Symposium: McCutcheon and the future of campaign finance regulation

Once the Court granted probable jurisdiction in McCutcheon v. Federal Election Commission, it seemed likely, and was confirmed at oral argument, that a majority of Justices viewed aggregate contribution limits as unjustified under the First Amendment.  The predictable reactions to the decision fell into two longstanding camps:  the defenders of political freedom versus the guardians of regulation.  As reflected by the divided Court, there are those who seek to minimize government intrusion into political speech and those who believe considerable government regulation is necessary to safeguard democracy and prevent corruption.

Critics of the case are making the direst predictions since, well, Citizens United.  In his 2010 State of the Union address, President Obama personally lectured members of the Court and predicted a “stampede” of money resulting from that decision, including money from foreign sources.  The amount of money spent in subsequent elections rose, although at a rate no higher than in preceding elections.  The foreign money has yet to show up, perhaps that is because it is illegal for foreigners to contribute in American elections and courts since Citizens United upheld the ban.  Now some, including Justice Breyer in his dissent in McCutcheon (asserting “grave problems with democratic legitimacy”), seem to be predicting the collapse of our democracy.

The nation was not an illegitimate democracy and did not collapse in the first two hundred years or so of its existence, when there were few or no regulations of campaign financing.  It is hard to see how, when, or why the McCutcheon case and its limited holding will now destroy the foundation of our democracy.   It is more likely that the current predictions, like President Obama’s prediction after Citizens United, will not come true and that the underlying reason for the hysteria may be a growing realization that the First Amendment continues to curtail the extent to which advocates of campaign finance regulation can regulate.

The practical effect of McCutcheon is that individuals will still be subject to a limit (currently $ 2600) on contributions to any one candidate and higher limits on contributions to any PAC or party committee.  Now, however, donors will no longer be limited in the number of candidates or committees they may support.  The dissent indulges in elaborate speculation that individuals after the ruling theoretically may contribute to every candidate and every committee and thereby dispense over $ 3 million in contributions.  This is a little like saying that because Nazis have a First Amendment right to parade in Skokie, Illinois, we can expect Nazi parades to break out in every city and town in the country.  The fact is there aren’t that many wealthy individuals and there still are laws that prohibit earmarking and laundering.  Moreover, some people may be rich but they are not stupid.  They will not irrationally give money to candidates they don’t know, or don’t agree with or who don’t have a chance of winning or who don’t need the money or who may not even be in contested races.  Mr. McCutcheon had the charming patriotic habit of making his checks payable in the amount of $ 1776.  He gave checks to sixteen candidates before encountering the unconstitutional limit.  He stated that there were ten more candidates that he wanted to support with similar donations but legally could not.  Aren’t contributions to twenty-six candidates a more likely scenario than Justice Breyer’s extravagant hypothetical, which presumes contributions to 468 candidates?

There is no denying that some individuals like Mr. McCutcheon will increase the number of candidates that they support with their limited donations.  This will result in modest increased funding in a system that during 2011-2012 saw $ 7.2 billion raised and spent.  (Approximately $ 1 billion was raised and spent by President Obama’s reelection committee and the Democratic National Committee.)  The national parties are potentially greater beneficiaries, because they no longer will have to compete for a portion of a supporter’s overall limit on contributions to parties and committees.  Any increase in candidate or party funding is a positive development since the money is still subject to limit, publicly disclosed, and received by the electorally most accountable participants in politics.

While the relative practical effect of McCutcheon is modest, the continuing effect on future campaign reform may not be.  In a forty-year stream of cases starting with Buckley, the Supreme Court has questioned and struck down a litany of campaign finance schemes.  The unconstitutional statutes included:  limits on how much a candidate’s campaign can spend after collecting limited donations; limits or bans on how much an individual, a PAC, or a party committee could spend without collaborating with a candidate; a ban on contributions by minors; a contribution limit of $ 400 (too low); public financing programs that punished or rewarded persons who did not participate or who made independent expenditures; increased contributions for candidates who were opposed by candidates who fund their own campaigns; and independent spending by corporations and unions.   At the same time, Justice Clarence Thomas has been the only Justice who advocated overturning Buckley’s allowance for contribution limits.  His concurrence in McCutcheon did so again.

The Court’s jurisprudence sends a clear message to Congress and state legislators:  “You can impose a reasonable limit on how much a contributor can donate to a candidate’s campaign or to committees that donate to candidates, but you cannot limit or ban what else a donor does with money.”  This message started with Buckley.  CitizensUnited made the point emphatically.  McCutcheon is a logical and consistent extension.  Advocates of greater regulation still seem to be going through the five stages of grief over the fact that many of their ideas are simply unconstitutional.  After Citizens United they went through denial and anger.  Now they are somewhere between bargaining and depression.  If they reach acceptance, the final stage, they should focus on finding constitutional ways to regulate money in politics.  Chief Justice Roberts, writing for the Court, suggested mandatory public disclosure, solicitation rules and restrictions on transfers between and among committees in addition to existing rules.  Of course any laws  must avoid vagueness and overbreadth.  But the ultimate goal should be to promote transparency, avoid unnecessary burdens, and provide avenues for sufficient funding of political debate and associational activities.  The McCutcheon decision simply underscores that such goals can be accomplished without violating the First Amendment and without jeopardizing democracy.

