A federal judge in Virginia has declared unconstitutional a century-old law banning political contributions from corporations, a ruling that, if upheld, could have major implications for the rules governing campaign fund-raising and spending.
But while the ruling addressed one of the biggest issues in the ideological and partisan battle over regulating campaign donations — a question likely to be taken up at some point by the Supreme Court — the circumstances of the case left unclear how much practical and legal effect it would have.
The decision, issued Thursday by Judge James C. Cacheris of Federal District Court for the Eastern District of Virginia, did not come in one of the many legal and regulatory challenges now being mounted by proponents of loosening campaign finance restrictions. Instead, it was from the criminal trial of two Virginia businessmen accused of circumventing the law to donate tens of thousands of dollars to the Senate and presidential campaigns of Hillary Rodham Clinton.
“This was definitely something that is almost incidental in terms of the case it was decided in,” said Sean Parnell, president of the Center for Competitive Politics, a group that supports efforts to ease campaign-finance regulations.
Still, the ruling drew from and extended the reasoning in the Supreme Court’s landmark decision last year in the Citizens United case. The justices ruled in that case that the government may not ban political spending by corporations in candidate elections, but did not address the current bans on direct contributions by corporations to candidates.
In his decision, Judge Cacheris said that if corporations and people have an equivalent right to free speech under Citizens United, they also have an equivalent right to contribute to candidates, albeit within the same limits currently established by federal law.
“That logic is inescapable here,” Judge Cacheris wrote.
Federal prosecutors alleged that the two businessmen, William P. Danielczyk Jr. and Eugene R. Biagi, solicited employees of their financial firm to make campaign donations to fund-raisers hosted by Mr. Danielczyk and then reimbursed the employees with company money. Current law caps total contributions by individuals to $5,000 for each candidate in each election cycle and bans contributions from corporations and labor unions altogether.
Defense lawyers had sought to have the case dismissed, arguing that the law banning corporate contributions was itself unconstitutional in light of Citizens United. Judge Cacheris agreed.
If “corporations and human beings are entitled to equal political speech rights” under the Citizens United decision, he wrote, “corporations must also be able to contribute.”
Some election lawyers said that the decision, if upheld, could lead to the collapse of all legal limits on campaign donations, whether from corporations or individuals.
“If this case stood, it would mean the end of campaign contribution limits for everyone, because it would be so easy to get around the law through a straw or sham corporation,” said Richard L. Hasen, a law professor at the University of California, Irvine, who is helping to defend a lawsuit challenging municipal campaign laws in San Diego.
But the practical impact of the decision is unclear. Mr. Hasen and others said that Judge Cacheris’s ruling had ignored a 2003 Supreme Court decision, Federal Election Commission v. Beaumont, that upheld the ban on direct corporation contributions to federal candidates and was not specifically overturned in Citizens United.
The prosecution did not cite the Beaumont decision in its own court papers.
“It’s strange that the government didn’t bring up this controlling Beaumont case in its brief and the judge didn’t bring it up,” said Mr. Hasen, who said he expected prosecutors to file a motion asking the judge to reconsider his decision.
Peter Carr, a spokesman for the United States attorney’s office for the Eastern District of Virginia, said prosecutors were reviewing Judge Cacheris’s ruling.
