dissenting:

We occasionally hear a case falling so squarely between two conflicting Supreme Court opinions that no matter which way we veer, we are likely to run aground. This is one of those cases. With Bellotti and Austin, the Supreme Court has laid out a difficult course for us to navigate in determining whether restrictions on corporate campaign spending are constitutional. Judge Rymer works her way admirably through this challenge, but in the end I am not convinced. At the risk of running off course myself, I choose a different line because I think it is more consistent with the development of Supreme Court precedent in this area and reflects a more sensitive understanding of the ways in which corporate spending can distort the electoral process. Although certainly not disposi-tive, this approach has the added benefit of upholding the expressed discernment of the people of Montana about these matters.

In Buckley v. Valeo, 424 U.S. 1 , 96 S.Ct. 612 , 46 L.Ed.2d 659 (1976), the Court’s first major campaign spending case, the plaintiffs challenged the Federal Election Campaign Act, which placed dollar limits on political contributions to candidates and on individual expenditures “relative to a clearly identified candidate.” 1 The Court held that the contribution limits were constitutional because the government has a compelling interest in eliminating corruption (or its appearance) in the electoral process, and the restrictions did not completely preclude individuals or groups from expressing their support of a particular candidate. See id. at 26-29 , 96 S.Ct. 612 . But the limits on individual expenditures were struck down.- These restrictions, the Court held, could not be justified by the government’s interest in battling corruption because independent spending in candidate elections presents little risk of quid pro quo bargaining. See id. at 45M/7, 96 S.Ct. 612 .

Shortly afterward, the Court decided First Nat’l Bank of Boston v. Bellotti, 435 U.S. 765 , 98 S.Ct. 1407 , 55 L.Ed.2d 707 (1978), which involved a complete ban on corporate spending in referenda campaigns. Here, as in Buckley , the government argued that the restriction was justified by its interest in battling corruption and in preserving the integrity of the electoral process. See id. at 788-89 , 98 S.Ct. 1407 . The Court disagreed. “Referenda are held on issues, not candidates for public office,” the Court stated. See id. at 790, 96 S.Ct. 612 . And while a candidate may offer political favors in return for campaign contributions, a referendum cannot. As a result, “[t]he risk of corruption perceived in cases involving candidate elections simply is not present in a popular vote on a public issue.” Id.

Buckley and Bellotti focused much attention on the government’s asserted interest in preventing quid pro quo corruption. Indeed, in a subsequent case, the Court stated that “preventing corruption or the appearance of corruption are the *1060 only legitimate and compelling government interests thus far identified for restricting campaign finances.” Federal Election Comm’n v. National Conservative Political Action Comm., 470 U.S. 480, 496-97 , 105 S.Ct. 1459 , 84 L.Ed.2d 455 (1985).

But twelve years after Bellotti , the Court was presented with a new asserted interest. In Austin v. Michigan Chamber of Commerce, 494 U.S. 652 , 110 S.Ct. 1391 , 108 L.Ed.2d 652 (1990), a state statute prohibited corporations from using general treasury funds to make independent expenditures in candidate elections, but allowed them to set up segregated campaign funds to which employees, shareholders, and members could contribute. See id. at 655-56 , 110 S.Ct. 1391 . Because the statute targeted campaign expenditures, not contributions, the state could not justify it as a measure to fight quid pro quo corruption. See Buckley, 424 U.S. at 45-47 , 96 S.Ct. 612 . So instead, the state argued that “the unique legal and economic characteristics of corporations” created the risk of a different kind of corruption not based on political deal-making.

Four years earlier, the Court had itself identified this “new” form of corruption. In FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238, 257 , 107 S.Ct. 616 , 93 L.Ed.2d 539 (1986) (“MCFL ”), the Court explained that state laws grant corporations special advantages that not only allow them to play a dominant role in the economy, but permit them to use “resources amassed in the economic marketplace” to obtain “an unfair advantage in the political marketplace.” The Court elaborated:

. Id. at 258 , 107 S.Ct. 616 .

