Court Could Alter Money Rules

Posted April 21, 2008 at 6:46pm

A challenge to the Millionaire’s Amendment before the Supreme Court today stands to cause a pesky 11th-hour fundraising headache for numerous Congressional campaigns that by midsummer may find themselves at a sudden cash disadvantage if the law is overturned.

Almost 30 candidates so far this cycle have told the Federal Election Commission that they have devoted substantial personal cash to their campaign accounts, including Sen. Frank Lautenberg (D-N.J.) and Rep. Vern Buchanan (R-Fla.).

A handful of candidates on today’s Pennsylvania primary ballot, too, may be affected by the decision. In retiring Rep. John Peterson’s (R) central Pennsylvania district, hotel developer Matt Shaner (R) has given his campaign roughly $1.2 million for the primary, while consultant Derek Walker (R) has spent about $806,000 out of his own pocket, according to documents given to the Federal Election Commission.

In Rep. Jim Gerlach’s (R) suburban Philadelphia district, the Democrat who is unopposed in today’s primary, Bob Roggio, has given his campaign just more than $60,500.

And in Indiana’s primary two weeks down the road, wealthy doctor Woody Myers (D), who is challenging Rep. André Carson (D), has given his campaign more than $1.2 million ahead of the May 6 primary.

The case before the high court today involves wealthy House candidate Jack Davis (D), who is looking to replace retiring Rep. Tom Reynolds (R-N.Y.). Davis, a multimillionaire Buffalo-area factory owner, took the Federal Election Commission to court nearly two years ago to challenge the amendment, which was added on to 2002s Bipartisan Campaign Reform Act.

As its name suggests, the provision attempts to level the fundraising playing field in races involving a wealthy candidate. In House races, candidates whose opponents spend $350,000 or more of their own money may be allowed to exceed the $2,300 individual contribution limit — perhaps by double or more — and lift caps on party committee coordination. A more-complicated calculation is used for Senate races, but the intent is the same: fundraising parity.

Davis and other critics of the law, however, argue that the provision violates his free-speech and equal-protection rights, and is little more than an incumbent protection tool.

“The provision targets a class of candidates who are exercising their fundamental right to pay for their own electoral efforts and diminishes the exercise of that right in a direct and substantial manner,” Davis argued in his appeal to the Supreme Court. The provision “favors incumbents by discouraging challengers from personally financing their campaigns … for those who remain undeterred, the statue punishes them from making personal expenditures by rewarding their opponents.”

The high court decision, which is expected to come before July, may just miss Lautenberg’s surprise primary trial. The Senator is worth as much as $112 million, estimates, and he notified the FEC early last year that he wrote his campaign a $1 million check.

In contrast, Rep. Rob Andrews (D-N.J.), Lautenberg’s main primary challenger, has not personally given to his campaigns this cycle and is worth at most $231,000, according to personal disclosure documents.

But the two will face each other in the Garden State’s June 3 primary, likely before the high court’s decision.

Buchanan may not be so lucky. A car dealer, he told the House clerk last year that he was worth at least $67 million. And the freshman lawmaker spent nearly $5.5 million of his own money last cycle to defeat bank executive Christine Jennings (D) by just 369 votes. Buchanan tripped the self-financing threshold last cycle and has already given his campaign roughly $100,000 since Jan. 1, 2007.

Buchanan and Jennings are expected to face each other again this fall. Jennings’ camp said Monday that she supports the law — and hinted that she’s counting on taking advantage of it in the run-up to November.

“People are tired of candidates who think they can just buy a seat, and that’s why Christine Jennings plans to remain a candidate of the people,” Jennings spokeswoman Melissa Smith said Monday. “The Millionaire’s Amendment plays an important role in campaign finance reform efforts by leveling the playing field, and Christine Jennings supports those efforts. Buchanan is the third-wealthiest Member of Congress, and provisions like the Millionaire’s Amendment help make sure that the priorities of millionaires don’t outweigh those of voters.”

Stanley Brand, whose firm represents Davis, said his client expects a decision by late June, when the Supreme Court’s term ends. In addition to the facts directly involved in the case, Brand said lawyers are already mumbling that if the law is overturned, candidates may try to recoup hefty FEC fines for violations during the past five years.

“I’ve talked to lawyers who have said, ‘if you win, we may go back and challenge the fines that have been assessed,’” Brand said.

Rick Hasen, an election law expert at Loyola Law School in Los Angeles, said Monday that in addition to the “immediate importance for millionaire candidates and the candidates who run against them,” the case’s decision may signal the John Roberts-led court’s approach to presidential public financing and other election law issues.

If the court rules on the case, “it could say some very interesting things about Congress’ ability to ‘level the playing field,’” Hasen said. “It could provide ammunition, talking points and precedent to [challenge] additional campaign laws down the road, such as public financing programs in states … and even the presidential public financing system.”