Proposed Pay-to-Play Laws in the Wake of Citizens United v. FEC: Congress and States get in on the Act
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As we have previously analyzed on the blog, the recent U.S. Supreme Court decision in Citizens United v. FEC has sparked both election law commentary over the limits of government efforts to restrict political speech as well as a much celebrated one-way fight between branches of government at the State of the Union Address. Now, the third branch of government is about to get in on the act as Senator Charles Schumer (D-N.Y.) and Congressman Chris Van Hollen (D-Md.) are set to unveil “responsive” federal legislation containing federal pay-to-play prohibitions with the apparent support of at least one Republican, Rep. Mike Castle (R-Del.). This legislation was recently released and is called the "DISCLOSE ACT". Please click here to view the summary.
The Citizens United opinion expressly recognized the First Amendment rights of corporations and labor unions to participate in the political process through the funding of independent communications expressly advocating the election or defeat of clearly identified candidates. Couched as it was in Constitutional principles, there are limits to what Congress can do to overturn the opinion. The Senate and House Democratic leadership appears to have concluded that if the prohibition of such speech is unconstitutional, the preferred response will be to require disclosure of corporate and union independent expenditures to the FEC and to shareholders and further to require corporate CEOs to appear on expenditures with the same “stand by your ad” messages we have learned to love in campaign advertising. The bill will also seek to impose additional limitations on the abilities of foreign individuals and companies to influence political speech by U.S. corporations.
Of significance for corporations doing business with the federal government, it is expected that the Schumer/Van Hollen legislation will contain significant federal pay-to-play limitations. Under draft versions of the legislation currently circulating on Capitol Hill, Schumer/Van Hollen is expected to entirely bar federal government contractors from using corporate funds to finance independent expenditures advocating the election or defeat of a federal candidate. Such contractors are already barred by federal law from making campaign contributions (11 CFR 115.2) but the proposed legislation is expected to seek in addition to preclude such contractors from financing independent speech about federal candidates. Whether such a prohibition could withstand constitutional scrutiny is, at best, an open question.
Another class of citizens expected to have their right to finance independent expressions of support or opposition of federal candidates muzzled under the proposed Schumer/Van Hollen legislation are all recipients of federal TARP (bailout) funds. Again, the constitutionality of such a prohibition remains open to debate, but considering the degree to which Members of Congress on both sides of the aisle have been scoring political points by demonizing TARP recipients, one can certainly understand why Congress would try.
