Fallout Could Impact Political Ad Ruling

Constitutional Amendments

To date three constitutional amendments have been introduced to counteract Citizens United. Sen. Chris Dodd's (D-Conn.) proposal, co-sponsored by Sen. Tom Udall (D-N.M.), would grant Congress explicit authority to regulate campaign-related spending in federal elections and to states in their elections, including for ads.

Senator John Kerry (D-Mass.) has expressed support  for a constitutional amendment "to make it clear once and for all that corporations do not have the same free speech rights as individuals." In the House, Rep. Leonard Boswell's (D-Iowa) proposal would prohibit "corporations and labor organizations from using operating funds for advertisements in connection with any campaign for election for Federal office." A third, sponsored by Reps. Donna Edwards (D-Md.) and John Conyers (D-Mich.), would permit "Congress and the states to regulate the expenditure of funds by corporations engaging in political speech."

Miscellaneous Proposals 

Among these are requiring prior approval of a percentage of shareholders before a corporate ad supporting or opposing a federal candidate airs -at least one bill requires this for public corporations spending $10,000;  and prohibiting the use of any federal funding to contribute to political campaigns or participate in lobbying. The Stand By Your Ad Act of 2010, sponsored by Rep. John Boccieri (D-OH), would require campaign-related communications financed by certain tax-exempt or political organizations to name their five largest donors. The Pick Your Poison Act of 2010, introduced by Rep. Alan Grayson (D-Fla.), would prohibit corporations that employ registered lobbyists from spending on electioneering communications. Another concern that may be addressed is assuring that stations provide adequate airtime to political candidates.

State and Local Activity

At least 24 states, and a number of localities, had state and local election laws similar to the federal corporate spending limits struck down by the Supreme Court. Other states lacked those and allowed state and local election activity prohibited for federal elections. In states with limits matching the federal, one or more of the following steps have been taken or may be planned in the wake of the ruling:

--State repeal, rewriting in light of Citizens United or suspension of enforcement of existing state law on corporate/union campaign spending. For example, a bill introduced March 5 in the Connecticut legislature would create new disclosure/ disclaimer requirements for independent expenditures, including by unions and corporations. In Montana, the attorney general said the state's corporate spending limits would stay in place until challenged, and a challenge was filed March 8. In New York, a bill introduced Feb. 17 would require shareholder approval for corporate independent expenditures, which are currently unlimited there for non-federal candidates. The Los Angeles Ethics Commission announced recently that it will stop enforcing a 2001 city ordinance banning direct corporate support in ads for candidates in city elections.

--Lawsuits by opponents of campaign finance limits to force repeal under Citizens United.

--Lawsuits using Citizens United to challenge other state law election-related provisions. (At the federal level, there were already pending court challenges to federal "soft money" and other restrictions, and the effect of the Supreme Court ruling on them is being assessed).

State Court Cases

The ruling is triggering aftershocks in some of the dozens of campaign finance-related lawsuits pending in state (and federal) courts. For example, some judges have ordered the parties to file briefs assessing the impact of the decision. In some states pending cases are similar to the Citizens United challenge; other cases attack state laws such as allowing public financing of campaigns for judgeships.

Suggested Station Responses to the Ruling

--Keep in touch with further federal, state and local law changes that affect political ads, how they can be financed and what in-ad "disclaimers" they require. Knowing what ads are legal and whether modified restrictions have been adopted locally or federally will help stations decide whether to run ads over which they have discretion (i.e. ads other than by federal candidates), and to maximize election-related revenue.

--If a station does not expect to be sold out of political inventory, whether for the primary or general election, consider being proactive in letting new sources of political ads know you have availabilities.  All kinds of corporations, for-profit and nonprofit, publicly traded and privately held, labor unions and incorporated advocacy groups of every political stripe, can take advantage of the liberalized spending regime.

--Work with federal candidates and their campaigns, who have a right of access to all kinds of air time. Negotiate with them to reach a reasonable compromise between their demands and station inventory, equal time obligations and other concerns. This is necessary in any election year, but perhaps especially so this year due to greater demand by more non-candidates.

--Have a revised, written political disclosure statement that sets out clearly the station's policies on selling political time to candidates and non-candidates for the primary and general election. Don't defer this until the last minute.