Posted July 23, 2008 by Paul S. Ryan Public Financing After Davis: “The Reports of My Death Are Greatly Exaggerated”There has been much speculation in the weeks since the Supreme Court decided Davis v. FEC,[1] striking down the federal law “Millionaire’s Amendment,” about whether and how the decision would impact lawsuits challenging the constitutionality of public financing program trigger provisions. Public financing advocates in several states have conveyed to me growing anxiety on the part of lawmakers who have historically supported public financing, but who have read overblown media accounts regarding the impact of the Davis decision. Meanwhile, respected election lawyers including Bob Bauer and Rick Hasen, for example, have debated this issue on their respective blogs. Bauer noted on his blog the post-Davis commentary “suggesting that public financing schemes that offer supplementary funding to candidates facing millionaire spending have been put in peril by Davis,” but argued that “[t]his is far from certain: Davis does not compel that conclusion.”[2] Hasen responded on his blog that public financing program trigger provisions “are now constitutionally suspect in light of Davis.”[3] Similar comments by these and other election law experts have been reported in the media. Missing from this commentary, however, has been a thoughtful discussion of the differences between the Millionaire’s Amendment struck down in Davis and public financing program trigger provisions, which were not analyzed by the Court in Davis. Differences between the two should lead courts to conclude in the future as they have in the past that public financing program trigger provisions are not unconstitutional. Any anxiety on the part of policy makers regarding the impact of the Davis decision on public financing programs is, at the very least premature, if not entirely unwarranted. I. Davis v. FEC and the Millionaire’s Amendment A brief review of what was actually litigated in Davis is in order, to lay a foundation for comparison between the Millionaire’s Amendment and public financing program trigger provisions. Under federal law, candidates for the U.S. House of Representatives are typically subject to a $2,300 per election contribution limit, as well as a limit on coordinated party expenditures (i.e., expenditures made by a political party in coordination with the candidate benefiting from the expenditure). Importantly, as the Court noted on the first page of its Davis opinion, “[u]nder the usual circumstances, the same restrictions apply to all the competitors for a seat and their authorized committees.”[4] But under the Millionaire’s Amendment, as the Davis Court explained, when a candidate for the U.S. House of Representatives spent personal funds in excess of $350,000, “a new, asymmetrical regulatory scheme [came] into play.”[5] The self-financing candidate remained subject to the original $2,300 contribution limit and coordinated spending limit, while a non-self-financing opponent was permitted to receive contributions up to treble the original limit (i.e., $6,900 rather than $2,300) and the coordinated party spending limit was eliminated. The legal claim in Davis was that a self-financed candidate’s First Amendment rights are violated when such candidate’s spending triggers the “asymmetrical regulatory scheme” of differential contribution limits. In assessing any claims that the First Amendment has been violated, the Court engages a two-step analysis. First, the Court examines the challenged statute to determine whether it does in fact burden activity protected by the First Amendment. Second, in the event that the challenged statute does burden First Amendment activity, the Court determines whether there is any government interest sufficient to justify the burden. A. Millionaire’s Amendment “Burden” Analysis The Court began its “burden” analysis of the Millionaire’s Amendment by noting that in its 1976 decision in Buckley v. Valeo[6] the Court had rejected a cap on candidate expenditure of personal funds as violative of the First Amendment.[7] The Court went on to find that, though the Millionaire’s Amendment did “not impose a cap on a candidate’s expenditure of personal funds, it impose[d] an unprecedented penalty on any candidate who robustly exercises that First Amendment right.”[8] In the Court’s view, the Millionaire’s Amendment burdened First Amendment activity because it “require[d] a candidate to choose between the First Amendment right to engage in unfettered political speech and subjection to discriminatory fundraising limitations.”[9] The Court continued: “Under [the Millionaire’s Amendment], the vigorous exercise of the right to use personal funds to finance campaign speech produces fundraising advantages for opponents in the competitive context of electoral politics.”