Despite the 2012 election cycle's disappointing returns on investment for business-friendly political action committees unleashed by the U.S. Supreme Court's 2010 ruling in Citizens United v. Federal Election Commission, corporate campaign spending remains a hot topic. Earlier this month, you'll recall, the New York State Common Retirement Fund filed a books-and-records suit in Delaware Chancery court, demanding that Qualcomm shareholders be permitted access to information about the company's political expenditures. The Securities and Exchange Commission, meanwhile, is considering a proposed rule to require such disclosures, which, predictably, the U.S. Chamber of Commerce opposes. All told, the Center for Public Integrity estimates, Citizens United opened the way for almost $1 billion of new political spending in 2012.

That could be only the tip of the iceberg, according to a Jan. 23 brief by the Justice Department, if the Supreme Court extends First Amendment protection to direct corporate campaign contributions, and not just to the independent expenditures addressed in Citizens United.

The Justice Department's brief asks the Supreme Court to deny a bid for review by two Hillary Clinton fundraisers indicted for campaign finance violations. As I've reported, William Danielczyk and Eugene Biagi were charged with, among other things, illegally reimbursing Clinton donors with corporate funds, in violation of the law against giving corporate treasury money directly to political candidates. Last year, a U.S. district judge cited Citizens United and dismissed those counts of the indictment, but the 4th Circuit Court of Appeals reinstated the charges last June, holding that direct political contributions do not merit the heightened First Amendment scrutiny the Supreme Court applied in Citizens United. According to the appeals court, there's a difference between the independent expenditures (read: political action committee contributions and issue-oriented spending) that were at issue in Citizens United and direct political contributions to candidates, which aren't protected by the First Amendment under the Supreme Court's 2003 ruling in Federal Election Commission v. Beaumont.

In November, Danielczyk's lawyers at MoloLamken argued in a petition for certiorari that the appeals court ruling maintained a distinction between direct contributions and independent expenditures that the Supreme Court effectively wiped away in Citizens United. The cert petition conceded that there's no circuit split on whether Beaumont remains good law, since all the federal appeals courts that have considered that question after Citizens United have ruled the same way as the 4th Circuit. Nevertheless, the petition urged the justices to correct a "perverse" and outdated ban on direct contributions that impinges on corporate free speech rights.

The Justice Department's opposition argues first and foremost that there's no need for the Supreme Court to take up the case, since Danielczyk and Biagi are asking for extraordinary interlocutory review of an issue that hasn't even divided the federal circuits. The brief also asserts that there are sound policy reasons to distinguish between independent spending and direct contributions, which are likelier to imply corruption. Without a bar on direct corporate giving, for instance, individuals could circumvent limits on their own contributions and attempt to buy influence through direct corporate donations, the Justice brief said, echoing the 4th Circuit.

The most interesting argument in the brief, though, was the Justice Department's prediction of the consequence of lifting the ban on direct corporate spending. It's easy to set up a corporation: It costs a grand total of $75 to incorporate in the state of Nevada, according to the brief. So if there were no ban on corporate campaign spending, a rich person could easily get around restrictions on individual donations by setting up all kinds of dummy corporations, each one of which could funnel money to candidates. And it would be no trick to hide that influence: "The corporations may all have different names, and the complexities of corporate structure may mask their relationship to each other and to the conduit contributor," the brief said.

That's a very disquieting thought, considering what we already know about corporate reluctance to disclose independent political expenditures. Imagine the fight that would ensue over disclosure of direct contributions by corporations established for the purpose of circumventing limits on individual contributions. Any hope of transparency would be pretty much lost.

One other interesting footnote on the Danielczyk cert petition: Citizens United, the conservative non-profit behind the namesake Supreme Court ruling, filed an amicus brief, along with several other free speech groups. I think you can guess which side they support.

The justices will conference on the case next month.

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