PUBLISHED 

UNITED STATES COURT OF APPEALS 

FOR THE FOURTH CIRCUIT 

UNITED STATES OF AMERICA,  

Plaintiff-Appellant, 

v. 

WILLIAM P. DANIELCZYK, JR., a/k/a 

Bill Danielczyk; EUGENE R. BIAGI, 

a/k/a Gene Biagi, 

Defendants-Appellees. 

 No. 11-4667 

CAMPAIGN LEGAL CENTER; 

DEMOCRACY 21, 

Amici Supporting Appellant, 

REPUBLICAN NATIONAL COMMITTEE; 

CENTER FOR COMPETITIVE POLITICS; 

JEFFREY D. MILYO, PH.D.; DAVID 

M. PRIMO, PH.D., 

Amici Supporting Appellees.  

Appeal from the United States District Court 

for the Eastern District of Virginia, at Alexandria. 

James C. Cacheris, Senior District Judge. 

(1:11-cr-00085-JCC-1; 1:11-cr-00085-JCC-2) 

Argued: May 18, 2012 

Decided: June 28, 2012 
2 UNITED STATES v. DANIELCZYK 

Before TRAXLER, Chief Judge, and GREGORY and 

DIAZ, Circuit Judges. 

Reversed by published opinion. Judge Gregory wrote the 

opinion, in which Chief Judge Traxler and Judge Diaz joined. 

COUNSEL 

ARGUED: Michael R. Dreeben, UNITED STATES 

DEPARTMENT OF JUSTICE, Washington, D.C., for Appellant. Jeffrey A. Lamken, MOLOLAMKEN, LLP, Washington, D.C.; Lee Elton Goodman, LECLAIR RYAN, PC, 

Washington, D.C., for Appellees. ON BRIEF: Neil H. MacBride, United States Attorney, Mark D. Lytle, Assistant 

United States Attorney, OFFICE OF THE UNITED STATES 

ATTORNEY, Alexandria, Virginia; Lanny A. Breuer, Assistant Attorney General, Criminal Division, Richard C. Pilger, 

Director, Election Crimes Branch, Eric L. Gibson, Trial Attorney, Criminal Division, William M. Jay, Assistant to the 

Solicitor General, UNITED STATES DEPARTMENT OF 

JUSTICE, Washington, D.C., for Appellant. Todd M. Richman, Assistant Federal Public Defender, OFFICE OF THE 

FEDERAL PUBLIC DEFENDER, Alexandria, Virginia, 

Chris Ashby, LECLAIR RYAN, PC, Washington, D.C., 

Joseph M. Rainsbury, LECLAIR RYAN, PC, Roanoke, Virginia, for Appellee Eugene R. Biagi; Michael G. Pattillo, Jr., 

Lucas M. Walker, MOLOLAMKEN, LLP, Washington, D.C., 

for Appellee William P. Danielczyk, Jr. Donald J. Simon, 

SONOSKY, CHAMBERS, SACHSE, ENDRESON & 

PERRY, LLP, Washington, D.C.; Fred Wertheimer, 

DEMOCRACY 21, Washington, D.C.; J. Gerald Hebert, Tara 

Malloy, Paul S. Ryan, THE CAMPAIGN LEGAL CENTER, 

Washington, D.C., for Amici Supporting Appellant. John R. 

Phillippe, Jr., Gary Lawkowski, REPUBLICAN NATIONAL 
UNITED STATES v. DANIELCZYK 3 

COMMITTEE, Washington, D.C., for Republican National 

Committee, Amicus Supporting Appellees. Allen Dickerson, 

CENTER FOR COMPETITIVE POLITICS, Alexandria, Virginia, for Center for Competitive Politics, Amicus Supporting 

Appellees. Terence P. Ross, Jessica M. Thompson, CROWELL & MORING LLP, Washington, D.C., for Jeffrey D. 

