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The Supreme Court Nixes Corporate Contributions for the 2020 Campaign

The justices refused to consider a challenge to a longstanding ban on corporate donations to political campaigns.

The justices refused to consider a challenge to a longstanding ban on corporate donations to political campaigns.

A few weeks ago, the Supreme Court delivered a surprising rebuke to those who think corporations just don’t have enough influence on U.S. elections. In declining to hear the case of 1A Auto, Inc. vs. Sullivan, the court essentially guaranteed that corporations will be sidelined for at least the next election cycle.

Some background: since the passage of the Tillman Act of 1907, corporate contributions have been banned in federal elections. The Tillman Act was violated most famously by President Nixon’s re-election campaign in 1972, in which illegal corporate money was used to fund even more illegal campaign activities, like the break-in at the Democratic National Committee’s headquarters at the Watergate.

A more recent example of a Tillman Act violation was committed by President Trump’s ex-lawyer Michael Cohen, who was convicted of facilitating payments from the National Enquirer’s parent company American Media Inc. to an alleged Trump mistress. The company got off with a non-prosecution agreement and the obligation to not break the law again, but Cohen is now in jail for this and other crimes.

In the aftermath of 2010’s Supreme Court case Citizens United v. FEC, in which the court allowed corporations to buy unlimited amounts of political ads, many court watchers thought the justices’ next move would be to get rid of the corporate contribution bans that exist in federal elections, as well as those that exist in a little under half the states. According to the National Council of State Legislatures, 22 states ban corporations from giving directly to political campaigns in state races. And like the Tillman Act itself, Massachusetts’ ban dates back to 1907.

A 2003 Supreme Court decision, FEC v. Beaumont, upheld the Tillman Act. Justice Souter writing for the Court noted in Beaumont, “[a]ny attack on the federal prohibition of direct corporate political contributions goes against the current of a century of congressional efforts to curb corporations’ potentially ‘deleterious influences on federal elections[.]’”

And while Citizens United did not overrule Beaumont, the cases are in considerable logical tension. Citizens United grants corporations certain political speech rights, as Justice Kennedy said, “the Government may not suppress political speech on the basis of the speaker’s corporate identity.” Meanwhile, Beaumont says it is constitutional for governments to limit corporate contributions in elections. As I write in my new book, Political Brands, corporations are taking full advantage of their Citizens United rights to spend in federal elections, millions of dollars at a time.

Given the Roberts court’s hostility to campaign finance laws, it appears overruling Beaumont is inevitable. But on May 20, the court had the chance to strike down these corporate contribution bans, and it declined. The case was 1A Auto, Inc. v. Sullivan, and the complaint was spearheaded by the Goldwater Institute. It challenged the constitutionality of the Massachusetts law, which makes corporate contributions to state and local campaigns illegal, with penalties of up to a year in prison and thousands of dollars in fines.

The case could have raised interesting issues, since Massachusetts (unlike federal law) allowed unions to make contributions, and the Federalist Society tried to make hay out of the differential treatment of corporations and unions under that law.

The Massachusetts Supreme Judicial Court upheld the corporate ban in 2018, citing the risk of corruption. The state said, “Experience confirms that, if corporate contributions were allowed, there would be a serious threat of quid pro quo corruption. . . . [As] the Supreme Court noted that, . . . ‘the deeply disturbing’ political scandals of the 1970s ‘demonstrate[d] that the problem is not an illusory one.’ Sadly, the risk of quid pro quo corruption is no less illusory in Massachusetts. In just the last decade, several Massachusetts politicians have been convicted of crimes stemming from bribery schemes intended to benefit corporations.”

But because the U.S. Supreme Court has rejected the request to hear 1A Auto, Massachusetts gets to keep its corporate ban. By logical extension, the other 21 states with corporate bans also get to keep them — and the Tillman Act will be the law of the land for the foreseeable future.

The views expressed are the author’s own and not necessarily those of the Brennan Center for Justice.

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