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Supreme Court Upholds Political Money Law
Wed Dec 10 14:20:29 2003
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Supreme Court Upholds Political Money Law
http://story.news.yahoo.com/news?tmpl=story&u=/ap/20031210/ap_on_go_su_co/scotus_campaign_finance_7

By ANNE GEARAN, Associated Press Writer

WASHINGTON - A sharply divided Supreme Court upheld key features of the nation's new law intended to lessen the influence of money in politics, ruling Wednesday that the government may ban unlimited donations to political parties.

Those donations, called "soft money," had become a mainstay of modern political campaigns, used to rally voters to the polls and to pay for sharply worded television ads.



Congress may regulate campaign money to prevent the real or perceived corruption of political candidates, a 5-4 majority of the court ruled. That goal and most of the rules Congress drafted to meet it outweigh limitations on the free speech of candidates and others in politics, the majority said.

At the same time, the court acknowledged the 2002 law will not stop the flow of money in politics.

"We are under no illusion that (the law) will be the last congressional statement on the matter. Money, like water, will always find an outlet. What problems will arise, and how Congress will respond, are concerns for another day," Justices John Paul Stevens (news - web sites) and Sandra Day O'Connor (news - web sites) wrote for the majority.

Supporters of the new law said the donations from corporations, unions and wealthy individuals capitalized on a loophole in the existing, Watergate-era campaign money system.

The court also upheld restrictions on political ads in the weeks before an election. The television and radio ads often feature harsh attacks by one politician against another or by groups running commercials against candidates.

The so-called "soft money" is a catchall term for money that is not subject to existing federal caps on the amount individuals may give and which is outside the old law prohibiting corporations and labor unions from making direct campaign donations.

Federal election regulators had allowed soft money donations outside those restrictions so long as the money went to pay for get-out-the-vote activities and other party building programs run by the political parties.

Soft money allowed the three national Democratic Party committees to match their GOP rivals nearly dollar-for-dollar on get-out-the-vote and issue ad resources in the 2002 election.

The Democratic committees raised about $246 million in soft money in the last election cycle, compared with $250 million for the Republicans.

Supporters of the new law, called the Bipartisan Campaign Reform Act, said that in practice, soft money was funneled to influence specific races for the House, Senate or the White House, and that donors, parties and candidates all knew it.

In addition to Stevens and O'Connor, Justices David Souter (news - web sites), Ruth Bader Ginsburg (news - web sites) and Stephen Breyer (news - web sites) signed the main opinion. Chief Justice William H. Rehnquist and Justices Antonin Scalia (news - web sites), Anthony Kennedy (news - web sites) and Clarence Thomas (news - web sites) dissented on most issues. Swing voter Kennedy struck a compromise on one portion of the law. He said he would vote to uphold a soft money ban only as it applies to federal candidates and officeholders.

The majority's ruling bars candidates for federal office, including incumbent members of Congress or an incumbent president, from raising soft money.

The majority also barred the national political parties from raising this kind of money, and said their affiliates in the individual states may not serve as conduits for soft money.

Without soft money, politicians and political parties may only take in donations that are already allowed in limited amounts, such as a private individual's small re-election donation to his or her local member of Congress.

That means no more huge checks from wealthy donors, and no contributions from the treasuries of corporations or labor unions.



The Supreme Court's 300-page ruling on the 2002 campaign finance overhaul settles legal and constitutional challenges from both the political right and the left. Although the reform effort was passed by Congress and signed into law by President Bush (news - web sites), many politicians and others in the business of politics were leery of it.

The law is often known as "McCain-Feingold" — named for its chief Senate sponsors, Sens. John McCain, R-Ariz., and Russ Feingold, D-Wis. McCain built his maverick 2000 presidential campaign largely around the assertion that the old system of political money laws was full of holes.

The new rules have been in force during the early stages of preparation for the 2004 elections for president and Congress. The high court ruling means those rules remain largely untouched as the political seasons heats up. The first delegate-selection contests are just weeks away, in January.

A lower court panel of federal judges had issued its own, fractured ruling on the new law earlier this year, but the Supreme Court got the last word.

The justices cut short their summer vacation to hear an extraordinary four hours of oral arguments on the issue in early September. The court's regular term began a month later.

The case marked the court's most detailed look in a generation at the complicated relationships among those who give and receive campaign cash. The case also presented a basic question about the wisdom of the government policing political give and take.

The court has given government an extensive role in the area on grounds that there is a fundamental national interest in rooting out corruption or even the appearance of it. That concern justifies limitations on the freedom of speech, the court has said.

The case is McConnell v. FEC, 02-1674.

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On the Net:

Federal Elections Commission: http://www.fec.gov

Campaign Finance Institute guide to the BCRA: http://www.cfinst.org/eguide/
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Searched the web for McConnell v. FEC, 02-1674. Results 1 - 10 of about 293

Supreme Court Upholds Key Parts of Campaign-Finance Law Wednesday, December 10, 2003 12:14 PM ET Dow Jones Newswires

WASHINGTON -- The Supreme Court upheld the key components of sweeping campaign-finance reforms -- a ban on soft-money political donations and certain election ads -- with five votes.

Justices Sandra Day O'Connor and John Paul Stevens jointly penned the opinion of the court that affirmed the legality of those two main components of the law, passed last year by Congress after years of debate.

