Posted May 7, 2009 by Tara Malloy and J. Gerald Hebert
Decades of Campaign Finance Law Under Siege
Many decades of hard-earned reforms to the nation’s campaign finance laws are in danger of being dismantled by a litigation offensive mounted by interests opposed to those reforms.
Emboldened by the conservative majority in the U.S. Supreme Court, ideological and interest group opponents of campaign finance regulation have brought an unprecedented number of cases in the past year to challenge campaign finance laws at the federal, state and municipal levels. The challenges are being brought by national party committees, trade associations, ideological groups and so-called “527” organizations. These opponents are often represented by attorneys working for tax-exempt organizations whose public filings reveal little about their funding sources and whose primary mission is to overturn existing campaign finance laws.
What is most striking about these groups’ litigation effort is that it challenges longstanding campaign finance laws that have already been upheld and declared constitutional. For this reason, their challenges often fail in the lower courts as these courts simply uphold preexisting Supreme Court precedent that is supportive of campaign finance regulation. The problem is that under Chief Justice John Roberts, the Supreme Court is quickly undermining that very precedent.
The Roberts Court, however, is not overturning earlier Supreme Court rulings openly. In their current offensive, anti-reform groups rarely challenge the general constitutionality of campaign finance law “on its face,” but instead frame their cases as challenges to the law “as applied” to specific situations. These kind of “as applied” challenges have given the Roberts Court the opportunity to significantly erode existing precedent without having to reverse such precedent explicitly. Effectively, however, the Roberts Court has begun to overturn a variety of campaign laws previously upheld by the High Court.
At the federal level, recent challenges are attempting to tear down many decades’ worth of election law, including the principles behind restrictions on corporations that extend as far back as the Tillman Act of 1907. That Act banned political contributions by corporations and was shepherded through Congress by President Teddy Roosevelt in an era when corporations wielded staggering power in Washington as the main sources of funding for political parties. Challenges to other long-standing provisions of the election laws, such as coordinated party spending limits, demonstrate that the mission of anti-reform advocates is far more ambitious than merely rolling back the Bipartisan Campaign Reform Act of 2002 (BCRA), also known as McCain-Feingold. Instead, their apparent goal is to go back nearly a century and dismantle many of the campaign finance reforms enacted in the wake of the Watergate era scandals and to revert to an era of unregulated, undisclosed spending in federal elections that fueled public outrage at the turn of the 20th Century.
This federal litigation offensive is being replicated at the state level. During the past two years, opponents of campaign finance regulation have challenged state or municipal campaign finance laws in Arizona, California, Connecticut, New York, North Carolina, Ohio, Utah, Washington and West Virginia, to name just a few jurisdictions.
As a result of this redoubled anti-reform effort, the campaign finance arena has experienced one of its most active litigation periods. In the past year, the Campaign Legal Center, a nonpartisan Washington-based legal institute with particular expertise in issues of campaign finance law, lobbying regulation and government ethics, has represented a party or was active as an amicus in over twenty cases in both federal and state court, and monitored and consulted in several additional cases.
The litigation efforts against decades’ worth of campaign finance laws are concentrated in five principal subject matter areas:
I. Attacking Limits on Use of Corporate and Union Treasury Funds
II. Going After the “Soft Money” Ban and Coordinated Spending Limits
III. Challenging Public Financing Programs
IV. Attempting to Deregulate “527 Group” Spending
V. Undermining Meaningful Political Disclosure
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I. Attacks on Limits to Political Use of Corporate and Union Treasury Funds
A rash of litigation is currently underway against restrictions on the use of corporate and union treasury funds to influence federal elections. These various restrictions have been enacted over the course of the last century in response to a variety of abuses and scandals. The last significant addition to these laws was Title II of BCRA which prohibited the use of corporate and union treasury funds to finance “electioneering communications,” i.e. advertisements referencing specific federal candidates that are broadcast shortly before an election. This funding restriction was upheld in a “facial” or direct challenge to its constitutionality by the Supreme Court in the 2003 case, McConnell v. FEC.
In 2007, however, in Wisconsin Right to Life v. FEC, the Supreme Court gutted BCRA’s electioneering communications funding restriction. Essentially, the Supreme Court held that this restriction could be applied only to ads that “expressly advocate” for the election or defeat of a federal candidate or represent the “functional equivalent of express advocacy.” Encouraged by the WRTL decision, opponents of campaign finance laws have recently filed several additional challenges to Title II of BCRA.
