Campaign Finance, Corporate Personhood, and the Malleability of Precedent

Chief Justice John Roberts (left) with former President George W. Bush at a press release in 2005 (Courtesy of the White House).       

Chief Justice John Roberts (left) with former President George W. Bush at a press release in 2005 (Courtesy of the White House).       

Since the Supreme Court’s relatively well-publicized Citizens United decision of 2010 (and more recently, their McCutcheon v. FEC ruling in April of this year), there has been no shortage of vehement perspectives that have made their way onto the public stage. Citizens United is “the most serious threat to American democracy in a generation,” writes Newsweek. The new order of campaign finance is “worse than Watergate,” writes Slate. Even Obama weighed in, calling the decision one that “strikes at our democracy itself.” With the Court’s dismantling of a century of law, it seems, money has finally become the new metric of American citizenship. Government has finally yielded to towering plutocratic ambitions. Behold, the shameful plight of the democratic institution.

The McCutcheon v. FEC ruling, decided earlier this year, struck down the “aggregate contribution limits” of the Bipartisan Campaign Reform Act as a violation of the First Amendment. The ruling, taken with Citizens United, reads like another crack in the dam against no-holds-barred campaign financing. As Justice Thomas writes in his concurring opinion in McCutcheon:

“Political speech is ‘the primary object of First Amendment protection’ and ‘the lifeblood of a self-governing people.’ Contributions to political campaigns, no less than direct expenditures, ‘generate essential political speech’ by fostering discussion of public issues and candidate qualifications.”[1]

This holding, combined with the conclusions of Citizens United, portends drastic consequences for the campaign finance structure. If money is free speech (as McCutcheon suggests), and if the free speech of corporations is protected under the First Amendment (as Citizens United suggests), then there seems to be a steady constitutional inclination towards unhindered corporate spending in political campaigns. How exactly this expansive reading of the First Amendment will play out in future elections, though, is a topic of heated debate. For some, the dangers are calamitous. For others, they’re overstated. In any case, campaign finance remains a winding and contentious subject, rife with regulatory minutiae and shady financial backchannels. More likely than not, a precise understanding of the political effects of these decisions will come only with the fidelity of time.

A more productive approach for unraveling these Supreme Court rulings may be to examine the holdings from their constitutional origins – that is, by tracing the development of “corporate personhood” more generally. While Citizens United may have reinvigorated the conversation on corporate free speech, the idea that corporations are protected under certain constitutional Amendments extends long before 2010, to a single headnote in an 1886 decision called Santa Clara County v. Southern Pacific Rail Road. The headnote reads:

“Before argument, Mr. Chief Justice Waite said: ‘The Court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution which forbids a state to deny to any person within its jurisdiction the equal protection of the laws applies to these corporations. We are all of opinion that it does.’”[2]

Besides San Mateo County v. Southern Pacific Rail Road, an 1885 case that established (on largely tenuous grounds) that the Fourteenth Amendment applied to corporations as well as to natural persons, the headnote’s assertion rests on largely meager foundations. And although the headnote was not part of the formal opinion (which dealt with the taxation of railroad properties), it went on to serve as a critical citation for a slew of subsequent cases, exempting corporations from ad valorem taxes (Wheeling Steel Corp. v. Glander), granting corporations the First Amendment right to spend unlimited corporate funds on ballot initiatives (First National Bank of Boston v. Bellotti), affording corporations the First Amendment right to religious exemptions (Burwell v. Hobby Lobby Stores, Inc.), and underpinning many of the crucial precedents used in Citizens United and McCutcheon.

The idea that corporate personhood, a concept that has had such pervasive and precarious ramifications on our social and political economies, traces over a century back to a dubious court case and a brief headnote is disconcerting, to say the least. It raises important questions, moreover, about the discretionary power of the Supreme Court to draw specific outcomes out of the facts and legal precedents at hand, whether by emphasizing certain elements or by downplaying others. In McCutcheon, for example, Chief Justice Roberts dismissed in two swift moves a precedent set by Buckley v. Valeo that deemed aggregate contribution limits constitutional: he noted first, that Buckley’s treatment of aggregate limits was a mere three sentences (and so hardly worthy of attention), and second, that the legal and statutory backdrop against which McCutcheon was brought differed significantly from that of Buckley. “Most notably, statutory safeguards against circumvention have been considerably strengthened since Buckley was decided,” wrote the Chief Justice, citing various FECA Amendments.[3] Whether the FEC is actually capable of enforcing these statutory changes is, of course, a different question entirely, and one in which the Chief Justice seems to place an inordinate amount of faith.

The Chief Justice’s prompt repudiation of the Buckley precedent hints rather ominously at the malleability of legal doctrine: with no objective benchmark against which court opinions can be reasonably assessed, Chief Justice Roberts could just as easily have deemed the Buckley precedent controlling. This kind of narrow or selective interpretation of precedent resurfaces in a pivotal section of Citizens United as well, narrowing the definitional grounds on which “corruption” could be constitutionally evaluated. Writing for the majority and again citing Buckley, Justice Kennedy outlines the specific form of corruption that the Court would use to weigh state interests and reach a final verdict: “When Buckley identified a sufficiently important governmental interest in preventing corruption or the appearance of corruption, that interest was limited to quid pro quo corruption.”[4] Buckley’s particular definition of corruption, on which Kennedy relies considerably, thus excludes the very kind of influence that is relevant to and wielded by modern campaign financiers – increased access and preference obtained not by explicit bribery (ostensibly the only type of corruption covered by Buckley’s definition), but by the expected practices of obligation-exchange politics, subtler in form but often equal in influence. Justice Stevens underscores this point, writing in his dissent to Citizens United:

“Corruption can take many forms. Bribery may be the paradigm case. But the difference between selling a vote and selling access is a matter of degree, not kind. And selling access is not qualitatively different from giving special preference to those who spent money on one’s behalf.”[5]

Despite Stevens’ reasoning, the crude definition set by Buckley remained controlling in the decision, and the Court ultimately held “that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.”[6] Chief Justice Roberts reiterates this holding in McCutcheon as well, writing that “while preventing corruption or its appearance is a legitimate objective, Congress may target only a specific type of corruption—‘quid pro quo’ corruption.”[7] Future cases dealing with comparable issues of campaign finance and corporate personhood will doubtless embark from the same definitional premise, however narrow in focus or far removed from political realities it may be.

As esteemed and authoritative as the dictates of the judiciary have been, the legitimacy of the Supreme Court rests first and foremost on the cogency of its written opinions. Justice is not an exact science, and in a profession like the judiciary’s, where rhetorical persuasion is the star-stuff of survival, it is hardly surprising that the courts are granted notable discretion in the way they choose their words. At the same time, however, this latitude implies a level of independent judicial power that is enough to give anyone pause. If precedent is both dismissible and controlling (as Buckley is for McCutcheon and then Citizens United), then it is conceivable that judicial opinions assume a similar degree of discretionary flexibility. Within this latitude, perhaps, lies the creation point of law, from which corporate personhood as we know it today haphazardly emerged, from which it haphazardly developed, and from which it will no doubt haphazardly proceed.

Peggy Xu is a second year in the college double majoring in Classical Studies and Law, Letters, and Society.

  1. McCutcheon v. Federal Election Commission, 572 U.S. (2014)  ↩

  2. Santa Clara County v. Southern Pacific R. Co., 118 U.S. 394 (1886)  ↩

  3. McCutcheon, 572 U.S.  ↩

  4. Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), emphasis added  ↩

  5. Id.  ↩

  6. Id.  ↩

  7. McCutcheon, 572 U.S.  ↩