Court Stays the Course on Politics and Business
Corporations and unions can play in politics, but complete disclosures are not required. A corporate political campaign in Texas two years ago was unusual, featuring an unknown corporation that was open about what it was doing.
The “corporations are people” movement got a boost this week when the nation’s highest court turned back an attempt to limit corporate political contributions in Montana.
Those contributions don’t come only from name-brand companies — the first such advertisements in Texas came from a family-owned corporation in East Texas that most people have never heard of.
At least they were open about it.
Two years ago, in the Citizens United case, the U.S. Supreme Court ruled that political speech by corporations is just as protected as political speech from humans. The justices said then — and repeated this week — that the speech is protected regardless of who is speaking. They didn’t disturb state laws in Texas and elsewhere that prevent corporations and labor unions from giving directly to candidates, but they said independent expenditures from those outfits are allowed.
On Monday, faced with Montana’s restriction on corporate electioneering, the court reiterated its position.
That spending might not be popular, according to some polling, but according to five of the nine justices, it’s constitutional.
Texas law won’t change, and, in fact, Texas was one of the first places where a corporate ad popped up after the 2010 ruling.
A company you’ve probably never heard of, KDR Development Inc. of Jacksonville, bought newspaper ads that tried to steer voters away from state Rep. Chuck Hopson, R-Jacksonville. He had just switched parties — a timely decision, as it turned out, given the Republican sweep in rural Texas in 2010 — and an old political rival wanted to replace him with a “real” Republican.
Larry Durrett, who lost to Hopson in the 2006 general election, was the president of KDR. The ad did not directly say to vote against Hopson, but it came close, identifying his opponents as “true conservative Republicans” and saying one of them would be more deserving of support.
Hopson easily won the primary and then the general election. He is in another battle now, one of several incumbents in the Texas House who have been forced into July’s Republican primary runoff.
The KDR episode veered away from conventional thinking about corporate spending in a couple of ways. One was the corporation itself: an unknown, family-held organization set up mainly to handle real estate transactions for a related family corporation that holds dozens of fast-food franchises in Texas. It’s not a national outfit. It’s not the stereotype, with a president who could substitute for the evil heavy in a James Bond movie.
Instead, it was as uncomplicated as a schoolyard scuffle. A former political rival found a way to cause trouble for an incumbent politician. Only the source of strength had changed. “You take the money out of the pocket that’s got some money in there,” Durrett said at the time, though he says he scarcely remembers the campaign now.
The other difference has to do with wrongdoing, actual or perceived. In the Montana case, state courts cited the state’s history of trouble with corporate spending and corruption.
One way to stink things up is to coordinate spending between a campaign and a third-party group, which is still a no-no even while the corporations and labor unions are free to frolic on the political playground.
It’s hard to police. The denials of coordination sound the same whether they come from honest or dishonest people. Bad guys look like they’re getting away with something. Good guys look sleazy. Judges have a version of this problem in Texas and other states where they’re elected: The people most interested in financing their campaigns are the lawyers and litigants with cases before the courts. It looks dirty whether the judges are straight or crooked.
In the KDR case, almost everything was disclosed. The company paid for ads, put its name on the ads and answered questions about it from pesky reporters. (The exception was that it wasn’t required to say how much it spent and where.) The company avoided a kind of corruption that plagues politics: Voters could see who was buying the ads, figure out why and make a judgment about it.
That disclosure is not required.
As it stands now — after Citizens United, after the Montana case — the companies and the humans play under similar rules. Voters can demand more information, but the donors don’t always have to give it to them.
Texas Tribune donors or members may be quoted or mentioned in our stories, or may be the subject of them. For a complete list of contributors, click here.
Quality journalism doesn't come free
Perhaps it goes without saying — but producing quality journalism isn't cheap. At a time when newsroom resources and revenue across the country are declining, The Texas Tribune remains committed to sustaining our mission: creating a more engaged and informed Texas with every story we cover, every event we convene and every newsletter we send. As a nonprofit newsroom, we rely on members to help keep our stories free and our events open to the public. Do you value our journalism? Show us with your support.Yes, I'll donate today