Montana voters weigh bid to limit corporate election spending

Initiative 194, known as the Montana Plan, would strip entities doing business or holding property in the state of the power to spend money on elections by limiting their granted powers to only those “necessary and convenient.” Organizations that violate the restriction would forfeit privileges such as limited liability, which protects owners from personal responsibility for business debts. The measure exempts news and editorial content.

The push is the latest chapter in Montana’s century-old fight against corporate influence in politics. In 1912, Montanans passed the Corrupt Practices Act with 76 percent of the vote, angered by the political power of mining giant Amalgamated Copper. The Supreme Court struck down that law in 2012’s American Tradition Partnership v. Bullock, ruling it conflicted with Citizens United.

Moore argues I-194 gets around the 2010 Supreme Court decision because it does not ban an existing right but instead redefines what powers the state grants corporations in the first place. Tom Moore, a former chief of staff to FEC Commissioner Ellen Weintraub and a senior fellow at the Center for American Progress who devised the legal theory behind the plan, told Fortune: “When the state creates a corporation, it is starting from nothing and deciding what to give the corporation, and no case has ever held that they have to give local spending power to a corporation.” He called the approach “redefinition” rather than regulation. Moore said he believes the measure would shut down dark-money spending by preventing wealthy donors from laundering money through nonprofits and trade associations, though individuals, including Elon Musk, could still write large checks directly.

Opponents say the distinction between banning corporate political giving and exercising political rights is blurry. Bradley Smith, a former FEC chairman and professor at Capital University Law School, told Fortune: “The Supreme Court isn’t engaged in a semantic game.” Smith said states cannot make corporations surrender constitutional protections in exchange for the benefits of incorporation. “The core centerpiece undoubtedly is we’re going to deny all corporations in the state the right to speak about political affairs and about political candidates, and that’s just going to fail,” he said.

Montana is not acting alone. Hawaii enacted a similar law, Act 11, in May, and it now faces two federal lawsuits, one from the U.S. Chamber of Commerce and another from the Grassroot Institute of Hawaii, which the Institute for Free Speech, an organization Smith founded, represents. Those cases could help determine whether states may use corporate law to restrict political spending despite Citizens United. Moore expects the issue to reach the Supreme Court. If voters approve I-194, it would take effect January 1, 2027, unless a court blocks it.