A federal appellate court has used the U.S. Supreme Court's Citizens United v. F.E.C. decision to strike down a Wisconsin law limiting how much a person can donate to "independent expenditure" political groups.

For many years, Wisconsin law has prohibited any individual from donating more than an aggregate $10,000 per year to Political Action Committees (PACs) and political candidates. Monday's decision [3] from a three-judge panel of the United States Court of Appeals for the Seventh Circuit found unconstitutional that portion of the law limiting contributions to "independent" PACs, which are technically distinct from campaign committees. The outcome is not entirely surprising given recent U.S. Supreme Court decisions and the identity of the judges on the panel.

Bush Judge Asserts Donation Limits Violate Free Speech

"Citizens United [4] held that independent expenditures do not pose a threat of actual or apparent quid pro quo corruption, which is the only governmental interest strong enough to justify restrictions on political speech," wrote Judge Diane Sykes for the three-judge panel. Sykes was an appointee of President George W. Bush and the other two judges, Richard Posner and Joel Flaum, were both Reagan appointees.

"Accordingly, applying the $10,000 aggregate annual cap to contributions made to organizations engaged only in independent spending for political speech violates the First Amendment."

Judge Sykes is a former Wisconsin Supreme Court Justice (and former spouse of conservative talk radio host Charlie Sykes), and her appointment to the federal court was particularly controversial. In the view of good-government groups like the Alliance for Justice [5], she "consistently ruled in favor of corporations, insurance and big business and against individuals" and demonstrated hostility to reproductive freedom.

In the case at hand, she ruled in favor of the Wisconsin Right to Life (WRTL) PAC, which was represented by James Bopp [6], an activist lawyer who has worked for years to strike down fair and open election laws. Bopp was the driving force behind the Citizens United case, according to the New York Times, and estimates [7] he is involved in 25 to 30 post-Citizens United cases, which would further degrade election regulation under the guise of protecting "speech" (meaning money). Terry and Mary Kohler were named as the individuals whose "free speech" rights were allegedly harmed when the $10,000 aggregate limit on political donations prevented them from contributing to the WRTL PAC. The Kohlers head the Charlotte and Walter Kohler Foundation, which has given $300,000 [8] to Bopp's James Madison Center for Free Speech, and are longtime supporters of former House Speaker (and current presidential candidate) Newt Gingrich [9].

Prior to this decision, three (of thirteen) appellate courts had struck down similar state laws restricting contributions to independent expenditure groups, also citing Citizens United. With money deemed to be "speech" and corporations "people" protected by the First Amendment, the U.S. Supreme Court in Citizens United held that the only governmental interest justifying limits on the "free speech" of corporations and billionaire CEOs is to prevent corruption (which it redefined very narrowly). The Court also asserted that corruption is only associated with direct contributions to political candidates, and not with contributions to so-called "independent" organizations that run ads supporting candidates.

The Seventh Circuit acknowledged this, writing that "various other justifications for restricting political speech have been offered -- equalization of viewpoints, combating distortion, leveling electoral opportunity, encouraging the use of public financing, and reducing the appearance of favoritism and undue political access or influence."

However, in the view of Judge Sykes, "after Citizens United there is no valid governmental interest sufficient to justify imposing limits on fundraising by independent-expenditure organizations."

"Independent" vs "Direct" Distinction Is Flawed

Justice Kennedy's opinion in Citizens United claimed that "the potential for quid pro quo corruption distinguished direct contributions to candidates from independent expenditures." He suggested that "[t]he absence of prearrangement and coordination of an expenditure with the candidate or his agent not only undermines the value of the expenditure to the candidate, but also alleviates the danger that expenditures will be given as a quid pro quo for improper commitments."

The first presidential race after Citizens United, however, shows that the distinction between direct campaign contributions and "independent" expenditures does not hold up. Accordingly, the idea that corruption follows one but not the other is suspect.

According to an October report [10] from Democracy 21, the Campaign Legal Center, and the Center for Responsive Politics, donors to presidential campaigns are capitalizing on the U.S. Supreme Court's categorical distinction between independent and campaign committees to do an end-run around campaign finance limits.

In the second quarter of 2011, over 50 individuals donated the legal maximum to Mitt Romney's campaign ($2,500), then made around $6.4 million in additional contributions to the "Restore Our Future" Super PAC, which was created by former Romney staffers. Almost half of these individuals gave between $100,000 and $500,000 to the Super PAC, and one person donated $1 million. These donations made up half of the "Restore Our Future" funds.

Nine individuals donated to both President Obama's reelection campaign and his "Priorities USA Action" Super PAC, which was formed by former White House aides. The nine donors collectively gave $2.6 million to Obama's Super PAC, primarily from one donor giving $2 million and another giving $500,000.

The Campaign Legal Center observed that "the Super PACs are simply shadow candidate committees. Million-dollar contributions to the Super PACs pose just as big a threat of corruption as would million-dollar contributions directly to candidates." Candidates know the identities of those bankrolling the Super PACs that support their election, and will likely have the same depth of gratitude that they would if the donation had gone directly to their campaign.

Other Options

The U.S. Supreme Court's Citizens United claimed that the U.S. Constitution's First Amendment compelled the result, so there is no way to alter its impact short of another constitutional amendment. No ordinary act of legislation can overturn the decision.

A variety of amendments have been proposed or discussed, some of which have been analyzed by attorney Greg Colvin here [11]. Last week, Senator Bernie Sanders also offered [12] an amendment, noting that "the Citizens United ruling has radically changed the nature of our democracy, further tilting the balance of power towards the rich and the powerful at a time when the richest in this country have never had it so good."