Fourth Circuit Victory Recognizes Free Speech Rights.(United States Federal Election Commission vs. James Madison Center for Free Speech)(Brief Article)

On January 25, the James Madison Center for Free Speech won an important victory against the Federal Election Commission (FEC). In Beaumont v. FEC, the United States Court of Appeals for the Fourth Circuit held that a federal ban on corporate contributions to candidates was unconstitutional as applied to not-for-profit issue-oriented corporations, such as the plaintiff, North Carolina Right to Life.

In Beaumont, the Fourth Circuit extended a finding first made by the United States Supreme Court in the 1986 case of FEC v. Massachusetts Citizens for Life ("MCFL"). There, the High Court held that not-for-profit issue-oriented corporations such as MCFL posed no threat of the corruption of the electoral system that justified limits on independent expenditures by business corporations. (Independent expenditures advocate the election or defeat of a candidate and are made without coordination with the candidate.)

Thus, the justices held, they must be exempted from a federal corporate independent expenditure ban.

In Beaumont, the Circuit Court applied that rationale to contributions to candidates. Because not-for-profit issue oriented corporations pose no corruption threat, then nothing justified prohibiting them from also making contributions to candidates themselves, the Circuit Court held.

Requiring them to do so through political action committees (PACs) "could effectively cripple small, nonprofit advocacy groups that may have few or no ties to the world inhabited by for-profit corporations." The court concluded that any "congressional interest in minimizing corruption" was adequately addressed by the $1,000 per election limitation on contributions to a candidate.

James Bopp, Jr., general counsel for the James Madison Center (and for the National Right to Life Committee), who represented the plaintiffs, declared the case "a significant expansion of the ability of not-for-profit corporations to engage in political activity." He noted, "The ability of such corporations to do independent expenditures has long been recognized, ...