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Campaign Finance

Campaign Finance Laws -- What's Left and Where Do We Go from Here

by: tmess2

Sun Apr 06, 2014 at 12:50:34 PM EDT

This past week, the United States Supreme Court, by a 5-4 vote in McCutcheon vs. Federal Election Commission, struck down the law imposing an "aggregate" limit on the amount that one individual can give to all candidates and party committees in a single election.

A mere eleven years ago, by a 5-4 vote, the Supreme Court upheld a significant portion, but not all, of the Bipartisan Campaign Reform Act (better known as McCain-Feingold) in McConnell vs. Federal Election Commission.  In this opinion, the swing vote was Justice Sandra Day O'Connor with Justices Stevens, Souter, Breyer, and Ginsburg also joining in that opinion.  On the other side were Chief Justice Rehnquist and Justices Scalia, Kennedy, and Thomas.  A key part of the opinions upholding parts of McCain-Feingold was the recognition of the potential appearance of corruption from large scale expenditures (especially by corporations) even if not direct contributions to candidates.

In 2006 Justice O'Connor retired and Justice Samuel Alito took her seat.  In that same term, Chief Justice Rehnquist died and was replaced by Chief Justice Roberts.

In 2007, in Federal Elections Commission vs. Wisconsin Right to Life, the Supreme Court decided by a 5-4, with Justice Alito and Chief Justice Roberts joining the McConnell dissenters, that "issue" ads run on the eve of an election were not election spending subject to FEC regulation (despite the clear intent of McCain-Feingold to regulate such ads).  (An "issue" ad is an ad run by a group that typically criticizes a politician for stands on certain issues.  The main difference between an issue ad and an a "campaign" ad is that the issue ad does not expressly request a vote for or against any candidate -- even though it is not hard to read between the lines and get the message as to how the ad wants the person to vote.

In 2010, in Citizens United v. Federal Election Commission,  the same 5-4 majority struck down a long-time restriction on corporations using their money for independent expenditures on campaign ads.   When combined with Wisconsin Right to Life,  the Supreme Court essentially held that corporations (i.e. groups organized outside of campaign finance laws and thus exempt from campaign finance disclosure requirements) could spend unlimited amounts of money -- regardless of whether they phrased their ad as a mere issue ad or went the next step of asking for a vote for or against a specific candidate.

Now, the Supreme Court has gone the next step and struck down the aggregate contribution limits.  The law recognizes four "base" limits on contributions to a single candidate or committee.  First, a donor can only give a candidate $2,600 per election (effectively $5,200 for the two-year cycle, $2,600 for the primary and $2,600 for the general).  Second, a donor can give $32,400 per year to a national party committee.  Third, a donor can give per year $10,000 in federal money to a state committee.  Fourth, a donor can give a federal political action committee $5,000 per year in federal money (noting, of course, that these restrictions do not apply to donations to non-PACs that make "independent expenditures").  Besides these limits on donations to a single candidate or committee, before Wednesday, the law contained three limits on aggregate or total contributions to all candidates/committees.  First, a donor could only give a total of $48,600 for a two-year cycle to all federal candidates (state candidates being outside the jurisdiction of the FEC).  Second, a donor could only give a total of $48,600 per two-year cycle in federal money to state and local parties and PACs (again noting that these limits do not apply to non-PACs, e.g. Americans For Prosperity).  Finally, a donor could only give a total of $74,600 per two-year cycle in federal money to non-candidate committees (including national political parties). 

In its decision on Wednesday, the Supreme Court found that these aggregate limits could not be based on the appearance of corruption (the reason used to uphold the base and aggregate limits in 1976 and 2003).  Limitations on aggregate donation were invalid in the absence of proof of actual bribery.  While the majority is technically correct that there decision on Wednesday leaves intact the base limits (and the bar on direct donations by corporations), that is simply a matter of the limits of this case.   Under the reasoning of the majority, neither the base limits nor the limits on corporate donations can be justified.  The most that can be justified are reporting requirements to assure that there is no "bribery" of candidates.  As such, the only thing keeping the rest of current campaign finance laws in place is that the current five-Justice group is not yet ready to take the next logical step.  However, until one of them retires, all campaign finance laws are at risk of being struck down at any time.

As the dissent notes, the claim that the base limits are enough is simply not accurate.  Without the aggregate limits, a person can form unlimited PACs and use each of those PACs to give additional money to the same candidate without limits.   The giving of money to committees with the understanding that the money is to be spent on a specific  race is already a problem that is difficult to police.  This new ruling makes it even harder to enforce the restriction on targeted donations.  Furthermore, the ruling undermines the entire justification for the base limits.  It is hard to tell what will happen next.  As noted above, there is no indication in the majority opinion of any substantial basis for distinguishing what is left in campaign finance law from what has already been struck down. 

