The Court after Scalia: Campaign finance law Wonderland

Jan Witold Baran is a partner at Wiley Rein LLP, where he heads the Election Law and Government Ethics Group. He has argued four Supreme Court cases and represented parties in several others.  His amicus brief in Citizens United on behalf of the U.S. Chamber of Commerce was cited by the Court in its opinion.  He is the author of The Election Law Primer for Corporations, published by the American Bar Association.

Speculating about how the Supreme Court will decide future campaign finance cases is like studying Alice in Wonderland. The book is interesting but there are parts that are nonsensical, passages that are bizarre and numerous interpretations. So is campaign finance law. There also is risk of making a prediction that turns out to be untrue. For example, contrary to President Barack Obama’s histrionic warning in his State of the Union speech, Citizens United v. Federal Election Commission did not open floodgates of foreign money in U.S. politics. A longstanding federal prohibition on any foreign contributions or expenditures remains on the books and was upheld in a subsequent case. Foreign donors when caught are regularly prosecuted for violating the law. The president must have confused Citizens United with the legality of foreign government contributions to a family-run nonprofit organization linked to one of his cabinet members.

Second, the legal complexity does not lend itself to nuanced understanding. Instead, advocates on opposite sides have developed shorthand arguments such as “corporations are not people,” “money is not speech,” and “the system is rigged.” The current political rallying cry of critics, including some presidential candidates, is “reverse Citizens United!” This implies that all will be well if only that case is reversed, that there was a reasonable if not idyllic state of campaign finance prior to Citizens United. There was not. The laws struck down in Citizens United were merely the most recent regulatory gimmicks that met an unconstitutional fate, and there are decades of prior cases in the field which created a regulatory regime not contemplated by the original laws.

Numerous campaign finance restrictions have fallen in the past forty years. The Court has faced state or federal laws that limited how much a candidate could donate to her own campaign, that limited contributions to state legislative candidates to no more than $100, that limited how much a campaign could spend (Congress thought $90,000 per election was plenty enough for a House race), that limited or prohibited independent spending by any individual, political committee, or political party, that triggered more money for candidates who were opposed by “millionaires,” and that prohibited donations by minors. All of these laws violated the First Amendment. If Citizens United were reversed presumably these rulings would still stand.

While Citizens United is often cast as momentous and a departure from decades of campaign finance cases, its holding was relatively narrow and consistent with the seminal 1976 case of Buckley v. Valeo. Buckley had struck down a statute that limited to $1000 the amount that could be spent on independent political advertising by an individual. The two statutes involved in Citizens United were much more draconian. One of the federal laws made it a crime for any corporation or union to merely mention a candidate’s name in public pre-election television advertising. Citizens United itself was a corporation that mentioned a candidate’s name in a proposed cable-distributed video, Hillary, The Movie. At oral argument the Justices displayed discomfort that the law would make such a video illegal. The government’s lawyer further confirmed that the other statute, which prohibited any corporate-financed speech advocating the defeat of then Senator Hillary Clinton, would similarly prohibit Hillary, The Book. That seems to be when the Court recognized the full scope of government intrusion into First Amendment rights. The Court ordered more briefs and another round of oral arguments and promptly struck down the two statutes at issue. Anyone can now produce Hillary, the Movie or publish Hillary, the Book.

If Citizens United were merely reversed, the regulatory landscape would look as it did before the 2010 decision. While incorporated organizations and unions would not be allowed to finance public communications that advocated the election or defeat of named candidates, and such groups would not be allowed to mention the name of a candidate or political party when communicating with the public during pre-election periods via certain media such as television, radio, satellite, or cable, these groups still would be able to spend money praising or criticizing candidates at other times and through alternative media channels. That is what corporate groups and unions did before Citizens United. Why wouldn’t they do so again?

