Corporate Financing

By Kellyn Brown

When GOP presidential candidate Mitt Romney, campaigning in Iowa last month, was pressed by a heckler to raise corporate tax rates, he responded that “corporations are people, my friend.” The crowd of supporters cheered. Whether you agree with him, the high court already essentially did.

In early 2010, a sharply divided U.S. Supreme Court ruled that corporations have many of same free speech rights as individuals. In reversing a century-long trend, businesses and unions can now spend large amounts of cash on supporting or opposing candidates for office (the court left in place restrictions on direct contributions).

The case stemmed from action taken by the conservative group Citizens United, which in 2008 wanted to air a 90-minute film critical of then-presidential candidate Hillary Clinton. Federal courts prohibited it. The group appealed, and from there the Supreme Court opened the corporate floodgates.

How this will affect Montana – which has several high-profile races next year and is a relatively cheap advertising buy– is altogether unclear since it still has its spending bans in place. But last week, during oral arguments at the state Supreme Court, it appeared that is about to change.

American Tradition Partnership, citing the Citizens United case, has asked the court to declare parts of the 1912 Corrupt Practices Act unconstitutional. That law was passed in response to an era rife with political corruption in Montana influenced by a few corporations, mainly the Anaconda Copper Mining Company and the Montana Power Company.

Politics have changed since. For one, citizens now elect U.S. senators, so legislators can no longer be bribed for their votes. But the state’s corporate spending ban has remained in place – in essence maintaining that those corporations are not considered people. But should be they be?

After Romney made his statement, the Washington Post’s Brad Plumer made the comparison:

“For a long time, the courts have treated corporations like people in many respects. They can sue and be sued. They can enter contracts. They can own property. They have some free speech rights. Thanks to last year’s Citizens United case, they can now fund political broadcasts in elections without limits. True, corporations still aren’t allowed to vote or run for office, but who knows what possibilities future Supreme Courts might imagine?”

While I doubt AT&T or GM will be running for office any time soon, the influence that corporations like them could wield over elections in Montana will be far more pronounced if the state’s Supreme Court follows the U.S. Supreme Court, which seems inevitable.

Montana Attorney General Steve Bullock, a Democrat who is also running for governor, argued last week that there may be ways for the state to keep its bedrock law in place, such as exempting voluntary associations of people who form corporations but keeping the ban in place for corporations owned by stockholders. But it’s difficult to foresee an outcome other than the court ruling the state law unconstitutional.

At one point, according to the Associated Press, Justice James Nelson told Bullock the Citizens United decision is now “the law of the land” and that “you are trying here to carve out one little niche where it doesn’t apply.”

The decision could directly affect Bullock and other Democrats in races next year, such as Montana Sen. Jon Tester. Republicans are more receptive to the change and Republican Rep. Denny Rehberg, Tester’s challenger, was even endorsed by Citizens United last week.

Whether that means Citizens United will spend loads of money in Montana remains to be seen. What seems imminent, however, is that the state’s Republicans – and, yes, Democrats as well – are about to get some really rich new friends to court. Friends that, before recently, weren’t considered people.