The Volokh Conspiracy

I blogged about the Sen. Sanders / Reps. Deutch, DeFazio, Hastings, McDermott proposed constitutional amendment last week, but an e-mail from a reader led me to one other problem with the amendment. The amendment, you may recall, reads:

Section 1. The rights protected by the Constitution of the United States are the rights of natural persons and do not extend to for-profit corporations, limited liability companies, or other private entities established for business purposes or to promote business interests under the laws of any state, the United States, or any foreign state.

Section 2. Such corporate and other private entities established under law are subject to regulation by the people through the legislative process so long as such regulations are consistent with the powers of Congress and the States and do not limit the freedom of the press.

Section 3. Such corporate and other private entities shall be prohibited from making contributions or expenditures in any election of any candidate for public office or the vote upon any ballot measure submitted to the people.

Section 4. Congress and the States shall have the power to regulate and set limits on all election contributions and expenditures, including a candidate’s own spending, and to authorize the establishment of political committees to receive, spend, and publicly disclose the sources of those contributions and expenditures.

What the amendment would do with the speech of nonprofits is not clear: Section 1 says constitutional rights “are the rights of natural persons” — which doesn’t include groups such as the ACLU, the NRA, the NAACP, and so on — but at the same time says that they “do not extend to for-profit corporations, limited liability companies, or other private entities established for business purposes or to promote business interests,” a category that also doesn’t include such non-business-related nonprofits. So the proposal is ambiguous as to those groups.

But non-profits that are “established ... to promote business interests” — even when they are not funded by business corporations, but only by private individuals — clearly would be denied constitutional rights by the proposed amendment. So a non-profit aimed at promoting “business interests” would be stripped of the freedom of speech and of the press (and other rights), but a non-profit aimed at opposing those same business interests would retain those rights.

Of course, section 4 specifically says that the government “shall have the power to regulate and set limits on all election ... expenditures,” with no exception for nonprofit corporations, pro-business or otherwise — so maybe after all the amendment would equally strip all nonprofits of the right to speak about elections. The government would simply have to set a $100 limit on nonprofits’ election expenditures, and that would strip them of the ability to send out mailings, buy newspaper ads, buy billboards, and even spend more than $100 in employee salaries to maintain Web sites. At least that would be equality, albeit equality of speech suppression.

But as to non-election-related speech, pro-business nonprofits would be stripped of constitutional rights more generally by section 1, while non-pro-business nonprofits would presumably still have First Amendment rights (albeit limited as to election-related speech by section 4).

UPDATE: The original post on how the amendment’s text applies to restrict newspapers and other media organizations is here.

That’s one of the effects of HJR 90, proposed by Reps. Theodore Deutch, Peter DeFazio, Alcee Hastings, and Jim McDermott, and a similar Senate proposal by Sen. Bernie Sanders:

Section 1. The rights protected by the Constitution of the United States are the rights of natural persons and do not extend to for-profit corporations, limited liability companies, or other private entities established for business purposes or to promote business interests under the laws of any state, the United States, or any foreign state.

Section 2. Such corporate and other private entities established under law are subject to regulation by the people through the legislative process so long as such regulations are consistent with the powers of Congress and the States and do not limit the freedom of the press.

Section 3. Such corporate and other private entities shall be prohibited from making contributions or expenditures in any election of any candidate for public office or the vote upon any ballot measure submitted to the people.

Section 4. Congress and the States shall have the power to regulate and set limits on all election contributions and expenditures, including a candidate’s own spending, and to authorize the establishment of political committees to receive, spend, and publicly disclose the sources of those contributions and expenditures.

Nearly all newspapers, TV stations, cable networks, and radio stations (except of course for nonprofits such as NPR) are organized as corporations or other entities established for business purposes. Under section 3, they “shall be prohibited” from making expenditures “in any election of any candidate ... or the vote upon any ballot measure.” Since to write or print or broadcast anything, newspapers, networks, and broadcasters must spend money, this would ban — not just authorize Congress to ban, but itself ban — editorials supporting or opposing a candidate or a ballot measure. (“Shall be” in the Constitution is generally language that indicates that something becomes the law without further Congressional action, e.g., “This Constitution ... shall be the supreme Law of the Land” and “The executive Power shall be vested in a President of the United States of America.”)

To be sure, section 2 does say that such entities are “subject to regulation ... through the legislative process so long as such regulations ... do not limit the freedom of the press.” But section 1 tells us that business entities do not have constitutional rights; presumably, then, the freedom of the press (one of “the rights protected by the Constitution”) doesn’t extend to them. And since section 2 applies “the freedom of the press” just to regulations “through the legislative process,” and section 3 prohibits expenditures through the constitution itself, it appears that section 2′s supposed protection for the liberty of the press doesn’t even purport to limit section 3′s prohibition. Certainly nothing in section 3′s flat ban has any proviso saving the “freedom of the press.”

