Supreme Court Upholds Soft-Money Ban

Posted December 10, 2003 at 9:54am

A divided Supreme Court issued its long-awaited ruling on the constitutionality of the Bipartisan Campaign Reform Act this morning, upholding a federal ban on soft money and controversial restrictions on issue advertising in a 5-4 decision.

“Money, like water, will always find an outlet,” the court stated in its majority opinion written by Justices John Paul Stevens and Sandra Day O’Connor. “What problems will arise, and how Congress will respond, are concerns for another day. In the main we uphold BCRA’s two principal, complementary features: the control of soft money and the regulation of electioneering communications.”

In a 300-page split decision, the high court struck down a provision banning contributions from minors and invalidated a provision that required national parties to choose between coordinated expenditures and independent expenditures in the post-nomination period.

“Many years ago we observed that [t]o say that Congress is [IMGCAP(1)]without power to pass appropriate legislation to safeguard … an election from the improper use of money to influence the result is to deny to the nation in a vital particular the power of self protection,” the court said.

“We abide by that conviction in considering Congress’ most recent effort to confine the ill effects of aggregated wealth on our political system.”

The stunning decision was applauded by authors and supporters of the reforms, which will revolutionize the way campaigns are run in this country for years to come.

“This is a major victory for American democracy,” said Rep. Marty Meehan (D-Mass.), one of the sponsors of the law. “In upholding the constitutionality of the money ban, the Supreme Court has affirmed our efforts to put an end to the trading of access and votes for huge, unregulated donations from special interest group.”

Meehan and other Congressional sponsors — including Rep. Christopher Shays (R-Conn.) and Sens. John McCain (R-Ariz.) and Russ Feingold (D-Wis.) — said that the “opinion represents a landmark victory for the American people in the effort to reform their political system. Now that the court has spoken, we must make sure that the law is properly interpreted and enforced.”

In a prepared statement reacting to the decision in the case that bore his name, Sen. Mitch McConnell (R-Ky.) said the court’s decision “unfortunately allowed Congress to diminish the ability of political parties and citizens groups to speak in the days before an election.”

“Justice Kennedy correctly observed this decision replaces respected First Amendment principles with … rules which dismantle basic protections for speech,” McConnell said. “This law will not remove one dime from politics. As the Majority opinion correctly observed, ‘[m]oney, like water, will always find an outlet.’

“In fact, it already has,” McConnell continued. “Wealthy donors like George Soros are writing multi-million dollar checks to fund massive special interest groups to run political ads. Outside special interest groups have become the modern day political parties. Soft money is not gone — it has just changed its address.”

In a press release, Fred Wertheimer, president of Democracy 21 and a key supporter of the law, called the decision a powerful reaffirmation “that campaign finance laws like the Bipartisan Campaign Reform Act protect the constitutional rights and interests of the American people rather than ‘restricting’ their speech.”

Common Cause President Chellie Pingree also issued a statement lauding the decision.

“The American people wanted this law, Congress enacted it and now the Supreme Court has ruled it constitutional,” Pingree said. “The toxic link between donors who write six-figure checks and people in power at the highest levels of government has been severed.”

In addition to Stevens and O’Connor, those signing the majority opinion were Justices David Souter, Ruth Bader Ginsburg and Stephen Breyer. Chief Justice William Rehnquist and Justices Anthony Kennedy, Antonin Scalia and Clarence Thomas dissented.

In explaining its decision to uphold the ban on soft money, the court concluded that such a restriction was justified because the previous system allowed donors “to contribute substantial sums of soft money to the national parties, which the parties can spend for the specific purposed of influencing a particular candidate’s federal election.”

Therefore, the court concluded, it’s “not only plausible, but likely, that candidates would feel grateful for such donations and that donors would seek to exploit that gratitude.”

In a dissenting opinion, Rehnquist — who has traditionally voted to uphold campaign finance regulation — made an about-face in a bitter dissent criticizing the majority for upholding soft-money restrictions and “missing the point.”

“Certainly ‘infusions of money into [candidates’] campaigns … can be regulated,” Rehnquist stated. But he wrote that the statute not only regulates donations given to influence a particular federal election, “it regulates all donations to national political committees, no matter the use to which the funds are put.”

Rehnquist also accused the court of attempting to “sidestep the unprecedented breadth of this regulation by stating that the close relationship of federal lawmakers to the parties makes all donations to the national parties suspect.

“But a close association with others, especially in the realm of political speech, is not a surrogate for corruption; it is one of our most treasured First Amendment rights,” Rehnquist argued.

In his dissenting opinion, Justice Kennedy blasted the majority opinion, accusing the court of surpassing the limits of Buckley v. Valeo — a 1976 ruling that considered post-Watergate reforms — and expanding Congress’ regulatory power.

