HELENA - The state Supreme Court will hear a case Wednesday that could have a major impact on future elections, as it decides whether to retain or remove Montana's 100-year-old ban on direct corporate spending for or against political candidates.
At issue is the state's appeal of a 2010 decision by District Judge Jeffrey Sherlock of Helena. Citing the U.S. Supreme Court's narrow 5-4 decision in Citizens United v. Federal Election Commission, Sherlock declared the 1912 Montana law as unconstitutional.
The Citizens United ruling "allowed corporations and unions to use their general treasuries to pay for political advertisements that expressly call for the election or defeat of a candidate, also known as independent expenditures," said the Center for Responsive Politics, a nonpartisan, nonprofit Washington, D.C., group that tracks campaign finance matters.
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Sherlock quoted a Minnesota federal judge who held that a similar ban in his state was unconstitutional. The Minnesota judge said the U.S. Supreme Court decision was "unequivocal: The government may not prohibit independent and indirect corporate expenditures on political speech."
The Montana Supreme Court will hear oral arguments at 9:30 a.m. Wednesday in its courtroom in the state Justice Building, 215 N. Sanders, in Helena.
Attorney General Steve Bullock will argue the case for the state. He said the issue isn't a matter of overturning Citizens United, but rather looking at Montana's unique historical circumstances and why people passed the initiative that imposed the ban.
"The implications of upholding Judge Sherlock's decision could radically change the way citizens participate and the way our government works and our elections," Bullock said. "Here we have a history where corporate contributions have corrupted."
Bullock, a Democratic candidate for governor, said the Corrupt Practices Act has guaranteed citizens the right to participate in elections without their interests being overshadowed by corporations, as was the case before 1912.
But Donald Ferguson, executive director of Western Tradition Partnership, the conservative political action organization based in Washington, D.C., challenging the Montana ban, said the court should uphold Sherlock's ruling.
Ferguson said his group targeted the Montana law because it is "particularly unconstitutional." The group, now called American Tradition Partnership, has filed two other pending lawsuits going after Montana campaign limits and disclosure laws.
"This should be a clear case for the court to decide in WTP's favor, given the previous (U.S.) Supreme Court ruling," he said.
Joining WTP in challenging the law were Champion Painting Co. of Bozeman and Montana Shooting Sports Association Inc. of Missoula.
Montana was one of two dozen states to ban corporate contributions in state races over the years. Corporations still can donate through political action committees to which executives and others voluntarily donate.
Legal briefs filed by the attorney general's office and many of the friends-of-the court briefs cited the historic political clout exercised by copper mining companies and their owners - the Copper Kings - that dominated Montana politics in the late 1890s and early 1900s.
The brief by Bullock and his assistants quoted from an affidavit by retired University of Montana historian Harry Fritz that foreign (out-of-state) corporations "extorted special interest favors from Montana lawmakers through ‘naked corporate blackmail of a sovereign state.' "
To combat corporate influence, Montanans passed the Corrupt Practices Act by initiative to ban direct corporate spending in campaigns.
In his ruling, Sherlock acknowledged the historic political influence of the Copper Kings, but said he didn't find it sufficient to justify restrictions on corporations' First Amendment rights in light of the U.S. Supreme Court's Citizens United decision.
"The court has already quoted portions of the affidavit submitted by Dr. Fritz showing the pernicious influence of the Copper Kings and their various corporate alter egos," Sherlock wrote. "However, the Copper Kings are a long time gone to their tombs."
Sherlock said the U.S. Supreme Court held that "the anti-corruption interest is not sufficient to displace the speech here in question, noting that 26 states do not restrict independent expenditures by for-profit corporations."
In response, those challenging the ban said the lesson of last year's Citizens United ruling "is that more speech, not less, is good," said a brief from the plaintiffs' attorney, Margot Barg of Bozeman.
Yet Champion Painting, Montana Shooting Sports Association and Western Tradition Partnership as corporations are forbidden from using corporate funds to support or oppose political candidates or parties, she said.
"Citizens United decidedly established that the right to make independent expenditures to support or oppose political candidates is political speech protected under the First Amendment, even if the source of such speech is a corporation," Barg said. "This right is already being enjoyed by everyone in Montana, except corporations, even though the state has no compelling interest in depriving corporations of this right."
A friend-of-the-court brief by Allen Dickerson, attorney for the Center for Competitive Politics of Alexandria, Va., agreed.
"There is no evidence that aligning Montana's campaign laws with the First Amendment would reset the state to the early 1900s," it said.
At the height of its power, Amalgamated Copper employed 80 percent of Montana's wage-earners, it noted, while Montana today has more than 46,000 domestic corporations, 52,000 domestic limited liability companies and 2,500 limited liability partnerships.
Federal regulatory measures passed since then, such as antitrust and labor protection laws, would prevent corporations from exerting the same influence that the Copper Kings once held over Montana, he said.
"Finally, individuals have more space to speak out and air grievances against corporations than ever before," the center's brief said, citing diverse media and the Internet. "With that in mind, the idea that Montana could turn the clock back to 1900 merely by allowing corporations to speak in elections cannot withstand scrutiny."