Opening Argument – Polarizing Campaign Finance Law

National Journal

The most remarkable aspect of the Supreme Court’s big 5-4 decision on June 25 easing restrictions on corporate campaign spending has gone virtually unnoticed: Like Congress, the Court is so ideologically polarized that even when a principled, pragmatic, nonideological solution to a knotty problem was staring them in the face, all nine justices spurned it.

The knotty problem was that Congress, in the "issue ad" provision of the 2002 McCain-Feingold campaign finance law, had joined a legitimate goal with an illegitimate one.

The legitimate goal was to prevent business corporations — which have no mandate from their ideologically eclectic stockholders to use their money to meddle in election campaigns — from doing just that.

The illegitimate goal was to censor criticism of elected federal officials (along with other candidates) by nonprofit citizens advocacy groups — ranging from the National Rifle Association to the Sierra Club — whose members pay dues and band together precisely for the purpose of promoting political causes near and dear to them.

Congress quite deliberately, and cynically, accomplished both goals in the same provision (Section 203) by the simple and stealthy expedient of making it a federal crime for any corporation (excepting media corporations) to pay for a broadcast ad that refers to any federal candidate during the run-up to an election.

Because nearly all nonprofit advocacy groups are incorporated, the effect was to extend to such groups a ban ostensibly aimed at companies like General Electric and Dow Chemical. Indeed, it was the nonprofit citizens groups, not Big Business, that had bought many or most of the attack ads that legislators so resent.

Congress thereby made a mockery of the First Amendment’s injunction that "Congress shall make no law … abridging the freedom of speech, or of the press, or the right of the people … to petition the government for a redress of grievances." These provisions were intended above all to guarantee citizens (and groups of citizens) the same right to criticize incumbent officeholders that Section 203 restricts.

The ideal solution would have been for the Supreme Court to uphold the ad ban as applied to business corporations and to carve out an exception for nonprofit advocacy groups.

How many justices proposed doing that? Not one. Instead, in FEC v. Wisconsin Right to Life Inc., the five conservatives in the majority and the four liberal dissenters alike focused on all-or-nothing arguments treating all corporations as fungible.

I discussed the flaws of this approach in my April 28 column. But such is the fog of complexity surrounding this issue that my arguments are worth revisiting now that the justices have once again made a hash of it. It is also worth explaining how Congress sneaked censorship of advocacy groups into a law masquerading as a curb on Big Business and Big Labor.

(The same fog of complexity also prompts me to confess to oversimplification: I will not explain how the majority justices splintered into three separate opinions; why the exemption of political action committees from the issue-ad ban alleviates the burden on citizens groups far less than that on business corporations and unions; or the important difference between campaign contributions and independent campaign spending.)

Some background: Recognizing that business corporations amass vast sums invested by shareholders who (in most cases) do not intend that their money be spent on election campaigns — and that such sums can be used corruptly as quasi-bribes to buy influence — Congress has banned corporate contributions to federal candidates for 100 years. The Court has never questioned this ban. But until McCain-Feingold, corporations were free to spend money on so-called issue ads, meaning ads designed to persuade voters to pressure their representatives to support or oppose legislative measures.

The main reason for this distinction was that issue ads did not have the same potential to buy politicians as campaign contributions (or even independent campaign expenditures). But it is impossible to draw a clear line between issue ads and campaign spending. Especially during the 1990s, companies and citizens groups alike spent many millions on broadcast ads — dubbed "sham issue ads" by critics — that also had the purpose or effect of persuading viewers to vote for or against identified candidates.

The radio ads that Wisconsin Right to Life wanted to run in 2004, for example, urged viewers to "contact Senators Feingold and Kohl [both Wisconsin Democrats] and tell them to oppose the filibuster" of some of President Bush’s judicial nominees. This was an issue ad because the group no doubt wanted the filibuster to stop. But it was also intended to persuade viewers to vote against Feingold, who was up for re-election.

Indeed, in the 1990s issue ads became a way for business corporations as well as some nonprofits to circumvent the restrictions on corporate campaign spending. By the same token, criminalizing such circumvention would inevitably chill genuine issue advertising as well. And that’s what Congress chose to do in Section 203’s ban on pre-election broadcast ads that refer to candidates.

Many members recognized that no justification existed for extending this ban to nonprofit citizens advocacy groups. So the Senate adopted the so-called Snowe-Jeffords amendment to allow such groups to buy issue ads so long as they used only membership dues and contributions and thus avoided serving as conduits for business or union money.

But then the late Sen. Paul Wellstone, D-Minn., proposed an amendment to override Snowe-Jeffords and censor nonprofit advocacy groups too. Supporters of this amendment made it clear, by railing against "negative attack ads," that their goal was not to prevent corruption but to stop citizens groups such as the NRA from criticizing them.

A different bunch of (mostly Republican) senators — who opposed all curbs on issue ads, and perhaps wanted to gain support for their own campaigns in the form of business-funded or union-funded issue ads — cynically put the Wellstone amendment over the top. These senators believed (and McCain-Feingold’s sponsors warned) that it was so obviously unconstitutional that it would provoke the Supreme Court to strike down the entire issue-ad provision.

They guessed wrong. In the first ruling on Section 203, in 2003, all nine justices ignored both the unsavory history of the Wellstone amendment and the large distinction between citizens groups and business corporations. By 5-4, the Court upheld the issue-ad ban across the board.

Then, in the June 25 decision, again by 5-4, the justices went the other way, all but overruling the 2003 decision and rendering Section 203’s issue-ad ban unenforceable across the board. This sharp shift reflected the replacement of Justice Sandra Day O’Connor, who (to the surprise of many) wrote the 2003 decision, by Justice Samuel Alito, who voted with the majority in the new decision.

The two decisions had one thing in common: All nine justices ignored the Wellstone amendment and took an all-or-nothing approach, lumping nonprofit citizens groups together with corporations such as General Electric and Dow Chemical.

You might think that somebody on the Court would have looked for a way to salvage the sensible restrictions on business corporations and unions while striking down Congress’s cynical imposition of the same restrictions on nonprofit advocacy groups. But nobody did. Why not?

One reason was the facts of the case: Wisconsin Right to Life had spent business contributions along with members’ dues on its issue ads and made common cause with business corporations; this enabled its adversaries to portray the group as a conduit. Another reason was that the Court’s precedents have usually (if not always wisely) recognized no distinction between the free-speech rights of business corporations and those of individuals and citizens groups.

But the main reason for the all-or-nothing approach of justices on both sides, in my view, was the same ideological polarization that obstructs pragmatic compromise in Congress.

While the majority justices noted in passing the ad ban’s special burdens on nonprofit advocacy groups, they proceeded to gut Section 203 as it applied to business corporations. They thus fetishized corporate free-speech rights to the point of opening the door wide to business corporations (and unions) that seek to misuse shareholders’ (and workers’) money to buy political influence.

And although the four liberal dissenters stressed the need to curb "the corrosive and distorting effects of immense aggregations of wealth" on campaigns, they also unhesitatingly blessed Section 203’s censorship of citizens groups. They are so determined to uphold any and all curbs on big money in politics that they are willing to throw the free-speech baby out with the bathwater.

Not all liberals are so blinkered. "Here, Congress has passed a law under which, for example, it can be a federal crime for the ACLU to spend money criticizing members of Congress," wrote Walter Dellinger, the former acting solicitor general, in Slate. "How can that possibly not raise a most profound constitutional issue?"