HONOLULU — Hawaii enacted SB 2471, a corporate law that prohibits corporations and other artificial persons operating in the state from spending money on politics. The law does not restrict individuals who form or manage corporations from engaging in political spending on their own behalf.
Supporters of the law say it represents a novel approach to campaign finance regulation by targeting the legal structure of corporations rather than attempting to regulate political expenditures after they occur. Tom Moore, a senior fellow at the Center for American Progress and former chief of staff to Federal Election Commission commissioner Ellen Weintraub, said that SB 2471 operates upstream of the Citizens United decision by altering the powers granted to corporations rather than regulating how they use those powers.
Moore explained that Citizens United protected the right of corporations already empowered to spend in politics, but Hawaii’s law changes the corporate charter itself. "Citizens United said, ‘Hey, if you’re a corporation that is empowered to spend in politics, your right to spend independently in politics can’t be infringed.’ Fine. What this [Hawaiian law] does is say, ‘You know, we’re not going to create that kind of corporation anymore. We’re going to create the kind of corporation that doesn’t have any political spending powers.’ Citizens United and all the other campaign finance cases that the courts have ever decided do not speak to that," he said.
He added that courts have long recognized state authority over corporate powers. "The Supreme Court has said for 200 years that the states can do whatever they want in terms of assigning powers to corporations. They made a fatal assumption in Citizens United that 100 years ago, when states gave away all the powers and said, ‘You can do anything that a human could do,’ they assumed that states would never change their mind on that. But they never said the states couldn’t change their mind on that, and now they are," Moore said.
Brad Smith, chairman and founder of the Institute for Free Speech, called Hawaii’s law an “end run” around Citizens United and believes the Supreme Court will view it as a violation of the First Amendment.
Smith dismissed such measures as ineffective legal maneuvers. "They’re gimmicks, and the Supreme Court is not usually impressed by gimmicks. If you want to do it, you probably have to change the makeup of the Supreme Court or be willing to pack the court and have the political muscle to do it," he said. He also argued that conditioning corporate status on the relinquishment of constitutional rights is impermissible, comparing it to denying homeowners the ability to use home equity for political activity.