The Court nonetheless struck down the corporate spending limits in MCFL as applied because the plaintiff was an ideological organization “formed to disseminate political ideas, not to amass capital.” Id. at 259 , 107 S.Ct. 616 . But the plaintiff in Austin , the Michigan Chamber of Commerce, possessed several characteristics that made it more like a corporation and less like a nonprofit ideological group. See Austin, 494 U.S. at 662-665 , 110 S.Ct. 1391 . So the Court applied the analysis it had articulated in MCFL to uphold the statute.

Michigan’s statute, the Court made clear, did not aim at traditional quid pro quo corruption. See id. at 659 , 110 S.Ct. 1391 . It targeted “a different type of corruption in the political arena: the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public’s support for the corporation’s political ideas.” Id. at 660 , 110 S.Ct. 1391 . “The unique state-conferred corporate structure that facilitates the amassing of large treasuries warrants the limit on independent expenditures,” the Court stated. Id. “Corporate wealth can unfairly influence elections when it is deployed in the form of independent expenditures, just as it can when it assumes the guise of political contributions. We therefore hold that the state has articulated a sufficiently compelling rationale to support its restriction on independent expenditures by corporations.” Id.

Austin did not expressly overrule Bel-lotti; in fact, Justice Marshall’s opinion remained conspicuously silent about the relevance of its holding for state referen-da. 2 But most observers have concluded that the Court’s analysis undermines the distinction between candidate elections and *1061 referenda, which was the key to Bellotti . Although the traditional quid pro quo corruption may not be a problem in referen-da, it is difficult to see why the distorting effects of corporate wealth — the “new corruption,” as it has been called — would not be equally problematic in both contexts. Once Austin was decided, therefore, the natural conclusion was that a similar restriction on corporate spending in state referenda would be upheld in spite of Bel-lotti. See Thomas C. Goldstein, Corporate Influence in Referenda: A Comment About the Prescription, 1996 Ann. Surv. Am. L. 469 , 473 (1996) (stating that “the Court in Austin substantially reversed course from Bellotti ” and that “the expenditures in Austin, which were not coordinated with the candidate, were the rough equivalent of spending in referenda.”); James B. Raskin, Direct Democracy, Corporate Power and Judicial Review of Popularly-Enacted Campaign Finance Reform, 1996 Ann. Surv. Am. L.Rev. 393, 408 (stating that a ban. on corporate spending in ballot initiatives is “perfectly congruent with the Court’s new and far more nuanced conception of ‘corruption’ ”); Gerald G. Ashdown, Controlling Campaign Spending and the New Corruption: Waiting for the Court, 44 Vanderbilt Law Review 767, 779 (1991) (“The conclusion is inescapable that legislatures are now free to restrict corporations to spend only from separate political funds in ballot measures as well as candidate elections.”) (emphasis added); David Cole, First Amendment Antitrust: The End of Laissez-Faire in Campaign Finance, 9 Yale L. & Pol’y Rev. 236, 252 (1991) (“[I]f corruption includes the distorting effects of large amounts of wealth on the political debate, corruption is no less troubling in referenda than in candidate elections. Thus, this distinction also seems destined to fall in light of the Austin Court’s redefinition of corruption.”).

Judge Rymer resists this conclusion. Although the Montana initiative is identical to the Austin statute in that it permits corporations to spend from a segregated fund — something the Bellotti statute did not allow — she asserts that the relevant distinction is between laws that regulate spending in candidate elections and laws that target spending in ballot initiatives or referenda. (Majority Op. at 1057). She does not explain how this traditional distinction survives Austin’s identification of a new form of corruption unrelated to quid pro quo bargaining. She only quotes Austin’s statement that “[cjorporate wealth can unfairly influence elections when it is deployed in the form of independent expenditures, just as it can when it assumes the guise of political contributions.” . (Majority Op. at 1057). This statement, however, does not suggest that corporate wealth plays a greater role in candidate elections than in referenda. It merely describes the effect of corporate wealth in elections generally.

Judge Rymer appears to recognize this difficulty. As a result, she attempts to find support for her position in the concurring opinions of Justices Brennan and Stevens in Austin . She suggests that Justice Brennan relied on the same distinction between candidate elections and referenda campaigns that she relies on here. Justice Brennan, she points out, noted that under the Austin statute, “a corporation remains free, for example to use general treasury funds to support an initiative proposal in a state referendum.” (Majority Op. at 1056-57). The implication is that Justice Brennan’s vote turned on the limited scope of the Austin statute.

