Landmark Supreme Court Case Opens Door to Corporate Funding of Election Ads

Earlier this month, the U.S. Supreme Court held that corporations and unions have the same right to engage in independent political speech as do individuals, including the right to expressly advocate the election or defeat of candidates. This is a significant victory for businesses and trade associations, as well as unions.

Reversing two decisions that held political speech could be banned merely because the speaker was a corporation, the Supreme Court held that laws may not prohibit a corporation from using its own corporate treasury funds to independently advocate the election or defeat of political candidates. Thus, a corporation may use its own treasury funds to pay for an ad that urges the public to "vote for" or "vote against" a particular candidate.

While the decision is a significant victory for free corporate speech, it is also important to note what today's decision does not do:

•              The ban on corporate contributions to candidates and parties remains.  A corporation cannot make a direct contribution from its general treasury funds to a federal candidate or to a PAC that contributes to federal candidates. All such contributions must be personal funds.

•              The opinion does not change what federal PACs can and cannot do under federal law.