McConnell v. Federal Election Commission: News Update

McConnell v. FEC
Litigation Over the Bipartisan Campaign Reform Act of 2002

A History

December 18, 2003

Last year, after an intense legislative battle by Senators John McCain (R-AZ) and Russell Feingold (D-WI) and Representatives Christopher Shays (R-CT) and Marty Meehan (D-MA) and others, Congress finally passed, and the President signed, the most significant improvement in federal campaign finance law in a quarter century, known as the Bipartisan Campaign Reform Act of 2002 (BCRA).

Briefly, BCRA prohibits soft money in federal elections, prohibits corporations and unions from using their funds to pay for so-called “issue ads” that depict candidates immediately before an election as campaign ads, and beefs up disclosure requirements. The law became effective on November 6.

Within a month of passage of the new campaign finance law, 84 plaintiffs—ranging from Sen. Mitch McConnell (R-KY) to the AFL-CIO to the Republican party—filed 11 different lawsuits challenging every provision of the Act. The U.S. Department of Justice and the Federal Election Commission are the lead defendants in the suits, supported in their defense of BCRA by the principal congressional sponsors of the law, who intervened in the case.  All the lawsuits were consolidated into one case, McConnell v. FEC.

Realizing that BCRA would inevitably be challenged in court, the sponsors wrote a provision into the campaign finance law for an “expedited” court review process. Legal challenges to BCRA would first be heard by a three-judge federal panel in Washington, D.C., and the ruling of the panel would be directly subject to review by the U.S. Supreme Court. The three-judge panel would serve largely as the trial court, compiling the evidentiary record in the case.The three-judge court was expected to issue its ruling by February 2003. This schedule would have provided the U.S. Supreme Court with sufficient time to review the decision on appeal and issue a final determination before getting too far into the 2004 election cycle.

A. Three Judge Panel Decision

The three-judge federal panel did not issue a ruling until May 2, 2003—well into the 2004 election cycle and probably too late for the high court to take up the case before the summer recess. The delay has been a source of consternation for both the plaintiffs and defendants, but especially for the defenders of BCRA, who would prefer that BCRA’s rules be firmly in place as the 2004 campaign gets underway.

Nevertheless, on May 2nd, the three-judge panel—comprising Circuit Court Judge Karen Henderson (appointed by Bush senior), District Court Judge Colleen Kollar-Kotelly (appointed by Clinton), and District Court Judge Richard Leon (appointed by Bush junior)—issued a 1,648-page decision, the longest decision in the history of the D.C. federal district court.

But the volume of the decision has not translated into clarity. The three judges were sharply divided in their legal opinions and could not agree on a coherent rationale, or even a statement of the relevant facts. Among the three judges, Judge Henderson was the most hostile to BCRA, declaring: “I believe the statute before us is unconstitutional in virtually all of its particulars…” (Henderson Memorandum, p. 5). Judge Kollar-Kotelly was generally the most supportive of the law, and Judge Richard Leon bounced back and forth between the two, casting the deciding vote in what was usually a 2-to-1 split decision on each major issue. The judges squabbled, both in the courtroom and in their written opinions, and their disagreement is reflected in the court’s reasoning. (see footnote below for more information) 

Perhaps the most surprising element of the decision is that the court mostly invalidated the soft money restrictions, which were thought to be the least vulnerable to constitutional attack, even while significantly upholding the issue advocacy restrictions. Key elements of the decision include:

