Court: Government can block business campaign cash
Bob Egelko, Chronicle Staff Writer, Saturday, June 11, 2011
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Even though the U.S. Supreme Court has opened the door to corporate spending in elections, the government can still prohibit businesses from contributing money to candidates, the federal appeals court in San Francisco has ruled.

Thursday'sdecision by the Ninth U.S. Circuit Court of Appeals upheld campaign finance regulations in San Diego that allow only individuals to donate to candidates.

The ruling supports the constitutionality of San Francisco's ban on corporate contributions, said Deputy City Attorney Jon Givner. He said the city's regulations, which also allow business-backed committees to donate money from sources other than corporate treasuries, have not been challenged in court.

Other appeals courts in New York and St. Louis have issued similar rulings on state laws, but a federal judge in Virginia ruled May 26 that the century-old law banning corporate contributions to candidates in federal elections was unconstitutional.

The issue could return soon to the Supreme Court, which ruled in January 2010 that the constitutional right of free speech entitled corporations and unions to give unlimited sums to independent committees supporting candidates.

Interpreting that ruling, the Virginia judge, James Cacheris, said that if corporations have the same right as individuals to express themselves through political expenditures, they must also have the same right to give money to candidates.

But the San Francisco appellate panel noted that the Supreme Court had upheld the federal ban on corporate contributions as recently as 2003. And because corporations are artificial entities that can multiply indefinitely, the appeals court said, allowing them to donate to candidates could undermine dollar limits on campaign contributions.

That "anti-corruption rationale" remains a legal basis to outlaw corporate contributions even after the Supreme Court ruling, said Judge Kim Wardlaw in the 3-0 decision.

"The contribution ban is important," said attorney Tara Malloy of the Campaign Legal Center, which submitted arguments supporting San Diego. Although corporations can still influence candidates by funding independent support groups, she said, candidates prefer direct donations and are more likely to be swayed by them.

Read the ruling at www.ca9.uscourts.gov/datastore/opinions/2011/06/09/1055322.pdf.

E-mail Bob Egelko at begelko@sfchronicle.com.