Milyo, Ph.D., and David M. Primo, Ph.D., Amici Supporting 

Appellees. 

OPINION 

GREGORY, Circuit Judge: 

The Government appeals the district court’s grant of William P. Danielczyk, Jr. and Eugene R. Biagi’s (the "Appellees") motion to dismiss count four and paragraph 10(b) of the 

indictment, alleging that they conspired to and did facilitate 

direct contributions to Hillary Clinton’s 2008 presidential 

campaign in violation of 2 U.S.C. § 441b(a) of the Federal 

Election Campaign Act of 1971 ("FECA"), and 18 U.S.C. § 2.1 

The district court reasoned that in light of Citizens United v. 

Federal Election Commission, 130 S. Ct. 876 (2010), 

§ 441b(a) is unconstitutional as applied to the Appellees. We 

disagree for the following reasons and thus reverse the district 

court’s grant of the motion to dismiss count four and paragraph 10(b) of the indictment. 

I. 

Danielczyk and Biagi were officers of Galen Capital 

Group, LLC, and Galen Capital Corporation (together, 

"Galen"). At the time of the charged conduct, Danielczyk was 

Galen’s chairman, while Biagi was Galen’s secretary. In 

1

The indictment also alleges that Danielczyk co-hosted a fundraiser for 

Clinton’s 2006 Senate campaign. These allegations support counts that are 

not at issue in this appeal. 
4 UNITED STATES v. DANIELCZYK 

March of 2007, Danielczyk co-hosted a fundraiser for Clinton’s campaign and had individuals, including Biagi, give 

donations to the campaign with the promise that they would 

be reimbursed by Galen. Danielczyk and Biagi concealed 

Galen’s reimbursements by writing "consulting fees" on the 

reimbursement checks’ memorandum lines, by issuing the 

checks for amounts larger than the actual contributions, and 

by creating false back-dated letters to the individual donors 

that characterized the reimbursement payments as "consulting 

fees." In total, Danielczyk and Biagi reimbursed the donors 

for $156,400 in contributions made to Clinton’s 2008 campaign, and the campaign in turn reported the contributions to 

the Federal Election Commission. 

Danielczyk and Biagi were indicted on seven counts for 

this contribution scheme. Count four and paragraph 10(b) 

respectively charged the Appellees with knowingly and willfully causing contributions of corporate money to a candidate 

for federal office, aggregating $25,000 or more, in violation 

of § 441b(a) and 2 U.S.C. § 437g(d)(1)(A)(i), and conspiring 

to do so. On April 6, 2011, Danielczyk and Biagi moved to 

dismiss count four, contending that § 441b(a) is unconstitutional as applied to them in light of Citizens United. 

Prior to the Supreme Court’s decision in Citizens United, 

§ 441b(a) made it unlawful for corporations to make both 

direct contributions to political candidates and independent 

expenditures on speech that expressly advocates for or against 

the election or defeat of a candidate. However, the FECA permitted individuals to make independent expenditures and 

direct contributions within limits. See, e.g., 2 U.S.C. 

§ 441a(a). The act also allowed corporations wanting to make 

either type of expenditure to form political action committees 

("PACs"), which were entities separate from the corporations 

subject to regulatory requirements. See 2 U.S.C. 

§ 441b(b)(2)(C); 11 C.F.R. §§ 114.1(a)(2)(iii), (b), and 

114.5(d). Citizens United struck down § 441b(a)’s prohibition 

against corporate independent expenditures, reasoning in part 
UNITED STATES v. DANIELCZYK 5 

that the ban was not supported by the interest in preventing 

quid pro quo corruption, 130 S. Ct. at 908-09, and further that 

"the First Amendment does not allow political speech restrictions based on a speaker’s corporate identity," id. at 903. Citizens United left untouched § 441b(a)’s ban on direct 

corporate contributions. 

