Five justices hold firm on 'soft' campaign money.

One of the most important decisions of this Supreme Court term is that in McConnell v. Federal Election Commission. (1) The ruling upheld many key provisions of the Bipartisan Campaign Finance Reform Act of 2002 (BCFRA). In a rare event, the justices returned early from their summer recess to hear oral arguments on September 8, 2003, several weeks before the traditional beginning of their term on the first Monday in October. With the 2004 election looming, the justices knew that it was essential to resolve any questions about campaign financing as soon as possible.

The opinion handed down on December 10, 2003, is long--almost 140 pages--and very complex. The Court produced several majority opinions, each written by a different justice. Justices John Paul Stevens and Sandra Day O'Connor wrote the decision's most important part, upholding restrictions on soft money in political campaigns and limits on broadcast advertisements by corporations and unions. Having two justices jointly deliver an opinion for the majority is also quite unusual.

The Supreme Court reaffirmed the law that has governed campaign finance for over a century, while allowing most of the additional restrictions contained in the BCFRA. In doing so, the closely divided (5-4) Court deferred to Congress in addressing the potentially corrosive effects of money in the political system.

Spending as speech

In its 1976 decision in Buckley v. Valeo, the Supreme Court announced basic principles concerning the government's ability to regulate campaign spending. (2) The Court held that spending money in political campaigns is speech protected by the First Amendment, not simply conduct that communicates a message; therefore, it would apply strict scrutiny when evaluating any restrictions on campaign spending. The Court ruled that restrictions on campaign contributions paid directly to candidates and committees met strict scrutiny, but that limits on expenditures--the total amount one person can spend--did not.

The Court agreed that the government has a compelling interest in preventing the corruption or appearance of corruption that accompanies large contributions. But it also said that limiting how much a person can spend overall is unconstitutional because doing so results in greater restriction of speech, and spending carries little risk of corruption. Under this framework, for instance, if a person had $1 million to spend in a political campaign, the government could limit how much he or she could contribute directly to either candidate or to any committee, but it could not keep the person from spending the entire amount by dividing it among many committees or by paying for a candidate's advertisements.

The Court has repeatedly affirmed this framework, although several justices have strongly criticized it. (3) Justices Antonin Scalia, Anthony Kennedy, and Clarence Thomas have repeatedly challenged the distinction between contributions and expenditures, arguing that restrictions on both should be considered unconstitutional. Justice John Paul Stevens has also criticized the distinction, but has argued the opposite: that expenditure limits, like spending limits, should be constitutional.

Upholding reform

The BCFRA was the result of years of hearings and debate as Congress sought to close loopholes and solve problems that had developed under Buckley. First, the act sought to restrict "soft money"--funds raised by political parties that were not covered by limits on contributions to candidates or committees. Corporations, unions, and individuals who had met their contribution maximums could circumvent traditional campaign finance law by giving money to political parties, which then spent the funds as they wished.

As the Court noted in McConnell, the use of soft money has increased enormously in recent years, from $21.6 million in 1984 to $498 million in 2000. (4) These contributions were often much larger than the individual maximums allowed by federal law. In 1996,

   the top five corporate soft-money donors
   gave, in total, more than $9 million in nonfederal
   funds to the two national party committees.
   In the most recent election cycle,
   the political parties raised almost $600 million--60
   percent of their total soft-money
   fired-raising--from just 800 donors, each
   of which contributed a minimum of
   $120,000. (5)

The Supreme Court upheld the BCFRA's restrictions on soft money to prevent donors from circumventing contribution limits that the Court upheld in Buckley and subsequent cases. The Court reaffirmed that contribution limits do not have to meet strict scrutiny and said that the soft-money restrictions serve "the government's important interest in preventing corruption and the appearance of corruption." (6)

Thus, the Court deemed constitutional the specific provisions of the act that limit soft money: prohibiting the national political parties from raising or spending these funds; barring state political parties from spending soft money on federal election activity; banning federal officeholders or candidates from raising or spending it; and blocking state candidates from using soft money for public communications that promote or attack federal candidates.

The act also seeks to restrict so-called issue advertisements by corporations and unions that clearly are intended to support or oppose particular candidates. In Buckley, the Court said that regulations pertaining to federal elections, such as disclosure and reporting requirements of contributions and expenditures, apply only to funds used for communications "that expressly advocate the election or defeat of a clearly identifiable candidate." (7) Advertisements that focus on issues rather than individuals are not subject to these regulations. Groups paying for political ads can circumvent the contribution limits allowed by Buckley simply by omitting the magic words, "Elect Jane Doc" or "Vote for John Smith." As the Court noted, "Corporations and unions spent hundreds of millions of dollars of their general funds to pay for these ads, and those expenditures, like soft-money donations to the political parties, were unregulated." (8)

The act applies campaign finance law to broadcast advertisements made by corporations and unions that mention a federal candidate and are shown to the relevant electorate within 30 days of a primary election or 60 days of a general election. The act requires that such "electioneering communication" be paid for by "hard money" and that these expenditures be disclosed to the Federal Election Commission. The act also treats coordinated electioneering communications as contributions to candidates or parties.

The Supreme Court upheld these provisions and summed up: "In the main we uphold BCFRA's two principal complementary features: the control of soft money and the regulation of electioneering communications." (9)

Other provisions

The Court declared unconstitutional the provision of the act that prohibits people 17 years old or younger front con tributing to candidates and political parties. The provision was obviously intended to prevent parents from circumventing contribution limits by donating money in their children's names, but the Court pointed out that "the government offers scant evidence of this form of evasion." (10) Moreover, the Court stressed that "minors enjoy the protection of the First Amendment." (11) In essence, the Court said that the law should not stop a teenager from contributing his or her paper-route money to a political candidate.

The Court dismissed a challenge to the act's so-called millionaire provisions, which raise limits on contributions to a candidate when an opponent spends a large amount of his or her own money on a campaign. The Court, in an opinion by Chief Justice William Rehnquist, quoted the lower court's conclusion that "none of the ... plaintiffs is a candidate in an election affected by the millionaire provisions ... and it would be purely conjectural for the court to assume that any plaintiff ever will be." (12)

Finally, an opinion written by Justice Stephen Breyer upheld the provision of the act that requires broadcasters to keep publicly available records of political broadcasting. The Court stressed the government's authority to regulate broadcasting, and it rejected the argument that this requirement was unduly burdensome. (13)

The Bipartisan Campaign Finance Reform Act will change how money is raised and spent in political campaigns. The effects will be seen in the upcoming federal elections, especially in the presidential campaign. But the Court was divided 5-4 on the most important issues raised by the act, and a change in the Court's composition could mean a future reconsideration of campaign finance and the First Amendment.

Notes

(1.) 124 S. Ct. 619 (2003).

(2.) 424 U.S. 1 (1976).

(3.) See, e.g., Nixon v Shrink Mo. Gov't PAC, 528 U.S. 377 (2000); Fed. Election Comm'n v. Golo. Republican Fed. Campaign Comm., 533 U.S. 431 (2001).

(4.) 124 S. Ct. 619, 649.

(5.) Id.

(6.) Id. at 659.

(7.) 424 U.S. 1.80.

(8.) McConnell, 124 S. Ct. 619, 651.

(9.) Id. at 706.

(10.) Id. at 711.

(11.) Id.

(12.) Id. at 710 (citing 251 F. Supp. 2d 176, 431 (D.D.C. 2003).)

(13.) Id. at 715-16.

ERWIN CHEMERINSKY is the Sydney M. Irmas Professor of Public Interest Law, Legal Ethics, and Political Science at the University of Southern California.