Jan Witold Baran is a partner at Wiley Rein LLP where he heads the Election Law and Government Ethics Group.  He has argued four Supreme Court cases and represented parties in several others.  His amicus brief in Citizens United on behalf of the U.S. Chamber of Commerce was cited by the Court in its opinion.  He is the author of The Election Law Primer for Corporations, published by the American Bar Association.

In association with Bloomberg Law

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Symposium: McCutcheon and the future of campaign finance regulation

McCutcheon Supreme Court Case Could Give Money More Say in Politics

Why are social justice organizations up in arms about an upcoming U.S. Supreme Court case involving political contribution limits? It might have something to do with America’s widening income inequality, which in many ways is being financed by wealthy campaign donors. A ruling in favor of lifting limits on the amount individuals can contribute would allow the wealthiest of the wealthy to control parties in ways that would make the Great Gatsby proud.

McCutcheon v. Federal Election Commission is seen by campaign finance reform watchdogs as a sequel to Citizens United, the 2010 Supreme Court decision that held the First Amendment prohibits the government from restricting political independent expenditures by corporations, associations, or labor unions. Independent expenditures are campaign communications that support or oppose candidates but are made independently of the candidate, committee, or party. In other words, the Supreme Court said that money talks and political races are not the venue to hush it — even if spending by Fortune 500 companies might drown out the political expressions of people of color and those of limited means.

A case brought by an Alabama businessman and the Republican National Committee, McCutcheon seeks to lift the aggregate limit — currently set at $ 123,200 — on how much an individual can donate directly to federal candidates, parties and traditional political action committees during a two-year election cycle. A ruling in favor of the plaintiffs threatens to exacerbate the muffling of the poor while widening margins of inequality. Oral arguments are scheduled to begin Oct. 8.

“In McCutcheon v. FEC, the Supreme Court has the opportunity to restore faith in government and the political process by limiting the influence of money in politics,” said Kim Keenan, general counsel for the NAACP. “This is the result that Americans deserve.”

The NAACP is helping lead the Democracy Initiative coalition, which joins civil rights organizations with labor and environmental groups in response to the post-2010 assault on voting rights, including restrictive photo ID and “proof of citizenship” voter registration laws. Democracy Initiative member organizations Sierra Club, Greenpeace, Communications Workers of America and the NAACP, along with about a half-dozen other organizations that collectively represent over 9.4 million members, have signed on to an amicus brief in McCutcheon that opposes lifting contribution limits.

“The last thing our nation needs is another decision like Citizens United, opening up the floodgates to even more corrupting money from big polluters that will drown out the voices of the rest of us and wash away any remaining notion of accountability in our government,” said Courtney Hight, director of the Sierra Club’s Democracy Program.

The brief argues that un-damming campaign contributions would further damage public trust in government officials. Gallup polling shows that the American public currently has the lowest confidence in Congress in 40 years, while the public policy think tank Demos reports that 60 percent of Americans today say members of Congress are more likely to vote in a way that pleases their financial supporters. Another poll released last year by the Corporate Reform Coalition showed that 84 percent of Americans believe corporate political spending mutes the voices of the average American.

Without the cap on individual contributions to candidates, parties and committees, a donor could effectively buy races — or a series of races, for that matter — by paying millions. That kind of spending would be unfair to low-income voters who have no other choice but to rely on the “one wo/man, one vote” principle because they don’t have extra income to spend on races. Since the policy priorities of the wealthy are not in harmony with those of the less well-off, uncapping political donations could widen income and racial inequality.

As the legal brief notes:

A study of the 2004 Presidential election is illustrative. In that campaign, the top-contributing zip code (located on Manhattan’s Upper East Side) was 86.4% white. This one zip code, home to fewer than 100,000 voting age residents, generated more campaign dollars than the 377 U.S. zip codes with the largest percentage of African Americans, home to 6.9 million voting age residents; as well as the 365 zip codes with the largest percentage of Hispanic residents, with 8.1 million adults.

This could have only gotten worse since 2004 given that the primary beneficiaries of post-Great Recession recovery have been the wealthiest 1 percent of Americans.

In his report Stanford University political science professor Adam Bonica writes, “Revolving door jobs [between Wall St., K St. and the Beltway], lobbying, and campaign contributions by the rich, when coupled with free market ideological proclivities in the voting population, are likely to have abetted the increase in inequality.” He also notes that the financial deregulation we’ve seen in recent decades, whether in politics or the marketplace, “has been a source of income inequality.”

Bonica’s study finds a correlation between low income and low voter turnout, which he says is further driven by “measures that make it relatively costly for the poor to vote” (voter ID laws being one example) and wealthy citizens who are able to influence political processes through their resources.

“If those with lower incomes are less likely to vote,” writes Bonica, “then the political system will be less responsive to a rise in inequality.”

Last year, I reported on studies that showed people of color are less likely to vote when they believe the forces of super PACs and other big money bundling schemes are running the show.

While McCutcheon impacts federal elections, the corporate domination of politics is playing out in states as well, where legislatures are rolling back public campaign finance programs and making it easier for big businesses to influence policy. We see this in North Carolina, where a controversial new elections law ends public financing of judicial elections, forcing candidates to rely on private donors, and increases limits on donations to political candidates. It also allows corporations and individuals to contribute unlimited dollars for certain activities related to political campaigns, like hiring accountants.

These kinds of laws make elections feel like auctions. While everyone can vote, not all of us can afford to bid.

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McCutcheon Supreme Court Case Could Give Money More Say in Politics