Currently, all candidates in this country for Congress or the Presidency must adhere to contribution and spending limits set by the Federal Election Commission. For instance, contributors may give a maximum of $1,000 per election to a candidate, $5,000 to a state political party, and $20,000 to a national political party. But the constitutionality of the FEC limits now is being called into question, thanks to a spending dispute that erupted between two other Colorado Senate candidates a decade ago. Ten years ago, Republican Ken Kramer was campaigning with the help of President Ronald Reagan, hoping to defeat Democrat Tim Wirth. Wirth, then a popular Congressman, became the target of a $15,000 radio ad campaign paid for not by Kramer but by the Colorado Republican Party. The Colorado Democratic Party filed a complaint with the FEC that the Republicans radio buy put them over their $103,000 spending limit set by an FEC formula, but Washington lawyer Jan Baran, who represents the Colorado Republican Party, says the party’s ad fell outside FEC limits.

JAN BARAN, Republican Attorney: Up to that time, a belief that the only type of advertising that would be covered by the limit would be advertising that did two things: one, mention a candidate by name, and secondly, conveyed what the law calls a message of express advocacy, and that means that the message had to contain the words that expressly advocated either the election or defeat of a clearly identified candidate.

KWAME HOLMAN: Here’s the ad as it was heard 10 years ago.

AD SPOKESPERSON: Tim Wirth said he’s for a strong defense and a balanced budget. But according to his record, Tim Wirth voted against every major new weapon system in the last five years, and he voted against the balanced budget amendment. Tim Wirth has a right to run for the Senate, but he doesn’t have a right to change the facts.

KWAME HOLMAN: Tim Wirth won the election, but the FEC upheld the complaint, ruing the radio ad was, indeed political speech subject to FEC limits. In doing so, Baran suggests the FEC changed the rules in the middle of the game.

JAN BARAN: What the Federal Election Commission did in this case is to say, well, that’s really not standard, we’re going to say that if you sent out a message that simply contains what it calls an electioneering message, then that expense counts toward the limit.

KWAME HOLMAN: And even if the Colorado Republican Party did overspend in 1986, Baran argues the spending limits the FEC sets for state parties are inadequate for modern day politics.

JAN BARAN: The way this limit works is that it doesn’t allow the Colorado Republican Party, for example, to pay the postage on one letter to just every Republican in the state of Colorado advocating the election of a candidate.

KWAME HOLMAN: So today, Jan Baran, the Colorado Republican Party, and both major national political parties are on the same side in a case before the Supreme Court.

JAN BARAN: This is the core of the First Amendment and the government rarely, if ever, is able to dictate how much political speech anyone, including a political party or perhaps especially a political party may engage in.

KWAME HOLMAN: But Ann McBride of the government watchdog group Common Cause argues the Supreme Court already struck the right balance between free speech and the federal government’s interest in the landmark 1976 case known as Buckley Vs. Vallejo.

ANN McBRIDE, Common Cause: Speech can be limited when there is a compelling state interest and in this case, in the campaign finance area, the compelling state interest was corruption or the appearance of corruption. We believe what’s been proposed in this case would clearly create corruption, the appearance of corruption, and that there is a compelling state interest.

KWAME HOLMAN: McBride says abolishing the state party spending limit would create a campaign financing loophole. She says individual donors could funnel unlimited $20,000 contributions, for instance, to the national party, which could pass the money along to the state party, which then could dedicate that money to a particular candidate.

ANN McBRIDE: A $20,000 contribution run through the political party in Colorado has the same corrupting impact as a direct contribution to that candidate.

JAN BARAN: This is a very highly regulated process, and it’s subject to many checks and balances, including public disclosure, to ensure that we preserve the integrity of our electoral process and our campaign finance system.

KWAME HOLMAN: But how much or how little that system will be changed as result of the Colorado case now is up to the nine justices of the court. A decision is expected this summer.

JIM LEHRER: And for more on the case and today’s arguments here now is NewsHour regular Stuart Taylor, correspondent for the "American Lawyer" and "Legal Times." Stuart, first of all, tell us briefly how it got to the Supreme Court. We know where it began in Colorado. How did it get here today?

STUART TAYLOR, The American Lawyer: Democrats in Colorado complained that the ad violated the existing election law. The Federal Election Commission took up that complaint, agreed with it, and sued, trying to get a civil penalty against the Colorado Republicans. The Federal Election Commission lost that case in the district court. They won it in the appeals court. The appeals court upheld their view of the restriction, and now the Colorado Republican Party, supported by a lot of other groups, including the National Republican Party and more lukewarm by the National Democratic Party are pushing now in the Supreme Court not only to overrule the lower court decision but to knock a very large hole in the existing web of federal campaign expenditure restrictions.

JIM LEHRER: So there are two ways to look at this case, are there not? I mean, there is the very narrow thing about what happened in Colorado. Now, is anybody arguing that? Do they want–the national parties both want this broader in–tell us, explain the differences and, and what the parties actually want the Supreme Court to do.

