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by Ralph Holmen
Incorporated REALTOR® associations have a constitutional right to engage in political speech, according to a January 2010 Supreme Court decision. As a result, associations may distribute to the general public communications supporting or opposing political candidates. Previously, corporations, including incorporated associations and labor unions, had to form political action committees (PACs) funded solely by individual and voluntary contributions, in order to create and distribute these types of communications.
What this decision means for associations
For the NATIONAL ASSOCIATION OF REALTORS®, the change offers an expanded opportunity to create and disseminate public campaign commercials (print, radio, TV, e-mail, Web, or cable communications). It also means that NAR’s political influence in Washington could grow even stronger—even though its PAC is already among the nation’s largest, with contributions of $4,020,900* in the 2007-2008 election cycle. A potential downside to the ruling is that other unions and corporations, too, now have potentially deeper pockets to fund political advertisements that could contradict NAR’s issue agenda.
NAR President Vicki Cox Golder has appointed a Presidential Advisory Group, chaired by NAR past president Cathy Whatley, to evaluate the implications of this case for NAR and RPAC, and consider how NAR can best implement this new opportunity to advance the association’s legislative agenda. (Update: The result of that PAG was the Political Survival Initiative.)
For state and local associations, the implications of the Supreme Court decision are similar. REALTOR® associations in 23 states were previously prohibited from using treasury funds to make public political communications, but they may now use those funds as well as PAC donations to create public advertisements expressly supporting candidates for state or local offices, such as governor or mayor.
The case
In its landmark ruling in Citizens United v. Federal Election Commission, the Supreme Court overturned decades of precedent and explicitly overruled two of its own relatively recent rulings. It declared that corporations, like individuals, have a First Amendment right to make public communications expressly advocating the election or defeat of federal candidates. Both Justice Anthony Kennedy’s majority opinion and Justice John Paul John Paul Stevens’ vociferous dissent (where he says the decision “threatens to undermine the integrity of elected institutions across the Nation”) are lengthy and complex, but the bottom line is simple and straightforward: Corporations may now use treasury funds to pay for creating and publicly disseminating communications expressly advocating the election or defeat of specifically identified federal candidates.
The Court’s ruling also applies with equal force to state (or even local) laws that in the past might have limited or prohibited corporations from making these types of public communications. Those laws are now invalid under the Court’s decision, and many states have already initiated legislative action to repeal their now-unenforceable laws.
Many campaign finance laws remain intact
It’s important to note that this new ruling is about campaign communications and did not overturn existing laws governing campaign contributions. Incorporated associations are still banned from making contributions directly to the campaigns of candidates for federal office.
Corporate political communications now permitted under this ruling must be made wholly independent of, and not in cooperation or collaboration with, the supported candidates and their campaigns or political parties. Any such communications that are coordinated with a candidate’s campaign would be deemed contributions to the candidate, and therefore illegal under the still-valid provisions of the Federal Election Campaign Act.
Subject to such required independence from campaigns, this ruling also clears the way for “issue advocacy” communications that address policy or legislative issues. Such communications may now also identify and—positively or negatively—portray, describe, or otherwise refer to candidates in relation to such issues.
For example, NAR could now use treasury or dues funds to distribute a television ad explicitly encouraging people to vote for a specifically named candidate for Congress. Likewise, even in a state that previously restricted corporate independent expenditures, a state association of REALTORS® could publicly express its support for candidate Smith (the association’s choice for governor) in an upcoming election, in a print ad or a radio or TV spot that explicitly encourages voters to “Vote for Smith.”
As a result, you may see far more political advertising on television during this fall’s elections than ever before.
* According to the Center for Responsive Politics, NAR had the largest Political Action Committee in the United States from 2005 to 2008 and is the nation’s third-largest donor to political campaigns, having given more than $30 million since 1990.
Ralph Holmen is the Associate General Counsel of the National Association of Realtors® in Chicago. He can be reached at 312-329-8375 or rholmen@realtors.org.