A researcher for the Center for Competitive Politics will provide testimony before the a hearing Tuesday in the House Ways and Means Committee on proposed campaign finance legislation.
In the wake of the U.S. Supreme Court’s decision in Citizens United v. Federal Election Commission, legislatures in Maryland and other states have rushed to enact legislation to “fix” a supposed problem.
“It is important to note that long before the Court’s decision in Citizens United, corporations, unions and other groups could spend an unlimited amount of money on independent expenditures—ads, direct mail and other public communications—advocating for or against candidates for state office in Maryland,” Laura Renz, CCP’s director of research and government relations, wrote in prepared testimony. “This is a healthy exercise in our democratic process, but several bills pending in the House would restrict this First Amendment right, with little or no justification.”
Renz will testify at the House Ways and Means Committee hearing Tuesday at 2 p.m. on the following campaign finance bills:
House Bill 616 would require a corporation making an independent expenditure of $10,000 or more to obtain majority approval for its stockholders, effectively imposing a de facto ban on business corporation speech in clear conflict with Citizens United. The state Senate of Iowa recently amended its post-Citizens United legislation to include a requirement for majority director approval instead of majority shareholder approval, partly to satisfy constitutional concerns.
HB 616 would also prohibit a “person doing public business” from engaging in independent expenditures, which also violates a core holding of Citizens United. The Court ruled that independent expenditures, unlike direct contributions to candidates, cannot pose a quid pro quo risk of corruption or its appearance-one of the only justifications the Court has accepted for government regulation of political speech. House Bill 690 would prohibit state contractors from making independent expenditures, and it’s constitutionally questionable for the same reason.
House Bill 917 would prohibit all corporations from making campaign contributions. Maryland law currently allows corporations and unions to contribute to candidates under the same contribution limits as individuals: $4,000 per candidate, per cycle with a maximum aggregate contribution of $10,000 to all candidates. The legislature, if it decides to pass this legislation, should justify why only corporations-and not labor unions-should be banned from contributing to candidates.
House Bill 986 would require that a corporation making an independent expenditure obtain board authorization of the expenditure-and obtain authorization from a two-thirds majority of shareholders. It seems clear that the latter part of the provision is designed simply to stifle corporate expenditures and would be blatantly unconstitutional. This bill would also require that any political expenditure paid for by a corporation “be true,” which would subject companies to government speech boards to engage in the impossible task of determining whether inherently subjective political speech is “true.”
“These bills address independent expenditures, which are made without coordinating with candidates-and thus do not provide an appearance of corruption according to the Supreme Court. They’re a core expression of free speech in our democratic process,” Renz said. “Rather than rush to enact misguided ‘fix’ legislation, the legislature should instead view independent expenditures for what they are—an effective way for individuals, unions and businesses to speak out on important political issues facing the state and its citizens.”
