‘Soft Money’ Ban Seen Surviving High Court Test

Not long ago, the drive for campaign funding reform looked as though it would stall at the steps of the Supreme Court, stopped by the 1st Amendment right of freedom of speech.

But twice in the last two years, the high court has rejected free-speech claims from party activists and instead upheld strict limits on the flow of money into the political system.

The court’s tilt in favor of campaign finance regulations has heartened the advocates of reform and convinced them that the “soft money” ban approved by the House this week will survive the inevitable legal challenges.

“They’ve seen the explosive growth of soft money, and they recognize the problem,” Don Simon, general counsel for the citizen lobby group Common Cause, said of the justices. “A majority of the court has shown itself to be strongly in favor of rules that deal with the corruption of politics by big money.”

But legal experts believe that a separate restriction on political advertising could be struck down on free-speech grounds. The House and Senate bills forbid incorporated groups to broadcast ads that refer to a “clearly identifiable candidate” near election day.

The bill itself says the provisions are separate and “severable,” however. If one provision of the law is struck down by the courts, the other provisions can remain unaffected.

And it is the central, soft-money provision that appears to be backed by the high court’s last two rulings in campaign finance cases. Soft money refers to the unlimited donations to national political parties.

Two years ago, the court, by a 6-3 vote, revived a $1,000-per-person limit on contributions to candidates in Missouri. Conservative judges had thrown out the limits on free-speech grounds, and lawyers for the Republican National Committee urged the justices to strike down contribution limits as archaic and unconstitutional. Since the money funds political ads, it is speech protected by the 1st Amendment, they said.

But the high Court said too much money can corrupt the system.

“Democracy works only if the people have faith in those who govern,” wrote Justice David H. Souter. And that faith can be destroyed if the public comes to believe that “large donors call the tune.”

“Money is property. It is not speech,” added Justice John Paul Stevens. And money, like property, can be regulated by the government, even if pure speech cannot be, he said.

And last year, the court, on a 5-4 vote, rejected the notion that political parties have a special free-speech right to raise and spend campaign money.

Lawyers for the Colorado Republican Party had asked the court to knock down all the spending limits for parties. They argued that political parties are not agents of corruption but are essential players in a democratic system that values open debate on public issues.

But Souter, speaking for the court, cast aside this idealized image of the parties as debating societies and focused on “how the power of money actually works in the political structure.”

Parties can be used as “channels for circumventing” the legal limits on corporations, unions and the wealthy if their money can flow through the party to the campaigns, he said.

This, of course, is precisely the argument against soft money. In the late 1970s, the Federal Election Commission opened a supposedly narrow channel to permit unregulated money to flow into the parties for so-called party building activities. In theory, these were separate from an actual election and, therefore, outside the realm of federal election law.

A decade or so later, party officials realized they could broadcast “issue ads” that touted their positions and derided the opposition without running afoul of the federal election laws. The Supreme Court has said that issue ads were protected as free speech so long as they did not advocate the election or defeat of a particular candidate.

By the mid-1990s, the channel of unregulated soft money had turned into a river.

Heading into the 1996 presidential race, Bill Clinton and Sen. Bob Dole realized they could solicit huge contributions for their parties from rich donors, corporations and unions. Then they could use that money to run media campaigns that attacked the opposition.

But Souter later wrote that if this sort of “end run” around the law is permitted, the federal election laws should be scrapped.

Souter’s most recent opinion (FEC vs. the Colorado Republican Party) was joined by Justices Stevens, Ruth Bader Ginsburg, Stephen G. Breyer and Sandra Day O’Connor. The four dissenters said campaign spending by political parties is not a type of corruption and should be protected under the 1st Amendment.

The legislation provides for a speedy review in the federal courts. Challengers could sue before a three-judge panel in Washington, and from there the case would go directly to the high court.

Some election lawyers say a provision regulating broadcast ads near election days may not survive a court test.

The bill prohibits the use of corporate or union money, including funds from nonprofit corporations, for TV and radio spots that “refer to a clearly identifiable candidate” within 60 days of an election.

Proponents said corporations and unions should not be allowed to run attack ads before an election. But critics say the provision is so broad it could bar media spots by advocacy groups.

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Campaign Finance Overhaul

The House approved the Shays-Meehan campaign finance reform bill, which is nearly identical to the McCain-Feingold bill passed by the Senate last April. Key backers in the Senate have embraced the House measure and its wording on the few points where the bills differ. They promise a rapid floor vote that could send the measure to President Bush for his signature. The Shays-Meehan bill would:

Prohibit “soft money,” unlimited contributions by individuals, unions, corporations and interest groups to the national political parties.

Prohibit state and local party organizations from spending soft money on federal elections, with the exception of funds collected for voter turnout and registration.

Allow individuals to give up to $2,000 per election to candidates for president and Congress, up from the current $1,000. The limit would rise with inflation.

Allow individuals to give a total of $95,000 every two years to candidates and parties, up from $50,000. This limit would also rise with inflation. (The Senate approved a $75,000 limit, which would be dropped in favor of the House figure.)

Ease contribution limits under certain circumstances for federal candidates who face self-financed wealthy opponents.

Prohibit unions, corporations and interest groups from using their general funds to pay for broadcast advertising that targets a “clearly identifiable” federal candidate for 30 days before a primary election and 60 days before a general election. Ads funded by money these groups raise under federal campaign contribution rules would be exempt.

Take effect Nov. 6, the day after the 2002 congressional elections. (The Senate version calls for an earlier effective date.)

Source: Los Angeles Times