Judge strikes down ban on corporate campaign donations

A federal judge has struck down a 1905 law which prevented corporations from making direct donations to political campaigns. Although the case is likely to wind up in the Supreme Court, there is already speculation that it could completely upend a campaign funding system already in disarray as a result of last year's Citizens United decision.

According to the New York Times, the decision arose out of the criminal trial of two Virginia businessmen accused of illegally using using company funds to reimburse their employees for making $186,600 in donations to Hillary Clinton in 2006 and 2008.

Federal Judge James C. Cacheris drew upon the Citizens United decision to find that if corporations enjoy the same free speech rights as citizens to make outside expenditures on behalf of candidates, then the "logic is inescapable" that they also have the same right to make direct donations, up to the $2500 limit imposed on individual donors.

"(F)or better or worse, Citizens United held that there is no distinction between an individual and a corporation with respect to political speech," Cacheris wrote. "Thus, if an individual can make direct contributions within (the law's) limits, a corporation cannot be banned from doing the same thing."

The Times speculated that the effect might be even more far-reaching, noting that "some election lawyers said that the decision, if upheld, could lead to the collapse of all legal limits on campaign donations, whether from corporations or individuals."

Legal experts consulted by the paper, however, pointed out that the decision ignores a 2003 Supreme Court case which upheld the ban on direct corporate contributions and was not explicitly overturned by Citizens United.

“The District Court is acting way outside of its bounds,” Tara Molloy of the Campaign Legal Center told Bloomberg News. “Not only it is a bad decision, but it’s a fairly shocking decision as well.”

Prosecutors are reviewing the ruling and may decide to appeal. Meanwhile, the two individuals accused in the case are awaiting trial on the remaining charges of conspiracy, obstruction of justice and causing false statements.