Financing Political Speech

Financing Political Speech Prior to 1907, when Congress first prohibited corporate contributions, there were no federal restrictions on the size or source of campaign contributions or expenditures. Although Congress added more regulations over the next forty years, these restrictions were riddled with loopholes and went virtually unenforced.

The first meaningful restrictions on campaign finance came with passage of the Federal Election Campaign Act of 1971 (FECA), which contained effective disclosure requirements. The Watergate scandals following the 1972 presidential election provided the impetus for further government ethics reforms, including strict limits on all campaign contributions and expenditures, enacted in 1974.

In Buckley v. Valeo (1976), the Supreme Court considered the constitutionality of the sweeping reforms contained in the 1974 amendments to FECA. In a lengthy per curiam opinion, the Court first rejected the argument that campaign funding was primarily conduct rather than speech, and recognized that limitations on contributions and expenditures for political purposes necessarily reduced the amount of speech, especially in an age of mass communication. It further rejected the government's asserted interest in equalizing political influence as a basis for restrictions, stating that the concept that some could be silenced to enhance the relative power of others was “wholly foreign to the First Amendment” (p. 48). Nevertheless, the Court held that the speech interests at stake could in some cases be overcome by the compelling government interest in preventing the reality or appearance of “corruption,” defined as “political quid pro quos” (p. 26). The end result was that the Court upheld those provisions of the law requiring disclosure of campaign contributions and expenditures, limitations on contributions, and public subsidies for presidential candidates. But it invalidated limitations on total campaign expenditures, expenditures from candidates' own funds, and expenditures made independently by supporters, holding that such restrictions violated the First Amendment.

Importantly, the Court in Buckley held that in order to avoid vagueness problems that could chill political speech, the disclosure provisions of FECA applied to independent expenditures only if those expenditures included specific words of advocacy of election or defeat, such as “vote for,” “vote against,” “support,” or “defeat.” Similarly, political parties were able to receive and spend funds subject only to state regulations so long as the funds were not used to specifically support or oppose candidates for federal office. As many states permit unrestricted corporate and individual contributions, this allowed the national parties to receive substantial sums not subject to FECA's limitations and prohibitions. These funds became known as “soft money.” By the late 1990s, political parties and other groups were using soft money not only to assist candidates for state office, but also to support a wide array of get‐out‐the‐vote activities in federal elections. Additionally, soft money was used to pay for aggressive advertising campaigns praising or attacking the political views of particular candidates for federal office, but without explicitly advocating the election or defeat of the candidate.

In response to these perceived abuses of soft money, Congress enacted the Bipartisan Campaign Reform Act of 2002, placing new limits on a variety of political activity. This act prohibited national political parties, their officers, and federal officials from receiving or soliciting funds not subject to the limitations and prohibitions of federal law. It subjected state and local parties to new restrictions when spending money raised outside of the federal limits, in any election in which federal candidates were scheduled to appear on the ballot. Unions and corporations, including incorporated advocacy groups such as local Right to Life groups or the American Civil Liberties Union, were prohibited from running broadcast ads that mentioned the name of a federal candidate within sixty days of an election, unless paid for by small individual contributions through a “political action committee.”

The Bipartisan Campaign Reform Act was immediately challenged on First Amendment grounds by a broad coalition of individuals, parties, and advocacy groups. On 10 December 2003, the Supreme Court decided the case, captioned McConnell v. Federal Election Commission, by upholding all of the major provisions of the law. Though purporting to apply Buckley, in fact the narrow, 5 to 4 majority opinion was far more deferential to Congress than the Court had been previously. And while the Court continued to list “corruption” or “the appearance of corruption” as the only government interests compelling enough to override the speech protections of the First Amendment, it applied the term so broadly as to make it meaningless. In fact, the Court repeatedly referenced competing “constitutional values,” loosely defined as protecting “the integrity of the process,” and clearly more amenable to the equality interests specifically rejected by the Buckley Court. As such, the decision not only overturned accepted understandings of Buckley, but it opened the process to far more regulation than had previously been thought possible. Indeed, the majority opinion concluded by specifically recognizing that new forms of regulation would follow.

Whether such regulation will be successful in stopping the flow of money into politics or reducing the influence of special interests, however, is another question. Despite the passage of the Bipartisan Campaign Reform Act, a record $4 billion was spent on the 2004 elections, with much of it being spent by groups operating outside the regulatory scheme.

Bibliography

Annelise Anderson, ed., Political Money: Selected Writings on Campaign Finance Reform (2000).
Lillian R. BeVier , McConnell v. FEC: Not Senator Buckley's First Amendment, Election Law Journal 3 (2004); 124–146.
Richard Briffault , McConnell v. FEC and the Transformation of Campaign Finance Law, Election Law Journal 3 (2004); 147–176.
Bradley A. Smith , Unfree Speech: The Folly of Campaign Finance Reform (2001).

Marlene A. Nicholson

; revised by

Bradley A. Smith