Court ruling on campaign spending could pay off for GOP

Reporting from Washington — 

The Supreme Court’s decision Thursday to wipe out most campaign spending limits, coming on top of the Massachusetts Senate race upset, could prove to be a major blow to Democrats and a boost to Republicans in the November midterm elections.

The Massachusetts vote, which ended the Democrats’ filibuster-proof 60-vote majority in the Senate, is already reverberating through lobbying and business-oriented interest groups. Some are rethinking their willingness to cooperate with President Obama on such contentious issues as healthcare and the environment.

And the court decision, which ends a long-standing ban on direct corporate campaign spending, is expected to swell the already substantial flow of money from business groups into Republican coffers.

“The Supreme Court just predetermined the winners of next November’s elections,” an angry Sen. Charles E. Schumer (D-N.Y.) said. “It won’t be Republicans. It won’t be Democrats. It will be corporate America.”

Schumer and Maryland Rep. Chris Van Hollen, chairman of the Democratic House reelection effort, said they would offer legislation to try to scale back the reach of the decision before the congressional elections.

According to Democratic aides, the proposals could include tighter monitoring of rules that prohibit coordination between outside groups and campaigns, or increased disclosure requirements that would force companies to be more transparent about their electoral activities to shareholders and others.

But the fact that the high court grounded its ruling in the 1st Amendment -- holding that corporations have the same rights as individuals to use their funds to express political views -- will make it hard for Congress to legislate substantial restrictions.

The justices did not strike down the ban on direct corporate giving to individual candidates for federal office. But the distinction is not expected to have much impact because most business-related contributions already were flowing through lobbying organizations such as the U.S. Chamber of Commerce and independent groups set up to support candidates on the basis of issues.

In the last few days of the Massachusetts Senate race, for example, the chamber spent more than $1 million in support of the Republican candidate and eventual winner, Scott Brown.

The chamber’s spending has come under fire from reformers, but the Supreme Court decision probably clears the way for the organization to spend more freely than ever on the 2010 midterm contests.

One of Obama’s most notable political achievements in his first year in office was persuading some key Republican-leaning business lobbies to support Democratic initiatives.

Organizations like the Business Roundtable, the National Restaurant Assn., the National Federation of Independent Business and the pharmaceutical industry, for example, broke ranks with the chamber and worked with the administration on healthcare.

But in the days leading up to the Massachusetts vote, when polls showed Brown heading toward an upset, some of those groups turned back fitfully toward their Republican roots.

The National Federation of Independent Business, for example, insisted on more public criticism of the Democrats’ healthcare plan.

That prompted Grover Norquist, the conservative activist who heads Americans for Tax Reform, to remark that “members are wondering why the organization was either AWOL or collaborating for months and months.”

Dan Danner, president of the business group, disputed Norquist’s suggestion that the organization had changed its stripes. But he acknowledged that the group’s view of the Obama administration’s healthcare overhaul had soured.

Danner also noted that his organization was one of the first to send personnel and money into Massachusetts to help Brown.

Conservative pressures -- and responses like the federation’s -- are expected to intensify. That worries Democrats, as does the impact of the court ruling.

“The decision is a big worry for Democrats,” said Michael Meehan, who has run several Senate campaigns in recent years. “It totally swings the balance.

“In a typical contested Senate race, we calculate that one-third of the spending comes from the candidate, one-third from the party and one-third from outside groups. There are still limits on the first two, but unlimited sums are allowed from corporate America,” he said. “To the extent that corporations continue to favor Republicans, this is a major concern for Democrats everywhere.”

Sen. Russell D. Feingold (D-Wis.), author of the current campaign spending limits law, said the court decision gave a big advantage to the corporate world. “Corporations have huge war chests that far exceed current spending in our political system,” he said.

But Republican consultants said the decision would simply shift spending by political action committees and issue-based “front groups” to the corporations themselves.

“I don’t believe that the ruling will fundamentally change the outcome of the elections, given the obscene amounts of money . . . spent independently in the last two years by everyone,” said Jim Innocenzi, a GOP strategist in Alexandria, Va.

Several executives for major companies, including Microsoft, said Thursday that they would not be quick to pump new funds into GOP causes.

According to Greg Casey, chief executive of the Business Industry Political Action Committee, which encourages corporations to participate in politics, the cautious response is just what he expected.

Though he hailed the court decision for making it clear that companies have 1st Amendment rights, Casey said that “to listen to the other side, you’d think that the corporate community is just sitting there wanting to write checks for negative ads. That’s not the case.”

“What they want is to become serious players in issues discussions. And it’s going to take them some time for executives to become comfortable” with the new rules, he said.

Democrats were less sanguine -- partly because corporate spending has historically benefited Republicans.

Tad Devine, a Democratic strategist, worried that corporations now might dominate elections so completely that the candidate’s message could be eclipsed.

“Corporations are going to impose their view and judgment about what a campaign should be about,” Devine said.

The court’s decision, he said, will decrease the effectiveness of small, individual donations -- just a year after Obama’s campaign seemed to harness the power of such contributions on a massive scale.

“I think the pendulum is going to turn back to the other side,” Devine said.

tom.hamburger@latimes.com

joliphant@latimes.com

Kim Geiger in the Washington bureau contributed to this report.