Fallout Could Impact Political Ad Ruling

In my Jan. 29 column, I summarized the Supreme Court's 5-4 January 21 blockbuster, highly controversial campaign ad ruling in Citizens United v. Federal Election Commission (FEC).  I addressed what it did and didn't do, its meaning for broadcast TV (and radio, cable and satellite), its implementation, possible action by Congress to limit its impact, and suggested to TV stations steps to take and pitfalls to avoid. 

The opinion held for the first time that corporations and labor unions have the same First Amendment political free speech rights as individual Americans. From this, the court majority concluded that existing limits on corporate and union financing of "independent expenditure" ads (not coordinated with candidates or their campaigns) -- such as in the McCain/Feingold campaign finance law -- violated corporate free speech rights.

The court voided the ban on corporate "express advocacy" (explicitly calling for election or defeat of a named federal candidate, e.g. "vote for" or "vote against"), except for disclaimer and disclosure requirements, and freed corporations and unions to spend with no limit from their own general funds on such ads any time before primaries and general elections. The ruling also affects state and local campaign ad spending. Ads by non-candidates are not entitled to lowest unit charge.

Today's column summarizes the main developments and effects of the ruling so far and suggests some steps for stations to take.

The ruling rocked campaign ad spending and opened the door to more election-related advertising on local stations this year than ever before in history.  What happens in the aftermath of the ruling at the FEC, in Congress and the states will shape campaign ad spending for years to come - the devil's in the details.  Broadcasters have a stake in the outcome, both in terms of the service they provide to the public by their role in elections, and ad revenues.  Staying alert to developments and participating in the process may be good business.

Effect on 2010 Campaign Spending

A storm of criticism followed the ruling, which came amid high interest in further campaign finance reform. President Obama set the tone in his State of the Union address ("I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities. And I urge [Congress] to pass a bill that helps correct some of these problems.")

The storm has continued, but one aspect generates relatively little controversy: the ruling's probable significant increase in the amounts spent on local station political advertising this year. One estimate is an additional $400 million on top of what was projected to be a record election season even before Citizens United.

The U.S. Chamber of Commerce and its 6,000 local affiliates exemplify both the revenue potential and what causes concern to opponents of the ruling.  According to the lead article in the March 17 Washington Post, the Chamber spent more on lobbying and political activities last year than either the Democratic or Republican National Committee. This year, the Chamber plans to spend at least $50 million on political races and related activities, 40% more than in 2008. The Chamber expects to focus on about 10 Senate and 40 House races in "battleground" states such as Florida, Indiana, Ohio and Pennsylvania.

According to the report, "the chamber's potential impact on the November elections was bolstered further by [Citizens United], which allows corporations and their surrogates to spend freely on political ads for and against specific candidates right up to Election Day."  

For several reasons, the increased spending seems likely, even if legislation reins in the ruling and despite the oft-repeated observation that most for-profit corporations will not risk -- this year, at least -- alienating elected officials and stockholders by openly advertising for or against a candidate.

Legislation, if enacted, is unlikely to restore corporate campaign spending limits completely to their pre-ruling status.

For-profit corporations which avoid doing their own pro- or anti-candidate ads are still expected to funnel funds to incorporated nonprofit advocacy groups such as the U.S. Chamber, AARP and others who will run the ads with far less public visibility for the for-profit corporations.The is also a high number of closely contested elections this year compared to most. Some states such as California have potentially close races for all three. And ballot issues are plentiful and corporations can spend without limit on them too.

FEC Actions

As the main implementing agency for campaign spending law for candidates for Congress, the Presidency and Vice Presidency, the FEC:

-- said on its website that it is considering the ruling's impact and will provide guidance as soon as possible on steps to be taken to "comply fully with the opinion."

--received a petition for rulemaking, filed by the Indiana lawyer who represented Citizens United, seeking repeal of implicated FEC rules and other steps.