Citizens United Turns 10 – Here Are 10 Things to Know About the Decision and Corporate Political Involvement

21 Jan, 2020

Citizens United Turns 10 – Here Are 10 Things to Know About the Decision and Corporate Political Involvement

Ten years ago today the Supreme Court issued its decision in Citizens United v. Federal Election Commission finding the First Amendment prohibits the government from restricting corporations, labor unions, nonprofits and associations, among others, from engaging in independent expenditures for political communications. This decision continues to spark debate and has become central to the national narrative surrounding money in politics and the financing of political activity in the decade since.

With the renewed spotlight on political involvement and campaign finance in the current Democratic presidential nominee race, the public is likely getting used to hearing “Citizens United” tossed around during candidate discussions. In an effort to break down some of the common misconceptions and revisit what the decision does and does not allow for, here are 10 things to remember about the Citizens United decision on its tenth anniversary:

  1. In Citizens United v. FEC, the Supreme Court found that prohibiting certain types of political speech by corporations, unions and other groups violated the First Amendment. The decision set a precedent that ushered in the creation of super PACs and other political nonprofits, which under the ruling can raise and spend unlimited amounts of money from virtually anyone for political communications.
  2. Independent expenditures consist of political advertising and communications. Independent expenditures include everything from radio, TV, digital and print ads expressly advocating for or against an issue or candidate. This engagement is separate from direct contributions to candidates; individuals, political party committees and traditional political action committees are still among the only entities that can give directly to a candidate’s campaign committee.
  3. There’s little control over super PAC and outside spending in elections. Super PACs and independent expenditure committees are prohibited from coordinating with a federal candidate. Consequently, candidates can’t prevent super PAC involvement. This is why you hear of candidates taking a “no PAC pledge” as opposed to a pledge against super PACs or other entities spending on their behalf. It’s easy for candidates to reject corporate PAC money as a largely symbolic gesture since they can’t control the real influx of spending in our elections.
  4. Some, but not all, of this activity is disclosed. Super PACs are required to register with the Federal Election Commission (FEC) and disclose their donors as well as expenditures, but some political nonprofits, so-called “dark money” groups, are not subject to the same disclosure requirements. These groups can also contribute directly to other super PACs, providing a legal channel for a super PAC to accept unlimited amounts of dark money while reporting only the nonprofit as the donor instead of the real sources. The Center for Responsive Politics (CRP) found that super PACs and other outside spending groups accepted an estimated $176 million from undisclosed, dark money groups in the 2018 election cycle.
  5. Corporations still can’t contribute directly to candidates. While the Citizens United decision allows corporations to use general treasury funds to engage in independent expenditures of their own or support super PACs and nonprofit groups doing so, it did not change the law that restricts them from using corporate monies to contribute directly to a candidate for federal office. This means PACs are still the only way corporate and association employees can combine funds to directly support candidates.
  6. Corporations have overwhelmingly chosen to participate politically through traditional PACs, not super PACs or independent expenditures. The Public Affairs Council’s 2019 PAC benchmarking data demonstrates that although corporations can now engage in direct political communications or support other entities doing so, the overwhelming majority have chosen not to. The Council has been tracking this data in each election cycle since 2012 and the percentage of corporations that have contributed to a super PAC or conducted independent expenditures of its own has never risen above 6 percent. In addition, the report finds that 36 percent of companies have instituted an internal policy prohibiting contributions to super PACs or conducting independent expenditures.
  7. The ruling doesn’t change how traditional PACs operate, are regulated or the important role they play in the political process. While the decision allows corporations to participate in new ways, it doesn’t impact a company’s connected political action committee at all. Corporate PACs are still operating under the Federal Election Campaign Act guidelines set in the 1970s. Similarly, contribution limits for corporate PACs haven’t changed in decades either—individuals can still contribute up to $5,000 per year and PACs can in turn contribute $5,000 per election to federal candidates.
  8. Wealthy individuals are driving much of the increased activity ushered in by the Citizens United decision. According to a new report issued by the CRP, “individual millionaires and billionaires, not corporations, emerged as the dominant political giving force” following the Court’s decision. They cite that just ten donors accounted for more than $1 billion in giving over the decade since the ruling.
  9. Without any contribution limits in place for outside spending groups, their influence and size has increased in each election cycle since the 2010 decision. In the two decades prior to the ruling, spending by independent groups totaled $750 million according to the CRP. In the ten years since Citizens United that spending has increased to $4.5 billion.
  10. Political Action Committees, including corporate and association PACs, have experienced only modest spending growth over the past decade. CRP reports that connected PACs contributed $497 million in the 2018 election cycle, compared to $416 million in the 2008 cycle, demonstrating that blaming corporate PACs for the explosion of super PAC spending and outside influence in elections is misguided.

The Citizens United decision has undoubtedly reshaped the political landscape over the course of the last decade. Prior to the ruling, the U.S. campaign finance system was often misunderstood and the 2010 ruling has only contributed to its complexity. Furthermore, there is not often a clear distinction made between PACs and independent expenditure groups in our national conversation about campaign finance and corporate influence. But one thing is clear, the Citizens United decision has reinforced the importance of traditional, connected PACs as the only way to directly fund a candidate in a limited, highly regulated, voluntary and transparent way.