North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
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May 11, 1978

Subject:

Elections; Expenditures in Support of or in Opposition to Referendum Issue by Corporations;

G.S. 163-269; G.S. 163-270; G.S. 163-278.19.

Requested By:

Rep. Ben Tison Post Office Box 120 Charlotte, N.C. 28201

Question:

May a corporation make expenditures to express its voices in support of or in opposition to referendum issues?

Conclusion:

Yes. The First Amendment of the U.S. Constitution protects the right of a corporation to express its views on public issues submitted by referendum to the voters.

G.S. 163-269, G.S. 163-270 and G.S. 163-278.19 prohibit corporations, insurance companies and other business entities from making contributions or expenditures in aid of or on behalf of any candidate, campaign committee, political committee or for any political purpose whatsoever. (Emphasis added.)

In a prior opinion of this Office, the view was expressed that a corporation could not expend funds in support or opposition of issues submitted to a referendum in light of the above statutes and opinions of courts in other jurisdictions which construed statutes containing the words "or for any political purpose whatsoever."

The Supreme Court of the United States, in the case of First National Bank of Boston et al v. Bellatti, decided April 26, 1978, held that the expression of views on an issue of public importance is at the heart of the First Amendment and struck down that portion of a Massachusetts statute which prohibited specified business corporations from making contributions or expenditures "for the purpose . . . of influencing or affecting the vote on any question submitted to the voters, other than one materially affecting any of the property, business or assets of the corporation."

Although North Carolina does not have a statute similar in language to the Massachusetts statute, it is the view of this Office that the words "or for any political purpose whatsoever" appearing in

G.S. 163-269, 270 and 278.19 should not be construed as prohibiting a corporation from making contributions or expenditures for the purpose of influencing or affecting the vote on issues submitted to the voters by expression of corporate views.

The Supreme Court states: "The freedom of speech and of the press guaranteed by the Constitution embraces at the least the liberty to discuss publicly and truthfully all matters of public concern without previous restraint or fear of subsequent punishment. . . . Freedom of discussion, if it would fulfill its historic function in this nation, must embrace all issues about which information is needed or appropriate to enable the members of society to cope with the exigencies of their period." Thornhill v. Alabama, 310 US 88, 101-102 (1944).

The Court further stated that the question before it was whether the statute abridges expression that the First Amendment was meant to protect and held that it did. Thus, the fact that the corporation wanted to expend funds to express its views on a public issue submitted to the voters, did not remove such expression from the protection of the First Amendment.

We conclude that a corporation may expend its funds to express its views on referendum issues which are submitted to the voters and that such right of expression is protected by the First Amendment to the United States Constitution.

The prior opinion of this Office to the State Board of Elections, dated July 20, 1977 giving a different interpretation to the North Carolina statutes referred to herein, is superseded as to that portion thereof dealing with corporate contributions or expenditures on referendum issues.

Rufus L. Edmisten Attorney General

James F. Bullock Senior Deputy Attorney General