Campaign Finance: Supreme Court Arguments Yesterday

The Supreme Court heard oral argument in the McCutcheon vs. FEC case yesterday. To recap, McCutcheon is a wealthy Alabama Republican who is contesting the biennial limits on campaign contributions which any donor can make to candidates over a two-year period. This translates into about $116,000 over that time span. The aggregate limits are at issue here since McCutcheon rightfully argues that it restricts the number of candidates to whom he can make a campaign contribution and thus is an infringement on his First Amendment rights to Free Speech and Free Association.

One caveat before looking at the oral argument: contrary to popular belief, this is not Citizens United on steroids as one Liberal outlet described it. That case was about independent expenditures by outside groups, not direct contributions to candidates or political parties. In previous entries, I tried to present this case in detail. Given oral arguments yesterday, this case can go any number of ways. Most likely, it will be another 5-4 decision which will be blown out of proportion by liberals should the Court strike down the aggregate limits. Reading the liberal press this morning, the main gist of the argument is that the Court should leave well enough alone and that Solicitor General Donald Verrilli made the better and more passionate arguments for retaining these limits.

Surprisingly, missing from the oral arguments was must mention of the First Amendment itself and also of the Buckley vs. Valeo decision that let campaign contributions withstand constitutional scrutiny. There were references, but considering that one needs to get beyond this decision first, the lack of its mention- except in a few discreet instances- was somewhat surprising to this writer.

As anyone who has ever witnessed an oral argument, read the transcripts (available the same say as argument) or heard the audio recording (usually available within a week), you know that it is not too long before the case is presented that Justices interrupt with questions or observations. Generally, the Justices have made a preliminary decision where they stand and use oral arguments to either clarify certain points or facts, but more often to prof counsel to see how far their arguments extend. For this, they use hypothetical situations to test the outlying bounds of an argument on either side. And so it was yesterday.

Leading the questioning of the petitioner’s counsel was Stephen Breyer who can at times be hard to read and is more long-winded in his questioning and setting up the hypothetical. Under the present law’s (McCain-Feingold) campaign contribution limits, a person can donate to the candidacy of nine people before they run afoul of the law. The main thrust of conservative editorials against aggregate limits is what the difference is between nine and ten candidates for office. That is, why did Congress decide that donating the maximum to nine candidates had no connection to corruption, but once the tenth is entered into mix, suddenly the chances of corruption increase.

Between Kagan and Breyer, they tested the boundaries of these hypothetical situations under the assumption that the $2,600 limit per candidate per donor was changed in the aggregate. In other words, one can make a $2,600 donation to as many candidates as you wanted. They assumed the maximum- 536 races (all congressional seats plus 100 senators plus the president- general election and primary). The total came to $1.3 million per election times two elections, or $2.6 million. In 2010, close to $1.5 billion was spent on political campaigns. If we extrapolate out a little, that $1.5 billion equals 652 donors making the maximum contribution. Thus, the worry, as expressed in this hypothetical, was that 652 people would control who gets elected.

Justice Alito countered that this scenario was highly unlikely and started to address a theme later picked up by Roberts that may eventually be the undoing of the liberal arguments. Besides being highly unlikely, the FEC has rules- not contested here- that deter one from getting around campaign contribution limits. The most important one discussed was the “earmark rules.” When a person donates to a PAC, the PAC is free to disburse those funds as they see fit. You cannot make a $5,000 donation to a PAC with a stipulation that that contribution goes to a particular candidate. Because the aggregate limits exist, any contributor is limited as to who they may individually contribute to. Thus, to reach the aggregate limits, which Congress and the FEC set, the only option is to contribute to a PAC, cross your fingers and hope your preferred candidates get the disbursement. What this does is skew the equation away from individual contributions and in favor of political action committees. It also steers money away from individual candidates into independent expenditure outside groups. As a result, you get the dreaded (to liberals) Koch brothers and the dreaded (to conservatives) George Soros.

Since the alleged purpose of the campaign contribution limits is to eliminate corruption or the appearance of corruption and increase participation in the democratic electoral process- the more “small donors” the greater the participation- the system in place now because of the aggregate limits actually thwarts that participation. Roberts in particular tried to illustrate this point when Verrilli was arguing his case in favor of the limits.