Something more than reversing Citizens United will be necessary to fundamentally change campaign finance regulation. Perhaps amending the First Amendment will be the solution, as some have advocated. However, such an undertaking is enormously difficult and unlikely to succeed. More achievable could be a wholesale revisit of Buckley v. Valeo. The Buckley case set forth the principle that campaign spending laws impermissibly infringe on speech rights unless they prevent corruption or the “appearance of corruption” and are narrowly tailored. The Court in Citizens United (as in several prior cases including Buckley) concluded that the government had failed to demonstrate that limits or bans on independent political speech prevent corruption. Can the government plausibly demonstrate that advocacy corrupts candidates? That is a challenge. The other major governmental justification for the campaign finance laws was that spending limits were necessary to “equalize” opportunities among electoral participants. The Buckley Court rejected equalization of resources as a permissible justification. While the equalization rationale periodically is endorsed by an individual Justice or two, it has not seen favor by any majority. It nonetheless has lasting appeal to some. Thus, it will take either a demonstration that independent speech corrupts or a reversal of Buckley’s rejection of the equalization rationale to really change campaign finance. The resulting change in First Amendment jurisprudence would be major and profound.

While a reversal of Citizens United or Buckley will be a progressive’s goal, conservatives seem to have more modest but equally important challenges. An often overlooked holding in Citizens United was the eight-one conclusion that disclosure and disclaimer provisions applicable to independent political expenditures are constitutional. Spenders must file reports with the Federal Election Commission (which is why we know how much is spent on independent ads), and advertisements must identify the name of the group or individual that spends the money and whether they are authorized by a candidate to do so. The holding meant that existing statutes that require reports and the identification of the spender in public advertising could be enforced. Advocates of more regulation concluded that if current disclosure and identification laws are constitutional, then laws that require even more disclosure and more burdens must be constitutional. As a result, Congress in 2010 attempted to pass the so-called DISCLOSE Act, which would have substantially increased the amount of information that would have been disclosed by political spenders and increased the amount of text that would have to appear on advertising notices including the names of executives or donors.

Although Congress was unsuccessful in passing more disclosure laws, some states now are requiring groups that spend money in politics to reveal the names and addresses of their financial supporters and similarly require more information on public communications such as the names of the largest one, two, or three financial supporters. Delaware has enacted a law that requires groups that spend more than $500 for any communication that mentions a state candidate to file reports with a government agency and disclose the expenditures and the donors to the group. The Third Circuit upheld the statute when challenged. A writ of certiorari was filed and denied. One cannot know whether the case was denied because, after the death of Justice Antonin Scalia, there was reluctance to take on this particular case (Justices Samuel Alito and Clarence Thomas stated they would have granted certiorari) or because the overwhelming eight-one majority in Citizens United (Justice Scalia was one of the eight) made plenary review futile. Eventually there will be cases that will involve highly burdensome disclosure and excessive mandatory statements that will warrant review by the Court.

There also are efforts to define what constitutes political spending that is coordinated with a candidate or agent. If spending is accomplished independently of a candidate, there can be no limits or prohibitions on the activity. Advertising that is “coordinated” with a candidate is treated as a contribution in kind and therefore subject to limits and prohibitions. New York recently enacted a statute that, according to a press release by Governor Andrew Cuomo, seeks to “Combat Citizens United.” It does so in part by prohibiting independent expenditures by the candidate’s family members and by prohibiting the involvement of anyone employed by the candidate in the preceding two years. These types of restrictions likely will attract constitutional challenges. The Supreme Court has already struck down similar blanket prohibitions on classes of persons. For example, federal attempts to prohibit independent expenditures by political parties were struck down not once, but twice. A statute that banned political contributions by minors was unanimously struck down. Bans on political expenditures by a family member or former associate seem to conflict with those other cases.

All of the above issues lie ahead for the Supreme Court. Whatever its composition, the Justices will enter the rabbit hole of campaign finance First Amendment Wonderland. Whether the majority is perceived as conservative or progressive, the outcomes will not resolve the debate about free speech and the regulation of money in politics.