William L. Kovacs

October 5, 2026

Montana enacted its Corrupt Practices Act in 1912 to restrict corporate political spending. It followed Citizens United, and the Supreme Court upheld the prohibition, citing the state’s history of regulating corporate influence. These events illustrate how state controls interact with federal oversight over campaign finance.

In 2012, the U.S. Supreme Court reversed that decision in American Tradition Partnership v. Bullock, finding it not meaningfully distinct.

The legacy of these laws shows the tension in safeguarding democratic processes.

On November 3, 2026, the People of Montana will decide whether they are brave enough to challenge corruption inherent in an unlimited supply of money in politics. If they say “Yes,” they will create a framework for every state in the Union to limit corporate campaign expenditures, dark money, and their corrupting influence on politics.

Montana Initiative No. 194 (I-194) finds that “all political power is inherent in the people and that corporations and other artificial persons are creations of statute that exist only by virtue of powers affirmatively extended by the state”. If passed, Montana will be the first state to prohibit political spending by all corporations incorporated or doing business in Montana.

The penalty for corporations that violate the law is forfeiture of their corporate charter and all powers the state granted them, such as limited liability, perpetual duration, and the right to continue under the same name.

According to the official Montana ballot description, I-194 qualified for the November 2026 ballot on August 17. It applies broadly to artificial persons, including corporations, nonprofits, trusts, partnerships, trade associations, and unincorporated associations.

Montana is not merely proposing a restrictive and innovative campaign-finance measure. It is returning to a constitutional dispute it previously lost, this time through a different legal mechanism.

The 2012 U.S. Supreme Court dissent is particularly relevant. Justice Breyer, joined by Justices Ginsburg, Sotomayor, and Kagan, questioned whether the majority’s conclusion about independent expenditures should override Montana’s factual findings concerning corruption.

The legal question is whether withholding a state-created corporate power differs constitutionally from prohibiting the exercise of an existing First Amendment right.

Supporters argue that it does, since states create corporations and their powers come only from the state. The competing argument is that a state cannot evade constitutional protection simply by characterizing protected speech as an unauthorized corporate act.

The Supreme Court has debated the extent of corporate power since Daniel Webster argued The Trustees of Dartmouth College v. Woodward in 1819. The court found corporations to be artificial beings, invisible, intangible, and existing only in contemplation of state law. It never addressed a corporation’s constitutional rights, but for two centuries the corporate community continued to assert that it had many of the same constitutional rights as a human person. Obviously, it did not have the right to vote, but it had the right to speak. And to speak, it needed to spend money.

Polls find that 79% of Americans believe the unregulated and unlimited amount of corporate money in politics gives rise to corruption or the appearance of corruption.

For decades, Congress had prohibited corporations and labor unions from making independent expenditures that advocate for or against candidates.

In 2010, the U.S. Supreme Court, in Citizens United v. the Federal Election Commission, held political speech is indispensable.

Moreover, the First Amendment cannot limit speech based on the speaker’s status.

That ruling unleashed billions in corporate independent expenditures for campaign ads.

Additionally, “dark money” cannot be traced to a contributor.

Citizens United, however, ignored the substantial differences between a natural citizen and an artificial corporation.

A citizen has a finite lifespan, limited resources, and one vote. A corporation may exist perpetually, accumulate enormous amounts of capital, operate across national boundaries, and aggregate the economic resources of thousands or millions of shareholders, customers, and employees. Directors and executives ordinarily select its political position, not a vote by every person whose money contributes to the corporation’s wealth.

Corporations also benefit from state-created attributes unavailable to individuals: perpetual succession, limited liability of their owners, centralized management, transferable ownership, and the ability to amass resources over generations.

Those advantages may be economically useful. But when combined with the right to make unlimited constitutionally protected political expenditures, they produce political power that no ordinary citizen can match. Corporations may exercise greater practical power in the political marketplace because their speech is backed by concentrated and potentially unlimited capital.

What is most troubling about Citizens United is not that the Supreme Court failed to recognize the differences between natural persons and corporations. It is that the majority declined to give those differences controlling constitutional significance when determining whether corporate political expenditures could be restricted.

Montana’s initiative presents several constitutional questions that reach far beyond campaign finance. If corporations exist by virtue of state law, to what extent may a state define the powers and privileges it grants them?

The Supreme Court has already rejected Montana’s earlier effort to prohibit corporate independent expenditures. I-194 approaches the controversy differently. Rather than simply prohibiting political spending, it seeks to exclude political spending from the powers the state confers upon artificial persons, the corporations.

Whether that distinction is constitutionally meaningful remains unresolved.

The competing constitutional principles are substantial. The First Amendment protects political expression, including expression by associations of individuals. States, however, have historically possessed broad authority to create corporations and define their legal powers and privileges.

The question is whether that authority extends to withholding corporate political-spending powers without violating the constitutional protections recognized in Citizens United.

Montana’s initiative brings those principles into direct conflict. Its eventual judicial treatment could clarify not only the constitutional limits of campaign-finance regulation but also the relationship between corporate charters, state authority, and the First Amendment.

If Montana prevails, states will have a mechanism to control unlimited corporate expenditures and dark money in politics. If Montana fails, corporate lobbyists have another mechanism to limit states’ power to control corporations that exist only by state law.

Montana faces an immense challenge because a majority of the Supreme Court has found that unregulated, unlimited corporate expenditures for political ads supporting or opposing candidates do not create corruption or even the appearance of corruption. More cynically, the court does not believe that the appearance of corporate money, influence, or access should cause the electorate to lose faith in democracy. Montanans may have more common sense than the court, but the court determines what the law is, even when it fosters corruption.

William L. Kovacs served as senior vice president for the U.S. Chamber of Commerce and chief counsel to a congressional committee. His books include: Congress: An Irrelevant Institution or Guardian of the Republic, Reform the Kakistocracy, the recipient of the 2021 Independent Press Award for Social/Political Change, and  Devolution of Power. He can be contacted at [email protected]