High Court Upholds Most of Campaign Finance Law

The Supreme Court struck a blow Wednesday against the “growing evil

The 5-4 decision upheld nearly all of last year’s broad campaign finance reform law, calling it a modest effort to ensure that the political system responds to the interests of ordinary voters, not just to those with the most money.

It was the most significant campaign-funding ruling since such laws were enacted in the post-Watergate era of the 1970s.

The law passed by Congress last year banned unlimited donations, known as “soft money,” from individuals, corporations and labor unions to political parties. Those donations -- often reaching six figures or more -- had come to dominate the fundraising process. The law also imposed limitations on political advertising by special interest groups.

The justices Wednesday called the McCain-Feingold act -- named for its chief Senate sponsors, Republican John McCain of Arizona and Democrat Russell D. Feingold of Wisconsin -- only “the most recent federal enactment designed to purge national politics of ... the pernicious influence of big money campaign contributions.” It will “protect the integrity of the political process,” they concluded, by cutting the connection between large donations and political power.

But in one of four dissents, Justice Antonin Scalia said: “This is a sad day for the freedom of speech.” Why, he asked, should a court obliged to protect free speech “smile with favor upon a law that cuts to the heart of what the 1st Amendment is meant to protect: the right to criticize the government.”

Election law reformers celebrated the majority’s ruling Wednesday.

“The toxic link between donors who write six-figure checks and people in power at the highest levels of government has been severed,” said Chellie Pingree, president of Common Cause, a Washington-based political watchdog group.

A reluctant President Bush signed the bill into law last year, and on Wednesday, White House reaction to the ruling was muted. It “will help bring some clarity to the process,” Press Secretary Scott McClellan said.

The Democrats who are seeking to replace Bush were more enthused. “McCain-Feingold is a very important first step toward the sweeping campaign reform this country really needs,” said former Vermont Gov. Howard Dean. “I’m glad the Supreme Court upheld the constitutionality of this law.” While Wednesday’s ruling sweeps aside legal doubts about the measure, its impact remains in question. Large amounts of cash will continue to pour into the political system, but the sources and flow are likely to be different.

In the 1996 election, for example, both President Clinton and his challenger, then-Senate Majority Leader Bob Dole (R-Kan.), tapped big donors for contributions to their parties. This money in turn paid for ads that boosted their campaigns.

This year, Bush is raising record amounts for his 2004 reelection campaign, but he is doing so by collecting individual contributions of $2,000 or less, the new legal limit. Dean, the Democratic front-runner, also is raising large amounts of money -- mainly through small contributions gathered via the Internet.

The Bipartisan Campaign Reform Act of 2002, McCain-Feingold’s official name, was intended to close the “twin loopholes of soft money and bogus issue advertising that have virtually destroyed our campaign finance laws,” said Justices John Paul Stevens and Sandra Day O’Connor, quoting one of its Senate sponsors.

In upholding the law, the justices looked back to history. Money limits for federal campaigns are neither a new idea nor a suspect notion, they said, citing the Progressive Republicans of the early 20th century. Led by President Theodore Roosevelt, Congress in 1907 barred corporations from using their treasury funds to support candidates for federal offices. A similar ban on union funding was added in 1947. And after the Watergate scandal, Congress limited individuals to giving no more than $1,000 to a candidate for a single campaign.

By the 1990s, however, the system had sprung leaks. And by the end of the decade, a vast amount of money was pouring through the holes in the election law system, the justices said.

In the 2000 election cycle, $498 million in soft money flowed into the Democratic and Republican national parties. Theoretically, those funds were supposed to be used for purposes unrelated to specific campaigns, but everyone knew that was not the case. The money allowed big donors to buy influence with the members of Congress and the president.

At the same time, corporations, unions and rich individuals were funding broadcast ads that praised or attacked candidates. Often, they did so behind a facade of misleading names. For example, a group called “Citizens for Better Medicare” was, in fact, made up of the major drug companies; it ran ads opposing candidates who favored controls on drug prices, the court noted. Another group, called “Republicans for Clean Air,” was in reality two brothers, Sam and Charles Wyly, who spent $25 million on ads supporting then-Texas Gov. George W. Bush during the Republican primaries.

