I am very pleased to welcome to ELB Book Corner several contributors to The Oxford Handbook of American Election Law (Eugene D. Mazo ed. 2024). The 30% discount code for ELB readers is ALAUTHC4. The third contribution is from Sarah Haan:

The corporation’s role in campaign finance is among the most hotly contested and politically charged issues in American election law. The United States Constitution is silent on the subject—and on the broader topic of corporate constitutional rights. Public opinion data suggest that a majority of Americans are concerned about the effect of corporate electoral spending on democracy and would like the law to impose greater restrictions. Since the 1970s, however, the law has moved against public sentiment, as judicial opinions have cited the First Amendment to erode existing restrictions on corporate campaign finance. This trend hit a high mark in 2010, when the U.S. Supreme Court decided Citizens United v. Federal Election Commission, deregulating corporate and union independent expenditures. Remarkably, corporate spending on elections did not swamp campaign finance in the wake of that case, but transparency problems continue to obscure our understanding of the impact of corporate spending on the political process.

Critics have highlighted the wealth-generating and organizational advantages that corporations possess as a matter of legal design, arguing that these features skew the democratic process when they are used to finance elections. The corporate form embodies legal features, such as limited liability and perpetual life, that make it uniquely capable of aggregating and deploying wealth. Corporate capitalism is constantly undergoing change, and this impacts the capacity for corporate political spending to shape or distort politics. For example, recent years have seen the rise of “regulatory entrepreneurship,” in which a startup company pursues a business model that violates existing law, and thus must begin its existence by raising capital for the purpose of changing the law. The emergence of autonomous business entities— businesses that are governed by self- executing algorithms, and may have no human involvement beyond the person who originally created the algorithm— sharpens the distortion concern. If a corporation can operate with no human participation, in perpetuity, can its efforts to influence electoral outcomes be democratic in any mean­ingful sense?

Since the 1940s, American law has treated unions and corporations with “rough paral­lelism” regarding political spending, by regulating the campaign finance of both kinds of organizations similarly, and by analyzing them on equivalent terms in First Amendment cases. Yet unions and corporations are different in important ways. Corporations exist to generate profits, while unions earn no profits. The general treasury of a business corporation is funded by its productive activities and by the capital it raises through debt and equity financing, while the general treasury of a labor union is funded by union dues collected from workers.

For years, however, the Supreme Court has interpreted the First Amendment to require opt-out rights for workers in relation to union political spending, but not for shareholders in relation to corporate political spending. The asymmetry deepened in 2018, when the Roberts Court decided Janus v. AFSCME— a case that overruled precedent to sharply curtail “subsidization” of union speech by agency fees paid by nonmembers. Janus has revived a debate over compelled economic association. As critics note, a number of participants in business corporations, including shareholders, could be said to “subsi­dize” the corporation’s wealth-generating activities, and thus, under the logic of Janus, its political speech. After Janus, the constitutional treatment of union political spending appears to be diverging from the treatment of corporate political spending in ways that impose greater comparative burdens on union speech.

In Citizens United, the Supreme Court portrayed transparency as a cor­ruption cure-all; the high value of disclosure was the one thing most of the Justices could agree on. The Justices seemed to imagine a world in which disclosure would only improve, capitalizing on advances in internet-based technology and perhaps even producing something like real-time disclosure of cor­porate expenditures. The optimism of these assumptions now looks quaint. With signs that disclosure laws stand on less firm ground today than they did in 2010, and given the significance of “dark money” in U.S. elections, it remains an urgent project for scholars to measure and analyze the impact of corporate spending on the electoral process.