Montana Votes to Strip Corporations of Election Spending Power

Montana voters are deciding Tuesday whether to strip corporations, nonprofits and trade associations of the power to spend money on state elections — a direct challenge to the Supreme Court's 2010 Citizens United ruling, sixteen years after that decision.

Initiative 194, branded the Montana Plan, would remove political spending from the toolkit of what it calls "artificial persons." Rather than banning corporate donations outright, the initiative narrows the powers Montana grants entities that do business or hold property in the state to only those "necessary and convenient." The penalty for violation is steep: organizations would forfeit state-granted privileges, including limited liability — the legal shield that protects owners from personal responsibility for business debts.

PACs, news and editorial content, and individuals are exempt. That last carve-out matters, because it signals what the measure actually targets.

What does the initiative actually change?

The legal theory behind the Montana Plan comes from Tom Moore, a former chief of staff to FEC Commissioner Ellen Weintraub and now a senior fellow at the Center for American Progress. His argument rests on corporate law, not election law: states define what corporations can do in the first place.

"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," Moore said.

The distinction, in his framing, is between withdrawing a granted power and banning an existing right. "It's not regulation; it's redefinition," Moore said.

He said I-194 would shut down dark money routes. Today, a donor can give to a nonprofit, which funnels the money to a PAC; the PAC then reports the nonprofit as the donor, not the person behind it. Moore said the measure cuts off that laundering channel while leaving individuals free to give.

"This is not going to stop Elon Musk from writing a big fat check to some election in Montana," Moore said. "What it will stop them from doing is laundering the money through a dark money group."

The promise of transparency comes with a caveat: nothing in the initiative restricts what individuals themselves can spend, so unlimited personal money in Montana elections would remain untouched.

Why critics say it will fail

Opponents call the redefinition argument a semantic dodge. Bradley Smith, a former FEC chairman and professor at Capital University Law School, said states cannot sidestep the First Amendment by relabeling political spending as a corporate power.

"The Supreme Court isn't engaged in a semantic game," Smith said.

States can set rules for corporations, Smith said, but they cannot make entities surrender constitutional protections in exchange for the benefits of incorporation. His prediction is blunt.

"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.

Smith has skin in this fight beyond the classroom: he founded the Institute for Free Speech, which is representing a plaintiff suing Hawaii over similar legislation.

Has Montana tried this before?

Yes — more than a century ago. In 1912, Montana voters passed the Corrupt Practices Act by initiative with 76% of the vote, angered by the political grip of mining giant Amalgamated Copper after the state's Copper Kings had bribed state legislators.

That law barred corporate election spending until the Supreme Court struck it down in American Tradition Partnership v. Bullock in 2012, ruling it conflicted with Citizens United. Montana's current attempt is built on different legal ground — corporate powers rather than election regulation — precisely because the earlier route failed.

Is this part of a broader movement?

Montana is not alone. Hawaii enacted a similar law, Act 11, in May. It now faces two federal lawsuits: one from the U.S. Chamber of Commerce and another from the Grassroot Institute of Hawaii, represented by Smith's Institute for Free Speech.

Those cases could determine whether the corporate-law strategy survives judicial review — a question I-194's drafters cannot answer yet.

Moore expects the issue to reach the Supreme Court, whether through I-194 or the Hawaii litigation. If Montana voters approve the initiative, it takes effect January 1, 2027, unless a court blocks it first. Given the legal challenges already queued up, that effective date looks more like the start of a courtroom fight than the end of one.