
assessment of the dangers posed by those entities to the
electoral process,' . . . and have accepted the 'legislative
judgment that the special characteristics of the corporate
structure require particularly careful regulation,' . . . .
The Court today rejects a century of history when it treats
the distinction between corporate and individual campaign
spending as an invidious novelty born of Austin . . . .
Relying largely on individual dissenting opinions, the
majority blazes through our precedents, overruling or
disavowing a body of case law including FEC v. Wisconsin Right
to Life, Inc., 551 U.S. 449 . . . , McConnell v. FEC, 540 U.S.
93, 124 . . . , FEC v. Beaumont, 539 U.S. 146, FEC v.
Massachusetts Citizens for Life, Inc., 479 U.S. 238 . . . ,
�Federal Election Comm'n v. National Right to Work Comm.], 459
U.S. 197 . . . , and California Medical Assn. v. FEC, 453 U.S.
182 . . . ." (Id. at 930-931.)
There has been much controversy over the Citizens United
decision over the last two years. Proponents of AJR 22 have
commented on and submitted petitions reflecting signatures of
thousands of constituents who have voiced their disagreement
with the decision. This measure represents California's call
to Congress to overturn Citizens and restore limits to the
influence of corporations in the American democracy.
Committee staff notes that it has the indirect impact of
raising the level of discussion as to the rights or non-rights
involved at the heart of the Court's decision in Citizens
United. The measure would not, nor could it, overturn that
decision for this State, and the law of the U.S. Supreme Court
would still stand until one of two things happens: (1) a
constitutional amendment is proposed, passed, and ratified; or
(2) a future U.S. Supreme Court decision overturns Citizens
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United. This measure is arguably a first step for California
in a national movement.
3. The Super PAC problem
This resolution would urge the U.S. Congress to overturn the
decision in Citizens United. In doing so, the resolution states
that the ruling represents a serious and direct threat to our
democracy and that the general public and political leaders in
the United States have recognized, since the founding of our
country, that the interests of corporations do not always
correspond with the public interest and, therefore, the
political influence of corporations should be limited.
The political influence of corporations post-Citizens United
has, in part, been seen in the form of independent
expenditure-only political action committees, or Super PACS, to
which corporations may donate to influence elections. The
problem of Super PACs and the ruling in Citizens United are
unmistakably intertwined. Prior to 2010, similar groups at
times appeared as "527s" (after Section 527 of the U.S. Internal
Revenue Code; e.g. Swift Boat Veterans For Truth), created
primarily to influence the election of a candidate without
expressly advocating for a candidate's election or defeat. The
difference, however, was that 527s carried with them a question
as to their legitimacy in being used for this purpose, and they
usually involved direct expenditures by individuals. By
rejecting the general premise that there can be a compelling
state interest strong enough to support narrowly tailored limits
on independent expenditures and holding that independent
expenditures could not be limited simply because they were
corporately-funded, the Court in Citizens United effectively
prohibited any limitations on this form of campaign spending by
corporations. In doing so, the Court arguably provided the
legitimization for the existence of political committees that
take unlimited contributions from persons as well as
corporations for the purpose of making independent (i.e. not
coordinated with candidates or their committees) expenditures to
advocate for or against a candidate or issue.
Again, in Citizens United, the Court outright rejected not just
the specific regulations that were at issue as failing strict
scrutiny, but seemingly rejected the entire notion that
independent expenditures can corrupt the political process in
the same way as contributions to candidates or expenditures
coordinated with candidates (or their committees). The Court
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rationalized that individual donations to those independent
expenditure committees do not result in corruption and, having
determined that the law could not distinguish among speakers,
whether natural persons or artificial entities, for the purposes
of First Amendment rights, the Court concluded that donations
made by corporations to these committees do not result in
corruption. Thus, corporations could also donate unlimited
amounts of money to independent expenditure committees, or Super
PACs.
Not long after Citizens United, a federal district court
decision in Speechnow.org v. FEC (2011) 599 F.3d 686 took this
one step further by interpreting the Citizens United holding to
mean that the government cannot prohibit the use of corporate
treasuries to directly contribute to these committees (as
opposed to first raising money through a segregated PAC). As a
result, corporations today cannot be limited in their donations
to independent expenditure-only committees, and may give
unlimited amounts of money directly to those Super PACs from
their corporate treasuries. This has a significant impact on
the disclosure of campaign spending. Previously, corporations
would have had to form segregated PACs, which face disclosure
requirements under federal law.
While existing law requires Super PACs to disclose their donors,
as discussed above, a donor's identity can be concealed by
donating first to a 501(c)(4) (tax exempt) "social welfare
organizations" that do not have to in turn disclose their donors
(the Super PAC must list the 501(c)(4), not the 501(c)(4)'s
donors under disclosure laws). The fact that corporations have
the ability to not only expend large amounts of money, but also
to outspend individuals, raises concerns of the impact and
influence of those entities in American elections. Committee
staff notes that it arguably raises concerns as to the degree of
certainty with which the Court could have determined this type
of spending could not lead to real or apparent corruption.
Where the legitimacy of the American democracy relies in many
ways on the transparency, openness, and accountability of its
government, such untraceable spending in the elections of its
public representatives arguably undermines that system.
This measure not only makes several statements as to the impact
of Citizens United on our democratic system and the
responsibility of legislators to defend that system, but it also
seeks to start the process to restore some limits to the impact
of corporations in American elections by urging Congress to
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overturn that decision.
