Election finance law could be overturned

WASHINGTON — The Supreme Court's conservative bloc sounded poised Wednesday to strike down on free-speech grounds a 100-year-old ban on corporations spending large amounts of money to elect or defeat congressional and presidential candidates.

If the justices were to issue such a ruling, it could reshape U.S. politics. Big companies and industries — and possibly unions — could pay for campaign ads to support or defeat members of Congress.

And far more money could flow into elections. Last year, the political parties spent about $1.5 billion on the 2008 campaigns, while corporations earned more than $600 billion in profits.

Until now, corporations and unions have been restricted in their election-related spending. Since 1907, federal law has prohibited corporations from giving corporate money to candidates. And since 1947, corporations and unions have been barred from spending money on their own to urge voters to elect or defeat federal candidates. Corporate executives, as individuals, can contribute money to a corporate political action committee, or PAC, but these amounts are relatively modest, compared with the funds available to the corporate treasury.

Three justices — Antonin Scalia, Anthony Kennedy and Clarence Thomas — have said they would overrule past decisions that upheld federal and state restrictions on corporate election spending. Chief Justice John Roberts and Justice Samuel Alito have said they favor free speech over the campaign-funding limits. But they have not said whether they would give corporations a free-speech right to spend millions of dollars on campaign ads.

That was the issue before the court Wednesday. It was a rare re-argument in a seemingly narrow case of a small, nonprofit group called Citizens United. It had produced an anti-Hillary Rodham Clinton video, "Hillary: The Movie," designed to undercut her 2008 campaign for the presidency. However, it got tied up in a legal battle with the Federal Election Commission (FEC).

Because Citizens United is incorporated and received a small amount of corporate money, the group and its movie came under FEC regulation.

In March, the justices debated whether the law should apply to a nonprofit group that produced a campaign-related video. But rather than decide that narrow question, the justices said in June they would focus instead on whether to say that all corporations, like individuals, have a right to spend freely to elect or defeat candidates.

Ted Olson, the former solicitor general under President George W. Bush, pressed the justices to rule broadly. "Corporations are persons entitled to protection under the First Amendment," said Olson, who represented Citizens United.

It was the first argument for new Justice Sonia Sotomayor, and she wasted no time in challenging Olson. She noted that in March, Olson had said his client could win with a narrow ruling saying a small, nonprofit group cannot be regulated by the FEC.

"Mr. Olson, are you giving up on your earlier arguments that there are ways to avoid the constitutional question to resolve this case?" she asked.

It was also the first argument for new Solicitor General Elena Kagan, President Obama's top courtroom lawyer. She defended the corporate spending restrictions in the face of steadily skeptical questions from the court's conservatives.

When Scalia said the court should be "suspicious" of Congress because lawmakers are inclined to protect themselves, Kagan said he had it backward. Freeing corporations and unions to support candidates would help the incumbents, not hurt them. "They want winners," she said.

Sens. John McCain, R-Ariz., and Russ Feingold, D-Wis., co-sponsors of the 2002 campaign funding law, were in the courtroom and listened intently to the 90-minute argument. The ruling could strike down part of the McCain-Feingold Act that restricted corporate and union-funded election ads in the months before the election.

It is unclear whether the justices will decide the case before their regular term begins Oct. 5.