Under the U.S. Supreme Court: Unleashing more political money

WASHINGTON, Sept. 22 (UPI) -- The new U.S. Supreme Court term starts on the first Monday of October, and the justices plunge into controversy early on as Republicans push for more elbow room on big campaign contributions.

The justices hear McCutcheon and the Republican National Committee vs. the Federal Election Commission Oct. 8.

As the argument approaches, both sides are using briefs to get their licks in and influence the high court before everyone meets in the courtroom.

The Republican challenge may be likely to fall on sympathetic ears at the Supreme Court where the five-justice majority on the nine-member court handed down the decision in 2010's Citizens United vs. FEC. The new case might become one of the progeny of Citizens United, which effectively ended restrictions on political contributions from the general funds of corporations and unions for independent electioneering.

The U.S. appeals court in Washington used Citizens United to rule in SpeechNow.org vs. FEC, declaring limits on individual contributions to groups making independent expenditures unconstitutional.

The two rulings established a new order in how outside groups can affect elections, one pretty much without boundaries, as long as the money flows toward independent electioneering. They also ushered in the era of super PACs, which may engage in unlimited independent political spending and unlike political action committees, can raise funds from individuals, corporations and unions without limits.

The new case was brought by an Alabama man, Shaun McCutcheon, and the RNC to challenge "aggregate limits" -- the restrictions on the total amount of contributions that can be given directly during a particular two-year election cycle.

The Federal Election Campaign Act sets up separate limits on the amounts individuals may contribute to federal candidates and other political committees, some indexed for inflation.

As of now, an individual may contribute as much as $2,500 per election to federal candidates, $30,800 per calendar year to a national party committee and $5,000 per calendar year to any non-party political committee. Those "base" limits are not under challenge.

But the FECA also sets an overall limit on the aggregate amount individuals may contribute in a two-year period, both to non-candidate linked committees and committees linked to a candidate. Those limits restrict what an individual may contribute to no more than $46,200 to all federal candidates, and no more than $70,800 to federal political action committees and political party committees.

The RNC and McCutcheon seek to break through those barriers on direct contributions.

The challenge is a genuine appeal to the U.S. Supreme Court, unlike most cases that end up in the high court, which are the product of requests for review. Appeals must be heard, and once the Supreme Court "notes jurisdiction" in a district court case, it is required to hear it.

The RNC and McCutcheon -- who wanted to make larger contributions than the aggregate limits allow -- asked a three-judge U.S. District Court panel in Washington for an injunction against the continued implementation of the aggregate limits, saying they were unconstitutional or weren't justified by a narrowly tailored government interest.

The panel dismissed the challenge, relying on 1976's Buckley vs. Valeo, in which the U.S. Supreme Court ruled limits on political contributions implicate fundamental First Amendment interests, but said such limits may be imposed as long as they are closely drawn to match a sufficiently important governmental interest, such as corruption.

The panel also rejected the cascade effect of Citizens United.

"Plaintiffs raise the troubling possibility that Citizens United undermined the entire contribution limits scheme," the panel opinion said, "but whether that case will ultimately spur a new evaluation of Buckley is a question for the Supreme Court, not us."

Much of the argument in the U.S. Supreme Court is likely to focus on Buckley.

In its own brief to the high court, the FEC lays out the history of contribution limits.

"For more than 70 years, federal law has generally limited the amounts that individuals may contribute to political candidates, political-party committees and non-party political committees for the purpose of influencing elections for federal office," the FEC said. "Both Congress and this [Supreme] Court have recognized that such limits are an important tool in combating corruption and the appearance of corruption in federal politics."

Pointing to Buckley, the FEC said, since 1974, "federal law has included both [a] base limits on the amount an individual may contribute to particular entities and [b] aggregate limits on the total amount of an individual's contributions. This [Supreme] Court has upheld both against constitutional challenges."

In a long exposition defending aggregate limits, the FEC highlighted the scandals of the Nixon administration.

