What Really Happened in Citizens United v. FEC?

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Decided in January of 2010, Citizens United v. Federal Election Commission made considerable changes to how political campaigns are funded in the United States. In a 5-4 split decision, the justices found that laws preventing corporations and labor unions from supporting political advertising violated the First Amendment's free speech protections.

The Supreme Court's decision in Citizens United caught the public's attention in a big way, and few modern cases have received as much backlash. Many wondered if it would change the face of American politics forever - and in some ways, it has. By drastically undercutting campaign finance regulations, the case opened the door for organizations such as political "super PACs" to continue working to sway elections.

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Background of the Case

In 2008, a conservative nonprofit group called Citizens United made a film entitled "Hillary: The Movie," which was critical of Hillary Rodham Clinton's ability to be president. At the time, then-Senator Clinton was a candidate for the Democratic party's Presidential nomination. "Hillary" had already been released in theaters and on DVD, but Citizens United wanted to make it available through video-on-demand.

The FEC stopped Citizens United from airing and promoting the film through on-demand platforms because the Bipartisan Campaign Reform Act prohibited such broadcasts within 30 days of the presidential primaries.

Citizens United sought an injunction and declaration from the courts that Section 441b of the Act was unconstitutional as applied to their film.

The Bipartisan Campaign Reform Act (BCRA)

Passed in 2002, the Bipartisan Campaign Reform Act was the first major campaign finance law to pass in Congress since 1974. It is also known as the "McCain-Feingold Act," named for its sponsors Senators John McCain and Russ Feingold.

The Act addresses what is known as "hard" and "soft" money in political campaigns. "Soft money" refers to the unlimited funds collected by political parties. "Hard money" is donations that are made directly to a particular candidate's campaign.

In the years leading up to the passage of BCRA, vast amounts of soft money were flowing into political parties that were not meant for candidates - but was used for them anyway.

To put a stop to this, the BCRA restricted soft donations. Mainly, Congress wanted to prevent large contributions from corporations, labor unions, and wealthy individuals from having too much power in elections.

The BCRA also restricted "electioneering communications" by corporations and labor unions. Such organizations were not allowed to use their general treasury funds to independently produce their own campaign ads.

This rule applied to any broadcast, cable, or satellite advertisements that referred to a clearly identified candidate for federal office and was made within 30 days of a primary election.

What Was the Supreme Court's Rationale in Citizens United?

In the opinion written by Justice Anthony Kennedy, the five-justice majority concluded that limiting "independent political spending" by corporations and other groups violated the First Amendment. They assumed that independent, transparent campaign spending could not be corrupted.

The majority's opinion focused primarily on protecting free speech, saying that "political speech must prevail against laws that would suppress it by design or inadvertence." The Court found that the BCRA was an "outright ban on speech" backed by criminal sanctions.

Justice Kennedy wrote that while the government can regulate political speech by corporations via disclaimer and disclosure requirements, it cannot suppress political speech altogether.

Corporations Have First Amendment Rights?

Free speech rights for corporations were established decades before Citizens United. The Supreme Court has recognized that the First Amendment applies to corporations in several cases, including First National Bank of Boston v. Bellotti. Those rights were extended to political speech in NAACP v. Button in 1963.

Dissenting Opinions

The decision in Citizens United was a close one. The justices were split 5-4, with several notable dissenting opinions. Justice John Paul Stevens wrote on behalf of himself and the other three dissenting justices: Justice Ruth Bader Ginsburg, Justice Sonia Sotomayor, and Justice Stephen Breyer.

The dissenting justices disagreed with the way Justice Kennedy framed the issue, saying, "The real issue in this case concerns how, not if, [Citizens United] may finance its electioneering."

The dissenters argued that the only dispute in the case was whether Citizens United had a right to use funds from its general treasury to broadcast its film about Hillary Clinton. They thought the answer was, unequivocally, no.

Justice Stevens points to Congress and the Court's efforts over the previous 100 years to limit campaign spending by corporations, beginning with the Tillman Act of 1907. Plus, the dissent argues that although corporations can make enormous contributions to society, they are not actually members. For example, American corporations can be run by people who do not live in the United States.

Justice Ginsburg has called Citizens United the Court's worst ruling under Chief Justice Roberts, saying, "I think the notion that we have all the democracy that money can buy strays so far from what our democracy is supposed to be."

Justice Stevens feared the impact the case would have, writing that the majority's ruling "threatens to undermine the integrity of elected institutions across the Nation." Many since then have agreed.

The Practical Result of Citizens United on Campaign Finance

The Supreme Court's decision in Citizens United granted corporations, nonprofits, trade unions, and others the ability to spend money independently on federal election campaigns. As long as they do not formally "coordinate" with a candidate or political party, corporations can spend an unlimited amount of money on campaign advertising.

This led to the creation of "Super PACs," political action committees with immense power. Traditional PACs could donate directly to a candidate's campaign but were subject to contribution limits. But that changed in 2010.

In Speechnow.org v. Federal Election Commissiona federal court used the logic of Citizens United to give outside groups (later known as Super PACs) the ability to accept unlimited contributions from both individuals and corporations as long as they don't give directly to candidates.

Critics of the decision argue that it dramatically expanded the already significant influence that corporations, special interest groups, and wealthy individuals have on elections. A 2015 Brennan Center report found a small group of individuals now hold "more power than at any time since Watergate, while many of the rest seem to be disengaging from politics."

McConnell v. Federal Election Commission

Citizens United was not the first time the Supreme Court was asked to examine the BCRA. In 2003, the Court upheld the Act in McConnell v. Federal Election CommissionSenator Mitch McConnell was a longtime opponent of the BCRA and joined groups, including the National Rifle Association and the California Democratic Party, in challenging its constitutionality.

In a complex ruling, the Supreme Court held that the First Amendment does not protect all political speech - and upheld the key provisions of the BCRA. The majority found that the Act's restriction on soft-money contributions was justified to prevent "actual corruption threatened by large contributions...and the appearance of corruption" that could result.

Austin v. Michigan Chamber of Commerce

Before Citizens United, the Supreme Court had upheld election spending restrictions for decades. In Austin v. Michigan Chamber of Commerce, the Supreme Court held that a law prohibiting corporations from using treasury money to support or oppose state office candidates did not violate the First or Fourteenth Amendments. In the Court's opinion, Justice Thurgood Marshall found that the statute was essential to achieving the vital goal of maintaining integrity in the political process.

Citizens United overruled Austin, finding that "independent political spending" did not present a substantial threat to the electoral process as long as it was not coordinated with a candidate's campaign.

Read the full decision from Citizen's United v. Federal Election Commission on FindLaw's Cases & Codes.