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Most recent update January 22, 2010

Commentary: The Campaign Finance Page

INTRODUCTION

BACKGROUND: THE INSIDIOUS EFFECTS OF SOFT MONEY

AN ATTEMPTED SOLUTION: THE BIPARTISAN CAMPAIGN REFORM ACT

BCRA IN THE SUPREME COURT - McCONNELL V. FEC

CASES AFTER McCONNELL: WISCONSIN RIGHT TO LIFE AND CITIZENS UNITED

THE FIRST AMENDMENT AND CAMPAIGN FINANCE REFORM

INTRODUCTION

In 2002, Congress passed a massive revision of the law that regulates national political campaigns. The Bipartisan Campaign Reform Act (BCRA) – or, as it is more commonly known, the McCain-Feingold law – was an attempt to end abuses that allow large corporations, labor unions, well-funded interest groups, and wealthy individuals to circumvent the disclosure requirements of campaign finance law, and the legal limits on the size of campaign contributions, by pouring hundreds of millions of dollars of "soft money" into federal election campaigns.

Within days of BCRA's passage, eleven lawsuits were brought to challenge the constitutionality of almost all provisions of the law. The 84 plaintiffs (later reduced to 77) ranged from the Republican National Committee, the U.S. Chamber of Commerce, and the National Rifle Association, to the ACLU, the AFL-CIO, and the California Democratic Party. The case was known as McConnell v. Federal Election Commission, after Senator Mitch McConnell, the lead plaintiff.

McConnell v. FEC was assigned to a three-judge court in the District of Columbia. After a massive amount of information relevant to the financing of election campaigns was collected and assembled, the court heard nine hours of oral argument by 23 separate attorneys.1 On May 1, 2003, it issued a voluminous set of opinions upholding most sections of BCRA, narrowing some, striking down a few, and finding that others were not yet "ripe" for a legal challenge. The case was immediately appealed to the Supreme Court, which scheduled a special session for oral argument on September 8, 2003 - a highly unusual four hours of argument by eight separate attorneys.

On December 10, 2003, the Supreme Court announced its decision upholding all the major provisions of BCRA. The majority opinion by Justices John Paul Stevens and Sandra Day O'Connor described the long history of efforts to "purge national politics of what was perceived to be the pernicious influence of 'big money' campaign contributions,"2 and recounted how, in the past 25 years, our system of campaign finance has been subverted by ever-larger infusions of unregulated and undisclosed soft money, in the form of contributions to political parties and massive spending on TV ads. Dissents from Justices Anthony Kennedy, Antonin Scalia, and Clarence Thomas accused the majority of trashing the First Amendment and acquiescing in a self-serving law passed by incumbent officeholders in order to hobble the campaign efforts of their challengers.3

It was not long before new "as applied" challenges were brought to BCRA. In April 2007, a challenge by Wisconsin Right to Life was argued before the Supreme Court. By this time, Justice O'Connor, the "swing vote" in McConnell, had been replaced by a new justice, Samuel Alito. It seemed likely that a majority of the Supreme Court would now, at the very least, create a loophole in BCRA for "issue ads" of the type run by Wisconsin Right to Life, and this is exactly what happened.

Then in January 2010, a slim majority of the Supreme Court upended campaign finance regulation entirely by striking down longstanding bans on direct corporate expenditures for election campaigns. The decision in Citizens United v. Federal Election Commission allows unlimited corporate power to dominate elections. The five-justice majority viewed corporations as having full First Amendment rights and saw no compelling justification for limiting their expenditure of shareholders' money for electioneering; the four-justice dissent had a very different view of the scope and purpose of the First Amendment.

This Campaign Finance Page outlines the free expression policy issues in this huge, complex, and vitally important debate. The sections that follow provide background on the problems that led to BCRA's passage, explain the Supreme Court's decision in McConnell, describe the challenges posed by Wisconsin Right to Life and Citizens United, and analyze the stakes for free speech and democracy.

BACKGROUND: THE INSIDIOUS EFFECTS OF SOFT MONEY

Circumventing Contribution Limits

In 1971, Congress passed sweeping legislation that limited both contributions to and expenditures on federal election campaigns. Known as FECA (the Federal Election Campaign Act), the law also barred corporations and labor unions from spending money on federal elections unless they create separate "segregated funds," or PACs. And it imposed disclosure requirements so that, theoretically at least, the public would know who is paying for federal election campaigns.

FECA was challenged in the case of Buckley v. Valeo, decided by the Supreme Court in 1976. In a near-200-page opinion, the Court upheld FECA's cap on campaign contributions; struck down the cap on independent expenditures because, the majority said, such a cap unduly burdened the First Amendment right to political speech; and upheld the disclosure requirements. The Court interpreted the disclosure rules narrowly, however, to apply only to "communications that expressly advocate the election or defeat of a clearly identified candidate" by using such explicit words as "vote for," "elect," or "reject."4

Politicians, political parties, corporations, unions, interest groups of all sorts, and wealthy individuals soon found ways around the contribution limits and disclosure requirements of FECA. The primary vehicle was soft money5 – funds not subject to FECA because they were, ostensibly, used for state and local rather than federal elections, for general party-building, or for campaign advertisements that avoided the "magic words" of express advocacy identified in the Buckley decision.

