Opening Argument – Campaign Finance Reform: What the Court Should Do

National Journal

After seven years of congressional struggle, hundreds of editorials, 1,638 pages of lower-court opinions, dozens of Supreme Court briefs, and four hours of oral arguments on September 8, the fate of the Bipartisan Campaign Reform Act of 2002 appears to be in the hands of Justice Sandra Day O’Connor.

The four more-liberal justices seem supportive of the law also known as McCain-Feingold. The four more-conservative justices seem hostile to it. So the nation’s most powerful woman, who was inscrutable during the arguments, will probably play her usual role of casting the deciding vote. Here’s what she should do:

The justices should uphold BCRA’s prohibition of unlimited contributions by corporations, unions, and wealthy individuals of unregulated "soft money" — money that has more often been redolent of the shakedown than of the freedom of speech — to political parties. They should also bless the ban on the buying by business corporations and labor unions of what BCRA calls "electioneering" advertisements. But the justices should strike down Congress’s extension of this "electioneering" ban to nonprofit ideological corporations such as the National Rifle Association, the Sierra Club, NARAL, the National Right to Life Committee, and the American Civil Liberties Union.

These outcomes would be faithful to the crucial distinction that has run through the Court’s campaign finance decisions since Buckley v. Valeo, in 1976: Caps on large campaign contributions, and other regulations carefully designed to curb the buying and selling of influence, have a relatively modest impact on First Amendment rights and serve the compelling purpose of avoiding corruption and its appearance. But absent some plausible anti-corruption purpose, curbs on campaign spending — whether to muffle the political voices of the wealthy, or to shield incumbents from criticism — are generally unconstitutional.

It is not the Supreme Court’s job to decide whether the soft-money ban is wise policy, or whether, as I wrote in 2001, "the cure of legislating political purity and purging private money will always be worse than the disease." (I hereby amend that to "can be worse.") The policy question turns on whether the hoped-for anti-corruption benefit will end up justifying the feared cost of weakening our political parties, which have the unique virtue of being broad-based coalitions familiar (and thus accountable) to the voters.

The proliferation of gimmicks to evade BCRA’s soft-money ban is neither surprising nor encouraging. Most of them channel unlimited contributions to new, often obscure organizations that are not technically political parties but provide similar support to candidates. To the extent that the soft-money ban merely substitutes such groups for the parties in the influence-peddling bazaar, while diverting other donors to ideologically driven interest groups, it could make our politics less transparent and more polarized but no less corrupt.

On the other hand, the many soft-money donors who ponied up reluctantly, under pressure from candidates, may now keep their money. And there are signs that the soft-money ban may do less damage to the parties than some of us have feared. The national party committees raised more in hard money alone ($160 million) in the first six months of this year than their $138 million in combined hard and soft money at the same point in 1999, during the last presidential election cycle. No longer able to milk a few huge donors, they have rounded up hard-money contributions ranging from a few dollars up to BCRA’s $25,000-per-donor-per-year cap. Perhaps William Brock, the former senator and Republican National Committee chairman, was right when he wrote, "Far from reinvigorating the parties, soft money has simply strengthened certain candidates and a few donors, while distracting parties from traditional and important grassroots work."

Wise or not, the soft-money ban is consistent with Buckley’s rule that nobody has a right to make unlimited political contributions either to candidates or to parties. Opponents have argued that BCRA’s soft-money provisions unconstitutionally curb campaign spending — and also intrude too deeply into the affairs of state and local political parties (which in some states can still collect soft money for state and local elections) — by barring various ways of soliciting, spending, and transferring soft money between state and federal parties. But these provisions appear to be reasonable measures to prevent circumvention of the basic anticorruption purpose of keeping party soft money out of federal elections.

The constitutionality of BCRA’s new restrictions on "electioneering" ads by business corporations and unions is a closer call. Congress has barred federal campaign contributions by corporations since 1907, and by unions since 1948. The campaign reforms of 1974 sought to go further by barring them from buying independent, election-related ads, while allowing them to set up political action committees that solicit limited individual donations for election-related contributions and spending.

But the Supreme Court held that independent election-related spending had less corruptive potential than large contributions, and that the 1974 provision was so vague that it must be very narrowly construed. In its so-called "express advocacy" rule, the Court quite deliberately made it legal for corporations and unions to buy ads designed to help or hurt federal candidates as long as they avoided words such as "vote for Jones," "defeat Smith," or the like. By the mid-1990s, unions and corporations, mostly of the nonprofit ideological variety, were spending many millions on pre-election ads promoting or attacking federal candidates, sometimes in the natural course of advocating positions on legislative issues, sometimes in the guise of doing so. These are what critics call "sham issue ads."

BCRA sought to avoid the trap of unconstitutional vagueness by outlawing corporate and union "electioneering communications," which it defined to mean any broadcast ad naming a federal candidate that is aired in his or her election district (or state, in the case of senators) within 60 days before a general election or 30 days before a primary.

It is this provision that the Court should uphold as applied to business corporations and unions but strike down as applied to the spending of membership dues and individual contributions by nonprofit ideological corporations.

Why this distinction? Because, for reasons that the justices have never articulated very clearly, Congress had a legitimate reason for restricting the election-related speech of business corporations and unions, but not that of nonprofit ideological corporations. The reason is not that business corporations and unions have such huge amounts of money that they could exercise undue clout by flooding the political marketplace; so do billionaires and other wealthy individuals, who nonetheless have a First Amendment right to spend as much as they please on independent election-related speech.

Rather, what distinguishes wealthy individuals and nonprofit ideological corporations alike from business corporations and unions is that the latter often have incentives to curry the favor of elected officials and candidates for whose support many of their stockholders and union members would not want their money spent. There is no First Amendment right to spend someone else’s money on electioneering.

Nonprofit ideological corporations, on the other hand, exist to promote the political views of their members, and their ads generally reflect those views. Indeed, such corporations give voice to people of ordinary means who can participate in the political discourse of the nation only by pooling their resources. Requiring such corporations to use cumbersome PACs for election-related spending severely limits the amounts of money they can raise and thus inhibits this pooling of resources.

That is exactly what Congress was trying to do. BCRA’s legislative history shows clearly that the ban on "electioneering" ads by nonprofit ideological corporations was designed not to prevent corruption or its appearance, but rather to protect incumbents from the "negative attack ads" that many members so passionately denounced in their floor statements.

Attack ads are, to be sure, often crude and unfair. But in the words of the 1964 decision in New York Times v. Sullivan, the First Amendment reflects "a profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide open, and that it may well include vehement, caustic, and sometimes unpleasantly sharp attacks on government and public officials." Congress’s effort to squelch unpleasantly sharp attack ads represents an unambiguous assault on the freedom of speech.