MR. TAYLOR: The Republican Party wants it to do a little more than the Democratic Party does. The Republican Party wants to go well beyond saying this particular radio spot against Tim, Tim Wirth, should have been upheld. They want the court to hold unconstitutional the provision of the Federal Election campaign laws that bars political parties from spending unlimited funds on their own candidate. So for example, if they win and win big, the Republican Party in this fall’s election and the Democratic Party would be able to spend as much money as they can raise on behalf of their own Presidential candidates on top of the federal funding that the candidates get. Under existing law, they’re very strictly limited in what they can spend to a few cents per voter.

JIM LEHRER: And that would apply to all–I mean, if the Supreme Court should rule in that way, that would apply to all state parties, right?

MR. TAYLOR: Yes. It would apply to all political parties across the board, state, local in terms of supporting federal candidates. And now the purpose of the provision in the law, the reason there’s a cap on that, is that Congress thought that spending by political parties, unlimited spending on behalf of candidates, had a potential for corrupting the process, in part because parties can receive very large contributions, up to $20,000 a year, from moneyed individuals. Candidates cannot receive contributions that large. And one concern is that the parties would act as conduits so that the big contributor who wants to influence the elected official, instead of giving him $20,000 directly, which the law forbids, to just give it to the party. The party could spend it on his election, and you’d end up in the same place.

JIM LEHRER: And the party could theoretically under that formula give an individual candidate $1/2 million, right? I mean, you could get a bunch of $20,000 together.

MR. TAYLOR: Yes.

JIM LEHRER: And that would, would–and the theory there is that that would corrupt–how would that corrupt the candidate? What’s the theory as to how that would corrupt the candidate?

MR. TAYLOR: Well, there are two theories as to how it would corrupt the candidate. The one, the one that was pushed by Solicitor General Drew Days today was sort of, well, you remember Tamany Hall and the Teapot Dome scandal when political parties can be corrupting institutions, and if the candidate is too beholden to his own party, that can be corrupting. The–the stronger version of the argument which is made by groups like Common Cause is that the individual donors who make the money will exercise influence over candidates, quasi-bribery type influence, by giving–whether they give them the money directly, or whether they give it to them indirectly, and the party can effectuate that by spending an unlimited amount on the candidate. Now, of course, the other side of the argument is that the political party is the quintessential free speech, free politics organ of American democracy and that parties being able to spend money to elect candidates is a good thing, not a bad thing.

JIM LEHRER: Because they’re speaking for a group of people who share their views.

MR. TAYLOR: That’s correct.

JIM LEHRER: That’s the way the argument goes. And the–but the argument that was made today in–who made–who made the argument on the other side–in other words, the free speech argument? That’s the basic argument underlying the political party’s side, right?

MR. TAYLOR: Right. Jan Baran, who we just saw arguing the case, also argued it in the Supreme Court. And his fundamental point to the Supreme Court is that this is a very important form of free speech, the ability of a party to, to try and elect its own nominees, and that it shouldn’t be restricted unduly by the courts, and his claim is that it has not in the past been restricted because of the Supreme–because the Federal Election Commission didn’t used to construe the law quite the same way it does not.

JIM LEHRER: Is it possible to read, as you sometimes are able to, Stuart, the–what–where the Justices were leaning, based on their reactions and their questions for that?

MR. TAYLOR: You could read one or two of them, but you couldn’t read all of them. Justice Antonin Scalia, who has always been very hostile to campaign funding restrictions and in favor of freedom to spend money, made it clear today that he wants to strike this restriction down and strike it down big time. A couple of justices who the other side might have hoped would be more sympathetic to them, Justice Breyer and Justice Souter, both asked Solicitor General Days, what’s wrong with party discipline, what’s wrong with party government? Parties are supposed to be a good thing. And I’m not sure that he had a very convincing answer for them, because he was restricting himself to the thesis that parties, themselves, are corrupting and wasn’t making the more indirect argument that some other groups have made that you don’t focus on the party, focus on the people who are giving the money to the party, and passing it through to try and get–to get favors from the people the party’s going to elect.

JIM LEHRER: It’s–if the court decides to go the broad route on this, and not just resolve whether or not Tim Wirth’s situation was up or down, whether the Republican Party did the right or wrong thing, this could have enormous impact, could it not, if it comes–if it makes–if it gives a decision by July, is it supposed to?

MR. TAYLOR: It could have a very large impact, because parties can raise an awful lot of money, and in this election year, the Republicans seem to be able to raise more money than the Democrats, and if the court rules in a big broad sweeping way that parties can spend money, as much money as they want for candidates, I can imagine it might help the Republicans this year. Some other year it might help the Democrats.

JIM LEHRER: Yeah. But it would have an enormous effect on the election one way or another, would it not?

MR. TAYLOR: I–

JIM LEHRER: No, no. I don’t mean on the outcome of the elections. I don’t mean that, but just on the way money is raised and political campaigns.

MR. TAYLOR: Yes, because then you could–the traditional big donor could say, well, I can give my $20,000 to the party, and then they can take it right out and spend it on the guy we want them to spend it on. Now, there’s another restriction in the law that supposedly limits the big donor’s ability to say here’s how I want you to spend the money, but that’s very hard to enforce.

JIM LEHRER: Okay, Stuart. Thank you.

MR. TAYLOR: Thank you.

The post NewsHour: Setting Limits – April 15, 1996 appeared first on Stuart Taylor, Jr..