Supreme Court Removes Limits on Corporate, Labor Donations to Campaigns

Siding with filmmakers of "Hillary: The Movie," who were challenged by the Federal Election Commission on their sources of cash to pay for the film, the court overturned a 20-year-old ruling that banned corporate and labor money. The decision threatens similar limits imposed by 24 states.

The justices also struck down part of the landmark McCain-Feingold campaign finance bill that barred union- and corporate-paid issue ads in the closing days of election campaigns.

Justice Anthony Kennedy wrote the main opinion, which reads in part that there is "no basis for allowing the government to limit corporate independent expenditures."

"There is no basis for the proposition that, in the political speech context, the government may impose restrictions on certain disfavored speakers," he wrote. "The government may regulate corporate speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether."

Dissenters included Justices John Paul Stevens, Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor.

"The notion that the First Amendment dictated [today's ruling] is, in my judgment, profoundly misguided," Stevens wrote for the others. 

"In the context of election to public office, the distinction between corporate and human speakers is significant. Although they make enormous contributions to our society, corporations are not actually members of it," he added.

The ruling is sure to send a jolt to political campaigns throughout the country that are gearing up for the 2010 midterm elections. It will also impact the 2012 presidential race and federal elections to come.

Arizona Republican Sen. John McCain, whose name bears the law that was upended Thursday, said he hadn't read the decision but thought that it was headed that way when he listened to arguments presented last fall. McCain said he does not think it completely repudiates the law he wrote with Wisconsin Democratic Sen. Russ Feingold.

It also undercuts recent congressional legislation mandating tighter controls on political donations that had restricted the flow of corporate dollars into the political system.

The case involves the film by conservative group Citizens United, which criticized then-presidential candidate Hillary Rodham Clinton during the 2008 Democratic presidential primary campaign.

Citizens United planned to air ads promoting its distribution through cable television video-on-demand services. The FEC said the film amounted to a campaign ad and that Citizens United, an incorporated entity that takes corporate money, could only use limited, disclosed contributions from individuals to promote and broadcast it.

Prior to the ruling, Bob Edgar, president of watchdog group Common Cause, warned against overturning McCain-Feingold. 

"Money has already corroded the discussion before Congress," he said. "It'll open Pandora's Box." 

The U.S. Chamber of Commerce, AFL-CIO, National Rifle Association and other groups sided with Citizens United in calling a loosening of restrictions. 

Fox News' Lee Ross and The Associated Press contributed to this report.