Campaign Finance 'Reform' Hurts the Democrats Who Pushed It

Campaign Finance 'Reform' Hurts the Democrats Who Pushed It

NewsMax.com Wires
Friday, July 18, 2003

WASHINGTON – So far it has proved to be a political catastrophe for most of its supporters and a political windfall for many of its opponents.

But the ultimate fate of the 2002 Bipartisan Campaign Reform Act is still very much up in the air. The Supreme Court hears argument on the constitutionality of the law, which contains the ban on using "soft" money in federal elections, in a special four-hour session Sept. 8.

Before the passage of BCRA, which amended the 1971 Federal Election Campaign Act, huge donations of "soft money" were unregulated but could be used only for "party-building activities" such as voter-registration drives or advertising on issues and supposedly could not be used directly in a campaign.

"Hard money" was subject to FECA's source disclosure requirements and strict limits but could be used directly in a campaign.

The problem was that the two major parties and a number of special-interest groups had become adept at blurring the lines between the two types of funding, making a mockery out of the regulations on hard money.

"In recent years ... soft money contributions to political parties have increased dramatically," the Justice Department told the Supreme Court in a brief defending the BCRA. "Soft money has been used (among other things) to purchase advertisements that have featured federal candidates but have not expressly advocated a particular electoral result."

Congress "concluded that the effect of such practices was to enable corporations, labor unions and wealthy individuals to make unlimited and unreported contributions to political parties that were in turn used to benefit federal candidates," the department said, citing a 1976 landmark decision by the Supreme Court, "thus reintroducing the 'opportunities for abuse inherent in a regime of large financial contributions.'"

Though its provisions are diverse and complex, the core of the BCRA, better known as the McCain-Feingold law, tried to address two issues:

the acceptance and use by political parties of "soft money" (i.e., money raised outside the framework of FECA's disclosure requirements and source and amount limits) for the purpose of influencing federal elections

the growing use of corporate and union treasury funds for communications designed to influence, and generally known to influence the outcome of federal elections.

The BCRA says the national parties or their committees "may not solicit, receive or direct to another person a contribution, donation or transfer of funds or any other thing of value, or spend any funds, that are not subject to the limitations, prohibitions and reporting requirements" of FECA.

In other words, it bans "soft" money.

The legislation was opposed by the White House and the Republican congressional leadership, and most congressional Democrats supported it. President Bush reluctantly signed the bill into law last year with zero fanfare.

Almost as soon as it was implemented, however, the act was hit by a number of challenges, who made for some strange bedfellows. There were predictable plaintiffs, such as Sen. Mitch McConnell, R-Ky., who as a chief GOP Senate fund-raiser had always opposed McCain-Feingold, as well as National Rifle Association and Republican National Committee. But the plaintiffs also included Democrat organizations, as well as unions and American Civil Liberties Union.

Court Rejects Unconstitutional Measure

Under the terms of the law the challenges were combined and heard by a special three-judge trial court.

In May, the trial court issued nearly 1,700 pages of opinions and memoranda. Some of the more obscure provisions of the law survived the trial court ruling; some did not. But the core of the law, the ban on the use of "soft" money in federal elections, was struck down by a 2-1 vote.

The trial court's opinions were so complicated two of the judges issued a memorandum that included a "schematic description," really just a chart, to show which provisions were judged constitutional by which judges.

Under the terms of the law, the trial court's rulings have been stayed and the case was appealed directly to the Supreme Court.

During its brief period of implementation, BCRA has produced unpredictable results.

Democrats, Be Careful What You Wish For

Democrats generally supported BCRA, and Republicans generally opposed it. But it soon became apparent that "soft" money was the only factor keeping the Democrats financially in the ballpark with Republicans, who had many more "hard" money donors.

The latest figures reported by the Federal Election Commission bear this out. Bush has raised more than $34 million in his unopposed (so far) quest to be re-nominated as the Republican Party's presidential candidate, more than the combined total of the nine Democratic Party contenders.

Now BCRA must face scrutiny by the Supreme Court.

