Reconciling Buckley, the first amendment, and campaign finance reform

When money talks: Reconciling Buckley, the first amendment, and campaign finance reform

Manson, Stephanie Pestorich

I. Introduction

Just imagine the headlines if teams started contributing to referees based on how that referee called their games. Sports fans everywhere would be absolutely outraged.1

In the 1999-2000 election cycle, the two major political parties raised $1.2 billion.2 Of that amount, $495.1 million was “soft money.”3 By the end of the 1999-2000 cycle, more than 130 different groups had aired over 1,100 “issue advertisements” costing approximately $500 million.4 The press, public interest groups, and politicians are calling for reform of the current campaign finance system. However, questions remain as to what reforms would fix the campaign finance system’s problems and, significantly, whether these reforms would be constitutional.

During the 2000 presidential primary, Senator John McCain campaigned on specific campaign finance reforms, including a ban on soft money and disclosure of issue ads.5 Although it was McCain’s run for the presidency that helped the public focus on the problems of the campaign finance system, Congress has been debating his proposals for years.6 Senator McCain, along with Senator Russell Feingold and Representatives Christopher Shays and Marty Meehan, have introduced legislation that would ban soft money in federal campaigns.7 In the 106th Congress, the bill sponsored by Representatives Shays and Meehan passed the House of Representatives but died in the Senate.8 Much of the debate surrounding the bill focused on the constitutionality of the reforms.9

The survival of the reforms depends upon which constitutional standard the Supreme Court applies. In 1976, the Supreme Court announced the current standard for examining limits on campaign contributions in Buckley v. Valeo.10 The Buckley Court applied “exacting scrutiny” under the First Amendment to various campaign reforms passed by Congress.11 The limits on political speech could survive only if they were “closely drawn” to serve a “significant” government interest.12 The Court identified two government interests that justified the restrictions upheld in Buckley – preventing the corruption of officeholders and candidates and preventing the appearance of corruption.13 In subsequent decisions, the Court has assumed that these two interests are the only interests that allow restrictions on campaign finance to pass constitutional scrutiny.14 Therefore, any campaign finance reform that does not further one of these two interests will not be upheld.15 Instead, a limitation on campaign finance that does not prevent corruption or the appearance of corruption will be deemed an unconstitutional restriction on speech.16

For example, restricting soft money does not prevent the possibility of a quid pro quo between a donor and a candidate because soft money is donated to political parties and not to individual candidates.17 Because the money is not donated directly to any federal candidate, there is no candidate for the donor to influence.18 A ban on soft money, therefore, may not satisfy this strict standard.19 The same can be said for a ban on issue ads, A candidate who is featured in an issue ad has not received anything by the group paying for the advertisement.20 This is because, by definition, the ad cannot expressly promote or oppose a federal candidate.21 The opportunity for the advertiser to influence the candidate is diminished because the candidate has nothing for which to be grateful. As these examples illustrate, the standard applied by the Court stands in the way of many of the proposed reforms.

The Supreme Court’s current emphasis on preventing corruption may seal the fate of the proposed reforms.22 However, several Justices have grown increasingly dissatisfied with the current campaign finance jurisprudence laid out in Buckley and its progeny.23 If the Court’s standard changes, the fate of the proposed reforms may change with it.24

In one of the Supreme Court’s most recent decisions dealing with campaign finance reform, Nixon v. ShrinkMissouri GovernmentPAC,25 six Justices expressed their unhappiness with Buckley.26 Because of their dissatisfaction, the Justices offered four competing frameworks for evaluating campaign finance reform.27 The most radical idea was that of Justice Stevens; he suggested a fundamental departure from the Supreme Court’s previous approach to regulations of campaign finance activity.28 He declared that the Buckley Court’s reliance on the First Amendment was misplaced.29 “Money is property,” he wrote, “it is not speech.”30 Justice Stevens concluded that because the Court should view political contributions as property, the Court should review such restrictions under the due process clause.31 To illustrate his point, he drew a distinction between a candidate who speaks for himself and a candidate who hires someone to speak for him.32 Justice Stevens noted that although both activities deserve constitutional protection, “bought” speech deserves less protection than does the right to speak for oneself.33 This “money is property, not speech” argument would permit a more lenient level of scrutiny for campaign reform measures than the Buckley standard.34 Thus, a reform that would assert a significant interest other than the prevention of corruption could survive Justice Stevens’s standard.35

On the other hand, Justice Breyer, joined by Justice Ginsburg, found that the basic speech framework of Buckley was appropriate, but questioned the Court’s application of Buckley.36 Justice Breyer claimed that Buckley was flexible enough for the legislative and executive branches to enact and to enforce more stringent campaign finance measures.37 He envisioned the Court as “balanc[ing] interests” and “defer[ring] to empirical legislative judgments” when evaluating campaign finance reforms.38 Although Justice Breyer believed that the Buckley opinion allowed for this kind of balancing test, he declared that if Buckley did not allow for such a test, the Constitution required a reconsideration of Buckley.39 Thus, a reform that would assert a significant interest other than the prevention of corruption could survive Justice Breyer’s standard.40

A fourth Justice in Shrink PAC, Justice Kennedy, also voiced his uneasiness about the system created in Buckley.41 In his dissent, Justice Kennedy contended that the Buckley framework protected the worst kinds of political speech – soft money and issue ads – and drowned out the speech that should be most protected – contributions of individuals.42 He concluded that by relying on Buckley, the Supreme Court created a campaign finance system that was more offensive to the First Amendment than the system the Court rejected in Buckley.43 He would require close scrutiny for provisions such as the one at issue in Shrink PAC, a provision that restricted the amount of direct contributions to candidates.44 Overall, Justice Kennedy believed that although the First Amendment protected a system of direct contributions, it did not necessarily protect the “covert speech” that Buckley allowed.45 Thus, a reform that would prevent a significant interest other than quid pro quo corruption could also survive Justice Kennedy’s standard.

