Law Review: Money Talks — Campaign Finance Reform and Free Speech
With Election Day around the corner, candidates across the country are engaged in competitive races that are sure to have a lot of money spent on them. An analysis by Politico estimates that $6,000,000,000 will be spent this election cycle, more than double the amount of money spent in the 2016 election. Former presidential candidate Mike Bloomberg spent more than $1,000,000,000 of his own money in the Democratic primaries. This kind of vast spending in political races has been a concern for many analysts since wealthy lobbyists and donors can heavily influence the winner by pouring in large swaths of cash into a race. As a result, Congress and many state legislatures have passed legislation to restrict donations and spending in elections. However, according to our nation’s High Court, those efforts have often been at odds with the First Amendment’s protection of free speech.
The relationship between campaign finance reform and free speech dates back to the landmark case Buckley v. Valeo, 424 U.S. 1 (1976). In 1974, Congress added amendments to the Federal Election Campaign Act (FECA) with significant restrictions on campaign expenditures and contributions. After the amendments passed, Senator James L. Buckley of New York brought suit in the District Court for the District of Columbia challenging the bill’s restrictions on First Amendment grounds. The district court denied Buckley’s request for declaratory relief. Buckley appealed the decision to the D.C. Circuit Court of Appeals who rejected his claim, deciding that the government had a “clear and compelling interest in safeguarding the integrity of elections.” Buckley then appealed to the Supreme Court who, in a per curiam opinion, affirmed in part and reversed in part the decision of the court of appeals. The Court ruled that spending money on elections to further political expression was a protected form of free speech, holding that limits on campaign expenditures, expenditures from a candidate's personal funds and independent expenditures from groups supporting the campaign violated the First Amendment. However, the Court also held that limits on individual contributions to candidates and the disclosure requirements were constitutional, reasoning that they “accordingly serve the basic governmental interest in safeguarding the integrity of the electoral process without directly impinging upon the rights of individual citizens and candidates to engage in political debate and discussion.”
Just two years later, the Supreme Court would extend its ruling in Buckley to corporations in First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978). The case concerned a Massachusetts law that barred corporations from spending money “for the purpose of... influencing or affecting the vote on any question submitted to the voters, other than one materially affecting any of the property, business or assets of the corporation.” The same year the law was passed, Massachusetts held a referendum to add an amendment to the state’s Constitution that would allow the state legislature to impose a graduated income tax. First National Bank of Boston wanted to advertise their opposition to the amendment since they felt it would affect their business interests, and proceeded to sue Massachusetts Attorney General Francis Bellotti in the Supreme Judicial Court of Massachusetts. The court found for the attorney general, writing: “Only when a general political issue materially affects a corporation’s business, property or assets may that corporation claim First Amendment protection for its speech or other activities entitling it to communicate its position on that issue to the general public, and G. L. c. 55, Section 8, which clearly identifies these parameters of corporate free speech is, therefore, not unconstitutional on its face.” The bank appealed to the U.S. Supreme Court who reversed the decision of the Massachusetts Court and struck down the law, holding that corporations are protected by the First Amendment. Writing for the majority, Justice Lewis Powell explained that corporations were entitled to the same free speech protections as individuals: “If the speakers here were not corporations, no one would suggest that the State could silence their proposed speech. It is the type of speech indispensable to decisionmaking [sic] in a democracy, and this is no less true because the speech comes from a corporation, rather than an individual.”
While the decision in Buckley established a right of free speech regarding an individual’s ability to spend money in an election, the Bellotti decision affirmed that right applies to corporations as well.
In the succeeding years, the Supreme Court would continue to unravel campaign finance restrictions passed by Congress in FEC v. National Conservative PAC, 470 U.S. 480 (1985). The case concerned 26 USC § 9012(f) which barred independent political committees from spending more than $1,000 on a candidate’s election campaign if that candidate accepted public financing. The Federal Election Commission (FEC) brought suit against the National Conservative Political Action Committee (NCPAC) in the District Court for the Eastern District of Pennsylvania for violating the law in an effort to support President Ronald Reagan’s presidential reelection campaign. In response, NCPAC contended that 26 USC § 9012(f) was unconstitutional; a three-judge panel agreed. The Supreme Court affirmed the decision of the district court, holding that the $1,000 expenditure limit was inconsistent with Buckley, and that there was no “sufficiently strong governmental interest” being served. In his majority opinion, then-Justice William Rehnquist lambasted the $1,000 expenditure limit: “for purposes of presenting political views in connection with a nationwide Presidential election, allowing the presentation of views while forbidding the expenditure of more than $1,000 to present them is much like allowing a speaker in a public hall to express his views while denying him the use of an amplifying system.”
