Contribution Regulation and Its Critics

November 25, 2014
posted by Bob Bauer

When the Supreme Court took up the McCutcheon case, and again when it was decided, commentators suggested that the Court might be poised to reconsider the constitutional foundations of contribution regulation. The Justices had done what they needed to do to expand and solidify the right to independent spending; now they would turn their attention, in the same deregulatory spirit, to contribution limits, perhaps laying the foundation for invalidating them. McCutcheon does not by its terms really justify this fear. It did direct attention to the question of how—and not whether—contributions are regulated. And other cases percolating in the court system have begun to confront those questions.

An example is Holmes v. Federal Election Commission, — F.Supp.3d —-, 2014 WL 5316216 (D.D.C., 2014). The plaintiffs wished to support a challenger in the general election at the same level as the supporters of the incumbent. While in theory, the limits are the same for both—$2600 per election—the incumbent could collect from a donor the full amount for an uncontested primary and then combine this unspent amount with another contribution, given under the general election limit, from that same donor. The donor’s effective general election limit would be $5200. Another contributor who planned to oppose this incumbent, but did not support a candidate in the primary to select the challenger, would have only $2600 to give the winner for the general election. Not so good for the challenger; very good for the incumbent.

The District Court brushed this claim aside and found no constitutional violation. The limits were formally the same for each candidate, the Court concluded: any iniquities were a byproduct of political chance—“the vagaries of the election process”–and the contribution limits still served their anti-corruption purpose. But, it is not accidental that incumbents can escape serious primary contests; it is similarly predictable that challengers who are not “self-funders” will have to work harder to raise money and will stand a better chance of facing primary opposition. The Court’s opinion seems in this respect somewhat detached from political reality, an impression bolstered by its trustful “deference” to the superior expertise of politicians in crafting campaign finance rules.

And it is hard to dismiss out of hand, as this Court does, the implications of this structural inequity for the anti-corruption rationale. The effectiveness of contribution limits is brought into question when a candidate can receive a donation for an election she does not have, the effect of which is to enable her to receive twice the lawful limit for the election she actually faces. And, on the other side, another donor giving to her opponent after the primary is held strictly to the limit—in the interest of preventing corruption.

The case highlights again the long-standing problem with per election limits. The law would more sensibly provide for an election cycle limit that the donor could spread as he or she wishes over the entire two-year period. The failure to periodically revise campaign finance rules in the light of experience and changes in the constitutional law has led to cases like Holmes, which is now on appeal.

As in Holmes, a similar issue has been raised in a case recently brought against the regulation of contributions for City elections in Houston. There, among other claims, the plaintiff has objected to a black-out period on fundraising, extending to all but nine months of an election cycle. He notes that politicians who held other offices could raise money throughout the election cycle and transfer it at any time to a campaign established for a City elective position. (And even incumbents in City offices, who were not running for re-election but perhaps for other offices, could raise whenever they choose to retire campaign debts.) In short, certain candidates—incumbent officeholders—were better off under this structure of limits.

These cases involving the contribution limits—cases other than McCutcheon—don’t often enter into the mainstream campaign finance discussion, or engender much excitement. But as independent spending doctrine becomes increasingly settled, the anomalies and inequities in the structure of contribution regulation will move more to foreground. Rules written long ago, and maintained in place out of inertia or indifference, such as the per election limits, may be overdue for re-examination. Also, officeholders still write contribution rules, retaining flexibility that has been wrested from them in writing other campaign finance regulation, and this alone will bring greater scrutiny to these enactments.

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