Hypotheticals and the Doctrine of Circumvention

December 16, 2013
posted by Bob Bauer

The McCutcheon case continues to stir up comment about the hypotheticals the Justices used at oral argument to debate the need for an aggregate limit. Zac Morgan at the Center for Competitive Politics takes on one such hypothetical and suggests that it does not illustrate the need for any such limit. He correctly contends that the anti-earmarking and anti-proliferation provisions of the statute would apply with or without an aggregate limit to prevent the violation the hypothetical was meant to suggest.

Whether this is true is certainly worth considering, but there is a larger point, too, about the hypotheticals batted around during the argument. In presenting the hypotheticals, the Justices revealed the extent to which the law is complicated and lends itself fairly routinely to misunderstanding. And if this is so—if even our finest jurists must struggle to craft hypotheticals that fairly reflect the operation of the law—the utility of hypotheticals in illustrating any need for regulation is doubtful. In the McCutcheon argument, the hypotheticals may have added to confusion over the law rather than illuminating anything deficient in it.

But there is another problem. The use of hypotheticals in campaign finance arguments ties into the troublesome doctrine of “circumvention.” If in some way, somebody may imagine a practice seemingly in tension with statutory policies, then we hear the cry of “circumvention!” and a demand that the law be amended to prevent it. And circumvention is widely understood to mean “loopholes.” See, e.g., Lindsey Powell, Getting Around Circumvention: A Proposal for Taking FECA Online, 58 Stan. L. Rev. 1499, 1504 (2006) (referring to recent legislative action on campaign finance as “amendments intended to close emerging loopholes,” resulting in a “cycle of circumvention and amendment”).

But circumvention as a doctrine is ill-defined and in some formulations even incoherent. In the 2001 Colorado Republican case, the Supreme Court characterized circumvention as a “valid theory of corruption.” FEC v. Colorado Republican Fed. Campaign Comm., 533 U.S. 431, 456 (2001). It is not that: it is a theory of enforcement, of how far the government’s regulatory authority extends. Through the false equation of “circumvention” with corruption itself, the advantage shifts to the regulators. For what is often called a loophole may represent simply a regulatory adaptation of political actors that enables them to achieve their goals but with a lesser risk of corrupt action. Or, in the alternative, the revised practice may present some risk of corruption but, however real the risk, the regulatory response needed to counteract it would slip over the line and become excessively dangerous to speech and association, out of proportion to the gain. Treating circumvention and corruption as the same allows regulatory objections to be lodged against any significant regulatory adaptation on the basis that the adaptation itself is corrupt.

The confused legislative and judicial response to regulatory adaptation is evident even in the history behind the adoption of circumvention as a “theory of corruption.” In Colorado Republican, the Court considered whether elimination of the party coordinated expenditure limits would result in candidates directing large donations to the party, with explicit understanding that the money would be spent on their behalf, and in that way “circumventing” the individual per-election contribution limits. The Court determined that this avenue of circumvention could only be closed by retaining the limits, rather than dispensing with them as the Colorado Republican Party had urged. But then, in a footnote, the Court concedes that the “dollar-for-dollar pass-through” it had envisioned probably would violate existing earmarking rules. Even so, the Court stated, the hypothetical “illustrates the undeniable inducement to more subtle circumvention.” Id. at 460, n.23.

But if the circumvention at issue was nothing of the sort, and in fact prohibited by existing law, how did this hypothetical help the Court reach its decision? And if its aim is to attack more “subtle circumvention,” how does it reconcile this objective with the space allowed political actors to adjust appropriately to the regulatory environment? It would seem that the more “subtle” the adaptation, the less the risk of corruption in its most invidious form.

Circumvention is, of course, regularly laid at the feet of mischievous lawyers. They are supposedly coming up with schemes all the time to gut the campaign finance laws by charting courses for their clients around and between the various obstacles of the law has erected. This is a caricature of what lawyers are hired to do, which is to offer clients a route to a worthy objective that steers clear of statutory restrictions and prohibitions. The lawyers retained for this purpose are not generally aiding programs to corrupt officeholders or wreak havoc on the lawful and representative processes of government. Their aim is to counsel on ways to engage in political activity that is not corrupt in intent nor effect, but that must be managed within complex regulatory constraints—constraints bearing in most cases only an indirect, often tortuous relationship to the goal of preventing corruption.

The “hypothetical” heard in campaign finance debates is too often typically one of two kinds. The first, cited by Zac Morgan or the Court in Colorado Republican, is a practice that, on close examination, is likely barred anyway by existing law or rule, such as the earmarking provision. The second kind is an adjustment to regulation that clients make often with the advice of counsel, and the lawyer’s role here is not to aid in the corruption of government but to provide what is altogether reasonable and even healthy: legal representation.

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