Commentary – Supreme Court decision on corporate campaign contributions threat to laws aimed at corporate misconduct

by James Gobert, Professor of Law, University of Essex

In Citizens United v. Federal Election (see link in this section) the United States Supreme Court, by a 5-4 division along conservative-liberal lines, held that campaign contributions of corporations were protected by the 1st Amendment (political speech). The Court’s decision has been roundly criticised in editorials and by politicians. President Obama, himself a former law professor, has warned of the consequences. I share his concerns but am particularly worried about the implications of the decision for the long term prospects for laws directed to corporate criminal liability. While the following vision may appear apocalyptic, here is the chain reaction that I fear may have been set in motion by the Court’s decision:

  1. Wealthy corporations, either directly or through Political Action Committees (PACs), swell the campaign war chests of pro-business candidates with mega-contributions. The contributors comprise the “usual suspects”: oil companies opposed to environmental legislation; banks concerned about efforts to curb their investment strategies or limit bonuses; and insurance companies and HMOs opposed to health care reform. Few corporations would be so crass as to condition their contribution on votes on specific issues but this is not necessary when a candidate’s pro-business credentials are well-established and his/her votes predictable.
  2. The campaign contributions are used to bombard the electorate with negative TV ads. Who can forget the Swift Boat Veterans for Truth ads and the effect that they may have had on the 2004 presidential election? Voters, not well-informed in the best of times, may be naive enough to believe the professionally polished ads. Less ideological candidates may lack the money to correct the inaccuracies in the TV blitz.
  3. Election of pro-business candidates has legislative ramifications. Proposed laws aimed at reigning in corporate excesses never get out of hearing rooms, are filibustered in the Senate, or are voted down. Indeed, it is the legislation that is not enacted which is more threatening than that which is; the latter at least is open to public scrutiny and judicial review; the latter remains as an invisible force allowing business to carry on as usual. Further, a pro-business Congress may repeal existing legislation such as the Alien Tort Claims Act. Two hundred years after its passage, for most of which time it lay dormant, this Act is now being used to call to account corporations which have been complicit in human rights violations. In the Khulumani cases, for example, a mix of multinational automotive corporations (e.g., Ford and Daimler), technology companies (e.g., IBM) and international banks (e.g. Barclays) is currently being sued for allegedly aiding and abetting crimes committed by the former apartheid government in South Africa.
  4. Budgets of agencies charged with enforcing regulatory legislation aimed at businesses are slashed in the name of fiscal responsibility. In the present financial climate such cuts are easy to justify (although which agencies’ budgets are cut and by how much is the more critical issue). Back-room lobbying by the business community of pro-business legislators leads to agencies being starved to the point they can no longer effectively carry out their functions. The “law on the books” may be hard-hitting but the “law in practice” may undermine it through non-enforcement. In the UK the agency responsible for enforcing health and safety laws has seen its budget cut, by a Labour government no less, to the point that it can now only inspect a company once every dozen years.
  5. Presidential nominations to the United States Supreme Court require the “advice and consent” of the Senate. It would not be difficult for pro-business senators to find reasons to block the appointment of liberal nominees while approving the appointment of more conservative candidates. With Justices being appointed for life and with so many cases being decided by a single vote (Citizens United was itself a 5-4 decision), a single Supreme Court Justice can influence the course of the law well beyond the administration that nominated the Justice.
  6. The above phenomenon as it relates to judges is played out slightly differently in the 30+ American states where State Supreme Court Justices are elected. Again, campaigns of conservative candidates for judgeships may be liberally funded by corporations seeking to seat ideologically sympathetic Justices on the State Supreme Court. Again, the money may be spent on negative ads, with the difference being that in state judicial races (unlike in Congressional races) the chance of an opposing candidate being able to match the corporately-funded candidate may be minimal. For a chilling account of the effects of such a scenario, I would recommend John Grisham’s “The Appeal” (although a work of fiction, there is, as in many of Grisham’s’ novels, a solid factual underpinning).
  7. Is there a way to escape the above vision of doom and gloom? A constitutional amendment reversing the Supreme Court’s decision is highly unrealistic. The more realistic way forwards would be for Congress to reform campaign financing. But that would require approval by a Congress composed of pro-business Senators and Representative who are likely quite happy with the way things are. And even if legislation restraining the power of corporate spending in election campaigns were to be enacted, it would still have to survive scrutiny by a Supreme Court that has already staked out its position on corporate political speech.