Court Voids Curbs on PAC Spending : Two Conservative Groups Win Ruling Allowing Unlimited Political Outlays

The Supreme Court--striking down a major Watergate-era campaign reform law--ruled Monday that political action committees may continue to make unlimited independent expenditures on behalf of presidential candidates.

The justices, in a 7-2 decision, held that a law limiting such spending to $1,000--in contrast to the millions of dollars that were spent in the general elections of 1980 and 1984--violated the First Amendment’s guarantee of free speech. The law has not been enforced because of the pending court decision.

The ruling is a major victory for two political action committees that have played a significant role in the nation’s presidential elections. Together, the National Conservative Political Action Committee and the Fund for a Conservative Majority spent more than $10 million on behalf of President Reagan in the 1980 campaign, compared to the $30,000 spent by committees backing President Jimmy Carter.

Spent $15 Million

NCPAC and FCM spent an estimated $15 million backing Reagan in 1984. No figures are available on political action committee spending on behalf of Walter F. Mondale, the Democratic presidential candidate last year.

The decision clears the way for increased presidential campaign activity by about 4,000 other such committees--called PACs--now organized in the United States.

The law at issue in Monday’s ruling does not apply to congressional elections. Although there is no limit on spending by political action committees, such committees may give as much as $5,000 in contributions to congressional candidates for each election.

The court, in an opinion by Justice William H. Rehnquist, acknowledged that today’s political action committees are a far cry from street-corner political orators--and that, technically, the law at issue limited expenditures, not speech.

But, in a nationwide presidential election, Rehnquist said, “allowing the presentation of views while forbidding the expenditure of more than $1,000 to present them is much like allowing a speaker in a public hall to express his views while denying him the use of an amplifying system.”

‘Nonsensical Patchwork’

In a sharp dissent, Justice Byron R. White accused the majority of transforming Congress’ campaign-spending reform attempt into a “nonsensical, loophole-ridden patchwork.” Justice Thurgood Marshall, in another dissent, said that spending limits should be upheld as a justifiable means of promoting “equal access to the political arena,” as well as “eliminating political corruption and the appearance of such corruption.”

The decision was notable in one other respect: The result may have become known prematurely because of a rare “leak” from the court.

The justices’ work is closely guarded and their judgments are known only to a few at the court before they are officially released. But the Fund for a Conservative Majority had distributed elaborately prepared news releases late last week, predicting victory and announcing that it planned a news conference at 10:30 a.m. Monday, a half hour after the time at which the court announces its decisions.

Robert C. Heckman, the fund’s chairman, denied that the group was privy to confidential information, saying that it had simply calculated that a decision was likely to be announced soon. “It was honestly just a wild stab,” he said. A court official refused to comment.

The $1,000 spending limit was one of several provisions of extensive campaign reform legislation passed in the 1970s after the Watergate scandal and the campaign finance abuses it disclosed. Laws were enacted aimed at limiting the opportunity for corruption, including a plan for public financing of presidential campaigns and restrictions on private contributions and spending.

In 1976, the Supreme Court, in the case of Buckley vs. Valeo, substantially upheld the new legislation. The justices approved limits on direct contributions to candidates for federal office, saying that they were justified as a means of preventing corruption or the appearance of corruption. But they struck down limits on individual, independent expenditures made in behalf of such candidates, saying that the provision collided with the right of free speech.

Monday’s case involved a law enacted in 1974 that imposed a $1,000 limit on expenditures by independent political action committees on behalf of presidential candidates who receive public financing for their general election campaigns.

PACs Solicit Donations

Such committees solicit donations from individual contributors and make expenditures for radio and television advertisements and other campaign activities on behalf of--but independent from--a candidate’s campaign committee.

Meanwhile, presidential nominees receive vast public funding in return for passing up direct private contributions. In the 1984 general election, for example, Reagan and Mondale each received $40.4 million in public funds, with each major party national committee permitted to spend an additional $6.9 million on its candidate’s behalf.

In 1980, a U.S. District Court struck down the $1,000 limit on independent committee expenditures, but two years later the Supreme Court deadlocked 4 to 4 on the issue.

The dispute was revived in 1983, when the Democratic Party and the Federal Election Commission sought court approval of the provision in suits they brought against the National Conservative Political Action Committee and the Fund for a Conservative Majority. But a special three-judge federal district panel struck down the law again.

200,000 Contributors

In Monday’s ruling (FEC vs. NCPAC, 83-1032), the court rejected the idea that political action committees, because of their nature, are not entitled to the full First Amendment protections. The majority said it is “significant” that, in 1980, about 100,000 individuals had contributed an average of $75 each to NCPAC, with another 100,000 contributing an average of $25 each to FCM.

There is no evidence that the political process has been corrupted by political action committee activities, the court said. “The fact that candidates and elected officials may alter or reaffirm their own positions on issues in response to political messages paid for by the PACs can hardly be called corruption, for one of the essential features of democracy is the presentation to the electorate of varying points of view,” Rehnquist wrote.

Even if the large pooling of financial resources by the two big political action committees did pose the possibility of corruption, the law was so overly broad--applying even to neighborhood political groups--that it could not be upheld, the court said.

The justices did leave open the possibility that Congress could enact narrowly drawn legislation that would meet with their approval.

White’s outspoken dissent accused the majority of ignoring “political reality” by drawing a distinction between direct and “independent” campaign contributions. “It is pointless to limit the amount that can be contributed to a candidate or spent with his approval without also limiting the amounts that can be spent in his behalf,” he said.

‘Please the Spenders’

White warned that the infusion of “massive PAC expenditures” into the political process might force candidates “to please the spenders rather than the voters, and the two groups are not identical.”

The ruling drew praise from Heckman of the Fund for a Conservative Majority, who predicted that smaller political committees in particular would be encouraged to play a greater role in presidential elections. “The decision has removed the chilling effect on such activity by a law that was clearly unconstitutional,” he said.

Common Cause, a campaign reform organization that supported the limit on political action committee spending, expressed disappointment with the ruling and said it hopes to explore the prospect of new legislation. In a statement, the organization noted, however, that the public financing system for presidential campaigns remains intact, as do limits on direct contributions by PACs to candidates.