[10] B. Millionaire’s Amendment “Government Interest” Analysis Having concluded that the Millionaire’s Amendment burdened First Amendment activity, the Court proceeded to step two of its constitutional analysis—determining whether there was any government interest sufficient to justify the burden. The government offered three interests and the Court rejected them all. First, the Court rejected the argument that the burden was justified by a governmental interest in eliminating corruption, noting that the Court had found in Buckley that a candidate’s “reliance on personal funds reduces the threat of corruption”[11] posed by private contributions and that by discouraging the use of personal funds the Millionaire’s Amendment disserves the anticorruption interest.[12] Second, the Court rejected the government’s argument that the Millionaire’s Amendment’s “asymmetrical limits are justified because they ‘level electoral opportunities for candidates of different personal wealth,’” noting that the Court’s prior decisions “provide no support for the proposition that this is a legitimate government objective.”[13] Finally, the Court rejected the government’s claim that the asymmetrical limits are justified because they “ameliorate[] the deleterious effects” of existing contribution limits that “make it harder for candidates who are not wealthy to raise funds and therefore provide a substantial advantage for wealthy candidates.”[14] Without judging the merits of this argument, the Court concluded that the “obvious remedy is to raise or eliminate those limits,” not to burden the speech of self-financed candidates through asymmetrical treatment under the law.[15] II. Applying Davis to Public Financing Program Trigger Provisions Applying the Davis Court’s analytical structure and reasoning to assess the constitutionality of public financing program trigger provisions does not, in the words of Bob Bauer, compel the conclusion that public financing program trigger provisions are unconstitutional. Yet some have read Davis broadly as standing for the proposition that any change in the rules of the game as a result of self-financed candidate spending violates the First Amendment. However, significant distinctions between the Millionaire’s Amendment and public financing program trigger provisions exist—both with respect to the “burden” prong of the constitutional analysis and with respect to the “government interest” prong of the analysis. Based on these distinctions, a strong argument can be made for the constitutionality of public financing program trigger provisions notwithstanding the Davis decision. A. Public Financing Program Trigger Provision “Burden” Analysis Regarding the “burden” on speech, the Davis Court’s analytical starting point was the fact that “[u]nder the usual circumstances, the same restrictions apply to all the competitors for a seat.”[16] This simply is not the case in the context of public financing programs. Candidates participating in public financing programs are subject to much more severe campaign finance restrictions than candidates who choose to finance their campaigns using private funds.
In short, “under usual circumstances,” the same restrictions do not apply to a candidate participating in a public financing program and a candidate who is not. A participating candidate accepts significant burdens and disadvantages vis-à-vis a nonparticipating candidate from the get-go. The Buckley Court recognized this fact, explaining: Any disadvantage suffered by operation of the eligibility formulae under [the public financing law] is thus limited to the claimed denial of the enhancement of opportunity to communicate with the electorate that the formulae afford eligible candidates. But eligible candidates suffer a countervailing denial. As we more fully develop later, acceptance of public financing entails voluntary acceptance of an expenditure ceiling. Non-eligible candidates are not subject to that limitation.[17] Comparing a system in which candidates start under the same rules (e.g., the Millionaire’s Amendment system) to a system in which candidates start under different rules (e.g., a public financing system) is comparing apples to oranges. The Supreme Court in Davis gave no consideration whatsoever to the latter scenario—the issue simply was not before the Court. Is a privately-financed candidate who has been operating under less restrictive rules than her publicly-financed opponent burdened when the more severe restrictions willingly suffered by the publicly-financed opponent are eased a bit under a public financing program trigger provision? The privately-financed candidate would still arguably be operating under less restrictive rules than her publicly-financed opponent notwithstanding the operation of the trigger provision. Consider the hypothetical example of two candidates running for governor in a state that offers a voluntary public financing option. Candidate A decides to forego the public financing option and instead privately finance her campaign under the state’s $10,000 contribution limit with no limit on how much she may spend. Candidate B decides to participate in the public financing program and, consequently, must agree to raise no private contributions beyond 10,000 $5 “qualifying contributions,” which are turned over to the state, and to spend no more than the $1 million grant of public funds. If Candidate A raises and