Such "sham issue" advertisements, as they are called, generally ran on radio or TV in the month or two before a federal election. They typically addressed a political issue, described a particular candidate's position on the issue, and urged viewers either to "thank" the individual or tell him to change his position. The message to vote for or against the candidate was clear despite the absence of "magic words." As the Supreme Court eventually found, these ads "enabled unions, corporations, and wealthy contributors to circumvent" FECA, and, although "ostensibly independent of the candidates, the ads were often actually coordinated with, and controlled by, the campaigns."6

The evidence submitted to the court in McConnell v. FEC contained many examples of such sham-issue campaign ads. One, created by the Republican National Committee, featured the voices of then-presidential candidate Bob Dole, his wife Elizabeth, and a narrator, talking about "the value of hard work," the superiority of "work to replace welfare," and the importance of "discipline to end wasteful Washington spending." The ad ended with Dole intoning: "It all comes down to values. What you believe in. What you sacrifice for. And what you stand for."7 This ad was plainly designed to aid Dole's campaign; yet it was funded wholly outside the campaign finance system, with soft money contributions that were neither disclosed nor subject to the contribution limits of FECA.

Similarly, an ad funded by the League of Conservation Voters in 1996 had the following text:

It's our land; our water. America's environment must be protected. But in just 18 months, Congressman Ganske has voted 12 out of 12 times to weaken environmental protections. Congressman Ganske even voted to let corporations continue releasing cancer-causing pollutants into our air. Congressman Ganske voted for the big corporations who lobbied these bills and gave him thousands of dollars in contributions. Call Congressman Ganske. Tell him to protect America's environment. For our families. For our future.8

Although the message was admirable - promoting environmental protection - this ad was clearly a campaign pitch to defeat Congressman Ganske. As Judge Richard Leon noted in his separate opinion at the three-judge court stage of the McConnell case, "if one word were changed, if instead of 'call Congressman Ganske,' the ad said, 'Defeat Congressman Ganske,' it would clearly qualify as a candidate ad subject to contribution limits and disclosure requirements."9

Sham issue ads such as these are virtually indistinguishable from official campaign messages funded by "hard money." As the three-judge court in McConnell found, even official ads rarely use the "magic words" these days. One political consultant explained:

In the modern world of 30-second political advertisements, it is rarely advisable to use such clumsy words as "vote for" or "vote against." ... All advertising professionals understand that the most effective advertising leads the viewer to his or her own conclusion without forcing it down their throat. ... The notion that ads intended to influence an election can easily be separated from those that are not based upon the mere presence or absence of particular words or phrases such as "vote for" is at best a historical anachronism.10

How Soft Money Works

The soft money system that funded sham-issue ads and other aid to federal candidates worked in several ways. The primary method was through large contributions to the national Republican and Democratic parties, ostensibly for activities other than federal election campaigns. In addition to sham issue ads, the two major parties then used soft money for get-out-the-vote drives, overhead, and other expenses that benefitted federal candidates without dipping into their campaign funds or being subject to FECA limitations.

The national parties also passed along soft money to their state and local affiliates, which spent it on activities that benefitted federal candidates. As the Supreme Court majority explained in McConnell, under previous campaign law formulas, state parties could attribute a lower percentage of their general, "mixed purpose" expenditures to federal elections than national parties could. As a result, in the year 2000, for example, "the national parties diverted $280 million - more than half their soft money - to state parties."11

Contributions made directly to state and local parties were also used, albeit indirectly, to boost federal campaigns. Finally, the parties gave soft money to nonprofit organizations and political committees to spend on sham issue ads and other activities that helped federal candidates. In 1996, for example, the Republican National State Elections Committee gave $500,000 to the National Right to Life Committee for "issue advocacy" activities; Americans for Tax Reform received almost $4 million.12

All manner of interest groups, meanwhile, funded their own sham-issue ads. The leading spenders were the National Rifle Association, "Citizens for Better Medicare," which was funded by the pharmaceutical industry, "Republicans for Clean Air," which actually consisted of just two individuals, and "The Club for Growth," a conservative group that boasted in a memo of spending "$1 million in television advertising in key congressional districts to advance our pro-growth issues." This memo frankly noted that unions had used the same tactics "against pro-growth candidates," and that "these issue advocacy campaigns can make all the difference in tight races."13

Finally, corporations and labor unions spent money directly on sham issue ads. In doing so, they circumvented FECA's ban on corporate or union campaign spending for federal elections unless they set up separate funds, or PACs.

The explosion in soft-money spending after the Buckley decision was dramatic. In 1980, the Republican Party spent about $15 million in soft money and the Democrats spent about $4 million – amounting to 9% of total spending by the two national parties. By 2000, combined major party soft-money spending was $498 million, or 42% of the total. And since were no limits on the size of soft-money contributions, the bidding war for access to and favors from elected officials drove contributions ever higher. The top 50 soft money donors each gave between $955,695 and $5,949,000. In 1996, the biggest soft-money donors were Philip Morris, Seagram & Sons, Nabisco, Walt Disney Company, and Atlantic Richfield.14

Wealthy individuals and corporations often gave gifts to both parties - a clear sign that the contributors were buying access rather than financing candidates whose views they supported. Among the many soft money donors who gave generously to both parties were Global Crossing, Enron, and WorldCom.15