In November 2008, the Supreme Court accepted the appeal of another such challenge, Citizens United v. FEC. The case challenges not only BCRA’s electioneering communications funding restriction, but also its accompanying disclosure requirements, as they apply to Citizens United’s film, Hillary: The Movie, and its advertisements promoting the film. In a sense then, Citizen United is a “piggyback” case to WRTL. Citizens United argues that just as the WRTL decision limited the application of the electioneering communications funding restriction to express advocacy or its functional equivalent, so too should the Supreme Court limit the application of BCRA’s electioneering communications disclosure requirements to express advocacy or its functional equivalent. If Citizens United is successful and the Supreme Court invalidates BCRA’s Title II disclosure provisions, the case will have far-reaching ramifications for both campaign finance and lobbying disclosure laws, likely fueling further legal challenges to any disclosure regulations that regulate beyond express advocacy communications.
In July 2008, a three-judge federal district court panel in Washington D.C. rejected Citizens United’s argument and ruled that the BCRA disclosure requirements are constitutional as applied to all electioneering communications. The Legal Center and Democracy 21 filed a brief as amici curiae in the district court supporting the disclosure requirements in June 2008.
Citizens United appealed to the Supreme Court, where the case is now pending. The opening brief filed by Citizens United made clear that it is challenging not only BCRA’s disclosure requirements but also the validity of Austin v. Mich. State Chamber of Commerce, a key Supreme Court decision that in 1990 upheld restrictions on corporate spending in federal elections. If the Supreme Court were to overrule the Austin precedent, as Citizens United urges, this would open the door to the dangers of unregulated corporate spending in federal elections. The Legal Center is part of a team of public interest groups that filed an amici brief on February 24, 2009 defending the electioneering communications regulations. The Supreme Court heard oral argument on March 25, 2009.
In addition to the Citizens United case, the electioneering communications disclosure provisions in BCRA were also challenged in Koerber v. FEC, a case filed in October 2008 in a North Carolina federal district court. Plaintiffs are challenging the disclosure provisions as applied to two television ads that meet the statutory definition of “electioneering communications,” yet according to plaintiffs, are not the functional equivalent of express advocacy.
The Legal Center with Democracy 21 filed an amici brief in October 2008 with the district court defending the BCRA disclosure provisions. On October 29, 2008, the district court concluded that plaintiffs were not likely to succeed on the merits of their challenge, and denied their motion for a preliminary injunction. Plaintiffs appealed the decision, and the Legal Center filed an amici brief along with Democracy 21 with the Fourth Circuit Court of Appeals on April 24, 2009. The case remains pending.
II. Going After the “Soft Money” Ban and Coordinated Spending Limits
In this era of exploding campaign costs, the party committees are constantly seeking new avenues of revenue. In the case of the Republican National Committee (RNC), it filed two separate suits in November 2008 seeking to overturn key laws curbing unlimited “soft money” contributions to political parties and capping coordinated spending between party committees and candidates.
The first lawsuit, RNC v. FEC, challenges the ban on “soft money” that was the signature accomplishment in the enactment of BCRA. Plaintiffs challenge both provisions of Title I of BCRA that bar the national parties from raising or spending soft money, i.e. money not in compliance with federal contribution limits and source restrictions, and provisions that prohibit state parties from using soft money for activities that affect federal elections, such as voter registration or GOTV (get out the vote) drives. Prior to these restrictions in BCRA, six- and seven-figure soft money checks provided the bulk of funding to party committees and were a popular tool for garnering or maintaining the attention of Congress in a high-stakes pay-to-play legislative environment.
Because the soft money provisions were upheld in the Supreme Court’s 2003 decision in McConnell, the RNC plaintiffs bill the case as a challenge to the provisions only as applied to the funding of certain party activities. However, the complaint lists nine such activities, including party spending on so-called “grassroots lobbying” or issue ads, and therefore the many exceptions sought would eviscerate the previously upheld soft money ban.
The case, which is currently pending in a district court in Washington D.C., was briefed in the first months of 2009. The Legal Center serves as co-counsel to the congressional sponsors of BCRA who are participating as amici curiae in the litigation: Senator McCain (R-AZ), Senator Feingold (D-WI), former Representative Marty Meehan (D-MA), and former Representative Christopher Shays (R-CT).
The second lawsuit brought by the RNC, Cao (RNC) v. FEC, challenges the limits on coordinated spending between political parties and their candidates for federal office. The coordinated spending limits were enacted in 1974 as part of the comprehensive post-Watergate reforms, and were specifically found to be constitutional in the Supreme Court’s 2001 decision in FEC v. Colorado Republican Federal Campaign Committee ( Colorado II).
Here again, because these limits were upheld in Colorado II, the RNC’s complaint frames the case as a challenge to the limits “as applied” to party spending that is not “unambiguously campaign related” or “functionally identical to contributions.” If accepted by the court, however, this argument would essentially require the invalidation of the coordinated party spending limits previously upheld by the Supreme Court in Colorado II. The Legal Center is considering amicus participation in support of the FEC.