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The Republican 2016 Primary Rules and the Democratic Convention

by: tmess2

Sun Feb 02, 2014 at 12:24:42 PM EST

A little over a week ago the Republican Party (again) adopted a series of changes to their rules for the 2016 Presidential Primaries.  This represents the third set of changes to the rules that applied in 2012 and should be the final set of changes (the deadline for the Republican National Committee to finalize the rules is September 2014).  A more thorough discussion of the changes can be found at Josh Putnam's frontloading website where Josh has done several detailed articles on this issue. 

As I see it, there are five major changes from the rules that applied in 2012.  First, and most significant, the Republican Party has changed the penalty for those states who try to move into the window (February) reserved for Iowa, New Hampshire, Nevada, and South Carolina or who otherwise violate timing rules (see below on winner-take-all).  For large states (those with over twenty-nine delegates), those states will be reduced to nine elected delegates and their three super-delegates (amazing how the RNC members protected themselves from any penalty to their states).  For small states (those with fewer than twenty-nine delegates), their delegations will be reduced to six elected delegates and their three super-delegates.  Second, winner-take-all primaries may now be scheduled any time after March 15 (in 2012 the date was April 1).  Third, the rules now define what qualifies as proportional -- allowing a state to set a 20% requirement to qualify for a delegate and allowing winner-take-all if a candidate gets a majority in a state or district.  Fourth, caucus states that conduct a preference vote (e.g. Iowa, Maine, Washington) must award delegates to the national convention based on that preference vote.  Previously, the preference vote was not binding and delegates were elected to the next level (and ultimately to the national convention) without regard to the preference vote.  States however (e.g. Illinois and Pennsylvania) may still use a loophole primary in which primary voters directly elect delegates separate from the presidential preference vote.  Fifth, delegations must be certified 45 days before the national convention (previously it was 35). 

While not an express change to the rules, the expectation is that, in light of these changes, the Republicans will probably schedule their convention in late June/early July.  (The change from 35 days to 45 days was probably a mistake setting up a conflict with California and New Jersey that could result in a mid-July date being chosen.)

What should these changes mean to the members of the Democratic Rules and By-laws Committee as they draft the Democratic Rules for 2016.  My thought is that they should mean very little.  The only change that really matters to the Democrats are the changes to the calendar.  With the Republicans enacting strong penalties for states that violate the timing rules, the Democrats are free to enact similar strong penalties (maybe a 75% penalty instead of the former 50% penalty).  The remainder of the Republican rules changes (i.e. proportional vs. winner-take-all) are making a mountain out of a molehill.  If these new rules had been in place in 2012, the primary fight would have been even closer.  What ends a primary campaign is not the rules, but cash.  When the supporters of the candidate in second place no longer see a path to victory, the money dries up and the race ends.   

As far as the scheduling of the convention, the date of the convention only really matters for the purposes of campaign finance laws.  Money received before the convention can count toward the "primary election" -- unless the donor is already at the primary limit requiring it to be credited toward the general election.  However, any money left over from the "primary" is carried over to the general election.  If you are relying mostly on large donors who contribute the maximum, you want to switch over to the general election as soon as possible after you have received the maximum primary donation from your fat cats so that you can tap into the general election funds.  If you are relying mostly on small donors who never approach the cap for an election, it really does not matter when you switch from primary funds to general election funds.  Under the current system, an earlier convention would not hurt the Democratic candidate, but it is not absolutely necessary.  (Under the old-system of public financing later was better to conserve the limited public funds.)  If the Republicans go in June or July, my own thought would be that the Democrats should move up one or two weeks -- after the Olympics but before Labor Day. 

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Supreme Court Update

by: tmess2

Sun Jan 12, 2014 at 10:47:24 AM EST

On Friday, the Supreme Court returned from its annual extended winter-break with its first conference of 2014.  January at the Supreme Court marks a transition between the first "quarter" of its term to the second quarter.

In the first quarter, the Supreme Court is primarily hearing arguments in cases and deciding what cases to hear for the remainder of the term.  With Friday's grant of review to eight cases for the April argument docket, the April docket will probably have more cases than the February docket.  In the first quarter, opinions are issued in only the most clean cut cases.  (Of the six opinions issued on cases argued in October, November, and December, all six were 9-0 decision with only two concurring opinions -- five from October and one from November).

In the second quarter, in addition to hearing arguments on the remaining cases, the Supreme Court begins to issue opinions in some of the semi-controversial cases and begins granting cases for the following term. 