spends $10 million, is Candidate A burdened by a public financing program trigger provision that provides Candidate B with up to $1 million dollars in additional public funds to match expenditures above $1 million by a nonparticipating opponent? Bear in mind that Candidate B remains bound by the increased $2 million spending limit and may raise no private funds, while Candidate A continues to raise private funds under a $10,000 limit and spend as much as she raises—$10 million and counting. Unlike the Millionaire’s Amendment context, where the self-financed candidate was subject to more restrictive campaign finance laws that a non-self-financed opponent, a self-financed candidate in the public financing context typically operates under less restrictive campaign finance laws than a publicly-financed opponent, even when a trigger provision is in effect. Whereas the Davis Court concluded that under the Millionaire’s Amendment, “the vigorous exercise of the right to use personal funds to finance campaign speech produce[d] fundraising advantages for opponents in the competitive context of electoral politics,”[18] the same can not credibly be said about public financing program trigger provisions. It is on this basis that the “burden” analysis in the public financing context is distinguishable from the Davis Court’s burden analysis in the Millionaire’s Amendment context. B. Public Financing Program Trigger Provision “Government Interest” Analysis Even greater distinctions can be drawn between the government interests asserted and rejected in Davis to justify the Millionaire’s Amendment and those that have been asserted and accepted by the Supreme Court and lower courts to justify constitutional burdens that might be associated with public financing programs. In Buckley, the Supreme Court rejected several constitutional challenges to the federal presidential public financing program. In doing so, the Court recognized several important governmental interests that support public financing generally—several of which arguably justify any First Amendment burdens that might be deemed to result from public financing program trigger provisions. The Buckley Court found that, in enacting the presidential public financing program, “Congress was legislating for the “general welfare” to reduce the deleterious influence of large contributions on our political process, to facilitate communication by candidates with the electorate, and to free candidates from the rigors of fundraising.”[19] The Buckley Court explicitly rejected the argument that the presidential public financing program violated the First Amendment, reasoning that the public financing program was “a congressional effort, not to abridge, restrict, or censor speech, but rather to use public money to facilitate and enlarge discussion and participation in the electoral process, goals vital to a self-governing people.”[20] The presidential public financing program, according to the Court, “furthers, not abridges, pertinent First Amendment values.”[21] The Court’s elaboration on this point is worth quoting at length. [T]he central purpose of the Speech and Press Clauses was to assure a society in which “uninhibited, robust, and wide-open” public debate concerning matters of public interest would thrive, for only in such society can a healthy representative democracy flourish. Legislation to enhance these First Amendment values is the rule, not the exception. Our statute books are replete with laws providing financial assistance to the exercise of free speech, such as aid to public broadcasting and other forms of educational media, and preferential postal rates and antitrust exemptions for newspapers.[22] The Buckley Court continued: It cannot be gainsaid that public financing as a means of eliminating the improper influence of large private contributions furthers a significant governmental interest. In addition, the limits on contributions necessarily increase the burden of fundraising, and Congress properly regarded public financing as an appropriate means of relieving major-party Presidential candidates from the rigors of soliciting private contributions.[23] Importantly, with respect to public financing program trigger provisions, the Buckley Court rejected the argument that the public financing program is unconstitutional because “it does not treat all declared candidates the same.”[24] The Court concluded that Congress “was justified in providing both major parties full funding and all other parties only a percentage of the major-party entitlement.”[25] The Court recognized that providing the same amount of funding to all parties would “make it easy to raid the United States Treasury.”[26] The Court examined the formula by which the federal public financing program differentially allocates public funds to major and minor party candidates and concluded: [T]he choice of percentage requirement that best accommodates the competing interests involved was for Congress to make. Without any doubt a range of formulations would sufficiently protect the public fisc and not foster factionalism, and would also recognize the public interest in the fluidity of our political affairs. We can not say that Congress’ choice falls without the permissible range.