Election Ad Ruling: What's It Mean To TV?

Eight days ago, the Supreme Court's long-awaited corporate campaign spending ruling in Citizens United v. Federal Election Commission struck the law of political broadcasting with lightning.

The five-justice bare majority opinion reverses more than 100 years of bans on corporations' use of their own funds for ads and other communications that expressly advocate the election or defeat of a candidate for federal elective office. The opinion also frees labor unions from more than 60 years of those limits. Similar laws in 24 states are also expected to fall.

The next day, editorial headlines in the New York Times and Wall Street Journal captured the strong polarization about the opinion both within the court itself (there was a ringing 90-page dissent by four justices) and in the public reaction. The Times headline was "The Court's Blow to Democracy;" in the Journal, it was "A Free Speech Landmark." 

The controversy is sparking efforts to scale back some predicted effects of the opinion through legislation or other means (see below). In the meantime, the old limits are void at least for federal campaigns. The effects could be felt as soon as the Illinois primary election next Tuesday.

What does the ruling mean for television and radio stations and their management?

I focus here -- preliminarily because rule or other changes are likely in the wake of the decision -- on what the decision does and doesn't do; questions the ruling leaves open -- and how they may be resolved; what happens next; steps stations should take; and pitfalls to avoid between now and the Nov. 2 general election.

What the Supreme Court Opinion Does

Fundamentally, the decision is about where the money can come from to pay for certain political advertising on broadcast TV and radio, cable and satellite.

Specifically, the opinion does four main things:

1. Overrules prior Supreme Court decisions upholding federal law bans on corporate, and labor union, use of their own general treasury funds for ads not coordinated with candidates ("independent expenditures") that expressly support or oppose named candidates for federal elected office (president and Congress).  

Previously, corporations and unions could finance such "independent expenditures" only through political action committees (PACs). PACs are funded by voluntary donations from individuals such as corporate employees and union members. Who can contribute and how much are regulated by the IRS and FEC. Now, there is no limit on the sources or amounts of funds that a corporation or union itself can spend on "express candidate advocacy" independent ads. Corporations and unions can also spend freely on independent "issue ads" that do not name candidates.

2. Strikes down the federal ban on corporate and union use of their own funds to pay for "electioneering communications." These are defined as "any broadcast, cable or satellite communication" that "refers to a clearly identified candidate for federal office," is made within 30 days of a primary election or 60 days of a general election, and is "publicly distributed" (i.e., the communication can be received by at least 50,000 people in a state within the 30- or 60-day period.) 

Previously, corporations and unions could contribute to electioneering communications only through PACs. Now they can finance the communications directly at any time, including within 30 and 60 days of elections and right up to Election Day.

3. Upholds the validity of existing federal law disclosure and disclaimer requirements applicable to election-related advertising by corporations and unions. Specifically, these provisions continue in effect indefinitely and apply to advertising newly permitted as a result of the opinion (but note that they are subject to change):

• Disclosure. Corporations/unions spending more than $10,000 per year to produce or air election-related ads must report, to the FEC, the names and addresses of anyone contributing $1,000 or more to the ads' preparation or distribution.

• Disclaimer. Any third-party "independent" ad that refers to a federal candidate and is not authorized by a candidate or candidate's committee must include in the ad the statement: "[Full name] is responsible for the content of this advertising," and state the paying party's permanent street address, telephone number (or Web address) and that the communication is not authorized by any candidate or candidate's committee. The statement must be spoken clearly and be displayed in text on the screen for at least four seconds. In addition, if the paying party is a corporation, the station should require that a list of the corporation's chief executive officers or members of the executive committee or board of directors be placed in the station's public file.

4. By 1 and 2 above, the court opens the door to substantial additional demand for election-related air time by any form of corporation or union, including trade associations, for-profit and nonprofit incorporated groups, and advocacy organizations from all over the political spectrum.  

By definition, the opinion applies to independent, third-party expenditures, meaning not by candidates or their authorized committees. Time requests that flow from the opinion therefore do not trigger lowest unit charge, which must be provided only to legally qualified candidates or their authorized committees.