McCutcheon vs. FEC- Part 2: Campaign Finance and the Supreme Court 1971-2001

Soon after the Federal Election Campaign Act (FECA) was passed in 1971, there were challenges against the law which required Congress to form the FEC and to amend the law in response to court challenges. Perhaps the most infamous of these decisions was the landmark 1976 decision, Buckley vs. Valeo. In 1974, over the veto of President Ford, Congress enacted amendments to FECA which was passed in 1971. In Buckley vs. Valeo, there was a mixed bag of results. The decision was 7-2 (a per curiam decision at that), but more of a plurality decision than anything else. For example, Justice Byron White argued that the law should be sustained in whole under the concept of deference to Congress in this area. Chief Justice Burger argued that the entire scheme of limiting campaign contributions and expenditures should be struck down as violating the First Amendment. But, the decision actually upheld the basic premise of FECA in the first place- that Congress had the authority to pass laws in this area to address corruption or the appearance of corruption in federal elections. The 7-2 majority furthermore dismisses a major complaint heard today from the Left- that campaign contributions and expenditures are not “speech” in the traditional sense. As the Court explained, without money in today’s mass-media driven information society, speech means little. Therefore, money is the means by which speech is disseminated and, in the political context, certainly has more than a passing relationship to Free Speech concerns. With that out of the way, they then addressed the individual objections in the appeal.

The first objection was that the campaign contribution limits were an infringement on Free Speech. Here, the Court basically dismissed the assertions by Buckley and McCarthy (Eugene McCarthy was a party to the case) on the grounds that by establishing a $1,000 individual limit across-the-board, it was neutral with respect to anyone AND that the limit served an important Congressional goal- to remove the appearance of corruption, impropriety or undue influence by moneyed interests. Hence, campaign contribution limits were upheld by the Court along with the ancillary $25,000 yearly limit and the limits on volunteer reimbursement. Turning to expenditures, however, the Court ruled that the limits in FECA seriously affected the quality and quantity of speech and thus violated the First Amendment. The lower court upheld this provision arguing that it was a loophole-closing provision regarding the contribution limits. The Supreme Court dismissed those arguments stating that they served to chill political speech, especially by independent groups. They further ruled that campaign expenditure limits were an unconstitutional intrusion on Free Speech rights as well as limits on self-financing of campaigns. But, the Court ruled that the financial disclosure provisions of the law were constitutional. In fact, Buckley’s lawyers argued that the disclosure requirement was all that was required of Congress to address the alleged ills of campaign financing. Thus, they were upheld, as was the legitimacy of the FEC which was challenged under the Separation of Powers concept.

To illustrate how the law worked to suppress speech, in 1976 it took $7,000 to run a full-page political ad in a major metropolitan newspaper. That required seven people contributing the maximum for a single one day advertisement. Hence, the expenditure limit actually limited the effectiveness of any campaign in getting the message out. Regarding the contribution limit, however, the Court basically decided there were no Free Speech implications since nothing stopped a campaign from simply seeking solicitations from more people which would then draw more people into the political process and actually enhance speech.

Regarding the role of corporations in the political speech context, the Court, in a 5-4 decision, ruled that a Massachusetts state law prohibiting the use of corporate political advertising was an unconstitutional violation of Free Speech. The case- First National Bank of Boston vs. Belotti– was decided in 1978 in response to a proposed ad in the paper against a referendum for a state income tax. The Court ruled that prohibiting corporations from expressing a view of public interest struck at the heart of the First Amendment. Thus, although Obama can rail all he wants about Supreme Court precedence and corporate involvement in the political process, he seems to be stuck in the Progressive Era and needs to get more contemporary. Surely, an alleged constitutional scholar such as he has heard of the Belotti decision.

In 1981, the Court decided California Medical Association vs. FEC. In another 5-4 case, the medical association, a non-profit organization of doctors formed a PAC and challenged the $5,000 limit on contributions. However, liberals mistakenly use this decision as justification for their views. This decision did not address First Amendment concerns per se, but was argued under the Fifth Amendment. Only Justice Blackmun addressed that issue in his concurrence stating that the $5,000 limit did not violate the First Amendment because (1) contribution limits were allowed under Buckley vs. Valeo and (2) the limit served a justified governmental interest in preventing actual or perceived corruption, was equally enforced and was not overly broad.

In that same year, the Democratic Senatorial Campaign Committee challenged a ruling by the FEC regarding funding by its Republican counterpart in certain House and Senate campaigns. Again, this was not a First Amendment case, but one that challenged the powers of the Federal Elections Committee. The Court unanimously agreed that the FEC was clearly within their statutory rights to take the Republican request and approve it. Thus, this can more accurately be viewed not as a First Amendment case, but as a statutory interpretation case which strengthened the role of the FEC.

