MENU

Supreme Court Update: 2003 2nd Quarter

By Todd Overman
October 01, 2003
Since 1907, corporations have been prohibited from contributing directly to candidates in federal elections. See 2 U.S.C. Section 441b(a)-(b) (2002). However, corporations are free to establish and administer political action committees (APACs@) that can make contributions and expenditures in connection with federal elections. 441b(b)(2)(C). A nonprofit advocacy corporation, North Carolina Right to Life, Inc. (ANCRL@), sued the Federal Election Commission (AFEC@) challenging the constitutionality of Section 441b and its implementing regulations. NCRL is a 501(c)(4) corporation and provides counseling to pregnant women and advocates alternatives to abortion. It is funded primarily by individual contributions, but NCRL does receive some contributions from business corporations. In accordance with the prohibition on corporation contributions, NCRL established a PAC to contribute directly to federal candidates. The District Court granted summary judgment to NCRL and held Section 441b unconstitutional as applied to the corporation, as to both direct contributions to federal candidates and independent expenditures in connection with federal elections. A divided Fourth Circuit Court of Appeals affirmed, treating NCRL as materially indistinguishable from the nonprofit advocacy corporation at issue in the Court=s decision in FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986). The Fourth Circuit reasoned that A[t]he rationale utilized by the Court in [Massachusetts Citizens for Life] to declare prohibitions on independent expenditures unconstitutional as applied to [the advocacy corporation involved there] is equally applicable in the context of direct contributions.@ 278 F.3d 261, 282 (2002). Interestingly, the FEC petitioned for certiorari only on the issue of the constitutionality of the ban on direct contributions.