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1 1 (July 16, 2003)

handle is hein.crs/crsaifx0001 and id is 1 raw text is: Order Code RS21571 July 16, 2003 CRS Report for Congress Received through the CRS Web Campaign Finance and Prohibiting Contributions by Tax-Exempt Corporations: FEC v. Beaumont L. Paige Whitaker Legislative Attorney American Law Division Summary The Federal Election Campaign Act (FECA) prohibits corporations, including tax- exempt, advocacy corporations, from using treasury funds to make direct contributions and expenditures in connection with federal elections. Corporations seeking to make such contributions and expenditures may legally do so only through a political action committee or PAC, 2 U.S.C. § 441b. The Supreme Court has long upheld the ban on corporate contributions, including those made by corporations that are tax-exempt under the Internal Revenue Code. However, in FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986), the Court created an exception for independent expenditures made by such entities that do not accept significant corporate or labor union money finding that restrictions on contributions require less compelling justification under the First Amendment than restrictions on independent expenditures. In FEC v. Beaumont, 123 S. Ct. 2200 (2003), North Carolina Right to Life (NCRL), a tax-exempt corporation, unsuccessfully attempted to extend the MCFL exception to contributions by tax-exempt corporations. Finding that limits on contributions are more clearly justified under the First Amendment than limits on expenditures, the Court reaffirmed the prohibition on all corporations making direct treasury contributions in connection with federal elections and upheld the ban on corporate contributions as applied to NCRL. This report provides an analysis of the Court's decision, including a brief discussion of possible implications for a pending Supreme Court case, McConnell v. FEC, which involves the constitutionality of the Bipartisan Campaign Reform Act (BCRA), also known as McCain-Feingold, P.L. 107-155 (H.R. 2356, 107th Cong.). Related CRS reports include CRS Report RS21551, Campaign Finance: Issues Before the Supreme Court in McConnell v. FEC, and CRS Report RL30669, Campaign Finance Regulation Under the First Amendment: Buckley v. Valeo and its Supreme Court Progeny. Background The Federal Election Campaign Act (FECA) at 2 U.S.C. §441b prohibits corporations, including non-profit corporations that are tax-exempt under the Internal Revenue Code, from using treasury funds to make direct contributions and expenditures Congressional Research Service + The Library of Congress