A)James Madison, the Federalist Papers, No. 10
Campaign Finance Outline
Theories of Democratic Governance
1)Factions, 3-11
a)James Madison, The Federalist Papers, No. 10
b)Faction – Has some “common impulse of passion or of interest, adverse to the rights of other citizens or to permanent interests of the community”
i)How do we know what the “permanent interests” are?
(1)Couldn’t get specific, cited paper money as adverse to public interest
ii)Could this just be self-interested rhetoric?
(1)Madison may have wanted to simply keep his landed money, power
2)Citizens and Representatives, 11-14
a)Edmund Burke, Speech to the Electors of Bristol
i)Duty is to the nation as a whole, not your constituents
(1)Fundamentally different from being an ambassador of a country
ii)You owe your constituents your judgment
iii)No duty owed to any subgroup or distinct interest
3)Pluralism and Progressivism, 14-23
a)Richard J. Ellis, Pluralism
i)Argues that government actors and institutions are largely autonomous of one another, and we cannot speak of “the state” as a unitary actor
(1)It is not a lack of autonomy that justifies refraining from reference to “the state”, but a lack of coherence between the various moving parts of the government
ii)Argues against “neo-statists” by saying pluralists are not overly society-focused
(1)Believes this focus is appropriate for understanding politics, democracy
iii)Pluralists see the state as passively acted upon by various interests of society
iv)It is not the autonomy of “the state” that pluralists emphasize, but of individual political actors
4)Legal theories on government regulation in a democracy
a)Legal formalists
i)Political branches cannot be allowed to interfere with liberties
(1)There is no compromising in this category
ii)Politics by its nature implicates deal making, bargaining, tradeoffs
(1)Liberties cannot be subjected to this process
b)Legal realists
i)The law must be practical
(1)Focus on abstract “liberties” doesn’t get us anywhere
ii)This theory became ascendant in ~1937
(1)Marks a transition where courts began to defer to the legislature to decide what role government should play in meeting citizen needs and defending liberties
(2)Austin v. MI Chamber of Commerce is clearest expression of this theory
(a)Court focuses on practical effect of corporate money, not formalities of First Amendment jurisprudence on corruption
iii)Citizens United represents serious pivot away from this approach
(1)Court again willing to step in, define liberties itself
History of Campaign Finance Regulation
1)Founding-1830s
a)Money not really a factor
b)Elections dominated by small group of monnied elites
c)Candidates ran on their reputation
2)1830s-1880s
a)campaigns financed by those seeking civil service positions
3)1880s-1970s
a)Pendleton Act
i)President Garfield assassinated by disgruntled campaign contributor who didn’t get civil service position, prompts reform
ii)Patronage system effectively eliminated
(1)Ends politicization of current federal workforce?
b)Corporate contributions banned (1925)
i)Later extended to all corporate and union spending
4)1970s-present
a)Federal Elections Campaign Act (FECA, 1974)
i)By far the most comprehensive regulation of campaign finance at the time
(1)Response to Watergate, associated campaign finance scandals
ii)Four principle components:
(1)Contribution/expenditure limits
(a)Contribution and expenditure limits were originally seen as serving relatively equal and complimentary purposes
(2)Special restrictions
(a)Particular persons and organizations
(b)Corporations and unions
(c)Government contractors
(i)No contributions during formation to completion of contract
(ii)Can form PACs
(d)Foreign nationals
(3)Disclosure
(4)Public funding
(a)Presidential Public Financing system
(i)Was effective until 2008
b)Bipartisan Campaign Reform Act (BCRA, 2002)
i)Response to rise of “soft money” in 1990s
(1)Loopholes let parties accept unlimited money, often exchanged for influence
(2)Also responding to preponderance of “faux issue ads”
ii)Banned soft money, capped contributions to the parties
(1)Also closed roundabout avenues via state parties, ect.
iii)Established new test for what speech would be regulated: “Electioneering Communications”
(1)Focused on the district where a candidate was running at the proximity of the advocacy to an election (30/60 day window)
(2)Attempt to broaden the “express advocacy” standard then in place
iv)Raised contribution limits to candidates to sweeten the deal for legislators
Bribery
1)Elements of bribery:
a)Public official
b)Corrupt intent
i)Refers to the expectation that the gift or benefit will influence the official’s conduct in a manner beneficial to the donor
ii)Will be read into bribery statutes where not present (State v. O’Neill)
c)Anything of value
i)The benefit received may be…
(1)A political benefit
(a)Campaign contributions (even if otherwise legal)
(b)An endorsment? (open question)
(c)Votes for plant authorization and public financing (Dickinson v. Van de Carr)
(2)To a third party
(3)Other non-cash incentives
(a)Loans to an official,
(b)business transactions resulting in sales commission
(c)numbers in an illegal lottery
d)Intent to influence
i)Does NOT require definitive quid pro quo
(1)But see United States v. Brewster (suggesting the opposite in bribery cases)
(2)Sometimes defined as “consideration”
ii)Issue: how specific is the influence sought by the contributor?
