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Michael C. Dorf

Should the Supreme Court Alter Its Approach to Campaign Finance Regulation?


Wednesday, August 12, 2009

Among the most important decisions the Supreme Court made last Term was its decision not to decide the case of Citizens United v. Federal Election Comm'n (FEC). On the last day of its Term, the Court ordered re-argument in this case, which involves FEC regulation of the political film "Hillary: The Movie" during the 2008 primary campaign. Although the Court might have decided the case on narrow grounds, it instead asked the parties and their amici to address a broad question: Whether two important First Amendment precedents upholding campaign finance regulation ought to be overruled.

In order to give political campaigns time to react to whatever ultimate decision the Justices reach, the Court scheduled the oral argument for September 9, before the start of the regular Term in October. The Court ordered expedited briefing on its new question. The main briefs have now been submitted, and it is clear that the case could have far-reaching consequences for the regulation of campaign finance and, more broadly, for our democracy.

In this column, I shall begin by explaining what legal doctrines are in play in Citizens United.  I shall then ask more basic questions about the limits the First Amendment, properly interpreted, places upon the regulation of campaign finance.

McCain-Feingold and "Hillary: The Movie"

As discussed last year in a column on this site by Julie Hilden, Citizens United involves a provision of the Bipartisan Campaign Reform Act (BCRA), also known as McCain-Feingold. Section 203 of BCRA forbids corporations and labor unions from using their general treasury funds for direct expenditures devoted to what the Act defines as "electioneering communications." (Separate funds can be used, however, subject to further regulations.)

As narrowly construed by the Supreme Court in the 2007 case of FEC v. Wisconsin Right to Life, Inc., electioneering communications are, in turn, defined to refer to communications that are the functional equivalent of express advocacy for or against a particular candidate for office, within 30 days of a federal primary election or within 60 days of a federal general election.

Most applications of Section 203 involve 30-second television advertisements, but Citizens United was an unusual case. The FEC took the position that a feature-length film that was unremittingly critical of Hillary Clinton--at the time, a candidate for the Democratic nomination for President--was essentially an extended campaign ad. And because Citizens United received a portion of its funding from general corporate funds, the FEC said, BCRA forbade the airing of the film during the campaign blackout period.

The Court could have decided Citizens United on a number of relatively narrow grounds. Because only a small portion of the funding for "Hillary: The Movie" came from corporate funds, the Court might have said that the FEC lacked jurisdiction to restrict the film. Or, the Court could have said that Section 203 does not apply to video-on-demand services, the principal means by which the film was to be distributed, because people who independently decide to watch such fare are not likely to be undecided voters whose decisions are still in play. Or, the Court could have carved out an exception--either as a matter of the meaning of Section 203, or because of First Amendment principles--protecting feature-length films.

Why did the Court decide instead to order re-argument? We cannot know for sure, but the answer may have something to do with the extraordinarily aggressive stance taken by the government in defending the application of BCRA to "Hillary: The Movie." During the first oral argument, Deputy Solicitor General Malcolm Stewart said, in answer to questions, that the government could even ban corporate-funded or union-funded books during the election period, if those books clearly took sides for or against candidates, even if the express advocacy were only a tiny fraction of the book. This broad assertion met with incredulity on the Justices' part.

Citizens United does not directly deal with banning books, of course. However, if the government views existing precedent as allowing the banning of books, then one could see why the Court would want to reconsider that precedent. And that is exactly the point that the Court has asked the parties to address. Its reargument order asks whether to overrule either or both of two precedents, Austin v. Michigan Chamber of Commerce and McConnell v. Federal Election Comm'n, that were decided, respectively, in 1990 and 2003.

The Buckley Case

To understand the significance of Austin and McConnell, one must first go back to the leading Supreme Court decision involving campaign finance regulation, the 1976 ruling in Buckley v. Valeo.In the early 1970s, Congress attempted to comprehensively regulate campaign finance by restricting both how much money people (defined to include corporations and other institutions) could donate to political campaigns, and how much candidates, campaigns, and parties could spend to win election.

The Buckley decision is long and complex, but over time, it has come to stand for a relatively straightforward rule: Congress and the states may impose reasonable limits on how much money persons and groups can contribute to political campaigns, but they may not limit how much the candidates and campaigns can spend.

What is the purported justification for this distinction between contribution limits (permissible if reasonable) and spending limits (almost always impermissible)? According to the Buckley Court, campaign contributions are First Amendment activity, but only at one remove: If I give money to the campaign to re-elect my Congressman, I expect the campaign to use that money as it best sees fit in gaining re-election; I understand that some of the money may be used to air political advertisements, but I have no direct role in creating those ads. I have an interest in the campaign's speech--which is why contribution caps must be reasonable--but the campaign does not speak on my behalf.

By contrast, given that the single most expensive item for political campaigns is getting out the message (through advertising and other means), spending limits directly constrain the political speech of candidates and their campaigns. Yet, the Court said in Buckley, "the concept that government may restrict the speech of some elements of our society in order to enhance the relative voice of others is wholly foreign to the First Amendment."

The Rise of Independent Expenditures

In the years since Buckley, various Justices have expressed dissatisfaction with the distinction between contribution limits and expenditure limits. Some would prefer to invalidate both, while others would prefer to give government greater leeway to regulate campaign spending along with campaign contributions. However, no alternative approach has appealed to a majority of the Court, and so the Buckley framework remains in place.

Meanwhile, people and organizations interested in using their money to affect politics have found ways to get around contribution limits. Thus, we have seen the rise of independent expenditures. In the simplest example, a wealthy individual or large corporation might spend money directly to promote a particular candidate, by, for example, running his, her, or its own advertisements. In running the ads directly, the individual or corporation would not be making contributions, and thus would not be subject to reasonable restrictions as allowed by Buckley. Instead, the direct spending would, under the Buckley framework, not be subject to any limits at all.

