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Legislative Options After Citizens United v. FEC: Constitutional and Legal Issues

Impact of Citizens United on Current Federal Campaign Finance Law

In brief, before the Court’s ruling, corporations and labor unions were prohibited from using their general treasury funds to make expenditures for communications expressly advocating election or defeat of a clearly identified federal candidate.11 In addition, corporations and unions were prohibited from using general treasury funds to finance electioneering communications,12 which FECA defines as any broadcast, cable, or satellite communication that refers to a clearly identified federal candidate made within 60 days of a general election or 30 days of a primary.13 However, corporations and labor unions were permitted to use political action committees (PACs), financed with regulated contributions from certain employees, shareholders, or members, to make independent expenditures for express advocacy communications and to fund electioneering communications within the restricted time periods. 14

As a result of the Court’s ruling, it appears that federal campaign finance law does not restrict corporate or, most likely, labor union15 use of general treasury funds to make independent expenditures for any communication expressly advocating election or defeat of a candidate. In addition, the law now also permits corporate and union treasury funding of electioneering communications.16 However, the law prohibiting contributions to candidates, political parties, and political action committees (PACs) from corporate and labor union general treasuries still applies. 17

Legislation and Proposals in Response to Citizens United

In response to the Supreme Court’s ruling in Citizens United v. FEC, various proposals have been discussed and legislation has been introduced. This report provides an analysis of the constitutional and legal issues raised by several proposals, organized by regulatory topic: increasing disclaimer requirements, increasing disclosure for tax-exempt organizations, requiring shareholder notification and approval, restricting U.S. subsidiaries of foreign corporations, restricting political expenditures by government contractors and grantees, taxing corporate independent expenditures, and providing public financing for congressional campaigns. The report also discusses amending the Constitution.

This report does not describe specific legislation. For a comprehensive discussion of legislation that has been introduced and an analysis of policy options, see CRS Report R41054, Campaign

11

2 U.S.C. § 441b(a).

12

2 U.S.C. § 441b(b).

13

2 U.S.C. § 434(f)(3).

14

2 U.S.C. § 441b(b)(2)(C).

15 Although the issue before the Court was limited to the application of 2 U.S.C. § 441b to Citizens United, a corporation, the reasoning of the opinion would also appear likely to apply to labor unions. “The text and purpose of the First Amendment point in the same direction: Congress may not prohibit political speech, even if the speaker is a corporation or union.” Citizens United, slip op. at 5 (Roberts, C.J., concurring).

16 In addition to impacting federal campaign finance law, it appears that the Court’s ruling in Citizens United v. FEC may also affect numerous state laws prohibiting corporate expenditures. See, e.g., Ian Urbina, Consequences for State Laws in Court Ruling, N.Y. TIMES, Jan. 23, 2010.

17

2 U.S.C. § 441b(a).

Congressional Research Service

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