As far as cases from the fall that still have not been decided, there are several potentially big cases.  From October, the Justices are still working on their opinions in McCutcheon (the challenge to the "aggregate" limits that individuals can contribute to all federal candidates combined) and Schuette (the challenge to the Michigan state constitution ban on affirmative action).  From November, the case generating the most media interest is Galloway (the challenge to the opening prayer at town council meetings).  Finally, from December, the big cases are probably EME Homer City Generation (a challenge to the EPA rules for calculating the interstate impact of pollution and regulating polluters when they contribute to pollution problems in near-by metropolitan areas) and Lozano (the second case in recent years to interpret a provision of the Hague Convention on Child Abduction, this time looking at whether the time for raising a claim is tolled if the abducting parent hides the child).

With new arguments starting on Monday, January is going to be a big docket with 12 arguments on five days.  The biggest case is probably the Noel Canning case involving the rules governing recess appointments.  This case was even bigger before the recent de facto change to the filibuster rules, but given that there will be times when the White House and Senate are controlled by different parties, this case will still be significant. 

The other big case in January is McCullen v. Coakley.  This case involves a challenge to a Massachusetts law creating a buffer zone around abortion clinics.  This law creates a larger buffer zone than has previously been approved by the Supreme Court.  While technically a First Amendment case, this decision will be the first implicating abortion rights since the 2007 decision upholding the federal ban on partial birth abortions.  Given what is in the pipeline, it is unlikely that the Supreme Court will go another seven years without hearing a case on abortion.

Two cases that may become big are United States v. Quality Stores and Paroline v. United States.  Quality Stores raises the question of whether severance packages are subject to Social Security taxes.  Given the current cap on income subject to Social Security taxes, this case is not as big as it could be.  If that cap were lifted as part of Social Security reform, this case could be huge.  Paroline involves the calculation of restitution for victims of child pornography. The issue is the degree to which the victim has to show that her damages are caused by the individual defendant (typically someone who downloaded a handful of photographs as opposed to the actual producer).  

There's More... :: (4 Comments, 504 words in story)

Supreme Court 2013-14 Term Preview: Part I -- Fall Arguments

by: tmess2

Thu Sep 26, 2013 at 22:40:35 PM EDT

The United States Supreme Court will start its 2013-14 Term on October 7.  The United States Supreme Court follows a somewhat predictable cycle. 

Starting with October, it holds seven argument sessions, typically designated by the month in which the argument begins (i.e. October, November, December, January, February, March, and April).  Each argument session is followed by two weeks off (though the post-December and post-January off periods tend to be an extra week or two off).  In each argument session, the Supreme Court holds arguments on Monday, Tuesday, and Wednesday (except for any holidays) of each week.  On each day, arguments begin at 10:00 a.m EDT and runs for approximately two hours (typically one hour per case).  If necessary, arguments resume at 1:00 p.m. EDT.  In recent years, as the Supreme Court has taken fewer cases, afternoon arguments have become a rare exception.  However, this fall, the Supreme Court has scheduled several afternoon arguments.  Over the summer, the Supreme Court released the argument calendars for the October, November, and December sessions and those cases will be the topic of this post.  A second post will consider the remaining cases that have been accepted for argument in early 2014 and other cases in the pipeline that might get added.

The annual term begins with a case from Illinois about whether government employees must raise employment discrimination claims under employment discrimination law or if they can recharacterize their claims as a civil rights violation.  While every case is important to the parties, the two big cases in October are McCutcheon vs. Federal Elections Commission and Schuette v. Coalition to Defend Affirmative Action. 

The issue in McCutcheon are the continued constitutional validity on the aggregate contribution limits (i.e. what a donor can give to all candidates and party committees combined). This limit prevents donors from donating the individual maximum to every candidate that the party is running.  The would-be large donors contend that this limit is no longer constitutional (if it ever was).  In light of previous decisions (of which Citizens United may be the least significant), the Supreme Court has been big on money as speech in recent years, and could very well strike down these limits.  However, since the previous decisions basically allow unlimited donations to unregulated Super PACs, this decision may ultimately prove meaningless.

Schuette involves a state constitutional amendment that precludes universities from adopting affirmative action policies in admissions.  The challenge to this provision is based on a series of Supreme Court decisions that have struck down constitutional provisions that restructure the political process by state constitutional amendments to prevent minorities from fighting for programs in regular day-to-day politics (e.g. legislation, appointments to Boards of Regents).

