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Since the Supreme Court’s landmark decision in Citizens United v. Federal Election Commission in 2010, Americans have been told that only the Court itself or a constitutional amendment could stem the flood of corporate and dark money in politics.
That’s not true.
Citizens United (558 U.S. 310) held that lawmakers cannot regulate a corporation’s right to spend independently in elections. But regulation is just one tool in the legislative toolbox. Another extraordinarily powerful tool has gone largely unexamined: every state’s virtually unlimited authority to define the powers it grants its own corporations.
A power states have always had — but never used
Corporations have only the powers that states give them — no more.
States stopped being selective about those powers in the mid-1800s. But every state retained the authority to be as selective as it likes — including the authority to strip its corporations of the power to spend in politics. So far, no state has exercised that power.
The obvious question: why not?
As University of Chicago law professor Vincent S.J. Buccola puts it, “one possibility is that legislators do not know their own legislative authority. If so, maybe they will soon discover it.”
Montana steps up
Enter the Montana Plan.
Under the plan, Montana would no longer grant its corporations the power to spend money in politics. And because out-of-state corporations can exercise only the powers that domestic corporations can, this would also remove political spending power from every out-of-state corporation operating in Montana.
Why this is different from regulation
The difference between regulating rights and declining to grant powers is not semantic — it’s doctrinal and foundational. That distinction may make the Montana Plan the most promising strategy to eliminate corporate and dark money in politics since the Supreme Court’s Citizens United decision. Corporations would still be able to form freely and pursue their business goals under Montana law. They simply would not hold a power that the people of Montana have decided no state-created entity needs: the power to pour money into politics.
The constitutional initiative under development in Montana would revoke all previously granted corporate powers and then regrant them in a positive, carefully defined manner, omitting political spending powers.
This structure draws upon two centuries of Supreme Court jurisprudence regarding corporate powers. The Court has held that states may define, limit, or revoke corporate powers for any reason, or for no reason at all.
The rule applies to out-of-state corporations, too
This doctrine applies with equal force to “foreign corporations,” those chartered out of state but doing business within Montana. As the Court held in Paul v. Virginia (75 U.S. (8 Wall.) 168, 181 (1869)), a corporation “can have no legal existence beyond the limits of the sovereignty where created,” and any other state may decline to grant it powers that are “prejudicial to their interests or repugnant to their policy.”
Montana’s draft initiative simply applies that doctrine. It extends no power to spend in politics to any domestic or foreign corporation, full stop. That would end corporate political activity at all levels: local, state, and federal. And because all dark money flows through corporations organized under section 501(c) of the tax code, it would also shut down all dark money in Montana’s politics.
Oregon must take charge
Montana has a long history of standing up to corporate power — and now it’s showing the rest of the country how to do the same. It’s time for the Oregon legislature to take a hard look at the powers it grants corporations and remove the one that allows unlimited political spending.