The Pew Charitable Trusts

From the 1880s until just before World War I, Montana was essentially owned by mining companies, and most of all by Anaconda Copper. Money bought political power: An industry mogul openly bribed his way to a U.S. Senate seat; the choice of a state capital was decided by a spending war that saw two rival mining company candidates spend the equivalent of $70 million in today's dollars to influence just 52,000 voters. It was clear: Montana had a problem.

Then, in 1912, things changed. Voters approved a ban on corporate campaign spending and contributions that was aimed at cleaning up the political process. "The law represented nothing less than the voters taking back a government that belongs to them," Montana Attorney General Steve Bullock said recently, "and only to them."

And so it was, until the recent U.S. Supreme Court ruling that threatens to dismantle the century-old Montana laws, along with similar measures in 23 other states. The court's 5-4 decision last month in Citizens United v. Federal Elections Commission made one clear-cut change-it declared any ban on corporate- or union-sponsored political advocacy to be unconstitutional, on the grounds that such advocacy was constitutionally protected political speech. But in practice the decision may do more. It may alter state and local elections across the country in ways the court didn't discuss.

States such as Montana face a complicated set of problems and a question of basic fairness. Citizens United could serve to lock in place strict limits on the amount of money individuals can spend on campaigns, while giving corporations and labor much broader freedom.

Current Montana law limits contributions from people to $500 for a gubernatorial campaign,  $250 for other statewide elections, and $130 for any other office. It limits corporate contributions to zero. Now the ban on corporate spending could be thrown out altogether following a challenge based on Citizens United, with the individual limits, which were unaffected by the decision, remaining untouched.

But this would pose constitutional problems of its own. The court ruled in Citizens United not only that corporations and unions have free speech rights and that spending equals speech, but  that speech can't be regulated based on the identity of the speaker. If Montana ended up limiting individual but not corporate activity, the result could be unconstitutional according to the very language of Citizens United.

If this came to pass, the simplest fix would be to enact a law in the Legislature or via ballot initiative to fix the discrepancy. The state could apply the same limits to all contributors to avoid unequal treatment. But limiting corporations would run afoul of Citizens United, leaving the whole process roughly where it started . . "It has the potential to really mess things up in the political system out here, and not in a good way," says Jon Motl, a Montana attorney who's worked on campaign finance issues.

For its part, the Montana Attorney General's office declined to comment on any hypothetical case, citing the likelihood of future litigation over the state's laws in the wake of Citizens United . And the "people vs. corporation" inequality scenario is just a hypothetical at this point. But, Motl adds, it's a particularly concerning one. "It is just not good when you make a decision that can potentially create an opportunity for the system to look bad," he says. "I'm talking about faith and confidence. This has the potentially to really, really hurt that."

It's unclear how many states might find themselves in this latter situation, but 21 states besides Montana currently ban corporate contributions while only limiting them from individuals, or have no limits for individuals but ban or limit them from corporations. All these states are in potentially the same fix.

Despite all these difficulties, there are those who see the Citizens United decision as a boon to the American political process: More spending equals more ideas, they say, which means more choices. "It is voters that decide who holds power in our constitutional republic, and the court's opinion only allows voters access to more information," says Stephen M. Hoersting, vice president of the Center for Competitive Politics and former counsel to the National Republican Senatorial Committee. "Government has no place in determining either who has said enough or when the people have heard enough."

Outsized Impact

But it's clear that the Supreme Court has opened the door for a major increase in the cost of winning an election. I n low-budget elections, such as those in Montana, any additional spending could have a great impact .

In Montana's 2008 elections, the average state senator won by spending just $17,000, less than was spent a century ago when some campaigns cost $1,000 per vote. Even the most expensive winning campaign for the state senate in 2008 cost just $75,000. It's clear that laws such as Montana's have been successful in holding down campaign costs, while states without similar regulations have seen more costly contests.

The 24 states with the most stringent restrictions saw $144 million flow from corporations, unions and various associations (and their PACs) into the 2008 state election cycle, less than a quarter of all contributions, according to the National Institute on Money in State Politics. In the  six states with no bans or limits, $110 million flowed into candidate coffers from non-individual sources, more than 40 percent of all contributions.

Much of the concern over Citizens United is not about corruption in the traditional sense, but about the outsized influence limitless campaign spending could have. "When you're talking about millions of dollars at the state level," says Edwin Bender, executive director of the Institute on Money in State Politics, "you're talking about effectively being able to buy a majority of seats in the House or Senate in some states."

Looking Forward

There has been much discussion in Congress of how Citizens United might be softened. Wisconsin Senator Russ Feingold — the co-architect of the McCain-Feingold campaign finance reform that was largely erased by Citizens United — called for "as robust a response as possible." Senator John Kerry of Massachusetts has called for a Constitutional amendment.

Many of the states seem unlikely to take any action, however, And it remains to be seen how much can be done, either at the state or federal level, without violating at least one of the constitutional principles laid out by the Supreme Court. 

Some states, such as Wyoming and Minnesota, have seen bills filed to repeal laws that conflict with the Citizens United ruling. In Iowa, the director of the Ethics and Campaign Disclosure Board has already admitted that the ruling overturns state law; in Colorado, the Republican Party has filed suit against the state's laws.

So far, Montana is the only state to publicly say it will maintain its laws until a court rules them unconstitutional. "We didn't want this fight in Montana," Bullock, the attorney general, says. "We do not want to be set back a century." But it seems just a matter of time before a challenge is leveled against the state's law. Already, one official said, candidates and lawmakers are calling to see how the ruling might make it easier for them to raise money. "With the floodgates opened to corporate spending," Bullock says, "it won't take a Copper King to buy a $17,000 election."