HELENA - The Montana Supreme Court on Friday overturned a lower court ruling and reinstated the state's century-old ban on direct spending by corporations for or against political candidates.
The justices ruled 5-2 in favor of the state's attorney general's office and commissioner of political practices to uphold the initiative passed by Montana voters in 1912.
Western Tradition Partnership, a conservative political group now known as American Tradition Partnership, joined by Champion Painting Inc. and the Montana Shooting Sports Association Inc. had challenged the Montana ban after the U.S. Supreme Court's 2010 ruling in Citizens United v. Federal Election Commission. The U.S. Supreme Court decision granted political speech rights to corporations.
District Judge Jeffrey Sherlock of Helena ruled that the U.S. Supreme Court decision rendered the Montana ban unconstitutional.
But the Montana Supreme Court's majority saw it differently and overturned Sherlock.
"Citizens United does not compel a conclusion that Montana's law prohibiting independent political expenditures by a corporation related to a candidate is unconstitutional," Chief Justice Mike McGrath wrote for the majority. "Rather, applying the principles enunciated in Citizens United, it is clear that Montana has a compelling interest to impose the challenged rationally-tailored statutory restriction."
The court held that corporations are not deprived of political speech by the Montana law.
They can form political committees, as many other groups have done, but must file reports disclosing where they raised their money and how they spent it. They also can hire legislative lobbyists.
"The many lobbyists and political committees who participate in each session of the Montana Legislature bear witness," the majority opinion said. "Under the undisputed fact here, the political committee is an easily implemented and effective alternative to direct corporate spending for engaging in political speech."
Joining McGrath in the majority were Justices Brian Morris, Patricia Cotter, Michael Wheat and Jim Rice.
Dissenting were Justices James Nelson and Beth Baker.
Nelson said the Montana court was required to follow the U.S. Supreme Court precedent and strike down the state ban, even though he adamantly disagreed with the U.S. Supreme Court's Citizens United decision.
"In my opinion, District Judge Sherlock's well-reasoned and courageous - though politically unpopular - decision should be affirmed," Nelson wrote. "I cannot agree with this court's determination not to do so."
Baker said she would uphold only those provisions in state law to ensure that independent corporate political expenses were properly reported and disclosed.
It was unclear Friday whether American Tradition Partnership would appeal Friday's ruling to the U.S. Supreme Court.
"We're reviewing our options," said Donald Ferguson, executive director of the group. "We feel Montanans do not forfeit their freedoms of speech and association simply because they associate as a corporation."
The Montana Supreme Court decision was a major victory for Attorney General Steve Bullock, who personally argued the case. He is a Democratic candidate for governor in 2012.
"We're really pleased with the decision and think it's based on solid constitutional analysis, common sense and a clear understanding of our history and our current system of electing our state's leaders," Bullock said.
He said Montana has had a Corrupt Practices Law in place since 1912 and it has served Montana well.
"The Citizens United decision deals with federal laws and elections - like those contests for president and Congress," Bullock said. "But the vast majority of elections are held at the state or local level, and this is the first case I am aware of that examines state laws and elections."
McGrath's majority opinion is replete with references from books by Montana historians discussing successful efforts by the Copper Kings in Butte in the late 19th and early 20th centuries to control the state by influencing legislative and judicial decisions through bribes and applying political pressure on at least one governor.
"This naked corporate manipulation of the very government (governor and Legislature) of the state ultimately resulted in populist reforms that are still part of Montana law," McGrath wrote. "In 1906 the people voted to amend the state Constitution to allow for voter initiatives."
Shortly thereafter, Montanans used this initiative power to enact such reforms as primary elections to choose political candidates, the direct election of U.S. senators and the Corrupt Practices Act.
The opinion said evidence presented in District Court and not refuted by Western Tradition Partnership reveals that the group's purpose "is to act as a conduit of funds for persons and entities including corporations who want to spend money anonymously to influence Montana elections."
"WTP seeks to make unlimited expenditures in Montana elections from these anonymous funding sources," McGrath wrote.
He noted that Western Tradition Partnership also has filed separate lawsuits challenging Montana's campaign spending laws and the constitutionality of the state's political donation limits and its disclosure requirements.
Elsewhere in the decision, the chief justice asked, "If the statue has worked to preserve a degree of political and social autonomy is the state required to throw away its protections because the shadowy backers of WTP seek to promote their interests."
Missoulian State Bureau reporter Charles S. Johnson can be reached at (406) 447-4066 or at email@example.com.