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Ruling may give companies more clout

The Supreme Court's decision to remove campaign finance restrictions on corporations means a tsunami of company cash is likely to flood through the political system.

The Supreme Court's decision to loosen campaign finance restrictions on corporations means a tsunami of company cash is likely to flood through the political system, giving big firms and labor unions even more influence over candidates.

Thursday's 5-4 ruling allows companies and labor unions to spend whatever they want to get their political message out to voters, striking down limitations that prevented company profits from being diverted into political ads. The ruling did not affect a ban on companies contributing directly to political candidates.

And while it’s not yet clear exactly how corporate America will deploy its newly expanded political spending powers, critics and supporters of the decision agree: Voters are likely to hear a lot more in future elections about which candidates that large companies support and who they oppose.

“The large corporation will have an enormous new foothold in U.S. politics,” said Howard Rubenstein, a public relations executive who has advised numerous large corporations over the past five decades and opposes the ruling. “We shouldn’t have a 'For sale' sign on these elections.”

President Barack Obama agreed, saying the action puts the interests of large companies and organizations ahead of average voters.

"The Supreme Court has given a green light to a new stampede of special interest money in our politics," he said. "It is a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans."  

Experts say companies could begin to name specific candidates in high-profile “issue” advertising. An oil company, for example, might go beyond drumming up support for expanded domestic drilling by including the names of candidates who favor the policy. Financial services companies looking to thwart tougher regulations can now spell out which candidates they think are best suited to help them achieve those objectives.

That could have a chilling effect on candidates on the campaign trail, who may be less willing to take strong positions on issues for fear of drawing fire from well-funded corporate opponents, said Edwin Bender, executive director of the National Institute on Money in State Politics.

“Imagine if you’re running for office and you take a stand on a particular issue, say climate change,” he said. “You would then face the prospect of seeing energy companies spending millions of dollars against you.”

In the extreme, some companies might decide to endorse their own slate of candidates. Others might incorporate political endorsements in their marketing campaigns.

Supporters of the decision argue, as did the high court, that a corporation’s right to free speech — including political ads — is protected by the First Amendment just as it is for individuals.

“Political speech, which lays at the heart of the First Amendment, should no longer be relegated to second-class status," said Allison Hayward, assistant professor of law at George Mason University, and a former counsel at the Federal Elections Commission.

That view was echoed by the U.S. Chamber of Commerce, which represents big companies in Washington.

"The decision provides clarity and predictability for all entities — non-profits, trade associations, labor unions and corporations — that engage in the political process,” the group said in a statement. “We applaud the court for affirming that our system can only be made stronger through open and honest debate.”

The Chamber is the nation's biggest spender on political lobbying by far, doling out $65 million in the first nine months of 2009, according to the Center for Responsive Politics. Other big spenders include Exxon Mobil, General Electric, Blue Cross/Blue Shield and trade groups for real estate agents, doctors and the drug industry.

( is a joint venture of Microsoft and General Electric's NBC Universal group.)

Still, while many are predicting a new wave of campaign spending and advertising, some corporate executives may choose to tread lightly for fear of alienating customers.

“One company may think this is an excellent tool to influence the political process,” said Dave Levinthal, a spokesman for the Center for Responsive Politics. “Other companies may find this is potentially toxic because they don’t want to be seen supporting one party or another.”

The ruling upheld requirements that companies disclose their campaign spending, which could lead to another potential source of backlash. Shareholders who disagree with political ads funded with corporate profits could take issue with how their investment is being spent.

And while federal disclosure laws will remain, companies who chose to undertake direct campaign spending will find fewer restrictions in state campaign laws. Roughly half the states have no restrictions, according to Bender.

“Independent expenditure disclosure in the states is awful,” he said. “This money often is hidden in different ways in different states in (political action committee) reports and expenditures reports. So it’s very hard for us to know how much is being spent even now.”

It’s also not clear which party will benefit most from the ruling. Corporate campaign donations tend to favor Republicans, but many companies trying to influence the outcome on a political issue hedge their bets by spending on both sides of the aisle.