Hawaii Limits Citizens United Impact

Last November, I wrote about the Montana Plan — a ballot initiative built on a deceptively simple legal idea: states don't have to restrict corporations from spending in elections; they just have to stop granting them that power in the first place. At the time, it was a promising theory waiting to be tested. On May 15th, Hawaii's governor signed it into law.

Hawaii is now the first state in the nation to enact legislation using this strategy. Montana is still gathering signatures for a 2026 ballot vote. Hawaii beat them to it — through the legislature.

A Quick Reminder of the Core Idea

Citizens United v. FEC (2010) gave corporations a First Amendment right to spend unlimited money on independent political expenditures — and McCutcheon v. FEC (2014) removed what limits remained on aggregate individual donations. The Court's logic in both cases: restricting that spending restricts speech, and corporations are associations of individuals whose speech the Constitution protects.

The Montana Plan — and now the Hawaii law — don't try to argue against that ruling. They sidestep it.

The theory goes like this: corporations exist because states create them. States define what powers a corporation has when it's chartered or licensed to operate. If a state simply declines to grant corporations the power to spend in elections, there's no restriction on speech — there's just a corporation that doesn't have that authority in the first place. You can't invoke a right to do something you were never empowered to do.

As the Center for American Progress explains, which helped develop this legal theory: "States create corporations and grant them their powers. Hawaii can simply decline to grant corporations the power to spend in elections. That's not regulating speech — it's defining what the corporation is."

What Hawaii Actually Did

Hawaii Senate Bill 2471 — now Act 11 — does exactly that. It redefines the powers granted to corporations operating in the state to exclude spending money in federal, state, or local Hawaii elections.

The vote was striking. Governor Josh Green signed the bill the day after the legislature passed it. The Hawaii Senate passed it unanimously. The House vote was 41 Democrats and 9 Republicans in favor, with only one Republican opposed. In today's political environment, that kind of bipartisan margin on campaign-finance reform is remarkable.

The law takes effect July 1, 2027 — giving time for the legal battles that are almost certainly coming.

The Enforcement Teeth

This isn't aspirational. The law has real consequences for corporations that violate it.

A corporation that spends money in a Hawaii election could have its authority to do business in the state revoked. Officers and directors who authorized the expenditure could face shareholder lawsuits and personal liability. That's not a fine buried in a compliance report — it's an existential threat to a company's ability to operate in Hawaii.

That enforcement structure is deliberate. The goal is to make corporate election spending carry real risk, not just a slap on the wrist that wealthy interests can absorb.

The Opposition — Including From a Democrat

This is worth being honest about: the opposition isn't just coming from business groups and dark-money organizations.

Hawaii Attorney General Anne Lopez — a Democrat — opposed the bill, arguing it would be difficult and costly to defend in court. Her core concern is real: Citizens United treats corporations as "associations of individuals," and courts reading through the corporate form might view the rights-vs-powers distinction as a technicality that doesn't actually change the First Amendment analysis.

That's a legitimate legal worry. The rights-vs-powers argument is clever and well-constructed, but it hasn't been tested in the Supreme Court. A legal challenge from business groups or national dark-money organizations is essentially guaranteed once the law takes effect.

The legislature and the governor judged it worth the fight anyway. The question is whether the courts will agree.

Fourteen States Are Watching

Hawaii's law didn't emerge in isolation. The corporate-charter strategy has been gaining traction across the country, and Hawaii explicitly modeled its bill on the Montana Plan's legal framework.

Fourteen other states have introduced similar bills in 2026. None have advanced yet — California, Minnesota, Vermont, and Rhode Island are among those with legislation in the pipeline. Notably, some of those bills are in Republican trifectas, which tracks with the bipartisan vote in Hawaii. This approach has found resonance beyond the usual campaign-finance reform coalition.

Hawaii becoming the first to pass and sign a law changes the dynamic. It's no longer a theoretical strategy. It's a law with a governor's signature, an effective date, and a legal challenge waiting to happen.

What Comes Next

This is still early. The law doesn't take effect until mid-2027, and the legal fight over its constitutionality will likely stretch beyond that.

But the importance of what happened in Hawaii isn't really about Hawaii. It's about what it proves. For sixteen years, critics of Citizens United have been largely stuck — Congress won't act, the Court won't reverse itself, and the flow of corporate money into elections has only grown. The Montana Plan offered a new path. Hawaii just showed it can actually become law.

If the law survives its first court challenges, even partially, the playbook becomes much more attractive to those fourteen states waiting in the wings. And if a handful of large states adopt similar laws, the practical impact on corporate election spending could be significant — even without touching Citizens United directly.

My prediction from November was: "If it succeeds, other states might follow — and that could change the landscape far more than anything happening in Washington right now."

Hawaii just became "other states." The rest is still to be written.