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From: Democracy 21
Shortly after the 2008 national election, the Republican National Committee (RNC) filed a lawsuit challenging the ban on soft money enacted in 2002 in the Bipartisan Campaign Reform Act (BCRA), also known as the McCain-Feingold bill.
BCRA banned the national parties from raising or spending soft money - funds that do not comply with federal contribution restrictions.
The federal restrictions included a limit on contributions from an individual to a national party committee of $28,500 per year and a ban on any contributions from corporations and labor unions to such national party committees.
BCRA ended the practice of the national parties engaging in massive evasion and circumvention of these federal limits by raising and spending hundreds of millions of dollars of soft money to influence federal elections, such as through ads that promote and attack federal candidates.
The Supreme Court in McConnell v. FEC (2003) upheld the constitutionality of the BCRA soft money ban in its entirety.
"The RNC lawsuit is designed to eviscerate the nation's campaign finance laws and return us to the dark ages of campaign finance practices when huge contributions, as high as $9 million, were given to the national parties to gain access to federal officeholders and influence over government decisions," said Democracy 21 President Fred Wertheimer.
For example, Freddie Mac (including its executives and their spouses) contributed an overall total of $6.4 million in soft money to the national parties during the 2000 and 2002 election cycles, including $3.7 million in soft money to national Republican party committees.
Enron (including their executives and spouses) gave an overall total of $1.6 million in soft money to the national parties during the 2000 election cycle, including $1.1 million in soft money to national Republican party committees.
"Imagine the impact on citizen confidence in government decisions if during the current financial crisis, GM gave $10 or $20 million to a national party, or to each national party, as its fate was being decided in Washington," Wertheimer said.
"Imagine the impact on citizen confidence in government decisions if PhARMA (the pharmaceutical industry’s advocacy arm), during the battle over health care reform, gave $10 or $20 million to a national party, or to each national party, as its interests were being decided in Washington," Wertheimer stated.
"If the RNC prevails in this lawsuit, corporations, interest groups and others again will be free to give huge, multi-million contributions to the national parties and the ability to curb the undue influence of big money in American politics will be gone," Wertheimer said. "The prohibition on corporate contributions, enacted in 1907, will be effectively gutted, as will other important federal contribution restrictions in existence for decades," Wertheimer stated.
Prior to the soft money ban enacted in 2002, the national parties had been permitted by a compliant Federal Election Commission to circumvent and evade federal contribution restrictions by claiming that the soft money they raised was not being spent to influence federal elections.
This bogus rationale was used by the parties to spend hundreds of millions of dollars in soft money on campaign ads attacking and promoting federal candidates that were thinly disguised as "issue ads."
By 2002, the soft money system had grown into a $500 million per election national scandal, when Congress finally stepped in and enacted BCRA to ban soft money.
In addition to prohibiting the national parties from raising or spending any soft money, BCRA requires state parties to spend only hard money for activities which influence federal elections, such as ads that promote or attack federal candidates and get-out-the-vote activities for elections in which federal candidates are on the ballot.
The new RNC lawsuit seeks to eliminate these rules also, and to open the door wide again for the use of soft money by state parties to influence federal elections.
The RNC lawsuit argues that the RNC will spend soft money for several purposes that are not related to the campaigns of a particular federal candidate and that such expenditures cannot be regulated by federal campaign finance laws. The lawsuit alleges that BCRA is unconstitutional insofar as it requires the RNC to spend hard money for purposes that it describes as not directly related to the election of federal candidates.
This precise argument, however, was explicitly made by the RNC in the McConnell case and explicitly rejected by the Supreme Court in upholding the constitutionality of the soft money ban.
The Supreme Court found in McConnell that the claim that the national parties spend money on non-federal campaign activities “is beside the point.”
According to the Court, the national party soft money ban "regulates contributions, not activities. As the record demonstrates, it is the close relationship between federal officeholders and the national parties, as well as the means by which parties have traded on that relationship, that have made all large soft money contributions to national parties suspect."
In other words, the Supreme Court found that the constitutional justification for banning soft money contributions to the national parties had nothing to do with how the parties spend the money. The constitutional rationale instead flows from the dangers of corruption and the appearance of corruption that come from the unlimited soft money contributions being made to the parties.
Thus, the arguments being made by the RNC about how it intends to "spend money" are irrelevant to the reasoning used by the Supreme Court in the McConnell case to conclude that the ban on soft money contributions to parties is constitutional.
If the Supreme Court were to rule for the RNC in this new case, it would have to reverse its ruling in the McConnell case, made just five years ago.
