The Supreme Court Could Axe Efforts to Reduce Private Money in Campaigns

This article originally appeared in the Daily Journal in October 2010.

The Supreme Court will soon define the constitutional boundaries of
public campaign financing laws across the country. Public campaign
financing laws provide candidates for elected office with government
funds to run their campaigns. Critics claim these programs are welfare
for politicians, that the public should not be forced to support
candidates with whom they disagree, and that public funds could be
better spent in other areas. Proponents contend that these programs
provide qualified candidates who may not have access to campaign funds
with the opportunity to run competitive campaigns, allow candidates to
spend time with all of their constituents and not just those who can
provide campaign donations, reduce corruption or the appearance of
corruption, either of which may arise as a result of private
contributions, and increase public confidence in their elected
officials.

In order to allow publicly financed candidates to remain competitive
in the face of heavy opposition spending from privately financed
opponents or independent expenditure groups, many public campaign
finance laws provide so-called "rescue funds." These rescue fund
provisions, meant to allow publicly financed candidates to remain
viable throughout the campaign cycle, now stand on constitutionally
shaky ground because of the Court's 2008 decision in Davis v. FEC.

In Davis, the Court struck down a portion of the Bipartisan Campaign
Reform Act (popularly known as McCain-Feingold), the so-called
"Millionaire's Amendment," on First Amendment grounds. I believe that
decision was misguided and simply wrong. Regardless of the wisdom of
the Davis decision, it has precedential value and the Court's
rationale in that case threatens the continued viability of rescue
funds.

Under the amendment, the contribution limit applicable to a candidate
who ran against a self-financing candidate tripled (rising from $2,300
to $6,900) if the self-financing candidate spent over a threshold
amount of his own money, $350,000. The amendment was designed to allow
a candidate running against a heavily self-financing candidate to
remain competitive.

The Court found that the amendment acted as an impermissible
expenditure limitation on a self-financing candidate. The amendment,
however, did not impose [any] limitation on a self-financing
candidate's spending. Rather, under the amendment, a self-financing
candidate's spending merely triggered the opportunity for that
candidate's opponent to raise larger contributions.

The Court, however, found that the state's asserted interest in
leveling electoral opportunities for candidates with differing
personal wealth was insufficient to justify the burden the
asymmetrical regulatory scheme placed on a self-financing candidate's
First Amendment rights. Indeed, the Court's ruling stressed the
problem of two candidates running under the same regulatory scheme
being subject to different contribution limits.

The Court paid little heed to the purpose behind that asymmetrical
scheme, allowing candidates to stay competitive when running against
wealthy self-financing candidates. Instead, the Court concluded that
the state's asserted interest in leveling electoral opportunities for
candidates with differing personal wealth was insufficient to justify
the burden the amendment placed on a self-financed candidate's First
Amendment rights.

Enter John McComish and company. Relying on the Court's reasoning in
Davis, some past and future candidates and a political committee
challenged the constitutionality of the rescue funds provisions
contained in Arizona's public campaign financing law. The plaintiffs
claimed that such provisions unconstitutionally infringe on the First
Amendment rights of non-publicly financed candidates and independent
expenditure groups, whose spending triggers a publicly financed
candidate's receipt of additional public funds. The plaintiffs' claim
rested on the theory that their First Amendment rights are burdened
when a statutory scheme provides additional public funds to another
candidate based on their spending. Similar to the plaintiff's claim in
Davis, McComish and the other plaintiffs claimed that the public
financing scheme acted as an impermissible disincentive on their right
to speak (spend money).

The 9th U.S. Circuit Court of Appeals disagreed, finding that
Arizona's public campaign financing law was distinguishable from the
provision at issue in Davis on a number of grounds. While the Davis
Court applied strict scrutiny, finding that the law presented a
substantial burden on speech rights, the 9th Circuit applied a less
searching level of review, finding that the law imposed only an
indirect or minimal burden on plaintiffs' speech rights.

The 9th Circuit found a number of important differences between the
Millionaire's Amendment and the rescue fund provisions at issue in the
Arizona case. First, the purpose behind the two provisions is
different. The Millionaire's Amendment was designed to level the
electoral playing field, an interest that has never been in favor with
the Court. The purposes of Arizona's public campaign financing law, by
contrast, are to reduce corruption or its appearance and encourage
participation in a public campaign financing scheme, two interests
that have long been upheld as compelling by the Court. In addition,
the Millionaire's amendment was an impermissible restriction based on
the identity of the speaker, meaning whether the candidate was or was
not wealthy. The Arizona public campaign financing law, however,
includes no identity-based restrictions. Further, the Millionaire's
Amendment treats similarly situated candidates disparately, while
Arizona's law treats different candidates differently. As the 9th
Circuit pointed out, it is permissible to subject opposing candidates
to different regulatory schemes when one candidate opts into a
voluntary public campaign financing system and one does not.

Essentially, plaintiffs desired the "right to speak free from
response." However, as the 9th Circuit correctly found, there is no
such right, and to the contrary, "the purpose of the First Amendment
is to secure the widest possible dissemination of information from
diverse and antagonistic sources."

The rescue funds provision imposes no limitation on a candidate's or
third party's expenditures. It merely allows publicly financed
candidates with the funds necessary to respond to that speech.

The Supreme Court issued an order to enforce the district court's
injunction against the distribution of rescue funds. This is an
ominous move by the High Court. The injunction will be in place until
the Court rules on an appeal of the 9th Circuit decision or until the
Court decides not to consider an appeal. When and if the Supreme Court
rules on Arizona's public campaign financing law, the Court could
determine the constitutional limits of rescue fund provisions across
the country.