CAP Praises Montana’s Citizens United Challenge via Initiative 194 Passage

Starting Jan. 1, 2027, corporations, trade associations, and nonprofits doing business in Montana will no longer hold the legal power to spend money supporting or opposing political candidates or ballot initiatives in the state — a direct challenge to the framework the Supreme Court built in its 2010 Citizens United ruling, and a change that could cost violating organizations their limited liability protections. Montana voters approved the measure, Initiative 194, also known as the Montana Plan, on Tuesday, making Montana the second state after Hawaii to redefine corporate law this way, the Center for American Progress reported.

The initiative does not ban corporate political spending outright. Instead, it rewrites the powers Montana grants to the corporations and other “artificial persons” it charters, limiting them to only those powers that are “necessary and convenient” to do business. Political spending would no longer be among them. The measure applies to entities that do business or hold property in Montana, while exempting political action committees, news and editorial content, and individuals. Organizations that violate it would forfeit the privileges Montana grants them to operate in the state — including limited liability, which shields owners from personal responsibility for business debts — according to Yahoo.

CAP Praises Montana’s Citizens United Challenge via Initiative 194 Passage — Photo: yahoo.com

A Redefinition, Not a Ban — and That Is the Legal Gambit

The entire strategy rests on a distinction its architect insists is semantic in name only. Tom Moore, a senior fellow at the Center for American Progress and a former chief of staff to FEC Commissioner Ellen Weintraub, devised the legal theory behind the Montana Plan and told Fortune that states have authority over what corporations can do through corporate law.

“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.

Moore described I-194 as cutting off a route wealthy donors use to hide their identities: giving money to a nonprofit that funnels it to a PAC, which then reports the nonprofit — not the person — as the donor. “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.” Individuals can still donate directly.

Montana's plan to beat Citizens United could reshape political spending

“The people of Montana have taken a historic step toward ending the scourge of corporate and dark money in politics,” he said in the statement the Center for American Progress released. “These pioneering states are setting a bold example for other states to follow suit, sending a powerful message that we don’t have to give corporations unlimited power.” The center said it helped spark the campaign that the Transparent Election Initiative carried to victory.

Why Opponents Say It Won’t Survive Court

Bradley Smith, a former FEC chairman and professor at Capital University Law School, told Fortune that states cannot sidestep the First Amendment by relabeling political spending as a corporate power rather than a right.

One year ago, the Corporate Power Reset, CAP's novel legal strategy to undo Citizens United, was just an idea. Today, it's the law in Hawaii, likely to pass in Montana this November, and poised to move forward in 30+ other states next year. Learn more about the strategy to get… pic.twitter.com/oxlrkSwPOJ

— https://x.com/amprog/status/2099929021916098599

Bradley Smith, a former FEC chairman and professor at Capital University Law School, said states can set rules for corporations, but they cannot make them surrender constitutional protections in exchange for the benefits of incorporation. He said, “The Supreme Court isn’t engaged in a semantic game,” and “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.”

Smith’s position is that states can set rules for corporations, but they cannot make them surrender constitutional protections in exchange for the benefits of incorporation. That is the central legal question the measure will almost certainly face: whether stripping a power the state never had to grant is meaningfully different from taking away a right the First Amendment protects. FEC lays out the 2010 decision that sixteen years ago held corporations have a First Amendment right to spend money to influence elections — the precedent I-194 is built to sidestep.

Montana’s Century-Old Fight With Corporate Money

This is not Montana’s first attempt to curb corporate influence in its elections. In 1912, Montanans passed the Corrupt Practices Act by initiative with 76% of the vote, angry at the political power of mining giant Amalgamated Copper, years after the state’s mining magnates had turned their wealth into political control. The parallel is deliberate: I-194’s backers framed the vote as the same kind of citizen-led pushback, a century later, against concentrated economic power in politics.

The law takes effect Jan. 1, 2027, giving Montana officials just over a year to implement the new corporate-charter rules before the first election cycle runs under them. Montana is now the second state after Hawaii to redefine corporate law, setting a bold example for other states to follow in the effort to make Citizens United irrelevant.