Interestingly, the justices appear to be getting ready to hear the case "de novo," considering the issues as if the trial court's confused opinions didn't exist. They reversed the order that briefs are usually filed at the Supreme Court.

Normally, the loser of the case in a lower court files a merit brief with the high court first, offering arguments as to why the lower court should be reversed. The winner in the lower court files a merit brief second, offering arguments as to why the lower court's ruling should be affirmed.

In the case of BCRA, however, the Supreme Court ordered the numerous challengers to file their briefs first, detailing arguments on why the act should be struck down. The defenders of the law, including the Justice Department acting on behalf of Congress, are filing their briefs second.

In other words, the briefing schedule is similar to a trial court's, not that of an appeals court.

How the Supreme Court Is Likely to Rule

Clues to how the Supreme Court will finally rule probably reside in two cases.

The first is the main precedent in campaign finance cases, 1976's Buckley vs. Valeo. Buckley essentially was a test of the 1971 Federal Election Campaign Act.

A "per curiam," or unsigned, Supreme Court opinion upheld FECA's limits on "hard" money contributions, but declared restrictions on expenditures to be violations of the First Amendment.

The opinion said contribution limits were a proper response to the reality or even the appearance of undue influence on candidates from large contributions. Expenditure limits, on the other hand, place restrictions on the ability of candidates, groups and private individuals "to engage in protected political expression, restrictions that the First Amendment cannot tolerate," the opinion said.

The opinion generally upheld FECA provisions that required the names of donors be disclosed, as long as the contributions were made for "political purposes" or in coordination with a campaign.

Two current Supreme Court members were also members of the 1976 Buckley court: Chief Justice William Rehnquist, then an associate justice, signed on to most of the opinion; Justice John Paul Stevens did not participate in the case.

Buckley was argued in November 1975 and decided in January 1976. Stevens was not sworn in as a justice until December 1975, well after the case had been argued and briefed. However, Stevens has remarked several times from the bench that "money is not speech," and his position on campaign finance laws is favorable.

The second clue as to how the court will decide the BCRA case occurred a little more than a month ago. On June 16, the Supreme Court handed down a 7-2 ruling in FEC vs. Beaumont. The case involved a federal law that makes it illegal for a non-profit corporation to make direct contributions to federal campaigns, but not to set up a political action committee that makes such contributions.

The majority ruled that the law was "consistent" with the First Amendment.

Though the Beaumont ruling dealt only with corporate contributions, Justice David Souter reaffirmed Buckley's tenets in his majority opinion. The Supreme Court's "cases on campaign finance regulation represent respect for the 'legislative judgment that the special characteristics of the corporate structure require particularly careful regulation' ... And we have understood that such deference to legislative choice is warranted particularly when Congress regulates campaign contributions, carrying as they do a plain threat to political integrity and a plain warrant to counter the appearance and reality of corruption and the misuse of corporate advantages."

Souter was joined in his opinion by Rehnquist, Stevens, moderate Justice Sandra Day O'Connor and fellow "liberal" justices Ruth Bader Ginsburg and Stephen Breyer. Moderate Justice Anthony Kennedy wrote separately to agree with the judgment, though not with Souter's reasoning.

Justice Clarence Thomas dissented, joined by fellow conservative Justice Antonin Scalia. "I continue to believe that campaign finance laws are subject to strict scrutiny," Thomas said, citing his dissent in several of Buckley's progeny.

Thomas said campaign finance restrictions in general "are not narrowly tailored to meet any relevant compelling state interest," which they must meet if they are to survive strict judicial scrutiny.

So how will the Supreme Court vote on the constitutionality of BCRA?

At this point, we can only guess, and our guess would be a lot more informed after hearing argument in September and tallying up the justices' comments from the bench. But let's take a flyer.

My gut instinct, and the reading of campaign finance decisions in the 1990s, tells me that the court will split 7-2 or 6-3 in upholding the ban on "soft" money in federal campaigns.

A smaller majority could strike down the more peripheral provisions of the act; a majority of the justices could even try to find fault with how the federal ban is applied.

But the ban on "soft" money, after a long strange journey, will survive.

Analysis by Michael Kirkland, UPI's correspondent for legal affairs.