Imagine a corporation wants to spend $10 million to defeat a political candidate. Under the Supreme Court's landmark 2010 Citizens United ruling, it can spend as much as it wants provided it doesn't coordinate with the candidate's campaign.
On Tuesday, Montana voted to change that.
In a state President Donald Trump won by nearly 20 points in 2024, roughly 65% of Montanans voted to approve Initiative 194 – the "Montana Plan" – embracing a novel legal strategy to curb corporate political spending. If states cannot restrict political speech under Citizens United, can they instead strip corporations of the power to spend money on elections?
The vote follows a record $11.87 billion in political advertising nationwide this election cycle that was split about evenly between the two parties, according to media tracking firm AdImpact.
The voter-approved measure is set to become state law on Jan. 1 in a state where voters can make law via ballot initiatives. Montana's Republican-controlled legislature could amend or repeal it, though if that happens, proponents have pledged to take the fight back to voters in 2028.
Now, Montana is poised for a constitutional showdown that could reach the nation's highest court. If the strategy survives, it could provide a replicable blueprint for restricting corporate political spending across the country. Similar measures are being explored in more than 30 states.
"If a single state can successfully deny corporate power over elections, it proves that Citizens United wasn't the final word on democracy, and we will continue battling," said Tom Moore, a former Federal Election Commission official and current senior fellow at the Center for American Progress who helped develop the Montana Plan.
How the law works
The Montana Plan hinges on a legal distinction: Corporations may have constitutional rights, but their powers come from the states.
Under Initiative 194, Montana would strip corporations, trade associations, labor unions and nonprofits, including those headquartered elsewhere, of the legal power to spend money influencing elections in the state.
In practice, that should mean no corporate-funded attack ads, no trade associations bankrolling referendum campaigns and no politically active nonprofits spending their own funds to sway Montana voters.
Violators risk losing state-granted corporate privileges like limited liability, which generally protects shareholders from personal responsibility for corporate debts, until all improperly spent funds are surrendered and legal conditions are met.
"The argument of the people supporting the initiative is, in theory, trying to be pretty simple. Keep your campaign cash out of Montana, or you run the risk of putting your shareholders' personal balance sheets on the line," said Kal Munis, a politics professor at Montana State University who is an expert in the state's politics.
The financial stakes extend well beyond Montana. Known corporate contributions to outside groups in federal elections surged from $13 million in 2010 to more than $600 million by September 2026, according to OpenSecrets, a nonpartisan nonprofit that tracks such spending. That excludes money funneled through nonprofits that conceal their donors.
But there's an irony to the Montana Plan. It had high-dollar backers from corporate America.
State campaign finance data shows Samantha Walton, wife of Walmart heir Lukas Walton, gave $722,300 to groups backing the plan, while LinkedIn co-founder and Democratic megadonor Reid Hoffman contributed $150,000. The campaign's organizing nonprofit, Transparent Election Initiative, is itself a type of dark-money group that generally isn't required to disclose its donors.
And the new law wouldn't exactly take billionaires out of politics. It exempts individuals, political committees, government entities and bona fide news, commentary and editorial content.
Consider Tesla and SpaceX CEO Elon Musk, the 2026 election's largest known individual donor, with at least $474 million in political giving, according to a CNBC analysis of campaign finance records. Musk could still spend millions of his personal fortune influencing Montana elections. His companies, however, would face the new restrictions.
Moore argued that because corporations derive their legal existence from states, those states should have the power to restrict their political spending.
The Supreme Court showdown
Opponents call the Montana Plan an unconstitutional end run around Citizens United. If states cannot directly prohibit protected political speech, they argue, they cannot accomplish the same thing by threatening companies' legal privileges.
And critics warn the restrictions would reach beyond corporate giants, silencing local trade groups, labor unions and community organizations on school bonds, tax measures and other local ballot issues.
"Why allow a media corporation to speak out, while denying a non-profit association of citizens the right to organize around clean water or lower taxes?" said Brad Smith, who leads the Institute for Free Speech and is a former FEC Chairman. "Billionaires will find loopholes. All this really does is silence Montana's small- and medium-sized businesses."
The first legal test is already underway in Hawaii, where lawmakers enacted a similar law in May. Montana is the first state to embrace the strategy through a statewide vote.
The Hawaii law faces formidable legal opposition. The U.S. Chamber of Commerce has sued to block it, while Smith's Institute for Free Speech is representing the Grassroot Institute of Hawaii in a separate challenge. The national ACLU has also weighed in, arguing in a court brief that the law violates the First Amendment.
Legal and campaign finance experts told CNBC the dispute could eventually reach the Supreme Court, whose 6-3 conservative majority has repeatedly loosened campaign finance restrictions. Just in June, the justices struck down limits on political parties' spending in coordination with candidates.
"Shifting the prohibition into the corporate code is a distinction without a difference," said Michael Kang, a Northwestern Pritzker School of Law professor who studies campaign finance. "The courts will see right through it because the clear intent remains to bypass Citizens United. It seems like a legal sleight of hand."
Montana has lost this fight before. In 1912, voters banned corporate campaign spending after copper barons bribed lawmakers and dominated state politics. The law stood for a century before the Supreme Court struck it down in 2012 under Citizens United. This time, the threat could also come from within: Montana's Republican-controlled legislature could weaken or repeal the new law.
"The way we look at it, this is states' rights vs Citizens United," Moore said. "That's the pitch once and if it makes it to the Supreme Court they're going to need to decide between one of their two favorite legal theories and things to fall back on."
