Background of Citizens United v. Federal Election Commission

Prepared by the LWVUS Campaign Finance Task Force (for footnotes in text below, refer to this link)

The following discussion is about federal Court decisions interpreting laws and the Constitution regulating free speech, money, corporations, politics, and elections. Proposals to amend the Constitution arise out of fears that the First Amendment to the Constitution is being interpreted in such a way that our freedom, indeed our democracy, can be purchased. Here’s what the First Amendment says:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; of the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Background of Citizens United v. Federal Election Commission (FEC) [1]

Supreme Court Decision. In Citizens United v. FEC, the Supreme Court struck down long-standing provisions of federal campaign finance law prohibiting the use of corporate general treasury funds for independent expenditures[2]and electioneering communications[3]. The Court found that these provisions constituted a “ban on speech” and were unconstitutional under the First Amendment. The Court held that government could not restrict political speech based on the speaker being a corporation and not a natural person.

In its ruling, the Court invoked its landmark 1976 decision, Buckley v. Valeo, which held that the use of money, for both contributions and expenditures, is a form of speech protected by the First Amendment. In Buckley, the Court found that contributions to candidate campaigns could be regulated because they create a risk of quid pro quo corruption. However, the court found no danger of corruption in independent expenditures or in expenditures by candidate campaigns, which therefore could not be limited. The Court defines corruption narrowly to include votes-for-money quid pro quo or the appearance thereof but generally to exclude the other distorting effects that big money has on politics or government.

Following the Supreme Court’s reasoning in Citizens United, the US Court of Appeals for the District of Columbia ruled in v. FEC that since independent expenditures do not create actual or apparent quid pro quo corruption, individual and corporate contribution limits to PACs are impermissible if the PACs do not contribute to candidate campaigns but make only independent expenditures.

Impact on Federal Campaign Finance Law. Prior to the Citizens United ruling, corporations and labor unions were prohibited from using general treasury funds to make independent expenditures and electioneering communications. In the new, post-Citizens United world, corporate and labor union general treasuries are permitted to fund independent expenditures and electioneering communications. Subsequent to, they may also give unlimited amounts to PACs or other entities that make independent expenditures. Corporations and labor unions are still prohibited from making direct contributions to candidate campaigns or political parties.

Prior to, individuals were allowed to spend unlimited amounts directly on independent expenditures, but they were bound by contribution limits to PACs. After, individuals are also allowed to make unlimited contributions to PACs that make only independent expenditures.

Amending the Constitution. Since the Court’s decision is one of constitutional (not statutory) interpretation, amending the Constitution is an option for reversing the effects of these rulings. To date, 14 resolutions have been introduced in Congress to respond to Citizens United. Such resolutions require approval by two-thirds of both the House and the Senate, and they require ratification by the legislatures of three-fourths of the states.