Opening Salvos Fired in Challenge of Campaign Law

Lawyers clashed Wednesday in federal court on the first day of a momentous case that will determine the fate of the new campaign finance law and likely shape the fund-raising machinery of American politics for years to come.

Defenders said the law, which bans the unregulated contributions to national political parties known as “soft money” and restricts interest-group advertising, is a legitimate effort to clean up a system besmirched by huge donations.

Detractors called it an outrageous assault on political speech that will cripple parties and hinder the rights of groups and individuals to make their views heard.

At stake is the future of the biggest overhaul of the campaign finance system since the post-Watergate reforms of the 1970s. After years of discussion and debate, the Bipartisan Campaign Finance Reform Act of 2002 won approval in Congress and became law with President Bush’s signature in March.

Within hours of the signing, opponents filed suit to challenge the law as unconstitutional. Eventually more than 80 plaintiffs joined the case, including the California Democratic and Republican parties.

The law’s central provisions concerning soft money went into effect on Nov. 6, the day after the midterm elections.

On Wednesday, proponents argued in U.S. District Court that the soft-money ban should remain.

“This case is about a situation where corporations, unions and wealthy individuals go to the parties to buy access based on the money they give,” said Roger M. Witten, an attorney for the law’s sponsors, Sens. John McCain (R-Ariz.) and Russell D. Feingold (D-Wis.).

Asserting the need to fix what he called “a thoroughly broken campaign finance system,” Witten said there had been many instances in recent years in which fund-raising was linked to legislative policy.

Describing a 1999 document from PhRMA, a pharmaceutical industry association, Witten said the group planned to urge Sen. Mitch McConnell (R-Ky.) to consider the industry’s views and remember that drug manufacturers had given hundreds of thousands of dollars to GOP committees.

Floyd Abrams, an attorney for McConnell, who is the lead plaintiff in the case, dismissed the charge, telling the court that the senator’s answer to the trade group, had such an incident occurred, would have been: “They didn’t ask anything and I didn’t promise anything.”

Other attorneys for plaintiffs said the soft-money ban should be scrapped and parties allowed to raise as much money as any other political player.

Kenneth W. Starr, who also represents McConnell, said the law established a “dragnet of regulation” reaching from Washington deep into state and local politics.

California politics figured prominently in attacks on the law. Starr cited a 1996 radio advertisement in the campaign against state Proposition 209 -- an initiative that year to restrict affirmative action programs -- as an example of the type of ad that could be banned under the new rules. That’s because the law restricts state party spending on a range of activities that influence federal elections, including efforts to bolster voter registration or turnout.

“This means that Congress has effectively federalized state and local election activities,” said Deborah Caplan, an attorney for the California parties.

The arguments in the case known as McConnell vs. Federal Election Commission displayed an all-star cast of legal talent.

Leading the team opposed to the law was Starr, the former independent counsel in the investigation of Whitewater, a failed Arkansas real estate venture that involved President Clinton and First Lady Hillary Rodham Clinton. Starr was joined by an array of 1st Amendment specialists and lawyers for the American Civil Liberties Union, the National Rifle Assn., the AFL-CIO and other groups.

Those supporting the legislation included Seth P. Waxman, a solicitor general in the Clinton administration, and lawyers for the Federal Election Commission and the Justice Department.

After two days of oral arguments conclude today, a special three-judge panel is expected to rule in coming weeks. While an appeal of that decision appears certain no matter which side prevails, the trial court record will help frame the case for the Supreme Court.

Under the law, the case will go straight to the high court for an expedited review, expected to occur next year. The court could uphold the law, strike it down or invalidate parts of it and allow the rest to stand.

The opening of the court battle resumed a debate that has consumed Congress for years: Is big money a blessing or a bane in national politics? The law says mainly the latter.

It prohibits the national parties and, with certain limited exceptions, federal officeholders and candidates from raising soft money -- a form of political finance that came into vogue in the late 1980s and 1990s as a way to avoid federal contribution limits.

Those limits affect donations made directly to candidates from individuals and political action committees. Under federal law, only those regulated funds, known as “hard money,” may be spent on advertising that urges voters to elect or defeat a candidate.

Soft money, on the other hand, is much easier to raise and has often been used by parties to pay for issue-oriented advertisements that seek to influence voters’ perceptions of candidates while avoiding language that would cross the line of express advocacy.

Many voters would recognize soft-money ads on television by this type of ending: “Call Senator X and tell her ....”

The law also bans certain types of broadcast advertising by outside interest groups in the 30 days before a primary or 60 days before a general election.

All of these measures are billed by advocates as steps to limit the appearance of corruption caused by contributions of $100,000 or more to politicians and their allies from donors -- including individuals, corporations and unions -- who may have business in Washington.

Trying the case are Judges Colleen Kollar-Kotelly and Richard J. Leon of the U.S. District Court for the District of Columbia and Judge Karen LeCraft Henderson of the U.S. Court of Appeals for the D.C. Circuit. Kollar-Kotelly is a Clinton appointee; Henderson was appointed by the first President Bush and Leon by the second.

Leon and Henderson grilled the lawyers repeatedly with questions about the law’s scope. During the arguments, the panel saw videotapes of issue ads that had aired in campaigns in recent years -- ads advocates of the law said had been rigged to avoid federal campaign rules and that opponents said were constitutionally protected free speech.

Before the arguments began, the judges received thousands of pages of briefs, interviews, records and affidavits.