By Doug Pinkham
Public Affairs Council President

September 9, 2009

It's September, and normal people are buying school supplies, finalizing their ESPN fantasy football teams, or returning from a weekend at the beach. But not Supreme Court-watchers and campaign finance geeks. They're awaiting the rehearing of the Citizens United v. Federal Election Commission case.

In fact, today is the day for oral arguments. Interest in the case is so high that the court announced on Friday that it will release the audiotape to news organizations by late morning. Click here for details.

Why has this case resulted in major stories in the New York Times, Wall Street Journal and Washington Post - not to mention editorials, blog commentaries and dozens of friend-of-the-court briefs?

Here is a condensed explanation:

• The case stems from the efforts of a conservative group called Citizens United to air a disparaging documentary about Hillary Clinton through a video-on-demand service. The FEC ruled that airing the broadcast would amount to the use of corporate money for electioneering close to an election, which was prohibited by the Bipartisan Campaign Reform Act of 2002 (BCRA). A lower court concurred with the FEC.

• The case was first argued before the Supreme Court in March and a ruling was expected in June. Instead, the court surprised everyone by saying it also wanted to address the broader issue of whether a 1990 decision - which served as the foundation for BCRA - should be reconsidered. That case, Austin v. Michigan State Chamber of Commerce, permitted the banning of corporate funding to support or oppose federal candidates.

So, what's at stake? It depends whom you ask.

The ACLU, the AFL-CIO, the U.S. Chamber of Commerce, the Reporters Committee for Freedom of the Press and other strange bedfellows are arguing that these laws unfairly restrict corporate speech. (Keep in mind that non-profits and unions are technically corporations too.)

Other groups, including the League of Women Voters, the Committee for Economic Development, the Sunlight Foundation and Common Cause, see a danger in reversing precedent to allow corporations freer rein in campaign communications. They are worried about a world in which large companies dominate political speech, which they say would lead to corruption and a frustrated, ill-informed public.

Former FEC Chairman Michael Toner, speaking at a luncheon sponsored by the Public Affairs Council last week, predicted four possible outcomes of the rehearing. They range from mild (the court could reach a narrow decision related to pay-per-view broadcasts) to "extra spicy" (the court could conceivably remove all impediments on both electioneering and express advocacy communication).

Toner predicted the court will strike down BCRA's blackout period for issue advertising just before an election, but will stop short of allowing unlimited express advocacy communication.

If he's right, will we see individual companies running thousands of TV spots before the mid-term elections? Will the Fortune 500 suddenly divert huge sums of money to fund issue advertising? I seriously doubt it for at least three reasons:

• When big corporations were given the chance to fund issue advertising through 527 organizations, campaign finance watchdogs expected a huge influx of corporate dollars into these groups. But the vast majority of companies stayed away. In fact, according to the Campaign Finance Institute, only 2 percentof the contributions to federal 527s in 2007 came from businesses.
• Companies aren't in the business of stirring up trouble, which is what often happens when you tackle issues in a public way through political advertising. Very few CEOs are willing to risk the ire of employees, shareholders, customers and others who might disagree with a hard-hitting issue-oriented commercial. If they feel strongly about an issue and want to take to the airwaves, companies are far more likely to support advertising by a trade or business association.
• No company has any extra money to spend on advertising these days anyway. And that situation isn't going to change for awhile.

So, the irony is that the Supreme Court's rehearing of Citizens United may very well result in a major change to campaign finance law, but not a radically different political environment. Throwing out the BCRA ban on electioneering ads near an election may further ramp up spending by trade associations and labor unions, but don't expect the next election to be brought to you by your favorite, or least favorite, corporation.

One of the best news articles out of today's hearing comes from the New York Times, which concludes that "there seemed little question" after arguments were heard that the makers of the Hillary documentary would win. "The only open question," the paper reports, "was how broad that victory would be."

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If ever there were an issue worthy of issue advertising, it's healthcare reform. And many groups - ranging from AARP to the U.S. Chamber to the Pharmaceutical Research and Manufacturers of America - will be waging huge advocacy campaigns this fall to convince Congress to take their side, reports the Associated Press. 

Meanwhile, last week the administration announced that it would routinely release a list of official visitors to the White House. The decision resulted from a Freedom of Information Act lawsuit filed by Citizens for Responsibility and Ethics in Washington, which also opposed the administration's restrictions on registered lobbyists advocating for economic stimulus funding. While this move is consistent with Obama's stated support for government transparency, it's interesting to note that the White House initially sought to continue the Bush administration's policies and limit disclosure of its visitors list. Read the Los Angeles Times story.

Even though Congress is steeped in historic policy debates that should spell big business for Washington's influence industry, lobbying in many sectors has declined markedly as defense contractors, real estate firms and other companies pull back on spending, The Washington Post reports. In fact, overall spending on lobbying has leveled off for the first time in a decade, according to disclosure data filed with Congress.

And finally, here's one last story from the summer. According to the Los Angeles Business Journal, a Beverly Hills councilman has proposed that all lobbyists entering City Hall wear a "special" identification badge. Local lobbyists aren't too happy about the suggestion and argue that there must be other ways of distinguishing paid advocates without using a labeling system.  Be sure to read "Lobbyists Say They Don't Need No Stinkin' Badges."