On February 25, 2013 the U.S. Supreme Court denied certiorari in Danielczyk vs. U.S., a case that challenged state and federal laws prohibiting corporations from making direct contributions to political candidates.
The petitioners in the case, William Danielczyk and Eugene R. Biagi, were Galen Capital officers. In 2011, the Justice Department indicted them for allegedly using more than $150,000 in corporate funds to reimburse employees for making contributions as “straw donors” to Hillary Clinton’s senatorial and presidential campaigns. (The Clinton campaign was unaware of the activities, according to the government’s brief.)
Lawyers for Danielczyk challenged one of seven counts in the indictment: that he knowingly contributed corporate money to a candidate. They argued that these contributions were essentially the same as the indirect contributions that the U.S. Supreme Court authorized in its 2010 Citizen United decision. (In that case, the Court ruled that corporations and unions have the same First Amendment rights as individuals and may make unlimited independent expenditures, as long as they do not give directly to candidates. For a summary of Citizens United, see OLR Report 2010-R-0124.)
In May 2011, U.S. District Judge James Cacheris dismissed that count, saying Citizens United removed the legal underpinnings for the federal ban against direct contributions to candidates. Later, the U.S. Court of Appeals for the 4th Circuit reversed Cacheris’ ruling.
By denying certiorari, the ban on campaign finance contributions from corporations directly to candidates remains in place. For more information on Danielczyk, see this article from the Christian Science Monitor, this Reuters article, and this blog entry from SCOTUSblog.