Now perhaps one could argue that, notwithstanding sections 1 and section 3, business entities retain the “freedom of the press” even though they lose all other constitutional rights. But, as I’ve discussed in considerable detail in this article, the “freedom of the press” has throughout American history meant the freedom of all to use communications technology, not a freedom limited to any specific industry. So if business entities do still have “freedom of the press” rights, which leaves the New York Times free to exercise such rights, then other business corporations would have the same rights as well, including the right to rent space or time in newspapers and television and radio programs to express their views, much as newspapers, cable networks, and broadcasters have the right to use such space or time.

On top of that, the proposal would mean that any government could take corporate property — whether of big businesses or small closely held corporations — without paying any compensation at all, could take corporate property without due process, and more. That would be quite a constitutional amendment.

Regulations of campaign expenditures usually exempt the media (which has usually been read quite broadly to include most regularly published publications). Thus, for instance, the Federal Election Campaign Act, which as written banned independent expenditures of over $1000 in support of or opposition to a candidate, exempted the media — otherwise, the Act would have barred newspaper editorials for which over $1000 was spent, or which used more than $1000 worth of newspaper space (depending on how one decided to do the accounting). Buckley v. Valeo struck down the Act’s independent expenditure limits on First Amendment grounds, but it upheld various disclosure and reporting requirements; these too would have applied to media expenditures, if it weren’t for the media exemption in the statute. Likewise, bans on independent expenditures by corporations and unions (which were upheld by Austin v. Michigan Chamber of Commerce, though more recently struck down by Citizens United) have generally exempted the media, or else newspapers owned by corporations wouldn’t have been able to editorialize.

Because of this, it generally hasn’t been clear whether the media exemption was constitutionally mandated — whether a legislature could, if it wanted to, regulate newspapers’ expenditures related to political campaigns the same way it regulated other expenditures. But Olson v. City of Golden (D. Colo. Sept. 1, 2011) held that such an exemption is not constitutionally mandated.

Until 2010, a Golden (Colorado) ordinance provided that, “Any person [other than a candidate, political committee, or issue committee] making ... expenditures totaling more than $50.00 shall deliver notice in writing of such expenditures to the City Clerk not later than three business days after the day that such funds are expended or services or materials provided.” “Expenditure” was in turn defined as “the payment, distribution, loan or advance of any money for goods or services related to the support or opposition of any candidate, ballot issue, ballot question or issue.”

In 2010, the ordinance was amended to exclude “any cost incurred in covering or carrying any news story, editorial endorsements, opinion or commentary writings, or letters to the editor by any broadcasting station (including a cable television operator, programmer or producer), newspaper, magazine, or other periodical publication, including any Internet or electronic publication, that is viewable by the general public and is primarily devoted to the dissemination of news and editorials to the general public.” But until then, the Golden ordinance had no such media exemption.

Marian Olson published The Voice of Golden, a free newspaper delivered by bulk-mail to 7,300 Golden households (apparently each month). The city concluded that Olson’s editorializing about various candidates and ballot measures in her October 2005 issue was worth more than $50 (since it occupied more than a page, and the standard advertising rate for the newspaper was $50/page), and that Olson therefore had to file reports, which she hadn’t done. The city sued, seeking “judgment declaring that Ms. Olson was in violation of the 2005 Ordinance, an order requiring Ms. Olson to abate violation of the 2005 Ordinance, and an award of costs, attorney fees, and interest associated with prosecuting the violation.” The city eventually withdrew its claim, in exchange for Olson’s reporting the October 2005 expenditures. But eventually Olson sued, claiming that applying the ordinance to her was unconstitutional.

Not so, the district court held:

There is no doubt that the press has a unique and important role in American society, especially in politics. However, Ms. Olson has presented no case law, and the Court has found none, holding that the First Amendment requires that the press must be excluded from campaign funding disclosure requirements....

Continue reading ‘Newspapers Have No First Amendment Exemption from Political Spending Reporting Requirements’ »

That’s the title of an article in The New Republic. England apparently sharply constrains campaign spending (both by candidates and by advocacy groups that are acting independently of the candidates), so unsurprisingly this means dramatically greater power for newspapers. And equally unsurprisingly this is leading the author to call for still more restrictions, this time on newspapers.

To some, this situation may reveal the problem of campaign finance laws: By trying to prevent parties from spending large sums of money and stopping wealthy independent organizations from dominating the campaign, the relative voice of the newspapers is enhanced. But rather than admit that campaign finance laws are futile, one might also conclude that controls on campaign spending should be complemented by attempts to address media power.

The most obvious strategy in this regard is to limit the concentration of the media. Given the unrivalled capacity to engage in unrestrained electoral advocacy that comes with owning a newspaper, it is important that no single person or company be able to dominate the market. Others, by contrast, have called for the regulation of media content. Most of the content regulations being discussed at present are aimed at stopping invasions of privacy and preventing the acquisition of information through hacking and blagging. There have, however, been some calls that newspapers be required to cover political matters with due impartiality, as is required on UK television and radio. But even at the height of anti-Murdoch feeling, such a far-reaching measure seems very unlikely to be pursued....

[W]hile the robust political tradition of the UK press should not be sacrificed, it is time to think about how newspapers can better reflect a wide range of opinions and not give so much power to the proprietor.

Thanks to Paul Sherman (Institute for Justice’s Make No Law blog) for the pointer.