(1)Intent clearly shown where defendant sought a height variance for his hotel (State v. Agan)
iii)Issue: how explicit is the agreement?
(1)There is a violation “only if the payments are made in return for an explicit promise or undertaking by the official to perform or not to perform an official act.” (McCormick v. United States)
iv)Speech or Debate Clause
(1)When members of congress are indicted, the prosecution’s case may not depend on either legislative acts or the motivation for legislative acts
v)A campaign contribution by a person with business pending before the official is not sufficient to demonstrate intent
(1)Agricultural trade association to Sec. of Agriculture (Sun-Diamond Growers of California)
(2)State legislator to organization of foreign medical graduates (McCormick v. United States)
e)Official act
i)How do we draw a line between public and private acts?
ii)Requires control over the relevant thing sought
(1)A state legislator’s influence over the liquor licensing process is not sufficient (State v. Bowling)
iii)Acts “outside the formal legislative process” may be official acts
(1)Attempts to promote specific business ventures in Africa (United States v. Jefferson)
2)Federal bribery statute (18 U.S.C. §201(b):
a)Whoever---
i)Directly or indirectly, corruptly gives, offers or promises anything of value to any public official… or offers or promises any public official… to give anything to any other person or entity, with intent---
(1)To influence any official act; or
(2)To influence such public official… to commit… or allow, any fraud… on the Unites States; or
(3)To induce such public official… to do or omit to do any act in violation of the lawful duty of such official person…;
ii)Being a public official… directly or indirectly, corruptly demands, seeks, receives, accepts, or agrees to receive or accept anything of value personally or for any other person or entity, in teturn for:
(1)Being influenced in the performance of any official act;
(2)Being influenced to commit… or allow, any fraud… on the United States; or
(3)Being induced to do or omit to do any act in violation of the official duty of such official…;
b)Shall be fined… or imprisoned… or both
3)Elements of an unlawful gratuity (18 U.S.C. §201(c)):
a)Whoever, in the discharge of an official duty…
i)Gives offers or promises anything of value to any public official for or because of any official act performed or to be performed
ii)Being a public official, demands, seeks, receives, accepts, or agrees to receive the same
b)Shall be fined… or imprisoned… or both
c)Requires “nexus” between the gratuity and a specific public act by the official
i)Indictment that does not link a gratuity to a matter under a Secretary’s review cannot sustain an illegal gratuity conviction (United States v. Sun-Diamond Growers of California)
4)Theories of bribery
a)Law v. Politics (Justice Frankfurter)
i)Things that are law belong to the judges
(1)Property, money, right to contract, due process, economic liberties
ii)Public policy belongs to politics
(1)Redistricting, voting procedures, campaign finance
(2)Totally fine to make deals, weigh interests
iii)Clear demarcation will make it more likely that judge’s orders will be followed
Sennott v. Rodman & Renshaw – Sennott gets defrauded by agent of financial firm over period of months. Court says firm not liable because they didn’t do anything to suggest agent was their agent, and because Sennott ignored clear signs that agent was not legit.
Baseline Issues/Themes
1)What is corruption?
a)Continuum of corruption (further down = greater concern with the donor):
i)Bribery ($$$ in pocket)
ii)Quid pro quo
iii)Too compliant (SAO)
iv)Improper/undue influence
v)Corrosive and distorting
vi)Too compliant (LS
vii)Inequality
b)Competing definitions:
i)Tight – “quid pro quo”
(1)Leading cases:
(a)Buckley, WRTL, Citizens United
(b)Justices Scalia, Thomas, Kennedy
(2)Pluralism theory
(a)Society is best served by allowing competing interests to speak for themselves and let the chips fall where they may
(b)We should encourage elected officials to be responsive to the desires of citizens
ii)Broad – “undue influence”
(1)Leading cases:
(a)McConnell v. FEC,
(b)Justices Ginsberg, Kagan
(2)Prevent donors from “calling the tune”
(3)Civic republican theory
(a)Promote individual participation in the political process
(i)Idealized version is the Greek city-state
(b)Regulate campaigns to the extent that individuals might be discouraged by the outsized influence of others
iii)Broader still – “corrosive effect of large sums of money that has nothing to do with public support”
(1)Leading cases:
(a)Austin v. Michigan Chamber of Commerce
(b)Justice Stephens
(2)Is this equality, even though court doesn’t say so?
