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Updated June 25, 2007

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

THE FIRST AMENDMENT AND CAMPAIGN FINANCE REFORM

WISCONSIN RIGHT TO LIFE IN THE SUPREME COURT

 

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, cynically passed by incumbent officeholders, 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.

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 challenge posed by Wisconsin Right to Life, 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 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 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, 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

And the 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 tackles the problems through two main sections, called Titles I and II, and three minor ones, Titles III, IV, and V.

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

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

r Section 323(b) bans state and local political parties from using soft money for "federal election activities." It defines "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) bars national, state, and local political parties from giving money to certain nonprofit organizations and political groups so that they can spend money on federal election campaigns.

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

r Section 323(f) bars state officeholders and candidates from using soft money for federal campaign purposes.

Title II of BCRA tackles 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 rejects the magic words approach and substitutes a broader definition of "electioneering communications" for federal office.

Seven sections of Title II were challenged in McConnell:

r Section 201 defines 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 imposes disclosure requirements on all such communications.

It also has a narrower, "backup definition" of "electioneering communication" (in case the first one were to be held unconstitutional). The backup definition is: "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 says 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 bans corporations and labor unions from funding electioneering communications except through separate segregated funds or PACs. It has 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 eliminates 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 imposes disclosure rules for independent campaign expenditures.

r Section 213 limits 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 defines "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 have eight assorted sections that were also challenged in McConnell:

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

r Section 305 dictates 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 increases 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 are $37,500 for contributions to candidates and $57,500 for other contributions.

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

r Section 318 bars 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 requires 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 bars 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 requires 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), bans soft money contributions to the national parties; the remaining parts of Title I, the Court said, are 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 regulates political expression, and therefore is subject to "strict scrutiny." Particularly troubling, from a First Amendment standpoint, is 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 does not ban these ads (except for corporations and unions that choose not to set up political committees); it only regulates how they are funded, and requires disclosure of their sponsors.27

Requiring disclosure while expanding the definition of "electioneering communications" serves 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 is 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 bars candidates from soliciting soft money, have 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 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 regulates 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 have bought not only access but legislative decisions that favor 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 has long been settled, and was not new with the McConnell case. To some extent, all of the dissenters reargued past debates, just as many of the litigants sought to use the case to revisit past decisions of the Court.

THE FIRST AMENDMENT AND CAMPAIGN FINANCE REFORM

The justices in the McConnell majority approved Congress's integrated plan for campaign finance reform as a means of redressing the harm done to the democratic process by the past quarter-century's corruption of federal elections. The dissenters, and other critics of the decision, thought it marked a dark day for the First Amendment. It remains to be seen which of these very different views is more accurate, or whether BCRA will really eliminate or even substantially reduce the corrosive influence of big money on legislative decisionmaking.

Any restrictions on campaign activity - disclosure requirements, caps on expenditures, bans on corporate electioneering - burden the fundamental First Amendment right to political speech. But the First Amendment is not an "absolute," and 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 almost all cases involving campaign finance, therefore, 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, and its complete circumvention of the campaign finance system.

The majority and dissenting opinions in the case dramatize the difference 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, suggest that BCRA might not have the widely censorious effects that its critics fear, and might even result in more diverse speech, and more varied viewpoints getting heard in the political process.

During the litigation, for example, the ACLU created a broadcast ad that easily came within section 203's definition of "electioneering communication." The ad criticized House Speaker Dennis Hastert for delaying progress on an anti-discrimination bill. It urged viewers to "send Speaker Hastert a letter urging him to support fairness" and bring the bill to the floor of Congress."38 Because this ad seems truly issue-based and not designed to support or oppose Hastert's re-election, its sponsor should not have to conform to campaign finance regulation before airing it. Nor should the sponsoring organization, if incorporated, have to set up a separate PAC.

