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Uncorrupting Corporate Speech
[November 18, 2002]

By S. M. Oliva

Earlier this week, the U.S. Supreme Court agreed to review Federal Election Commission v. Beaumont, a case challenging a fundamental tenet of campaign finance law—the ban on direct corporate contributions to federal candidates.

Specifically, Beaumont challenges the application of the overall corporate ban to nonprofit, advocacy corporations, such as North Carolina Right to Life, one of the plaintiffs in this case. Under 2 U.S.C. § 441b, no corporation may “make a contribution or expenditure in connection with any [federal] election.” The stated purpose of this rule, according to past Supreme Court rulings, is to “combat the problem of corruption of elected representatives through the creation of political debts.” The theory, in essence, is that corporations will only contribute to a candidate if they receive something in return after the election. This leads to corruption. And even if it doesn’t, it leads to the appearance of corruption in the subjective minds of some people.

Of course, corporate interests still participate in the political process, through lobbying and political action committees. Campaign finance law is, at best, an elaborate fiction designed to assuage the socialist tendencies of certain segments of the population. But the very moral principle behind campaign finance law is wretched: the notion that corporate money is qua corruption. In the first place, this indicates an ignorance of the difference between political and economic power. The former derives from the use of force, the latter from the exercise of individual rights in a capitalist economy. In the eyes of campaign finance reformers, only political power is legitimate; therefore economic power must be made subservient to the political. Hence, campaign finance laws.

The Beaumont case takes this ethical concept to its irrational conclusion. Here, the corporations involved are not for-profit producers, but non-profit advocates. These are groups that deal directly in the realm of ideas, and their attempts at campaign expenditures reflect their desire to promote and expand a particular ideology. Now, this is not to say for-profit corporations are not also driven by ideas; they most certainly are. The distinction here is meant to demonstrate the fallacy of the campaign finance reformers thinking, not to proclaim nonprofits the moral superior of for-profits.

Those who support § 441b’s application to nonprofits are taking the segregation of economic and political power to the next level: now they wish to divorce ideas from political power. By restricting the ability of nonprofit advocates to influence the electoral process, political campaigns become even less about principles, and more about superficial, arbitrary concerns. This makes it much easier for unscrupulous, power-driven politicians (think John McCain) to manipulate the process for their own ends. That is what campaign finance reform is about, not promoting democracy, and certainly not securing individual rights.

Having said this, the Supreme Court’s decision to review Beaumont is a good one, even though the court below actually ruled in favor of the nonprofit groups. That lower court, the U.S. Court of Appeals for the Fourth Circuit, managed to create dissension from within the appellate ranks, since the Sixth Circuit previously held 441b’s application to nonprofits was constitutional. The Supreme Court must resolve the conflict to ensure consistent standards for federal elections.

Finally, this case curiously bears the FEC’s name as petitioner, even though the commission never sought review of the Fourth Circuit’s decision. Solicitor General Ted Olson, the government’s chief lawyer in the appellate courts, made the decision to appeal on behalf of the FEC without their direct consent. This is Olson’s privilege, and I would not fault him for exercising it here. As noted, there is a split among the appellate courts that requires prompt resolution. But Olson’s petition to the Supreme Court, it should be noted, relied heavily on narrow, technical readings of case law. One hopes that when briefing on the merits and oral argument take place, the solicitor general will further explore the “corruption” principle at the heart of § 441b. It’s very difficult to argue organizations devoted entirely to promoting ideas are dangerous to the democratic process. I know that Olson will give it his best shot, but ultimately I hope (and suspect) he’ll lose.


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