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US v Danielczyck Reconsideration Opinion

US v Danielczyck Reconsideration Opinion

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Published by Paul Prados
Reconsiderration of opinion applying Citizens United
Reconsiderration of opinion applying Citizens United

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Published by: Paul Prados on Jun 07, 2011
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06/07/2011

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1IN THE UNITED STATES DISTRICT COURT FOR THEEASTERN DISTRICT OF VIRGINIAAlexandria DivisionUNITED STATES, ))v. ))WILLIAM DANIELCZYK, Jr., &EUGENE BIAGI,))1:11cr85 (JCC))Defendants. )
 M E M O R A N D U M O P I NI O N
 The issue before the Court is whether, in the wake of
Citizens United v. FEC 
, 130 S. Ct. 876 (2010), Defendants can becharged with directing corporate money to a political campaign.Finding that
Citizens United 
precludes such charges, on May 26,2011, this Court dismissed Count Four and Paragraph 10(b) of theIndictment. [Dkts. 60, 62.] Following that decision, becausethis Court “owes no deference to itself”
1
and can correct its ownopinions, this Court requested additional briefing and argumentas to whether, in light of
FEC v. Beaumont
, 539 U.S. 146 (2003),and
Agostini v. Felton
, 521 U.S. 203 (1997), this Court shouldreconsider its ruling. [Dkt. 63.] The Governmentcontemporaneously moved for reconsideration on the same grounds.[Dkt. 68.]
1
 
Vosdingh v. Qwest Dex, Inc.
, No. Civ. 03-4284, 2005 WL 1323007, at *1 (D.Minn. Jun. 2, 2005).
Case 1:11-cr-00085-JCC Document 73 Filed 06/07/11 Page 1 of 15
 
2Having considered the positions of parties and amici,this Court will deny the Government’s motion except to clarifythat 2 U.S.C. § 441b(a)’s flat ban on direct corporatecontributions to political campaigns is unconstitutional asapplied to the circumstances
of this case
, as opposed to beingunconstitutional as applied to all corporate donations.
2
 
I. Analysis
The Government alleges that Mr. Danielczyk, asChairman of Galen Capital Group, LLC, and Galen CapitalCorporation (together, “Galen”), and Mr. Biagi, as a Galenexecutive, subverted federal campaign contribution laws byreimbursing their employees’ costs of attending two fundraisersMr. Danielczyk co-hosted for Hillary Clinton’s 2006 Senate and2008 Presidential campaigns. Count Four of the Indictment [Dkt.1] charges Defendants with directing contributions of corporatemoney to Hillary Clinton’s 2008 Presidential Campaign inviolation of 2 U.S.C. § 441b(a) of the Federal Election CampaignAct of 1971 (“FECA”), which prohibits direct corporatecontributions to federal campaigns.
3
 Defendants claim that, under the logic of
CitizensUnited 
, the corporate direct donations ban violates the First
2
Although this Court is denying the Government’s motion, to the extent thereis any inconsistency between this Memorandum Opinion and Part C of theCourt’s May 26, 2010 Memorandum Opinion [Dkt. 60], this Opinion supersedesPart C.
3
 
This alleged corporate donation is also listed in Count One, Paragraph 10(b),as an object of Defendants’ alleged conspiracy under 18 U.S.C. § 371.
 
Case 1:11-cr-00085-JCC Document 73 Filed 06/07/11 Page 2 of 15
 
3Amendment and that Count Four and Paragraph 10(b) must thereforebe dismissed. The Government responds that
Citizens United’s
 ruling is limited to independent political expenditures, asopposed to direct campaign contributions, and that theconstitutionality of the corporate direct donations ban is asettled question under
FEC v. Beaumont
, 539 U.S. 146 (2003).To review,
Citizens United 
involved a nonprofitcorporation that produced a highly critical film about HillaryClinton during her 2008 presidential campaign. Because the filmwas in effect “a feature-length narrative advertisement thaturges viewers to vote against Senator Clinton,” it was subjectto 2 U.S.C. § 441b’s provision barring corporations or unionsfrom making
independent expenditures
as defined by 2 U.S.C. §431(17) or expenditures for “electioneering communications” asdefined by 2 U.S.C. § 431(f)(3). The Supreme Court held the banunconstitutional because it found that independent expendituresdo not trigger the government’s interest in preventing
quid proquo
corruption or its appearance.This
 
ruling stemmed largely from the Supreme Court’sopinions in
Buckley v. Valeo
, 424 U.S. 1 (1976), and
FirstNational Bank of Boston v. Bellotti
, 435 U.S. 784 (1978).
Buckley 
involved FECA’s limits on
direct
campaign contributionsand on
independent
election-related expenditures. Dealing firstwith direct contribution limits, the Court found a “sufficiently
Case 1:11-cr-00085-JCC Document 73 Filed 06/07/11 Page 3 of 15

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