SPEAKERS CONTENTS INSERTS
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62–492
2000
FIRST AMENDMENT AND RESTRICTIONS ON POLITICAL SPEECH
HEARING
BEFORE THE
SUBCOMMITTEE ON THE CONSTITUTION
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
MAY 5, 1999
Serial No. 49
Printed for the use of the Committee on the Judiciary
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For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
COMMITTEE ON THE JUDICIARY
HENRY J. HYDE, Illinois, Chairman
F. JAMES SENSENBRENNER, Jr., Wisconsin
BILL McCOLLUM, Florida
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR S. SMITH, Texas
ELTON GALLEGLY, California
CHARLES T. CANADY, Florida
BOB GOODLATTE, Virginia
STEVE CHABOT, Ohio
BOB BARR, Georgia
WILLIAM L. JENKINS, Tennessee
ASA HUTCHINSON, Arkansas
EDWARD A. PEASE, Indiana
CHRIS CANNON, Utah
JAMES E. ROGAN, California
LINDSEY O. GRAHAM, South Carolina
MARY BONO, California
SPENCER BACHUS, Alabama
JOE SCARBOROUGH, Florida
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JOHN CONYERS, Jr., Michigan
BARNEY FRANK, Massachusetts
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
MAXINE WATERS, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ROBERT WEXLER, Florida
STEVEN R. ROTHMAN, New Jersey
TAMMY BALDWIN, Wisconsin
ANTHONY D. WEINER, New York
THOMAS E. MOONEY, SR., General Counsel-Chief of Staff
JULIAN EPSTEIN, Minority Chief Counsel and Staff Director
Subcommittee on the Constitution
CHARLES T. CANADY, Florida, Chairman
HENRY J. HYDE, Illinois
ASA HUTCHINSON, Arkansas
SPENCER BACHUS, Alabama
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BOB GOODLATTE, Virginia
BOB BARR, Georgia
WILLIAM L. JENKINS, Tennessee
LINDSEY O. GRAHAM, South Carolina
MELVIN L. WATT, North Carolina
MAXINE WATERS, California
BARNEY FRANK, Massachusetts
JOHN CONYERS, Jr., Michigan
JERROLD NADLER, New York
CATHLEEN CLEAVER, Chief Counsel
BRADLEY S. CLANTON, Counsel
JONATHAN A. VOGEL, Counsel
PAUL B. TAYLOR, Counsel
C O N T E N T S
HEARING DATE
May 5, 1999
OPENING STATEMENT
Canady, Hon. Charles, a Representative in Congress from the State of Florida, chairman, Subcommittee on the Constitution
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WITNESSES
Bonifaz, John C., Executive Director, National Voting Rights Institute
Bopp, James, Jr., Esq., General Counsel, James Madison Center for Free Speech
Briffault, Richard, Columbia Law School
Mason, David M., Commissioner, Federal Election Commission
Moramarco, Glenn J., Senior Attorney, Brennan Center for Justice, New York University School of Law
Murphy, Laura W., Director, American Civil Liberties Union, Washington Office
Pilon, Roger, Director, Center for Constitutional Studies, CATO Institute
Remcho, Joseph, Esquire, Remcho, Johansen & Purcell
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Bonifaz, John C., Executive Director, National Voting Rights Institute: Prepared Statement
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Bopp, James, Jr., Esq., General Counsel, James Madison Center for Free Speech: Prepared Statement
Briffault, Richard, Columbia Law School: Prepared Statement
Mason, David M., Commissioner, Federal Election Commission: Prepared Statement
Moramarco, Glenn J., Senior Attorney, Brennan Center for Justice, New York University School of Law: Prepared Statement
Murphy, Laura W., Director, American Civil Liberties Union, Washington Office: Prepared Statement
Pilon, Roger, Director, Center for Constitutional Studies, CATO Institute: Prepared Statement
Remcho, Joseph, Esquire, Remcho, Johansen & Purcell: Prepared Statement
APPENDIX
Material submitted for the record
FIRST AMENDMENT AND RESTRICTIONS ON POLITICAL SPEECH
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WEDNESDAY, MAY 5, 1999
House of Representatives,
Subcommittee on the Constitution,
Committee on the Judiciary,
Washington, DC.
