On June 25, the U.S. Supreme Court reaffirmed its unpopular
Citizens United decision and blithely stripped Montana of a century-
old law that protected its elections from corporate politicking. The
court decided that Montana would not even get the opportunity to
present evidence in its case. Instead, the court summarily reversed
the Montana Supreme Court, which had upheld Montana's law just six
The Montana case, American Tradition Partnership v. Bullock, was
seen as the last best chance in perhaps decades to get the Supreme
Court to reconsider its position on Citizens United. Now that hope
is gone. OK. So now what?
There is plenty of work to do to keep American democracy robust
in light of Citizens United and its little sister, American
Tradition. For one, now that corporations are in our elections to
stay, we need some new rules of the road that are tailored for
If I'm buying political ads as an individual, then I am spending
my own money. This is quite distinguishable from a corporate manager
at a public company buying political ads with corporate resources.
In that case, the money isn't just attributable to him or her.
Instead, the corporate manager is using what Justice Louis Brandeis
once termed "other people's money."
The other people in this case include investors, who may have
zero interest in subsidizing the manager's pet political projects.
Thus, different rules should apply when managers spend other
people's money in politics rather than their own.
What would these different rules look like? First, there should
be clear disclosure to investors that the spending is happening.
Second, there should be some ability of investors to approve the
political expenditures. As the Supreme Court just stated in the
union context, an opt-in mechanism is key.
To see how such rules would work in the real world, check out the
United Kingdom. In 2000, the United Kingdom amended its Companies
Act to better protect investors from politically active corporate
insiders. There are two aspects to the law: public companies in the
United Kingdom report political spending down to the pound to
investors, and investors get to vote on the political budgets of
public companies before the money is spent.
So how do we get these reforms implemented here? First, we have
to remember that because of our system of federalism, there are two
types of elections: state and federal. And to further complicate
things, at the federal level, different administrative agencies have
overlapping jurisdiction regulating money in politics. …