Magic Words

by Jeffrey Rosen | September 29, 2003

Last week at the Supreme Court, after a four-hour marathon of oral arguments about the McCain-Feingold campaign finance law, only one thing was clear: Unless the Court wants to reconsider three decades of its own precedents, it should uphold most of the campaign finance reform bill without complaint. The bill's congressional opponents, supported by Justices Antonin Scalia, Clarence Thomas, and Anthony Kennedy, want the Court to rethink campaign finance law from the ground up. This is an odd invitation from the self-styled defenders of judicial restraint, and the Court should resist it.For nearly 30 years, the Court has told Congress how to regulate campaign finance in mind-numbing detail. To change those instructions now would be perverse, to say the least, since the complexity of McCain-Feingold--officially known as the Bipartisan Campaign Reform Act of 2002, or bcra--is a response to the Supreme Court's own demands. The morass of current campaign finance regulations results from the Court's landmark 1976 decision in Buckley v. Valeo, which held that Congress could regulate contributions by donors far more extensively than expenditures by candidates. The Court suggested that contributions posed a greater threat of corruption (because big donors would expect access in return for their generosity) and were less central to free speech (because a big donor might support a candidate no more enthusiastically than a small one). But, whatever its constitutional merits, the distinction between contributions and expenditures quickly became meaningless in practice. Two years after Buckley, the Federal Election Commission (FEC) endorsed a legal loophole that allowed parties to spend an unlimited amount of "soft money"-- that is, unregulated donations from individuals, corporations, and unions exceeding the federal contribution limits. Soft money was originally supposed to be spent on party-building and other activities independent of specific federal campaigns. But, in 1996, the national parties, corporations, and unions began to use soft money to fund campaign ads masquerading as "issue ads"--that is, ads that praised or attacked federal candidates without "expressly advocating" their election or defeat, as prohibited by Buckley. The national parties also transferred increasing amounts of soft money to the state parties to fund similar ads. By 2000, representatives and senators complained that they were forced to spend most of their time chasing after large gifts from corporate and union donors who gave to both parties with the clear expectation of getting access in return. National soft money spending by the parties skyrocketed from $19 million in 1980 to $80 million in 1992 to $498 million in 2000, by which point it represented nearly half of the parties' total expenditures. Bcra was designed to plug the soft money loophole and make campaign finance regulations as effective as they were designed to be in the '70s. The first part of the bill prohibits national parties from receiving and spending soft money in most circumstances, and it imposes similar restrictions on state parties that use soft money to influence federal elections. The second part prohibits corporations and unions from directly funding sham issue ads in the weeks before a federal election. If you haven't had the pleasure of reading the Supreme Court's campaign finance decisions, you might assume this latter part would be the most constitutionally vulnerable: It seems, after all, like a direct restriction on free speech. But, in fact, the Court has upheld similar restrictions since 1907, when it allowed Congress to prohibit all corporations from contributing general treasury funds to federal elections. In Buckley, the Court defined all campaign expenditures as including "funds used for communications that expressly advocate the election or defeat of a clearly identified candidate." As examples of this "express advocacy," the Court pointed to magic words, such as "vote for" or "vote against." But, in the three decades since Buckley, the distinction between issue ads and campaign ads collapsed, as ads increasingly praised or attacked candidates without actually using the magic words. (A typically subtle example is from the 1996 Montana congressional race: "Who is Bill Yellowtail? He preaches family values but took a swing at his wife. ... Call Bill Yellowtail. Tell him to support family values.") To regulate these ads, Congress, in bcra, came up with a new, purportedly objective definition of "electioneering communications": broadcast ads that mention a candidate, are geographically targeted at the candidate's electorate, and run 60 days before a federal general election or 30 days before a primary. If corporations or unions want to fund these ads, they have to do so by creating separate political action committees (PACs), which can only accept contributions up to $5,000 from individual members who want their money to be spent for partisan purposes. Bcra, in other words, is Congress's earnest attempt to follow the Supreme Court's Byzantine instructions about how to regulate campaign contributions and expenditures without violating the Constitution. The Supreme Court never said in Buckley that the First Amendment requires Congress to define "express advocacy" so narrowly that it is limited to ads that explicitly say, "Vote for me." Instead, it said that the First Amendment required a definition clear enough that it didn't restrict corporations and unions from engaging purely in issue advocacy rather than political electioneering, and that is precisely what bcra tries to provide. The corporations that object most vigorously to the new restrictions are nonprofit advocacy groups, such as the American Civil Liberties Union (aclu) and the National Rifle Association (NRA), which accept corporate contributions and are therefore also covered by bcra. They argue that Congress's new definition might restrict some ads that are designed as true issue advocacy. For example, the aclu notes that one of its ads told viewers to "call Dennis Hastert," the speaker of the House of Representatives, and "tell him to support" a federal anti-discrimination law. But a lower-court judge found that this ad, the only one of its kind in the aclu's history, had been manufactured specifically so that