"A 1974 congressional report identified multiple instances in which contributions to numerous separate entities had been made at the request of a particular candidate," the FEC said. "For example, the dairy industry had avoided then-existing reporting requirements by dividing a $2 million contribution to President [Richard] Nixon among hundreds of committees in different states, 'which could then hold the money for the president's re-election campaign.' ...

"Shortly thereafter, President Nixon 'circumvented and interfered with' the 'legitimate functions of the [U.S.] Agriculture Department' by reversing a decision unfavorable to the dairy industry," the FEC said, "and Attorney General John Mitchell [who was also President Nixon's campaign manager] halted a grand-jury investigation of the milk producers' association. ...

"On another occasion, a presidential aide promised an ambassadorship to a particular individual in return for 'a $100,000 contribution, which was to be split between 1970 Republican senatorial candidates designated by the White House and [President] Nixon's 1972 campaign.' That arrangement was not unique."

The FEC refers back to Buckley to defend modern aggregate limits.

"In Buckley vs. Valeo," the commission said, "this [Supreme] Court upheld Congress' authority to impose aggregate limits on individual political contributions in order to prevent circumvention of the base limits on contributions to particular candidates, parties, and political committees. The aggregate contribution limits in the current version of FECA are not distinguishable in any relevant respect from the aggregate contribution limit that Buckley upheld. The holding of Buckley thus controls this case, and this [Supreme] Court should adhere to it."

In Buckley, the justices "recognized that limits on contributions, in contrast to limits on expenditures for direct advocacy, impose only 'a marginal restriction upon the contributor's ability to engage in free communication.'" The RNC and McCutcheon's "arguments for strict [court] scrutiny of the aggregate contribution limits at issue here cannot be reconciled with Buckley. The burdens imposed by the current aggregate contribution limits are indistinguishable in both kind and degree from the aggregate limit the [Supreme] Court in Buckley upheld against a similar First Amendment challenge."

To gut Buckley would have wide implications, the FEC argued.

"Buckley's distinction between regulation of contribution limits and regulation of expenditure limits has provided the structure for constitutional review of campaign-finance laws for nearly 40 years," the FEC said. "This [Supreme] Court has expressly reaffirmed it, and Congress has relied upon it, as have numerous state legislatures. Its reasoning remains sound, and overruling it now would disserve important principles of stare decisis" -- settled court law.

Wait a minute, the RNC said in its own brief -- this case is about the First Amendment.

Courts use three levels of review when weighing a government action: rational basis review, the lowest level; intermediate, or "exacting" scrutiny; and the highest level, strict scrutiny.

"The government cannot justify the aggregate limit under either exacting or strict scrutiny," the RNC told the Supreme Court. "Strict scrutiny should apply ... though exacting scrutiny suffices for McCutcheon to prevail because the aggregate limit is not supported by either the anti-corruption interest or a derivative conduit-contribution concern, required by Buckley."

What about corruption?

Examining "this aggregate limit under a simple quid-pro-quo corruption analysis is also instructive," the RNC said. "A quid-pro-quo corruption interest may justify the base limit on a contribution to a candidate. But it does not justify the aggregate limit because a contribution at the full-base-level limit [currently $2,600/election] to all of candidates A [through] Y, cannot corrupt candidate Z.

"There is no monetary quid for an official quo [absent all manner of illegal activity]. Buckley's description of quid-pro-quo corruption involved a large sum to a particular candidate who then gives a quid for that quo, which is absent with respect to Z. At best Z could be grateful for contributions to other candidates, but gratitude is a forbidden theory of corruption.

"Thus,the aggregate limit is overbroad as to the anti-corruption interest," the RNC continued. "It is merely a prophylaxis-on-prophylaxis layer atop the limits on contributions to and by candidate committees that already eliminate a quid-pro-quo risk. ... Thus, it is not properly tailored [closely or narrowly] to the anti-corruption interest. As a result it becomes clear that this aggregate limit serves only the forbidden equalizing interest" -- trying to "equalize" contributions among competing candidates.

