News

Recognizing the Problems of Political Corruption and Influence-Peddling, Supreme Court Upholds the Campaign Finance Law

(December 10, 2003) - In something of a surprise decision, the Supreme Court today upheld all significant provisions of the sweeping 2002 "Bipartisan Campaign Reform Act" (BCRA) - also known as the McCain-Feingold Law.

The law attempts to end abuses of the campaign finance system that allow large corporations, labor unions, well-funded interest groups, and wealthy individuals to circumvent legal limits on the size of campaign contributions by giving hundreds of millions of dollars in "soft money" to political parties, which then spend it on electioneering, and by funding "sham issue" ads that are designed to influence federal elections but that have not, until BCRA, been subject to the law's contribution limits or disclosure requirements. These loopholes, as the Supreme Court recognized in its decision, have allowed influence-peddling and the appearance of corruption to overwhelm the democratic process.

The 298-page decision in McConnell v. Federal Election Commission (after Senator Mitch McConnell, the lead plaintiff) comes in many pieces. Justices Stevens and O'Connor jointly authored an opinion upholding 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 a part of BCRA that bars minors from contributing to political campaigns (the Court noted that they have First Amendment rights), and holding that various other parts of the law are not yet ripe for a legal challenge. Justice Breyer weighed in with an opinion upholding Title V of BRCA, which requires broadcasters to keep records of political ads.

The Stevens-O'Connor majority opinion recounts the long history of efforts to "purge national politics of what was perceived to be the pernicious influence of 'big money' campaign contributions."1 It explains that the 1971 Federal Election Campaign Act limited both contributions to and expenditures on federal election campaigns, that the Supreme Court's 1976 Buckley v. Valeo decision upheld the cap on campaign contributions but struck down the cap on independent expenditures, and that in the years after Buckley, "soft money" contributions to political parties grew so fast that they completely subverted the law's contribution caps and disclosure requirements.

Moreover, a Federal Election Commission ruling that parties can use soft money for ads that mention candidates, as long as they don't "expressly advocate the candidate's election or defeat,"2 opened the door to massive spending on sham issue ads that essentially support or oppose candidates but that, until BCRA, have been immune from regulation because they don't use explicit "magic words" like "vote for" or "defeat." BCRA eliminated the "magic words" requirement by defining 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." The law requires that such ads be paid for out of "hard money" contributions and that the identities of those who actually funded the ads be disclosed.3

The broad definition of "electioneering communications" was one of the more troublesome parts of BCRA, from a First Amendment standpoint. (BCRA even included a narrower, "backup definition" of "electioneering communication" in case the first one were held unconstitutional.) 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 said, "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.4

Subjecting these ads to the law's disclosure requirements gives voters essential information. Stevens and O'Connor quoted the decision of the lower court justifying the expanded definition:

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. ... Plaintiffs' disdain for BCRA's disclosure provisions is nothing short of surprising. ... 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.5

There is much more in this lengthy decision for activists, political parties, and all those concerned about the state of our democracy to ponder. The bottom line is that a majority of justices have recognized that there is an urgent need for reform of an electoral system where large-money interests have "used soft money to finance a virtual torrent of televised election-related ads during the periods immediately preceding federal elections," and that "remedial legislation was needed to staunch that flow of money."6

Updates: On June 25, 2007, 2½ years after the McConnell decision, a new Supreme Court majority substantially cut back on McConnell in an "as applied" challenge to BCRA by Wisconsin Right to Life ("WRTL"). The Court now ruled that BCRA's expanded definition of "electioneering communications" violates the First Amendment when applied to any ad that can "reasonably" be interpreted as not expressly advocating the election or defeat of a candidate. Justices Scalia, Kennedy, and Thomas went farther and would have overruled McConnell.

On June 26, 2008, the Court struck down another part of BCRA - 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 had 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 wealthy candidates' right to contribute to their own campaigns. The dissent argued that the Amendment didn't burden free speech because rich candidates could still spend as much of their own money as they liked.

For details, see FEPP's updated Campaign Finance Page.

NOTES

1. McConnell v. Federal Election Commission, No. 02-1674 (Dec. 10, 2003), slip opinion of Justices Stevens and O'Connor, pp. 3-4.

2. Id., p. 12.

3. Bipartisan Campaign Reform Act, §201, amending the Federal Election Campaign Act, §304, 2 U.S. Code §434(f)(3)(A)(i). For a description of all the major provisions of BCRA, see the Campaign Finance Page.

4. McConnell v. Federal Election Commission, No. 02-1674 (Dec. 10, 2003), slip opinion of Justices Stevens and O'Connor, pp. 83, 86.

5. Id., pp. 89-90, quoting the district court decision, 251 F. Supp. 2d 176, 237 (D.D.C. 2003).

6. Id., p. 102.