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Corporate Funds and Federal Elections
Since the early 1900s, federal law has prohibited the use of corporate funds to influence federal elections. In 1907, Congress passed the Tillman Act, prohibiting corporations and national banks from contributing to federal campaigns. Forty years later, the Taft-Hartley Act banned direct election contributions by labor unions and corporations to federal elections.

In 1971, the Federal Election Campaign Act (FECA) initiated sweeping reforms by requiring full reporting of contributions to federal elections. In 1974, amendments to the FECA created the Federal Election Commission and enacted stricter limits on election contributions and expenditures.

That same year, Buckley v. Valeo challenged the 1974 FECA amendments in the U.S. Supreme Court on the grounds that they violated the First Amendment's guarantees of free speech. The Court, introducing the concept of spending money as a form of unrestricted political speech, overturned limits on campaign expenditures. However, it upheld contribution limits because such limits served the government’s interest in reducing election corruption.

Before the Massachusetts Supreme Court
In 1976, Massachusetts passed Massachusetts General Laws ch. 55 § 8, which expanded the 1974 FECA amendment's prohibitions. The new statue disallowed the use of “corporate funds to purchase advertising to influence the outcome of referendum elections, unless the corporation’s business interests were directly involved.”

That same year, Massachusetts proposed a constitutional amendment (to be voted upon in a referendum election) modifying income tax laws. The First National Bank of Boston, New England Merchants National Bank, the Gillette Co., Digital Equipment Corp., and Wyman-Gordon Co. claimed that this amendment affected their business interests and that they should be allowed to spend corporate funds on relevant advertising. The Massachusetts Attorney General's Office, applying Massachusetts General Laws. ch. 55 § 8, disagreed.

In response, the corporations sued Massachusetts Attorney General Francis Bellotti, the Coalition for Tax Reform, Inc., and United Peoples, Inc., contending that Massachusetts General Law ch. 55 § 8 was unconstitutional because it violated their right to free speech. The Supreme Judicial Court of Massachusetts heard The First National Bank of Boston & others v. Attorney General & others on June 8, 1976.

On February 1, 1977, the Massachusetts Supreme Court ruled in favor of the defendants, stating that Massachusetts General Laws ch. 55 § 8 was constitutionally applied because of a failure to find a material affect on the corporations’ business interests. The plaintiffs appealed the decision to the United States Supreme Court.

Before the Supreme Court
The U.S. Supreme Court heard First National Bank of Boston et al. v. Bellotti, Attorney General of Massachusetts, on November 9, 1977.

In oral argument, Francis H. Fox represented the appellants. E. Susan Garsh joined him on the briefs. Massachusetts Assistant Attorney General Thomas R. Kiley spoke during oral argument for the appellee. Bellotti and Asst. Attorney General Stephen Schultz joined him on the brief. Main issues addressed included corporations as persons, the scope of freedom of speech, and the power of the states.

The Associated Industries of Massachusetts, Inc. and the U.S. Chamber of Commerce filed briefs of amici curiae supporting a reversal of the lower courts’ ruling. The Federal Election Commission filed briefs of amici curiae supporting an affirmation of the constitutionality of the statue. The State of Montana, the New England Council, and the Pacific Legal Foundation also filed amicus briefs. The Northeastern Legal Foundation’s motion to file a brief was denied.