Many large soft-money contributions to political parties were directly solicited by senators and congressmen. They often reminded the corporate officers they solicited that the congressional committees they served on dealt with issues affecting the particular corporation. Senator John McCain, a sponsor of the BCRA, testified that members of Congress interacted with big donors at frequent "fundraising dinners, weekend retreats, cocktail parties, and briefing sessions." When a solicitation was successful and the donor wanted a private meeting a month later, "it's very difficult to say no, and few of us do say no."16 Senator Zell Miller

once publicly described how he "locked himself in a room with an aide, a telephone, and a list of potential contributors. The aide would get the "mark" on the phone, then hand me a card with the spouse's name, the contributor's main interest, and a reminder to "appear chatty." I'd remind the agri-businessman that I was on the Agriculture Committee; I'd remind the banker I was on the Banking Committee. And then I'd make a plaintive plea for soft money. ... I always left that room feeling like a cheap prostitute who'd had a bad day.17

The pressure on corporations, trade associations, and wealthy individuals to make ever-larger donations was documented in a survey by the nonpartisan Committee for Economic Development. Nearly three-quarters of senior executives at the nation's largest companies said they felt pressured to make large political donations. The main reason was "fear of retribution and to buy access to lawmakers. Seventy-five percent said political donations gave them an advantage in shaping legislation; and nearly four-in-five executives called the system 'an arms race for cash that continues to get more and more out of control.'"18

The evidence in McConnell v. FEC also included instances of essentially direct offers to trade money for political influence. A letter from the Republican National Committee to a drug company asking for its opinion and suggestions on health care reform along with a $250,000 donation provided one example. An invitation to a fundraising dinner, sent to the Association of Trial Lawyers of America, provided another. The letter read, in part: "Our event will give you an excellent opportunity to meet with the Members of the [Judiciary Committee] to discuss issues relevant to your organization."19

Thus, although there was no evidence in the McConnell case of outright bribery, or direct trading of money for votes on a specific piece of legislation, the evidence did show not only a widespread public perception of corruption, but an actual, severe distortion of the democratic process. As Senator Warren Rudman explained, looking for direct tradeoffs "misses the point," because the access and influence that large donors buy "is inherently, endemically, and hopelessly corrupting. You can't swim in the ocean without getting wet; you can't be part of this system without getting dirty."20

By the end of 2000, according to one expert, "it was clear that although 'scholars might differ about how best to change the campaign finance system, ... they could not avoid the conclusion that party soft money and electioneering in the guise of issue advocacy had rendered the FECA regime largely ineffectual.'"21 Or, as the Supreme Court majority put it (quoting a 1998 Senate report), the senators agreed

that the "soft money loophole" had led to a "meltdown" of the campaign finance system that had been intended "to keep corporate, union and large individual contributions from influencing the electorial process." One Senator stated that "the hearings provided overwhelming evidence that the twin loopholes of soft money and bogus issue advertising have virtually destroyed our campaign finance laws, leaving us with little more than a pile of legal rubble."22

AN ATTEMPTED SOLUTION: THE BIPARTISAN CAMPAIGN REFORM ACT

Identifying the problem was one major task; figuring out how to solve it was immeasurbly harder. Almost any regulation in the area of campaign finance strikes directly at political speech - which is essential to democracy and therefore entitled to rigorous First Amendment protection. The BCRA tackled the problems through two main sections, called Titles I and II, and three minor ones, Titles III, IV, and V.

Title I addressed the problem of soft money directly. It amended FECA by adding six new sections, five of which were challenged in the McConnell case.

r Section 323(a) barred national political parties from soliciting, receiving, or spending soft money.

r Section 323(b) barred state and local political parties from using soft money for "federal election activities." It defined "federal election activities" to include not only communications that support or oppose clearly identified candidates for national office, but voter registration and get-out-the-vote campaigns conducted in connection with a national election, and services by a party employee if he spends more than 25% of his time on "activities in connection with a federal election."

r Section 323(d) barred national, state, and local political parties from giving money to certain nonprofit organizations and political groups so that they can spend it on federal election campaigns.

r Section 323(e), with certain exceptions, barred federal officeholders and candidates from soliciting or spending soft money. (One important exception allowed them to attend and speak at fundraising events.)

r Section 323(f) barred state officeholders and candidates from using soft money for federal campaigns.

Title II of BCRA tackled the problem of sham-issue ads by corporations and labor unions. FECA banned corporate or union spending on federal campaigns but, as interpreted by the Supreme Court in the Buckley case, only if the communication used specific "magic words" words like "elect," "vote for," or "defeat." BCRA rejected the magic words approach and substituted a broader definition of "electioneering communications" for federal office.

Seven sections of Title II were challenged in McConnell:

r Section 201 defined an "electioneering communication" as "any broadcast, cable, or satellite communication" that "refers to a clearly identified candidate for federal office," is made within 60 days of a general election or 30 days of a primary or convention, and "is targeted to the relevant electorate." It imposed disclosure requirements on all such communications.