The ruling came with an array of opinions, but it appears four justices dissented on at least some of the components of the law's ban on soft-money and election ads that air at the end of the campaign season.

The high court's majority opinion first turned to the soft-money provisions in the first title of the Bipartisan Campaign Reform Act, sponsored by Sens. John McCain (R., Ariz.) and Russ Feingold (D., Wis.).

Soft money is the term for unlimited donations that circumvent 25-year-old restrictions on direct contributions to candidates for federal political offices. Opponents of the new law challenged the new restrictions on free-speech grounds.

"There is substantial evidence to support Congress' determination that large soft-money contributions to national political parties give rise to corruption and the appearance of corruption," the opinion said. "We reject the plaintiffs' First Amendment challenge."

In addition to upholding a ban on soft money in national and federal election activities, the court's majority also upheld restrictions on state and local political activities. The campaign-finance law also covered local politics out of fear special interest groups would look there for loopholes.

"Preventing corrupting activity from shifting wholesale to state committees and thereby eviscerating [the law] clearly qualifies as an important government interest," the opinion said.

One of the most-controversial components of the campaign-finance reforms was a provision that restricts so-called issue ads paid for by corporations and labor unions in the final days of the election cycle. Under the law, special interests face restrictions on both endorsements and issue ads as much as two months before an election.

Prior campaign-finance laws had drawn a line between endorsement ads, which were restricted, and issue ads, which were allowed if certain guidelines were followed.

The ruling said the First Amendment "doesn't erect a rigid barrier between express advocacy and so-called issue advocacy." The court added challengers of that portion of the law haven't "carried their heavy burden" of proving the provision is "overbroad."

Campaign-finance experts who were closely watching the case said they didn't expect so much of the law would survive a court review, given the skeptical tone of key justices during September's oral arguments.

"What we didn't expect is that so much of this law would be upheld," said Richard L. Hasen, an election-law specialist and a professor at Loyola Law School in Los Angeles. "It's quite a surprise."

Mr. Hasen, who was in the process of reading about 300 pages of majority and dissenting opinions, also said he was surprised the court would uphold the soft- money ban for state and local organizations.

But the majority, in a summary of its opinion, made it clear it was backing ongoing congressional efforts to limit the influence of money in politics.

"We abide by that conviction in considering Congress' most recent effort to confine the ill effects of aggregated wealth on our political system," the opinion said. "In the main we uphold the Bipartisan Campaign Reform Act's two principal, complementary features: the control of soft-money and the regulation of electioneering communications."

The majority opinion also made it clear it expects the campaign-finance puzzle hasn't been solved.

"We are under no illusion that the Bipartisan Campaign Reform Act will be the last congressional statement on the matter," the justices said. "Money, like water, will always find an outlet."

Four justices declined to back components of the soft-money and election- communications provisions of the campaign-finance law, arguing the Supreme Court majority was trampling on the First Amendment in upholding those components of the law.

"This is a sad day for freedom of speech," Justice Antonin Scalia said. He warned the Supreme Court's majority has set a precedent in election law that will bring about even more limits on the political process.

"The first instinct of power is the retention of power, and, under a Constitution that requires periodic elections, that is best achieved by the suppression of election-time speech," said Justice Scalia. He added political finance limits "can be expected to grow more voluminous, more detailed and more complex in years to come."

Justice Anthony Kennedy wrote the main dissenting opinion, which was supported almost entirely by two other justices. Besides Justice Scalia's dissent, Justice Clarence Thomas wrote his own separate dissent and signed onto part of the Kennedy opinion.

Justice Kennedy warned the Supreme Court, in upholding key parts of the reform laws, "replaces discrete and respected First Amendment principles with new, amorphous and unsound rules -- rules which dismantle basic protections for speech."

Reaction from opponents of the law has been muted, even as supporters of money in politics restrictions come to grips with the notion they have received a resounding win from the Supreme Court.

"This is a huge victory for democracy and the American people," said Mary Boyle, spokeswoman for Common Cause. "It severs the toxic link between donors who write six-figure checks and people at the highest levels in government."

She added her group, after a preliminary read of the decision, hasn't found an area where the court's ruling represented a defeat for the law's proponents. If the ruling contains an adverse decision for proponents, "it's pretty small," said Ms. Boyle.

"It's historic in that the Supreme Court has upheld the most significant campaign-finance reform in a decade," she added.

Politically speaking, Democrats believe the law won't hurt them in the upcoming 2004 federal election cycle.

"In the end I think this is healthier for the Democratic party," said Rep. Bob Matsui (D., Calif.), the Democratic Congressional Campaign Committee chairman.

While conventional wisdom says Republicans have a hard-money fundraising advantage, he said, "It is just a question of recalibrating where we get our money from."

Rep. Matsui added that in recent years, Democrats have tried to compete with Republicans in the pursuit of large money donors. The new law will force Democrats to instead seek out smaller donors.

The main case is McConnell v. Federal Election Commission, 02-1674. A dozen challenges were accepted by the Supreme Court for review of the campaign-finance law.

-By Mark H. Anderson; Dow Jones Newswires; 202-862-9254; mark.anderson@ dowjones.com

( Rob Wells and John Godfrey contributed to this report.)

Dow Jones Newswires
12-10-03 1214ET

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