Only a year later, the Supreme Court would strike down another section of FECA in Federal Election Commission v. Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986). In 1978, Massachusetts Citizens for Life, (MCFL) Inc. spent $9812.76 on flyers urging voters to vote for “pro-life” candidates in the upcoming state and federal elections. A complaint was then filed with the FEC that MCFL had violated section 316 of FECA — codified in 2 U.S.C. § 441b — which forbade corporations from spending their general treasury funds in a federal election. The FEC then sought a civil penalty in the District Court for the District of Massachusetts who held that section 441b did not apply to the flyers since they were not considered an expenditure under the act, and if it did, it was unconstitutional. On appeal, the First Circuit Court of Appeals reversed the part of the decision that held the section did not apply to the flyers, but affirmed the part of the decision that held that the section violated the First Amendment, writing: “We must conclude that the FEC has offered no substantial government interest in prohibiting MCFL’s expenditures for publication of its Special Election Editions. We therefore hold that the application of section 441b to indirect, uncoordinated expenditures by a non-profit ideological corporation expressing its views of political candidates violates the organization's First Amendment rights.” The Supreme Court affirmed the decision of the court of appeals, holding that while MCFL was indeed in violation of section 441b, the law itself contravened the First Amendment. Justice William Brennan wrote for the majority: “Voluntary political associations do not suddenly present the specter of corruption merely by assuming the corporate form. Given this fact, the rationale for restricting core political speech in this case is simply the desire for a bright-line rule. This hardly constitutes the compelling state interest necessary to justify any infringement on First Amendment freedom. While the burden on MCFL’s speech is not insurmountable, we cannot permit it to be imposed without a constitutionally adequate justification.”
Hitherto, the Supreme Court had handed down decisions invalidating laws limiting campaign expenditures. However, the Court would begin to reverse its campaign finance jurisprudence in Austin v. Michigan Chamber of Commerce., 494 U.S. 652 (1990). The case concerned section 54(1) of the Michigan Campaign Finance Act which prohibited corporations from using general treasury funds on independent expenditures in races for state elections. The Michigan State Chamber of Commerce, a non-profit group advocating the interests of businesses, wanted to use their funds to place an advertisement in a newspaper supporting a candidate for the Michigan House of Representatives. The group sought injunctive relief in the District Court for the Western District of Michigan who denied the injunction and sustained the section of the law. On appeal, the Sixth Circuit Court of Appeals reversed the district court’s ruling, holding that the Michigan law was inconsistent with the First Amendment: “The potential for unfair deployment of wealth for political purposes is not presented by the Chamber's mere incorporation… We therefore hold that Sec. 54's restriction on independent corporate spending is unconstitutional as applied to the Chamber, for it infringes upon speech at the core of the first amendment without a compelling justification.” The Supreme Court, in an opinion by Justice Thurgood Marshall, overruled the decision of the court of appeals, holding that Michigan was justified in regulating contributions to state elections through “a compelling state interest: preventing corruption or the appearance of corruption in the political arena by reducing the threat that huge corporate treasuries, which are amassed with the aid of favorable state laws and have little or no correlation to the public's support for the corporation's political ideas, will be used to influence unfairly election outcomes.”
Just over a decade later, the Supreme Court would rule in favor of another campaign finance law, this one passed by Congress. In 2002, Congress passed the Bipartisan Campaign Reform Act (BCRA) in another effort to regulate money spent on political campaigns. The law particularly regulated how much money could be spent on political advertising and the amount of money donated to political parties from corporations, unions and wealthy individuals. There was no shortage of controversy when the law was passed as it was immediately challenged in McConnell v. Federal Election Commission, 540 U.S. 93 (2003). The case ensued from a suit filed by the California Democratic Party, National Rifle Association and then-Senate Majority Whip Mitch McConnell. The plaintiffs argued, inter alia, that the bill’s restrictions on campaign donations violated the First Amendment. In a ruling with three separate majority opinions, the Court upheld most of the provisions of the act. The majority opinion written by Justices John Paul Stevens and Sandra Day O’Connor upheld the regulation on soft money, i.e., money from corporations and unions, deciding it was consistent with the First Amendment. Chief Justice William Rehnquist delivered the Court’s opinion that struck down a provision in the law that banned contributions from minors, while Justice Stephen Breyer delivered the Court’s opinion regarding the law’s requirement that broadcasters keep publicly available records of politically related broadcasting requests.