Relying on Citizens United, the district court held that 

§ 441b(a)’s ban on direct corporate contributions as applied to 

Galen is unconstitutional because it impermissibly treats corporations and individuals unequally for purposes of political 

speech. The district court rejected the Government’s contention that the differential treatment of corporations in the context of direct contributions fulfills legitimate governmental 

interests, such as the prevention of quid pro quo corruption. 

It concluded that the interest in preventing quid pro quo corruption could be fulfilled by requiring corporations to comply 

with the act’s contribution limits for individual donors. 

Five days after it granted the motion to dismiss, the district 

court sua sponte ordered the parties to file briefs on whether, 

in light of Agostini v. Felton, 521 U.S. 203 (1997), and Federal Election Commission v. Beaumont, 539 U.S. 146 (2003), 

the court should reconsider its decision. In Beaumont, the 

Supreme Court rejected an as-applied challenge to § 441b(a)’s 

ban on direct corporate contributions. 539 U.S. at 163. The 

Government argued that Beaumont directly controlled the 

case and must be applied even if Citizens United may have 

eroded Beaumont’s reasoning. This is because the Agostini 

principle requires lower courts to apply Supreme Court precedent that directly controls the case before it despite subsequent Supreme Court case law that may have affected the 

precedent by implication. 521 U.S. at 237. 

After considering the briefs, the district court denied reconsideration of its dismissal. It reasoned that Beaumont did not 

directly control the case because it addressed an as-applied 

challenge of § 441b(a)’s ban on direct corporate contributions 
6 UNITED STATES v. DANIELCZYK 

against a nonprofit corporation and not, as in this case, a forprofit corporation like Galen. The district court further 

affirmed the rationale in its earlier ruling that § 441b(a) violated Citizens United by treating corporations and individuals 

unequally. Accordingly, it concluded that count four and paragraph 10(b) remained dismissed. The Government timely 

appealed. 

II. 

For the following reasons, we hold that § 441b(a) is not 

unconstitutional as applied to the Appellees. Beaumont clearly 

supports the constitutionality of § 441b(a) and Citizens 

United, a case that addresses corporate independent expenditures, does not undermine Beaumont’s reasoning on this point. 

The district court erred when it granted the Appellees’ motion 

to dismiss. 

A. 

The Agostini principle provides that in circumstances when 

Supreme Court precedent has "direct application in a case, yet 

appears to rest on reasons rejected in some other line of decisions, [courts] should follow the line of cases which directly 

controls, leaving to [the Supreme] Court the prerogative of 

overturning its own decisions." Agostini v. Felton, 521 U.S. 

203, 237 (1997) (quoting Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 484 (1989)). Thus, lower 

courts should not conclude that the Supreme Court’s "more 

recent cases have, by implication, overruled [its] earlier precedent." Id. 

In Beaumont, the Supreme Court addressed a First Amendment challenge to § 441b(a) as it applied to nonprofit advocacy corporations. Federal Election Commission v. 

Beaumont, 539 U.S. 146, 156 (2003). In that case, North Carolina Right to Life, Inc. ("NCRL"), a nonprofit corporation 

organized to provide counseling to pregnant women and to 
UNITED STATES v. DANIELCZYK 7 

promote alternatives to abortion, brought an as-applied challenge to § 441b(a)’s ban on direct corporate contributions and 

independent expenditures. Id. at 150. A panel of this Circuit 

found the ban on both independent expenditures and direct 

contributions unconstitutional as applied to NCRL. Beaumont 

v. FEC, 278 F.3d 261, 279 (4th Cir. 2002), rev’d by Beaumont, 539 U.S. 146. 

