Such direct contributions have long been illegal in federal elections, and remain so. Limits on direct campaign contributions or expenditures (as opposed to "independent expenditures") have been upheld under the First Amendment, as applied to both individuals and business entities, because of the compelling governmental interest in limiting corruption or even the appearance of corruption in political elections. (Independent expenditures, whether by individuals or corporations, do not implicate this interest because of the supposed lack of an apparent quid pro quo—at least according to the Supreme Court.)
In Citizen United, the Supreme Court struck down limitations on the ability of corporations and labor unions to make certain independent expenditures to candidates for federal office. Previously, such expenditures had to be routed through political action committees; now they can be made out of general treasury funds.
Mr. Gillette and I have previously pondered whether this change in the way that corporations and unions can spend their money (out of their general funds, rather than through PACs) would really change how much they spend in attempts to influence elections. Particularly because PACs may allow corporation to spend money on politics without alienating potential customers who may disagree with the corporation's preferred policies.
