Tuesday, January 26, 2010

Will Supreme Court Decision Allow Non-Profits to Endorse Candidates for Election?

Last week the U.S. Supreme Court ruled 5-4 that Congress could not restrict the political activities of corporations and labor unions in federal elections because it would violate their free speech rights under the First Amendment to the U.S. Constitutions. The U.S. Congress had previously passed legislation that prohibited corporations and labor unions from purchasing television advertising advocating the election or defeat of a particular candidate in the days leading up to a federal election. The court wrote:
The Government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether.
While the court's decision adjudicated the free speech rights of organizations falling under section 501(c)(4) of the federal tax code, the reasoning of the majority opinion, based on the First Amendment, raises a related question: Do tax-exempt non-profit organizations likewise now have First Amendment free speech rights that cannot be abridged by prohibitions on partisan political activity in section 501(c)(3) of the tax code?

The Chronicle of Philanthropy writes that, while the court's decision technically only applies to 501(c)(4) organizations, the issue is not settled as to whether or not it would also apply to tax-exempt, non-profit organizations:
Charities governed by 501(c)(3) — which are not affected by the court ruling — present a more complicated picture, legal experts say. Such groups are barred from any partisan political activity and may conduct only a limited amount of lobbying. The Supreme Court has previously ruled that such restrictions do not violate free-speech rights because charities benefit from tax-deductible contributions.

But the new ruling gives such weight to the First Amendment that some legal experts expect it may prompt a charity to challenge the existing rules. Although it would be a tough case to make, says Ronald Jacobs, a Washington lawyer, “it wouldn’t surprise me if someone tried it.”
In a separate opinion piece at the same website, Leslie Lenkowsky, professor of public affairs and philanthropic studies at Indiana University, continues the argument:
[The] Supreme Court has opened the door for more extensive political activity by nonprofit groups, which may be a mixed blessing.

This has generally been obscured because the Supreme Court’s decision refers to election spending by “corporations,” which many understand as “businesses.” In fact, the opinion is using “corporations” in a legal sense, referring not just to businesses but also to labor unions and many other types of incorporated organizations, including nonprofit ones.

Many non-profit groups -- particularly the larger ones with deeper pockets -- are organized as corporations under state law, which is why Lenkowsky argues for more expansive implications of the court's decision.

I can imagine, however, that the counter-argument to expanded non-profit advocacy would be that non-profit institutions in effect obtain their tax-exempt status in exchange for surrendering some of their free speech rights -- a tax-exempt benefit that 501(c)(4) organizations do not enjoy. Free speech rights are not restricted, because the organization could always turn down the tax-exempt designation.

But it still raises interesting possibility: Might the Catholic Church now have the free speech right to endorse candidates in federal elections without losing its tax-exempt status as a 501(c)(3) non-profit?

If so, then Massachusetts might once again look politically like it did early in the 20th century when William Cardinal O'Connell exerted enormous political power. Imagine how different the abortion or casino gambling debates would play out if the church were free to engage in partisan political activity.

1 comment:

Tom Degan's Daily Rant said...

Are corporations really persons?

Do corporations think?

Do corporations weep?

Do corporations fall in love?

Do corporations grieve when a loved one dies as a result of a lack of adequate health care?

Do corporations have loved ones?

Are corporations even capable of loving?

Do corporations sometimes lose sleep at night worrying about disease, violence, destruction, and the suffering of their fellow human beings?

Do corporations feel your pain?

Can a corporation run for public office?

Is a corporation capable of having a sense of humor? Is it capable of laughing at itself? (EXAMPLE: "So these two corporations walk into a bar....")

If a corporation ever committed an unspeakable crime against the American people, could IT be sent to federal prison? (Note the operative word here: "It")

Has a corporation ever walked into a voting booth and cast a ballot for the candidate of its choice?

We all know that corporations have made an ocean of cash throughout our history by profiting on the unspeakable tragedy of war. But has a corporation ever given its life for its country?

Is a corporation capable of raising a child?

Does a corporation have a conscience? Does it feel remorse after it has done something really bad?

Has a corporation ever been killed in an accident as the result of a design flaw in the automobile it was driving?

Has a corporation ever written a novel or a dramatic play or a song that inspired millions?

Has a corporation ever risked its life by climbing a ladder to save a child from a burning house?

Has a corporation ever won an Oscar? Or an Emmy? Or a Tony? Or the Nobel Peace Prize? Or a Polk or Peabody Award? Or the Pulitzer Prize in Biography?

Has a corporation ever performed Schubert's Ave Maria?

Has a corporation ever been shot and killed by someone who was using an illegal and unregistered gun?

Has a corporation ever paused to reflect upon the simple beauty of an autumn sunset or a brilliant winter moon rising on the horizon?

If a tree falls in the forest, does it make a noise if there are no corporations there to hear it?

Should corporations kiss on the first date?

Could a corporation resolve to dedicate its life to being an artist? Or a musician? Or an opera singer? Or a Catholic priest? Or a Doctor? Or a Dentist? Or a sheet metal worker? Or a gourmet chef? Or a short-order cook? Or a magician? Or a nurse? Or a trapeze artist? Or an author? Or an editor? Or a Thrift Shop owner? Or a EMT worker? Or a book binder? Or a Hardware Store clerk? Or a funeral director? Or a sanitation worker? Or an actor? Or a comedian? Or a glass blower? Or a chamber maid? Or a film director? Or a newspaper reporter? Or a deep sea fisherman? Or a farmer? Or a piano tuner? Or a jeweler? Or a janitor? Or a nun? Or a Trappist Monk? Or a poet? Or a pilgrim? Or a bar tender? Or a used car salesman? Or a brick layer? Or a mayor? Or a soothsayer? Or a Hall-of-Fame football player? Or a soldier? Or a sailor? Or a butcher? Or a baker? Or a candlestick maker?

Could a corporation choose to opt out of all the above and merely become a bum? Living life on the road, hopping freight trains and roasting mickeys in the woods?

I realize that this is pure theological speculation on my part but the question is just screaming to be posed: When corporations die, do they go to Heaven?

Our lives - yours and mine - have more worth than any goddamned corporation. To say that the Supreme Court made a awful decision on Thursday is an understatement. Not only is it an obscene ruling, it is an insult to our humanity.


Tom Degan
Goshen, NY