You’ve heard plenty about the effect of the U.S. Supreme Court’s 2010 Citizens United decision on campaign spending, and how it opened the floodgates for corporate money and spending by outside groups.

But what exactly did the decision do? Who can spend money to influence elections, and how? How is it playing out in Montana?

To address these questions, and others, here’s our primer on the phenomenon known as “outside spending,” and the rules as we know them:

What did Citizens United change? The 5-4 decision in January 2010 in favor of Citizens United, a nonprofit group that broadcast a movie criticizing Hilary Clinton in the 2008 presidential campaign, ended a federal ban on corporations and unions spending money directly out of their treasury to finance an “independent expenditure.”

What’s an independent expenditure? Money spent to influence an election, usually on some sort of TV advertising, by a group not associated with a candidate. The ad tells the viewer to vote for or against a candidate, but the sponsor of the ad is prohibited from coordinating with the candidate.

Are there limits on the amount that corporations or individuals can contribute to fund independent expenditures? Not any more. A subsequent federal court decision in March 2010, citing Citizens United, abolished those limits.

Did this abolishment lead to the “Super PACs”? Yes. The so-called “Super PACs” are political action committees formed to make independent expenditures promoting or opposing a certain candidate. So far, they’ve been most active in the race for the Republican presidential primary races, with three Super PACs spending more than $60 million on behalf of Mitt Romney, Rick Santorum and Newt Gingrich.

Do Super PACS have to report their spending and contributors? Yes. They must file reports with the Federal Election Commission, sometimes within 24 or 48 hours of the spending.

Are Super PACs spending in Montana? Not yet. The outside spending we’ve seen here, mostly in the U.S. Senate race involving Sen. Jon Tester, D-Mont., and U.S. Rep. Denny Rehberg, R-Mont., has been by 501(c) nonprofit groups.

What is a 501(c) group, and how can it do political spending? A 501(c) is a nonprofit supposedly formed for “educational” or other purposes that are not primarily political. It is barred from supporting or opposing candidates, and cannot engage in political activity as a “primary activity.” However, they’ve found a loophole in this ban, producing TV ads known as “issue advocacy” ads, which usually attack or support a candidate.

What’s an “issue-advocacy” ad? Almost all of the TV ads we’ve seen in Montana in the Tester-Rehberg race are issue-advocacy ads. They do not tell the viewer to vote for or against a candidate. Rather, they make statements about an issue (the health care law, for example), tie that statement negatively to the candidate, and then tell viewers to call the candidate and express their dissatisfaction. They are essentially political ads disguised as so-called “education.”

Do 501(c) groups have to report their spending and contributors? Not in any timely fashion – and they can conceal their donors entirely. They must file a year-end report with the IRS disclosing how much they raise and spend, but it doesn’t become public until months after the election.

Can Montana require 501(c) groups to report their spending and contributions? Montana is trying to force disclosure by 501(c) groups when they spend on ads to influence elections for state offices such as governor or legislator. But 501(c) groups have fought this effort in court. A trial is scheduled next year.

Did Citizens United affect 501(c) groups? Yes. It allows nonprofits to use corporate funds to finance communications that can be seen as election-related — although the nonprofits still are not supposed to engage in politics as a “primary activity.”

Has Citizens United affected campaign spending in Montana? It has led to striking down Montana’s 100-year-old ban on corporate money being spent directly on independent expenditures. That decision may be appealed to the U.S. Supreme Court.


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