The subcommittee met, pursuant to call, at 2:15 p.m., in Room 2237, Rayburn House Office Building, Hon. Charles Canady [chairman of the subcommittee] presiding.
Present: Representatives Charley T. Canady, Asa Hutchinson, Bob Goodlatte, Bob Barr, William L. Jenkins, Melvin L. Watt, Maxine Waters and Barney Frank.
Staff present: Cathleen Cleaver, Chief Counsel; and Bradley S. Clanton, Counsel; Susana Gutierrez, Clerk and Anthony Foxx, Minority Counsel.
OPENING STATEMENT OF CHAIRMAN CANADY
Mr. CANADY. The subcommittee will be in order.
Good afternoon. Thank you all for being here. I apologize for the delay in the commencement of the hearing.
The right of the American people to freely express themselves on matters of politics and government has long been considered one of our most fundamental freedoms. Indeed the freedom to discuss public issues has been described by the Supreme Court as, and I quote, ''integral to the operation of the system of government established by our Constitution.'' As Justice Cardozo once wrote, the ''[f]reedom of expression is the matrix, the indispensable condition of nearly every other form of freedom.''
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Despite the special protection afforded political expression by the first amendment, recent legislative proposals would restrict political speech in order to reform a campaign finance system that some believe is not working. Reports of illegal and abusive fund-raising practices during recent elections have given additional momentum to these proposals.
The purpose of this hearing is not to examine the details of any specific campaign reform proposals. As I have said at previous hearings on political speech and campaign finance reform, the Committee on House Oversight has primary jurisdiction over the issue of campaign finance reform. It is, however, appropriate for this subcommittee to consider the impact of legislative proposals on our constitutionally protected freedoms.
To that end, the purpose of today's hearing is to establish the legal framework within which the constitutionality of campaign finance reform proposals must be analyzed under the first amendment and to consider whether the various types of reform proposals encroach upon the freedoms of expression and association. The Supreme Court outlined the relevant first amendment framework in Buckley v. Valeo. The Buckley Court held that campaign contributions and expenditures are forms of political expression and association and are therefore entitled to the highest degree of protection under the first amendment. Restrictions on these activities are permissible only if they further a compelling governmental interest and are narrowly tailored to serve that end.
In the course of striking down several campaign finance reform measures in that case, the Buckley Court explained that ''[i]n the free society ordained by our Constitution, it is not the Government, but the people, individually as citizens and candidates, and collectively as associations and political committees who must maintain control over the quantity and range of debate on public issues in a political campaign.''
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It is imperative that we keep this principle of liberty in mind as we engage in this important discussion. It is also crucial to remember that our good intentions do not permit us to ignore the constitutional limitations on our legislative authority. As Justice Scalia once wrote, and I quote him at some length here, ''governmental abridgement of liberty is always undertaken with the very best of announced objectives (dictators promise to bring order, not tyranny), and often with the very best of genuinely intended objectives. (zealous policemen conduct unlawful searches in order to put dangerous felons behind bars.) The premise of our Bill of Rights, however, is that there are some things—even some seemingly desirable things—that government cannot be trusted to do. The very first of these is establishing the restrictions upon speech that will assure 'fair' political debate.''
That is the end of the quotation from Justice Scalia.
With these principles in mind, I look forward to hearing the testimony of each of the witnesses who will testify today.
Mr. Jenkins, do you have anything you want to say?
Mr. JENKINS. Thank you, Mr. Chairman. I do not have an opening statement. I am sorry if I delayed the committee, but——
Mr. CANADY. You are the only reason we are going now.
Mr. JENKINS. I was working diligently——
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Mr. CANADY. You have expedited us.
Mr. JENKINS [continuing]. In another subcommittee of this same committee——
Mr. CANADY. I want to thank you.
Mr. JENKINS [continuing]. Just up the hallway.
Mr. CANADY. I appreciate that. And I realize the members of the subcommittee—the Judiciary Committee are very busy today. We have been very busy over the last couple of weeks, and Members have many commitments. I thank Mr. Jenkins for taking the time to leave another meeting and be here so that we could begin the hearing. I appreciate that very much.
We will now go to our panel of witnesses. Our first witness this afternoon will be Commissioner David M. Mason of the Federal Election Commission. Commissioner Mason was nominated to the Federal Election Commission by President Clinton on March 4, 1998, and confirmed by the U.S. Senate on July 30th, 1998. Prior to his appointment, Commissioner Mason served as a Senior Fellow in Congressional Studies at the Heritage Foundation. Commissioner Mason also served as Deputy Assistant Secretary of Defense during the Bush Administration.
