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Campaign reform: new statutes, new challenges.

States offer a mix of changes to political speech and finance regulation.

Numerous new state political campaign reform laws - that reach farther than the Federal Election Campaign Act or even create new types of regulation - are running into tough court challenges. Associations, of course, are often active in state campaign activities. Nory Miller discusses these developments below.

- Jerald A. Jacobs, ASAE General Counsel

With some exceptions, most district and circuit courts hearing challenges to new state campaign reform laws or regulations have been very tough, subjecting them to the highest level of First Amendment review: strict scrutiny. Most courts have demanded that states prove each measure is really necessary. They have refused to recognize any new government purposes to justify regulating political speech other than the one recognized 22 years ago by the U.S. Supreme Court - that is, preventing corruption and the appearance of corruption. And these courts have shown a determination to eliminate regulations that could stifle political campaigning and debate.

Three North Carolina tests

For example, a 1998 North Carolina district court decision struck down three provisions because they were too broad and regulated political activity that did not threaten to harm the political process (North Carolina Right to Life, Inc. v. Bartlet).

One provision the court found invalid imposed registration and reporting requirements even on individuals and groups that were involved solely in issue advocacy. The court held that organizations involved only in promoting issues - and not in campaigning for particular candidates - could not be required to register, report contributions, or limit contributions or expenditures.

A second provision the court struck down prohibited all corporations from making political contributions or expenditures. The court found this unacceptable because the state had not shown that restricting all corporations was necessary. Noting that many nonprofit corporations are more like voluntary political associations than business firms, the court found that "statutes limiting corporate political spending must distinguish between those corporations which threaten the political process and those which do not."

The third provision had completely banned fund-raising while the legislature was in session as a means of preventing corruption or the appearance of corruption. The court found that applying the ban to non-incumbents made no sense because they were not yet participating in the legislative session. It also found there was no good reason to think corruption was more likely to occur with the legislature in session than in recess. Further, the court found the ban too severe because it prohibited small contributions with no power to corrupt as well as large ones.

Contribution limits questioned

A number of courts have struck down contribution limits because they were significantly too low. This year, a California district court found that state's contribution limits invalid for two reasons (California Prolife Council PAC v. Scully).

First, the law set limits at $100, $250, and $500 - depending on district size and whether the office was local or statewide - but doubled those limits for any candidate who agreed to limit expenditures. The court found that doubling the limits for some candidates meant the higher limits were not a threat to the political process. If higher limits were not dangerous, then the lower limits clearly were not necessary and therefore not constitutional. The court had to set aside the fact that the higher limits only applied when spending limits also applied, because spending limits have been found unconstitutional.

The California court also decided the challengers had convincingly shown that the limits were so low they interfered with candidates' ability to mount an effective campaign. As have others, this court made clear that effective campaigns help the political process and are highly protected speech. It is evident that any reform laws that seriously threaten to interfere with conducting meaningful campaigns will be found unconstitutional.

Courts have also thrown out contribution limits in Arkansas and Missouri. In Arkansas, the court said contribution limits of $300 per election were too low for statewide candidates and its contribution limits of $100 too low for candidates for certain offices (Russell v. Burris, 1997). (Also see Carver v. Nixon, 1995, which struck down Missouri's contribution limits as unconstitutional because they were so low.)

Move to name sponsors

One court that has shown a more accepting approach to campaign restrictions is the U.S. Court of Appeals for the Sixth Circuit. A month or so ago, that court upheld a Kentucky law requiring all advertisements for a particular candidate to carry the name of the advertisement's sponsor (Gable v. Patton, 1998). By contrast, in 1995, the U.S. Supreme Court had reversed the conviction of a woman who had distributed anonymous leaflets advocating a particular position, because the state could not constitutionally require her to include her name on the leaflets.

The Supreme Court's opinion explained at length the importance of anonymous leafleting to this country's history. That court distinguished such leafleting from contribution disclosure requirements and "limited disclosure requirements for lobbyists," which have been held constitutional, because those requirements were far more closely linked to preventing corruption and far less of a threat to free speech. The Sixth Circuit did not explain why it reached a different conclusion about the Kentucky regulation. It may have done so because the Kentucky rule applied only to advertisements for candidates and not to issue advocacy. In any event, different courts may view requiring sponsors to identify themselves very differently, at least until the Supreme Court settles the question in a future case.

In the same case, the Sixth Circuit also upheld a ban on all contributions from the public to candidates for governor for the 28 days preceding a primary or general election. But it struck down the part of the Kentucky law that prohibited candidates from contributing to their own campaigns. The Supreme Court had held in Buckley v. Valeo in 1976 that limits on political expenditures - by anyone were unconstitutional. This is being challenged in a number of states around the country. The Sixth Circuit, at least, has made clear it does not think the time has come to change the law on expenditure limits.

Although states continue to pass new campaign and lobbying laws, enactment is clearly no guarantee that the rules enacted are constitutional. It is appropriate, as well as safest, to follow any such laws while they are on the books. But do not accept them without question. Evaluate each rule in terms of the constitutional standard; well-founded challenges continue to succeed.

Associations that engage in political campaign activity in the states should follow these legal developments closely, since they affect the nature and scope of permissible association activity.

Nory Miller and Jerald A. Jacobs are partners at Jenner & Block, Washington, D.C. Jacobs edits this column.
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Author:Miller, Nory
Publication:Association Management
Date:Jul 1, 1998
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