Lawsuit Challenges Montana's New Ban on Corporate, Union, and Nonprofit Spending on Elections
The Institute for Free Speech argues that the measure circumvents the Supreme Court's Citizens United ruling and violates organizations' First Amendment rights.
An organized effort to circumvent the Supreme Court's ruling in Citizens United v. Federal Election Commission (2010) is gaining traction nationwide. It's also drawn a legal challenge in Montana.
On Tuesday, Montana voters passed I-194. This citizen-initiated ballot measure amends the state statute to prohibit "artificial persons" from spending "money or anything of value to support or oppose the outcome of a vote of the electorate." Artificial persons can be nonprofits, trusts, partnerships, corporations, trade associations, unions, and unincorporated associations. The prohibition extends to any entity doing business in Montana.
The initiative's text copies much of a similar law Hawaii passed in August, which stripped corporations operating in the state of their "power to spend money or contribute anything of value to influence elections or ballot measures." Under Montana's I-194, the "absence of political spending power" is now a condition for any entity seeking "state-conferred legal status and charter privileges." The statute would force every corporation looking to support or oppose a cause in Montana to funnel its money through a political committee.
The Frontier Institute, the Frontier Action Fund, the Montana Family Foundation, and the Montana Republican State Central Committee are now challenging the statute in court. "This law attempts to accomplish indirectly what the Constitution expressly forbids: silencing organizations that engage in political advocacy," said Owen Yeates, senior attorney at the Institute for Free Speech, the nonprofit that filed the lawsuit on behalf of those organizations.
The Institute for Free Speech—which is also leading the challenge against Hawaii's law—filed the lawsuit Tuesday in the U.S. District Court for the District of Montana. It seeks to block the state from enforcing I-194. It asks the district court to declare the statute "unconstitutionally void and unenforceable, as it violates the First Amendment rights of speech, association, petition, assembly, and the press."
The lawsuit argues that I-194 "denies the individuals constituting these groups—especially those not in the majority or not already exercising public instruments of power—the ability to pool their resources, and thus the ability to influence policy." The lawsuit quotes directly from the Supreme Court's opinion in Citizens United, alleging that I-194 "diminishes" Montanans' right to "inquire, to hear, to speak, and to use information to reach consensus," which the Court recognized as a "precondition to enlightened self-government and a necessary means to protect it."
Indeed, Montana's statute appears to run afoul of the Court's ruling in Citizens United, which states that "no sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations." However, the initiative's authors claim they aren't trying to "overturn or eliminate or violate" Citizens United; they only want to make it "irrelevant."
The Transparent Election Initiative (TEI), a nonprofit founded in 2025, led the ballot measure effort in Montana. The organization is the brainchild of Tom Moore, a senior fellow at the progressive think tank Center for American Progress who helped draft Hawaii's law, and Jeff Mangan, the former Montana commissioner of political practices.
With the statute's passage, Montana joins Hawaii as one of only two states to successfully enact a law redefining corporations as entities without the power to spend money or contribute anything of value in politics. That might not be the case for long.
Legislatures in at least 15 other states, including California, North Carolina, and Pennsylvania, are considering or have considered similar bills to strip corporations of their ability to spend money on politics. TEI's central argument is that "wealthy special interests wield outsized influence" on the nation's politics, leaving "ordinary Americans" outside the political process. Yet the group's most prominent supporters are a cadre of political elites, including two former Montana governors, a former Montana senator, Rep. Alexandria Ocasio-Cortez (D–N.Y.), and former Transportation Secretary Pete Buttigieg.
TEI also received the single largest donation on either side of the campaign: a $722,300 cash contribution from Samantha Walton, wife of billionaire Walmart heir Lukas Walton. The organization may not believe in the current system, but it's certainly willing to exploit it.
On its website, TEI concedes that "organized political campaigning" is a requirement to "qualify for and succeed at the ballot box." Still, it's working in earnest to prevent other organizations from exercising the same constitutional rights. Barring an injunction, the law will take effect on January 1, 2027.
