01.21.2010Citizens United vs. Federal Election Commission, the Court lifted the long-standing ban on corporate and union independent expenditures in federal elections, but upheld Federal Election Commission disclosure and disclaimer requirements on those ads. The Court lifted the ban on independent expenditures concluding that corporate and union issue ads do not give rise to corruption or the appearance thereof - thus, there is no longer a justification for the ban. The Court further explained that the Government may not impose restrictions on certain "disfavored" speakers. Although corporations and unions can now spend freely on federal elections, they are still subject to disclosure and disclaimer requirements on the issue ads that they run. The Court upheld the disclaimer and disclosure requirements because they help avoid confusion and "insure that voters are fully informed about who is speaking." The Citizens United decision will have an immediate and huge impact on upcoming federal elections. Corporations and unions may now spend freely to support or oppose the candidates of their choice. The decision will also affect state campaign finance laws in those states which currently restrict corporate and union expenditures. The Citizens United decision does not directly affect the federal prohibition on direct contributions by corporations and unions. Corporations and unions still may not make direct contributions in connection with federal elections. They may, however, establish PACs. Stay tuned for additional analysis in coming days.