October 2, 2013
posted by Bob Bauer

Rick Hasen has joined others in arguing that, if in McCutcheon the Supreme Court were to strike down the aggregate limit on political contributions, the large individual donor would be able to amass undesirable influence by donating to joint fundraising committees organized by candidates and parties. The money distributed through those committees is governed by limits—$2600 per participating candidate, etc.—but when first given to the joint fundraising committee, the total donated might be massive, in the millions, and the parties and candidates who would divide it up later could be insidiously grateful to the donor.

If the aggregate limit is a means of enforcing the base limits and blocking circumvention, it raises the question: how effective does an anti-circumvention measure have to be to prevail in a test of the provision’s constitutionality? In the case of the aggregate limit, the inquiry leads quickly to a consideration of a new fact of campaign finance—the super PACs.

In today’s reporting in the New York Times, the issue of super PACs is raised, but as counsel to the RNC Jim Bopp states it, the problem is one of unfairness to the parties. Adam Liptak, “Justices to Weigh Key Limit on Political Donors,” New York Times (Oct. 2, 2013). Bopp tells the Times that “candidates and parties are being disadvantaged” by the limits within which they are expected to operate while super PACs are free of the same restrictions. In the brief he authored for the RNC, he makes the same point. Republican National Committee, Brief on the Merits (May 6, 2013) at 12-13. McCutcheon’s brief notes—literally, in a footnote—that super PACs are not subject to a contribution limit. McCutcheon, Brief on the Merits (May 6, 2013, at 6, n.4). On the issue of circumvention, however, the briefs argue from within the campaign finance legal structure that various controls already on the books are sufficient to prevent evasion of the contribution limits, such as the specific per-election and calendar year “base limits” and the anti-earmarking provisions.

The Supreme Court, however, has previously looked outside the regulatory system, at other ways that money is spent to influence elections, to evaluate anti-circumvention arguments. In Buckley, the Court considered the suggestion that, as the lower court had held, a limitation on independent expenditures was a “loophole-closing” provision necessary to the enforcement of contribution limits. Buckley v. Valeo, 424 U.S. 1, 44-5 (1976). Advocates for this position argued that if a wealthy donor could spend without limit to support a candidate, even if independently, then the utility of contribution ceilings in containing undue influence would be seriously diminished.

The Court was not persuaded; it questioned the efficacy of the independent expenditure limit as an anti-circumvention tool. With considerable foresight, the Court noted that because independent expenditures were defined by express advocacy, and express advocacy in turn consisted of “magic words,” any shrewd speaker could spend money to influence an election with appeals omitting the express advocacy but having potentially significant impact on the election—and on the candidate’s feelings of indebtedness. Id. at 45. Because the “loophole-closing” power of limits on independent expenditures was questionable, the anti-circumvention claim was not strong enough to overcome First Amendment obstacles to regulating independent speech. The Court stated that “no substantial societal interest would be served by a loophole-closing provision…that permitted unscrupulous persons and organizations to expend unlimited sums of money in order to obtain improper influence over candidates for elective office.” Id.

In the case of the aggregate contribution limits as a measure of circumvention, there is room for similar doubts. The individual donor looking to buy influence by spending millions in federal races is certain of one direction to go—to super PACs. The aggregate limits do not restrict giving to super PACs; there is no limit of any kind on what the donor, other than a foreign national, can donate to these PACs. Under current law, a super PAC can commit itself to the support of a particular candidate and accept contributions earmarked for independent spending on behalf of that candidate. FEC Advisory Opinion 2010-09 (July 22, 2010). It can make contributions to candidates with money it takes in under the contribution limits while also making independent expenditures on behalf of the same candidates with funds contributed outside those limits. Federal Election Commission, Statement on Carey v. FEC (Oct. 5, 2011). A candidate’s former staff or consultants or can establish and run these PACs, provided they avoid actual “coordination” as it is currently defined, and have not worked for the candidate within the preceding 4 months. 11 C.F.R. (d)(5); Final Rules, Coordinated Communications, 71 Fed Reg. 33204 (rejecting broader temporal restriction on former employee or consultant involvement in independent activities). The candidates who expect to benefit from this independent activity can appear at super PAC events, mingling with the crowd or as a “featured guest,” so long as their attendance is not a means of illegal coordination, which mainly requires that they not trade strategically useful information with the PAC. And the events they attend can be fundraising events if they avoid soliciting funds, or limit themselves to soliciting only $5,000 in contributions from individual donors. See, e.g. FEC Advisory Opinion 2011-12 (June 30, 2011).

When all this is taken into account, looking outside and not only within the “system,” an observer might wonder how much can be said about the effectiveness of the aggregate limit as an anti-circumvention measure. The donor might well earn credit with the party and candidates with large-scale spending through joint fundraising committees or just check-by-check. But if this route to winning favor is blocked, the super PAC route is open.

It can (and will) be said that any funds deposited directly with the candidates and the parties they control necessarily present a greater risk of corruption, or its appearance, which vindicates the anti-circumvention objective. This argument may well carry the day, but the Court will hear the case in the specific context of the campaign finance system as we have it today—after the decisions in Citizens United and Speechnow, and with the arrival of super PACs, in which the influencing-seeking donor can “expend unlimited sums of money in order to obtain improper influence over candidates for elective office.”

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