With respect to direct contributions, the panel reasoned that 

the ban was unjustified in light of Federal Election Commission v. Massachusetts Citizens for Life, Inc. ("MCFL"), 479 

U.S. 238, 259 (1986), a decision in which the Supreme Court 

held that § 441b(a)’s ban on independent expenditures was 

unconstitutional as applied to a nonprofit corporation that, in 

many respects, was similar to NCRL. Id. at 275. As a result, 

the panel extended MCFL’s holding that solely addressed 

§ 441b(a)’s ban on independent expenditures to the context of 

the provision’s ban on direct contributions, concluding that 

"[i]n neither case is there the threat of quid pro quo, monetary 

influence, or distortion corruption that the prohibitions seek to 

prevent." Id. After this Circuit denied a rehearing en banc, the 

Federal Election Commission petitioned the Supreme Court 

for certiorari only on the issue of whether the ban on direct 

contributions was constitutional. Beaumont, 539 U.S. at 151. 

In a 7-2 decision, the Supreme Court reversed this Circuit’s 

opinion. 539 U.S. at 163. In doing so, the Supreme Court 

thoroughly explained its longstanding jurisprudence upholding Congress’s "original, core prohibition on direct corporate 

contributions" and warned that this jurisprudence "would discourage any broadside attack on corporate campaign finance 

regulation of corporate contributions." Id. at 153, 156. It 

remarked that it had previously held that § 441b(a) had "broad 

applicability" to both corporations and labor unions regardless 

of their financial disposition and rejected NCRL’s various 

arguments to limit this applicability, including that the ban 

did not adequately consider the variations between corporations with respect to affluence and diversity of corporate 
8 UNITED STATES v. DANIELCZYK 

form. Id. at 157. It then recognized four government interests 

that supported the ban on direct corporate contributions: anticorruption, anti-distortion, dissenting-shareholder, and anticircumvention (preventing the evasion of valid individual 

contribution limits). Id. at 153-55. The Supreme Court 

rejected NCRL’s position that these government interests are 

implicated only by for-profit corporations, reasoning that nonprofits, just like for-profits, benefit from state-created advantages, can amass political war chests, and are susceptible to 

corruption and misuse as conduits for circumventing individual contribution limits. Id. at 160. Thus, in addressing 

§ 441b(a)’s applicability to a nonprofit advocacy corporation, 

the Court based its conclusion on a century of law that has 

supported bans on direct contributions against for-profit corporations. Id. at 157. Overall, Beaumont makes clear that 

§ 441b(a)’s ban on direct corporate contributions is constitutional as applied to all corporations. 

B. 

The Appellees contend that Beaumont does not govern our 

inquiry here because its holding was limited to nonprofit corporations. For the reasons expressed above, we do not read 

Beaumont so narrowly. Beaumont stands for the proposition 

that a nonprofit corporation does not differ from a for-profit 

corporation for purposes of § 441b(a) because all corporations 

implicate the asserted government interests, and § 441b(a) is 

closely drawn to further those interests. However, even if we 

did agree with the Appellees, we cannot ignore Beaumont’s 

extensive discussion of Congress’s legitimate interests in regulating direct contributions made by all corporations. As the 

Supreme Court has stated, "When an opinion issues for the 

Court, it is not only the result but also those portions of the 

opinion necessary to that result by which we are bound." Seminole Tribe v. Florida, 517 U.S. 44, 67 (1996). Nor should we 

forget that NCRL recognized the uphill battle it faced in challenging the general ban on direct contributions and thus did 

not request complete upheaval of the law, but only that non-
UNITED STATES v. DANIELCZYK 9 

profits, like it, be exempt. Beaumont, 539 U.S. at 156. Thus, 

at the very least, Beaumont’s discussion of the ban as it 

applies to all corporations informs our inquiry here. 

C. 

The Appellees would have this Court hold that Citizens 

United repudiated Beaumont’s entire reasoning; this we cannot do. Citizens United held that in the context of independent 

expenditures, the Government could not suppress political 

speech on the basis of the speaker’s corporate identity. In 

reaching its decision, the Court did not discuss Beaumont and 

explicitly declined to address the constitutionality of the ban 

on direct contributions. Citizens United v. Federal Election 

Commission, 130 S. Ct. 876, 909 (2010). Nor did the opinion 

indicate that its "corporations-are-equal-to-people" logic necessarily applies in the context of direct contributions. Id. at 

903. Leaping to this conclusion ignores the well-established 

principle that independent expenditures and direct contributions are subject to different standards of scrutiny and supported by different government interests. See Preston v. 