  • The court invalidated the sweeping ban on party committees raising or spending soft money in federal elections. Under the court’s decision, national and state party committees are only restricted from spending soft money on advertisements that promote or attack a federal candidate. Parties may raise and spend soft money for all other activities, including issue ads that don’t mention a candidate (although they can trumpet their party), generic party campaign broadcast ads, party direct mail, voter mobilization efforts, fundraising, and staff and operating expenses.
  • The court upheld the prohibition on federal officeholders and federal candidates, including any committees they control (“leadership PACs”), from soliciting or spending soft money for any federal or state election-related activity.
  • The court struck down the restriction against parties transferring funds (including soft money) to non-profit groups.
  • The court upheld a modified version of the definition of a campaign advertisement (“electioneering communication”) for the purposes of the ban on corporate and union funding of advertisements and disclosure requirements. Under the court’s ruling, a campaign ad is any advertisement that promotes or attacks a federal candidate. BCRA originally restricted this definition only to those ads that aired within 60 days of an election, but the court voided the 60-day rule, leaving no time limit to the definition. The court also made clear that the “magic words” standard— under which an ad must explicitly say “vote for” or “elect” or something comparable—is not the only constitutionally acceptable test for whether an advertisement is a campaign ad.
  • The court kept in place the broad definition of “coordination” in the law, meaning that if campaign activities are coordinated between candidates and other organizations (including the parties), those activities are considered an in-kind contribution directly to the candidate. But it left for another day, and another court, the issue of whether the new FEC coordination regulations are valid.
  • The court voided the Wellstone Amendment, which would have applied the ban on corporate involvement in federal electioneering to certain non-profit corporations, as a well as to for-profit corporations.
  • The court let stand the increases in the contribution limits in BCRA, including (at least for now)the “Millionaire’s Amendment” that increases contribution limits for candidates running against wealthy opponents.
  • The court invalidated the ban on all campaign contributions from minors.

Both sides in the campaign finance debate are attempting to portray the ruling in a most favorable light—and each can do so, given that a general lack of consistent reasoning throughout the decision has confounded the political players and their legal teams alike. While both sides were hesitant to file for a stay to have the decision placed on hold until the Supreme Court can make a final determination on the case, ironically the NRA was the first to file such a motion. The NRA, an opponent of BCRA, filed the motion to have BCRA reinstated awaiting Supreme Court review out of concern that the lower court’s re-definition of what constitutes a campaign ad is even broader than BCRA’s 60-day bright-line definition.  They have since been joined by the Club for Growth, the National Right to Life Committee, and the Intervenors and the Justice Department defending the law, asking for a stay of all parts of the court decision.  The plaintiffs challenging the law and the defendants supporting BCRA have already appealed to the U.S. Supreme Court to review the full case.

On May 19th, the district court decided to stay its entire ruling, meaning that BCRA remains in full effect pending Supreme Court review later in the year. In a 2-to-1 decision, with Judge Leon dissenting, the court reasoned that there was too much confusion in changing the rules of the game again, and so the campaign finance law would remain effective through the course of the litigation.

The court stated:

“After due consideration of the motions, the oppositions, and replies, the relevant case law, and the pertinent Federal Rules of Civil Procedure, the Court is satisfied that a stay should be granted pending final disposition of these eleven actions in the Supreme Court of the United States. This Court’s desire to prevent the litigants from facing potentially threedifferent regulatory regimes in a very short time span, and the Court’s recognition of the divisions among the panel about the constitutionality of the challenged provisions of BCRA, counsel in favor of granting a stay of this case. Pursuant to Federal Rule of Civil Procedure 52(a) (“Findings of fact and conclusions of law are unnecessary on decisions of motions under Rule 12 or 56 or any other motion. . . .”), the Court deems no further discussion necessary to resolve these motions.”

Appeal to the U.S. Supreme Court has already been accepted and scheduled. The U.S. Supreme Court scheduled an unusually expedited hearing on BCRA, interrupting part of their summer recess.

B. U.S. Supreme Court Oral Arguments

Not since the U.S. Supreme Court ordered former-President Richard M. Nixon to surrender his secretive Watergate tapes 29 years ago has the Court interrupted its summer recess to get back to work early on a pressing case. The case is McConnell v. FEC – the challenge by Sen. Mitch McConnell (R-Kentucky) and more than 80 other plaintiffs against the nation’s new campaign finance law. After receiving briefs throughout the summer, the court heard oral arguments on Monday, September 8th, for four hours – another unprecedented action, given that oral arguments usually last only one hour. An army of lawyers, activists and press stood inside and outside the courtroom, most of whom were unable to get into the proceedings, while the Court agreed to air a tape of the proceedings immediately afterward on C-SPAN (you guessed it, another rarity for the Court).

The court winnowed down the team of lawyers making oral arguments to five on behalf of the plaintiffs suing against the law, and three on behalf of those defending the law. Plaintiffs’ lawyers include: Kenneth Starr of Clinton impeachment fame; Floyd Abrams of the ACLU; Larry Gold of the AFL-CIO; Jay Sekulow, representing several Christian activist teenagers; and Bobby Burchfield of the Republican party. Lawyers defending the campaign finance law include: U.S. Solicitor General Theodore Olson and Deputy Solicitor General Paul Clement on behalf of the Justice Department and FEC; and Seth Waxman, representing the congressional sponsors.

