McCain-Feingold backers see hope in high court ruling

Tuesday, June 17, 2003

WASHINGTON — In a dress rehearsal for the upcoming battle over the McCain-Feingold campaign-finance law, the Supreme Court yesterday upheld a longstanding ban on corporate contributions to political candidates — even when applied to nonprofit corporations.

In Federal Election Commission v. Beaumont, the Court by a 7-2 vote said the First Amendment did not prevent government from enforcing the ban in spite of the fact that political speech lies at the heart of why these nonprofit corporations exist.

The majority opinion, written by Justice David Souter, was quickly viewed as a significant boost for supporters of the Bipartisan Campaign Reform Act — the official name for the McCain-Feingold law. The high court is set to hear arguments in that case, McConnell v. FEC, on Sept. 8. Though the law at issue in yesterday’s ruling is not affected by McCain-Feingold, the language and tone of Souter’s opinion was decidedly favorable toward regulation of campaign money.

“The decision reaffirms in clear and unambiguous terms the power of Congress
to prevent corporations, including nonprofit corporations, from using their
treasuries for contributions to candidates and officeholders,” said Deborah
Goldberg of the Brennan Center for Justice. She added that the decision “bodes
well” for the soft-money ban contained in McCain-Feingold.

“This is the third time since 2000 that the Supreme Court has rejected challenges to the constitutionality of campaign-finance laws,” said Fred Wertheimer, president of Democracy 21 and a key supporter of McCain-Feingold. “This decision only serves to reinforce our view that the new campaign-finance law is constitutional and necessary to protect the integrity of our democracy.”

In Beaumont, North Carolina Right to Life Inc. challenged the ban on
corporate contributions, asserting that it infringed on the speech rights of
advocacy groups. The 4th U.S. Circuit Court of Appeals agreed, distinguishing the anti-abortion group from for-profit corporations.

“Any attack on the federal prohibition,” Justice Souter wrote, “goes against
the current of a century of congressional efforts to curb corporations’ potentially deleterious influences on federal elections.” Noting that the ban on corporate contributions dates back to the Tillman Act of 1907, Souter said subsequent rulings have done nothing but uphold the prohibition. Souter rejected the view that nonprofit corporations should be treated differently because of their strong advocacy role.

“Concern about the corrupting potential underlying the corporate ban may
indeed be implicated by advocacy corporations,” Souter added. He cited by
name AARP, the National Rifle Association and the Sierra Club as
examples of nonprofit advocacy corporations that have become “some of the
nation’s most politically powerful organizations.”

Souter also said that nonprofit corporations could be used as a conduit for money given by individuals who have reached the limit for individual contributions to candidates. The ruling only affects direct contributions from corporate treasuries, but allows them — as with for-profit corporations — to create political action committees — or PACs — through which contributions can be made under strict limits and disclosure requirements.

Significantly, Souter rejected the notion that “strict scrutiny” should be
used to review the contribution ban. Invoking the 1976 decision Buckley v. Valeo, Souter said the Court had long ago determined that contributions to candidates had less First Amendment significance than expenditures by candidates, because in giving money to a candidate, a donor is exercising only indirect speech — whereas a candidate spending money to convey a message is speaking more directly. As a result, restrictions on contributions are evaluated under a less-demanding First Amendment standard.

Justice Clarence Thomas, joined by Antonin Scalia, dissented, asserting that
strict scrutiny should apply and that under that standard, the ban should
be struck down. Justice Anthony Kennedy wrote a concurrence agreeing that the Court’s precedents demanded that the ban be upheld. But Kennedy added that if the case had squarely presented the distinction between contributions and expenditures, he would have joined Thomas and Scalia in dissent.

That means that in the McCain-Feingold case next fall, three justices might be inclined to overturn the basic holding of Buckley in a way that would invalidate many features of the law on First Amendment grounds.

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