“In doing so, it replaces discrete and respected First Amendment principles with new, amorphous, and unsound rules, rules which dismantle basic protections for speech,” Kennedy wrote.

Kennedy went on to list examples of “how BCRA reorders speech rights and codifies the government’s own preferences for certain speakers.”

“BCRA would have imposed felony punishment on Ross Perot’s 1996 efforts to build the Reform Party,” Kennedy said. “BCRA makes it a felony for an environmental group to broadcast an ad, within 60 days of an election, exhorting the public to protest a Congressman’s impending vote to permit logging in national forests.”

But in the majority opinion, the court rejected the plaintiff’s arguments that Buckley “drew a constitutionally mandated line between express advocacy and so-called issue advocacy.”

Moreover, in its opinion today, the court majority simply erased the infamous “magic words” of express advocacy — such as “vote for or defeat candidate Smith” — that were derived from the Buckley decision. The magic words gave rise to a major loophole that allowed unregulated money to fund what became known as “issue ads,” which carefully avoided the specific magic words but were nonetheless considered to be aimed at influencing elections.

The court majority said that a plain reading of its Buckley case and subsequent opinions showed that “express advocacy restriction is a product of statutory interpretation, not a constitutional command. Both the concept of express advocacy and the class of magic words were born of an effort to avoid constitutional problems of vagueness and overbreadth in the statute before the Buckley court.”

Those cases did not put in place a constitutional boundary “that forever fixed the permissible scope of provisions regulating campaign-related speech,” the court said.

“The notion that the First Amendment erects a rigid barrier between express and issue advocacy also cannot be squared with this court’s longstanding recognition that the presence or absence of magic words cannot meaningfully distinguish speech from a true issue ad. Buckley’s express advocacy line has not aided the legislative effort to combat real or apparent corruption, and Congress enacted BCRA to correct the flaws it found,” the court said.

Deciding to plug an increasingly attractive loophole that has recently fueled the growth political activity of tax-exempt and nonprofit groups, the high court upheld the law’s ban on national, state and local party committees, and their agents or subsidiaries, from soliciting any funds for, or making or directing any donations to, any group set up under 501(c) or 527 of the tax code.

Dozens of nonprofit groups, often with close ties to party organizations, have sprung up recently with a mission to engage in voter mobilization and get-out-the-vote drives. The lower court ruling in May had allowed party organizations and officials to solicit funds on behalf of these nonprofit groups.

But the high court’s majority reversed that holding, siding with the authors of the law who foresaw one way that money would flow into the accounts of nonprofit groups that do not have to disclose anything about the source of their contributions.

The opinion determined that attempts to plug this expected new loophole was “entirely reasonable. The history of Congress efforts at campaign finance reform well demonstrates that candidates, donors, and parties test the limits of the current law,” the court said.

Without the ban on solicitations, national, state and local party committees would have significant incentives to mobilize their formidable fundraising apparatuses, including the peddling of access to federal officeholders, into the service of like-minded tax-exempt organizations that conduct activities benefiting their candidates,” Stevens and O’Connor wrote in their opinion.

“It is clear that officeholders and party groups can’t solicit funds for” nonprofit groups engaged in election-related activity, said Trevor Potter, general counsel to the Campaign Legal Center. “To the extent they can raise funds without the participation of officeholders and party officials, they are free to do so.”

But party organizations would be free to donate any hard money funds raised to tax-exempt or nonprofit groups, the court ruled.

“We have found no evidence that Congress was concerned about, much less that it intended to prohibit, donations of money already fully regulated by FECA,” the court said.

Don Simon, general counsel for Common Cause, characterized the decision as not simply an affirmation of the law, but a “sweeping” affirmation of the worldview behind the law.

“As Buckley defined the constitiuonal field in this area for a generation, so too does this opinion,” Simon said.

In a statement, National Republican Congressional Committee Chairman Tom Reynolds (R-N.Y.) said the Supreme Court decision would cripple Democrats.

“Today’s ruling breaks the Democrats’ back,” said Reynolds, who insisted that “Republicans will continue to out-raise Democrats.”

Plaintiffs in the lawsuit who challenged the increased hard money limits in the new law were disappointed by the court’s decision.

“The court has turned a blind eye to the interests of non-wealthy voters,” said Dana Mason, a representative with the state Public Interest Research Groups, which worked closely with other groups such as the National Voting Rights Institutes, the Fannie Lou Hamer Projects and other in opposing the doubling of hard money limits in BCRA.

“The concerns of ordinary Americans, whose voices are drowned out by those who can write $2,000 checks, fell on deaf ears when the court upheld the increase in hard money limits,” Mason said.