Opening Salvo. With Senators McCain and Feingold sitting side-by-side in the courtroom, the morning salvo against the campaign finance law began with Ken Starr, the first of eight lawyers to participate in oral arguments. The morning session focused on the soft money provisions of BCRA.

Starr argued that BCRA should be invalidated because of overbreadth: that the law “intrudes deeply” into the political life of the nation. “There comes a point, your honor, where Congress goes too far.”

Overbreadth is a principle of jurisprudence sometimes invoked by the courts to invalidate laws restricting freedom of speech. Simply put, the courts are sometimes inclined to strike down a law if the same reasonable objectives could have been achieved through less intrusive measures.

In addition to the overbreadth argument, Starr, and later Bobby Burchfield, argued that BCRA’s restriction on the uses of soft money by state and local parties violates the principle of federalism. By placing limits on what state and local parties can do during federal elections, argued Starr and Burchfield, the national government is over-reaching its legitimate authority. State and local parties would be hamstrung to express their viewpoints in association with the national parties. The lawyers seemed to receive some support from Justice Antonin Scalia, who said: “The right to speak includes the right to speak in association with others.” Justice John Paul Stevens later retorted: “We have never held that.”

On behalf of the defendants, Olson argued that the soft money ban is narrowly tailored. If the provision restricting soft money fundraising and expenditures by state and local parties in federal elections were to be invalidated, it would pose such a large loophole in the law as to render the soft money ban virtually meaningless. Thus, the soft money ban is an appropriate remedy to preserve the integrity of existing contribution limits.

Justice Stephen Breyer appeared to agree with the defendants that the soft money ban is designed to preserve existing contribution limits. Justice Breyer observed: “I gather this statute was passed because… ‘Let’s call him Joe Wealthy wants to write a check for $10 million to help his favorite candidate Smith get elected,’ and they figured out a way. Who ‘they’ is is named in the lower court opinion but we’ll just say ‘they.’ They figured out a way despite the prior law to do it. It would pay for ‘get out the vote,’ it would pay for voter registration, and it would pay for issue ads which didn’t say ‘vote for Smith.’ What they said was ‘Jones, his opponent, is a real rat. Go tell him what you think of him, okay?’ Now, that was the problem.”

All justices, except Justice Clarence Thomas, asked the lawyers at least one question for clarification of points of fact or theories of argument.

Afternoon Arguments. The afternoon session focused on the electioneering communications provision of the new campaign finance law. Floyd Abrams on behalf of the plaintiffs opened the discussion, arguing that the Supreme Court had already decided this part of the case in the 1976 Buckley decision. Once again, the concept of overbreadth was invoked. The court, argued Abrams, decided in 1976 that the definition of a campaign advertisement subject to federal regulation must be very narrow in scope, so as not to infringe on a free and open discussion of pressing public policy. According to this reasoning, the magic words standard of express advocacy is a justifiable bright-line test between issue advocacy and campaign speech. When questioned by Justice Ginsburg, Abrams acknowledged that it was easy to “get around” the magic words standard of express advocacy, but asserted that BCRA’s “bright-line test” goes too far.

Not so, responded the defendant’s Paul Clement and Seth Waxman. The court did not rule in 1976 that the magic words standard is the bright-line test, just that a bright-line test is necessary. As such, the 60-day bright-line test of BCRA is appropriately narrow and more realistic in today’s political environment, where few political ads use the magic words.

More importantly, argued the defendants, BCRA’s new definition of campaign advertisements does not preclude anyone from sponsoring such ads, even right before an election. The law merely requires that since these ads are appropriately viewed as campaign ads intended to influence federal elections, the ads should be paid for from funds that are permissible in federal elections and disclosed to the public.

Jay Sekulow, a Washington attorney usually associated with religious causes, argued that the prohibition on contributions by minors violated their free speech rights. He further pointed out that no evidence was introduced that minors were being used by their parents to evade the contribution limits. Defendants did not respond to Sekulow’s argument.