(3)Descriptive theory
(a)Government should look like the general population
(b)Regulations should ensure that everyone gets a roughly equal say in elections (not limited to vote) to ensure no constituency has disproportionate power
c)Court rejects argument that bribery statutes are the limit of what government can do to limit campaign finance
(1)Hard to define what is a bribe, what should be called a crime
2)What is the scope of permissible government regulation?
a)Court draws distinction between Issue Advocacy and Election Advocacy
i)Not constitutionally mandated
(1)“Advocacy of the election or defeat of candidates for federal office is no less entitled to protection under the First Amendment than the discussion of political policy generally or advocacy of the pass or defeat of legislation.” (Buckley)
ii)defines the limits of speech which the government may regulate because of its potential to corrupt
(1)because speech in the political context is so vital, laws will be invalidated as overbroad if they regulate the discussion of issues along with advocacy for a candidate
b)Election advocacy (“express advocacy”)
i)Became a major issue with the Bipartisan Campaign Reform Act of 2002 (BCRA)
(1)Congress tries to expand its ability to regulate political ads by designating certain adds “electioneering communications”
(a)Any communication that was expressly advocating for a candidate or the “functional equivalent” of such an ad
ii)What is it?
(1)Limited to speech “advocating for the election or defeat of” a candidate
(2)Limited to speech that can be called “explicit advocacy” (Buckley)
(a)Requires magic words: “vote for,” “elect,” “support,” “cast your ballot for,” “Smith for congress,” “vote against,” “defeat,” “reject”
(b)Court explicitly rejects “relative to” language (Buckley)
(3)Possibly includes the “functional equivalent” of express advocacy
(a)Not clear if this was overruled by WRTL or Citizens United
(b)Functional equivalent = whether advertisement was susceptible of no reasonable interpretation other than as an advertisement supporting or opposing a candidate for office
(i)No reference may be made to the intention of the advertisers or the context of the advertisement
iii)The courts determine whether a communication is express advocacy based upon a substance in communication standard, rather than an intent-based standard (Wisconsin Right To Life)
(1)In Wisconsin Right To Life (WRTL) the Court overruled the BCRA provision banning “electioneering communications” 30 days before a primary and 60 days before a general election
(a)“electioneering communications” were any that “refers to a clearly identified candidate for federal office”
(b)Overruled McConnell v. FEC, which held that a blanket “blackout period” on electioneering communications 60 days before a general election or 30 days before a primary was permissible
(2)Functional equivalent = whether advertisement was susceptible of no reasonable interpretation other than as an advertisement supporting or opposing a candidate for office
(a)No reference may be made to the intention of the advertisers or the context of the advertisement
(3)But see Massachusetts Citizens For Life (MCFL)
(a)EA not require magic words so long as effect is to advocate for election or defeat of clearly identified candidate.
(i)Urging voters to vote for “pro-life candidate” and then providing names and pictures is EA. (MCFL)
(4)WRTL essentially demands a bright line rule in this context, no room for inquiry into intent and context of ad
c)Issue advocacy
i)What is it?
(1)Essentially any advocacy not captured by “express advocacy” definition
3)What other distinctions make sense in the electoral context?
a)Money v. volunteering
i)Based on the equal capacity of each person to volunteer
(1)Contrast with money, which is not available to us equally
(2)But do we really all have equal time to volunteer?
b)Type of speech v. identity of the speaker
i)Is the context of the speech (ie political speech) the most important distinction?
(1)Pluralist theory
ii)Or is the speaker (corporation, individual, PAC) the real focal point?
(1)Civic republican/descriptivist theory
4)What is money in the electoral context?
a)Why focus on money?
i)Lowenstein – we have decided this is a poor basis on which to make a decision, kind of a gut reaction
ii)Government decisions affect the distribution of resources, therefore those decisions must be made on ideas, absent pressure from money itself
iii)Money can’t determine the distribution of money
5)Can/should we regulate based on speaker’s identity?
