Levitt, Smith, and the Possibilities in Discussion

August 9, 2013
posted by Bob Bauer

Justin Levitt and Brad Smith are each top-flight thinkers about campaign finance who bring very different perspectives to issues in their field. Now a Professor at Loyola, Justin’s affiliations have included the Brennan Center for Justice. Brad, a Professor at Capital University Law School, founded and chairs his own Center, (the Center of Competitive Politics) and the two Centers are not at all alike in outlook or mission. Levitt and Smith have each recently written a piece—Levitt on the contribution/expenditure doctrine, Smith on the regulation of tax-exempt organizations—that, read side by side, track major, persistent disputes in political law. Each gets much right, but then overstates his case. For Levitt, his defense of regulation comes at the price of an understanding of the political costs. Smith is highly skeptical of regulation but in a way that gives short shrift to one complex regulatory goal that will not go away—public disclosure of certain kinds, and at certain levels, of spending to influence politics or policy.

Levitt on the Contribution and Expenditure Doctrine

Levitt wants to uphold the value of the contribution/expenditure distinction in resolving the question presented in the McCutcheon case of the two-year aggregate contribution limit. He calls for attention to the First Amendment values that each use of money, the contribution or the expenditure, expresses. Following Buckley v. Valeo, He suggests that a contribution merits less protection because the contributor is funding the speech of another, not his own. Levitt also characterizes the contributor’s position as one of inadequate “control”—“I [the contributor] have no control over whether the money is used to produce a message I agree with.” The contributor cannot know that he is paying directly for speech: he may be pitching in dollars for a chair or staff. The law is justified, Justin argues, in assigning less constitutional weight to money spent for the campaign overhead supporting speech rather than for the speech itself. And no additional weight is gained by taking into account associational interests, because, in Justin’s words, these interests can be met in “many, many ways” other than through the making of a contribution.

Levitt concedes that this analysis can be “tricky” in application. He admits to cases where the distinction is theoretically unsatisfactory and may yield the wrong or questionable results. But he denies that McCutcheon is tricky. In his view, a contributor is properly limited in the total amount of money that she can spend on these diluted—Justin calls them “attenuated”—contribution-based speech interests.

Certainly Levitt is correct about the theory behind the difference in treatment of contributions and expenditures, and the fact that it is “tricky” is also brought out well in his examples. But in his constricted view of the contributor’s interest, his analysis falters.

It is hard to see why a contributor who wishes to support a candidate’s speech is doing so only derivatively by offering control to the candidate over the best, most effective use of his funds. The contributor, liking the message, believes the candidate best able to execute it. Justin mentions the difference between funding speech and funding staff. Well, a candidate needs staff, and, to cite an obvious example, the candidate’s speech may depend for its effective development or transmission on an infrastructure that includes, among other assets, speech writers and pollsters skilled in testing messages. Levitt does not explain how a contributor might fund the candidate’s speech so directly that the candidate’s and the contributor’s speech interests effectively merge. His view of the contributor’s interest seems narrow, formalistic.

And Justin is also shortchanging the significance of the associational component of the interest. Following the jurisprudence of the day, he attributes only an expressive value to the association that the contributor seeks with the candidate. In other words, the associational interest is derivative—a second-order expressive interest. But it is more than that. The contributor is speaking but also acting—engaged in political activity. She is responding to an appeal, or initiating a contact, in an active association with others to advance a common political goal. It is precisely this sharing with others of the expense of, say, chairs and computers, or staff or consultants, that makes up the significance to the contributor of the financial support that she is providing.

Add to this the open question of the interest the government can persuasively claim in imposing the aggregate contribution limit. We will find out; the point made here not about the proper disposition of the case. But in his view of the contributor’s interest, Levitt does not explain how these limits as he defines them serve a clear government purpose, particularly where every contribution made to any one candidate or committee is itself limited. On an anticorruption rationale, it does not seem that a contributor supporting a federal candidate in Oregon is risking corruption by giving to other federal candidates elsewhere within the same per election limit. Nor does Levitt explain the interest the government might possess in restricting to predetermined shares the amounts within the limit that a donor may give to candidates, parties and other committees—much less the interest in reserving a specific allotment for parties.

Smith on Disclosure

Brad Smith writes about the controversy over the IRS’s management of tax-exempt applications. He makes two points, one about the controversy itself, which he expresses hotly in terms, and the other on a view of facts that not everyone will agree with.

But his larger, more theoretical concern relates to the regulatory ambitions behind the IRS rules. He detects in them the spirit of anti-politics, which looks to tame, with regulatory approvals and other requirements, messy, healthy political life. Smith asks why such activity should not be perfectly good “social welfare” activity. He doubts that the IRS has a defensible standard for deciding which social welfare activity is too “political” or partisan. And he suspects—he is confident—that one of the motives behind calls to move certain “social welfare” spending into FEC-regulated activity is the disreputable one of flushing out into public view a political adversary’s finances in the hope of intimidating and scaring away contributors.

Smith is certainly correct to suggest that the IRS’s involvement in policing political activities is and will remain widely unpopular, however well or impartially the agency may go about the task. His skepticism about the agency’s “facts and circumstances” test for ferreting out political activity is entirely justified. And he is right, too, that some reform programs are powered by a distrust of politics and an urge to tame it. It is the next step that he takes, rejecting the premises and value of properly designed disclosure, that seems to be a wrong, unnecessary turn in the argument.

Smith is certainly right to warn that disclosure is not an unqualified good in all forms and contexts—it is not always to be dismissed as “just disclosure.” But just as the public may (and should not) tolerate IRS meddling in politics, it is hard to imagine that it will (or should) abandon a legitimate expectation of some measure of transparency in the sphere of spending to influence politics and policy. In other writing on this topic, Brad appears to have left room for disclosure of such spending at the higher levels; he has emphasized his concern about the impact on the small donor of federal and some even more invasive state disclosure requirements. See Bradley A. Smith, In Defense of Political Anonymity, City Journal (noting federal disclosure threshold of $200 and limits in states as low as $20—and in West Virginia, $1). If disclosure is to be tethered to a reasonable anticorruption objective, and if the public reporting of donations carries risks for the donors, then a re-examination of the regulatory treatment of small contributors (or spenders), is in order.

The case for shielding the large donor has far less force. It rests in Brad’s argument on the view that government, in mandating disclosure, intentionally or heedlessly opens up to retribution and public opprobrium those paying for unpopular politics. There should be agreement that this is a potential cost of disclosure, but also that disclosure regimes can be structured or amended to mitigate the cost—and for some, like small donors, eliminate it altogether. And, again, whatever costs are attributed to disclosure, its value can’t be disregarded. The public does not have a right to know everything, but, in setting boundaries, the answer is not to leave it completely in the dark about the money spent to elect candidates and shape policy. And it is unrealistic to assume that arguments to dispense with disclosure will find a wide audience.

Levitt and Smith and the post-Buckley, post-Citizens United Discussion

A constructive turn in the campaign finance debate will depend on the active engagement of Justin Levitt, Brad Smith, and others like them who are accomplished and respected in the field. There is space for this discussion. Advocates for reform, troubled by the role of money in politics, can move into this space if they will entertain an expanded conception of political action in need of protection. Reform critics, worried about the risks and costs of government regulation, can join them there if they are open to ways their concerns can be addressed, such as in a reconsideration of the design of disclosure rules. It would be a good discussion to have.

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