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| The S T R A T E G I S T |
June 2011 - UPDATE |
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VA Federal Judge upholds - & refines - earlier ruling that contributions by for-profit corporations to Candidates are legal - sort of.
11 days ago, Judge James Cacheris of the Eastern District of Virginia held that the Supreme Court ruling in Citizens United rendered unconstitutional a ban on contributions by any corporation to a candidate. A raucous outcry ensued, highlighting the Supreme Court holding in FEC v Beaumont that a ban on contributions by a corporation (though in that case, importantly, a not-for-profit) was constitutional. As a result, the Judge made the unusual move of asking the parties to submit briefs on the matter (something the prosecution failed to reference earlier).
On Tuesday, June 7, Judge Cacheris upheld (but refined) his earlier ruling - surprising many pundits in the process. The Judge reasoned that Beaumont applied only to not-for-profit corporations like the one at issue in Beaumont, and not to for-profit corporations as in the case before Judge Cacheris. Judge Cacheris affirmed his earlier reasoning in his initial ruling, and further held that Beaumont only controlled as to not-for-profit corporations it expressly dealt with, and was only instructive as to the for-profit corporation at issue before Judge Cacheris. Citizens United independently controlled, and if corporations and individuals have the same free speech rights when it comes to Independent Expenditures, they must also have the same free speech rights to political contributions.
However, the Judge took the additional, and unusual, step of very clearly limiting the effect of his new ruling to the criminal case at hand - a ruling that is likely to be appealed immediately (without waiting for conclusion of the remainder of the trial). |
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Media Coverage
Early coverage of the ruling. (more to come. For updates, follow DBCapStrategies on  ):
Politico, and a PDF of the ruling
Center for Competitive Politics Blog and official statement
Rick Hasen's Election Law Blog offers a first report HERE, an update HERE, analysis of the ruling HERE, and notes on appealability of the ruling HERE
Scotus Blog
The New York Times
The Washington Post
Campaign Legal Center
Democracy 21
For a good daily round-up of campaign finance news, try Rick Hasen's Election Law Blog and the media update from the Center for Competitive Politics (subscribe by email to jtrotter@campaignfreedom.org). |
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DB Capitol Strategies and Dan Backer, Esq.
DB Capitol Strategies PLLC offers legal, strategic & operational guidance to political activists with a focus on PAC treasury and FEC reporting and compliance. Its principal attorney is Dan Backer, a graduate of the University of Massachusetts Amherst and George Mason University School of Law. In 2009, Mr. Backer earned the Professional Lobbying Certification (PLC) from the American League of Lobbyists.
Mr. Backer is admitted to practice law in Virginia & Washington DC, and before the U.S. District Courts for the Eastern & Western Districts of Virginia and DC. Mr. Backer has broad experience with public policy, advocacy, and grassroots programs, and is Treasurer or Asst. Treasurer of several PACs. |
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What does this mean, RIGHT NOW
First, the Judge explicitly limited his ruling to the criminal case at hand - perhaps to preserve the status quo through the ultimate appeal to, and decision, by the Supreme Court.
Second, the ruling applies only to for-profit corporations, and not tax-exempt not-for-profit organizations (organized under section 501(c) or 527 of the Internal Revenue Code).
Third, this has no immediate impact on PACs (though it may ultimately open the door for direct corporate contributions to PACs, and lead to the end of SSF's as discussed LAST WEEK).
Fourth, outside the Eastern District of Virginia, no for-profit corporation can safely rely on this ruling - it applies (if at all) only to those corporations in the Eastern District.
Fifth, if it applies at all, it likely does so only to Federal candidates & campaign committees in the Eastern District since candidate are themselves prohibited from accepting corporate contributions.
lastly, don't be the example. This ruling & re-ruling is likely to be appealed, and will slowly wend its way through the judicial system and ultimately be decided by the Supreme Court. In the meantime, any corporation attempting to make such a contribution - or a committee seeking to accept one - runs tremendous risks. |
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Looking ahead
Last week, The Strategist wrote:
It is likely the Judge will reconsider his ruling, though the Strategist still predicts that this outcome - contributions by corporations to candidates subject to the same limits as individuals - is inevitable. However, despite the strong indications towards this outcome in Citizens United, it failed to explicitly address the matter and the precedent in Beaumont still controls until the Supreme Court ultimately revisits this issue."
While wrong on the outcome of judge Cacheris' reconsideration, The Strategist continues to predict the increasingly likely outcome - that corporations (including some not-for-profit corporations) will eventually be free to contribute to candidates (and PACs), subject to the same limitations as individuals. This does raise interesting questions as to whether corporate mergers would be akin to a marriage - increasing the applicable limits at least if merged during the current year.
Nonetheless, it's unlikely that the predicted outcome - a ruling by the Supreme Court - will occur in time to impact the 2012 election. |
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Quick note: we've moved!
DB Capitol Strategies - and The Strategist - has just moved to a new Capitol Hill office. Our new address is:
209 Pennsylvania Avenue SE, Suite 2109
Washington, DC 20003 |
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