III. Challenges to Public Financing Programs
Challenges to public financing programs on the federal, state, and municipal level are hardly a new phenomena, but the number of suits has exploded in recent years. A particular focus of the recent challenges is the so-called “trigger provisions” of such programs that provide candidates participating in the programs with additional public funds in the event of high spending by non-participating opponents or outside groups.
In the same way challenges to BCRA were encouraged by the Supreme Court’s decision in WRTL, the challenges to public financing trigger provisions have been encouraged by another recent Roberts Court decision – namely Davis v. FEC (2008). There, the Court struck down the so called “Millionaire’s Amendment,” a BCRA provision that allowed certain congressional candidates to accept up to six times the $2,300 federal contribution limit if they faced an opponent who spent a large amount of personal funds to finance his or her campaign. Opponents of public financing are using the decision to challenge state programs’ trigger provisions, claiming that trigger provisions are analogous to the Millionaire’s Amendment because they similarly provide benefits to certain candidates, namely publicly-financed candidates, if their opponents spend large amounts of money for their campaigns. They argue that Davis flatly prohibits any statutory scheme that increases the financial resources available to one candidate based on the spending of his or her opponents.
On November 3, 2008, the Supreme Court denied certiorari in Duke v. Leake, the first case to present the question of whether public financing trigger provisions are unconstitutional under the Davis precedent. The denial of certiorari let stand the May 2008 decision of the Fourth Circuit Court of Appeals affirming the constitutionality of North Carolina’s public financing program for judicial elections, including the program’s “trigger provisions.” The Legal Center had been active in the aforementioned litigation, filing an amici brief on behalf of itself and nine public interest organizations, successfully urging the Fourth Circuit to affirm the district court’s decision to dismiss the challenge to the public financing program.
The Legal Center also serves as co-counsel for the intervening defendants in Green Party of Connecticut v. Garfield, which challenges the constitutionality of Connecticut’s recently-enacted state public financing system. Among other claims, plaintiffs have argued that the “trigger provisions” in Connecticut’s public financing law are constitutionally suspect in light of the Supreme Court’s decision in Davis. The district court, which initially had rejected plaintiffs’ challenge to the trigger provisions, granted plaintiffs’ motion to reconsider this issue in October 2008. The case remains pending.
The Legal Center is also active in the defense of several other state and municipal public financing programs around the country facing similar challenges.
IV. Attempting to Deregulate “527 Group” Spending
Attempts are also being made to again unleash huge amounts of additional money within the campaign finance system by deregulating the so-called “527 groups” that have gained infamy since 2000. At issue is the novel legal question of whether groups making only independent expenditures can constitutionally be regulated as federal “political committees” subject to the contribution limits and other restrictions of the federal campaign finance laws.
The leading case on this subject is SpeechNow.org v. FEC, filed in federal district court in Washington D.C. in February 2008 by the 527 organization SpeechNow.org and its supporters. Plaintiffs requested a preliminary injunction, arguing that because SpeechNow.org makes only independent expenditures, the state interest in preventing actual and apparent corruption does not justify its regulation as a political committee. Specifically, SpeechNow.org objects to the imposition of the $5,000 contribution limit and the comprehensive disclosure requirements applicable to political committees.
The Legal Center, along with Democracy 21, filed an amici brief in March 2008 opposing SpeechNow.org’s motion for a preliminary injunction. The brief highlighted that McConnell upheld the “soft money” provisions in BCRA, which imposed federal limits on contributions to national and state parties, even if the contributions were ultimately used for independent purposes. The McConnell decision, argued the brief, thus confirms that the state’s anti-corruption interest extends to limits on contributions to political committees even if they make only independent expenditures. The brief also chronicled the role played by 527 groups in the 2004 and 2006 elections, describing how such groups were closely tied to candidates and party committees and often served as “effective conduits for donors desiring to corrupt federal candidates and officeholders.”
On July 1, 2008, the district court denied plaintiffs’ motion for a preliminary injunction, relying heavily on the description of the recent electoral activities of 527 organizations presented in the Legal Center’s amici brief. SpeechNow.org has appealed the decision to the D.C. Circuit Court of Appeals. The appeal is currently being held in abeyance while the case proceeds in the district court.
Another recent case challenging the regulation of independent groups is The Real Truth About Obama, Inc. (RTAO) v. FEC. RTAO, a 527 organization, filed suit in a Virginia federal district court in July 2008, requesting a preliminary and permanent injunction enjoining enforcement of several FEC regulations. Specifically, RTAO argued that the FEC’s definition of “express advocacy” is unconstitutionally vague and overbroad, as is the FEC’s definition of “contribution,” which covers funds raised in response to solicitations that indicate that the money will be used “to support or oppose” the election of federal candidates. Both of these rules are crucial to the FEC’s analysis of whether an independent group qualifies as a “political committee” subject to the applicable requirements under federal campaign finance law.
