New setback to campaign-finance law

ALEXANDRIA, Va. - A U.S. judge has ruled that the campaign-finance law banning corporations from making contributions to federal candidates is unconstitutional, citing the Supreme Court's landmark

Citizens United

decision last year in his analysis.

In a ruling issued late Thursday, U.S. District Judge James Cacheris tossed out part of an indictment against two men charged with illegally reimbursing donors to Hillary Rodham Clinton's 2006 Senate and 2008 presidential campaigns.

Cacheris said that under the Citizens United decision, corporations enjoyed the same rights as individuals to contribute to campaigns.

The ruling from the federal judge in Virginia is the first of its kind. The Citizens United case had applied only to corporate spending on campaign activities by independent groups, such as ads run by third parties to favor one side, not to direct contributions to candidates.

Cacheris noted in his ruling that only one other court has addressed the issue in the wake of the Citizens United ruling. A federal judge in Minnesota ruled the other way, allowing a state ban on corporate contributions to stand.

"[F]or better or worse, Citizens United held that there is no distinction between an individual and a corporation with respect to political speech," Cacheris wrote in his 52-page opinion. "Thus, if an individual can make direct contributions within [the law's] limits, a corporation cannot be banned from doing the same thing."

In the count that was tossed out, defendants William P. Danielczyk Jr. and Eugene R. Biagi were charged with helping funnel a corporate contribution to Clinton's presidential campaign.

"Corporate political speech can now be regulated only to the same extent as the speech of individuals or other speakers," Biagi's lawyer, public defender Todd Richman, wrote in court papers.

Peter Carr, a spokesman for the U.S. attorney in Alexandria, which is prosecuting the case, said Friday that the office was reviewing the ruling. Prosecutors have the option to appeal to the U.S. Court of Appeals for the Fourth Circuit in Richmond.