The Implications of Citizens United: The Threat of Corruption in Campaign Politics in United States vs. Householder

In the case United States vs. Householder (2023), the Ohio District Court determined that former Governor of Ohio Larry Householder engaged in racketeering when he took an illegal sixty million dollar bribe from nonprofit groups to support his and his peers’ political campaigns. [1] This case is consequential as it may have addressed the implications of Citizens United vs. Federal Election Commission (FEC) (2010), which gave corporations, nonprofit groups, labor unions, and other organizations the right to free speech, including political endeavors, under the First Amendment. In particular, United States vs. Householder tested this decision by revealing two important implications through its finding: the presence of bribery within campaign politics and the influence of dark money, both of which Citizens United failed to account for due to its vague nature. If relying on legal precedent from FEC vs. MA Citizens for Life and McConnell vs. FEC in the final decision and sentencing, United States vs. Householder could dramatically change the landscape of campaign finance politics, as well as fix the loopholes created by the Citizens United decision. This is crucial for protecting the voting rights of the American people, as it removes harmful influences from elections such as racketeering (the act of obtaining money by an illegal enterprise, usually involving intimidation) and bribery.

In United States vs. Householder, FirstEnergy, a company based in Ohio that deals in energy and electricity, funneled campaign funds via a 501(c)(4) nonprofit organization and dark money group, Generation Now. This “nonprofit group” sent money to pay consultants, gave profits to members of the scheme, and bought campaign ads for Householder’s supporters while he ran for Ohio’s Speaker of the House. Householder used the two million dollars he received to settle a personal lawsuit, make repairs on a summer home, pay off debt, and finance his campaign. [2] Generation Now and Householder’s associates have already faced legal consequences, and Householder himself was convicted on March 9 for racketeering conspiracy in US vs. Householder which may result in up to twenty years in prison. [3] While Householder clearly engaged in illegal activity to advance his career and gain profits, this case is more significant for campaign finance regulations as it straddles the boundary left from Citizens United between free speech and illegal quid pro quo.

Through the inquiry of illegal quid pro quo, United States vs. Householder also highlights a new issue in politics: dark money. As a result of Citizens United’s extension of the First Amendment right to free speech, there has been a rise in dark money and dark money groups – calling themselves “nonprofit organizations” – which influence campaign politics. Generation Now is

considered a dark money group which relies on funding from their donors. The caveat that distinguishes a 501(c)(4) nonprofit organization as a dark money group is donor anonymity, which does not have to be compromised under the law. 501(c)(4) groups are often referred to as “social welfare groups,” meaning that they are allowed to engage in politics, so long as it is not their “primary” purpose, according to the FEC. However, the term “primary” remains ambiguous and clouds the scope of these groups in political financing. [4]

Following Citizens United’s ruling in 2010, more than one billion dollars have been estimated to be poured into federal elections through dark money groups, serving as the majority of the funding for more competitive races. [5] In addition, since donors remain anonymous, this practice raises the potential of international influence on US political campaigns by foreign individuals or even governments. Due to the anonymity status of dark money groups, there is little information available in this regard. Therefore, dark money groups such as Generation Now raise a significant problem for the American public: transparency. Voters cannot see who is truly sponsoring campaign advertisements – whether domestic or international – and therefore cannot make fully informed decisions when voting.

Citizens United vs. US, which significantly diverged from prior precedent, is the foundation of the legal issues presently debated. In 2008, the nonprofit organization Citizens United wanted to air an anti-Hillary Clinton advertisement entitled “Hillary: the Movie” to weaken support for her primary election prospects for Democratic presidential candidacy. [6] This violated the Bipartisan Campaign Reform Act of 2002 (BCRA), as well as precedent set by Austin vs. Chamber of Michigan Commerce and McConnell vs. FEC. These all stated that corporations, labor unions, nonprofit groups, and similar organizations could not use their independent expenditures for “electronic communication” speech, that which directly references a candidate for federal office. It also had strict provisions over advertisement air dates and disclosures. Citizens United overturned this law and applied “strict scrutiny” (the harshest type of scrutiny), a doctrine that required the government to show that an action advanced a “compelling interest” and that the action was narrowly tailored in order to restrict a right. This was the first time strict scrutiny was applied to political speech cases. [7] The Court opinion stated, “Although the disclaimer and disclosure provisions may burden the ability to speak, the Court found that they do not impose a ceiling on campaign-related activities and do not prevent anyone from speaking.” [8] However, as seen by US vs. Householder, Citizens United was too broad and left opportunities for dark money groups like Generation Now to rise to power, hurting voters by decreasing important transparency and oversight.

United States vs. Householder should examine previous cases, such as McConnell vs. FEC (2003), that highlight a compelling government interest to prevent corruption and provide more transparency and fairness for voters in contrast to Citizens United. McConnell vs. FEC was brought to the Supreme Court to challenge BCRA, especially regarding its provisions restricting

soft money in politics – political spending made by organizations and individuals other than the candidate’s own campaign – and the types of advertising allowed for these external parties. In this decision, the justices determined that “the restriction was justified by the government's legitimate interest in preventing ‘both the actual corruption threatened by large financial contributions and [...] the appearance of corruption’ that might result from those contributions.” [9] The opinion specified that corruption and the appearance of corruption of federal candidates and officeholders was imminent; therefore, restrictions of free speech passed under strict scrutiny. With this case in mind, United States vs. Householder may look to legal precedent and reassert that corruption is a justifiable reason for First Amendment restrictions, especially considering Householder’s racketeering scheme is the epitome of “corruption of federal candidates” with dark money as the motivator. Even though Citizens United overturned this precedent, United States vs. Householder demonstrates that racketeering is indeed embedded into our current political process, and government interest in fair elections may justify the restriction of First Amendment speech when the threat of corruption is undeniable.