Nonetheless, state and federal regulators attempted to close this loophole. In the Austin case, the Court considered a Michigan law that forbade corporations, other than media corporations, from using their general corporate treasury funds for expenditures designed to influence state legislative elections. Although the law regulated expenditures, rather than contributions, the Supreme Court upheld it.

The majority argued that corporations are different from other speakers: Favorable state laws (including those establishing the limited liability of shareholders) permit corporations to amass great wealth, but the customers and stock purchasers that create value for corporations do not thereby intend to endorse any particular political message. The government may thus legitimately act to curb the outsized and distorting influence of corporate speech, the Austin Court held. In contrast, the dissenters in the Austin case thought that Michigan was simply trying to increase the relative voice of non-corporate speakers by suppressing corporate speech, in violation of Buckley.

Congress, by enacting Section 203 of BCRA, sought to limit the impact of independent expenditures on federal election campaigns. As noted above, Section 203 limits the ability of potential campaign contributors to circumvent contribution limits by redeploying their money independently of the campaigns. In the McConnell case, the Court upheld Section 203 against a facial challenge, but the Justices fractured badly in the opinions they wrote to justify their respective votes. Moreover, the 2007 Wisconsin Right to Life case restricted the scope of Section 203.

Accordingly, in asking the parties whether Austin and McConnell should be overruled, the Supreme Court has put back in play the question whether corporations (and unions and other organizations) have the same right to spend money for political speech as natural persons do. And because the Justices' attitudes towards that question seem bound up with their broader views about campaign finance regulation, it is possible that the entire Buckley framework could be up for grabs when the Court rehears Citizens United next month.

Back to Basics: The Rationales for Regulating Campaign Finance

If so, it may be useful to remind ourselves why Congress and state legislatures want to regulate campaign finance in the first place. There are two core reasons. First, money distorts the representativeness of democracy. We have a principle of one-person-one-vote. However, when a wealthy person, acting alone or through a corporation or other organization, contributes or spends large sums of money to influence the outcome of an election, he or she greatly multiplies the effectiveness of his or her vote, relative to the votes of persons of modest means. Despite its appeal to seemingly core democratic values, this egalitarian rationale has been pretty squarely rejected by the Supreme Court as an insufficient ground for upholding campaign finance regulation.

The Court has, however, credited a second rationale: Avoiding the appearance of corruption. Bribery of, and extortion by, elected officials are crimes. The Supreme Court cases permit campaign finance regulation to the extent that the Justices think that those regulations are necessary to prevent either an actual quid pro quo or the appearance of one.

It is highly unlikely that the Supreme Court will use the Citizens United case as an opportunity to breathe new life into the egalitarian rationale for campaign finance regulation, but that is terribly unfortunate. Properly understood, the egalitarian and anti-corruption rationales are not in fact distinct, but two aspects of the same core principle.

A politician who takes bribes in exchange for doing political favors is corrupt because he has, in the literal sense, corrupted--that is, changed for the worse--the nature of his job. Instead of serving the public good as he and his constituents see it, he does the bidding of those who illegally pay him. But what makes that a crime against democracy is precisely that it disregards the egalitarian principle: The people who unwittingly elect a corrupt politician do not really have an equal vote with the individual, corporation, or union that bribes him.

Thus, we should understand the egalitarian rationale for campaign finance regulation as of a piece with the anti-corruption rationale. Both assert the primacy of the voters over the influence of moneyed interests.

The Problems with Campaign Finance Regulation

To recognize that unregulated campaign contributions and expenditures pose a threat to democracy is not, however, to deny that there have been serious problems with the regulation of campaign finance. The most serious of these was dubbed the "hydraulics of campaign finance reform" by law professors Samuel Issacharoff and Pamela Karlan a decade ago.

Water, we know, will find its level, and so too, Issacharoff and Karlan say, will money in politics. So long as there is demand for political influence--and the enormous money to be made by avoiding costly regulation, or obtaining favorable regulation, ensures there will always be--moneyed interests will seek to influence political outcomes. If the law restricts campaign contributions to candidates, money will be redirected to parties; if the law restricts contributions to parties, it will go to independent expenditures; and eventually the law will be unable to stop the money because it will go to obviously protected First Amendment activities, such as the writing of books.

Issacharoff and Karlan may well be right. Certainly, the years since Buckley suggest that politicians and the people who want to influence them are very creative in finding ways to circumvent the latest regulations, whatever they are.

But granting that, Section 203 of BCRA should still survive a facial challenge. "Hillary: The Book," if it existed, would not be regulated by Section 203, which only applies to television and radio broadcasts. "Hillary: The Movie" may well be protected by the First Amendment because our campaign finance laws have pushed it so far upstream that it cannot be reached. It does not follow, however, that all regulation of corporate, union, or other election-related speech is therefore unconstitutional.

Characteristically capturing the zeitgeist, Frank Rich observed last Sunday that the influence of corporate money in Washington is giving many ordinary Americans "the sinking sensation that the American game is rigged." Unfortunately, there is reason to think that the Supreme Court will make matters worse by overruling Austin and/or McConnell and holding BCRA § 203 facially invalid. If it does so, the American people could be excused for thinking that the Court too is part of the rigged game.

Michael C. Dorf, a FindLaw columnist is the Robert S. Stevens Professor of Law at Cornell University. He is the author of No Litmus Test: Law Versus Politics in the Twenty-First Century and he blogs at

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