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Profile: Royce Gregory
Royce Gregory was a participant or observer in the following events:
US District Judge James Cacheris throws out one count of the indictment against two men accused of illegally reimbursing donors to Democratic Senator Hillary Clinton’s Senate and presidential campaigns. In the ruling, Cacheris holds that the campaign finance law banning corporations from making contributions to federal candidates is unconstitutional. Cacheris rules that under the 2010 Citizens United Supreme Court ruling (see January 21, 2010), corporations have the same right as people to contribute to campaigns. No one has attempted to extend the Citizens United ruling to apply directly to campaign contributions by corporations. Previously, the law has been interpreted to apply only to independent corporate expenditures. In his ruling, Cacheris notes that only one other court has addressed the issue, with a Minnesota federal judge ruling that a state ban on corporate contributions is legal. Cacheris writes: “[F]or better or worse, Citizens United held that there is no distinction between an individual and a corporation with respect to political speech. Thus, if an individual can make direct contributions within [the law’s] limits, a corporation cannot be banned from doing the same thing.… That logic is inescapable here.” In court filings, prosecutors defending campaign finance law in the Virginia case said that overturning the ban on corporate contributions would ignore a century of legal precedent. Prosecutor Mark Lytle wrote: “Defendants would have the court throw out a century of jurisprudence upholding the ban on corporate political contributions, by equating expenditures—which the Court struck down in Citizens United—with contributions. This is, however, equating apples and oranges.” The case, United States v. Danielczyk, concerns accusations that William P. Danielczyk Jr. and Eugene R. Biagi helped funnel a corporate contribution to Clinton’s presidential campaign. The two men allegedly reimbursed $30,200 to eight contributors who gave to Clinton’s 2006 Senate campaign, and reimbursed $156,400 to 35 contributors to her 2008 presidential campaign. Clinton is not named as a defendant in the case. [Associated Press, 5/27/2011; New York Times, 5/27/2011]
Strongly Mixed Reactions - Biaigi’s lawyer Todd Richman says after the ruling: “Corporate political speech can now be regulated, only to the same extent as the speech of individuals or other speakers. That is because Citizens United establishes that there can be no distinction between corporate and other speakers in the regulation of political speech.” Sean Parnell of the Center for Competitive Politics, a group opposing campaign-finance regulations, says, “This was definitely something that is almost incidental in terms of the case it was decided in.” Fred Wertheimer of Democracy 21, a group supporting stricter campaign finance laws, says Cacheris went beyond his purview as a federal judge and ignored laws and Supreme Court rulings before the Citizens United decision that were not impacted (see February 7, 1972, April 26, 1978, and March 27, 2002). Had the Supreme Court wanted to overturn the ban on direct corporate campaign contributions, Wertheimer says, it could have done so in the Citizens United decision. Wertheimer says Cacheris’s ruling should be appealed and overturned. Law professor Daniel Ortiz says the ruling “pushes the outer limits of the Citizens United logic,” and will probably be overturned in a higher court. The Citizens United case differentiates between independent expenditures by corporations that are not coordinating with a candidate’s campaign, and direct campaign contributions. [Associated Press, 5/27/2011; New York Times, 5/27/2011] Ian Millhiser of the liberal news Web site Think Progress writes: “If today’s decision is upheld on appeal, it could be the end of any meaningful restrictions on campaign finance—including limits on the amount of money wealthy individuals and corporations can give to a candidate. In most states, all that is necessary to form a new corporation is to file the right paperwork in the appropriate government office. Moreover, nothing prevents one corporation from owning another corporation. Thus, under Cacheris’s decision, a cap on overall contributions becomes meaningless, because corporate donors can simply create a series of shell corporations for the purpose of evading such caps.” [Think Progress, 5/27/2011] Conservative legal scholar Eugene Volokh writes on his blog that he believes the Cacheris decision is in error. He believes the ban on corporate contributions to be legal and appropriate, though unlike Millhiser, he also supports the Citizens United decision. He cites the Supreme Court’s Buckley v. Valeo decision (see January 30, 1976) as limiting the means by which corporations can donate to political campaigns. He echoes Millhiser’s concerns about “shell corporations,” writing: “[T]he problem with corporate contributions is that they provide an avenue for evading individual contribution limits; if I want to donate $25,000 to a candidate instead of the $2,500 limit, I could set up nine corporations, and then donate myself and also have those corporations make similar donations. Few people would do that, but some people who want to be big political players might. Nor can this easily be dismissed as a supposed ‘sham’ and be thus distinguished from ‘legitimate’ corporate contributions.” The ban on direct corporate contributions does not stop individuals from donating directly to campaigns, Volokh writes, and thusly does not encroach on freedom of speech. [Eugene Volokh, 5/27/2011] Law professor Richard Hasen also believes the decision will be overturned or reconsidered, citing the Supreme Court’s ban on direct corporate spending in Federal Election Commission v. Beaumont (see June 16, 2003), a ruling that other courts have held was not overturned by the Citizens United decision. Neither the prosecution nor the defense referred to the Beaumont decision in their arguments. [Rick Hasen, 5/31/2011] “If this case stood, it would mean the end of campaign contribution limits for everyone, because it would be so easy to get around the law through a straw or sham corporation,” Hasen says. [New York Times, 5/27/2011]
Reconsideration - Four days later, Cacheris will ask for briefs from both sides in the case about the issues raised in his decision, indicating that he may well find that the Beaumont decision means that the ban on direct corporate contributions will remain in effect. [Rick Hasen, 5/31/2011] Cacheris will not reconsider his decision. [New York Times, 6/7/2011; Think Progress, 6/8/2011]
Appeals Court Overturns Decision - A day after Cacheris refuses to reconsider his decision, an appeals court will overrule his decision. [Think Progress, 6/9/2011; United States Court Of Appeals for the Ninth Circuit, 6/9/2011 ] In June 2012, a federal appeals court will find that the Citizens United ban does not apply to direct corporate contributions. Appellate Judge Royce Gregory will write, “Leaping to this conclusion ignores the well-established principle that independent expenditures and direct contributions are subject to different government interests.” [Thomson Reuters, 6/28/2012]
Entity Tags: Eugene R. Biagi, Eugene Volokh, Fred Wertheimer, Daniel Ortiz, William P. Danielczyk, Jr, Ian Millhiser, Sean Parnell, James Cacheris, Todd Richman, Richard L. Hasen, Mark Lytle, Royce Gregory, Hillary Clinton
Timeline Tags: Civil Liberties
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