4. Corporate personhood
This resolution would state, among other things, that the First
Amendment was designed to protect the free speech rights of
people, not corporations, and that corporations are not people
but, instead, are entities created by the laws of the states and
nations.
The Citizens United decision and its lesser-known progeny have
been widely decried by not only members of the public, but also
staunchly criticized by large numbers of constitutional and
legal scholars, organizations, elected officials, and even small
businesses - most of whom argue there is a difference between
speech by natural persons and "speech" by legally created
entities. Many argue that spending money in campaigns and
elections is not the same as engaging in speech. Still others
argue that the governmental interest of preventing corruption
(or the appearance thereof) is, irrespective of personhood
issues, sufficient to justify narrowly tailored laws, such as
that which was struck down in Citizens United.
Inversely, the Citizens United decision has been defended by
others as a victory for free speech. Some equate corporations
with persons at least for the purposes of First Amendment
rights, among others. Others merely believe the decision
protects the interests of the First Amendment by protecting
speech and viewpoints of all speakers, thereby adding to the
marketplace of ideas and upholding the rights of the listener
that are also protected under the First Amendment. Thus, the
argument between the various sides has greatly centered on
whether all speakers, natural persons or artificial entities,
enjoy the same free speech rights under the Constitution. The
issue, in other words, has been framed largely as one of
"corporate personhood."
In making its decision in Citizens United, the Court revived a
principle from First Nat'l Bank v. Bellotti (1978) 435 U.S. 765
that the First Amendment rights of corporate speakers is the
same of natural persons. In Bellotti, the Court stated that:
The press cases emphasize the special and constitutionally
recognized role of that institution in informing and educating
the public, offering criticism, and providing a forum for
discussion and debate. . . . But the press does not have a
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monopoly on either the First Amendment or the ability to
enlighten. . . . Similarly, the Court's decisions involving
corporations in the business of communication or entertainment
are based not only on the role of the First Amendment in
fostering individual self-expression but also on its role in
affording the public access to discussion, debate, and the
dissemination of information and ideas. . . . Even decisions
seemingly based exclusively on the individual's right to
express himself acknowledge that the expression may contribute
to society's edification. . . . (Bellotti, 435 U.S. 765,
782-783, footnotes and citations omitted.)
The author of this measure argues, however, that "�a]s pointed
out by Justice Stevens, 'in the context of election to public
office, the distinction between corporate and human speakers is
significant.' Corporations cannot vote or run for office, can
be controlled and managed by nonresidents and their financial
resources and legal structure raise legitimate concerns about
their role in the process." Despite these undeniable
differences, Committee staff notes that, the issues of the
constitutionality of particular regulations on campaign spending
aside, the question of whether First Amendment rights are held
by corporations is nuanced and has potentially significant legal
implications not just for speakers, but listeners of speech, and
could inadvertently impact other areas of law in which
corporations are treated as persons subject to similar civil and
criminal laws as natural persons.
In an arguably balanced approach, this measure would state that
the First Amendment was designed to protect the free speech
rights of people, not corporations, and that corporations are
not people.
Support : California Church Impact; California Faculty
Association; California Labor Federation; California League of
Conservation Voters; California Nurses Association; California
Professional Firefighters; California Public Interest Research
Group; California Teachers Association; City of Berkeley; City
of Santa Monica; Common Cause; Consumer Watchdog; CREDO; Davis
City Council; International Forum on Globalization; Laborers'
Local 777 and 792; thousands of individuals as petition
signatories; one individual
Opposition : None Known
AJR 22 (Wieckowski & Allen)
Page 16 of ?
HISTORY
Source : Public Citizen
Related Pending Legislation :
SB 982 (Evans), among other things, would require a corporation,
as defined, to disclose to its shareholders any campaign
contributions or expenditures made in the previous fiscal year
in support of or in opposition to a candidate, ballot measure
campaign, or a signature-gathering effort on behalf of a ballot
measure, political party, or political action committee in a
fiscal year-end report, and to provide prior notice of any such
contributions or expenditures, as specified. This bill is in
the Senate Banking & Financial Institutions Committee.
AB 2050 (Allen) would, among other things, prohibit a domestic
corporation from making any monetary contribution to any
candidate for local or state office in this state or any other
state, and to make specified disclosures when making a monetary
contribution in excess of $1,000 to any candidate for federal
office or any statewide ballot, referendum, or initiative voted
on in this state. This bill is in the Assembly Judiciary
Committee.
AB 1648 (Brownley) would have, among other things, added
specified disclaimer and disclosure requirements with respect to
certain advertisements in connection with elections. This bill
is on the Assembly Floor.
Prior Legislation :
AB 1148 (Brownley, 2012) was substantially similar to AB 1648
and failed a 2/3 passage on the Assembly Floor.
AJR 32 (Allen, Gatto, Wieckowski, 2012) would have called upon
Congress to call a constitutional convention to amend the
Constitution to bar "corporate personhood" and declare that
money does not constitute speech. AJR 32 died in the Assembly
Judiciary Committee.
Prior Vote :
Senate Elections & Constitutional Amendments Committee (Ayes 3,
Noes 2)
Assembly Floor (Ayes 48, Noes 22)
AJR 22 (Wieckowski & Allen)
Page 17 of ?
Assembly Judiciary Committee (Ayes 6, Noes 0)
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