I blogged about the original decision here, and about an earlier appellate court decision to the contrary here. After the original decision striking down the ban, the district asked for more briefing in light of a Supreme Court precedent that the parties and he hadn’t cited, but yesterday he reaffirmed his earlier decision; Prof. Rick Hasen (Election Law Blog) has more.

A commenter asks what I see as the source of federal authority for restricting contributions to federal candidates. The Court’s answer as to Senators and Representatives has generally been Article I, § 4, which says that “the Congress may at any time by Law make or alter [Regulations of the Times, Places and Manner of holding Elections for Senators and Representatives].” Restricting the conduct of people who are running for federal office, the theory goes, involves the regulation of the “Manner of holding Elections.” But I’m not sure whether this is right — “Manner of holding Elections” — could be used to refer to the manner of actually recording and counting the votes, and not the manner of running campaigns aimed at persuading voters. And, as the Court has recognized, this doesn’t speak to Presidential elections at all.

Rather, the better explanation, I think, is one that would build on the argument of Justice Sutherland — a supporter of fairly strong judicial enforcement of constraints on federal power — as to Presidential campaigns, in Burroughs & Cannon v. United States (1934). The President has the duty (Article II, § 3) to take care that the laws are faithfully executed, as well as other duties. The Congress has various powers, which the Constitution contemplates will be implemented in the interests of the legislators’ employers — the public.

Article I, section 8, clause 18 provides that Congress has the power to “make all Laws which shall be necessary and proper for carrying into Execution” all the powers of the Congress and the Presidency. I think that barring behavior that poses a substantial risk of being tantamount to bribery — and I do think that contributions pose such a risk (see Part III of this article) — is indeed “necessary and proper,” at least under the interpretation of that clause given in McCulloch v. Maryland (1819), to decrease the risk that legislative and executive action will be influenced by improper factors. Indeed, I think the enumerated power to limit campaign contributions is precisely the same enumerated power that justifies bans on outright bribes of legislators and executive officials.

Of course, the exercise of this power — like the exercise of other powers, such as the power to regulate commerce among the states, the power to make laws for D.C., the power to regulate the post office, and more — is subject to the First Amendment. Likewise, states’ exercise of their powers to legislate on all subjects they please (state governments are generally not constitutionally defined as governments of expressly enumerated powers) is subject to the First Amendment. The First Amendment, in my view, imposes some limits on the regulation of campaign contributions (and broad limits on the regulation of independent expenditures). But the commenter asked about the enumerated power question, so that’s what I’m trying to answer in this post.

So a district court held yesterday in United States v. Danielczyk (E.D. Va.). This is the opposite result from one reached by the Eighth Circuit ten days ago. (The district court discusses the district court decision that the Eighth Circuit affirmed, but not the Eighth Circuit decision itself.)

As I said when I posted about the Eighth Circuit decision, I think the ban on corporate contributions is indeed constitutional, even though I think Citizens United, which upheld corporations’ and unions’ right to engage in independent expenditures, is also right. I don’t think that corporate contributions to candidates by big businesses are likely to be particularly corrupting, among other things because (under Buckley v. Valeo) contributions to candidates by anyone — individual or corporation — can already be limited. Federal law, for instance, limits contributions to $2500 per election. IBM or the Service Employees International Union is not going to be able to materially influence a candidate by contributing $2500. If anything, corporate and union influence is much more likely to come from individual contributions by corporate employees and union members, which can indeed add up to much more money.

Rather, the problem with corporate contributions is that they provide an avenue for evading individual contribution limits; if I want to donate $25,000 to a candidate instead of the $2500 limit, I could set up nine corporations, and then donate myself and also have those corporations make similar donations. Few people would do that, but some people who want to be big political players might. Nor can this easily be dismissed as a supposed “sham” and be thus distinguished from “legitimate” corporate contributions. Say some pro-life or pro-choice advocate, for instance, sets up several advocacy groups, perhaps one per city or one per county; nothing wrong with that. But then the advocate, who may be the dominant force in the groups (as well as a major contributor), might easily be able to give money to all those groups, and then have those groups give money to a candidate. That might well be quite consistent with the groups’ institutional goals, and be hard to clearly identify as a “sham.” But nonetheless the contributor would be able to evade the contribution limits through this means; and given the constitutionality of the contribution limits, the government may reasonably prevent such evasion by banning corporate contributions. (I didn’t see any discussion of this issue in the Danielczyk opinion.)

This rationale does not, however, justify bans on corporate independent expenditures. First, the government is not allowed to limit the size of individual independent expenditures (as Buckley v. Valeo also held), so there’s no “prevent the evasion of individual expenditure limits” justification. And, second, a ban on independent expenditures would dramatically limit speech without leaving open ample alternative channels — a ban on contributions, on the other hand, does leave open the alternative channels of independent expenditures.

For more on why I generally support the constitutionality of contribution-expenditure distinction, see Part III of my my Freedom of Speech and Speech About Political Candidates: The Unintended Consequences of Three Proposals (2000). For more on the Danielczyk decision, see this post by Prof. Rick Hasen (Election Law Blog).