Campaign finance ruling: Can Congress do anything?

While many Republicans on Capitol Hill hailed this week’s Supreme Court 5-to-4 decision striking down restrictions on corporate spending on political campaigns, Democrats are ramping up measures to curb its impact.

For majority Democrats, it’s yet another urgent agenda item heading into a charged election season.

“This disastrous decision paves the way for free and unlimited special-interest spending in our elections,” said Sen. Charles Schumer (D) of New York at a briefing with Rep. Chris Van Hollen (D) of Maryland on Thursday. “We will not let this decision go unchallenged,”

The two lawmakers chair their party’s campaign organizations in the Senate and House. They aim “to reimplement the ban on corporate spending or modify it in a significant way,” Senator Schumer said.

Lawmakers huddled with the White House

House and Senate teams met with the White House counsel’s office Friday to work out proposals. The Senate Rules and Administration Committee is planning a hearing on these approaches Feb. 2.

One fix under consideration is to pass legislation limiting contributions or expenditures for companies that fit a certain category, such as corporations that retain lobbyists, do business with the federal government, or are a recipient of significant government aid, such as American International Group, Inc. (AIG) or auto companies.

Another set of fixes aim to not ban but to deter corporate political activity.

These include increased disclosure requirements or a requirement for shareholders to weigh in before a publicly traded corporation can run political ads.

“If a company is going to make an expenditure, the CEO could be required to do an on-camera ‘I approve this message,’ just as political candidates do,” says a Schumer aide.

“If you look at the staggering figures of the Fortune 100 companies and the revenues they have and the profits that they can now unleash directly in these elections, it has the potential to totally upend our system and corrupt the process in a way that I think should alarm every American citizen,” said Congressman Van Hollen.

The issues are constitutional

It’s a complex decision, and many lawmakers say they need time before determining what options Congress has in a decision argued on broad, constitutional terms.

Sen. John McCain (R) of Arizona, a cosponsor of the 2002 McCain-Feingold campaign finance law, says that he’s disappointed with the decision but doesn’t see much that Congress can do about it. “Maybe we’ll have to see how this new set of rules works in American political
campaigns,” he told CNN.

In a rare disagreement on this issue, Sen. Russ Feingold (D) of Wisconsin called the decision a terrible mistake. “The American people will pay dearly for this decision when, more than ever, their voices are drowned out by corporate spending in our federal elections,” he said in a statement.

It’s not clear how much scope Congress will have to act.

“The problem we face now is that the Supreme Court has interpreted the Constitution to extend real people's First Amendment right to corporations. Congress cannot overturn a court decision based on the Constitution,” says Scott Nelson, an attorney with Public Citizen.

Court endorsed disclosure of contributions

But he says it is at least a hopeful sign that the Supreme Court endorsed disclosure and reporting provisions to inform voters about the sources of speech that are election-related.

“Congress can potentially improve the disclosure of the sources of funds used by corporations when they make independent expenditures of the type allowed under this ruling,” he says.

Kenneth Gross, a Washington attorney who advises clients on the regulation of political activity, says that reaction is overblown. The high court left intact the congressional ban on corporate campaign contributions.

“Corporate money is only in the form of independent expenditures, you still cannot write a check to an individual candidate,” he says. Moreover, it’s not clear that corporations in the current economic and political climate will rush to get into political advertising.

“Shareholders have been very vocal for half a dozen years now on the political front,” Mr. Gross says. “If there’s more money going out because of these loosening of the rules, I think you’re going to see a louder drumbeat from shareholders.”

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