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FEC Record: Litigation

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U.S. v. Danielczyk

On June 28, 2012, the U.S. Court of Appeals for the 4th Circuit upheld the ban on corporate contributions in connection with federal elections. This appellate court ruling reversed a district court decision that would have allowed corporate contributions, based on the lower court’s interpretation of the Supreme Court’s decision in Citizens United v. FEC. See 558 U.S. 50 (2010).

The three-judge appeals court panel concluded that—while Citizens United overturned the ban on corporate expenditures—the government still may constitutionally prohibit corporate contributions under the Federal Election Campaign Act (the Act). See 2 U.S.C. § 441b(a).

Background

According to an indictment brought by the U.S. Department of Justice, in March 2007, William P. Danielczyk, Jr. and Eugene R. Biagi – who are officers of Galen Capital Group, LLC, and Galen Capital Corporation – participated in a fundraiser for Hillary Clinton’s 2008 presidential campaign in which donors gave $156,400 with the promise that they would be reimbursed by their corporate employer.

Danielczyk and Biagi were indicted on seven counts for this contribution scheme including a charge of knowingly and willfully causing corporate money to go to a federal candidate in violation of the Act. See 2 U.S.C. § 441b(a) and 2 U.S.C. § 437g(d)(1)(A)(i).

On April 6, 2011, Danielczyk and Biagi moved to dismiss this count, contending that the Act’s ban on corporate contributions is unconstitutional. Based on its reading of Citizens United, the district court granted the dismissal, finding the law unconstitutional as applied to Danielczyk and Biagi.

Fourth Circuit Court of Appeals Decision

On June 28, 2012, the appeals court reversed the district court’s decision stating that Citizens United opened the doors to corporate independent expenditures, but not to corporate contributions and corporate facilitation to federal candidates.

In support of its decision, the appeals court cited the 2003 Supreme Court decision of FEC v. Beaumont saying it “clearly supports the constitutionality” of the Act’s ban on corporate campaign contributions to federal candidates. The court concluded that Citizens United did not undermine Beaumont’s reasoning on this point.

U.S. District Court for Appeals for the Fourth Circuit: 11-4667

(Posted 7/11/12; By: Alex Knott)

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The FEC Record is produced by the Information Division, Office of Communications. Toll free 800-424-9530; Local 202-694-1100; E-mail info@fec.gov. Greg Scott, Director; Alex Knott, Senior Writer/Editor; Myles Martin, Editor