On December 30, 2011 the Supreme Court of the State of Montana effectively flipped the Supreme Court of the United States and their Citizens United decision the bird. In Western Tradition Partnership v. Attorney General of MT, Montana Attorney General Steve Bullock defended the state’s 1912 Corrupt Practices Act against the Western Tradition Partnership (WTP), Champion Painting, and the Montana Shooting Sports Foundation. The lead plaintiff, WTP, only divulged to the court that it wishes to “spend money anonymously to influence Montana elections.”  The Corrupt Practices Act limits campaign contributions from corporations and stands opposed to Citizens United. Legal commentators are predicating that the Montana Decision will set the stage for a showdown in the United States Supreme Court.

Montana’s Defense

The Montana Corrupt Practices Act was a voter initiative passed by Montanans in 1912. The Act was passed as a means to keep powerful Copper mining companies in the state from buying elected officials or taking over their seats. Prior to the Act there was such unbridled corruption that the practices were referred to as, “the Montana situation.” As a means to tip the scale of democracy toward the voter, Montanans fought back. The resulting law provides:

1) A corporation may not make a contribution or an expenditure in connection with a candidate or a political committee that supports or opposes a candidate or a political party.

(2) A person, candidate or political committee may not accept or receive a corporate contribution described in subsection (1).

(3) This section does not prohibit the establishment or administration of a separate segregated fund to be used for making political contributions or expenditures if the fund consists only of voluntary contributions solicited from an individual who is a shareholder, employee or member of the corporation.

(4) A person who violates this section is subject to the civil penalty provisions of 13-37-128.

Should this case be heard in the Supreme Court, Montana will be asked to make several showings. For the law to be upheld the State must show that it has a compelling state interest in restricting the practice and that the law is narrowly tailored to suit that interest without restricting other speech. Here, Montana argues that limiting corporate expenditures will dissuade corruption or at least the appearance of corruption. Although the interest was recognized in Citizen United, it was not considered compelling until the harm has occurred. The decision then turns on a showing of facts by the State that corrupt practices exist or have in the past and the law has restricted their occurrence. The Supreme Court of Montana was satisfied that the State had shown an interest in limiting government corruption, and prohibiting direct corporate expenditures was a narrowly tailored means to the desired end.

State Attorney General Steve Bullock

The Act has a staunch defender in State Attorney General Steve Bullock, who ironically is planning to run for governor of Montana in the upcoming election. His plans to run for office might lead you to believe that he would be pro-corporate donations because he will likely receive several during the campaign season. Contrary to that belief he has stated, “I owe it to a century of Montanans going forward to do all I can to defend this irrespective of what might happen in my next campaign.”

Should the law be upheld it would be more difficult for Bullock to receive contributions although his popularity within the state is likely to rise considering the publicity the case has been receiving lately.

Plaintiff's Argument

Plaintiffs in the case argued that the state of Montana had infringed on their free speech rights by “prohibiting political expenditures by corporations on behalf of or opposing candidates for public office.”

This argument follows a string of cases including the 1976 Buckley v. Valeo decision and its progeny that held “independent expenditure ceiling…place substantial and direct restrictions on the ability of candidates, citizens, and associations to engage in protected political expression.” This holding equated campaign donations to political expression, speech, which is protected by the First Amendment. The holding also limited direct expenditures to candidates by corporations.

Following Buckley, First Nat’l Bank of Boston v. Bellotti (1978) debated whether state laws restricting expenditures by corporations violated the First Amendment. In Bellotti, SCOTUS held there is no support in the First or Fourteenth Amendment “for the proposition that such speech loses the protection otherwise afforded it by the First Amendment simply because its source is a corporation.” This decision effectively extended the recognition of corporate expenditures as speech to state law.

In 1990, SCOTUS threw a wrench into the system. Austin v. Michigan Chamber of Commerce held that Michigan’s prohibition of corporate expenditures for political purposes “are justified by a compelling state interest: preventing corruption or the appearance of corruption in the political arena by reducing the threat that huge corporate treasuries, which are amassed with the aid of favorable state laws and have little or no correlation to the public's support for the corporation's political ideas, will be used to influence unfairly election outcomes.”

The goals of the Michigan statute in Austin and the existing Montana statute seem very similar and the Austin holding would justify the restrictions had the recent Citizens United v. FEC case been decided differently. In Citizens United the Supreme Court directly overruled Austin, and held there is “no basis for allowing the Government to limit corporate independent expenditures.” While lifting the restriction the Court stated, “ecause speech is an essential mechanism of democracy—it is the means to hold officials accountable to the people—political speech must prevail against laws that would suppress it by design or inadvertence.” What had been happening before was contributors had to seek a FEC advisory opinion prior to making an expenditure, creating a procedural restriction on the donation.

What’s Next

Citizens United considered the difficulties of corporations to make contributions through separate PACs and the burden of creating separate accounts. In Montana that burden is much different. A corporation has to fill out a simple two-page form unlike the Federal Electoral Commission’s forms. Because Montana has different interests and practices for enforcing its law, the Supreme Court will have a new issue to face.

Taking a look backward, the Montana statute is unlikely to be upheld should it be considered by the Supreme Court although it has been in operation for 100 years and reflects an overwhelming sentiment in the American psyche against corporations influencing government.

Most observers are expecting this case to be considered next term by the Supreme Court and the country will have to wait and see whether or not the Court will get it right and reverse Citizens United or if it will continue to allow corporations to make direct contributions to campaigns.

SOURCES:

Western Tradition Partnership v. Attorney Gen. of MT: http://electionlawblog.org/wp-content/uploads/MT-expenditures-decision.pdfBuckley v. Valeo: http://supreme.justia.com/us/424/1/case.htmlFirst Nat’l Bank v. Bellotti: http://supreme.justia.com/us/435/765/case.htmlAustin v. MI Chamber of Commerce: http://supreme.justia.com/us/494/652/case.htmlCitizens United v. FEC: http://supreme.justia.com/us/558/08-205/index.html