WASHINGTON, May 2 (UPI) -- A divided three-judge panel in Washington Friday struck down the federal ban on "soft" money as unconstitutional, leaving national political fundraising in a state of confusion until the Supreme Court ultimately hands down a decision.
Both sides in the dispute told the Supreme Court earlier this year they would appeal the panel's ruling directly to the justices, as required by federal law.
"Soft" money is largely unregulated and can only be used for "party building" activities such as get-out-the-vote drives, registration drives or "issue-oriented" advertising. Corporations and unions have given the parties millions of dollars in soft money in the past.
"Hard" money is strictly regulated, can only be given in relatively small amounts and, unlike soft money, can be used directly in a campaign.
However, both national parties had become adept at blurring the legal lines between hard and soft money, leading Congress to enact the ban last year over the quiet opposition of President George W. Bush, who signed the legislation into law without fanfare.
A number of challenges -- contending that the ban was an unconstitutional restriction on political speech -- were filed in federal court as the law was implemented last November.
The Supreme Court could call a special session to hear the case this summer, but more likely would make it the first case on the docket next October.
Even with the case "expedited" -- put on a fast track -- it is unlikely that the Supreme Court could reach a final decision until well into the presidential campaign season.
Altogether, 11 challenges to the Bipartisan Campaign Reform Act, better known as the McCain-Feingold law, were combined into one case.
Friday's decision was so complicated that the three-judge court issued a "per curiam" -- unsigned -- memorandum with a "Description and Chart of the Court's Rulings."
Section 323(a) of the BCRA bans national parties from "soliciting, receiving, directing, transferring and spending non-federal funds (i.e. soft money)."
In one of Friday's opinions, U.S. Judge Karen LeCraft Henderson, a Bush appointee, struck down the provision in its entirety. Judge Richard Leon, another Bush appointee, joined Henderson in general, but upheld the constitutionality of the ban on state and local parties using soft money "for communications that promote, oppose, attack or support a specific federal candidate."
Judge Colleen Kollar-Kotelly, a Clinton appointee, upheld the ban in its entirety.
"Accordingly, Judge Leon's decision regarding Section 323(a) controls," the memorandum said. That means the general ban on soft money is struck down, but the specific ban on state and local groups using soft money to influence federal elections is left intact.
However, Henderson and Leon also joined in striking down Section 203(d) of the law, which "prohibits national, state and local parties from soliciting funds for, or making donations to (non-profit) organizations" that make expenditures or contribute in federal elections.
Henderson and Leon also struck down Section 323(e), which prohibited federal officeholders and candidates from raising or spending soft money in local, state or federal elections.
Leon and Kollar-Kotelly joined in upholding Section 323(f), which prohibits state officeholders and candidates from using soft money for "communications" -- political ads -- that clearly refer to a federal candidate for office.
In another key provision, Leon and Kollar-Kotelly upheld Section 202, which forces the parties to count some coordinated spending by non-party entities as political contributions.
In other words, if an outside organization spends money to promote a party's candidate, and does so with the party's approval and input, then the spending must be included as a contribution to the party, and be part of any spending caps.
Another provision of the law "prohibits labor unions, corporations and national banks from using money from their general treasury to fund 'electioneering communications'" -- political ads again.
Leon and Kollar-Kotelly largely upheld the provision.
All three judges struck down as unconstitutional a provision that forced the parties to choose between making coordinated expenditures or unlimited independent expenditures on behalf of federal candidates.
Provisions requiring that the sponsors of political ads be revealed were upheld by Kollar-Kotelly and Leon.
All three judges also ruled that the challengers "lack standing" -- could not show how they were hurt -- by provisions that raise contribution limits for hard money.