It also had a narrower, "backup definition" of "electioneering communication" (in case the first one were to be held unconstitutional). The backup definition was: "any broadcast, cable, or satellite communication" that "promotes or supports," or "attacks or opposes," a federal candidate, and is "suggestive of no plausible meaning other than an exhortation to vote for or against" the candidate.

r Section 202 said that when an electioneering communication is coordinated with a federal candidate or with a political party, then the money spent on it amounts to a contribution – and hence is subject to the caps and other regulations of FECA.

r Section 203 banned corporations and labor unions from funding electioneering communications except through separate segregated funds or PACs. It had an exception for nonprofit advocacy groups and political organizations. This exception was based on a 1986 Supreme Court decision, Federal Election Commission v. Massachusetts Citizens for Life, which ruled that applying the ban on corporate electioneering to nonprofit, noncommercial corporations that are devoted to political advocacy violates the First Amendment.23

r Section 204 eliminated the exception created in section 203 for nonprofit advocacy groups and political organizations. It was put into a separate section so that, if ruled unconstitutional, it could be easily "severed" from the rest of the law.

r Section 212 imposed disclosure rules for independent campaign expenditures.

r Section 213 limited national political parties' discretion in spending on behalf of federal candidates by requiring them to choose, in some circumstances, between independent expenditures and "coordinated expenditures."

r Section 214 defined "coordinated expenditures" in a way that doesn't require formal collaboration between candidates and those funding campaign ads.

Finally, Titles III and V of BCRA had eight assorted sections that were also challenged in McConnell:

r Sections 304, 316, and 319, the so-called the "millionaire provisions," relaxed some of the campaign finance rules for opponents of candidates who are financing their campaigns through their own fortunes.

r Section 305 dictated that if candidates want to pay the "lowest unit charge" for broadcast campaign ads, then they cannot "make any direct reference to another candiate for the same office."

r Section 307 increased the FECA contribution limits from $1,000 to $2,000 for donations to any one candidate, and from $20,000 to $25,000 for donations to political parties. Total aggregate limits were $37,500 for contributions to candidates and $57,500 for other contributions.

r Section 311 imposed disclosure requirements on the sponsors of electioneering communications.

r Section 318 barred minors from donating to federal candidates, or to a committee of a political party, because some parents have been known to circumvent contribution limits by giving money to federal campaigns on behalf of their minor children.

r Section 504 required broadcasters to collect and disclose information about a broad range of political advertisements, from requests by specific candidates for air time, to requests made by anyone to broadcast messages "relating to any "political matter of national importance."

BCRA IN THE SUPREME COURT - McCONNELL V. FEC

The Majority Upholds BCRA

The Supreme Court's 298-page decision in McConnell v. FEC came in many pieces. Justices Stevens and O'Connor's jointly authored majority opinion upheld the major parts of BCRA - Title I, banning soft money, and Title II, governing "sham issue" advertising. Chief Justice Rehnquist contributed an opinion striking down section 318, which barred minors from contributing to political campaigns (he noted that "minors enjoy the protection of the First Amendment"), and holding that various other parts of the law are not yet ripe for a legal challenge.24 Justice Breyer weighed in with an opinion upholding section 504 of BRCA, which required broadcasters to keep records of requests for political advertising time.

The majority opinion described Title I of BCRA as "Congress' effort to plug the soft-money loophole." The "cornerstone" of the law, section 323(a), banned soft money contributions to the national parties; the remaining parts of Title I, the Court said, were designed to reinforce 323(a) and prevent circumvention of its soft money ban through diversion of funds to state and local parties or advocacy organizations. Since these are contribution limits, according to the Court, they do not burden political speech in the same way as limits on expenditures do. Caps on the amount of contributions "'entail only a marginal restriction upon the contributor's ability to engage in free communication.'"25

Under this relaxed standard of judicial review - as opposed to the "strict scrutiny" that the First Amendment requires when government directly restricts speech - the Court found Title I was justified by the interests in preventing "'both the actual corruption threatened by large financial contributors and the eroding of public confidence in the electoral process through the appearance of corruption.'" These interests, the Court said, "directly implicate 'the integrity of our electoral process.'"26

Title II of BCRA, in contrast to Title I, directly regulated political expression, and therefore was subject to "strict scrutiny." Particularly troubling, from a First Amendment standpoint, was Title II's broad definition of "electioneering communications" that are subject to FECA requirements.

But the Court said there is no constitutional rule that only "express advocacy" of a candidate's election or defeat (using the "magic words") can be regulated, while "so-called issue advocacy" cannot. Indeed, Justices Stevens and O'Connor's majority opinion observed, "the unmistakable lesson" from the evidence in the case is that the "magic words" requirement is "functionally meaningless" - most campaign communications do not use them, and virtually all campaign ads now masquerade as issue advocacy. Admittedly, both express advocacy of a candidate's election or defeat and the less direct advocacy contained in issue ads are core political speech. But BCRA did not ban these ads (except for corporations and unions that chose not to set up political committees); it only regulated how they are funded, and required disclosure of their sponsors.27

Requiring disclosure while expanding the definition of "electioneering communications" served a compelling public interest, said the Court, because it gives voters essential information. Stevens and O'Connor quoted the decision of the three judges in the district court:

The factual record demonstrates that the abuse of the present law not only permits corporations and labor unions to fund broadcast advertisements designed to influence federal elections, but permits them to do so while concealing their identities from the public. ... Curiously, Plaintiffs want to preserve the ability to run these advertisement while hiding behind dubious and misleading names like: "The Coalition-Americans Working for Real Change" (funded by business organizations opposed to organized labor), "Citizens for Better Medicare" (funded by the pharmaceutical industry), [and] "Republicans for Clean Air" (funded by brothers Charles and Sam Wyly). ... Given these tactics, Plaintiffs never satisfactorily answer the question of how "uninhibited, robust, and wide-open" speech can occur when organizations hide themselves from the scrutiny of the voting public.28

