CORPORATE INVOLVEMENT IN POLITICAL CAMPAIGNS

By Senator Jason Gant (R-Sioux Falls)

On January 2, 2010, the United States Supreme Court, issued a historic ruling in the case of Citizens United v. Federal Election Commission with regard to political communications by corporations. The Justices stated that because the First Amendment applies to corporations they should not be completely prohibited from being involved in political campaigns. This decision does a lot to change the political landscape in South Dakota.

Although the State of South Dakota won’t now have the ability to decide whether a corporation should be allowed political speech, we have retained the responsibility of ensuring openness and transparency in this new time. To that end, I authored an amendment to House Bill 1053 and current South Dakota law to clarify this emerging campaign finance issue during the 2010 legislative session.

I have long believed that the residents of South Dakota should be keenly aware of where political contributions come from. With the Supreme Court’s ruling as guidance, I was determined to ensure that the public knew who was funding corporate political speech. I started drafting with the premise that all corporate political speech would include the language of disclosure that has become commonplace throughout the states: “Paid for by . . . “. South Dakotans are comfortable with this language and it was important to me to keep that disclosure.

My amendment also ensured corporations are held to the same open and transparent standards as candidate campaign committees or political action committees or even political parties. It only makes sense that these groups should be treated equitably.

In order to avoid the mistakes of our past, I also included language addressing the ownership of corporations paying for political speech. I wanted to be as sure as possible that all owners were listed with the Secretary of State, but I wanted to keep the process least onerous on South Dakota corporations. The result is a simple filing requirement for our domestic corporations since they are already required to file their articles of incorporation and annual reports with the Secretary of State.

Further, I required that if another corporation or LLC was an owner of the corporation paying for the political speech, that their corporate information would be filed with the Secretary of State. This helps to keep closed loopholes that might have been opened and helps ensure that different corporations or LLCs or LLPs aren’t created to try and hide their true intentions. Foreign corporations would also be required to comply with the same type of disclosures, although they would have stricter time and financial requirements.

The final result of all this work is that South Dakota will comply with federal precedent and allow corporations to be involved in political activities, but that those corporations will be held to the same standard as all other groups involved in political campaigns.

I believe it is paramount to ensure that political campaigns in South Dakota are open and transparent. I trust that this new law on corporate political speech will do just that.

Note: Senator Gant’s House Bill 1053 of the 2010 Legislative Session passed the Senate and House of Representatives unanimously and the Governor signed the bill into law on March 29, 2010.