TEC issues opinion on direct campaign spending by corporations, labor unions

It’s official. The Texas Ethics Commission cannot enforce Election Code §253.094 or §253.002 to prohibit corporations or labor organizations from making direct expenditures in political campaigns, according to an opinion the commission issued April 21. As noted in Advisory Opinion 489, the TEC cannot enforce Election Code §253.002 to prohibit a person from making or authorizing a direct campaign expenditure by a corporation. Section 253.094 prohibits a corporation or labor union from making a political contribution or political expenditure that is not authorized. The opinion is a response to the U.S. Supreme Court’s Jan. 21 decision in Citizens United v. Federal Election Commission. In its 5-4 decision in Citizens United, the high court held that direct corporate expenditures on candidates’ campaigns cannot be limited under the First Amendment to the U.S. Constitution. The TEC noted in its advisory opinion that the Supreme Court’s decision does not impede the commission from enforcing the state’s political advertising disclosure requirements under Chapter 255 of the Election Code. Advertisements, even those for which corporations pay, must disclose who paid for them. The TEC further noted in the opinion that corporations now must report any direct expenditures they make for a political campaign, as required of individuals under Election Code §253.062. Referring to the new reporting requirement corporations face, TEC deputy general counsel Tim Sorrells says, “It was just something that wasn’t in the law, because there was a prohibition on corporate expenditures.” Tom Phillips, a former chief justice of the Texas Supreme Court who is now a partner in Baker Botts in Austin, says it is too early to tell whether lifting the prohibition against direct corporate spending on campaigns will have much of an impact. Phillips says that among smaller corporate entities there may be more political activity through the parent corporation. It will be simpler to do it that way, Phillips says.
-- Mary Alice Robbins