The decisions in the McConnell and Austin decisions gave advocates of campaign finance reform long-sought-after victories. However, the victories were both short-lived. A series of subsequent rulings by the Supreme Court would partly overturn McConnell, completely overturn Austin and strike down various sections of the BCRA.
In the 2008 case Davis v. Federal Election Commission, 554 U.S. 724 (2008), the Supreme Court struck down Section 319 (a) and (b) of the BCRA, which limited how much money a candidate could spend from his or her own funds. The provision also required self-funding candidates to declare how much of their own money they intended to spend if the amount exceeded $350,000. There was also a provision if the self-funded candidate’s opponent was not self-funded, then the opponent’s contribution caps would be tripled. Businessman Jack Davis, who was running for Congress in New York, filed a suit in the District Court for the District of Columbia; he argued that the law infringed on his First Amendment rights by requiring him to disclose his funds and restricting how much he could spend from his own money. The district court disagreed, upholding the parts of the law in the question. Davis appealed to the Supreme Court who reversed the district court’s ruling. Writing the majority opinion, Justice Samuel Alito noted that “If §319(a) simply raised the contribution limits for all candidates, Davis’ argument would plainly fail.” Notwithstanding, Justice Alito further elucidated: “We have never upheld the constitutionality of a law that imposes different contribution limits for candidates who are competing against each other, and we agree with Davis that this scheme impermissibly burdens his First Amendment right to spend his own money for campaign speech.”
Just two years later, the Supreme Court would deal another blow to the BCRA by striking down its provision limiting independent expenditures by corporations, unions and other entities in Citizens United v. Federal Election Commission, 558 U.S. 310 (2010). The case arose when the nonprofit group Citizens United sought to advertise a documentary critical of then-Senator Hillary Clinton who was a candidate in the Democratic presidential primaries. The group then sought an injunction in the District Court for the District of Columbia against the FEC from enforcing sections 201, 203 and 311 of the BCRA on the grounds that those sections were unconstitutional. The district court denied the injunction, holding that the sections of the law were constitutionally applied. On appeal, the Supreme Court reversed in part and affirmed in part. The Court upheld the disclaimer and disclosure requirements of sections 201 and 311, holding that they were consistent with the prior holdings in Buckely and McConnell. The Court also struck down the prohibition on independent corporate expenditures in section 203, overruling McConell in part and completely overruling Austin. The majority opinion penned by Justice Anthoney Kennedy stated: “The Government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether... The First Amendment protects speech and speaker, and the ideas that flow from each… If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.”
Not long after the decision in Citizens United, the Supreme would strike down another provision of the BCRA in McCutcheon v. Federal Election Commission, 572 U.S. 185 (2014). Shaun McCutcheon, a businessman from Alabama, challenged the constitutionality of section 441 of the BCRA, which limited how much a donor could contribute to a particular candidate or committee, and set aggregate limits restricting how much a donor could contribute in total to all candidates or committees. Like previous challenges to the law, McCutcheon filed suit in the District Court for the District of Columbia, where a three-judge panel rejected his claim, granting the FEC’s motion to dismiss. On appeal, the Supreme Court reversed the decision of the district court, holding that most of section 441 violated the First Amendment. The Court upheld the limit on individual donations to a campaign, but struck down the aggregate limit provision. The plurality opinion delivered by Chief Justice John Roberts explicated that, consistent with Buckley, “Congress may regulate campaign contributions to protect against corruption or the appearance of corruption.” Regarding the aggregate limits, Chief Justice Roberts expounded on the Court’s prior holding in Davis that “To require one person to contribute at lower levels than others because he wants to support more candidates or causes is to impose a special burden on broader participation in the democratic process. And as we have recently admonished, the Government may not penalize an individual for ‘robustly exercis[ing]’ his First Amendment rights.”
While the cases discussed thus far have been mostly unfavorable to campaign finance laws, most of them have not dealt with laws that were implemented by the states. Other than the decisions in Bellotti and Austin, the cases involved laws implemented by the federal government. To date, almost all states have their own laws regarding campaign finance. If advocates of campaign finance reform have had little success applying their desired laws through Congress, should they turn their advocacy to states instead? Some recent decisions issued by the Supreme Court suggest not.
