Citizens United v. Federal Election Commission: A Relaxation of Campaign Contribution Restrictions

On January 21, 2010, the United States Supreme Court ruling in Citizens United v Federal Election Commission ("FEC") reinforced the free speech rights of corporations and labor unions to participate in the political process through independent communications expressly advocating the election or defeat of clearly identified candidates.

During oral arguments, the FEC argued that the government had the power to ban and impose criminal penalties upon the distribution of a politically-oriented movies or materials if they were distributed by certain corporations.

In rejecting the FEC's position, the United States Supreme Court stated:

"If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech."

"When Government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought.  This is unlawful."

Not all corporations were subject to the ban on political speech.  Campaign finance laws typically contain an exemption for media corporations; consequently, Viacom, which effectively owns CBS News, has free speech rights; Disney, which owns ABC News, has free speech rights; and General Electric, which owns NBC News, has free speech rights.  However, other than a few media corporations or conglomerates owning these media corporations, corporate political speech was prohibited.  Accordingly, the United States Supreme Court found that these exemptions result in a further, separate reason for finding these prohibitions invalid: 

"Again by its own terms, the law exempts some corporations but covers others, even though both have the need or the motive to communicate their views.  The exemption applies to media corporations owned or controlled by corporations that have diverse and substantial investments and participate in endeavors other than news.  So even assuming the most doubtful proposition that a news organization has a right to speak when others do not, the exemption would allow a conglomerate that owns both a media business and an unrelated business to influence or control the media in order to advance its overall business interest.  At the same time, some other corporation, with an identical business interest, but no media outlet in its ownership structure, would be forbidden to speak or inform the public about the same issue.  This differential treatment cannot be squared with the First Amendment."

Be advised that Citizens United only allows a corporation or a labor union to make independent expenditures expressly advocating the election or defeat of a candidate; Citizens United does not allow a corporation or a labor union to make direct political contributions to candidates or political parties.