If your mind isn't numb by now, you might ask yourself, What happens if the RNC and McCutcheon win their challenge?

The OpenSecrets blog of Washington's Center for Responsive Politics, a non-profit, non-partisan group that has been hammering away at the hundreds of millions of dollars introduced into the political process since Citizens United, did an analysis.

"What would be the consequences if people could give the maximum contribution to as many candidates, parties and PACs as they wished?" the analysis said.

"The Center for Responsive Politics estimates that 1.2 million people gave contributions of $200 or more to presidential or congressional candidates during the 2012 election cycle. That's a tiny fraction -- one-half of 1 percent -- of the total adult population of the U.S. These donors gave a total of $2.8 billion to federal candidates, party committees and leadership PACs; that's about 64 percent of all of the funds raised by these organizations."

That means the the number of donors in 2012 giving more than $200 in the federal election process was roughly the population of metro Richmond, Va.

But "these figures don't include the 'outside money' that was such an important new feature in 2012 as a result of Citizens United and other court decisions," the blog said. "That's a world with no limits at all, and not surprisingly it was even more skewed toward a small number of very big donors: Just 216 people gave about 68 percent of all the money that super PACs received. The limits don't apply because these groups aren't giving money to candidates or parties; they're spending money themselves without coordinating with candidates."

Super PACs can raise unlimited money, but can only spend it independent of a campaign -- regardless of whether that spending benefits a campaign.

At the heart of the new campaign finance case "is the [very small] group of people who were giving at or near the overall limit being challenged by McCutcheon," the blog said. "We found 646 people in the 2012 election cycle who hit the maximum overall donation limit of $117,000. This tiny group was able to give a total of about $93.4 million directly to candidates and committees active in federal campaigns."

If the overall aggregate limits are struck down by the Supreme Court, "would the specific limits on contributions that are not being challenged in this case [$2,600 per election per candidate from an individual, etc.] be enough to hold down the potential for corrupting influence on elected officials? Critics of McCutcheon's position note that even with the aggregate limits in place, there's been a steady growth in the use of both leadership PACs and joint fundraising committees in recent years, allowing big donors to maximize their interaction with specific elected officials who covet their resources."

Leadership PACs, the blog explains, are created by members of Congress. They "give donors to party leaders and committee chairs another way to solidify those relationships [with politicians and parties]. Contributors can give up to $5,000 per year to these committees on top of the $2,600 per election they can give directly to a member's campaign. So these supporters can effectively double their financial ties to important members. Since 2002 the number of leadership PACs giving to other candidates has doubled from 226 in 2002 to 456 in 2012. Their contributions have risen from $25 million to more than $46 million during the same period.

"Joint fundraising efforts allow candidates and parties to band together to share the proceeds of big events that draw wealthy donors. Important members of Congress will often team with national and state party committees for dinners and other events that allow donors intimate access to these leaders while effectively writing one big check to the joint committee. The money is divided among the candidates and parties involved to comply with the specific limits on each of the participants."

The blog said it is "a win-win situation for donors, who can make a big impression on elected officials, and parties, which can move lots of resources to the races that are their priorities -- not to mention the candidates themselves."

The bottom line?

"All that's keeping the number of zeros on these checks from running off the page are the overall contribution limits," the blog said, adding, "Without those limits, tens of thousands could become hundreds of thousands and hundreds of thousands could turn into millions. Each individual could give at least $10,000 per year to party committees in every state, $32,400 per year to each national party committee [there are three of these for each party], and $5,000 per year to every PAC."

If the RNC and McCutcheon prevail -- and it would be foolish to be against them -- get ready for "a wave of newly created PACs focused on specific candidate's campaigns," the blog said, "which would allow donors to give $5,000 to any number of committees that would then give the money directly to the candidates."