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The Texas Ethics Commission (TEC) recently adopted an advisory opinion that gives all corporations and unions some degree of certainty if they choose to make direct campaign expenditures, the Texas equivalent of the “independent expenditures” the U.S. Supreme Court addressed in Citizens United v. Federal Election Commission.
In Citizens United, the Court struck down the restrictions on corporate expenditures encompassed in the McCain-Feingold Act. The 5-4 opinion found the Act’s prohibition on the use of general treasury funds by corporations to directly advocate the election or defeat of candidates or to broadcast electioneering communications ran afoul of the First Amendment’s established protections of free speech. It went on to explain that the PAC exemption from the expenditure ban was a “burdensome alternative” to corporate free speech because PACs are expensive to administer and subject to extensive regulations, resulting in a higher burden on smaller and non-profit corporations.
However, the Court upheld the Act’s disclosure and disclaimer requirements because “they impose no ceiling on campaign-related activities or prevent anyone from speaking.” To read an earlier alert that describes the Citizens United v. Federal Election Commission ruling in greater detail, click here.
Consistent with Citizens United, the TEC determined that it could no longer enforce provisions of the Texas Election Code that prohibit a corporation or union from making direct campaign expenditures. The TEC also recognized that Citizens United does not affect the TEC’s ability to enforce certain restrictions on corporations and unions who make political expenditures. Therefore, the TEC determined that the same political advertising disclaimer is required for corporate ads funded with direct campaign expenditures as is required for traditional campaign ads. In addition, all corporate expenditures must be reported to the TEC and the candidate supported by the expenditure.
The TEC thus far has declined to address the question of coordination of direct campaign expenditures. Accordingly, corporations making direct campaign expenditures should exercise caution before coordinating or discussing the expenditure with anyone outside of the corporation.
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You may also view the alert in the PDF linked below.