Thursday, November 02, 2023

Senator Hawley introduces bill to undo Citizens United

By Lene Powell, J.D.

Senator Josh Hawley (R-Mo) has introduced a bill aiming to limit public corporations’ ability to influence elections. The bill, Ending Corporate Influence on Elections Act of 2023, would “begin to undo” the Supreme Court’s 2010 decision in Citizens United v. FEC by establishing new prohibitions on certain political spending by publicly traded corporations.

The bill would:
  • Ban publicly traded corporations from making independent expenditures, political ads, or other electioneering communications; and
  • Ban publicly traded companies from giving money to Super PACs.
“For decades, Corporate America has funneled billions of dollars into elections in favor of politicians who favor their woke, social agendas—instead of American voters' interests. This legislation would hold mega-corporations' feet to the fire and stop their dollars from buying our elections,” said Sen. Hawley.

Citizens United. The Supreme Court’s decision in Citizens United lifted a key restriction on spending by corporations and unions advertising relating to political candidates. As explained in a Congressional report, federal election law previously required corporations and unions to finance such spending through voluntary contributions to their affiliated PACs.

Since Citizens United, corporations and unions may freely use treasury funds to air political advertisements explicitly calling for election or defeat of federal or state candidates (independent expenditures) as well as advertisements that refer to candidates during pre-election periods, but do not necessarily explicitly call for their election or defeat (electioneering communications). Independent expenditures must not be coordinated with a candidate’s campaign.

Impact. According to a 2019 review by nonpartisan research group OpenSecrets, which tracks money in U.S. politics, political spending from outside groups shot up significantly after Citizens United. Super PACs soon surpassed national party committees as the top outside spending groups.

Spending from “dark money” groups also increased, according to OpenSecrets. While Super PACs must disclose their donors, they can accept unlimited contributions from dark money nonprofits that are not required to disclose their donors. As a result, a Super PAC can list the “dark” nonprofit as the donor and keep the identity of the actual funding sources secret.

The shift has led to calls for more disclosure. According to law firm Covington & Burling, shareholders have submitted hundreds of proposals in recent years asking companies to disclose more information on their political spending and processes. Groups have also submitted rulemaking petitions asking the SEC to require public companies to disclose their political spending, including prominent law professors and the watchdog group Citizens for Responsibility and Ethics in Washington (CREW).

Citing negative effects on U.S. democracy, several legislators have introduced bills to overturn Citizens United, including Rep. Adam Schiff (D-Cal) and Sen. Jeanne Shaheen (D-NH).

Hawley bill. According to the bill text posted on Sen. Hawley’s website, S.B. 3173 would add a new section to the end of the Federal Election Campaign Act.

The bill would make it unlawful to:
  • Make a contribution or donation of money or another thing of value “in connection with” a Federal election;
  • Make a contribution or donation to a political committee that accepts donations or contributions that do not comply with the contribution limits or source prohibitions under the Act; or
  • Make an expenditure, independent expenditure, or disbursement for an electioneering communication.
Significantly, the bill would also make it unlawful for any person to receive either of the first two items from a publicly traded corporation.