the aclu could be a plaintiff in the campaign finance litigation and that very few genuine issue ads would be covered by Congress's definition. Besides, the aclu remains free to set up a separate PAC to fund issue ads that mention political candidates--as Justice Ruth Bader Ginsburg noted, the aclu could even call its PAC the "non-political, issue-oriented PAC"- -but the PAC could only accept limited donations from aclu members, rather than from the public at large. The question of how much free expression this restricts in practice might be resolved in a future case. A more basic question is why the aclu (or the NRA or any nonprofit advocacy group) should be treated like unions and profit-making corporations in the first place. Why shouldn't they be able to spend as much money on ads as they please? This restriction appears in an amendment to the campaign finance law proposed by the late Senator Paul Wellstone, which provides that nonprofit, ideological corporations that accept corporate donations should be subject to the same disclosure requirements and spending restrictions as for-profit corporations. Since the dangers of influence-peddling and corruption are less obvious when large donations are funneled through advocacy groups whose purpose is to argue for ideological positions, the Wellstone amendment seems to intrude more deeply on the First Amendment than, say, restrictions on Microsoft or General Motors. At least in theory, the aclu and the NRA are set up to defend civil-libertarian principles rather than partisan interests, and, when they support or oppose the positions of elected officials, they're less likely than for-profit corporations to want access in return. Nevertheless, the Supreme Court held only last June, in the seven-two Beaumont v. FEC decision, that the long-standing ban on direct corporate contributions to candidates could also restrict contributions by nonprofits, in order to prevent groups like the NRA from becoming conduits for unlimited corporate donations. Without the ban, the Court worried, nonprofit advocacy groups might feel pressure to transform themselves into corporate fronts. This concern may not materialize--and the First Amendment arguably should allow advocacy groups to look after their own interests without being protected by the Court. But, as long as the Court insists on treating them the same as other corporations, the Wellstone amendment can't be viewed as a radical extension of existing law. During the Supreme Court argument, Chief Justice William Rehnquist, who joined the Beaumont decision and has voted repeatedly to uphold campaign finance restrictions, seemed most troubled by the sweeping restrictions on soft money. Bcra prohibits the national political parties from receiving or spending any soft money, and it also restricts state political parties from receiving or spending soft money for any election in which a federal candidate appears on the ballot. The complete ban on the national parties' use of soft money seems draconian, since it affects even general party-building and get-out-the-vote activities that aren't targeted at particular elections. But, as Justice Stephen Breyer noted in the oral argument, Congress concluded, based on its own experience, that every large contribution to the Democratic National Committee or the Republican National Committee has the potential to corrupt, because large donors aren't concerned about how money is ultimately spent; instead, they expect access in return for having contributed in the first place. This is a very expansive definition of corruption--far removed from Justice Scalia's demand for evidence of a quid pro quo--but it's a definition that the Court has repeatedly endorsed in cases from Buckley to Beaumont. As for the restrictions on the state parties' use of soft money, it's possible to imagine a state election where an unopposed federal candidate appears on the ballot and the state party wants to donate soft money for entirely staterelated issues--such as ads supporting Proposition 209, the anti- affirmative-action amendment in California. If such a case arose, then the state parties could challenge the soft money restrictions for exceeding Congress's power to regulate federal elections. But Congress concluded, again based on extensive experience, that the national parties were using the state parties to do nothing more than launder money for federal purposes, and the Court is in a poor position to second-guess Congress's judgment on this quintessentially practical question. Although bcra should be upheld as a constitutional matter, it's hard to be enthusiastic about the policy it represents. If the Court upholds most of Congress's efforts to plug the loopholes that have undermined campaign finance regulations in the past, new loopholes will certainly proliferate in the future. Advocacy groups that accept no corporate funds, such as George Soros's Open Society Institute, may arise as shadow alternatives to the political parties, conduits for vast amounts of unregulated soft money that can then be channeled back into "independent expenditures" on behalf of particular candidates. This outcome is hardly ideal, but it's impossible to regulate the supply of money without also regulating the demand. And regulating the demand for soft money-- for example, by limiting how much TV stations could charge for campaign ads-- would raise even more First Amendment questions than bcra itself. The judicial alternatives to upholding bcra across the board, however, are even more troubling. If, for example, Justice Sandra Day O'Connor decides to write a divided opinion, striking down parts of bcra while upholding others, the loopholes will proliferate even more quickly, condemning the law to ineffectiveness from the moment it takes effect. And, if the Court strikes down most of bcra in the name of the First Amendment, as Justices Kennedy, Thomas, and Scalia urge, then Congress can legitimately complain that the Court has abandoned three decades of its own precedents at the very moment Congress and the FEC relied on them as an authoritative guide to the Constitution. If there's a clearer definition of judicial activism than an opinion that refuses to defer to Congress, the executive, and 30 years of Supreme Court precedents, I can't think of it.

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