Justices Back Outlay Limits on Campaigns

The Supreme Court came down Monday squarely on the side of the reformers who want to limit the influence of money in politics, ruling that Congress can restrict how much the political parties spend to fund their candidates.

The 5-4 decision upheld party spending limits that have been part of federal law since the post-Watergate reforms of the 1970s. Perhaps more important, however, the justices rejected the idea that the parties have a special free-speech right when it comes to raising and spending money.

Monday’s ruling gives lawmakers clear authority to regulate political spending and marks a decided shift in tone from five years ago. It may well reflect the fund-raising scandals and excesses that have beset Washington since 1996.

Justice David H. Souter, speaking for the court, cast aside an idealistic view of political parties as having a special role in U.S. politics, instead focusing on “how the power of money actually works in the political structure.”

Parties today are not just debating societies, he said. They often are “matchmakers” that bring together candidates and rich donors, and they can be “used as a funnel” to channel money from a wealthy contributor to a grateful candidate, he added.

Current federal law says that individuals can give $2,000 per election cycle to a candidate and $20,000 to a party. If the parties have a free-speech right to spend unlimited amounts to fund their candidates, far more money could be pumped into campaigns, he said.

“What would become of contribution limits if parties could use unlimited coordinated spending to funnel contributions to those serious contenders who are favored by the donors?” Souter asked.

He answered the question by saying that Congress can restrict spending by the parties.

“They see the problem of big money in the political system,” said Don Simon, general counsel for the citizens’ group Common Cause, which supports reform. “They have seen the explosive growth of soft money and they once again recognize the real danger of big money corrupting the system.”

The legal status of the parties and the constitutionality of spending limits are at the center of the debate in Congress over efforts to ban so-called “soft money” contributions.

Thanks to a loophole in federal election law, since 1996 the Republican and Democratic parties have taken in huge contributions from corporations, unions and individual donors. They are supposed to use the money to build their parties, not to fund candidates.

But in fact the parties spend hundreds of millions of dollars of soft money on so-called “issue ads” and other activities that differ little from true campaign ads that promote or attack specific candidates.

Reformers say the soft-money loophole makes a mockery of campaign finance laws, and in April, the Senate passed the McCain-Feingold bill to ban these unregulated contributions to the parties. The House is expected to take up the campaign finance bill soon, but its prospects are far from certain. It also is not clear whether President Bush would sign campaign finance reform legislation.

Opponents of the federal spending limits, led by Sen. Mitch McConnell (R-Ky.) and House Majority Whip Tom DeLay (R-Texas), say these restrictions on the parties violate their 1st Amendment rights.

Taken together with last year’s decision, Monday’s ruling shifts the court strongly and surprisingly in the direction of funding restrictions and away from the wide-open free-speech view that gained popularity several years ago.

Legal critics, liberal and conservative alike, had argued that the campaign funding laws had failed. They did not stem the flow of money into politics but merely redirected its flow, they said. And the 1st Amendment’s protection of free speech should be especially sweeping in the area of campaigns and political parties, they added.

Five years ago, the justices sounded these notes in a ruling that struck down the federal limits on “independent expenditures” by political parties. This refers to money spent to promote a party’s agenda or a candidate’s campaign, but that is not directly coordinated with a candidate.

On a 7-2 vote in the case of FEC vs. the Colorado Republicans, the justices said this limit violated the 1st Amendment. Four members of the majority--Chief Justice William H. Rehnquist and Justices Antonin Scalia, Anthony M. Kennedy and Clarence Thomas--went further, saying all such spending restrictions were unconstitutional. In a separate opinion, Thomas said the 1976 ruling in Buckley vs. Valeo upholding contribution limits should be overruled.

Three others, Justices Sandra Day O’Connor, Stephen G. Breyer and Souter, joined a ruling that endorsed the free-speech rights but stopped short of throwing out the spending limits for money that was coordinated directly with a candidate.

That issue was sent back to a trial judge in Denver, where the Colorado case originated. Last year, the U.S. Court of Appeals in Denver struck down the party limits on free-speech grounds and sent the case back to the high court.

But since rendering their 1996 decision that struck down federal limits on “independent expenditures,” the justices have seen and read much about fund-raising scandals and excesses. The scandals involved the 1996 Bill Clinton-Al Gore reelection campaign and the Democratic National Committee, as well as the huge wave of money that fueled the Republican and Democratic campaigns last year.

In something of a surprise, Souter, O’Connor and Breyer shifted sides in the Colorado case and formed the five-member majority Monday to uphold the party spending limits.

Although Monday’s ruling “didn’t deal with soft money,” Simon said, “it bodes very well for how the court will see the McCain-Feingold bill.”

In the 2000 presidential election cycle, the Democrats raised $270 million in soft money and the Republicans collected $447 million, according to data collected by the Federal Election Commission.

Sen. John McCain (R-Ariz.), the chief sponsor of the bill, agreed that the decision gives his reform effort an important boost. “Our opponents will have to find some excuse not to enact laws to restore Americans’ confidence in our political system.”

McConnell, the leading advocate of the free-speech view, said he preferred the 1996 ruling over Monday’s. “Those of us who side with freedom for American political parties still rejoice” in the earlier ruling that allowed them to spend freely for independent promotions.

Thomas spoke for the dissenters Monday, again calling for overruling all limits on political contributions and spending.

“I remain baffled that this court has extended the most generous 1st Amendment safeguards” to matters such as pornographic books, but has refused to shield political parties and their campaigns, he said. Rehnquist, Scalia and Kennedy joined in the dissent.

What’s Left The Supreme Court on Thursday will hand down its remaining decisions of the term. Among the major issues to be decided:

* Whether states can impose their own advertising restrictions on tobacco products beyond the broad federal law, which bans cigarette ads on television and requires warning labels on packages.

* A decision on a Rhode Island man’s 40-year struggle to develop his coastal marshland. The case has become a rallying cry for conservatives angry at government regulation of private property.

* A ruling on whether immigrants who commit crimes in the United States can be held indefinitely if the government has nowhere to send them.