STATEMENT: Supreme Court Showdown Pits Corporate Interests Against Independent Businesses and Citizens

High Court Threatening to Overturn Key Precedents Protecting Citizens Against Corporate Control of Politics

Washington, DC — The American Independent Business Alliance, a non-profit organization helping communities design and implement programs to support independent locally-owned businesses, today filed a friend-of-the-court brief in Citizens United v. FEC, No. 08-205, a case in which the Court has taken the unusual step of requesting reargument to overturn long-standing First Amendment doctrines regulating the engagement of for-profit corporations in political campaigns.

The brief argues that the Court's invitation to overrule key First Amendment precedents would undermine, rather than advance, First Amendment values by granting corporations the power to use huge corporate treasury funds in electoral campaigns even though such funds were not accumulated for political purposes. Elevating corporations to the status of citizens has no constitutional basis and would harm not only citizens, but America's small businesses.

"In a democracy, citizens should determine the rules governing the economic marketplace," said Brenda Wright, Director of the Democracy Program at Demos and one of the counsel for AMIBA. "The Supreme Court is threatening to reverse this key assumption of democracy and give for-profit corporations, with their enormous economic clout, unbridled power to influence who will be elected to office to govern the citizenry. We urge the Court to honor the First Amendment precedents ensuring that citizens, not corporations, exercise sovereign power in our democracy."

The case involves a claim that makers of a video opposing Senator Hillary Clinton's 2008 presidential campaign should have been able to use for-profit corporate funds to air the video — regardless of the political views of customers, employees, shareholders or other persons affiliated with the corporation — instead of using funds specifically donated by individuals who supported the political message.

Long-standing precedents of the Supreme Court establish that Congress and the states may require corporate political speech to be funded by donations from persons who agree with the corporation's message rather than by corporate general treasury funds that were not accumulated for political purposes. The Court's June 29, 2009 order in Citizens United unexpectedly asked the parties to brief whether two of these key precedents, Austin v. Michigan Chamber of Commerce and McConnell v. FEC, should be overruled.

AMIBA's brief argues that corporations are created by state law for specific and limited purposes. Allowing them to fund electoral campaigns would radically restructure our political system and return the nation to the discredited doctrines of the Lochner era, when the Constitution was interpreted to elevate the property rights of businesses over the rights of ordinary citizens to self-governance.

"Independent business owners often face a decidedly uneven playing field when competing against major corporations due to tax loopholes, subsidies and preferential treatment bestowed by politicians" said Jeff Milchen, co-founder of the American Independent Business Alliance. "Opening electoral contests to direct corporate campaign spending would undermine fair market competition."

"To hear reporters refer to this Court as ‘pro-business' is maddening," added Milchen. "Pro-Walmart and Goldman Sachs maybe, but overturning these precedents would be radically anti-business when viewed from the perspective of America's 6 million or so independent businesses."

Professor Greenwood added,

"The integrity of our legal system and future economic growth are at stake when law is for sale to the highest bidder, whether directly or indirectly. If the Supreme Court radically reinterprets the First Amendment to ban states and the Congress from regulating corporate campaign spending, our freedom — and the future of our market system — will pay an enormous price."

It was prepared by attorneys with Demos, a national, non-partisan policy organization that works to ensure broad political participation and a vibrant democracy; and by Daniel JH Greenwood, a professor at Hofstra University School of Law who has written extensively about the intersection of corporate law and democracy.

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