Political Activity in the Age of the Super PAC

Political Activity in the Age of the Super PAC

In the aftermath of Citizens United v. The Federal Election Commission, and related legal developments, corporations have more freedom to engage in the election process.  In Citizens United, a divided Court ruled that corporations may make unlimited independent expenditures to persuade voters to support or oppose particular federal candidates as long as the expenditures are not made in coordination with the candidates. Before Citizens United, a corporation could not fund a public advertisement urging support or opposition of a candidate. Corporations now have a number of options for how they may intervene in political campaigns, including:

  • Direct contributions to candidates through a corporate separate segregated fund or PAC.
  • Direct contributions to candidates by employees.
  • Independent expenditures direct by corporations, direct by employees (individuals), or corporation contributions to Super PACs or other independent expenditure committees such as 501(c)(4) or 527 organizations.
  • Sponsor a candidate appearance.
  • Distribution of political materials.
These opportunities for political involvement present corporations with a number of legal, compliance, procedural and policy considerations. Given the potential legal pitfalls, it is very important that corporations establish compliance policies governing political expenditures. It is also likely that corporations will continue to face demands from both the private sector and government to disclose their political contributions. In fact, on March 30, 2012 the U.S. District Court for the District of Columbia struck down a Federal Election Commission regulation that allowed certain contributions for electioneering communications to remain undisclosed. Under the Court’s ruling, contributions made by corporations for electioneering ads must be disclosed. Even though Citizens United opened up new doors for corporations to be more politically active, it also means that corporate political expenditures may be more scrutinized than ever.  Corporations must keep these issues in mind as they make decisions for how best to achieve their policy goals through participation in the election process. For more information, you can access a webinar that Michael Gilliland, James Wickett, and Michael Bell recently conducted on the impact of these developments.

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