State of the State: Ruling Clears the Way for Wealthy to Spend More on Campaigns

May 1, 2014

Jamey Dunn
Credit 2014 / WUIS/Illinois Issues
The U.S. Supreme Court last month issued a decision that opens the door for wealthy donors to give more to candidates, parties and political action committees (PACs). The ruling could have broad implications for the future regulation of campaign spending on the state and federal level. 

Shaun McCutcheon, a Republican businessman from Alabama, sued the Federal Elections Commission (FEC) after his prolific contributions to political campaigns bumped up against the limit on overall giving. Under federal law, individuals can give up to $5,200 over a two-year election cycle (or $2,600 annually) to each candidate. However, a law from the 1970s also capped how much in total a donor can contribute during an election cycle. For example, before the ruling, McCutcheon would have been limited to giving a total of $48,600 to federal candidates in the current campaign cycle. The law also capped the amount of total contributions a single donor could give to political parties and political action committees at $74,600. McCutcheon, who donates the historically symbolic amount of $1,776 to candidates, says he wanted to give to more candidates but could not under the law. 

“I understand the courts have decided that donating a maximum amount to each candidate or committee won’t cause political corruption,” McCutcheon wrote of his case in an opinion piece for Politico. “But what makes no sense to me, and what my case is solely about, are the aggregate limits. Somehow, I can give the individual limit, now $2,600, to 17 candidates without corrupting the system. But as soon as I give that same amount to an 18th candidate, our democracy is suddenly at risk. Only politicians in Washington could come up with something so absurd. Think about it: If a $2,600 contribution won’t corrupt 17 candidates, then the same size contribution wouldn’t corrupt 18 … or 28 … or 38.” According to the nonpartisan Center for Responsive Politics, which tracks campaign money, McCutcheon made $400,584 in political contributions between 2008 and 2012. 

The majority of the court agreed with McCutcheon’s line of thinking. “There is no right more basic in our democracy than the right to participate in electing our political leaders,” Chief Justice John Roberts wrote in the majority opinion. “We have made clear that Congress may not regulate contributions simply to reduce the amount of money in politics, or to restrict the political participation of some in order to enhance the relative influence of others.” Roberts likened an individual’s right to contribute to as many candidates as he or she chooses to the freedom the First Amendment grants to the press. “An aggregate limit on how many candidates and committees an individual may support through contributions is not a modest restraint at all. The government may no more restrict how many candidates or causes a donor may support than it may tell a newspaper how many candidates it may endorse.”

Now that the law has been set aside, a single donor can give $5,600 to every U.S. House and U.S. Senate candidate each election cycle, $32,400 to the three federal party committees and $10,000 to each party’s state level committee. Dropping the aggregate totals opens up the potential for individual donors to give an additional $2.4 million to candidates during an election cycle, such as the current one in which all of the U.S. House and 33 Senate seats are up for grabs, and almost $2 million to party committees. According to the FEC, individual donors were the largest contributors to party committees in the 2012 election cycle. 

The dissenting justices on the court argued that the ruling breaks away from previous legal thinking on the issue and will create loopholes for the wealthy to funnel millions to individual candidates through party committees and PACs. “[The majority’s] conclusion rests upon its own, not a record-based, view of the facts. Its legal analysis is faulty: It misconstrues the nature of the competing constitutional interests at stake. It understates the importance of protecting the political integrity of our governmental institutions. It creates a loophole that will allow a single individual to contribute millions of dollars to a political party or to a candidate’s campaign,” Justice Stephen Breyer wrote in the dissenting opinion. Justice Ruth Bader Ginsburg, Justice Elena Kagan and Justice Sonia Sotomayor joined in the dissent. Breyer argues that as the wealthy exercise their speech through tons of cash, the average American would not be able to compete, and his or her speech will be suppressed. “Where enough money calls the tune, the general public will not be heard.”

The McCutcheon decision comes after the 2010 Citizens United ruling, which allows unlimited spending from corporations, labor unions and other organizations, as long as they are not coordinating with a candidate’s campaign. While the McCutcheon ruling has not caused quite as much of a stir as the Citizens United decision, observers say it could indicate the court’s willingness to further erode campaign finance laws in the country. 

The key point is that the ruling focuses on contributions and not spending. Under Citizens United, the court deemed that political spending is speech protected by the First Amendment of the U.S. Constitution. The court found that such speech should not be limited. But the court has upheld that the interest of preventing corruption or the appearance of corruption is compelling enough to put limits on direct contributions to candidates. With its most recent ruling, this court has delved into the issue of contributions, and the majority seems to have set the bar higher for what constitutes a compelling justification for limiting them. Roberts wrote that “government regulation may not target the general gratitude a candidate may feel toward those who support him or his allies, or the political access such support may afford.” Instead of viewing corruption as a vaguely corrosive force that has the potential to wear down citizens’ faith in the system, Roberts describes it as specific incidents of pay-to-play, or at least the appearance of such. Roberts defines this in his opinion as a “direct exchange of an official act for money.”

