- Associated Press - Thursday, June 16, 2011

Federal prosecutors appealed a judge’s ruling that prompted howls of protest from advocates of campaign-finance reform when he declared the law that bans corporate contributions to federal candidates is unconstitutional.

Prosecutors in Alexandria filed the appeal Thursday in a case against two Northern Virginia residents accused of illegally funneling contributions to Hillary Rodham Clinton’s Senate and presidential campaigns.

Last month, U.S. District Judge James Cacheris tossed out part of the indictment against defendants William P. Danielczyk Jr. and Eugene R. Biagi, officers with a corporation called Galen Capital Group.

Judge Cacheris said corporations such as Galen enjoy the same right to make contributions as individuals under last year’s landmark Citizens United ruling from the Supreme Court. Judge Cacheris reaffirmed his ruling earlier this month, though he emphasized that the law was unconstitutional only as applied in this case.

Prosecutors have said Judge Cacheris‘ ruling overturns a century’s worth of campaign-finance law.

Mr. Danielczyk and Mr. Biagi, both of Oakton, are accused of skirting the limits on campaign contributions by using corporate funds to reimburse Galen employees for donations they made to attend fundraisers that Mr. Danielczyk hosted for the Clinton campaigns.

Judge Cacheris allowed charges to go forward on making contributions in other people’s names, but he tossed out the part of the indictment charging a violation of the ban on corporate contributions.

“For better or worse, Citizens United held that the First Amendment treats corporations and individuals equally for purposes of political speech,” Judge Cacheris wrote. “This leaves no logical room for an individual to be able to donate $2,500 to a campaign while a corporation like Galen cannot donate a cent.”

Peter Carr, a spokesman for U.S. Attorney Neil MacBride, declined to comment Thursday except to confirm that the appeal was filed. Todd Richman, a federal public defender representing Mr. Biagi, declined to comment on details of the case but said he looks forward to defending the ruling on appeal.

Critics said Judge Cacheris overstepped his authority and misread Citizens United. Judge Cacheris ordered both sides to prepare additional briefs so he could reconsider his decision but ultimately left his initial ruling in place.

In his subsequent opinion, though, Judge Cacheris took care to point out that corporations still would be subject to the same limits on contributions that are imposed on individuals. Citizens United, meanwhile, allows corporations to make unlimited contributions for independent political expenditures that are made separately from an individual candidate’s political campaign, like issue advocacy campaigns.

The ruling is not binding on other federal judges. It now goes to the 4th U.S. Circuit Court of Appeals in Richmond. A briefing schedule has not yet been set.

The 8th U.S. Circuit Court of Appeals in St. Louis last month upheld the corporate contribution ban, though a concurring judge said the Citizens United case leaves the ban on constitutionally shaky ground.



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