According to the Supreme Court decision in McConnell, there is an inherent problem of corruption or the appearance of corruption when national party officials raise unlimited soft money contributions, no matter what the money is spent for, given the close relationship between the national parties and federal officeholders and candidates.
The Court said, "Given this close connection and alignment of interests, large soft-money contributions to national parties are likely to create actual or apparent indebtedness on the part of federal officeholders, regardless of how those funds are ultimately used."
The Court’s ruling in McConnell about the corrupting influence of soft money was based on substantial evidence. For example, former New Hampshire Republican Senator Warren Rudman testified in the McConnell case:
No one should have any idyllic illusions about the role of money in politics. By and large, the business world, including corporations and unions, gives money to political parties for a combination of two reasons: they believe that large contributions to a party (or, in some cases, to both major parties) will enable them to gain privileged access to and special influence over elected and appointed government officials so they can affect government decisions in Washington that affect their interests; and they believe that if they decline solicitations for such contributions, elected and appointed officials will ignore their views or, worse, that competing business interests who do make large contributions to the party will question will have an advantage in influencing legislation or other government decisions.
Former Senator Rudman further testified:
Special interests who give large amounts of soft money to political parties do in fact achieve their objectives. They do get special access. Sitting Senators and House Members have limited amounts of time, but they make time available in their schedules to meet with representatives of business and unions and wealthy individuals who gave large sums to their parties. These are not idle chit-chats about the philosophy of democracy. In these meetings, these special interests, often accompanied by lobbyists, press elected officials – Senators who either raised money from the special interest in question or who benefit directly or indirectly from their contributions to the Senator’s party – to adopt their position on a matter of interest to them. ...No one says: "We gave money so you should do this to help us." No one needs to say it – it is perfectly understood by all participants in every such meeting.
Rudman concluded:
What I described in the preceding paragraphs is inherently, endemically, and hopelessly corrupting. You can't swim in the ocean without getting wet; you can’t be part of this system without getting dirty.
Regarding the issue of state party expenditures, the RNC (joined by the California Republican Party) claims in its lawsuit that unless state party spending is directly "targeted" to federal races, it cannot be subject to federal laws that require the state parties to spend hard money on the expenditures.
The California Republican party says that it wants to spend soft money on broadcast ads which attack federal candidates in the context of attacking their positions on state ballot measures, and that it should be able to spend soft money to do so.
As in the case of the national party restrictions, however, the challenged BCRA provisions limiting state party use of soft money to influence federal elections were all squarely upheld by the Supreme Court in McConnell.
As the Court noted, "Because voter registration, voter identification, GOTV, and generic campaign activity all confer substantial benefits on federal candidates, the funding of such activities creates a significant risk of actual and apparent corruption. … 'Public communications' that promote or attack a candidate for federal officials...also undoubtedly have a dramatic effect on federal elections."
The Court held that the state party soft money restrictions in BCRA are "closely drawn to match the important governmental interests of preventing corruption and the appearance of corruption."
It is these same restrictions that the RNC now seeks to have the Supreme Court strike down.
The RNC claims in the new lawsuit that the McConnell decision rejected a "facial" challenge to the soft money provisions of BCRA, while leaving the door open to the "as applied" challenge it now brings based on its "plans" to spend soft money for "non-federal" purposes.
That distinction is a meaningless one since McConnell upheld the party soft money ban because of the corrupting influence resulting from soft money contributions to the national parties, without any regard to how the parties were spending the money.
The claim by the RNC that McConnell did not address the soft money ban "as applied" to its plans to spend soft money is irrelevant and ignores the constitutional rationale for the McConnell decision.
The RNC case is pending before a three-judge district court panel in Washington, DC.
Representative Chris Van Hollen (D-MD) has intervened in the case to defend the BCRA soft money ban. He is represented by a legal team headed by WilmerHale and senior partners, Roger Witten and former U.S. Solicitor General Seth Waxman.
Waxman successfully argued in the Supreme Court in the McConnell case in defense of the constitutionality of the BCRA soft money ban.
The DNC also has intervened in the RNC case to defend the BCRA soft money ban.
The district court panel is considering the RNC case on an expedited basis, and is expected to issue a decision in the case by the summer. The decision is then expected to be appealed to the Supreme Court and considered in its next term.
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Capital Bits and Pieces Vol. VII, No. 47 Released: Wednesday, March 4, 2009
Contact: Kristen Hagan
202-429-2008
khagan@democracy21.org
For the latest reform news and to access previous reports, releases, and analysis from Democracy 21, visit www.democracy21.org .
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