But, as Judge Kollar-Kotelly observed in the lower court decision, this ad "was clearly designed simply to provide the [ACLU] standing to challenge BCRA." She quoted two expert witnesses who asserted that in reality, BCRA "is remarkably successful in differentiating between the majority of pure issue ads and candidate-oriented issue ads," and that although the ACLU demonstrated "that it is possible to deliberately create a pure issue ad that runs afoul of BCRA, ... it is telling" that the organization "was forced to fabricate its own example."39

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.40

Yet critics of BCRA, including the dissenting justices in McConnell, argue that it won't really solve the problem of political influence-peddling. In the short time that the law has been in effect, for example, hard money contributions have increased dramatically, and groups such as the Club for Growth and Emily's List, which amass such contributions and then turn them over to candidates, have expanded their political clout.41 Of course, this is partly because BCRA doubled the amount of hard money that individuals can contribute to federal candidates, from $1,000 to $2,000 per candidate per election.

After the Supreme Court argument on September 8, 2003, John Bonifaz of the National Voting Rights Institute complained that the Court had not even seen fit to hear oral argument on his group's challenge to this increase in allowable hard money contributions. Contributions go primarily to incumbents, he said, thus calcifying the power structure; and as the size of contributions increases, elected officials are even less responsive to the needs of ordinary citizens.42

Will BCRA work? Surely, it is not perfect. The dissenters noted that the law exempts the now highly concentrated mass media from restrictions on advocating for the election or defeat of federal candidates. Such an exemption seems clearly required by the First Amendment, but it is admittedly anomalous in an era when so much of the broadcast media present a narrow and superficial range of political opinion, while small nonprofits with dissenting views may be caught in the net of government regulation. Similarly, the soft money ban applies to small national parties that can make an enormous contribution to political debate, but that are already marginalized and that badly need large donors.

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. What problems will arise, and how Congress will respond, are concerns for another day."43

WISCONSIN RIGHT TO LIFE IN THE SUPREME COURT

On April 25, 2007, 2½ 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 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."44

Those on the Court who would like to overrule McConnell or at the least create a major 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.45

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 can't, 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 overrule McConnell explicitly and strike down section 203 in all its applications.46

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.

There is no more important issue for free expression policy than campaign finance. The BCRA has some dubious provisions, but as The New York Times wrote on the eve of the Supreme Court argument in WRTL:

In last year's election, the voters clearly showed they are unhappy with the role special interests play in Washington. That frustration has grown with each new scandal involving Congress or the Bush Administration. It would be disturbing if the court now changed the rules to make it easier for special interests to corrupt American democracy.47

r r r r r r r r

For more on the McConnell and WRTL cases, see the Campaign Legal Center at www.campaignlegalcenter.org, and the Brennan Center for Justice at www.brennancenter.org. The Supreme Court opinion in McConnell is at www.supremecourtus.gov/opinions/03pdf/02-1674.pdf, the Supreme Court briefs, www.supremecourtus.gov/bcra/bcra.html, and the opinions of the three-judge court, www.dcd.uscourts.gov/mcconnell-2002-ruling.html.

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. Quoted in McConnell v. FEC, 251 F. Supp.2d at 912-13 (Fact-Findings #362-63).

39. Id. at 576-78 (opinion of Judge Kollar-Kotelly, Fact-Finding #2.11.4.2).

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

41. Norman Ornstein & Anthony Corrado, "'Hard Money' Is Easy to Come By," New York Times, Sept. 5, 2003, p. A19; Neil Lewis, "Clout Shifts With the Change in Campaign Finance Rules," New York Times, Sept. 8, 2003, p. A19.

42. As recorded on C-SPAN, Sept. 8. 2003.

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

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

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

46. Federal Election Commission v. Wisconsin Right to Life, S.Ct. No. 06-969 (June 25, 2007).

47. "A Test for the Roberts Court," New York Times, Apr. 25, 2007, p. A26.


The Free Expression Policy Project began in 2000 as part of the National Coalition Against Censorship, to provide empirical research and policy development on tough censorship issues and seek free speech-friendly solutions to the concerns that drive censorship campaigns. From May 2004 to March 2007, it was part of the Democracy Program at the Brennan Center for Justice at NYU School of Law. FEPP has been supported by grants from the Robert Sterling Clark Foundation, the Nathan Cummings Foundation, the Rockefeller Foundation, the Educational Foundation of America, the Open Society Institute, and the Andy Warhol Foundation for the Visual Arts.

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