First Amendment - Campaign Finance Contributions - Fourth Circuit Holds That Ban on Corporate Direct Contributions Does Not Violate First Amendment
The Supreme Court's decision in Citizens United v. FEC, (1) ruling that the First Amendment prohibits restricting corporations' independent political expenditures, (2) has deeply shaken the campaign finance landscape. Among the regulations potentially threatened by the Court's reasoning is the federal ban on corporate direct contributions to candidates. (3) Recently, in United States v. Danielczyk, ?(4) the Fourth Circuit held that the ban remains constitutional. (5) This decision was correct under the principle of Agostini v. Felton, (6) which provides that only the Supreme Court can overrule its own decisions. (7) However, it allowed the Fourth Circuit to avoid important questions about the extent to which Citizens United's antidiscrimination principle (8)--which bars speaker discrimination based on corporate form--has undermined relevant Supreme Court precedent.
Modern campaign finance jurisprudence began with Buckley v. Valeo, (9) in which the Supreme Court upheld limits on individuals' direct campaign contributions but struck down limits on their independent political expenditures, (10) finding that the latter "impose[d] significantly more severe restrictions on protected freedoms." (11) Later, in First National Bank of Boston v. Bellotti, (12) the Court struck down a statute banning corporate spending to influence ballot initiatives. (13) In Citizens United, the Supreme Court reasoned that since Buckley protected independent expenditures, and Bellotti stood for the proposition that otherwise protected speech could not be regulated simply because it had a corporate source, limits on corporate independent expenditures were unconstitutional. (14) The Court also rejected several of the social interests it had previously held sufficient to justify restrictions on corporate speech: countering the distorting influence of corporate wealth on the political process; (15) protecting shareholders with opposing views; (16) and preventing the threat or appearance of corruption based on favoritism short of quid pro quo deal making. (17) Nonetheless, the Court explicitly declined to address the statutory ban on corporate direct contributions, which it had previously upheld in FEC v. Beaumont, (18) noting that Citizens United did not present that issue. (19)
The Fourth Circuit encountered that issue two years later. William P. Danielczyk, Jr., was the chairman of Galen Capital Corporation. (20) In 2007, Danielczyk cohosted a fundraiser for Hillary Clinton's presidential campaign. (21) Danielczyk and another Galen officer allegedly had Galen reimburse attendees for $156,400 in campaign donations. (22) In 2011, both were charged with illegally soliciting and reimbursing campaign contributions in violation of several federal statutes, including 2 U.S.C. [section] 441b(a), which bans corporate direct contributions to candidates for federal office. (23) The defendants filed motions to dismiss on several grounds, including that Citizens United rendered [section] 441b(a) unconstitutional as applied to them. (24)
The district court granted the defendants' motion to dismiss the charge arising from [section] 441b(a), holding the statute's ban on corporate direct contributions unconstitutional. (25) The court found the logic of Citizens United "inescapable here" (26): because Buckley implicitly found that direct contributions within statutory limits, like independent expenditures, do not create corruption or its appearance, there was no permissible basis to ban such corporate contributions. (27) While Citizens United did reaffirm Buckley's concern with quid pro quo corruption, a statute that flatly bans corporations from making the same direct donations individuals can make (28) could not withstand Citizens United's declaration that "the First Amendment does not allow political speech restrictions based on the speaker's corporate identity." (29)
Five days later, facing criticism for failing to consider Beaumont, (30) the district court requested additional briefing and argument. …