Finally, Justice Thomas, joined by Justice Scalia, contended that the majority’s application of Buckley “balance[d] away First Amendment freedoms.”46 Justice Thomas would apply strict scrutiny to all campaign finance measures, requiring narrowly tailored means to promote a compelling government interest.47 Thus, even those reforms which would prevent quid pro quo corruption would not necessarily be safe under Justice Thomas’s proposal.

Given all of these competing frameworks, what should be the proper standard for evaluating restrictions on campaign financing? What kind of campaign finance proposals will survive constitutional analysis? This Note will explore these questions. Part II of this Note reviews the current state of the law regarding campaign finance reform.48 More specifically, it examines the law that produced the decision in Buckley, the way in which Buckley actually defined the outer limits of campaign contributions, and how the Supreme Court has narrowed Buckley to reject all campaign finance proposals that do not advance the interests of preventing corruption or preventing the appearance of corruption.49 Part III discusses the current campaign finance reform proposals and how they attempt to fix the perceived problems.50 Part IV looks at how the reforms would fare under the current constitutional standard and evaluates the fate of the proposed reforms under the different standards suggested by the Justices in Shrink PAC.51 This Part also re-examines what the Court said in Buckley and suggests that Buckley may be more flexible than indicated by its current application.52 Finally, Part V concludes that the opinion in Buckley, the objections made by Justice White as to its subsequent application, and the Court’s action in Shrink PAC prove that campaign finance reform and the First Amendment are not mutually exclusive.53 More specifically, this Note concludes that preventing quid pro quo corruption need not be the only government interest promoted by a reform in order for that reform to pass constitutional scrutiny.54

II. The Current Standard. Exacting Scrutiny and the Prevention of Corruption55

Under current campaign finance jurisprudence, courts analyze restrictions on campaign contributions and expenditures as potential restrictions on the freedoms of speech and association under the First Amendment.56 The United States Supreme Court first articulated this framework in Buckley v Valeo.57 The Court has continued to view cases restricting campaign finance primarily as speech cases.58 It is this framework, first announced in Buckley, that the Justices called into question in Shrink PAC.

A. The Federal Election Campaign Act

The modern federal campaign finance system began when Congress passed the Federal Election Campaign Act of 1971 (FECA).59 Overall, FECA regulated media communications, limited the amount candidates could contribute to their own campaigns, and established a disclosure system.60 In 1974, Congress expanded the system created in FECA.61 The 1974 amendments to FECA broadened the contribution requirements, placed expenditure limitations on individuals, campaigns and candidates, established the public financing system for presidential elections, and created the Federal Election Commission.62

FECA, as amended, also limited expenditures in several different contexts.63 The amendments created a formula that limited the amount of money a candidate could spend on his own campaign based on the voting age population of the candidate’s district.64 FECA placed similar restrictions on expenditures of political parties by limiting their expenditures to an amount based on the voting age population for the district in which the party was acting.65 The amendments also limited any expenditures made by individuals and groups, “relative to a clearly identified candidate,” to $1,000 per year per candidate.66

Additionally, the Act expanded the disclosure and reporting requirementS.67 To administer the new requirements, the amendments created the Federal Election Commission.68 The Commission was created to be the repository of all campaign finance disclosures and the body that enforced the provisions of the Act.69 Finally, FECA provided for a system of public funding for presidential nominating conventions and presidential campaigns.70 The Court decided the constitutionality of FECA in Buckley v. Valeo.71

B. Buckley v. Valeo

In Buckley,72 candidates, office holders, contributors, and political committees challenged the constitutionality of FECA, as amended by the 1974 Act.73 Among other objections, they contended that the limits on contributions to federal campaigns and the limits on expenditures of such campaigns violated First Amendment speech and association rights.74 The Court concluded that FECA implicated First Amendment interests in political expression and association by regulating the amount of money candidates could spend and how much contributors could donate.75 The regulations on cobut-ing and spending money triggered the First Amendment because to be eff-ective, modem communication requires money.76 Therefore, the Supreme Court examined FECA’s provisions as potential infringement of the freedoms of speech and association under the First Amendment.77 Ultimately, the Court found the limits on the amount that a donor could contribute constitutional, but found the expenditure limits unconstitutional.78

1. Contribution Limits

FECA’s contribution limits survived constitutional scrutiny because they served the government’s significant interests in preventing corruption and preventing the appearance of corruption.79 The Court emphaSiZed that corruption referred to the potential for quid pro quo between donors and candidates.80 On the other side of the balance, the Court recognized that the contribution limits inhibited the First Amendment rights of the appellants.81 The Buckley Court emphasized that the expenditure of some amount of money is required for almost all types of communication.82 However, the Justices concluded that the limitations did not materially alter the ability of the public to discuss political issues.83 The Court further reasoned that the contribution limits were narrowly tailored because they restricted only the donor’s rights to contribute to individual candidates, the context in which the possibility for corruption is the greatest.84 The contribution limits themselves left open other means of communicating political messages; individuals and groups were free to engage in political communication independent of the candidates.85 Applying this reasoning, the Buckley Court upheld all of the contribution limits.86

2. Expenditure Limits

The Court’s rationale for upholding the contribution limits required the invalidation of the various limits on expenditures.87 Expenditure limits, unlike limits on contributions, “impose[d] direct and substantial restraints on the quantity of political speech.”88 FECA contained the following three different expenditure limits: a $1,000 limitation on expenditures by individuals or organizations other than candidates and political parties “relative to a clearly identified candidate;”89 limits on the amount a candidate could spend of his own money;90 and limits on how much a federal campaign itself could spend.91 Ultimately, the Court struck down all of FECA’s expenditure limits.92

