Under the U.S. Supreme Court: Taking the cuffs off political money

WASHINGTON, Aug. 4 (UPI) -- The U.S. Supreme Court opened the floodgates to corporate political contributions for "independent electioneering" in 2010's Citizens United vs. FEC, practically drowning federal political campaigns in money.

Now the same five-justice majority that held sway in Citizens United may be poised to loosen restrictions on campaign finance even further.

The justices are set to hear an appeal next term brought by an Alabama man, Shaun McCutcheon, and the Republican National Committee. They are challenging what are called "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 that individuals may contribute to federal candidates and other political committees, some indexed for inflation.

Currently, 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, the Federal Election Commission explains.

Those "base" limits are not under challenge.

But FECA also sets an overall limit on the aggregate amount individuals may contribute in a two-year period. Last year, those limits restricted 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 plaintiffs 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.

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

The panel dismissed the RNC-McCutcheon suit, and the suit's contention that aggregate limits must be subjected to "strict" court scrutiny.

The panel opinion said: "Contribution limits are subject to lower scrutiny because they primarily implicate the First Amendment rights of association, not expression, and contributors remain able to vindicate their associational interest in other ways," rejecting the argument the contribution limits were unconstitutionally low and overbroad because "it is not the judicial role to parse legislative judgment about what limits to impose."

The opinion said the plaintiffs' "arguments for strict 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."

At its core, "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 opinion 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 case law]."

The panel also rejected the cascade effect of Citizens United -- though the Supreme Court may yet vindicate that view.

"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."

The RNC and McCutcheon appealed the panel's ruling directly to the U.S. Supreme Court, where it may get a friendly reception from the five-justice conservative majority led by Justice Anthony Kennedy.

Kennedy, of course, wrote the majority opinion in 2010's Citizens United vs. FEC, effectively ending the restrictions on political contributions from the general funds of corporations and unions for independent electioneering.

The U.S. appeals court in Washington then used Citizens United to rule in SpeechNow.org vs. FEC that limits on individual contributions to groups making independent expenditures are 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 OpenSecrets blog of the Center for Responsive Politics in Washington says the Supreme Court ruling "allowed non-profit corporations under the Tax Code 501c to spend unlimited amounts of money running ... political advertisements while not revealing their donors."

Spending by those secretive 501c non-profits "increased from zero percent of total spending by outside groups in 2006 to 42 percent in 2010."

Meanwhile, 72 percent of "political advertising spending by outside groups in 2010 came from sources that were prohibited from spending money in 2006."

The Citizens United ruling had an immediate effect on the 2012 election cycle. OpenSecrets reports outside spending on independent electioneering was slightly less than $1.3 billion, with $256 million of that spent by the secretive 501(c)(4) organizations that did not have to report donors.

In Citizens United, the narrow 5-4 majority overturned two Supreme Court precedents to decide corporations -- and unions -- had the same political rights as people.

The restrictions swept away by the Supreme Court ruling had allowed corporations to set up a political action committees, but PACs are subject to restrictions and disclosures. PAC money has to come from the pockets of corporate executives -- not from the corporate treasury -- and the executives could only donate $2,500 every election cycle.

In the Citizens United majority opinion, Kennedy said PAC rules are too restrictive, and not allowing corporations and unions to spend general fund money on politics is unconstitutional.

"When government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought," he said. "This is unlawful. The First Amendment confirms the freedom to think for ourselves."

Justice John Paul Stevens, who would retire later in 2010, was among the liberal dissenters.

"The court's ruling threatens to undermine the integrity of elected institutions across the nation," Stevens wrote. "The path it has taken to reach its outcome will, I fear, do damage to this institution."

Meanwhile, a proposed rule authored by 10 professors of corporate law would undo some of the effects of Citizens United, but though still alive the proposal has been languishing at the Securities and Exchange Commission for years.

In August 2011, the professors wrote the SEC asking for "rules to require public companies to disclose to shareholders the use of corporate resources for political activities." Corporate executives currently can take money from a corporation's general fund -- as specified by Citizens United -- and contribute it to groups for independent electioneering that often boils down to support of a particular candidate or party -- all in secret.

The new Supreme Court case brought by the RNC and McCutcheon is setting off alarm bells among liberals.

In an article, The American Prospect, a left-leaning monthly, warns: "Are we ready for the next Citizens United? Can our democracy, and Americans' faith in government, take another body blow from the Supreme Court?"

The article says the current aggregate limit, about $123,200, "is already more than twice what the average American family earns in a year." But if the Supreme Court outlaws that limit as unconstitutional, "a single donor could contribute more than $3.5 million to Democratic or Republican party candidates and committees, and elected officials could solicit hundreds of thousands of dollars from single large dollar donors with ... ideological or policy agendas -- effectively reviving the 'soft money' system Congress ended in 2002."

The right-leaning National Review online takes a more sanguine view. "A win for McCutcheon and the RNC would be a big blow for a sane campaign-finance system, and more important, for our fundamental freedoms."