Soft Money Ban and Regulation of Phony Issue Ads Would Pass Constitutional Muster, Public Citizen Expert Testifies

March 22, 2000

Soft Money Ban and Regulation of Phony Issue Ads Would Pass Constitutional Muster, Public Citizen Expert Testifies

WASHINGTON, D.C. — Congress could ban soft money contributions to political parties and regulate election-related issue advertising without violating free speech rights guaranteed by the First Amendment, a Public Citizen constitutional law expert testified to Congress today.

A ban on soft money from corporations, unions and individuals and restrictions on so-called “issue ads” paid for by political parties and independent groups are central features of the McCain-Feingold legislation pending in the Senate and in stronger, prior versions that included the Snowe amendment. Under the Snowe amendment, the election activities of non-profit groups would have to be financed by individuals, and they would be encouraged to disclose the identities of donors.

“The approaches taken in those bills are sound as a matter of policy, will cure serious problems in our campaign finance system and are constitutional,” testified Alan Morrison, director and co-founder of the Public Citizen Litigation Group. “The Hagel bill, on the other hand, is far weaker, and its only possible justification is that McCain-Feingold is unconstitutional, which it is not.”

Morrison testified during the opening day of hearings on campaign finance in the Senate Committee on Rules and Administration, chaired by GOP Sen. Mitch McConnell of Kentucky.

McConnell last year led a Senate filibuster of the McCain-Feingold bill that thwarted the will of a Senate majority by preventing an up-or-down vote on the bill. He has said the Rules Committee hearings will focus on campaign finance proposals by Sen. Chuck Hagel, R-Neb.

“While we applaud Hagel for trying to break the logjam on campaign finance reform, his legislation would not stop the legalized bribery and influence-peddling that has become so pervasive in politics,” said Public Citizen President Joan Claybrook. “It would do nothing more than provide political cover to the opponents of real reform, those senators who voted against McCain-Feingold and who now have to face an aroused electorate.”

The Hagel bill would triple the amount of hard money that individuals can give directly to candidates — from $2,000 per election cycle to $6,000. It would still allow corporations, unions and individuals to give $60,000 in soft money per election, or $120,000 per two-year cycle. That would mean a wealthy executive and the executive’s spouse could give up to $240,000 every two years.

The Hagel bill also would do nothing to curtail the increasing use of phony “issue ads” that aid candidates for federal office and would not stop soft money from being redirected from national party committees to state parties.

Morrison’s testimony refutes arguments by reform opponents who claim McCain-Feingold would infringe on free speech.

The U.S. Supreme Court already has upheld laws forbidding corporations and labor unions from giving money to political parties if the money is used to advocate the election or defeat of a candidate for state or federal office, Morrison said. It is undisputed that the primary, if not exclusive, purpose of a political party is to elect its candidates to office. Congress could properly expand the definition of party activities that must be financed in accordance with federal guidelines that now regulate hard money. Once the definition is expanded, all activities of a national party would have to be financed in the same manner as the current direct advocacy activities, with money that is subject to the dollar limits imposed by the Federal Election Campaign Act.

Congress has another alternative that would unquestionably pass constitutional muster, Morrison said. It could stop parties from taking soft money by denying them federal matching funds for presidential primary campaigns and funds for political conventions and presidential general elections, or by denying party candidates the right to buy broadcast advertising time at reduced rates if the parties accepted soft money.

The other key reform issue is phony issue ads. Under the Supreme Court’s Buckley v. Valeo ruling in 1976, only ads that expressly advocate the election or defeat of a particular candidate are subject to the law. But in reality, parties and independent groups routinely run ads to aid candidates without explicitly asking viewers to “vote for” or “vote against” a candidate — a development that has created an enormous “issue ad” loophole.

Morrison said there are clearly areas where corporate or union financing of pure issue ads cannot be prohibited, such as during elections involving ballot initiatives. But Congress can regulate corporate or union sponsorship of so-called issue ads that identify a candidate or party and still leave room for legitimate issue advertising.

“Nothing in any of the Supreme Court decisions on campaign finance suggests that the Court would not uphold a narrowly drawn statute that recognized the reality that certain kinds of ads, at certain times in the election cycle, are the functional equivalent of ‘vote for’ or ‘vote against’ a candidate, and hence they can be regulated in the same manner as are independent expenditures that contain express advocacy,” Morrison said.

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Alan Morrison’s testimony.