The Court first examined the $1,000 limit on expenditures “relative to a clearly identified candidate.”93 The Court construed that language to restrict only those advertisements that contained words of express advocacy such as “‘vote for,’ ‘elect,’ ‘support,’ ‘cast your ballot for,’ ‘Smith for Congress,’ ‘vote against,’ ‘defeat,’ [and] ‘reject.'”94 Advertisements that used these “magic words” were considered “express advocacy” and were subject to the contribution limits upheld by the Court.95 However, ads that did not use these “magic words” were “issue ads,” which did not employ express advocacy and, thus, did not fall within the scope of FECA.96

Even when interpreted in this restrictive manner, the Court found the expenditure limitation unconstitutional.97 The governmental interest in preventing corruption was not sufficiently compelling to justify the restrictions on the speaker/spender’s First Amendment right to engage in political advocacy.98 In defending the limitation, the government also urged that an interest in equalizing the ability of various groups and individuals to influence campaigns warranted the expenditure restrictions.99 The Court, however, rejected this contention, stating that “[t]he First Amendment’s protection against government abridgement of free expression cannot properly be made to depend on a person’s financial ability to engage in public discussion.”100

Second, the Court struck down the limitation on expenditures from a candidate’s own personal or family wealth.101 The Justices concluded that there was no possibility of corruption from the use of personal funds.102 In fact, the Court postulated that the use of personal funds allowed candidates to rely less on the contribution of others and, therefore, protected such candidates from the type of corruptive forces that justified the contribution limitations.103 Again, the government tried to justify the limitation in the interest of equalizing the financial resources of candidates for office, but the Court rejected this argument as well.104 Ultimately, the Court concluded that the First Amendment did not tolerate the restriction on a candidate’s ability to speak on his own behalf.105

Third, the Court struck down the limitations on aggregate campaign expenditures by federal campaigns.106 This provision limited the amount any federal campaign could spend on its own efforts.107 In invalidating the limitations, the Court determined that the only danger associated with increasing campaign costs was the danger of dependence on large contributors.108 Thus, the Court concluded that the aggregate expenditure provision was unnecessary because the contribution limits adequately dealt with the danger of corruption from large contributions.109

3. Other Provisions

The Buckley Court also looked at the following three constitutionally suspect parts of FECA: the reporting and disclosure requirements, the public financing system, and the creation of the Federal Election Commission (FEC or the Commission).110 First, the Court examined the reporting and disclosure provisions that required candidates, political committees, and donors to report campaign contributions and expenditures to the FEC.111 The Court reviewed the disclosure requirements under the test established in NAACP v. Alabama,112 which required that the governmental interests survive “exacting scrutiny.”113 Although the Court acknowledged that the disclosure requirements may cause some donors not to contribute, the Court concluded that the governmental interests in providing information to the voting public, the interest in preventing corruption, and the interest in gathering information to detect violations of the contribution limits all justified the requirements.114 Second, the Court examined the constitutionality of the public financing of presidential campaigns.115 The Court upheld this provision, rejecting claims that the system discriminated against candidates that did not meet the Act’s qualifications.116 Finally, the Court invalidated the provision creating the Commission because it allowed the legislature to appoint executive officers in violation of the Appointment Clause of the Constitution.117

4. Separate Opinions

Several Justices wrote separate concurring and dissenting opinions.118 Justice White wrote a separate opinion, concurring in part and dissenting in part, arguing that the expenditure limits should be upheld.119 He pointed out that campaign funds were not always used for speech purposes and that the Court had no facts on which to conclude that the limits would restrict the communication of the candidates.120 He also criticized the Court’s equation of money and speech by stating that “the argument that money is speech and that limiting the flow of money to the speaker violates the First Amendment proves entirely too much.”121

Justice White advocated using a different standard than the “exacting scrutiny” described in the Court’s opinion.122 He described the inquiry in the following manner: “[S]o long as the purposes [that the expenditure limits] serve are legitimate and sufficiently substantial” there is “no sound basis for invalidating [them].”123 Under this standard, Justice White would have upheld the expenditure limits because they reinforced the contribution limits and because they might have prevented “unethical practices.”124

Justice White also criticized the Court’s disregard for the reasoned judgment of Congress.125 He contended that the legislators, who themselves had run for office, knew best what is and what is not corrupting.126 He argued that the Court should respect the judgement of Congress.127 In cases after Buckley, Justice White continued to object to the Court’s application of the First Amendment to campaign finance, not only because he disagreed with the Court in Buckley, but also because he believed that the Court, in subsequent cases, interpreted the per curiam opinion incorrectly.128

Four other Justices wrote separate opinions as well.129 Justice Burger wrote separately because he believed that the disclosure for small donations, the contribution limits, and the public financing system should not have been upheld.130 Justice Marshall believed that the limits on a candidate’s expenditures of personal or family funds should have been upheld.131 Justice Blackmun simply stated that he did not agree with the Court’s distinction between contributions and expenditures.132 Finally, Justice Rehnquist objected to portions of the public financing system because it impermissibly discriminated against minor party candidates.133

Since Buckley courts have applied the speech framework in their review of campaign finance regulations.134 These cases have defined the outer limits of current campaign finance law. 135 The most significant development is that the Court asserts the prevention of corruption as the only government interest significant enough to justify regulation on campaign finance.136

5. Summary

Overall, the Buckley Court upheld portions of FECA, while rejecting others.137 The Court upheld the contribution limits,citing the prevention of corruption as the significant government interest.138 The Court also upheld the disclosure requirements and the public financing system.139 On the other hand, the Court rejected all of the expenditure limits independent expenditures by individuals, expenditures by candidates of personal money, and expenditures by campaigns) and the creation ofthe Commission.140

