U.S. Supreme Court Issues Ground Breaking Campaign Finance Ruling

The U.S. Supreme Court, in a landmark decision, struck down a long standing prohibition on campaign financing and advocacy by businesses and unions in a 5-4 ruling on January 21, 2010.

Free speech advocates hail it as a major victory. The majority opinion determined that the financing limitations were an unconstitutional restraint of free speech and a limitation of citizens’ sources of information. Critics say that the decision will be an open invitation to corruption and deep-pocketed corporate and union influence. They argue it was conservative judicial activism, saying that the court decided an issue that was not even before the court for consideration.

The decision specifically overturned a 1990 Supreme Court decision that barred the Michigan Chamber of Commerce from purchasing a newspaper advertisement in a state legislative contest. That case was Michigan Secretary of State Richard Austin v. Michigan Chamber of Commerce. With the new ruling, businesses and unions are now free to use their own money to support or oppose candidates seeking public office. They must do this by advertising as they are still prohibited from directly contributing funds to candidates.

Despite the long time prohibition on corporation spending, previously, businesses, unions and other groups used political action committees (PACs) to contribute directly to candidates, but they had to be funded with voluntary contributions from members, employees or other individuals, not from corporate profits. This method of contributing was not affected by the decision, but it is still unclear how special interest money will be used now that corporations and unions are able to spend freely on advertising.

In addition to this newfound power to spend directly on campaign ads, the decision also struck down a portion of the McCain-Feingold campaign finance bill that prohibited so-called issue ads in the closing days of campaigns. Corporations and unions are now free to advertise right up to the election.

The court did not strike down all the campaign finance laws. The ruling left in place requirements under the McCain-Feingold bill that anyone contributing funds for political ads must disclose who is contributing.

President Obama made a statement after the landmark decision that he will work with Congress in response to this decision. Some state legislators and secretaries of state have also indicated they will work to increase or update disclosure laws to ensure the public is informed, no matter where the campaign funds originate. It is unclear whether this decision will be limited by some form of new legislation, since it is nearly impossible to pass any type of bill on Capital Hill these days with the rampant bipartisan bickering between parties.

Most experts agree on one thing – it is too early to tell how this decision will play out in practical terms, but we are likely to know soon with November’s congressional elections fast approaching.

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