The U.S. Supreme Court recognizes that the compelling governmental interest in preventing corruption supports the restriction of the influence of political war chests funneled through the corporate form.
Respondent, state chamber of commerce, brought an action to challenge the constitutionality of § 54(1) of the Michigan Campaign Finance Act, Mich. Comp. Laws § 169.254(1) (1979), which prohibited corporations from using corporate treasury funds for independent expenditures in support of, or in opposition to, any candidate in elections for state office. The appellate court held that § 54(1) could not be applied to respondent, a state nonprofit corporation, without violating the First Amendment. The State appealed from the decision.
Can § 54(1) be applied to the respondent, which is a state nonprofit corporation, without violating the First Amendment?
The Court ruled that the application of § 54(1) to respondent was constitutional because the provision was narrowly tailored to serve the compelling state interest of eliminating from the political process the corrosive effect of political war chests amassed with the aid of the legal advantages given to corporations.