Citizens United and Political Advertisements: Corporations' Lucky Loophole to the Unregulated Internet

I. INTRODUCTION After the Supreme Court's decision in Citizens United v. Federal Election Commission,1 corporations may now exercise their right to political speech via their pocketbook. This Note examines the risks that corporations take by contributing to election campaigns and posits that the disclosure provision of the campaign finance law will push a corporation unwilling to anger its consumers towards attractive alternative: a loophole in the law. This loophole's potential to allow corporations to exercise political influence without risk of ruining reputations will be what drives corporate campaign contributions to the world of political advertising on the unregulated Internet. Part II of the Note provides background information on the history of U.S. campaign finance law. The Note gives a brief overview of the system of corporate campaign contributions before 1971, examines relevant federal election campaign statute provisions, and explains the unregulated state of much of the Internet. Part II also brings the reader to the present day state of the law with a discussion of Citizens United v. FEC.2 Part III analyzes the risk of consumer backlash triggered by the disclosure provision of campaign finance reform. It offers a recent example of a corporate contribution gone wrong, and posits that the unregulated-and thus disclosure-free-nature of websites like YouTube.com (YouTube), coupled with corporations' viral marketing backgrounds, will draw corporations to begin uploading political advertisements online. This Part then demonstrates that this practice may subject the electorate to the dangers of potentially misleading or false advertisements. Finally, Part IV argues that neither the judiciary nor the legislature can close the unregulated Internet loophole in the campaign finance law. The danger to the electorate from unregulated Internet political advertising can only be mitigated through internal corporate policies, which would be against a corporation's self-interests to implement. II. BACKGROUND U.S. campaign finance law shapes how the electorate receives its information about political candidates. Its nuances affect every candidate, and thus every voter. Its evolution from the beginning of federal election regulation to today's form is therefore relevant to understanding the corporate issues related to unregulated Internet political advertising. A. Corporate Campaign Contributions Before 1971 Congress has strictly forbidden any campaign contributions to federal elections by corporations and labor unions since 1907, first through the Tillman Act and later the Taft-Hartley Act of 1947.3 However, the laws passed pre-1971 lacked an institutional framework to administer their [campaign finance] provisions effectively, which allowed politicians to largely ignore[] the provisions.4 Campaigns underreported contributions, evidenced by the spending reported by Congressional candidates jumping by more than ten-fold from the 1968 election (before Congress again tackled campaign finance law in 1971) to the 1972 race.5 Recognizing that the election laws thus far had failed to achieve the goal of effective campaign finance reform, Congress passed the Federal Election Campaign Act of 1971 (FECA).6 FECA is Congress's attempt at consolidat[ing] its earlier reform efforts . . . [and] instituting more stringent disclosure requirements for federal candidates, political parties and political action committees (PACs).7 B. Statutory Regulation of Corporate Political Speech Although FECA succeeded in prompting more disclosures of campaign contributions than previous election laws, the 1972 election was still rife with abuse.8 The problems of administrating federal election laws were unsuccessfully divided among various government offices until 1974, when Congress established the Federal Election Commission (FEC) as independent agency to tackle the issue.9 The FEC holds enormous power in the realm of federal elections. …