Campaign finance in the USA and the First Amendment

by Simon Lemieux

This A2 article asks whether democracy in the USA is currently being strengthened or weakened by the Supreme Court in its rulings on campaign finance.

What is the background?

The issue of regulating election finance in the USA is one of those contentious issues which has been the source of political debate and legal challenges since the first modern attempts to impose some regulation and limits in 1974. Then, an amended version of the Federal Election Campaign Act (FECA) was passed by Congress, a measure challenged and subsequently weakened in the courts through rulings such as Buckley v Valeo.

In 2002, a further attempt to limit and control election spending was passed with the Bipartisan Campaign Reform Act, often called the McCain–Feingold Act. This act too, after initially being upheld by the Supreme Court in McConnell v FEC in 2003, has been weakened by recent court rulings. The best known is Citizens United in 2010, but others worth noting include the SpeechNow.org case, also in 2010, and Arizona Free Enterprise Club’s Freedom Club PAC v Bennett. The most recent case and the main focus of this piece is a Supreme Court ruling in April 2014: McCutcheon v FEC (http://www.theguardian.com/world/2014/apr/02/supreme-court-strikes-down-cap-campaign-contributions).

What is the current situation?

This is a good question and the short answer is: complex! To slightly simplify matters, the main terms of the current rules are as follows:

• A candidate can spend as much of their own money as they want on their own election campaign (and many do just that).
• There are limits on direct donations by others (whether single individuals or Political Action Committees, aka PACs), which are currently $5,200 per candidate within a 2-year election cycle by individuals, and a cap of $5,000 by the national party. Direct donations to a campaign are known as hard money.
• As a result of recent court judgements such as Citizens United, there are now effectively no limits or regulation regarding independent or indirect expenditure, often called soft money. This was traditionally money used for ‘party building’ activities such as campaign office expenses and equipment. The key criteria for money to be deemed ‘soft’ or independent expenditure are as follows. First, it cannot be used directly to promote a certain candidate, though it can be used to fund ‘attack ads’ which portray a rival candidate in a negative light (e.g. as lazy, unethical, corrupt or a promise-breaker). Second, there must be no official linkage or liaison between those groups (often known as SuperPACs) and a candidate’s official campaign. There are also 527 and 501(c) groups that campaign independently but focus more on ‘issue ads’, such as a rival candidate’s integrity. Swift Boat Veterans for Truth, for example, queried John Kerry’s war service record in the 2004 presidential election.
• Candidates can get matching public funds if they voluntarily agree to limit their overall campaign expenditure, but neither Romney nor Obama did this in 2012.
• In most cases the identity of donors must be disclosed, though this is not the case with 501(c) groups.

Where does the McCutcheon case fit in?

As mentioned earlier, the McCutcheon case was another blow for those (mainly but not exclusively on the progressive/liberal side of US politics) who want greater regulation and restriction of spending at election time. In summary it allows donors to give money to as many political candidates, parties and committees as they wish, though retaining the cap of $5,200 per election cycle for an individual candidate. Previously there was an overall or aggregate cap of $48,600 to candidates and $74,600 to state and local political party committees over a 2-year period – it is that limit that has now been ruled unconstitutional.

The case was brought by a Republican donor and businessman from Alabama, Shaun McCutcheon, who was ‘only’ able to donate to nine candidates before he hit the limit. So in theory, a wealthy donor such as McCutcheon who wanted to give the maximum amount to every House and Senate candidate and every political committee in his or her party could now give nearly $6 million. The ruling, like many other Supreme Court rulings dealing with campaign finance, was a close 5–4 verdict with the ‘conservative’ justices lining up on the winning side, and the ‘liberal’ justices constituting the minority.

Why is deregulation seen as a threat to democracy?

Why can weakening limits on campaign finance be seen as a threat to democracy? While it is not quite as simple as saying that the candidate who raises the most money always wins the election, finance does appear to have a strong effect. In the 2004 general elections, for example, 95% of House races and 91% of Senate races were won by the candidate who spent the most on their campaign. So loosening limits on fundraising would seem to benefit those candidates who enjoy the support of wealthy backers or have considerable skill at fundraising.

Is fundraising skill crucial for an elected legislator and should it be a main focus for members of Congress? Is it right or democratic that only those with connections to the wealthy stand much chance of getting elected? Should those with great wealth have a disproportionate influence on policies and law-making – do they really give money with ‘no strings attached’?

Stephen Breyer, one of the four Supreme Court justices who wanted to retain the overall cap, noted in his judgement that, ‘Where enough money calls the tune, the general public will not be heard,’ or to put it another way, ‘All votes and voters are equal but some are more equal than others.’

What are the arguments in favour of deregulation?

In essence, those in favour of deregulating campaign finance would say it is their constitutional right under the First Amendment, which guarantees freedom of speech to all Americans. Making political donations is seen as another form of free political expression. Only tyrannies restrict the political freedoms of their citizens! As put by one of the key opponents of campaign finance reform, Mitch McConnell, Republican senator for Kentucky, ‘It is the right of the individual, and not the prerogative of Congress, to determine how many candidates and parties to support.’

Supporters of deregulation would also point out that merely donating huge sums to candidates does not equal corruption. They would define corruption very narrowly as directly buying votes and influence along the lines of ‘I’ll give you $5,000 if you vote a certain way/propose a certain law/ask a specific question’ and so on.

What happens next?

Well, this certainly won’t reduce the amount of dollars sloshing around in US politics: expect some record sums to be spent in the November 2014 mid-terms. Some say it could well lead to limits on donations to individuals being ruled unconstitutional in due course. It is also possible to argue that the ruling could increase the power not just of a few rich donors, but also of central party bodies who might receive huge single donations and then distribute the money to selected candidates and state committees. Could this be party-machine politics twenty-first-century style?

On the other hand, there are perhaps only a handful of donors rich and willing enough to write such cheques. The Center for Responsive Politics which researches campaign contributions has calculated that only 591 donors nationwide gave the maximum allowable amounts to federal candidates in 2012. What is least likely, given the current composition of the Supreme Court, is that there will be a strengthening of laws limiting campaign finance. Through its recent rulings, is the Supreme Court protecting the First Amendment rights of all Americans, or merely the richest?

Simon Lemieux is head of history and politics at Portsmouth Grammar School, and has just updated the study guides for AQA American politics published by Philip Allan.