Corporations regularly wield immense Supreme Court-created power to defeat citizen ballot initiatives that are disfavored by company executives. Increasingly, corporations and wealthy individuals are putting measures on the ballot that advance their own self-interest. While it is far easier for corporations to defeat citizen initiatives than to pass their own, threatening to run a costly initiative campaign is sufficient to cow local governments into complying with their agendas.
- In First National Bank of Boston v. Bellotti (1978) the U.S. Supreme Court struck down a Massachusetts law prohibiting corporate spending to influence state ballot initiatives (on First Amendment grounds). Though the opinion resorted to “listeners’ rights” arguments that protect free speech and not the corporate “speaker,” the effect was to create a presumed corporate right to influence ballot questions. Justice Rehnquist’s sharp dissent is notable.
- In Austin v. Michigan Chamber of Commerce (1990) the Court held that there was no First Amendment violation in requiring a corporation to set up segregated funds (i.e., a PAC) for spending on candidate campaigns. So, while executives and employees could contribute to a corporation-affiliated PAC, the corporation could not write company checks directly to a candidate’s campaign.
- Following that ruling’s logic, in 1996 Montana citizens drafted and passed Initiative 125, which banned direct corporate contributions to initiative campaigns. The law was challenged by the Montana Chamber of Commerce and others as unconstitutional. Deciding Bellotti, rather than Austin was the guiding precedent, the Ninth Circuit Court of Appeals took Bellotti even further in striking down I-125 (Montana Chamber, et. al. v. Argenbright, 2000).
- After Bellotti, a series of Supreme Court decisions showed increased deference to legislative campaign contribution limits, leading some scholars to believe that a reversal of Bellotti might occur. However, since John Roberts was selected as Chief Justice, the Court seems to have tacked sharply against limiting corporate privileges, as we see with the Citizens United ruling.
Reclaim Democracy works to create widespread public awareness of the damage done to democracy by granting corporations the right to influence initiatives and referenda. We seek to re-frame local ballot measure battles and coordinate a legal strategy to erode corporate political speech privileges via local and state campaigns.
Examples and Opportunities:
- In 2020, an Illinois ballot measure was defeated that would repeal a flat state income rate. The ballot measure was the most expensive in Illinois’s history, and corporate spending topping more than $61 million.
- In California, Proposition 10, which would allow local municipalities to adopt rent-control provisions, was defeated in 2018. Campaign opponents raised $80 million, from mostly out-of-state investors.
- In 2018 in Nevada, a ballot measure for an open, competitive energy market failed, after $63 million in opposition funding was raised by NV Energy – then parented by Berkshire Hathaway.
- In 2012, California’s Proposition 37, which would require GMO foods to be labeled as such, was defeated after millions were spent by huge corporations like Monsanto and DuPont.
- Amazon has been usurping democracy for a decade by spending against state ballot initiatives.
- In Michigan, 2012’s failed Proposal 6 sought to amend the State Constitution to require the approval of a majority of voters for proposed international bridges or tunnels. The bill was backed by Matty Maroun, who generated $60 million annually from a privately owned toll bridge.
- Wal-Mart and their development partners regularly threaten communities with initiatives if local officials do not obey their wishes. Target and Home Depot also engage in this behavior.
- See more in our archive of past ballot initiative cases.
Key Background Resources
Other Court Cases
- McConnell v. FEC (2003) upheld most provisions of the Bipartisan Campaign Reform Act of 2002.
- FEC v. Massachusetts Citizens for Life, Inc. (1986)
- Nixon v. Shrink Missouri Government PAC (2000)
- FEC v. Colorado Republican Federal Campaign Committee (2001)
- Rethinking the Unconstitutionality of Contribution and Expenditure Limits in Ballot Measure Campaigns by Richard Hasen, concludes Bellotti and Buckley precedents, “Are ripe for reexamination in light of the Supreme Court’s new-found deference to campaign finance regulation.”
- Autoworkers (1957), and Pipefitters v. United States (1972), Abood v. Detroit Board of Education (1977, summary here)
- Materials on Nike v. Kasky and Corporate Personhood pages
- Corporations and Elections, A Century of Debate (2003) by Robert Mutch