Another problematic feature of Title II was its application to nonprofit political advocacy organizations. Some of these groups contribute immeasurably to democratic debate, and, for a variety of reasons, cannot or will not create separate PACs in order to criticize public officials or publicize their voting records on key issues. Section 204 of BCRA specifically covers them, despite the Supreme Court's contrary ruling in the 1986 Massachusetts Citizens for Life case.29 Justices Stevens and O'Connor in their majority opinion finessed this problem by reasoning that Congress was surely aware that BCRA "could not validly apply to MCFL-type entities," and that "as so construed," section 204 "is plainly valid."30

The only part of Title II that the Court struck down was section 213, which required political parties to choose between independent or coordinated expenditures on behalf of candidates. The section's application was narrow, since its definition of independent expenditures harked back to the magic words of pre-BCRA campaign regulation. Nevetheless, the Court did not think that the section made much sense, and it certainly did not survive "strict scrutiny."31

The Dissenters' Arguments

The dissents in McConnell v. FEC were blistering. They contained two main arguments - one pragmatic; the other more abstract. The pragmatic complaint was that, as Justice Kennedy put it, Title I "looks very much an an incumbency protection plan."32 Generally speaking, bans on big-money contributions favor incumbents because they already have name recognition. And specific provisions like section 323(e), which barred candidates from soliciting soft money, had exemptions - such as appearances at fundraising events - that are more useful to incumbents than to challengers.

Justice Scalia put it this way: BCRA "prohibits the criticism of Members of Congress by those entities most capable of giving such criticism loud voice: national political parties and corporations." "Is it accidental," he asked, "that incumbents raise about three times as much 'hard money' ... as do their challengers?"

... Or that lobbyists (who seek the favor of incumbents) give 92 percent of their money in "hard" contributions? ... Is it an oversight, do you suppose, that the so-called "millionaire provisions" raise the contribution limit for a candidate running against an individual who devotes to the campaign (as challengers often do) great personal wealth, but do not raise the limit for a candidate running against an individual who devotes to the campaign (as incumbents often do) a massive election "war chest"?33

The majority in McConnell responded to these critiques by arguing that "any concern that Congress might opportunistically pass campaign-finance regulation for self-serving ends is taken into account by the applicable level of scrutiny. Congress must show concrete evidence that a particular type of financial transaction is corrupting or gives rise to the appearance of corruption and that the chosen means of regulation are closely drawn to address that real or apparent corruption."34 But given the majority's deference to the overall BCRA plan, the rejoinder was not very persuasive.

The dissenters' more abstract concern was the unprecedented extent to which BCRA regulated core political speech. Justice Thomas wrote: "the Court today upholds what can only be described as the most significant abridgment of the freedoms of speech and assocation since the Civil War." Justice Scalia was more blunt: "This is a sad day for the freedom of speech."35

Scalia and Thomas were right about BCRA's unprecedented scope, though they overdramatized its likely oppressiveness. More important, they overlooked the facts of the case. The evidence convincingly showed how large sums of money had bought not only access but legislative decisions that favored wealthy individuals and large corporations at the expense of the public interest. The majority noted, for example, that "the evidence connects soft money to manipulations of the legislative calendar, leading to Congress' failure to enact, among other things, generic drug legislation, tort reform, and tobacco legislation." It described national party committees' shameless sale of opportunities to influence legislation, at price levels ranging from $10,000 to $100,000.36

At bottom, the dissenters and the majority had very different visions of how democracy should work. Justice Kennedy, who wrote the most extensive dissent, argued that the only justification for campaign finance regulation is to prevent quid pro quo agreements in which candidates explicitly promise to vote a certain way on legislation in exchange for money. Favoritism and influence are not the same as corruption, he argued, and are in any event unavoidable in a representative democracy.

It is in the nature of an elected representative to favor certain policies, and, by necessary corollary, to favor the voters and contributors who support those policies. It is well understood that a substantial and legitimate reason, if not the only reason, to cast a vote for, or to make a contribution to, one candidate over another is that the candidate will respond by producing those political outcomes the supporter favors.

And "the mere fact that an ad may, in one fashion or another, influence an election is an insufficient reason for outlawing it. I should have thought influencing elections to be the whole point of political speech."37

Justice Kennedy also argued against barring corporations and unions from campaign advocacy, though this issue had long been settled, and was not new with the McConnell case.38 Seven years later, in the Citizens United case, Kennedy had his revenge and wrote the Court's opinion striking down prohbitions on corporate campaign spending.

CASES AFTER McCONNELL: WISCONSIN RIGHT TO LIFE AND CITIZENS UNITED

On April 25, 2007, 2 years after the McConnell decision, a new, "as applied" challenge to BCRA was argued in the Supreme Court. Wisconsin Right to Life ("WRTL"), an organization that received major contributions from corporations, had broadcast "issue ads" just before the 2004 election, attacking Senators Russ Feingold and Herb Kohl for delaying votes on President Bush's judicial nominees. Feingold was up for re-election that year; Kohl was not. Wisconsin Right to Life did not qualify for the exception to campaign finance law established in the Massachusetts Citizens for Life case because it accepted contributions from business corporations. (See note 30, describing the paramaters of the MCFL exemption.)

