Now that the Supreme Court has swept aside longstanding limits on corporate and union spending in federal elections, it's likely companies will move large amounts of money to trade associations and other tax-exempt groups, former FEC Chairman Michael E. Toner told those assembled at the National Grassroots Conference. 

"I am pretty bullish... that a lot of corporate money is going to move to trade associations and tax-exempt organizations to do the advertising for the corporations," said Toner, who served on the FEC from 2002 to 2007 and was chairman in 2006. "I'm very skeptical that we're going to see in a big way a lot of corporate advertising, even though it's (now) lawful."

Toner spoke on the closing day of the four-day conference in Orlando, Fla., hosted by the Public Affairs Council. He is now head of Bryan Cave's election law and government ethics practice and is a widely respected election law expert and author on campaign finance matters.

In a 5-4 decision in the closely watched case of Citizens United v. Federal Election Commission, the high court ruled that corporations may use money from their general treasuries to pay for campaign ads. The court also struck down parts of the Bipartisan Campaign Reform Act, which prohibited unions and corporations from running issue ads in the closing days before primary and general elections.

While critics of the ruling predict it will lead to a flood of corporate and union money in federal campaigns beginning with this year's midterm congressional elections, Toner said he doesn't expect this.

"Politically, it's tough for corporate America to get involved in a lot of these federal elections," he said. "Companies have been very leery about getting out in front of these debates (and) shareholders have been very skeptical of spending corporate money for these purposes. I think some companies will begin advertising directly... but I'm not sure I'm prepared to conclude there's going to be hundreds of millions of dollars of this."

On the other hand, Toner predicts corporate America will send "a surge" of money to trade associations and other tax-exempt groups that can accept unlimited corporate dollars then run aggressive advertising on behalf of their donors,

Toner also predicted the ruling will encourage "full-blown" and "hard-hitting" union advocacy during federal elections.

"The real question is how much money they're going to have," Toner said, noting that unions must first focus on the expensive task of communicating with members and getting them to vote in key elections.

Because all such advertising must remain independent of federal candidates and political parties, Toner expects "a redoubling of efforts on preserving independence."

"What does your company or association need to do to maintain that independence if you want to move forward with advertising?"

And because many on Capitol Hill "are not happy" about the ruling, Toner expects there may be legislative efforts to dull its impact: public financing of campaigns, for instance;  increasing contribution limits for candidates and political parties; prohibiting federal stimulus money from being spent on campaign advertising; or strengthening the advertising disclosure obligations that the court upheld.

Finally, Toner believes the Citizens United ruling is likely to have "ripple effects," including:

•Giving companies more latitude to engage in campaign advocacy at the local and state levels. The decision threatens similar limits imposed by 24 states, and Toner anticipates such limits are "now in great peril and almost certainly will be struck down."

•A rash of FEC advisory opinions and rulemakings that address questions that arise about corporate involvement in voter registration drives, get-out-the-vote efforts and publishing voter guides with full-blown advocacy.

The case involved the group Citizens United, which produced a 90-minute documentary critical of then-Sen. Hillary Rodham Clinton titled "Hillary: The Movie." After the group was barred from airing the film on pay-per-view television during the 2008 presidential primary, it brought suit challenging key components of the Bipartisan Campaign Reform Act of 2002, otherwise known as McCain-Feingold. After hearing initial arguments on the details of the movie last June, the high court called for extended oral arguments on the case, thus signaling an interest in reviewing broader free-speech questions.

Legal experts say the 2010 elections will bring the first large-scale application of the high court's decision and other court rulings that have essentially stripped away advocacy restrictions.

Read the Supreme Court ruling at https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2007cv2240-39.