The Unenforceable Corrupt Contract: Corruption and Nineteenth Century Contract Law

Introduction

In Citizens United v. FEC, the majority in the U.S. Supreme Court purported to close the debate about corruption in campaign finance law. After decades of debate, the Court decisively rejected a broad understanding of corruption in favor of a narrow one, holding that only quid pro quo corruption could justify campaign finance regulation that infringed on First Amendment rights.

The decision was a bombshell. While some commentators had predicted that the Court might continue to whittle away at Congressional power to pass laws restricting corporate electoral activity, the case was decided on the broadest possible grounds. It overturned thirty years of direct precedent and opened the possibility that foreign entities might be able to spend money to influence elections.

However, the Court in Citizens United left open a few opportunities forgreater exploration. Justice Kennedy, who authored the majority opinion, heavily emphasized the criminal nature of the sanctions against corporate political speech. Yet, outside of criminal law, different tools could potentially be used todiscourage private companies from trying to use their wealth to influence public bodies for private advantage. What if, instead, Congress limited the jurisdiction of courts over certain contracts that it deems corrupt? What if, for example, Congress did not criminalize independent corporate expenditures, but directed courts not to enforce contracts related to independent expenditures? Similarly, what if Congress did not try to limit certain kinds of lobbying through criminal law, but simply refused to enforce contracts to lobby?

Public corruption is hardly a new phenomenon, and policymakers have long struggled to find an effective mechanism to deter or punish corruption. While we have recently tried to deal with public corruption through legislation aimed atreducing its incidence, nineteenth century policymakers adopted a very different tactic. In the nineteenth century, courts used contract law to discourage public corruption by refusing to enforce contracts that they deemed corrupt. Just as they would refuse to enforce contracts for prostitution, they would refuse to enforce contracts between public servants and private entities that undermined the integrity of representative government. In the most striking instance of thispractice, the U.S. Supreme Court refused to enforce a contract to lobby Congress, holding that it was a clearly corrupt practice and against the public policy of the United States. Thus, contrary to Justice Kennedy’s view in Citizens United, cases that uphold limits on campaign spending are not outliers, but rather are consistent with generations of cases that recognized the public danger of money having too much influence in politics.

Citizens United‘s blanket prohibition on Congressional criminalization of corporate spending requires us to think more imaginatively. If we take Kennedy’s repeated reference to criminal liability seriously, we might fruitfully explore ways to revive the use of judicial nonenforcement of contracts to discourage corruption in our electoral system. The ad hoc nineteenth century practice of refusing to enforce contracts to sell public obligations provides an intriguing possibility for exploration. These ideas involve real difficulties, and I explore the likely objections in the body of the Article. What is most appealing about nineteenth century courts’ approach to corruption is that it offers the possibility to move the debate outside the framework of criminal law and instead wield the power of civil law to dissuade behavior that distorts democratic self-governance. My goal is to spark discussion and open the range of options available to Congress–and, in doing so, to continue in a larger project of exploring the relationship between courts and public corruption.

This Article introduces some of these nineteenth century practices regarding corruption and suggests that they might shed light on new ways to think about dealing with money and politics after Citizens United. It is not intended as a comprehensive review, but as a provocative exploration of a vastly different way of thinking about courts and corruption. This Article’s primary goal is descriptive. It illustrates that, even prior to modern statutory campaign finance law, courts would use their power to refuse to enforce contracts to limit the power of money in the political sphere. In doing so, this description augments Justice Stevens’ dissenting argument in Citizens United that courts should give great weight to corruption concerns.

Part I briefly outlines Citizens United, with an emphasis on how the Court addresses corruption and the case’s focus on criminal liability. Part II outlines the scope of the private law of corruption as it existed in the nineteenth century and features three cases exemplifying the use of private law to limit corruption. In Part III, I attempt to connect the nineteenth century model to the modern puzzle of campaign finance law, arguing that private law has the advantage ofdiscouraging political behavior while not prohibiting it, potentially avoiding some of the First Amendment concerns raised by modern campaign finance legislation. Ultimately, I hope that the different way that nineteenth century courts dealt with political corruption is so striking that it ignites the imaginations of scholars and politicians struggling with ways to limit government capture.

Suggested Reading

Citizens United and Equality Forgotten

Citizens United is simply the culmination of the Court's narrow view of campaign finance, elevating individual speech rights and extending them to corporation sand unions at the expense of the broad, egalitarian conception of the American republic.