In Federal Election Commission v. Beaumont, 539 U.S. 146 (2003), the Supreme Court ruled that the First Amendment free speech and associational rights of nonprofit advocacy corporations are not violated by federal laws that bar corporations from making direct contributions to candidates for federal office.
Federal law has banned corporations from making contributions in federal elections
Since 1907 and the Tillman Act, federal law has prohibited corporations from making contributions or expenditures in federal elections. The ban on corporate contributions has three basic rationales:
- First, corporations should not be able to convert the special legal protections that allow them to attract capital into political war chests that could be funneled to legislators, corrupting them or creating the appearance of corruption.
- Second, individuals who pay money into a corporation should be protected from having that money used to support political candidates they oppose.
- Third, corporations should not serve as conduits for large contributions from individuals seeking to bypass other legal restrictions on their contributions.
Voter and nonprofit raise First Amendment challenge to corporate contribution ban
In 2000 Christine Beaumont, a North Carolina voter, joined with North Carolina Right to Life (NCRL) to sue the Federal Election Commission (FEC). NCRL is a tax-exempt, nonprofit advocacy corporation that provides crisis-pregnancy counseling and promotes alternatives to abortion. It argued that the corporate contribution ban “clearly burdens a form of expression in which NCRL would like to engage” (direct contributions to candidates for federal office) and therefore violates the First Amendment.
NCRL cited Federal Election Commission v. Massachusetts Citizens for Life (1986). In that case, the Court ruled that Massachusetts Citizens for Life (MCFL), a nonprofit corporation formed to disseminate ideas and not mass capital, posed no real threat of the kind of electoral corruption targeted by congressional regulation, and that the ban on its independent expenditures infringed on protected speech without compelling justification.
The district court, as well as the 4th U.S. Circuit Court of Appeals, ruled for Beaumont, arguing that the corporate contribution ban infringed on the NCRL’s First Amendment speech and associational rights. According to the courts, NCRL was an MCFL type of nonprofit corporation that posed no risk of “unfair deployment of wealth for political purposes.”
Court had differentiated between independent expenditures and direct campaign contributions
On appeal to the Supreme Court, the government argued that the “analytical lynchpin” of Massachusetts Citizens for Life was the distinction between independent expenditures and direct campaign contributions. In this case, the Court ruled that Congress could not constitutionally bar certain nonprofit corporations from expending funds to advocate the election of candidates to federal office.
But it did not extend this protection to contributions made directly to candidates for federal office. In fact, the Court has long held that prohibitions on direct corporate contributions to candidates burden First Amendment rights only minimally and serve important government interests in preventing the corruption of elections.
Court upheld direct contribution ban
In Beaumont, the Supreme Court ruled for the FEC, upholding the constitutionality of the ban on direct contributions even by nonprofit advocacy corporations.
In a 7-2 opinion written by Justice John Paul Stevens, the Court held that contributions to candidates are at the “edges” of political expression, not at the “core.” Restrictions on political contributions are merely “marginal” speech restrictions, and they require only a sufficiently important government interest, not a compelling one.
Dissenters said ban violated First Amendment
Justices Clarence Thomas and Antonin Scalia dissented, arguing that any campaign finance regulations must be narrowly tailored to advance a compelling state interest. They argued that the ban on corporate contributions failed to meet these requirements and thus violated the First Amendment’s speech and associational protections.
This article was originally published in 2009. Raymond B. Wrabley Jr. is a professor of political science at the University of Pittsburgh at Johnstown. He teaches courses on American politics, policy, and political institutions that cover constitutional issues, including First Amendment controversies.