Supreme Court Precedent on Corporate Contribution Ban Disregarded Again by District Court Judge in Reconsideration


Compounding his earlier mistake, Judge Cacheris of the U.S. District Court of the Eastern District of Virginia today reaffirmed his May 26 decision to strike down the century-old federal restriction on corporate contributions to candidates and political parties.  The Judge clarified, however, that his order was limited only to the case before the court, U.S. v. Danielczyk, a criminal matter concerning allegations that the defendants illegally directed corporate contributions to Hillary Clinton’s 2008 Presidential campaign.

Judge Cacheris’ order in effect overrules a standing Supreme Court precedent, FEC v. Beaumont, which approved the federal corporate contribution restriction in 2003.  His earlier decision failed even to cite the Beaumont precedent.  In today’s opinion, the Judge found that Beaumont was not directly applicable to the criminal case before the court, because Beaumont considered the corporate contribution ban as applied to a non-profit advocacy corporation, whereas Danielczyk involves the contributions of a for-profit corporation. 

“Impossibly, the district court has issued an opinion that is even less justified than its first ruling,” said Legal Center Associate Counsel Tara Malloy.  “Previously, by all appearances, the court overruled the Beaumont decision in error; today, it has overruled this Supreme Court decision after deliberation.”

The Supreme Court in Beaumont reasoned that because non-profit advocacy corporations shared some of the “corrupting potential” of their for-profit counterparts, they too could be constitutionally subject to the federal restriction on corporate contributions.   The Beaumont Court’s decision to extend the corporate contribution restriction to non-profits therefore necessarily relied upon the conclusion that the contribution restriction was constitutional with respect to for-profit corporations. 

“Judge Cacheris’ decision does not even pass the laugh test,” said Malloy.  “His reasoning would exempt for-profit corporations from the federal corporate contribution restriction, while suggesting that non-profit advocacy corporations are still bound by the restriction under Beaumont.  We hope that the government appeals as quickly as possible to clean up the legal mess created by this misguided decision.”