State high court backs ban on corporate spending in elections

The Montana Supreme Court upheld a state law banning directing campaign spending by corporations last week. The 5-2 ruling seems to go against a 2010 U.S. Supreme Court decision that OK'd direct corporate and union spending for political ads, Citizens United v. Federal Election Commission.

The state high court upheld Montana's 1912 Corrupt Practices Act, which was passed as a citizen's ballot initiative in reaction to control of state politics by the "Copper Kings" in Butte. The high court reversed Helena District Court Judge Jeffrey Sherlock's Oct. 18, 2010, ruling that the 1912 act was unconstitutional.

Montana Attorney General Steve Bullock, who is running for governor, represented Montana in the case brought by Western Tradition Partnership. The political organization has since moved its headquarters to Virginia and changed its name to American Tradition Partnership.

"For over 100 years, Montana has had an electoral system that preserves the integrity of the political process, encourages full participation and safeguards against corruption," Bullock said. "The Supreme Court's decision upholds that system and is truly a victory for all Montanans."

Bullock argued that extensive political corruption a century ago gives Montana a compelling interest in regulating corporate spending. He noted that corporations can participate in political campaigns by joining voluntary political action committees that are subject to disclosure requirements.

"The Citizen's United decision dealt with federal laws and elections - like those contests for President and Congress," Bullock said. "But the vast majority of elections are held at the state or local level, and this is the first case I am aware of that examines state laws and elections."

Chief Justice Mike McGrath, who wrote the court's the majority opinion, said the state and its voters "clearly had a compelling interest to enact the challenged statute in 1912."

"At that time, the state of Montana and its government were operating under a mere shell of legal authority, and the real social and political power was wielded by powerful corporate managers to further their own business interests," McGrath said. "The question then is when in the last 99 years did Montana lose the power or interest sufficient to support the statute, if it ever did."

McGrath referred to Montana's geography and economy to explain the need to protect the state's political system.

"Issues of corporate influence, sparse population, dependence upon agriculture and extractive resource development, location as a transportation corridor and low campaign costs make Montana especially vulnerable to continued efforts of corporate control to the detriment of democracy and the republican form of government," McGrath said. "Clearly, Montana has unique and compelling interests to protect through preservation of this statute."

ATP executive director Donald Ferguson said he believes the U.S. Supreme Court and Judge Sherlock had it correct, not the Montana Supreme Court.

"We feel Montanans do not forfeit their freedoms of speech and association simply because they associate as a corporation. American Tradition Partnership and Western Tradition Partnership have always obeyed every letter of all applicable laws," Ferguson said. "We are currently reviewing our legal options."

ATP has also sued Montana after then-Commissioner of Political Practices Dennis Unsworth ruled in 2010 that the group had engaged in political advocacy activities in Montana and failed to disclose the sources of its funding. The group spent money in local legislative races in 2008 and 2010.

In his Dec. 14 ruling, Sherlock rejected ATP's request to dismiss the case stemming from Unsworth's investigation. A trial is currently scheduled for March 2012.