On September 11, 2008, the district court rejected RTAO’s motion for a preliminary injunction. RTAO appealed the district court’s decision to the Fourth Circuit Court of Appeals, and the appeal is pending. The Legal Center, along with Democracy 21, filed amici briefs with both the district court and the Fourth Circuit to defend the challenged FEC regulations.
The Legal Center’s litigation efforts in this subject area also include the defense of municipal laws that seek to regulate contributions to committees making only independent expenditures. The Legal Center participated as an amicus and as a consultant to the state defendant in both a federal court challenge to the constitutionality of San Jose’s limit on contributions to independent expenditure committees, San Jose Silicon Valley Chamber of Commerce Political Action Committee (COMPAC) v. City of San Jose, and a federal court challenge to San Francisco’s municipal contribution limit, Committee on JOBS v. Herrera.
The Legal Center is also monitoring Long Beach Area Chamber of Commerce v. City of Long Beach, a challenge to Long Beach’s municipal contribution limit which is pending before the Ninth Circuit Court of Appeals.
V. Undermining Meaningful Political Disclosure
Beyond seeking to remove caps on contributions, opponents of reform are seeking to remove meaningful disclosure as well. Essentially, opponents of campaign finance laws not only want to make unlimited contributions and expenditures, but they would like to do so anonymously. As explained below, disclosure laws currently under attack include lobbying disclosure provisions in the Honest Leadership and Open Government Act (HLOGA) enacted last Congress, as well as state laws modeled on BCRA’s electioneering communications disclosure requirements.
National Association of Manufacturers (NAM) v. Taylor is a lawsuit filed by NAM in federal district court in Washington D.C. to challenge a provision of HLOGA that requires a lobbying coalition, such as NAM, to disclose any member organization of the coalition that funds the coalition’s lobbying activities and “actively participates” in such lobbying activities. This provision aimed to repair a loophole in the pre-HLOGA disclosure law that had allowed special interest groups to evade lobbying disclosure by creating umbrella coalitions to conceal the real interests behind a lobbying effort.
In February 2008, the Legal Center, joined by Democracy 21 and Public Citizen, filed an amici brief with the district court in support of HLOGA. The amici brief argues that federal lobbying disclosure laws have been on the books since the 1940’s, and were specifically declared constitutional in the Supreme Court’s 1954 decision in U.S. v. Harriss. Amici thus argue that Supreme Court precedent makes clear that HLOGA serves the governmental interest in providing full disclosure of lobbying activity and in protecting the integrity of the legislative process.
On April 11, 2008, the district court dismissed NAM’s complaint, finding that the HLOGA provision was narrowly tailored to serve the state’s compelling interests in promoting transparency and deterring corruption in government. NAM appealed the district court’s ruling to the D.C. Circuit Court of Appeals, and the appeal is currently pending. The Legal Center again filed a brief in support of the disclosure provision in June 2008 with the Court of Appeals.
On the state level, challenges to disclosure laws are appearing in the wake of the U.S. Supreme Court’s 2007 decision in WRTL. In Ohio Right to Life (ORTL) v. Ohio Election Commission, ORTL is challenging multiple provisions of Ohio’s state campaign finance law, including Ohio’s “electioneering communications” disclosure requirements. Repeating the legal argument made in Citizens United, ORTL asserted that the Supreme Court’s decision in WRTL renders the state electioneering communication disclosure law unconstitutional as applied to any communication which does not meet WRTL’s definition of express advocacy or its functional equivalent.
In July 2008, the Legal Center filed an amici brief on behalf of itself and Ohio Citizen Action to defend the constitutionality of Ohio’s disclosure requirements. In September 2008, the district court granted in part, and denied in part plaintiff’s motion for a preliminary injunction. The court, however, rejected ORTL’s request to enjoin Ohio’s electioneering communications disclosure law, relying in part on arguments presented in the Legal Center’s amici brief.
In addition to the Ohio statute, there are also ongoing challenges to the electioneering communications disclosure laws of at least two additional states (West Virginia and Florida), and the Legal Center is monitoring these cases.
The ultimate goal of this multi-pronged attack on campaign finance law is clearly to turn back the clock nearly a century and allow untraceable and unlimited contributions from and expenditures by those seeking favors from elected officials. Opponents of campaign finance laws believe they have a sympathetic Supreme Court that will allow them to ignore many decades’ worth of High Court precedent, as well as public outrage and scandals running from “
Teapot Dome” to Watergate.
To date, most of this well-orchestrated attack on campaign finance laws has escaped the notice of the press and the American people. At stake are not only millions of what could become “invisible dollars” spent on political campaigns but more importantly, the ability to use money to influence – if not determine – who controls the reins of power in this nation.
 In March 2008, the Legal Center and other public interest groups filed an amici brief with the Supreme Court in the Davis case to support the constitutionality of the Millionaire’s Amendment.