Following him, will be Ms. Laura W. Murphy, who serves as Director of the American Civil Liberties Union, Washington, D.C., office. Ms. Murphy directs the legislative and executive branch civil liberties agenda for the national organization. In addition to directing the Washington office, Ms. Murphy is the ACLU lobbyist on campaign finance reform.
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The next witness will be Professor Richard Briffault, who is Vice Dean and Joseph P. Chamberlain Professor of Legislation at Columbia Law School. His primary areas of research, teaching and writing are State and local government law, election law and regulation. The professor is currently serving as Executive Director of the Special Commission on Campaign Finance Reform of the Association of the Bar of the City of New York.
The fourth witness on this panel will be Roger Pilon. Mr. Pilon holds the B. Kenneth Simon Chair in Constitutional Studies of the CATO Institute. Prior to joining CATO in October 1988, he held five senior posts in the Reagan Administration. Dr. Pilon has written and lectured widely in the areas of moral, political and legal theory, and has been recognized for excellence in writing on the Constitution.
Next we will hear from Glenn J. Moramarco, Senior Attorney at the Brennan Center for Justice at New York University School of Law. Prior to joining the Brennan Center, Mr. Moramarco served as an assistant U.S. attorney, practiced law in Washington, D.C., and in Philadelphia, and served as a law clerk to Judge Leonard I. Garth of the U.S. Court of Appeals for the Third Circuit.
The sixth witness on our panel is Joseph Remcho, an attorney with the law firm of Remcho, Johansen & Purcell in San Francisco. Mr. Remcho served as a commissioner of the California Fair Political Practices Commission from 1976 to 1979. His primary interest is in the litigation of State and Federal constitutional issues with an emphasis on the first amendment, election law, education and public policy litigation.
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Next will be John C. Bonifaz, the founder and executive director of the National Voting Rights Institute. The National Voting Rights Institute, which was founded in 1994, is a nonprofit organization specializing in campaign finance litigation. Mr. Bonifaz formerly served as the staff attorney for the Center for Responsive Politics in Washington, D.C.
Our final witness on this rather lengthy panel will be James Bopp, Jr. Mr. Bopp is the general counsel at the James Madison Center for Free Speech, and an attorney with the law firm of Bopp, Coleson & Bostrom in Indiana. His law practice concentrates on first amendment cases regarding political free speech and the free exercise of religion and prolife issues. Mr. Bopp has written extensively on the subject of campaign finance reform and the first amendment.
Again, I want to thank all of you for being with the subcommittee this afternoon. I would ask that you do your best to summarize your testimony in 5 minutes or less, as you are guided by the green light. When it turns red, that means the 5 minutes is up.
And, of course, without objection, your written statements will be made a part of the permanent hearing record. We will probably not enforce the 5-minute rule strictly, but given the length of the panel and the fact that we are starting in the afternoon, if you would try to do your very best to conclude your statements within the 5 minutes.
We will—if there are other Members that would like to make an opening statement, I would be happy to recognize you now before the panelists start. I have introduced the panelists.
Mr. HUTCHINSON. I am anxious to hear their testimony, and so I will waive any opening statement, anticipating a good exchange later.
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Mr. CANADY. Okay. Thank you. Okay. We will now proceed with the testimony of Commissioner Mason.
STATEMENT OF DAVID M. MASON, COMMISSIONER, FEDERAL ELECTION COMMISSION
Mr. MASON. Thank you, Mr. Chairman and Members, for this opportunity to testify. There is no more important issue in public policy than the question of how we govern ourselves, and that is what elections are all about. It is the most fundamental kind of question we face.
I want to clarify that my testimony today represents my individual views, not the views of the Federal Election Commission or of any colleagues on the Commission.
The first amendment limits the government regulation of political activity in a number of ways. This hearing's title indicates an emphasis on speech, but I would like to point out that first amendment protections of the right to assembly, press, and petition are all implicated by current campaign finance laws and by the various proposals that are out there.
