In Montana, a Test Case for Corporate Political Spending

By Beacon Staff

Now that the Montana Supreme Court’s recent decision to restore a century-old ban on corporate political spending is likely heading to the U.S. Supreme Court, at least one national legal expert believes the state ruling has a chance of being upheld, which could have far-ranging implications for campaign spending laws.

In a 5-2 ruling on Dec. 30, the Montana Supreme Court overturned a lower court’s decision that declared Montana’s 1912 ban on corporate expenditures in state political campaigns unconstitutional. The district court ruling had come in response to the U.S. Supreme Court’s 2010 Citizens United v. Federal Election Commission decision, a landmark case that granted political speech rights to corporations and unions.

The lead plaintiff in the Montana Supreme court case, American Tradition Partnership, formerly Western Tradition Partnership, announced Jan. 5 it intends to appeal the Dec. 30 decision. In a statement, the partnership’s executive director, Donald Ferguson, said he was “confident these unbiased courts will uphold the First Amendment rights of Montanans to speak freely about powerholders.”

“To ban political speech based on nothing more than the identity of the speaker is to strike at the very heart of the God-given rights protected by the First Amendment,” Ferguson said.

Montana Attorney General Steve Bullock, who successfully argued for restoring the state’s corporate spending ban, said he would be honored to defend the case in U.S. Supreme Court, according to the Missoulian.

“Montana’s a state where no one is excluded from our elections – even out-of-state corporate executives can participate,” Bullock said in the Missoulian. “They can either directly contribute to a candidate or a committee or they can join with other like-minded people and form a PAC.”

Paul Ryan, an attorney with the Campaign Legal Center in Washington D.C., acknowledged in an interview that the odds are against the same nine U.S. Supreme Court justices ruling differently than they did in the Citizens United case. But, based on what has taken place during elections since 2010, Ryan said it’s possible at least one justice could be persuaded to offer a different ruling, which would be enough to reverse the court’s previous decision and uphold Montana’s ban. The court ruled 5-4 in Citizens United.

In Ryan’s estimation, the majority’s belief that corporate spending would remain “truly independent” of candidates has proven untrue. As an example, he pointed to the Restore Our Future super PAC, which helped Mitt Romney win the Iowa caucuses by pumping millions of dollars into advertisements. The super PAC is run by former Romney aides.

The majority’s claims that corporate spending would be properly disclosed have also proven off target, Ryan said. Because of these loopholes, he said “there may be members of the court willing to take a second look.” He noted that this year’s elections are on pace to see “record spending.”

“The court assured us all that we would have good disclosure, but reality has proved different,” Ryan said last week.

Eugene Volokh, a UCLA law professor who runs a widely referenced blog called The Volokh Conspiracy, predicted the U.S. Supreme Court will take on the Montana case but doubted it would uphold the ban.

“My sense is that the disagreement with Citizens United is so striking that it is likely that the Supreme Court will agree to hear the case, and will reverse the Montana Supreme Court’s decision,” Volokh wrote in a Dec. 30 blog post.

At the time of the Citizens United decision, 24 states had laws restricting corporate political spending. Montana’s ban has been on the books since 1912, during the “Copper Kings” era in which corporate interests had overwhelming control over state politics. Montana is the only state actively defending its law, legal experts say.

Edwin Bender, executive director of the National Institute on Money in State Politics based in Helena, said last week he doesn’t anticipate the Montana Supreme Court decision having a dramatic restrictive effect on the amount of money flowing into statewide campaigns, just as Citizens United did not unleash an onslaught of corporate spending in Montana. He also notes that remaining legal hurdles make it difficult to clearly predict what effect the ruling will have on state legislative and gubernatorial races.

“Is it going to change Montana politics and money flow? The answer is probably not very much,” Bender said.

As for national races like the U.S. Senate battle between incumbent Democrat Jon Tester and Republican Denny Rehberg, Ryan said the state ruling will have no impact.

“Tester-Rehberg, that’s a federal level race,” he said. “It’s entirely governed by federal campaign laws (where) corporations are allowed to make unlimited corporate independent expenditures.”

If the U.S. Supreme Court chooses to summarily affirm or reverse the Montana decision, then a decision will be handed down right away. But if the case heads to a full trial, the court won’t likely make a decision until at least late 2012 or early 2013, Ryan said. The high court’s ruling could have implications for states across the country.

“If the Supreme Court allows the Montana decision to stand, it could reinvigorate efforts to ban corporate spending,” he said. “It’s an important decision in that respect.”

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