UPDATED: Court Restores Ban on Corporate Political Money

By Beacon Staff

HELENA – The Montana Supreme Court restored the state’s century-old ban on direct spending by corporations on political candidates or committees in a ruling that appears to buck a high profile U.S. Supreme Court decision that granted political speech rights to corporations.

The decision grants a big win to Attorney General Steve Bullock, who personally represented the state in defending its ban and is now running for governor.

The corporation that brought the case, and is also fighting accusations that it illegally gathers anonymous donations to fuel political attacks, said the state Supreme Court got it wrong. The group argues that the 1912 Corrupt Practices Act, passed as a citizen’s ballot initiative, unconstitutionally blocks political speech by corporations.

“We feel Montanans do not forfeit their freedoms of speech and association simply because they associate as a corporation,” said American Tradition Partnership executive director Donald Ferguson in a statement. “We are currently reviewing our legal options.”

The lawsuit was prompted by the U.S. Supreme Court Citizens’ United decision from last year granting political speech rights to corporations. A lower court then ruled the state ban was unconstitutional in the wake of the high court’s decision.

But the Montana Supreme Court on Friday reversed the lower state court’s analysis and application of the Citizen United case.

The Montana Supreme Court said Montana has a “compelling interest” to uphold its rationally tailored campaign finance laws that include a combination of restrictions and disclosure requirements.

A group seeking to undo the Citizen United decision lauded the Montana high court, with its co-founder saying it was a “huge victory for democracy.”

“With this ruling, the Montana Supreme Court now sets up the first test case for the U.S. Supreme Court to revisit its Citizens United decision, a decision which poses a direct and serious threat to our democracy,” John Bonifaz, of Free Speech For People, said in a statement.

The Montana court agreed with Bullock’s argument that past political corruption, led by the famed Butte “Copper Kings” that dominated state politics long ago, gives Montana a compelling interest in regulating corporate spending. They pointed out also that corporations can form voluntary political action committees — subject to disclosure requirements — as a way to remain politically active.

The high court said it could not find the current laws unfairly impeded corporate owners from engaging in political activity. And it said “political” corporations like American Tradition Partnership “act as conduits for anonymous spending by others and represent a threat to the ‘political marketplace.'”

ATP has gained notoriety tangling with state campaign finance authorities, and riling Democrats and even some Republicans with hard-hitting attack mailers. It has done so without so far filing disclosures on spending or donors, previously arguing it does not need to do so.

It has a separate state lawsuit challenging the right of the state to penalize it, and a federal lawsuit that challenges many other aspects of state campaign finance regulations and disclosure requirements

The Montana Supreme Court argued there are plenty of ways for corporations to engage in politics, without funneling anonymous money into the process.

“The evidence submitted by the state in the district court similarly demonstrates that corporations, through their political committees organized under Montana law, are and have been a substantial presence and active participants in Montana politics,” the court wrote. “The many lobbyists and political committees who participate in each session of the Montana Legislature bear witness. Under the undisputed facts here, the political committee is an easily implemented and effective alternative to direct corporate spending for engaging in political speech.”

Two members of the Montana Supreme Court dissented. Both justices Beth Baker and James Nelson said that a state can’t impose an outright ban against political spending under the Citizens United decision — even if the U.S. Supreme Court may have got its decision on the matter wrong.

“Citizens United is the law of the land, and this court is duty-bound to follow it,” Nelson wrote. “When this case is appealed to the Supreme Court, as I expect it will be, a summary reversal on the merits would not surprise me in the least.”