The following year, an Ohio state campaign finance law was challenged regarding disclosure requirements. At issue in Brown vs. Socialist Workers Committee was the perceived threats of disclosure being balanced against the disclosure requirements upheld in Buckley. In this 6-3 decision, the Court ruled that since the Socialist Party had historically been the target of discrimination and harassment, disclosure of donors served to quell their participation in the political process. Therefore, the Ohio statute could not withstand scrutiny with respect to minor parties. Rehnquist argued a more disciplined and consistent approach in his dissent. If contribution limits and disclosure requirements were constitutional under Buckley, then they applied to all comers, not just the two major parties. Thus, one can see the conservative philosophical groundwork being laid for later decisions, including McCutcheon vs. FEC. That same year, in a blow to corporate causes in campaign finance, a unanimous Court in an opinion by Rehnquist decided that bans on corporate money when those funds were solicited from people not in the corporation was a constitutional exercise of Congress’ authority to remove the appearance of impropriety and undue influence by corporations in the electoral process. Thus, corporate PACs were perfectly fine provided the contributions came from members of the corporation.

Two years later in FEC vs. National Conservative PAC, the Court ruled that expenditure limits by that PAC in support of Ronald Reagan’s reelection efforts in 1984 were unconstitutional. The suit by the FEC was prompted by the Democratic Party which the Court ruled had no standing to sue in the first place. They could have left it at that, but instead (in a 6-3 decision) went further and buttressed the expenditure conclusions of Buckley as they applied to political action committees. Regarding independent group expenditures, FEC vs. Massachusetts Citizens For Life will go down as a landmark ruling and justification for Citizens United. This case involved a pro-life group- a non-profit corporation- that distributed a flyer which identified the pro-life voting records and views of candidates in Massachusetts. The FEC determined that the flyer violated electioneering by corporate interests. However, it was no less a liberal than William Brennan who agreed that this was a clear violation of First Amendment rights since the purpose of campaign finance laws- to remove actual or perceived corruption by moneyed interests in the electoral process- was clearly not applicable to a non-profit single-issue advocacy group even though they directly named candidates they were for or against. Strike another blow for the Obama assertion that the Supreme Court ignored precedent and 100 years of law.

Although Communication Workers vs. Beck is sometimes lumped in with campaign finance, it is more correctly a labor relations issue where the Court ruled that dues-paying nonmembers of a union cannot have those dues directed towards political advocacy efforts by the union in question. Then just when it appeared Free Speech was winning before the Supreme Court in the context of campaign finance, along came Austin vs. Michigan Chamber of Commerce. In a 6-3 decision authored by Thurgood Marshall in which Rehnquist joined, they ruled that the pooling of corporate interest money was constitutionally prohibited since it served a legitimate state interest- removing actual or perceived corruption by moneyed interests in the political process. Essentially, the Court ruled that the Michigan law in question did not unduly burden the Free Speech rights of the Chamber of Commerce or businesses corporations in general because they were free to establish an independent fund- a PAC. However, this may have been the last gasp involving the perceived corruption rationale used to uphold campaign finance laws. In effect, Citizens United overruled Austin, not 100 years of settled law. Citizens United overturned a mere 19 years of Supreme Court jurisprudence in an area where the law was anything but settled.

That was confirmed in 1996’s Colorado Republican Party vs. FEC where Breyer led the charge against expenditure limits by party committees in the general election for federal offices arguing that they were an infringement on First Amendment rights as applied in the particular case before them. However, Kennedy, Scalia, Thomas and Rehnquist went even further arguing that the limit was facially unconstitutional thus indicating that there was building momentum on the Court in 1996 that campaign finance expenditures by third parties and perhaps even contributions would fall under more exacting scrutiny. But yet again, in a 6-3 decision, in Nixon vs. Shrink Missouri Government, the Court again sided with limitations on contributions in order to combat corruption or the appearance of corruption.

This yo-yo-like, give and take, back and forth between competing views often decided on the most narrow of arguments specific to the case at hand left much ambiguity as to whether something was a contribution or expenditure, whether it was applicable to state or federal elections, whether it was a coordinated or independent expenditure, etc. In short, there was confusion enough to go around to make both sides simultaneously happy and angry. Furthermore, the sometimes shifting alignments were frustrating. Rehnquist in particular was all over the spectrum sometimes on the side of unfettered free speech, sometimes on the side of the elimination of corruption argument, often citing his respect for precedent rather than consistent constitutional principles. Likewise, the same can be said of Justice O’Connor who tended to be more conservative in this area, but sometimes jumped over. By the time McCain-Feingold came around, five of the current Supreme Court Justices had a record in this area. Scalia, Thomas and Kennedy seemed ready to strike down even contribution limits arguing a strict Free Speech rationale. Breyer was more fact-specific and often deferring to the judgement of state legislatures. Perhaps, Ginsburg was the only one staunchly in the pro-finance reform camp as George W. Bush took office in 2001.