C. Campaign Finance Law Since Buckley: Preventing Corruption as the Only Significant Government Interest

Understanding the current state of election law requires a brief examination of Buckley’s progeny.141 Since Buckley, courts have upheld limitations on campaign financing only when the state’s interest in preventing corruption is significant.142 In First National Bank ofBoston V. Bellott143 and in Citizens Against Rent Control v. City of Berkeley,144 the Supreme Court extended this reasoning to restrictions on contributions and expenditures for ballot initiative campaigns.145 Because ballot initiatives do not involve giving money to a potential officeholder, the Court reasoned, the concerns for corruption that are present when the donee is a candidate do not exist.146 The Court insisted that Buckley identified prevention of corruption as the only interest able to overcome the exacting scrutiny applied to campaign finance regulations.147

As he did in Buckley, Justice White dissented in both Bellotti and Citizens Against Rent Control, disagreeing with the Court’s application of the First Amendment to restrictions on political contributions.148 Justice White contended that the Buckley Court did not require corruption to be proved to the exclusion of any other compelling state interest.149 In Citizens Against Rent Control, he pointed out that the Court had listed permissible interests other than prevention of corruption in Bellotti.150 Both the language in Buckley and the Court’s own admission in Bellotti, that there were other possible interests, undermine the conclusion that the prevention of corruption is the only interest that can overcome the First Amendment.

More recently, the Supreme Court has examined the constitutionality of various state-level reforms.151 Again, the prevention of corruption continues to be the only acceptable reason for restricting political contributions or expenditures.152 In Buckley v. American Constitutional Law Foundation,153 the Court examined Colorado’s laws regarding the ballot initiative process.154 The Court applied Buckley’s exacting scrutiny to requirements that groups soliciting signatures for petitions disclose the amount paid or owed to each circulator.155 Because the Court found that the possibility of quid pro quo was not as likely in an initiative as it was in elections for office,156 the Court invalidated the regulation for its failure to prevent corruption.157

One of the most recent Supreme Court cases involving restrictions on campaign activities was Nixon v. Shrink Missouri Government PAC.158 The Court reiterated Buckley’s distinction between limitations on contributions and limitations on expenditures.159 Citing Buckley, the Shrink PAC Court declared that “a contribution limit involving `significant with associational rights . . . could survive if the government demonstrated that contribution regulation was ‘closely drawn’ to match a ‘sufficiently important interest.'”160 The prevention of corruption was the only interest cited as meeting this standard.161

Since Buckley, the standard for upholding campaign finance reforms turns solely on whether the reform prevents corruption.162 Therefore, any future campaign finance reform measure must prevent corruption in order to survive current constitutional review.163 Examination of current campaign reform proposals shows why this standard may be problematic.

III The Reformers: Perceived Problems and Proposed Solutions

Before analyzing the constitutionality ofthe reforms, one must first understand their content. While there are many different reform proposals, this Note will focus on proposals that ban soft money and restrict issue ads.164 As representative examples of such reforms, this Note will discuss the soft money ban and issue ad limits in the McCain-Feingold165 and Shays-Meehan166 bills.167

A. The Perceived Problems

McCain and his supporters168 seek to ban soft money and certain forms of issue advocacy.169 Both of these campaign finance mechanisms are creations of the post-Buckley era.170 Soft money and issue advocacy thrive because the current standard of review gives these campaign finance methods a First Amendment shield.171

1. Soft Money

The term “soft money” refers to money raised and spent outside the scope of FECA.172 It is money that FECA prohibits, either because of source or amount, when contributed directly to a candidate, but that is allowed for other purposes beyond the scope of FECA, such as state elections.173 FECA created soft money as we know it today in a 1979 advisory opinion.174 The opinion allowed a political party committee to spend money on get-out-the-vote (GOTV) and voter registration drives without attributing the money against the party’s contribution limits for any named federal candidates.175 After the Commission denied a public interest group’s petition for rulemaking on soft money, the public interest group, Common Cause, filed suit for judicial review of the denial.176 The district court required the Commission to promulgate regulations that are now the basis of the current soft money system.177

The regulations provide for an elaborate system of allocating money for certain committee expenses between federal and non-federal money.178 Election activities paid for through this system are exempt party-building activities that affect both federal and non-federal activity and, therefore, can be paid for with a mixture of federal and non-federal money.179 Expenses that can be paid for with soft money include the following: overhead expenses, generic voter registration and GOTV drives, issue advertising, and fundraising.180 The soft money system allows party committees who participate in both federal and non-federal activities to raise money outside the normal limits of FECA for the portion of the “exempt” expenses that can be financed with non-federal dollars.181

For example, the allocation for national party comittees permits the party committees to pay for exempt activities on a formula that allows for 60% of the funds to come from federal accounts in non-presidential years and 65% in presidential election years.182 For state and local parties, the allocation is based on the “ballot composition method,” which takes into account how many federal versus non-federal candidates are on the ballot in a given election year.183 This formula allows states with few state-level candidates in a given year to pay for more of their exempt activities with federal money than a state that has the same number of federal candidates but more state candidates.184 The reformers object to soft money because the expenses that can be paid for with unlimited non-federal money can often be used to indirectly influence federal elections.185 One way parties frequently spend soft money is on issue advertisements.186

