By James Vicini
WASHINGTON (Reuters) - The U.S. Supreme Court on Monday followed up on its 2010 ruling that unleashed corporate spending in federal elections, reversing a decision that upheld a century-old Montana law restricting business political campaign expenditures.
By a 5-4 vote, the high court ruled for three corporations - a political advocacy group called American Tradition Partnership Inc, a nonprofit that promotes shooting sports and a small family-owned painting business - that challenged the law for violating their free-speech rights.
In 2010, by a 5-4 vote in splitting along conservative-liberal ideological lines, the Supreme Court gave corporations the constitutional free-speech right to spend freely to support or oppose political candidates in federal elections, a ruling sharply criticized by President Barack Obama.
The decision two years ago has triggered a massive increase in campaign spending that affected the elections for Congress in 2010 and has reshaped the political races ahead of the November 6 presidential and congressional elections.
The Montana Supreme Court upheld the state law, ruling the 2010 decision did not control the outcome because Montana's law was different and justified by the state's interest in preventing corporate corruption and influence in politics.
The state court cited Montana's history when the voter-approved law was adopted in 1912, with mining and other corporate spending resulting in political corruption.
Attorneys for the three corporations appealed to the Supreme Court, arguing that Montana was bound by the 2010 ruling and that it applied to state as well as federal elections.
James Bopp, lead attorney for the corporations, said when he filed the appeal, "If Montana can ban core political speech because of Montana's unique characteristics, free speech will be seriously harmed. Speakers will be silenced because of corruption by others over a century ago."
The Supreme Court summarily ruled for the corporations in a brief opinion and reversed the ruling of the Montana Supreme Court.
The four liberal justices dissented. Justice Stephen Breyer wrote that the court should reconsider the 2010 ruling, or at least its application in this case.
Montana Attorney General Steve Bullock opposed the appeal.
"As Montana's history attests, corporate independent expenditures can corrupt," he wrote in a brief filed with the Supreme Court. "No state in the union has detailed a more compelling threat of corruption by corporate campaign expenditures than Montana."
The Supreme Court in February put on hold the state court ruling while it considered the appeal.
Liberal Justice Ruth Bader Ginsburg, joined by Justice Stephen Breyer, wrote in February that the Montana case provided the court with the chance to reconsider the 2010 ruling in view of the huge amounts of money being spent to "buy candidates' allegiance."
Obama criticized the 2010 ruling in his State of the Union address that year, with a number of Supreme Court justices present. Many of Obama's fellow Democrats in Congress also have opposed the ruling.
Some Republicans, including Senate Republican leader Mitch McConnell of Kentucky, have praised the ruling. McConnell filed a brief with the Supreme Court supporting the challenge to the Montana law.
Senators John McCain, the unsuccessful Republican presidential candidate in the 2008 race against Obama and a longtime supporter of campaign finance laws, and Sheldon Whitehouse, a Rhode Island Democrat, supported Montana.
Montana was also backed by 22 states while the three corporations received the support of the U.S. Chamber of Commerce business group.
The Supreme Court case is American Tradition Partnership Inc v. Steve Bullock, attorney general of Montana, No. 11-1179.
(Reporting By James Vicini; Editing by Will Dunham)