http://en.wikipedia.org/wiki/Citizens_United_v._Federal_Election_Commission
This is one of the most misunderstood supreme court decisions.
The fundamental question is do corporations have any rights under the constitution with regards to campaigning in elections.
The background is that McCain/Feingold banned corporations from electioneering.
This applied to both profit and for profit corporations. Electioneering was defined as messages endorsing or criticizing specific candidates in the run up to elections.
A Non Profit called Citizen's United was formed with the principal goal of making sure Hillary Clinton did not become the next president of the USA. Toward that end the made videos critical of her and aired advertisements for that video in the run up to primary elections in many states. The Federal Election Commission determined this was electioneering and stopped the adds.
Citizen's United brought suit claiming that their free speech rights were infringed. Citizen's United only claimed that they were not engaging in electioneering.
The court went further and found the law was unconstitutional on the grounds that corporations have the right of free speech under the first amendment.
Text of First Amendment:
"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."
Basically the first amendment is what provides for freedom of speech and freedom of religion in the American constitution.
Does "freedom of speech" extend to political speech?
Yes. Freedom of speech was not created so we could all enjoy porn. It was created so we could criticize politicians in the run up to elections without fear.
Some have claimed that it should not apply to corporations because a corporation is not a person.
I believe the first amendment obviously applies to corporations because corporations are nothing more than an association of people.
Freedom of speech is not an individual right because as an individual right it would only grant you the right to talk to yourself. For freedom of communication you need both a speaker and listener and both have rights.
If the first amendment did not apply to corporations then consider these changes to America:
Most churches are incorporated, thus would not have freedom of religion.
Universities would not have freedom of speech.
Newspaper companies would not have freedom of speech.
TV stations would not have freedom of speech.
Book publishers would not have freedom of speech.
The list goes on.
If Corporations did not have freedom of speech we would be limited to yelling our opinions from our front step so long as they were not too loud to annoy a neighbor.
Does this case allow corporations to give unlimited amounts of money to campaigns?
No. This case does not address the giving of money to politicians at all. It only considers independent expenditures. Basically corporations can create and then run their own adds. They are welcome to spend however much money they have doing this.
Did this case overturn 100 years of case law?
No. The 100 year old law in question was regarding giving to politicians. Only 10 years of case law was overturned going back to when McCain/Feingold was passed.
Does this case allow foreigners to campaign?
No. The case specifically said nothing about foreigners because it was not pertinent to the case. Both sides agreed Citizen's United was funded by Americans.
Could the logic from the case be extended to foreigners?
Yes. In America, foreigners have the same free speech rights as Americans. You cannot limit a foreigner's speech without limiting an American's right to hear that speech. Congress cannot ban "On the Origin of the Species," "The Communist Manifesto" or "Mein Kampf" just because Charles Darwin, Karl Marx and Adolph Hitler were not American.
Presumably if a foreigner wished to write a book on why Americans should support one candidate over another and wished to publish it then Americans would have the right to read that book, regardless of whether congress approved.
Does allowing corporations to spend large sums of money campaigning for or against candidates lead to corruption?
I would say it leads to no more corruption than is inherent in Democracy. In a Democracy there are appropriate and inappropriate ways to influence politicians. If I threaten to kill a politician if he goes against my interests then I have done something inappropriate. If I threaten to vote against a politician if he goes against my interests it is perfectly appropriate. That is the whole point of elections and exactly how a democracy should function. Furthermore if I threaten to publicly criticize a politician who goes against my interests that is also appropriate. If an oil company threatens "If you raise the tax on oil I will publicly criticize you in the run up to your next election" that is perfectly valid threat and compatible with democracy.
A world where politicians are constantly in fear of being voted against or publicy criticized is not a corrupt world. It is a functioning democracy. More political speech will enable more people to hear both sides. The people should be trusted to make the correct decision, even if they make the wrong decision. Democracy is not perfect or even good. As Winston Churchill said "Democracy is the worst form of government, except for all of those others that have been tried."
Updates:
Did McCain/Feingold benefit the rich or poor?
McCain/Feingold only impacted corporations. Individuals were already considered exempt because the first amendment clearly applies to them. If Bill Gates and Warren Buffet each individually decided to spend $100M running commercials in favor of their favorite candidate there was nothing to stop them. If instead 10 million citizens wished to pool $10 each to run commercials then they would have been banned from doing so. This clearly helps the very wealthy and hurts the lower middle class.
Perhaps only Corporations that are expressly political should be allowed to campaign. Anyone can donate to whichever political corporation they want therefore their rights are preserved. Is this good for the rich or the poor?
Consider two companies that are in direct competition. The one imports raw materials from China. The other imports raw materials from Africa. The first company is owned in its entirely by one billionaire. The second company is owned by millions of middle class individuals who own shares worth around $5. Now imagine politicians are considering putting trade restriction on either Africa or China. While neither company could contribute to campaigns, the one billionaire who owns his company in its entirety and gets 100% of the benefits it would get is free to use as much of his personal fortune as he sees fit. He can campaign like crazy for trade restrictions hurting his competitor. Meanwhile for the millions of individuals owning stock in the other company it does not make sense to campaign since the gains to be had from your personal campaign funds must be shared with millions of other people. The result is the billionaire has a huge advantage over the middle class. In this manner such rules actually beneft the very rich and hurt the middle class.
Are the opinions of the poor "drowned out?"
Even in the heat of an election the vast majority of adds are not political in nature. Watch a soap opera and you will still see more commercials for soaps than for politicians. If the political messages of the poor are drowned out it is by commercials that are actually commercial in nature.
In the case of Citizen's United, clearly Citizen's united was not drowing out anyone. It was in fact the government which had totally forbit Citizen's from communicating its message at all.
In general if a candidate fails to get his message out is not because his opponent is too well funded.