Leake, 660 F.3d 726, 735 (4th Cir. 2011) (concluding that Citizen United did not overrule "Buckley [v. Valeo, 424 U.S. 1 

(1976)], Nixon v. [Shrink Mo. Gov’t PAC, 528 U.S. 373 

(2000)], Beaumont, or other cases applying ‘closely drawn’ 

scrutiny to contribution restrictions"). 

Independent expenditure limitations are "substantial rather 

than merely theoretical restraints on the quantity and diversity 

of political speech." Buckley, 424 U.S. at 19. "By contrast . . . 

a limitation upon the amount that any one person or group 

may contribute to a candidate or political committee entails 

only a marginal restriction upon the contributor’s ability to 

engage in free communication," id. at 20-21, and thus "lie[s] 

closer to the edges than to the core of political expression," 

Beaumont, 539 U.S. at 161. The "markedly greater burden" 

on basic freedoms imposed by independent expenditure limitations requires that these limitations survive "exact scrutiny 
10 UNITED STATES v. DANIELCZYK 

applicable to limitations on core First Amendment rights of 

political expression." Buckley, 424 U.S. at 44. 

Direct contribution limitations, on the other hand, require 

the "lesser demand of being closely drawn to match a sufficiently important interest." Beaumont, 539 U.S. at 162 (internal quotation marks omitted).2

 The reason for this difference 

in scrutiny is clear: independent expenditures, by definition, 

are direct means by which political speech enters into the 

marketplace, see Citizens United, 130 S. Ct. at 898; direct 

contributions, conversely, do not necessarily fund political 

speech but must be transformed into speech by an individual 

other than the contributor, see Beaumont, 539 U.S at 161-62. 

To minimize the constitutional differences between regulations that govern independent expenditures and regulations 

that ban direct contributions by applying Citizens United to 

this case would repeat the same error this Circuit committed 

in Beaumont. See Beaumont, 539 U.S. at 151 (rejecting this 

Circuit’s conclusion that "the rationale utilized by the Court 

in [MCFL] to declare prohibitions on independent expenditures unconstitutional as applied to MCFL-type corporations 

is equally applicable in the context of direct contributions." 

(internal quotation marks omitted)). 

As recently recognized by the Second and Ninth Circuits, 

Citizens United preserved two of the four important government interests recognized in Beaumont: anti-corruption and 

anti-circumvention.3 Ognibene v. Parkes, 671 F.3d 174, 195 

2

The Appellees contest this standard of review only for the purpose of 

preserving the right to challenge it upon any later review by the Supreme 

Court. Appellee Br. 18. We note that this challenge has been rejected previously by the Supreme Court. See Beaumont, 539 U.S. at 161. 3

The Citizens United court did reject the anti-distortion rationale as it 

was used to support the ban on independent expenditures when it overturned Austin v. Mich. State Chamber of Commerce, 494 U.S. 652 (1990). 

130 S. Ct. at 913. The Court also disapproved of the dissentingshareholder interest as justification for the ban on independent expenditures. Id. at 911. 
UNITED STATES v. DANIELCZYK 11 

n.21 (2d Cir. 2011) (declining to hold that Beaumont was 

overruled by Citizens United, and determining that Citizens 

United preserved the anti-corruption and anti-circumvention 

interests); Thalheimer v. City of San Diego, 645 F.3d 1109, 

1125 (9th Cir. 2011) (holding that Citizens United did not disapprove of the anti-circumvention interest); Green Party of 

Conn. v. Garfield, 616 F.3d 189, 199 (2d Cir. 2010) 

("Beaumont . . . remain[s] good law. Indeed, in the recent Citizens United case, the Court . . . explicitly declined to reconsider its precedent involving campaign contributions by 

corporations to candidates for elected office."). 

