Edit Memo: Blockbuster Case Kicks Off New Supreme Court Term: The McCutcheon Steamroller

The Roberts Court Takes Aim at the Last Pillar of Campaign Finance Law

To: Interested Parties
From: Marge Baker, Executive Vice President, People For the American Way Foundation
Date: September 27, 2013
Re: Blockbuster Case Kicks Off New Supreme Court Term: The McCutcheon Steamroller

In the wake of landmark rulings in the Supreme Court’s last term – ranging from decisions on voting rights and LGBT equality to employment discrimination and affirmative action – this coming Court term is shaping up to be at least as consequential.  Most notably, on the second day of its new term – October 8th – the Court will hear arguments in a case that threatens to further unravel our nation’s tattered campaign finance laws.

When you look around at the campaign finance structure set up after the Watergate scandal, there just isn’t much of it left.  In Buckley v. Valeo (1976), the Supreme Court eroded the foundations of the Federal Election Campaign Act when it struck down limits on individuals’ “independent” expenditures expressly advocating or opposing the election of candidates for public office.  In Citizens United v. FEC (2010), the Court bulldozed the federal wall of separation between corporate treasury wealth and political campaigns, meaning that CEOs can spend other people’s money in politics without limit.  In Davis v. FEC (2008) and Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett (2011), the Court wiped out state laws that empowered candidates to receive more public financing or larger contributions to catch up even part way with candidates who outspend them with personal wealth or the benefit of outside expenditures.  And in SpeechNow.org v. FEC (2010), citing Citizens United, the D.C. Circuit Court of Appeals demolished any limits on how much money wealthy individuals can donate to independent advocacy groups, which gave rise in 2012 to the expenditure of $760 million by super PACs, with 90% of that money coming from fewer than 1,600 individual donors or fewer than one in 100,000 Americans. 

All of this judicial activism for the biggest spenders and CEOs in the name of the First Amendment has given us a political process awash in unregulated and highly motivated cash.

And now, this Term, conservatives on the Court are taking aim at the last pillar standing among the ruins of our once-ambitious campaign finance legal structure:  the caps on contributions directly to candidates and PACs and parties (as opposed to independent expenditures on their behalf).

Since Buckley, the Court has held that direct contributions to candidates’ campaigns can be reasonably capped in the interests of countering political corruption and the appearance of corruption, which the Justices recognized encompassed more than just criminal quid pro quo arrangements.  Corruption was a central concern of the Founders, as James Madison noted, and federal law since 1974 has set both “base limits” on what you can give to a particular federal candidate, PAC or party and “aggregate limits” on what you can give in an election cycle to all such federal campaign entities.

The Buckley Court reasoned that neither base nor aggregate contribution limits violate anyone’s free speech rights because citizens are always free to spend as much money as they wish independently advocating a candidate’s election or defeat.  Direct campaign contributions to federal candidates, PACs and parties only implicate the right to associate ourselves directly with a candidate (or PAC or party), and our interest in such association is vindicated equally well by a $2,600 contribution (which is the current generous cap on federal candidate contributions) as by the $1,000,000 contributions that were eliminated after Watergate; both contributions simply say, “I support you.”   Meantime, the public has a compelling interest in preventing the development of quid pro quo relationships between donors and candidates where money is traded for political favors, legislative influence and policy favoritism, distorting the process of democratic representation.

Now, in McCutcheon and Republican National Committee v. FEC, the Republican Party and a wealthy donor hope to continue the plutocrats’ winning streak in the Court with a sweeping challenge to the “aggregate limits” set by the Federal Election Campaign Act on a person’s total federal contributions.  These limits, inflation-adjusted for the 2013-14 election cycle, allow each individual in a family to contribute a total of $123,200 in a cycle.  This amount, which is more than double the total annual income of the average American family, includes a maximum of $48,600 to candidates for federal office and their authorized committees, and another $74,600 to national party committees, state party committees, PACs and other federal entities.  The plaintiff Shaun McCutcheon maxed out on his aggregate giving in 2012 but alleges that he wanted to give 12 more contributions of $1,776 each (get it?) to various Republican candidates and an additional $75,000 to various Republican party committees, but could not do so because of the aggregate limits.  The Republican Party sued because it wants to receive those additional contributions.  If the plaintiffs win, McCutcheon could theoretically give in one cycle more than $2.4 million to all Republican federal candidates, $194,000 to the national party, and $1 million to the state Republican committees.  A wealthy donor seeking Washington influence and hedging his or her bets could write checks for more than $7 million, covering every Democratic and Republican candidate for Congress and all of the party committees.

The unanimous three-judge district court (convened under the Bipartisan Campaign Reform Act) that heard the case below rejected the challenge, relying squarely on Buckley v. Valeo itself.  Whatever its other flaws (and there were many), Buckley refused to subject contribution limits to strict scrutiny because, as the lower court observed, they “primarily implicate the First Amendment rights of association, not expression, and contributors remain able to vindicate their associational interests in other ways.”  Furthermore, the Buckley Court specifically rejected the attack on the aggregate contribution cap, which was even lower at the time, because a limit on overall giving is “no more than a corollary of the basic individual contribution limitation” that the Court found to be permissible. 

The Buckley Court recognized that aggregate limits on giving prevent “circumvention” of the base limits by preventing contributors from funneling additional cash through a third party entity, such as a political party, to a candidate to whom they have already maxed out in direct contributions.  Without the aggregate limit, a wealthy donor “might otherwise contribute massive amounts of money to a particular candidate through the use of unearmarked contributions to political committees likely to contribute to that candidate, or huge contributions to the candidate’s political party.”  Both the legislative history of the federal Election Campaign Act and current political history are replete with examples of big donors circumventing base limits in precisely this way.  A 1974 congressional report explained how the dairy industry sidestepped reporting requirements by chopping up a $2 million contribution to President Richard Nixon into hundreds of contributions to various committees “which could then hold the money for the President’s reelection campaign.”  Today, candidates routinely urge committed donors who have already maxed out to them to consult with party committees that can effectively act as conduits for further contributions, a practice that would be validated and exacerbated by destruction of the aggregate limits. 

The plaintiffs know full well that the Buckley Court already brushed aside their argument, and they know that, if anything, the logic of blocking circumvention of the base limits has only grown more compelling over time with the proliferation of PACs and party committees.  That is why their argument was thoroughly rejected by the three-judge lower court panel that included the far-right Janice Rogers Brown. This is not a legally difficult case if you care about following unambiguous Supreme Court precedent.  Ordinarily, this is not a case the Supreme Court would even agree to hear.

But the “donor community” attacking Buckley from the right is on a surging campaign to establish that all campaign finance regulation is unconstitutional and they think they have a receptive audience in the five arch-conservative members of the Roberts court.    If they win this case on the grounds that they have a right to “express” themselves through hundreds of thousands of dollars more in direct contributions--an interest not sufficiently vindicated by their Buckley right to spend an unlimited amount independently, they will be back soon with this next logical target:  the base limits on contributions themselves.

The fact that this case is even before the Court demonstrates the magnitude of the threat our democracy faces and the need for robust remedies, including amending the Constitution to repair the damage from Citizens United and Buckley.  If we seek to be a country of, by, and for the people, effective campaign finance regulation to rein in the toxic mix of money and power in our politics is a must. 

Press contact: Layne Amerikaner, lamerikaner@pfaw.org, (202) 467-2305

###

Share this page: Facebook Twitter Digg SU Digg Delicious