It was clear from Roberts’ opinion that the public’s perception of what constitutes corruption does not warrant what he and the majority of the court see as an infringement on First Amendment rights. “Money in politics may at times seem repugnant to some, but so too does much of what the First Amendment vigorously protects,” Roberts wrote. “If the First Amendment protects flag burning, funeral protests and Nazi parades — despite the profound offense such spectacles cause — it surely protects political campaign speech despite popular opposition.” Justice Clarence Thomas, Samuel Alito, Anthony Kennedy and Antonin Scalia joined in the majority. In addition to the aggregate limits, Thomas said, he would also toss out the cap on donations to individual candidates, but the court did not take up those limits. 

The dissenting justices in the case took issue with the majority’s views on corruption, arguing that public perception is key to the country’s political system. “The ‘appearance of corruption’ can make matters worse. It can lead the public to believe that its efforts to communicate with its representatives or to help sway public opinion have little purpose. And a cynical public can lose interest in political participation altogether,” Breyer wrote.

The ruling will not have a direct effect on state-level campaign finance in Illinois because there are no aggregate limits placed on donors for state races. But Illinois advocates on both sides of the issue think it could have an indirect influence on the state level. 

David Morrison, policy analyst for the Illinois Campaign for Political Reform, says that the ruling “leaves reformers in the lurch.” He argues that because the court has broken from past rulings on campaign finance and indicated that it may be willing to roll back more regulation, a push for a constitutional amendment addressing campaign finance is needed. “I don’t know that the court has gone as far as we’re going to go yet,” he says. Morrison concedes that the prospect of getting a constitutional amendment approved in the current political climate is highly unlikely. Still, he says that given the unpopularity of rulings, such as Citizens United, it is time to start building public support behind a push to amend. “In the long term, I think we need to work toward that.” Polling after the Citizens United decision was issued indicated that 80 percent of Americans opposed the court’s ruling. 

Some Illinois lawmakers have already begun that push. As of press time, the Senate had approved a resolution urging a federal constitutional convention. Supporters of the resolution want to see the U.S. Constitution amended to overrule the Citizens United decision. “When it costs so much to run for some offices that only the independently wealthy need apply, it’s time to change the game. When the Supreme Court of the United States rules that money is a protected speech and that ordinary people cannot pass common sense laws because they might dilute the influence of the super rich, it’s time to change the game,” says Chicago Democratic Sen. Jacqueline Collins, who is a sponsor of Senate Joint Resolution 42. “When campaign finance rules serve only to frustrate those with little money or influence, while those with resources and connections find ways to circumvent them, it’s time to change the game. This amendment is Illinois’ contribution to the nationwide movement to change the way the game is played.” California and Vermont are considering similar moves. If the legislatures of two- thirds of the states approve a call for a convention on the issue, one could be convened under the Fifth Amendment. Morrison says that the language of the McCutcheon opinions could be used to bolster challenges to Illinois campaign finance laws. “I suppose it’s possible that a plaintiff might find something in this ruling that would lead them to think they have a better case here.”

Jacob Huebert, a lawyer for the Liberty Justice Center, agrees with Morrison’s point. However, that is likely the only thing that the two agree on when it comes to campaign finance law. The center is challenging Illinois campaign finance limits, and Huebert equates a constitutional amendment to overturn Citizens United to a repeal of the First Amendment. “I think it is encouraging for our side in this case and does not bode well for the constitutionality of Illinois’ contribution limit scheme,” he said of the McCutcheon ruling. Huebert says that the current court has sent the message that it prioritizes the right to free speech and requires that those seeking to limit speech be able to make a clear case for how those restrictions would directly combat corruption. 

The Liberty Justice Center is challenging the state’s individual donor limits on the premise that they are unfair because political parties are not limited in how much they can give to candidates. “The effect of those limits is not to limit corruption but to increase the party leaders’ power and protect incumbents from challengers,” Huebert wrote in an analysis about the U.S. Supreme Court’s ruling. Huebert says that lawmakers should have to draft a new campaign finance law that treats everyone equally and is “narrowly tailored to limit corruption.”

But ultimately, the Liberty Justice Center backs the elimination of limits on individual political donations. Huebert says that the group would favor an overturning of Buckley v. Valeo, which upheld the individual donation limits and set forth the idea that speech could be restricted if the limit served to protect against corruption. The court opted not to take up that issue in this decision. But if it does come before this court, those who would make the case that such limits protect our political system from corruption may have an uphill battle before them.

Illinois Issues, May 2014