There's More... :: (0 Comments, 515 words in story)

The Supreme Court, Free Speech, and Conditions on Spending

by: tmess2

Sun Jun 23, 2013 at 20:59:49 PM EDT

Last week, the Supreme Court issued a significant Free Speech decision in Agency for International Development vs. Alliance for Open Society International.  In that case, the Supreme Court faced a challenge to conditions that Congress had passed on funding for non-governmental organizations involved in fighting the spread of AIDS internationally.

Congress had imposed two conditions on recipients.  The first condition banned the use of the funds provided by the US government to advocate for the legalization of prostitution.  The second condition required that the recipients have a policy opposing the legalization of prostitution.  The Supreme Court in line with previous opinions noted that the first condition -- directly governing the use of the funds provided by the US was a valid condition even if it might somehow impair the preferences of the organization.  However, the court found that the second condition (restricting what the organization could do with its own funds) was an unconstitutional condition. 

This decision is potentially significant for two reasons.  First, it puts more teeth into the concept of unconstitutional conditions on government spending programs.  Before last year's health care decision, the concept that there was a limit on the strings that the government could place on grants was more an academic theory than a meaningful legal argument.  It's hard to predict the next area where this issue will arise, but some of the states trying to ban Planned Parenthood from getting any government funding may want to closely read this decision.

Second, it reflects a continued pro-Free Speech trend from this Court.  Whether dealing with corporate campaign spending, the making of violent video games, the desire of extremists to turn private funeral services into a political event, the Roberts Court has almost always sided with those claiming that their Free Speech rights have been infringed.  (There are some exceptions, but the norm has been to favor those wishing to speak over those trying to impose restrictions, however reasonable, on that speech.  With more campaign finance laws already scheduled to be reviewed in the next term, the continuation of the Free Speech tendency of the Roberts Court is a strong indication that Citizen United is not the end of the elimination of long-standing restrictions found in current campaign finance laws.

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The Future of Campaign Finance Laws??

by: tmess2

Thu Feb 21, 2013 at 16:51:52 PM EST

This past Tuesday, the Supreme Court handed down its orders from last Friday's Conference.  In that order, they agreed to full briefing (probably for argument next fall) in McCutcheon v. Federal Election Commission.  (The technical entry on the order is "probably jurisdiction noted.")  While this type of case is one that the Supreme Court technically has to hear, typically, the Supreme Court will rule these cases on the initial submissions without full briefing and argument (handing down the decision at the same time that it agrees that it is supposed to hear the case.) 

There are three basic limits contained in the various campaign finance laws.  First, there is the limit on what an individual can give to an individual candidate committee for an individual election.  These limits have been upheld as avoiding the appearance of corruption that could come from one individual giving a large donation to a candidate's committee.  Second, there is a limit on what an individual can give to non-candidate committees, such as party committees, over a two-year election cycle.  Third, there is an overall limit on what an individual can donate to all federal committees over a two-year election cycle.  (The limit is slightly under $200,000.00.; so 99% of U.S. citizens couldn't even come close to giving the limit.)

The challenge in McCutcheon is to the last limit (although the initial submissions indicate that if the court feels it can't strike down the overall limit without striking down the individual limits, going that extra step will not bother the plaintiffs).  The basic preliminary gist of the argument is that the court has held that it is unconstitutional to limit spending.  According to the plaintiffs, while the limits on a donation to an individual candidate might be justified (or might not) by the desire to avoid corruption, the overall limit does not aid that purpose and is merely an attempt to put a limit on the ability of donors to spend their money.

Another potential concern is Danielczyk v. United States, a case asking for the Supreme Court to strike down the ban on corporate contributions to political campaigns.  The Supreme Court merely passed this case to a later docket and may still reject it, but coming the same week as McCutcheon has to make you speculate about what is going on in the Justice's chambers. 

While it is too soon to run around shouting the sky is falling, the past several years have seen a series of mortal wounds (of which Citizen United might be the least significant) to the very concept of a system in which donations are both limited and publicly disclosed.  The current trend is heading to the GOP's preferred system of unlimited contributions with limited disclosure.  We will see this time next year if the Supreme Court is going to take that next big step toward getting pesky good government folks out of the way of the best government that money can buy.

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The Supreme Court and Politics

by: tmess2

Sat Dec 17, 2011 at 20:56:31 PM EST

The remainder of the Supreme Court term is looking like a political hot potato for the Supreme Court. 

Aside from the mammoth health care reform case, there are several other cases that have the potential to create massive outrage -- only one of which is currently set for argument.

