The Supremes Centre Stage

Over the past two weeks, foreign observers of American politics might be forgiven for thinking that two estates of government, the executive and the legislature, were the only game in town and that the third estate, the judiciary, was almost an afterthought. The Senate and the House have waged an epic battle over the Republicans’ efforts to reduce the federal budget and the President has weighed in, occasionally using incendiary language, as his opponents tried to steal a march on his policies. 

However, any thought that the Supreme Court was taking a back seat would be a grave error. Whilst the Supremes are not engaged in the current spat in Congress and the White House, the Court will soon rule on McCutcheon et al v FEC, a challenge to limits on federal campaign contributions by individuals. More of this case later.

The history of campaign finance reform in USA is complex. I don’t propose to go all the way back to Andrew Jackson’s presidency, when corporations sought to influence politicians by “money power.” Congress has made many attempts to limit what can be gifted to politicians in support of their election campaigns, with statutes passed in 1907, 1910, 1911, 1925, 1943 and 1947. They proved largely ineffective.

In 1971, Congress passed the Federal Election Campaign Act, requiring broad disclosure of campaign finance. Three years later, the Act was widened to establish a comprehensive system of regulation and enforcement. Limits were imposed on campaign finance. Everything in the garden of restrictive political contributions appeared lovely.

Enter the Supreme Court. In 1976, the Court’s ruling in Buckley v Valeo struck down FECA limits on candidate’s spending unless the candidate had accepted public financing. The Court’s grounds for its decision equated to the view that spending limitations were a violation of free speech. This interpretation of the extent of freedom of speech is both interesting and troubling. It expresses that money equates to speech and that an individual was entitled to spend his money as he saw fit. The decision led to a Federal Election Commission ruling that distinguished between “hard money” and “soft money” in federal politics.

In the simplest terms, "hard money" arises from political donations regulated through the FEC. "Soft money" is donated to political parties in a way that leaves the contribution unregulated. The difference boils down to a few crucial words and one administrative ruling. ­In 1978, the Federal Election Commission issued an administrative ruling that the funding rules established by law only applied to political campaigns, not to "party building" activities. The Commission didn't go into great detail about what constituted a party building activity, basically defining it as something that didn't explicitly tell people to vote for a specific candidate. Oddly, political parties uniformly ignored the ruling until 1988. In the presidential campaign of that year, people working for both major parties discovered the "loophole" and the race for soft money was on. Soft money has dominated American politics in every national election since then.

Because soft money is not regulated by election laws, companies, unions and individuals may give donations in any amount to a political party for the purpose of "party building," including advertisements seeking to educate voters about issues. However, the ads cannot take the crucial step of telling voters for which candidates to vote.

Many efforts were made in Congress to override Buckley v Valeo but they were killed off. The Bipartisan Campaign Reform Act of 2002, better known as McCain/Feingold, sought to overhaul the campaign finance laws, removing big money from federal politics. The Act was challenged from all quarters including the California State Democratic Party and the National Rifle Association. The Supreme Court in a 5-4 ruling upheld a number of key provisions of the Act but the litigation has not stopped and the Court’s increasing influence over campaign finance is strong.

In 2006, two cases weakened McCain/Feingold. In FEC v Wisconsin Right to Life, restrictions on political advertising were lifted, followed by the decision in Randall v Sorrell where individual contribution limits were struck down. What might have been thought as the final nail in the coffin of control on political contributions was the Court’s ruling in Citizens United v FEC. The finding was that statutory restrictions on expenditures were invalid. Now corporations and trades unions can donate whatever amount they liked as political contributions. In the 2012 presidential election, Newt Gingrich’s receipt of vast donations to keep him in the race for the Republican nomination was well publicized. A single contribution of $15 million was made to the Republicans by an oil corporation. Democrats, too, received vast donations from corporate interests.

Very soon, the Court will rule on the McCutcheon case, deciding whether it is constitutional to limit the amount an individual can spend on federal candidates. From the reports I have read, the decision will be tight but I suspect this conservative court is likely to rule on the side of free speech. The debate at the hearing was highly charged. Justice Bader argued: “Restrictions on campaign contributions promote democratic participation because candidates are forced to widen their fundraising. Then little people will count some.”  Justice Scalia’s retort was to ask whether a law that prohibits the speech of two per cent of the country was okay.

There is an argument that the public, i.e. the taxpayer, should alone fund elections. On its face, this seems a good idea but how would it be possible to start a new political party? Surely, the test of any political campaign contribution is that corruption, indeed the mere appearance of corruption, must be eliminated. Here, I use “corruption” to include seeking undue influence through spending power. A donation is not corrupt if it is made as a form of direct personal expression.

Do restrictions on political donations restrict free speech? I don’t see it. If I can spend a dollar on a political campaign, surely that is my expression of free speech. If I spend tens of millions of dollars on that same campaign, surely questions will arise as to what I want in exchange. Do I damage the freedom of speech of others who do not have similar resources? I believe I do.

Sadly, I suspect the Court’s influence on the forthcoming elections will be massive as restrictions on what people can spend are lifted again and again.

­