[27] Unlike the Millionaire’s Amendment scrutinized in Davis, which the Court found advanced no legitimate governmental interest, a system of public financing was found by the Buckley Court to advance governmental interests “vital to a self-governing people.”[28] Whereas the Millionaire’s Amendment did not advance the governmental interest in preventing corruption because it increased the size of allowable private contributions for certain candidates and discouraged the non-corrupting expenditure of personal funds, public financing programs have been found by the Court to further the significant governmental interest of eliminating the improper influence of large private contributions.”[29] Considering specifically the constitutionality of public financing trigger provisions, a court following Buckley should recognize that just as the presidential public financing program’s provisions allocating precious limited public resources to the races where they are most needed (e.g., differential allocation of funds to major and minor party candidates) advances the important governmental interest in protecting the public fisc, so too do public financing trigger provisions that allocate public resources to races where they are most needed (e.g., races in which nonparticipating candidates or independent groups spend well in excess of the original allotment of public funds to participating candidates) advance the important governmental interest in protecting the public fisc. Further, the viability of public financing programs depends on candidates’ voluntary decision to participate. If participating candidates do not receive sufficient funds to run competitive races, serious candidates simply will not participate. Given that the Buckley Court found that public financing generally is supported by strong governmental interests, it stands to reason that mechanisms such as trigger provisions that are designed to ensure the viability of public financing programs are supported by the same governmental interests. Again, a hypothetical example can illustrate this important point of law. In designing a public financing program, where a legislature determines that a highly competitive race for the office of state representative costs $1 million, surely it is constitutionally permissible under Buckley for the legislature to enact a public financing program that allocates $1 million in public funds to all eligible participating candidates. But recognizing that only 10% of races for state legislature are competitive, and that the other 90% noncompetitive races cost only $500,000, the legislature might wisely choose to allocate only $500,000 initially to participating candidates in order to advance the important governmental interest in protecting the public fisc—but to incorporate into the public financing program a trigger provision that allocates up to an additional $500,000 on a matching basis to candidates in the approximately 10% of races that are competitive, where the participating candidate’s opponent spends in excess of $500,000. Given that Buckley establishes the constitutionality of a program that allocates $1 million to every participating candidate, a program designed to protect the public fisc by targeting $1 million only to those races where it is truly needed, and allocating a lesser amount in other races, is likewise constitutional under Buckley. III. Conclusion To be certain, opponents of public financing laws have and will continue to argue that public financing programs generally, and public financing program trigger provisions specifically, are unconstitutional under the Supreme Court’s Davis decision. But, simply put, the Davis Court did not decide the issue and public financing program trigger provisions can be distinguished from the Millionaire’s Amendment invalidated in Davis. Strong legal arguments can be made for the constitutionality of public financing programs generally, and public financing program trigger provisions specifically. [1] 128 S. Ct. 2759 (2008). [2] Bob Bauer, Something To Be Said for Davis? (July 3, 2008), available at http://www.moresoftmoneyhardlaw.com/news.html?AID=1295. [3] Rick Hasen, More on Public Financing Post Davis v. FEC (July 7, 2008), available at http://electionlawblog.org/archives/011152.html. [4] Davis v. FEC, 128 S. Ct. at 2765. [5] Id. at 2766. [6] 424 U.S. 1 (1976). [7] Davis, 128 S. Ct. at 2771. [8] Id. [9] Id. (emphasis added). [10] Id. at 2772 (emphasis added). [11] Id. at 2773 (emphasis in original). [12] Id. [13] Id. [14] Id. at 2774. [15] Id. [16] Davis v. FEC, 128 S. Ct. at 2765. [17] Buckley, 424 U.S. at 95. [18] Id. at 2772 (emphasis added). [19] Buckley, 424 U.S. at 91. [20] Id. at 92-93 (emphasis added). [21] Id. at 93. [22] Id. at 93 n.127 (internal citations omitted). [23] Id. at 96. [24] Id. at 97. [25] Id. at 98. [26] Id. [27] Id. at 103-04 (internal citation omitted). [28] Id. at 92-93 (emphasis added). [29] Id. at 96. |
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