The oldest of the cases is United States v. Alvarez.  This case involves a First Amendment challenge to the Stolen Valor Act -- a federal criminal statute that covers falsely claiming military honors.  Some lower courts have found that this statute criminalizes speech in violation of the Free Speech Clause.  The easy out for the Supreme Court is to find that this case is about fraud, a traditionally-recognized exception to Free Speech.  However, arguably the Stolen Valor Act is broader than just covering fraudulent conduct.

Still pending on application for certiorari is Bluman v. FEC.  This case was on last week's conference but got postponed until the January conference.  The issue in the case is whether restrictions on campaign contributions by "foreigners" violates the First Amendment.  Given past Supreme Court holdings that campaign contributions are speech, these restrictions clearly implicate the speech rights of non-U.S. citizens (and nothing in the First Amendment is limited to citizens).  The issue below was whether there was a compelling interest in precluding nationals of other countries from influencing U.S. elections.  If the Supreme Court decides in January to take the case, it might be heard in the late April/early May sitting (and thus decided this June) or heard next October (possibly making it even more of an issue in the elections).

There are also a ton of gay marriage cases in the pipeline.  Probably closest to reaching the Court is the Proposition 8 case which is likely to be decided by the Ninth Circuit in January.  At this point, this case will not be argued this term, but it is likely to either be on one of the June conferences (or even worse in the "long conference" at the end of September.

However, last Friday and this Monday saw two very big cases land on this term's docket -- the Texas redistricting cases and the Arizona SB 1070 cases.

Of the two, the SB 1070 case is the simplest -- sort of.  It is unquestioned that immigration law is primarily the responsibility of the United States government.  However, the question before the courts in cases involving state laws implicating immigration is whether the federal laws on immigration were intended to preempt (bar) or permit state laws.  Last year, in dealing with the first round of immigration laws from Arizona, the Supreme Court found that the federal immigration statutes expressly permitted states to penalize employers who hire unauthorized immigrants.  This statute, however, seeks to impose penalties on immigrants (and may also require action on the part of federal agencies). 

The more complicated case is the Texas redistricting cases.

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Son of Citizens United

by: tmess2

Tue May 31, 2011 at 21:57:43 PM EDT

Last Thursday, in a little noticed decision, a judge in the Eastern District of Virginia struck down the federal law that prevents corporations from directly contributing to the campaigns of candidates.

The case itself is a criminal case in which a corporation is alleged to have reimbursed employees who gave to the campaign committees of Hilary Clinton when she was running for re-election to the Senate in 2006 and for the Democratic nomination in 2008.  The counts involving the hiding of the source of the contribution remain intact.  Most of the decision involves explaining why the challenge to the counts involving hiding the source of the contribution were frivolous.

However, starting on page 42 of the 52 page opinion, the District Court turned to the one count (out of seven) that charged the improper use of corporate money (the source of the reimbursement) to effectively contribute to a campaign.  After analyzing the lengthy case law on campaign contributions, the District Court found that the essence of Citizens United was that there was no difference between corporate speech and corporate conduct and the speech or conduct of a real live breathing human being for First Amendment purposes.  As such, if an individual would be able to make contributions to a candidate (up to the level permitted by statute), then it was unconstitutional to impose a different rule on corporations. 

It should be noted that for prudential reasons (i.e. not wanting the current Supreme Court to rule on this issue or this holding to have effect beyond Virginia) it is unlikely that this case will be appealed further.  However, as the District Court notes another District Court (in Minnesota) has opted not to extend Citizens United in the absence of the Supreme Court expressly overruling all of its prior cases on the limitations on corporate involvement in politics.   The Minnesota case, however, is likely to be appealed.  The clock is now ticking.

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The Costs of Winning

by: DocJess

Mon Dec 08, 2008 at 17:12:56 PM EST

You may have noticed that even though the 2008 elections are pretty much over, you're still getting requests for money. A lot of them are actually funneling dollars to the Party.

Yes, we won a lot of races, but it came at a price

For the Democratic Party, that number was $898,314,787 (through the 8 December data released by the FEC). That includes:

  • DNC - $254,509,896
  • DCCC - $171,205,222
  • DSCC - $121,862,505

The party took in a lot of donations, and had some cash on hand, but also a number of loans. Depending on how you calculate the debt, it is somewhere between $15 million (The Hill) and $26 million (Open Secrets).

So expect to see more of those requests in your inbox, complete with premiums. Count on signs, bumper stickers, tee shirts, coffee mugs, ornaments, and more as the debt wears on. Campaigns are expensive, winning is priceless.

And as for the losers? You may remember Freedom's Watch, the 501(c) created to run ugly, nasty, lying ads about Democrats. And they're done, folding, kaput. Good-bye and good riddance. 

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