In the 2006 case Randall v. Sorrell, 548 U.S. 230 (2006), the Supreme Court would strike down a Vermont law limiting campaign expenditures and contributions. In 1997, Vermont enacted Act 64 imposing strict limits on campaign expenditures and contributions by political parties, political committees and individuals alike. The contribution limits placed on individuals, the lowest in the country at the time, were particularly stringent, ranging from $400 to the governor to as low as $200 to a state representative. The expenditure limits ranged from $300,000 for someone running for governor to as low as $2,000 for someone running for state representative. Shortly after the bill was enacted, State Representative Neil Randall brought suit in the District Court for the District of Vermont against Vermont Attorney General William Sorrell, arguing that the provisions of Act 64 violated the First Amendment. While the district court found the law constitutional in part, it struck down the expenditure limits and contribution limits from political parties to candidates. On appeal, the Second Circuit Court of Appeals found that the contribution and expenditure limits were constitutional, and remanded the case back to the district court. The Supreme Court then reversed and remanded the decision of the court of appeals, striking down the expenditure and contribution limits. The plurality opinion authored by Justice Stephen Breyer found that the expenditure limits were inconsistent with the precedent set in Buckley, and that although the Court in Buckley held contribution limits from individuals were constitutional since the government had an interest in preventing corruption, the contribution limits imposed by Vermont were unduly low: “We conclude that Act 64’s expenditure limits violate the First Amendment as interpreted in Buckley v. Valeo. We also conclude that the specific details of Act 64’s contribution limits require us to hold that those limits violate the First Amendment, for they burden First Amendment interests in a manner that is disproportionate to the public purposes they were enacted to advance.”
Five years later, the Supreme Court would prevent another state from enacting campaign finance reform in the consolidated case Arizona Free Enterprise Club's Freedom Club PAC v. Bennett, 564 U.S. 721 (2011). In 1998, the citizens of Arizona approved a ballot measure called the Arizona Citizens Clean Elections Act. The law included a provision that provided candidates for state office with public funding if they received a certain number of $5 individual donations, and accepted certain restrictions and obligations on their campaign. The provision also allowed for a candidate who opted for public funding and was outspent by a privately funded candidate to receive additional funding that matched almost dollar for dollar what the privately funded candidate raised or spent. The Arizona Free Enterprise Club challenged the matching funds provision in the District Court for the District of Arizona, arguing that the provision posed a burden on their ability to exercise their free speech. The district court agreed and entered a permanent injunction against the provision. On appeal, the Ninth Circuit Court of Appeals reversed the decision of the district court, holding that “The matching funds provision does not actually prevent anyone from speaking in the first place or cap campaign expenditures,” and that “there is no evidence that any Plaintiff has actually suffered the consequence they allege the Act imposes.” The Supreme Court reversed the decision of the court of appeals, ruling that the matching funds provision posed a substantial burden on political speech without a compelling interest. Chief Justice John Roberts once again wrote for the majority: “Arizona’s program gives money to a candidate in direct response to the campaign speech of an opposing candidate or an independent group. It does this when the opposing candidate has chosen not to accept public financing, and has engaged in political speech above a level set by the State… This goes too far; Arizona’s matching funds provision substantially burdens the speech of privately financed candidates and independent expenditure groups without serving a compelling state interest.”
The constitutionality of campaign finance laws has been the subject of complex case law that has attempted to reconcile the competing interests of preventing corruption and the right of a person to freely express his or her ideas. The attempts to enact such laws by both the state and federal governments, whether in the form of limits on donations and expenditures or matching funds provisions, represent a good faith effort to combat corruption in politics and preserve the integrity of our elections. Conversely, the record illustrates that ideas that serve a desirable purpose can conflict with the Constitution. To date, the Supreme Court has upheld restrictions on individual donations to candidates in recognition that Congress and the states certainly have a “compelling interest” in preventing corruption. However, based on the standard set forth in Buckley, the Court has repeatedly struck down limits on campaign expenditures as an abridgment of free speech, and even nullified more sophisticated means like matching funds provisions. While there is unanimous agreement among the people that corruption in politics must be rooted out, a measure must be devised to combat corruption without impeding one of the most cherished rights in our republic—the freedom of speech.
Photo Caption: The constitutionality of campaign finance laws has been the subject of complex case law.
Photo Credit: Pixabay