WRTL argued that its ads were pure issue advocacy and could not constitutionally be regulated by BCRA. Encouraged by the change in Supreme Court membership (Justice O'Connor had now been replaced by Justice Samuel Alito), WRTL also argued that BCRA should be struck down "on its face" because as-applied challenges are too burdensome - in essence, that parts of the McConnell decision should be overruled.

The oral argument on April 25 was not encouraging for defenders of the portion of BCRA's that regulates sham issue ads. The sympathies of both Justice Alito and Chief Justice John Roberts, the other new addition to the Court (replacing Chief Justice Rehnquist) clearly seemed to be with BCRA's detractors. Alito asked Seth Waxman, who was defending the law on behalf of legislators, including BCRA co-author John McCain, whether a group running an issue ad that mentioned a candidate more than 60 days before a general election would have to stop running the ad after the 60-day deadline, even if "an important vote is coming up in Congress on that very issue." Waxman said it would depend on the context, but "Justice Alito did not appear satisfied."39

Those on the Court who wanted to overrule major parts of McConnell or at the least create a loophole for issue ads were likely encouraged by the wide range of amicus curiae briefs filed in the WRTL case attacking the law. They ranged from the ACLU to the Chamber of Commerce, the Republican National Committee, the National Association of Realtors, and the "Center for Competitive Politics." Those arguing against an exemption for WRTL or any other weakening of BCRA included the League of Women Voters and four former ACLU leaders, supported by the Brennan Center for Justice.40

On June 25, 2007, the Supreme Court ruled, 5-4, that section 203 of BCRA is unconstitutional as applied to WRTL's ad. Chief Justice Roberts, writing for himself and Justice Alito, said that Congress may not, consistent with the First Amendment, ban corporate-funded political ads if they can be "reasonably interpreted" as not expressly advocating the election or defeat of a candidate. Justices Scalia, Kennedy, and Thomas went farther in a concurring opinion; they wanted to strike down section 203 in all of its applications.41

The decision in Wisconsin Right to Life clearly reflected the change in Supreme Court personnel: Justice Alito had replaced Justice O'Connor. Justices Souter, Stevens, Ginsburg, and Breyer, in dissent, argued that all the factors supporting BCRA's expanded definition of "electioneering communications," and found so compelling in McConnell, were still present, and that the WRTL ad was clearly targeted at defeating Senator Feingold.

A year later, again reflecting its new anti-BCRA majority, the Supreme Court struck down another part of the law. In Davis v. Federal Election Commission, the Court, by a 5-4 vote, invalidated the “Millionaire’s Amendment,” which allowed federal candidates to solicit contributions at three times the normal limit ($6,900 rather than $2,300) if their opponent has contributed more than $350,000 to his or her own campaign. Writing for the majority, Justice Alito rejected the argument that the Amendment was necessary to "level the playing field" in federal elections, and ruled instead that it placed an unconstitutional burden on wealthy candidates' right to spend as much of their own money as they wished. The dissent argued that the Amendment didn't burden free speech because rich candidates could still spend unlimited amounts of their own money.42

The Court was now poised to further unravel campaign finance law, and a feature-length film entitled "Hillary: The Movie," which attacked the then-New York senator and presidential candidate, provided the opportunity. A federal district court ruled that the film, intended for television broadcast and financed by the nontprofit corporation Citizens United, with substantial support from for-profit corporations, was covered by section 203. The group's appeal focused narrowly on whether the law was even meant to apply to a full-length movie of this type, but in 2009, the Supreme Court ordered rebriefing and reargument on the much broader question of whether existing precedents - including Austin v. Michigan Chamber of Commerce (see note 38) and parts of the McConnell decision - should be overruled on the ground that any ban on corporate campaign spending violates the First Amendment.

It was no surprise when, on January 21, 2010, the Supreme Court released its sweeping decision in Citizens United v. Federal Election Commission, holding that the century-old ban on direct campaign expenditures by corporations (and by inference, on labor unions as well) violates the First Amendment. Overruling Austin as well as parts of McConnell, Justice Anthony Kennedy wrote for the five-justice majority that government cannot pick and choose among which kinds of individuals or entities will be allowed to engage in core political speech; it can "regulate corporate political speech through disclaimer and disclosure requirements," but it cannot "suppress that speech altogether."43 He added that the PAC alternative is too expensive and burdensome to be an adequate substitute for the full exercise of corporations' First Amendment rights.44

Justice Stevens, joined by Justices Ginsburg, Breyer and Sotomayor, wrote the dissent in Citizens United. The majority's basic premise, Stevens said, is "that the First Amendment bars regulatory distinctions based on a speaker’s identity, including its 'identity' as a corporation. While that glittering generality has rhetorical appeal, it is not a correct statement of the law."45 Stevens proceeded to explain why the artificial, state-created entities known as corporations have never been thought to have the same rights as individual citizens. He also took the majority to task for its aggressive judicial activism: brushing aside a number of narrower grounds for deciding the case and reaching out to establish radical new restrictions on the ability of legislatures to pass laws aimed at controlling the enormous power of money in American elections.