A closer reading of Justice Brennan’s statement undermines this implication. When Justice Brennan made this statement, he was responding to the dissent’s claim that the statute was under-inclusive. He first acknowledged that the statute “is concededly under-inclusive insofar as it does not ban other types of political expenditures to which a dissenting ... corporate shareholder might object.” Austin, 494 U.S. at 675-76 , 110 S.Ct. 1391 . He then explained: “The particular provision at issue prohibits corporations from using treasury funds only for making independent *1062 expenditures in support of, or in opposition to, any candidate in state elections. A corporation remains free, for example, to use general treasury funds to support an initiative proposal in a state referendum.” Id. at 676 , 110 S.Ct. 1391 .

The context of Justice Brennan’s statement makes clear that he did not think the limited scope of the statute (i.e. that it did not restrict corporate spending in state referenda) was what saved it. In fact, he recognized that the statute’s under-inclusiveness was problematic. He then argued that this under-inclusiveness was not fatal because candidate elections are at the heart of political debate and the state can choose to single out corporate spending in that context. See id. at 676-77 , 110 S.Ct. 1391 . He never suggested, however, that the state could not go further and limit corporate spending in referenda or ballot initiatives. Nor did he suggest that what distinguished Austin from Bellotti was that the latter involved referenda. To the contrary, he explained that Bellotti was different because it involved a complete ban on corporate spending, while Austin allowed for a segregated fund. See id. at 670 n. 1, 110 S.Ct. 1391 (“In [MCFL ], we observed that the requirement that expenditures be made through PACs ‘is of course distinguishable from the complete foreclosure of any opportunity for political speech that we invalidated in’ First National Bank of Boston v. Bellotti.”).

Justice Stevens did distinguish Bellotti from Austin on the ground that one involved referenda and the other involved candidate elections. See id. at 678 , 110 S.Ct. 1391 . But that is because he rejected Buckley’s conclusion that restrictions on campaign expenditures were not justified by the government’s interest in preventing quid pro quo corruption. See id. Therefore, he did not need to rely on the government’s new asserted interest — that corporate wealth distorts the electoral process. And because he relied on the traditional corruption rationale, he could make the same distinction the Court made in Bellotti . Justice Stevens’ views are interesting, but because he was the sixth vote to uphold the statute, they shed little light on the majority’s holding.

Finally, Judge Rymer argues that when a Supreme Court opinion directly applies to a case, we must follow it even if the opinion’s reasoning was undermined by a later Court decision. (Majority Op. at 1057). This is a serious argument no doubt. Bellotti has not been overruled, and the facts of this case are similar to Bellotti : both involve restrictions on corporate spending in state referenda. The problem is that while the facts of the two cases are similar, there is also a significant difference. The Montana initiative — like the statute in Austin — allows for corporate spending through a segregated fund, while the Bellotti statute banned corporate spending entirely. Thus, to say we must follow the case that directly applies begs the question: which case applies when both share a common and important feature with the case before us? In such a situation, we should not simply assert that one ease directly applies and then ignore the other. We must do our best to reconcile the two. And in my opinion, the best way to reconcile these cases is to acknowledge that Austin identified a new rationale for limiting corporate campaign spending that does not turn on whether candidate elections or ballot initiatives are at issue. In addition, the statute in Austin was less objectionable than the statute in Bellotti because it allowed for corporate spending through a segregated fund. Because the initiative also allows for a segregated fund, I think it is justified by Montana’s asserted interest in eliminating what its people have determined to be distorting effects of corporate wealth on the electoral process.

. The Act also limited campaign spending by candidates for- various federal offices and spending for national conventions by political parties. It required that contributions and expenditures over a certain amount be reporl-ed and publicly disclosed, established a system for funding Presidential elections, and created the Federal Election Commission to monitor and enforce these regulations. See Buckley, 424 U.S. at 7 , 96 S.Ct. 612 .

. The opinion cited Bellotti only four times and exclusively on mundane issues.