2. Issue Ads

In Buckley, the Supreme Court narrowly defined the kind of ads that constituted “express advocacy” and, therefore, fell within the purview of FECA.187 The Buckley Court created a bright-line test – the ad must expressly advocate the election or defeat of an identifiable candidate before it would be subject to the limitations of FECA.188 However, the Supreme Court did extend “express advocacy” to include a newsletter that encouraged readers to “vote pro-life” and then listed which candidates were considered pro-life candidates because it was an “explicit directive” to vote for specific candidates.189 Because advertisers can easily avoid the list of specific “magic words” set out in Buckley, party committees, wealthy interest groups, and others can pay for advertisements that talk about a candidate for federal office with money that is not subject to the limits in FECA.190

In 1995, the FEC promulgated regulations defining “express advocacy.”191 These regulations included the magic words from Buckley, as well as other specific phrases, such as, “support the Democratic nominee,” “reject the incumbent,” “[name of candidate] in `94,” “vote Pro-life” or “vote Pro-choice” when accompanied by a list of candidates, or the use of a candidate’s campaign slogan.192 The regulations went on to include communications that “could only be interpreted by a reasonable person as containing advocacy of the election or defeat of one or more clearly identified candidate(s).”193 However, the proposition behind this regulation has been challenged,194 The predominating view among the courts is that communications must contain words of express advocacy in order to be regulated under FECA.195

B. The Reform Proposals

To combat the loopholes that the Court created in Buckley, the reformers have proposed the Bipartisan Campaign Reform Act of 2001 in the Senate and the Bipartisan Campaign Finance Reform Act of 2001 in the House.196 The major goals of these proposals are to ban soft money and to limit issue ads.197 To accomplish these goals, the bills limit the ability of the parties to raise money outside the limits of FECA,198 require increased disclosure for independent expenditures,199 and redefine “express advocacy.”200

1. Soft Money

In order to limit the ability of the parties to raise soft money, both bills require that the national political parties only raise and spend money that comes under the restraints of FECA.201 The proposals completely bar all national party committees from raising or spending any money that does not fall under FECA, regardless of whether the money is used for federal or nonfederal activity.202 The bills also expand the definition of “federal election activity” to include many activities carried on by state and local party committees that are currently paid for in part by non-federal money.203 Under these bills, “excluded activity” would include only campaign activities by a state or local political committee on behalf of state or local candidates, contributions to state and local candidates, the costs of local political conventions, the cost of campaign materials such as signs and bumper stickers that contain only names of state or local candidates, and the costs of office construction or purchase.204 These provisions restrict the ability of state and local political parties to raise or spend money outside FECA’s limits, even on communications that do not affect federal elections.205

The bills limit the ability of political parties to pay for fundraising activities using soft money.206 The proposals prohibit the use of soft money to pay for any fundraising activity by any party committee that raises funds to be used for federal election activity.207 The reforms would also prohibit parties from making contributions to tax exempt organizations, other than political committees that are subject to the provisions of FECA.208 Finally, the bills would prohibit candidates for federal office, officeholders, or entities controlled by such candidates or officeholders from raising or spending soft money in connection with federal, state or local elections.209

2. Issue Ads

Although the two bills have an identical approach to soft money, they have very different approaches to issue ads.210 The McCain-Feingold bill increases the disclosure requirements for electioneering communications.211 The bill defines “electioneering communications” as any broadcast, cable or satellite communication that (1) refers to a “clearly identified” federal candidate, (2) is made within sixty days before a general election for federal office or within thirty days of a primary election, convention or caucus, and (3) is made to an audience that includes potential voters.212 The bill also requires any person or group that spends more than $10,000 on such communication to file a special disclosure statement with the FEC within twenty-four hours of the communication.213 McCain-Feingold prohibits the expenditure of labor union or corporation treasury funds for electioneering communications.214 Furthermore, the bill requires that any organizations that accept contributions from corporations or labor unions keep segregated accounts for individual and corporate donations; electioneering communications can only be paid for out of the individual donor account. 215

Shays-Meehan takes a very different approach to the problem of issue ads. Instead of merely requiring disclosure of issue ads, Shay-Meehan redefines “express advocacy.”216 Thus, the bill reclassifies many advertisements that are now defined as issue advocacy and defines them as express advocacy.217 This change in classification effectively requires advertisements that can currently be paid for with soft money to be paid for with money raised under the contribution limits of FECA.218 The bill provides the following three ways a communication can expressly advocate a position: (1) by containing specific phrases like the Buckley magic words, such as, “[name of candidate] for Congress,” “re-elect [candidate],” or by including any saying that “can have no reasonable meaning other than to advocate the election or defeat of… clearly identified candidates;” (2) by referring to any candidate in a paid radio or television advertisement within sixty days of an election; or (3) by opposition to a candidate.219 From this definition, the bill exempts “voting guides,” which are defined as communications in print form (or on the Internet) that discuss the voting record of a candidate without expressing clear support or opposition of such candidate.220 The effect of this definition is that virtually all communications that mention a federal candidate must be paid for by money raised under the FECA contribution limits.221

Notwithstanding whether or not one believes that either of these bills provide an accurate solution to the loopholes in the current campaign finance system, the proposals have one major problem. Under the standard articulated in Buckley, and narrowed by its progeny, the bills may be unconstitutional.222 Even if passed by Congress, the fate of McCain-Feingold or Shays-Meehan will ultimately be determined by the test applied by the Supreme Court.