Prevention of actual and perceived corruption and the threat 

of circumvention are firmly established government interests 

that support regulations on campaign financing. See Beaumont, 539 U.S. at 154; Nixon, 528 U.S. at 390 ("Even without 

the authority of Buckley, there would be no serious question 

about the legitimacy of the interest[ ] [of preventing corruption and the appearance of it] [ ], which, after all, underlie[s] 

bribery and anti-gratuity statutes."); Buckley, 424 U.S. at 27 

("Of almost equal concern as the danger of actual quid pro 

quo arrangements [through contributions] is the impact of the 

appearance of corruption stemming from public awareness of 

the opportunities for abuse."). While clarifying that the anticorruption interest is limited to actual quid pro quo corruption 

or the appearance of it, as opposed to the appearance of influence or access, Citizens United did not deny that anticorruption was a sufficiently important governmental interest, 

which is all that is required for closely drawn scrutiny. 130 S. 

Ct. 909-10. Instead, it held that the interest did not justify a 

ban on corporate independent expenditures under strictscrutiny review. Id. at 911. 

With respect to the anti-circumvention interest, the Beaumont court explained that without limitations on corporate 

contributions, individuals "could exceed the bounds imposed 

on their own contributions by diverting money through the 

corporation." 539 U.S. at 155. Thus the interest in preventing 

such evasion is grounded in the "experience" of "candidates, 
12 UNITED STATES v. DANIELCZYK 

donors, and parties [that] test the limits of the current law, and 

it shows beyond serious doubt how contribution limits would 

be eroded if inducement to circumvent them were enhanced." 

Id. (internal quotation marks and citations omitted).4 Citizens 

United did not undercut Beaumont’s endorsement of this 

interest. Indeed, the majority opinion did not even discuss this 

interest when it struck down the independent expenditure ban, 

and thus prior Supreme Court precedent affirming this interest 

remains the law this Court must follow. See e.g., FEC v. Colo. 

Republican Fed. Campaign Comm., 533 U.S. 451, 456 

(2001); Cal. Med. Ass’n v. FEC, 453 U.S. 182, 197-98 (1981). 

III. 

For the foregoing reasons, we hold that the district court 

erred in granting the Appellees’ motion to dismiss count four 

and paragraph 10(b) of the indictment.5

 The district court’s 

grant of the motion to dismiss with respect to count four and 

paragraph 10(b) is reversed. 

REVERSED 

4

The Appellees point to McConnell v. Federal Election Commission, 

540 U.S. 93 (2003), a case decided after Beaumont, to support their challenge to the anti-circumvention interest. In McConnell, the Supreme Court 

found unconstitutional § 318 of the Bipartisan Campaign Reform Act of 

2002, which prohibited minors from making direct contributions to candidates, and contributions or donations to political parties. 2 U.S.C. § 441K. 

Id. at 232. In doing so, the Court rejected the Government’s argument that 

the provision protected against use of minors as conduits to circumvent 

individual-contribution limitations because there was "scant evidence" to 

support this form of evasion. Id. McConnell did not address Beaumont’s 

endorsement of the anti-circumvention interest in the context of a corporate contribution ban, which remains good law. And unlike McConnell, 

the result in Beaumont is supported by the separate interest in preventing 

quid pro quo corruption. 

5

Consequently, we do not address the parties’ arguments regarding 

whether § 441b(a) is closely drawn to support the government interests 

asserted. We find that Beaumont forecloses this inquiry. See, e.g., 539 

U.S. at 160, n.7 (rejecting NCRL’s suggestion that an earmark rule would 

be a better-tailored approach than the ban on direct contributions to fulfill 

the anti-circumvention interest).