The trial of two business executives on federal criminal charges that they illegally passed corporate contributions directly to a political candidate, previously set to begin July 6, was put on hold Friday by the judge in Alexandria, Va.   U.S. District Judge James C. Cacheris said in a brief order that the trial would be stayed until the Fourth Circuit Court rules on federal prosecutors’ appeal of the judge’s order dismissing that corporate contribution charge.

Judge Cacheris, in dismissing that count, relied upon the Supreme Court’s decision last year in Citizens United v. Federal Election Commission, which greatly widened the opportunity of corporations to use their own in-house funds to try to influence federal elections.   While Citizens United dealt with spending by corporations independent of candidates, the judge concluded that the logic of that decision blocked the criminal prosecution in this case for passing corporate funds directly to a candidate for Congress or for the presidency.  If a private individual can give money directly to a candidate, corporations constitutionally have the same right, the judge concluded, so long as the corporations stay within the donation ceilings that individuals have to obey.

Corporate executives William P. Danielczyk, Jr., and Eugene R. Biagi were charged with channeling money from their financial firm, through “sham” donations by their employees, to the senatorial and presidential campaigns of Hillary Rodham Clinton.   The count accusing them of direct corporation contributions was only one part of the Justice Department’s case against them.

Judge Cacheris left the other charges intact, and those had been cleared for trial.  But, after the judge threw out the corporate donation count, the Justice Department notified the judge that it was appealing that dismissal to the Fourth Circuit in Richmond.   It is unclear how long that appeal will take, so the Danielczyk-Biagi trial may not begin for several months.  Neither side objected to the delay of the trial.  Judge Cacheris noted at a status conference that there were other issues that would not have been resolved by the scheduled July 6 start of the trial.

Ultimately, the issue of whether Congress had the authority to ban direct corporate contributions to candidates is expected to reach the Supreme Court.

Posted in Cases in the Pipeline

Recommended Citation: Lyle Denniston, Campaign money trial put off, SCOTUSblog (Jun. 17, 2011, 1:34 PM), http://www.scotusblog.com/2011/06/campaign-money-trial-put-off/