IV The Fate of the Reform Proposals

Although campaign finance reform has faced difficulties in Congress, passing a reform bill may actually be the easy part.223 Because of the current standard of review, any reform proposal must prevent corruption in order to be upheld.224 This Part addresses three issues. First, subpart A discusses how the reforms would likely be struck down under the current standard.225 Second, subpart B suggests how the current reforms might fare under the different frameworks set out by the Justices in Shrink PAC.226 Finally, subpart C proposes that the Buckley Court did not hold that the only interest that could justify restrictions on campaign finance was the prevention of corruption.227 Subpart C then examines the interests that would pass the test articulated in Buckley and further determines which interests of those advanced by current reforms will pass scrutiny under the Buckley standard.228

A. The Current Standard. Only the Prevention of Corruption

Because the prevention of corruption is the Only possible interest that allows a reform to pass constitutional scrutiny, the proposed reforms must explain what corruption the reform is fighting.229 The Supreme Court has thus far upheld the practice of using soft money for party-building and issue ads and has also upheld the bright line “magic word” issue ad test over contentions that restrictions would prevent corruption.230 However, evaluating the constitutionality of the proposed reforms may not be an easy task.

1. Soft Money

The constitutional of a soft money ban has been the subject of much academic debate.231 The argument in favor of constitutionality is that contributions to parties should be viewed like contributions to candidates, which could be restricted under Buckley.232 For this argument to work, the Court must find that limiting soft money prevents corruption in a way similar to the prevention of corruption that justified the limitations on direct contributions to candidates.233 The argument against constitutionality focuses on how the reforms do not fall into the narrow definition of preventing corruption.234

Commentators who believe the reforms are constitutional have found the requisite corruption in various ways.235 Some focus on the nature of soft money, concluding that there are “dangers of undue influence implicit in the process by which the soft money… is raised.”236 Others try to analogize soft money to other types of restrictions that the Supreme Court has deemed unconstitutional.237 The most important of these assertions of constitutionality is contained in a letter written by Professors Ronald Dworkin and Burt Neuborne and signed by 126 legal scholars (the “letter”).238

The letter argues that the Supreme Court’s opinion in Austin v. Michigan Chamber of Commerce,239 in which the Court held that the state of Michigan could prevent political contributions and expenditures from corporate treasuries, supports the proposition that the ban on soft money would be upheld.240 The letter concludes the following:

[s]urely, the law cannot be that Congress has the power to prevent corporations from giving money directly to a candidate, or from expending money on behalf of a candidate, but lacks the power to prevent them from pouring unlimited funds into a candidate’s political party in orderto buy preferred access to him after the election.241

The letter also notes that Congress’s ability to limit donations from corporations and unions to candidates supports its ability to limit contributions to parties as well.242 The problem with Dworkin’s and Neuborne’s analogy, however, is that the finds at issue in Austin were for contributions and expenditures by a corporation that expressly advocated a candidate.243 Soft money, on the other hand, does not pay for direct contributions, but for general campaign activity, which has been distinguished from direct contributions.244 Thus, Austin does not speak directly to the issue of soft money because soft money is frequently used to pay for issue ads and similar communications that do not contain express advocacy.

Those who believe that soft money would be deemed unconstitutional under the Buckley framework criticize the letter.245 One of the leading critics of the soft money ban, FEC Commissioner Bradley Smith, asserts that the letter incorrectly “focus[ed] only on the sources and not the uses of soft money.”246 Smith argues that the ability of parties to raise soft money to spend on such things as issue ads cannot be unconstitutional because the contribution is made not to the candidates – who are officeholders and are therefore able to be corrupted – but to the parties.247 As for the proposition that Austin supports a soft money ban, Smith notes that Austin only addresses the context of express advocacy, on which the Supreme Court previously allowed limitations.248 No matter the position of the commentator, all agree that the applicable standard is whether or not the restriction prevents corruption.249

2. Issue Ads

Although the case for banning soft money may have some hope of passing constitutional review under the Buckley regime, the case for banning issue advocacy is not as encouraging.250 As discussed above, the McCain-Feingold and Shays-Meehan bills take different approaches to the problem of issue advocacy.251 The Shays-Meehan solution is to redefine express advocacy to include many ads that are now considered issue ads, thereby subjecting them to the requirements of FECA.252

The academic community also has discussed the constitutionality of a ban on issue adS,253 The general consensus is that any attempt to restrict issue ads faces major constitutional problems under the Buckley regime and that the Court would not uphold an outright ban.254 The solution that is most likely to pass constitutional scrutiny, according to commentators, is a disclosure provision, like the one in McCain-Feingold.255 However, there is disagreement about whether Congress can even require disclosure.256

One commentator contends that the two major obstacles preventing disclosure of issue advocacy are vagueness and overbreadth.257 Professor Hasen argues that a statute can be narrowly written to avoid the vagueness problem, but that it is difficult to draft a statute that overcomes the overbreadth problem.258 He concludes that a disclosure law may be constitutional if it has a sufficiently short period for reporting and a high monetary threshold.”259 This conclusion follows from the assumption that the likelihood of an advertisement, at a high monetary threshold, that mentions a candidate in a limited time period right before an election and does not seek to influence the election, is small and that expenditures that seek to influence an election can be regulated.260 Thus, the disclosure requirements of McCain-Feingold may be upheld because of the high monetary threshold for disclosure.261

Other commentators assert that not even disclosure provisions would be allowed under Buckley.262 This view rejects the assumption that the Court would allow regulation of ads with the purpose of effecting a federal election.263 Proponents of the notion that required disclosure is unconstitutional contend that the Court will allow regulation only for those ads that implicate the interest in preventing corruption; ads that are not coordinated with the candidate cannot implicate that interest.264

Whether or not mere disclosure would be unconstitutional, it is clear that the current standard would not allow for the Shays-Meehan approach.265 As explained above, Shays-Meehan redefines express advocacy to require all ads that mention a candidate within sixty days before an election be paid for with hard dollars.266 Given the current standard set out in Buckley and its progeny, that the prevention of corruption is the only interest that would justify restriction of election-related contributions and expenditures, the outlook for the current reforms seems bleak.267 However, this grim prediction only applies if the Supreme Court reviews the reforms under the current standard. If the Court should decide that preventing corruption is not the only interest suffi– cient to overcome constitutional scrutiny, there may be some hope for the current reforms.

