New Challenges to Campaign Finance Regulation

Opinion by David Friedman
March 6, 2014, 1:30 a.m.

On Oct. 8, 2013, the Supreme Court heard oral arguments in the case of McCutcheon v. Federal Election Commission. Though perhaps not as consequential as some of the other cases before the Court this term, McCutcheon concerns the always-controversial issue of campaign finance. In particular, it involves a challenge to the Bipartisan Campaign Reform Act’s biennial caps aggregate contributions.

These caps are just one small part of the complex web of restrictions on campaign contributions that Congress has erected in order to regulate money in politics. They do exemplify some of the myriad regulations of campaign finance, so here an explanation is desirable. Under this particular scheme, there are two categories of restrictions: “base” contribution limits and “aggregate” contribution limits.

Base contribution limits restrict the amount of money that individuals can contribute to any particular candidate, state or local political party committee, national political party committee or other political committee during a two-year election cycle. Aggregate contribution limits, or caps, restrict the total amount of money that individuals can contribute to these categories of political entities combined during the course of this same cycle.

For instance, during the time period relevant to McCutcheon, an individual could contribute $5,200 to any single candidate of their choice ($2,600 for the primary and $2,600 for the general election) but only $48,600 to all candidates combined. Similarly, individuals could donate $32,400 to any single national party committee but only $74,600 to all national party committees combined.

Some legal context is needed to understand the challenge to these aggregate caps. Since the 1976 case Buckley v. Valeo, the Court has drawn a constitutional distinction between campaign contributions and campaign expenditures. In short, the government is generally allowed to place limits on the amount of money that individuals and entities can contribute to individual candidates and political committees, but it cannot place limits on the amount of money that individuals and entities can independently spend on political activities, such as (in recent years) donations to SuperPACs.

In the words of the Court, regulation of campaign spending restricts “core First Amendment rights of political expression,” while campaign contributions “lie closer to the edges than to the core of political expression.” The basic intuition behind this contrast is that campaign spending represents direct political speech, while the expressive value of campaign contributions is tempered by the fact that these contributions are indirect forms of expression—the contributor must rely on the candidate to ultimately turn the contribution into speech.

Still, even the regulation of campaign contributions is subject to some scrutiny. All such regulations must advance a “sufficiently important interest” and “employ means drawn to avoid unnecessary abridgment of associational freedoms.” The petitioner in this case, Shaun McCutcheon, is arguing that the biennial aggregate caps do not meet this standard. McCutcheon’s basic argument is that these caps effectively serve no governmental interest, and certainly not a “sufficiently important” one.

In McCutcheon’s view, while allowing a donor to contribute an enormous sum of money to a particular candidate may unacceptably risk corrupting the political process, there is no similar danger involved in donating $2,600 to twenty different candidates, or even one hundred different candidates. He argues that the small amount of each contribution limits the risk of corrupting any particular candidate, and furthermore that there is no reason why candidates should take heed of the aggregate amount of contributions made by a contributor. In Politico, he wrote, “Somehow, I can give the individual limit, now $2,600, to 17 candidates without corrupting the system. But as soon as I give that same amount to an 18th candidate, our democracy is suddenly at risk.”

The government has mustered two principal arguments in response. First, it argues that the aggregate caps are a necessary corollary to the limits on contributions to particular candidates and entities. This is because without them, wealthy contributors could contribute small amounts to large numbers of independent committees, who could in turn funnel this money to specific candidates. Second, the government argues that McCutcheon ignores the realities of the party system: There may not be a huge risk of corruption involved in donating $2,600 to ten different candidates of the same party, but there surely is a risk of corruption involved in donating this same amount to every single Republican or Democratic candidate that runs for Congress.

Much of the oral argument for this case centered on the whether the government’s latter point has proven true in practice. In this respect, the Justices seemed somewhat disappointed with the lack of hard evidence collected by the district court below. This did not stop them, however, from posing a number of hypotheticals about how removing aggregate limits might or might not corrupt the political process.

Observers paid particularly close attention to those posed by Chief Justice Roberts, who has served as the swing vote in past campaign finance cases. At one point in the argument, he expressed concern with the impact of these limits on small donors, asking if an individual interested in both gun control and environmental regulation must effectively choose between the two because he can only donate to so many candidates in any given cycle. Nevertheless, Roberts still seemed wary of the possibility that individual donation limits may be circumvented if the aggregate caps are removed. This could mean that a compromise of some kind is in the works.

In the end, regardless of the outcome, the landscape of campaign finance is unlikely to change much. As Justice Scalia pointed out during the oral argument, even if the contributions of wealthy individuals are limited by the aggregate caps, they can still spend as much as they like. The caps, for example, did not stop Sheldon Adelson from spending at least $98 million during the 2012 election campaign. Nevertheless, McCutcheon may provide crucial clues for how the Court will approach more consequential and divisive campaign finance cases in the future.

David Friedman and Thomas Fu are the managing editors of the Stanford Law Review. Contact them at [email protected] and [email protected].

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