The Manufactured Hysteria Over Citizens UnitedJohn O. McGinnis • July 12, 2012 • 8:42 am
[This is the third of four planned posts on Citizens United. The first was Citizens United—The Most Important Decision of the Roberts Court; the second was Citizens United—A Renormalization of First Amendment Law.]
Critics of Citizens United have intimated that it will result in a huge increase of for-profit corporate independent expenditures. President Obama played to such fears when he claimed in his 2010 State of the Union address that the decision “opened the floodgate for special interests–including foreign corporations–to spend without limit on our elections.”
At the time, it was widely reported that the president was falsely characterizing the decision: Citizens United did not invalidate prohibitions on campaign expenditures by foreigners, be they individuals or corporations. But it is also now clear that not many for-profit corporations make independent expenditures directly on behalf a candidate. Moreover, for-profit corporations give less than 20% of so-called Super PAC money used for independent expenditures for direct support of candidates. And many, if not most, of these donating corporations appear to be shells for individual contributions. (In my view, Congress and state legislatures should require such shell corporations to disclose the individuals behind them: Citizens United expressly permits disclosure laws). Publicly traded corporations appear to give less than 0.5% of all Super PAC funds. Thus, the amount of for-profit corporate treasury funds being spent in elections as a result of Citizens United represents a very small portion of total election expenditures. Citizens United has not released a floodgate of for-profit corporate independent expenditures. The president was in this respect no better a pundit than he was a legal analyst.
The New York Times recently reported that corporations are giving more to 501(c)(4) “social welfare” organizations, which can use a portion of their funds to run issue advertisements in elections. But this increase has nothing to do with the doctrine of Citizens United. Corporations were permitted to donate to 501(c)(4) organizations before that decision. Citizens United concerned only so-called “electioneering communications”–essentially expressions of support for candidates. 501(c)(4) organizations are not permitted to make such endorsements, but can run only issue ads.
Citizens are now giving more money to PACs that make independent expenditures. But citizens could make independent expenditures before Citizens United. Many had banded together to combine spending under so-called 527 organizations. It is true that Citizens United removes any doubt about the ability of citizens to make common cause in supporting candidates by using PACs or other nonprofit corporate forms. But that legacy of Citizens United is very different from the image of special interest money that the president tried to conjure. Citizens can and do have concerns about the good of the republic. They do not presumptively represent special interests any more than do legislators or the president or the editors of the New York Times. They have no less right to make their voices heard at election time.