Friday, January 22, 2010, 11:54 AM

GPS Special Edition: Corporations Free to Engage In Election Spending, Says U.S. Supreme Court

The Supreme Court yesterday swept aside federal laws that ban political spending by corporations in candidate elections.

The ruling in Citizens United v. Federal Election Commission struck down a decades-old ban on ads funded by corporations (including incorporated trade associations and non-profits) that expressly advocate the election or defeat of a federal candidate. The court also overturned the McCain-Feingold law’s ban on corporate-funded “electioneering communications” – broadcast ads that merely refer to a candidate and air in the periods immediately before federal elections.

Contrary to some reports, the ruling does not permit corporations to make campaign contributions to candidates or party committees. Such contributions are still prohibited under federal law and the laws of many states. For companies taking advantage of this new ruling, it is essential to avoid coordinating with a campaign or party committee about an ad’s content, timing, or placement, or else the ad may be treated as a prohibited in-kind contribution. Firewalls and other measures can protect the company from potential liability.

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