THE FIRST AMENDMENT AND CAMPAIGN FINANCE REFORM

Any restrictions on campaign activity - disclosure requirements, caps on expenditures, bans on corporate electioneering - burden the First Amendment right to political speech. But there are countervailing First Amendment interests on the side of allowing all viewpoints - not just the richest or most powerful - to be heard. And the First Amendment is not an "absolute": when there is a "compelling state interest," even core political expression can be regulated. It is difficult to think of a more compelling interest than the preservation of representative democracy.

The question in cases involving campaign finance often boils down to whether a restriction is overbroad - that is, whether it burdens more political speech than necessary - or whether it is "narrowly tailored" to remedy the evil at hand. In McConnell, a majority of the Supreme Court deferred to Congress's judgment about what was necessary to repair the damage. The dissenters passionately disagreed, but they offered no alternative prescription for addressing the unbridled influence of money in politics. A new Supreme Court majority in Citizens United thought that "more speech," no matter how great the imbalance in the wealth needed to disseminate that speech, is not only required by the First Amendment, but is the best way to foster democracy. Again, the dissenters (who had been in the majority in McConnell) passionately disagreed.

These sharply divided majority opinions and dissents not only dramatize the difference that one justice can make in deciding the course of constitutional law; they highlight the distinction between theoretical incursions on First Amendment freedoms and the real world of federal election campaigns. Although some of BCRA's provisions are alarmingly broad, the practical realities of money-based politics, as amply illustrated in the record before the Court in McConnell, suggested that BCRA - or what is now left of it - might not have the widely censorious effects that its critics feared.

The dissenters in McConnell noted that BCRA exempted the now highly concentrated mass media from restrictions on corporate advocacy for the election or defeat of federal candidates. Such an exemption for the news media seemed an obvious requirement of the First Amendment. Justice Kennedy's majority opinion in the Citizens United case pointed to the same anomaly: why should big media companies be allowed unrestricted spending for the election or defeat of political candidates, while other corporations are not? Citizens United eliminates the anomaly, but at what many observers think will be a significant cost to the fairness of elections and the functioning of democracy.

Interestingly, the ACLU itself has been torn by dissension over the free-expression interests on both sides of the campaign finance debate. Five former executive directors and legal directors of the organization filed a friend of the court brief in McConnell taking issue with the organization's continuing opposition to campaign finance regulation. With regard to disclosure requirements for electioneering ads, for example, this brief argued that they "enhance, rather than retard, First Amendment interests," because the marketplace of ideas is "ill-served by a regime of shadowy, untraceable expenditures," and "suffers when corporations and labor unions are able to monopolize electoral communications" through their large treasuries.46

It is too early to measure the fallout from the radical change in campaign finance law engineered by the Supreme Court's remarkably activist decision in Citizens United. The decision did have the virtue at least of eliminating the necessity for case-by-case decisionmaking on which of the thousands of nonprofit advocacy corporations (such as the ACLU) are entitled to the Massachusetts Citizens for Life exemption from the ban on corporate advocacy (see note 30). Now, the ban itself has been eliminated by judicial fiat.

The majority opinion in McConnell closed by noting: "We are under no illusion that BCRA will be the last congressional statement on the matter. Money, like water, will always find an outlet."47 Ultimately, it will take a fundamental rethinking of the meaning and purpose of the First Amendment - including a reconsideration of the Court's original ruling in Buckley v. Valeo that money equals speech - before the overwhelming power of heavily financed televised campaign ads will cease to frame and often determine the outcome of elections.

r r r r r r r r

For more on the McConnell, WRTL, and Citizens United cases, see the Campaign Legal Center and the Brennan Center for Justice.

NOTES

1. McConnell v. Federal Election Comm'n, 251 F. Supp.2d 176, 209 (per curiam opinion) (D.D.C. May 1, 2003), affirmed in part and reversed in part, McConnell v. Federal Election Comm'n, 540 U.S. 93 (2003).

2. McConnell v. Federal Election Comm'n, 540 U.S. 93, 114 (2003) (opinion of Justices Stevens and O'Connor). Justices Stephen Breyer, David Souter, and Ruth Bader Ginsburg joined in the majority opinion; Justices Rehnquist, Thomas, and Scalia concurred in parts of it.

3. McConnell v. FEC, 540 U.S. at 286 (opinion of Justice Kennedy, concurring in part and dissenting in part), 264 (opinion of Justice Thomas, concurring in part and dissenting in part), 247 (opinion of Justice Scalia, concurring in part and dissenting in part). Chief Justice Rehnquist also dissented in part, 540 U.S. at 350.

4. Buckley v. Valeo, 424 U.S. 1, 80 (1976).

5. In the various court opinions, the judges refer to soft money as "nonfederal funds," to distinguish this income source from the "federal funds" or contributions that were regulated under the pre-BCRA campaign finance law.

6. McConnell v. FEC, 540 U.S. at 131.

7. McConnell v. FEC, 251 F. Supp.2d at 828 (Fact-Finding #49).

8. Id. at 876 (Fact-Finding #277).

9. Id.

10. Declaration of Republican Political Consultant Douglas Bailey, quoted in McConnell v. FEC, 51 F. Supp.2d at 874-75 (Fact-Finding #274).

