A federal judge, after thinking it over and concluding he needed to make a correction, ruled again Tuesday that two corporate executives cannot be prosecuted for channeling corporate funds directly to the election campaign of a federal candidate.  The correction was that, instead of striking down that ban for all corporate donations to candidates, U.S. District Judge James C. Cacheris of Alexandria said he was doing so only for the criminal case before him — U.S. v. Danielczyk (District Court docket 11CR85).

He found, in his new order and opinion, that the Supreme Court’s ruling last year in Citizens United v. Federal Election Commission had overridden its reasoning in a 2003 precedent (FEC v. Beaumont) that had upheld the same flat ban on direct corporate contributions to candidates for President or Congress.   That was the same reasoning he had used on May 26 in striking down that ban altogether.

When criticism arose that he was attempting to personally overrule Beaumont, something no lower court judge has power to do, the judge chose to reconsider, called for new briefs, held a hearing, and then promptly issued a more modest ruling — but one that still sets up a potential conflict among federal courts on whether he was right or wrong in using Citizens United to question the ban.

A federal appeals court in another Circuit (the Eighth) has already ruled the opposite way, saying it is up to the Supreme Court to decide whether Citizens United has any impact on the corporate donation ban; Judge Cacheris acknowledged that ruling on Tuesday, but refused to follow it.  Even if his new ruling to the contrary were to be overturned in his own Circuit (the Fourth), the issue is headed toward the Supreme Court within a matter of months in one or more cases.  Attorneys in the Eighth Circuit Court are already setting up that case for an attempt to get it before the Supreme Court.

In narrowing the actual holding in the criminal case before him, Cacheris on Tuesday took the basic position that the Beaumont decision is not controlling on the constitutionality of the ban on direct corporate contributions.  “There is a question,” he wrote, “of whether Beaumont ‘directly controls’ this case.  Close examination of Beaumont shows that it does not.”

What the Supreme Court actually had held in Beaumont, the judge found, was that the ban on corporate donations was valid “as applied to nonprofit advocacy corporations.”  That ruling, he added, “made only assumptions as to its general constitutionality,” and the Court made it explicit it was ruling only on nonprofit advocacy   While the actual holding of that case could be extended, logically, to uphold the ban altogether, Cacheris wrote, there is a difference between following a precedent and extending it.

In the case before him, involving the regular business corporation, Galen Capital Group, the judge noted that it is not a non-profit advocacy corporation so Beaumont does not control the Galen executives’ legal fate under the indictment charging a violation of the flat ban.  “Beaumont remains good law, but it does not directly control the issue at hand,” the judge concluded.

The judge then went on to make broader statements, along the lines that the Beaumont decision cannot be squared with the Supreme Court’s more recent decision in Citizens United.  As he had previously, Cacheris said that Citizens United stands for the constitutional proposition that, if individual citizens can put up their money to try to influence federal elections, corporations must be allowed to do so to the same extent.  “Following Citizens United, Beaumont‘s reasoning is longer valid,” he ruled, adding “the logical implications of Citizens United…are clear.”

In closing, Judge Cacheris said he was not giving corporations “a blank check (so to speak) to directly contribute unlimited amounts of money to federal campaigns.”  Corporations, like individuals, are still subject to ceilings on the amounts they can contribute.

Posted in Cases in the Pipeline

Recommended Citation: Lyle Denniston, Judge stands by campaign ruling — mostly, SCOTUSblog (Jun. 7, 2011, 3:18 PM), http://www.scotusblog.com/2011/06/judge-stands-by-campaign-ruling-mostly/