Under the 1974 law that created the Federal Election Commission and first limited contributions to candidates, such ads were deemed illegal they if urged viewers, for example, to “Vote No on Jones” on election day. However, a legal loophole allowed sponsors to evade the restriction if they said something more general, such as: “Send a message to Jones that you don’t like his stand against seniors.” During the 2000 election, 130 groups spent an estimated $500 million on these phony issue ads.

Reformers in Congress were determined to close both the soft money and advertising loopholes.

McCain-Feingold forbids the parties and politicians from seeking or raising soft money. They may raise a lot of small money contributions from individuals, but none from corporations or unions.

And the law did away with the notion of “issue ads.” Instead, if a broadcast ad appears within 60 days of a federal election and refers to a “clearly identified candidate,” it is considered an “electioneering communication.” The wealthy, companies and unions are barred from running these ads, because they are essentially campaign contributions. However, the parties and candidates may run ads that are paid for with small, legal donations.

Throughout the congressional battle over the reform law, Sen. Mitch McConnell of Kentucky, the chamber’s second-ranking Republican, argued that these restrictions violated the 1st Amendment and its ban on laws “abridging the freedom of speech.” Because the money paid for speech about politics, and political speech is at the heart of democracy, all the restrictions should be struck down, McConnell said.

He sued in hopes of voiding the law, and he was joined by a series of groups including the Republican National Committee and the National Rifle Assn.

The free-speech argument may have proved too much. Had the court agreed with McConnell’s free-speech claim, the justices would have faced the prospect that all the campaign laws dating back a century were unconstitutional.

Instead, the five-member majority relied on past rulings to conclude that the funding restrictions put at most a “limited burden” on speech. The law limits how much money is given and spent, not what is said, the court explained.

Moreover, members of Congress knew all too well the possible corrupting influence of big campaign contributions, the justices said. For that reason, the court said, it had a special duty to defer to the judgment of the lawmakers themselves.

“Congress has a fully legitimate interest in maintaining the integrity of federal officeholders and preventing corruption of the federal electoral process,” the court said in McConnell vs. Federal Election Commission. “The overall effect of dollar limits on contributions is merely to require candidates and political committees to raise funds from a greater number of persons,” the court added.

Besides Stevens and O’Connor, Justice David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer formed the majority.

Scalia, in his dissent, argued that the funding limits made it harder for outsiders to voice their opposition, and harder for challengers to take on incumbents. Chief Justice William H. Rehnquist and Justices Anthony M. Kennedy and Clarence Thomas also dissented from much of the ruling. In all, the court’s opinions and the dissents ran to more than 275 pages.

The court voided only one provision in the law, a ban on contributions from minors. Congress added the provision to prevent rich parents from evading the limits by giving extra contributions in the name of their children. But the court said there was no evidence of such evasions.

Despite their differences, the justices managed to produce a clear ruling on a complex law.

Earlier this year, a three-judge panel in Washington found itself hopelessly divided over the issue -- and it produced a confused set of opinions that ran to 1,600 pages and decided almost nothing.

The Supreme Court justices were determined to issue both a definitive ruling and to do it this month, before the official opening of the 2004 election year. They also said they were “under no illusion” that the law upheld Wednesday would resolve all the problems of campaign funding.

“Money, like water, will always find an outlet,” they said. “What problems will arise ... are concerns for another day.”

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Court’s ruling

The Supreme Court upheld key provisions of last year’s campaign finance reform law, but overturned others. Here are some aspects:

Upheld

* Prohibition of corporate, union and unlimited donations, or ‘soft money,’ to party committees

* Ban on the solicitation of soft money by federal candidates

* Restrictions on election-time political ads by special-interest groups and others

Overturned

* Prohibition of donations by minors

Source: Associated Press