B. A New Standard. Suggestions from Shrink PAC

This Note contends that preventing quid pro quo corruption is not the only government interest significant enough to allow campaign finance reform. The current Court’s frustration with Buckley, as interpreted by its progeny, supports this contention.268 This subpart discusses the alternative frameworks discussed in Shrink PAC and how each might treat the reform proposals.269

1. Money Is Not Speech – Justice Stevens’s Approach

Justice Stevens suggested that restrictions on the amount of money contributed to or spent on election activities should not be classified as restrictions on speech, but rather as restrictions on the use of property.270 He stated that the Constitution protects people against government regulation pertaining to the use of their property, but that those protections are unrelated to the First Amendment.271 A property-based standard does not, however, guarantee the approval of the reform proposals. Although Justice Stevens did not explain exactly what standard would apply, he did point out that the expenditure limits struck down in Buckley would likewise fail a property analysis.272 If the contribution/expenditure distinction remains under a property regime, it is possible that issue advocacy cannot be regulated because it is an expenditure as opposed to a contribution.273 However, soft money is a contribution; therefore, the Court may uphold a soft money ban under Justice Stevens’s framework because the due process regime may allow for the advancement of other governmental interests. Because the prevention of corruption would not be the sole governmental interest allowing for regulation, reforms such as a soft money ban are more likely to survive the Court’s scrutiny.274 The likelihood of survival is increased because the government would be able to advance other interests, such as the interest in equalizing the ability of individuals and groups to influence campaigns, which was rejected on First Amendment grounds in Buckley.275 Thus, Justice Stevens would not require reforms to serve the prevention of corruption interest in order to survive constitutional review.

2. Balance and Defer – Justice Breyer’s Approach

Justice Breyer suggested that the review of campaign finance restrictions implicates two protected interests that require balancing.276 He believed that the Court should weigh both the interest in protecting speech and the interest in protecting the integrity of elections.277 Justice Breyer criticized those Justices who believed that restrictions on campaign finance should be subject to strict scrutiny.278 He likened the application of strict scrutiny to a presumption against the constitutionality of campaign finance restrictions.279 Given the competing interests, he concluded that such a presumption was “out of place.”280

Instead, Justice Breyer proposed asking “whether the statute burdens any one such interest in a manner out of proportion to the statute’s salutary effects upon the others.”281 To assist the Court in balancing the interests at stake, Justice Breyer advocated deferring to legislative judgment.282 However, he quickly explained that the Court should still carefully review campaign finance provisions for other “constitutional evils,” such as provisions that may unfairly protect incumbents.283

To apply Breyer’s framework to a soft money ban, the Court would need to balance the rights of the parties and contributors against the government’s interest in preserving the integrity of elections. The interest in preserving the integrity of elections is a broader interest than the current prevention of corruption standard and implicates more than just quid pro quo situations.284 If there were legislative findings that a soft money ban would protect the integrity of elections, Justice Breyer’s test would allow such a ban to stand.285 The same may be said for issue advocacy. Although the speech implications may be greater in the context of issue ads, the broader interest of assuring integrity may overcome the major problem inherent in the Buckley framework, that where there is no direct quid pro quo, the government cannot regulate.286 Thus, Justice Breyer’s balancing standard may also uphold reforms that do not explicitly serve the prevention of corruption interest.

3. Strict Scrutiny – Justice Kennedy’s and Justice Thomas’s Approach

Rather than propose tests that would allow for more restrictions on campaign finance, Justices Kennedy and Thomas advocated strengthening the standard to protect the First Amendment rights implicated by such restrictions.287 Justice Kennedy did not precisely define the applicable standard of review, but he claimed that the contribution limit at issue in Shrink PAC did not “come even close to passing any serious scrutiny.”288 He said there may be room for Congress to reform the system in a different way than in FECA, but he questioned whether any restriction on direct contributions and expenditures could be so limited.289 Finally, Justice Kennedy conceded that at the end of the day he would likely side with Justice Thomas, who supported strict scrutiny of restrictions on campaign financing.290

Justice Thomas, joined by Justice Scalia, contended that “[p]olitical speech is the primary object of First Amendment protection”291 and that contribution limits directly burdened this most fundamental right.292 He argued that Buckley discounted the rights of both candidates and contributors by allowing restrictions on campaign contributions.293 Because Buckley restricted the First Amendment rights of candidates and contributors, he would overrule it.294 He believed that such restrictions must be reviewed under strict scrutiny.295 Justice Thomas rejected the notion that the prevention of corruption will always be a sufficient interest to overcome constitutional review.296 Applying this standard to the current reform proposals, few would survive strict scrutiny. If a donor’s ability to make unrestricted contributions to candidates could not be limited, then donations that are one step removed from the candidate, like soft money, surely would be allowed. The same could be said for issue advocacy. If giving an unlimited amount of money to a candidate would be permitted, it seems unlikely that Justice Thomas would restrict an individual’s ability to spend money on advertisements that do not even expressly advocate the election of that same candidate. If an advertisement does not advocate the election or defeat of a candidate, even if it has the purpose of doing so, then this action is still far removed from giving the same amount of money to a candidate, which would be legal under Justice Thomas’s standard.297

However, because Justice Thomas believed that disclosure was a less restrictive means of preventing corruption,298 the disclosure provisions may still stand under his strict scrutiny analysis.’299 Nevertheless, under Justice Thomas’s standard, the interest in preventing corruption may be overcome by the interest of the speaker if the means chosen by the government are not narrowly tailored.300 He reasoned that the donation is not for a candidate and, therefore, does not pose as great a threat as direct contributions to candidates. Thus, Justice Thomas’s framework may restrict the ability for virtually any reform, even those that prevent corruption, from passing constitutional scrutiny.

