SEMA eNews Vol. 13, No. 4, January 28, 2010

Supreme Court Overturns Campaign Spending Ban

The U.S. Supreme Court rejected a long-standing ban against direct spending on political advertising by corporations and unions. The 5-4 decision overturns laws and court precedents dating back to 1907. Until this ruling, corporations and unions had been permitted to run “issue ads” on particular subjects but not allowed to directly advocate the election or defeat of a federal candidate.

The court ruled that the First Amendment protects corporations and unions the same as individuals, in terms of the ability to spend money to influence campaigns. However, the ruling does not overturn existing regulations that ban direct corporate and union contributions to federal candidates and political parties. These contributions must still be channeled through a political action committee, which is subject to campaign contribution limits.

It may take some time to understand the ramifications of the Court’s decision. Although there will likely be an increase in spending, many corporations may be cautious about pursuing direct advertising as part of their public relations strategy. Some lawmakers may also seek to reestablish limits through a Constitutional Amendment or by enacting roadblocks, such as a requirement that shareholders approve corporate spending.

For additional information, contact Stuart Gosswein.

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