6)Can/should we regulate based on the context of the speech?
7)Does “one person, one vote” principle have any place in campaign finance?
Spending Limits/Bans (“expenditures”)
1)Leading case:Buckley v. Valeo
a)Established distinction between expenditures and contributions that persists today
i)Before case, no major distinction made (at least not by congress)
2)Burden:
a)Adirect speech restriction, and subject to the highest level of protection
i)bars individuals from any significant use of the most effective modes of communication, substantial restraint
ii)laws that provide advantages to your opponent based on your expenditures are a direct infringement on your speech (Davis v. FEC, Arizona Free Enterprise)
b)Conceptions of expenditure regulation rejected by the Court:
i)Argument: Campaign expenditures are conduct, and can be regulated by the government within reasonable limits
(1)No, expenditures are speech, akin to burning draft cards in O’Brien
ii)Argument: The expenditure ceilings regulate content, and are subject to reasonable time, place and manner restrictions
(1)No, this is a blanket prohibition on speech, too broad to be condoned
3)Review: strict scrutiny
a)Narrowly tailored…
i)Limited to speech “advocating for the election or defeat of” a candidate
ii)Limited to speech that can be called “explicit advocacy”
(1)Requires magic words: “vote for,” “elect,” “support,” “cast your ballot for,” “Smith for congress,” “vote against,” “defeat,” “reject”
b)…to serve a compelling governmental interest
i)The government’s interest in preventing corruption or its appearance cannot justify expenditure limits
(1)Court recognizes no link between expenditures and corruption
(a)broadprophalactic is inappropriate in this case
(2)Expenditures made independently of a candidate cannot be corrupting (Buckley)
(a)this reasoning extends to Corporations and Unions (Citizens United)
(i)overrulesAustin v. Michigan Chamber of Commerce (holding corporate expenditures could be regulated in candidate elections because of the “distorting” influence of corporate money on the process
(b)Court makes uncited assumption that independent spending is not very effective, or at least less effective than spending by a candidate
(3)There is no threat of corruption from expenditures for or against a public ballot initiative (Bellotti)
(4)There is no threat of corruption from a candidate spending large sums of his own money on a political campaign (Davis v. FEC)
ii)The government’s interest in protecting shareholders cannot justify expenditure limits
(1)Corporate law gives shareholders adequate recourse
(2)Shareholders may always sell their interest
(3)Deference to decisions by corporate officers of what is in the company’s interest is broad
iii)The government’s interest in protecting candidates’ time to communicate with voters cannot justify expenditure limits (Randall v. Sorrell)
iv)The government’s interest in preventing circumvention of valid campaign finance restrictions cannot justify expenditure limits
(1)Exception: restrictions on expenditures coordinated with a candidate may be considered “in kind” and will be scrutinized as contribution limits (see Contribution Limits below)
(a)Party expenditures (Colorado Republican II)
(b)Third parties (Landell v. Vermont PIRG (2d Cir. 2002))
v)Exception: in certain circumstances, the government has an interest in burdening expenditures through mandatory disclosure (see Disclosure below)
vi)Exception: government can enforce expenditure limits when entered into voluntarily by candidates in exchange for public financing (see Public Financing below)
4)Scope of congress’s power to regulate expenditures (and all of campaign finance):
a)Speech “advocating for the election or defeat of” a candidate
b)Speech including “magic words” that indicate explicit advocacy of election or defeat of a candidate
i)“vote for,” “elect,” “support,” “cast your ballot for,” “Smith for congress,” “vote against,” “defeat,” “reject”
Contribution Limits
1)Leading cases:
a)Buckley v. Valeo – What burdens and scrutiny apply to contribution limits?
b)Colorado Republican II – when are expenditures more like contributions?
c)Randall v. Sorrell – what outer limits apply on deference? What tests are applied?
2)Burden:
a)speech by proxy, marginal restriction
b)a major aspect of the right to contribute is the right to associate with the candidate or organization, which is essentially uninhibited by contribution limits (Buckley)
i)The quantity of communication by the contributor does not increase perceptibly with the size of his contribution
3)Review: intermediate scrutiny
a)Law must be closely drawn…
i)In the normal case, the Court will not substitute its judgment for that of congress or state legislatures
(1)Those bodies enjoy a natural expertise in this area
ii)Contribution dollar level
(1)The Court has “no scalpel to probe” what is the most ideal level for contribution limits (Buckley)