Breyer and Sotomayor were perhaps sensing that the Court was prepared to strike down these limits and were angling for some extra time. This was an as-applied challenge to the aggregate limits for which there is a scant record at the lower level courts. Specifically, Breyer and Sotomayor seemed to be of the opinion that because of this scant record- that is, we really do not have evidence to see how these limits hinder or enhance the democratic process- perhaps the better option would be to remand this case to a lower court to develop that evidence. Scalia cut this option off by saying that a lower court record of evidence would not add anything to the conversation and that they could look at the law itself. Verrilli later, when Sotomayor spoke again, also seemed to indicate that was not a preferred route to take since Congress had studied the issue when McCain-Feingold was drafted and there is the congressional “record.” In fact, Sotomayor later expounded the liberal view and this case: more money leads to corruption and favors the rich, but there is no evidence to actually prove this. Thus, the money equals corruption argument is, at this point, one big hypothetical from the start.

Alito and Roberts and, to a lesser extent, Kennedy seemed to express the belief that the FEC anti-earmarking provisions and circumvention provisions were existing safeguards against the influence of money in politics. Verrilli basically argued some liberal Utopia: if there was this huge pool of small donors, a winning candidate would feel less beholden to that contributor, but as the contribution amounts increased, they would feel more beholden. That is, it is easier to tell a $100 donor to back off than it is to tell a $1 million donor to back off.

One of the interesting things about the liberal commentary leading up to this case and after is how some writers illustrate how campaign finance works because they X amount of dollars for Obama in 2008 or 2012. They then go on to show how the campaign contribution laws can be legally circumvented despite the safeguards the conservatives rely upon. One commentator noted that he raised over $1 million for Obama. But, if that same liberal- illustrating the horrors of campaign finance- believes that the reason for the limits is to avoid political corruption or its appearance, then does this same commentator feel that they have a corrupting influence on the process?

And there lies the main problem with the liberal view. When the Taft-Hartley Act was passed which, among other things, banned direct union contributions to political candidates, Harry Truman, a Democrat, vetoed that legislation arguing it infringed on First Amendment rights. Congress overrode that veto and the law went into effect. Citizens United allowed direct union expenditures on political advocacy and also corporate expenditures on political advocacy. The arguments Truman made with regards to unions applies equally to corporations. That is, limits and such work fine when they are to the advantage of liberals, but otherwise they are a worthy means to fight political corruption or the appearance of corruption. One can only assume that liberals believe that it is only conservative money that has a corrupting influence and liberal money comes with no strings attached…or so we should believe.

The Court also seemed to grapple with not only the mechanics of campaign finance in general- who raises the money? How is the money spread around?- but also with the ultimate reason for these laws. Specifically, they seemed to gauge the question of when campaign contribution recipients feel indebted to contributors which, in and of itself as the Court has previously stated, is not corruption. But when does “indebtedness” and “gratitude” cross the line into corruption? There was no satisfactory answer from the government. In fact, Scalia theorized that if the limits were struck down, the government- the FEC, Justice Department, etc.- likely would have to look long and hard to find a case of actual corruption.

If anything, Roberts seemed to be looking into a compromise solution where aggregate limits would be struck down for individuals, but stricter limits would be maintained for political action committees while the earmarking provisions were kept in place. However, the Supreme Court cannot rewrite McCain-Feingold, only rule on the constitutionality of the aggregate limits. It would appear that by striking down the aggregate limits, it will force Congress to revisit this issue to correct its constitutional infirmities. The reasoning is that by doing this, it would actually encourage more small donors to participate in the process while raising the outer limits to that $2.6 million.

If one had to predict an outcome, it will likely be a 5-4 decision in favor of the compromise solution with an appeal to Congress to change the law. Campaign contribution limits will likely remain constitutional; there appeared to be little support for overturning Buckley v. Valeo. The decision will likely be released much later in term given its complexity and the potential problems cobbling together a majority that can sign onto it.