High court appears ready to back ban on corporate contributions

Wednesday, March 26, 2003

WASHINGTON — The massive litigation over the McCain-Feingold campaign-finance law has yet to arrive on the Supreme Court’s doorstep.

But yesterday, the Court considered a case that was seen as something of a dress rehearsal for the debate to come. The case heard yesterday involves a First Amendment challenge to the longstanding ban on campaign contributions by nonprofit corporations.

The case, Federal Election Commission v. Beaumont, was brought by North Carolina Right to Life Inc. Contributions by corporations of all types have been prohibited by federal law for 96 years, and the North Carolina group challenged the ban as it applies to nonprofit advocacy groups that are incorporated.

Most justices yesterday seemed unmoved by the First Amendment arguments against the ban, and appeared ready to endorse its constitutionality — which could bode well for those who favor the extensive regulation of campaign money embodied in McCain-Feingold. The justices also showed no signs of new restlessness about the Court’s campaign-finance jurisprudence, embodied in the 1976 ruling Buckley v. Valeo. That ruling will be the framework for the Court’s review of McConnell v. Federal Election Commission, the challenge to the new law that is still pending before a special three-judge panel in the District of Columbia.

At one point during the oral argument, Justice Sandra Day O’Connor asked whether the prohibition on corporate contributions had been altered by the Bipartisan Campaign Reform Act — the official name for the McCain-Feingold legislation. Deputy Solicitor General Paul Clement reassured O’Connor that the ban, first codified in the Tillman Act of 1907, was “miraculously unaffected” by McCain-Feingold.

Clement asked the Court to preserve the “fundamental distinction” made in Buckley between contributions and expenditures. Under Buckley, which allowed regulation of contributions but not of expenditures, the ban on contributions could be upheld more easily under the First Amendment.

Clement said the Court had repeatedly approved Congress’ “broad prophylactic approach” to restricting corporate involvement in campaigns. Clement received no objections and was hit with remarkably few questions, sitting down with 11 of his allotted 30 minutes unused.

The lawyer for the North Carolina group challenging the restrictions, James Bopp Jr. of Bopp, Coleson & Bolstrum in Terre Haute, Ind., ran into more skeptical questioning.

Bopp asserted that the total ban has the effect of allowing “no speech, no association,” in violation of the First Amendment. Organizations like his client “play a vital role in our democratic republic,” Bopp asserted. Unlike for-profit corporations, he said, they “pose no threat of corruption, so long as they are not a conduit” for illegal contributions.

Justice Antonin Scalia countered, “If I bribe someone out of a political motive, if I am an environmentalist, say, that’s not corruption?” Scalia added, “You can have an immense corporation to advance political ideas. AARP — that’s an immense organization.” The justice was referring to the group formerly known as the American Association of Retired Persons. Bopp replied that “quid pro quo” corruption could be prosecuted in other ways.

Justice Ruth Bader Ginsburg also suggested that a nonprofit corporation, if exempted from the ban, “could serve as a conduit for a very wealthy person” to make otherwise illegal contributions. She added that nonprofit corporations, like for-profit ones, can create segregated funds such as political action committees to get their messages out.

The 4th U.S. Circuit Court of Appeals, in a January 2002 ruling written by then-Chief Judge J. Harvie Wilkinson III, sided with the North Carolina group and others like it.

“These organizations lie at the expressive heart of our political life,” Wilkinson wrote. “These endeavors are what attract contributions and adherents. It is through projects such as these that groups become important symbols in political life and valuable participants in the daily ebb and flow of political discourse.”

Yesterday’s argument came as a three-judge panel — Judge Karen LeCraft Henderson of the D.C. Circuit and Judges Colleen Kollar-Kotelly and Richard Leon of the U.S. District Court for the District of Columbia — continues to deliberate over the McCain-Feingold law. It heard arguments in the case in December, and indicated it would rule by early or mid-February to ensure that its decision could be reviewed by the high court in its current term. Typically, the Supreme Court ends its term in late June.

With March nearing an end and no ruling in sight, lawyers in the McCain-Feingold case are fearful that the Supreme Court will have to put off its review until the fall, when its composition may have changed, and the 2004 election looms.

Informally, however, the Supreme Court has indicated it could hold special oral arguments in the case in May or later, and issue its ruling during the summer.

The Federal Election Commission v. Beaumont case number is 02-403.

Tony Mauro covers the Supreme Court for American Lawyer Media and is a legal correspondent for the First Amendment Center.

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