C. The Ruling

In a sweeping victory for campaign finance reform, the U.S. Supreme Court upheld nearly all elements of the McCain-Feingold campaign finance law, known as the Bipartisan Campaign Reform Act of 2002 (BCRA). Public Citizen played a major role in pressuring Congress to enact BCRA and assisted in its legal defense.

The court did not dawdle in issuing a timely ruling on December 10, 2003, nor did the court leave much ambiguity in its thinking. In a 5-to-4 decision, the majority of the court ruled:

“[T]he statute’s two principal, complementary features – Congress’ effort to plug the soft money loophole and its regulation of electioneering communications – must be upheld in the main.”

The majority opinion, written by Justices Stevens and O’Connor, upheld the two key provisions of the campaign finance law: the ban on soft money in federal elections, and the regulation of campaign advertisements disguised as “issue ads.” The court did not stop there – nearly every element of BCRA in particular, and campaign finance regulation in general, was supported in the ruling.

Specifically, the court upheld:

  • The ban on national parties and officeholders raising and spending “soft money” – the unlimited contributions to parties from corporations, unions and wealthy individuals.
  • The limit on state parties spending soft money that affects federal elections.
  • The new definition of campaign advertisements subject to campaign finance regulation and disclosure, as any broadcast ad aired immediately before an election that depicts a federal candidate and targets that candidate’s constituency (known as “electioneering communications”). Such ads are now covered under campaign finance limits and disclosure requirements if they are aired 60 days before a general election or 30 days before a primary election.
  • The requirement that special interest groups use only regulated “hard money” to pay for electioneering communications and disclose where that money came from. Hard money consists of contributions from individuals or political action committees (PACs), subject to contribution limits and disclosure requirements.
  • The mandate that broadcast stations compile a public record of political ads and who paid for them.

The court invalidated only two provisions of the law: the ban on campaign contributions from minors, and the requirement that parties choose between making either independent expenditures or coordinated expenditures on behalf of candidates. The court affirmed most other aspects of campaign finance regulation and disclosure, and even admonished the Federal Election Commission for letting money in politics get so out of hand. FEC regulations, noted the court, created the problem of soft money. In the words of the Justices, “the FEC regulations permitted more than Congress, in enacting FECA (the original campaign finance law), had ever intended.”

Just as important, the court rejected out-of-hand the very narrow justification for campaign finance laws used by opponents of regulating money in politics – that campaign finance regulations are only justifiable to curtail the type of corruption that causes a change in legislative votes. The court expounded upon the fact that soft money leads not only to a possible change in legislative votes, but also to “manipulations of the legislative calendar, leading to Congress’ failure to enact, among other things generic drug legislation, tort reform, and tobacco legislation.” To claim that such legislative scheduling actions do not change legislative outcomes, says the court, “surely misunderstands the legislative process.” As such, campaign finance regulation need not be based on such a narrow interpretation of corruption.

The court strongly affirmed the right of the public to know who is paying for campaign advertisements and with how much money. There were eight votes – all except Justice Thomas – for applying the basic disclosure requirements even as to the broader definition of “electioneering communications.”

While this ruling affects all federal elections, it will have a tremendous impact on next year’s presidential contest. The parties will no longer have access to hundreds of millions of dollars of corporate and union money that they have used in prior presidential elections to saturate the airwaves with largely negative campaign commercials. Similarly, there will be no more six-figure contributions from wealthy special interests to buy favors from the White House – not even a Lincoln bedroom sleepover.

Make no mistake about it: we have entered a new era of campaign finance reform. After years of retreating under increasingly lax rules of campaign finance regulations, the U.S. Supreme Court has handed the reform community the means to make sure that some campaign finance laws no longer are just loopholes.

Candidates and officeholders, parties and special interest groups, and even the FEC, must now recognize that the Bipartisan Campaign Reform Act, which effectively closes many of those loopholes, is the law of the land.

Read the Statement of Public Citizen President Joan Claybrook and Alan B. Morrison, Founder of the Public Citizen Litigation Group

 Review the Ruling: McConnell v. FEC, No. 02-1674  (Dec. 10, 2003)

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1. For instance, Judge Kollar-Kotelly wrote in her memorandum: “I am compelled to respond to Judge Henderson, who, without any elaboration, has criticized three of my findings in particular as leaving her ‘with the definite and firm conviction that a mistake has been committed.’” (Kollar-Kotelly Memorandum, fn. 5).