11. McConnell v. FEC, 540 U.S. at 124.

12. McConnell v. FEC, 251 F. Supp.2d at 518 (opinion of Judge Kollar-Kotelly, Fact-Finding #1.85.2).

13. Id. at 545-50 (opinion of Judge Kollar-Kotelly, Fact-Findings #2.6.3-2.6.5.4).

14. Id. at 494-95 (opinion of Judge Kollar-Kotelly, Fact-Finding #1.75.1.2).

15. Id. at 815-17 (Fact-Findings #2-5; Report of Defense Expert Thomas Mann, quoted in Fact-Finding #5).

16. Quoted in McConnell v. FEC, 251 F. Supp.2d at 468-70 (opinion of Judge Henderson).

17. Id. (quoting Zell Miller, "A Sorry Way to Win," Washington Post, Feb. 25, 2001, B7).

18. Quoted in McConnell v. FEC, 251 F. Supp.2d at 484-85 (opinion of Judge Kollar-Kotelly, Fact-Finding #1.70.1).

19. Quoted in McConnell v. FEC, 251 F. Supp.2d at 862 (Fact-Finding #227); 500-01 (opinion of Judge Kollar-Kotelly, Fact-Findings #1.75.5-1.75.6).

20. Quoted in McConnell v. FEC, 251 F. Supp.2d at 481 (opinion of Judge Kollar-Kotelly, Fact-Finding #1.65).

21. Report of Defense Expert Thomas Mann, quoted in McConnell v. FEC, 251 F. Supp.2d at 443 (opinion of Judge Kollar-Kotelly, Fact-Finding #1.9).

22. McConnell v. FEC, 540 U.S. at 129 (quoting Senate Report No. 105-167, vol. 4, pp. 4611, 4535 (1998)).

23. Federal Election Comm'n v. Massachusetts Citizens for Life, 479 U.S. 238 (1986).

24. McConnell v. FEC, 540 U.S. at 231-32 (citing Tinker v. Des Moines Independent Community School District, 393 U.S. 503 (1969)). The parts of the law held not ripe for review were sections 304, 307, 316, and 319.

25. McConnell v. FEC, 540 U.S. at 134-35 (quoting Buckley v. Valeo, 424 U.S. at 20). In Buckley, the Court explained: "a contribution serves as a general expression of support for the candidate and his views, but does not communicate the underlying basis for the support. The quantity of communication by the contributor does not increase perceptibly with the size of his contribution ... The overall effect of the Act's contribution ceilings is merely to require candidates and political committees to raise funds from a greater number of persons and to compel people who would otherwise contribute amounts greater than the statutory limits to expend such funds on direct political expression." 424 U.S. at 21-22.

26. McConnell v. FEC, 540 U.S. at 136 (quoting Federal Election Comm'n v. National Right to Work Comm., 459 U.S. 197, 208 (1982)).

27. McConnell v. FEC, 540 U.S. at 193.

28. Id. at 196 (quoting the three-judge court, 251 F. Supp.2d at 237). The Supreme Court noted that minor parties or organizations sponsoring political ads could gain an exemption from the disclosure requirements if they coud show "'a reasonable probability that the compelled disclosure of a party's contributor's names will subject them to threats, harassment, or reprisals from either Government officials or private parties.'" Id., 198 (quoting Buckley v. Valeo, 424 U.S. at 74).

29. Federal Election Comm'n v. Massachusetts Citizens for Life, 479 U.S. 238 (1986). See the description of section 203, above.

30. McConnell v. FEC, 540 U.S. at 211. To qualify for the Massachusetts Citizens for Life exemption, the nonprofit organization must be "formed for the express purpose of promoting political ideas, and cannot engage in business activities"; it must have "no shareholders or other persons affiliated so as to have a claim on its assets or earnings"; and it cannot be "established by a business corporation or a labor union," or "accept contributions from such entities." Id., 210-11 (quoting Federal Election Comm'n v. Massachusetts Citizens for Life, 479 U.S. at 264).

31. McConnell v. FEC, 540 U.S. at 215-19.

32. McConnell v. FEC, 540 U.S. at 306 (dissent of Justice Kennedy).

33. Id. at 248-49 (dissent of Justice Scalia).

34. Id. at 185 n.72.

35. Id. at 264 (dissent of Justice Thomas), 248 (dissent of Justice Scalia).

36. Id. at 149-51.

37. Id. at 297, 336-37 (dissent of Justice Kennedy).

38. The Court specifically upheld a ban on corporate campaign spending in Austin v. Michigan Chamber of Commerce, 494 U. S. 652 (1990).

39. Linda Greenhouse, "Justices Raise Doubts on Campaign Finance Law," New York Times, Apr. 26, 2007, p. A1, A22.

40. All of the briefs in FEC v. Wisconsin Right to Life can be found at www.lawmemo.com/sct/06/WisconsinRTL/.

41. Federal Election Commission v. Wisconsin Right to Life, 551 U.S. 449 (2007).

42. 128 S.Ct. 2759 (2008). The Millionaire's Amendment is 2 U.S.C.S. § 441a-1.

43. Citizens United v. Federal Election Commission, S.Ct. No. 08–205 (Jan. 21, 2010), slip opinion, p. 2.

44. Id., p. 21.

45. Id., dissenting opinion of Justice Stevens, pp. 1-2.

46. Brief of Amici Curiae Former Leaders of the ACLU in McConnell v. FEC, S.Ct. No. 02-1674, p. 21.

47. McConnell v. FEC, 540 U.S. at 224.


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