Another important case that United States vs. Householder can rely on is Buckley vs. Valeo (1976), which referenced contribution and independent expenditure limits set under the Federal Election Campaign Act of 1971. The Supreme Court ultimately ruled that “the ‘governmental interest in preventing corruption and the appearance of corruption’ – which justified the contribution limitations – was not sufficient to warrant the limitation on independent expenditures.” [10] They add, “Abuses that might be generated by large independent expenditures did not appear to pose the same threat of corruption that large contributions posed since the ‘absence of prearrangement or coordination of the expenditure with the candidate or his agent alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidates.’” [11] However, this justification for striking down free speech restrictions proves to be untrue now as United States vs. Householder demonstrates a real and observable threat of quid pro quo for improper financial commitments.

Therefore, Buckley vs. Valeo could justify restrictions to the first amendment, given the changing political arena, which is made clear in United States vs. Householder. The proof can be seen in Buckley vs. Valeo itself, where the Court ruled that disclosure provisions were allowed to “(1) [help] voters to evaluate candidates by informing them about the sources and uses of campaign funds, (2) [deter] corruption and the appearance of it by making public the names of major contributors, and (3) [provide] information necessary to detect violations of the law.” [12] Here, Buckley vs. Valeo directly asserts the issue of corruption caused by anonymity and educated voting, concerns evident in United States vs. Householder. According to Buckley, these are justifiable reasons to limit first amendment rights, as it emphasizes the rights of the voter and making funding sources accessible to determine cases of bribery. Though relying on overturned precedent is unrealistic (as when overturned, they lose their legal validity) for debunking Citizens United as a whole, Buckley vs. Valeo emphasizes real threats that were overlooked by Citizens

United and restrictions must be added to limit free speech from inciting the present danger of corrupted influences.

The case United States vs. Householder could make a lasting impact on campaign finance law by addressing loopholes under Citizens United which threaten American democracy. With corruption and racketeering under the guise of first amendment rights for corporations, labor unions, nonprofits, and others, select organizations continue to place knowledgeable voting at risk. Dark money has undeniably had a negative impact on campaign politics, with the voters being the ones who suffer as they are unable to access the information needed to make an informed choice. Furthermore, United States vs. Householder should look to address these issues by following cases such as McConnell vs. FEC and Buckley vs. Valeo which emphasize the threat of corruption as passing strict scrutiny and justify free speech limits to protect the voter. With so much on the line for Americans, United States vs. Householder has the opportunity to make positive change for the entire country if ruled with the voter in mind; otherwise, voters will be making uninformed decisions pushed by corrupt agendas.

Edited by Marie Miller

[1] “United States v. Householder,” Casetext, January 1, 2023, https://casetext.com/case/united- states-v-householder-7.
[2] “Federal Grand Jury Indicts Ohio House Speaker Enterprise in Federal Public Corruption Racketeering Conspiracy Involving $60 Million,” United States Department of Justice, July 30, 2020, https://www.justice.gov/usao-sdoh/pr/federal-grand-jury-indicts-ohio-house-speaker-enterprise-f ederal-public-corruption.

[3] Julie Carr Smyth, “Ohio House Ex-Speaker’s Trial in $60M Bribery Probe to Begin,” AP News, January 19, 2023, https://apnews.com/article/politics-united-states-government-us-republican-party-ohio-business- 43427e4aa9451886de0a7db5341b3c4a.

[4] Alex Ebert,“Ohio’s Historic Corruption Case Tests Limits of Citizens United,” Bloomberg Law, January 20, 2023, https://news.bloomberglaw.com/white-collar-and-criminal-law/ohios-historic-corruption-case-tes ts-limits-of-citizens-united.

[5] Alana Rudder and Kelly Main,“501(c)(3) vs. 501(c)(4): Differences, Pros and Cons,” Forbes Advisor, January 6, 2023, https://www.forbes.com/advisor/business/501c3-vs-501c4/.
[6] “Dark Money,” Brennan Center for Justice, https://www.brennancenter.org/issues/reform-money-politics/influence-big-money/dark-money. [7] “Citizens United v. FEC,” Federal Election Commission, https://www.fec.gov/legal-resources/court-cases/citizens-united-v-fec/.

[8] “Citizens United v. FEC,” Federal Election Commission, https://www.fec.gov/legal-resources/court-cases/citizens-united-v-fec/. [9] “Citizens United v. FEC,” Federal Election Commission, https://www.fec.gov/legal-resources/court-cases/citizens-united-v-fec/. [10] “McConnell v. Federal Election Commission,” Oyez, https://www.oyez.org/cases/2003/02-1674.
[11] “Buckley v. Valeo,” Federal Elections Commission, https://www.fec.gov/legal-resources/court-cases/buckley-v-valeo/. [12] “Buckley v. Valeo,” Federal Elections Commission, https://www.fec.gov/legal-resources/court-cases/buckley-v-valeo/.