C. A New Standard: Buckley Revisited

The Buckley Court did not hold that the only interest that could justify restrictions on campaign finance was the prevention of corruption.301 Justice White argued this point in the cases following Buckley and this Note argues it now.302 Admittedly, the Supreme Court, as well as lower courts, frequently assert that Buckley stood for the fact that preventing corruption is the only significant interest.303 However, the Court in Buckley did not claim to create such a rigid standard.304 The Buckley Court merely stated that it was “unnecessary to look beyond the Act’s primary purpose,” which was prevention of corruption.305 The standard established in Buckley was one of “exacting scrutiny.”306 Although the Buckley Court did not spell out exactly what this “exacting scrutiny” required, in discussing the contribution limits, the Court stated that the government must “demonstrate[ ] a sufficiently important interest” and “closely drawn” means.307 The Justices never asserted that the prevention of corruption was the only interest that would allow restrictions on campaign finance.308 As noted above, the idea that Buckley stood for the principle that the only available interest to justify campaign finance reforms is the prevention of corruption was an idea advocated only after Buckley.309

As Justice White correctly pointed out, the Supreme Court narrowed the ability of campaign finance reforms to pass constitutional scrutiny by limiting the available interests that a government can promote with such restrictions.310 In emphasizing quid pro quo corruption, the Court disallowed reforms when the purpose was more general, such as preserving the integrity of elections.311 While the Court’s stated concern in upholding this narrow construction of the available interests was the First Amendment protection of political speech, the unintended consequence of this determination may be the inability of legislators to prevent more general harms to the electoral system.312 ff the Court were to apply the test for campaign finance reforms as broadly as originally stated in Buckley, the reforms would have a better chance of passing constitutional scrutiny. For example, if the Court recognizes a more general interest in protecting the integrity of elections, campaign finance reform proposals could restrict activities that do not implicate a direct quid pro quo situation, but nonetheless influence the election of federal candidates.

As explained, Buckley requires a sufficiently important interest including, but not limited to, the prevention of corruption. However, this interest does not encompass the desire to equalize speakers economically.313 In the context of the disclosure provisions, the Court concluded that three different interests survived “strict scrutiny.”314 The Court could evaluate a ban on soft money and restrictions on issue ads under the “exacting scrutiny” standard from Buckley, while allowing the government to assert more interests than just prevention of corruption. The government interest in preventing the impression in the minds of voters that offices are being bought is certainly a “sufficiently important government interest.”315 All of the reforms further this interest. A soft money ban, for example, could prevent the perception that corporations, unions, and wealthy individuals can “buy” elections by preventing them from giving unlimited amounts of money to political parties. However, a significant interest alone is not enough.316 The reform must also accomplish its goal by “closely drawn means.”317 In this case, one could argue that the reform is closely drawn because although it restricts soft money, the perceived evil, it does not completely ban contributions to political parties. This view looks like a balancing test – weighing the speaker/donor’s strong interest in First Amendment rights against the governmental interest in eliminating the perception that public offices are for sale. The Court would then determine whether the reform burdened either interest more than necessary.

The current Court does not seem completely opposed to such a standard. Although Shrink PAC was decided under Buckley, the plethora of frameworks offered in the separate opinions suggests that several Justices are unhappy with the prevention of corruption standard.318 The majority, Justices Souter, Rehnquist, Stevens, O’Connor, Ginsburg, and Breyer, shied away from the strict quid pro quo definition of corruption.319 They claimed that the interest in preventing corruption was larger than the bribery context and extended to a more general concern with the influence of money on governmental action.320 Although the Buckley Court intended to allow restrictions that encompassed more than outright bribery, the Court mentioned only quid pro quo situations.321 This hint of the Shrink PAC majority’s dissatisfaction may be an indication that given the right facts, the Court will “lower” the standard to uphold regulations furthering different, although significant, government interests. A lower standard would allow regulation of soft money and issue ads that, because of their nature, could not pass the corruption standard. Although this approach would upset a great deal of campaign finance precedent, it is consistent with Buckley.

V Conclusion:

Recognizing Speech Interests While Allowing for Reform

The American public distrusts the modern campaign finance system.322 However, the current constitutional standard stands in the way of popular solutions.323 The standard, as first articulated in Buckley v. Valeo, requires that any restrictions on campaign financing survive “exacting scrutiny;” any restriction must promote a significant government interest by closely drawn means.324 Cases subsequent to Buckley claimed that the only governmental interest able to justify restrictions on campaign spending was the prevention of corruption.325 The Court frequently has interpreted prevention of corruption to mean only the prevention of quid pro quo between candidates and donors.326 This interpretation disallows restrictions on issue ads and soft money that are not directly contributed to a candidate, thereby eliminating the concern about a quid pro quo.327 However, the current Supreme Court is unhappy with the system set up in Buckley and is willing to go beyond the quid pro quo definition of corruption.328 Furthermore, a more accurate reading of Buckley reveals that the Court does not state that the sole governmental interest must be the prevention of corruption.329 Such a reading would allow the Court to uphold reasonable restrictions on campaign finance while still protecting the important First Amendment rights implicated by the donating and spending of money in politics.330 Thus, a balancing test based on the “exacting scrutiny” standard in Buckley would adequately protect the First Amendment rights of candidates and donors while allowing reasonable reform.

Stephanie Pestorich Manson*

* The author wishes to thank Professor Ann MacLean Massie for her assistance in the development of this Note. She also appreciates the comments of Heidi Reamer. Finally, the author would like to thank her husband, Marshall Manson, whose love and support made this Note possible.

Copyright Washington & Lee University, School of Law Summer 2001

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