And as a result of the first amendment's limitations on government authority and certain legal conflicts with that, this whole area of the law is enshrouded with a sort of penumbra of constitutional uncertainty emanating from the first amendment. And that really is the first thing I want to talk: about as one member of the Commission charged with enforcing Federal election law, it is striking the degree to which constitutional considerations are an everyday part of what we do.
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We think about constitutional issues in terms of the landmark cases like Buckley and the campaign finance area and others. But if we will think about it, and think about other landmark cases, Brown v. Board of Education, Roe v. Wade, those cases are only the beginning of a string of constitutional litigation, administrative actions and so on that lower courts and administrative agencies and legislatures have to undertake to bring themselves into conformance with those major principles.
A couple of examples from the Federal Election Commission. We have, right now, 12 active regulations projects, different areas that we are thinking about changing our regulations. Seven of those implicate first amendment rights. And the Commission is having to go through the exercise of making sure that our regulations, or proposed changes to regulations, are consistent with the first amendment.
We have 20 cases actively in litigation right now. Eleven of those cases implicate significant first amendment issues ranging from political party expenditure limits to soft money/hard money allocation rules, corporate contributions, disclosure requirements, disclaimer requirements, coordination, communication, express advocacy. All of those issues have been litigated many times, but still very live.
And the list I just gave doesn't include, for instance, the Forbes litigation that we just dismissed, which has to do with the press protection under the FECA or Nixon v. Shrink Missouri Government, which implicates the $1,000 contribution limit. It has been 23 years since Buckley and nearly 20 years since the FECA was amended in any substantial way, and yet some of these very fundamental issues about the scope of the Act and the permissibility of the government activities remain unsettled.
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One good example is the Colorado Republican case, which arose out of a 1986 Senate election, and yet is still pending in litigation. As you are aware, it has been to the Supreme Court one time already and is apparently headed back. The Federal Election Commission and the Colorado Republican Party believed that that case was a free speech case as it went up to the Supreme Court, and the question was did an express advocacy standard apply, or did an electioneering message standard, a somewhat broader standard, apply to statements by political parties.
The district court and the appellate court issued conflicting opinions. It went to the Supreme Court, and the Supreme Court said, no, this is not a speech case at all, this is an associational rights case and said in the first instance that political parties had the right to engage in independent expenditures on behalf of their nominees or prospective nominees, and then sent back for rehearing and rebriefing the question of whether there could be any limits at all on political party expenditures coordinated on behalf of their candidates.
So now after 13 years of proceeding in this case, not only do we not get clarification on the express advocacy issue, but we have opened up a whole new set of constitutional issues which the Commission and the opposing parties had initially thought were settled. And that is the kind of constitutional uncertainty that we are going through all the time.
The district court now has reheard the second round of that case, declared that the party's spending limit is unconstitutional, and that has now been appealed to the circuit court. If we are lucky, the circuit court will issue an opinion within a year, and will one party or the other be able to file a cert petition in the Supreme Court on in the fall of 2000.
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This is going to present some real difficulties for the Commission and for political parties, because if the circuit court were to agree with the district court and strike down the political party spending limitation, we would have one circuit court that had said that, and a question as to whether the Commission should suspend the enforcement of that law pending a Supreme Court opinion, and for political parties, whether they should ignore the law and go whole hog and spend all they want with their candidates at what risk.
So the lesson for Congress from this is that you ought to proceed very carefully in how you legislate in an area that you know has substantial first amendment implications, because it is not as simple as getting a test case up to the Supreme Court, having the Supreme Court issue an opinion, and then everything is okay after that. In the interim we have substantial limits, substantial chilling effects, substantial uncertainty for the administrative agency, and I think, more importantly, for the people who are regulated under the law.
These are very difficult situations, and to me that counsels in favor of incremental rather than revolutionary efforts to change the law.
I see the red light is on. I will just mention very briefly a couple of other areas I wanted to highlight.
One is the Internet. The Commission has recently voted to issue a notice of inquiry on the Internet. I mentioned that in the first amendment context, because it presents such substantially different questions than the normal way we think about campaign finance regulation, which is typically in the context of broadcast communications, radio and television.
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And the most salient aspect of broadcast communications is the scarcity. There are only a few licenses out there, not everybody can own one, and because of the scarcity, there are high prices, and so we have a strange admixture of speech and finance concerns, which are quite different, if not absent altogether, in an Internet context.
And I think it is very beneficial to everyone involved to look at the Internet and how different it is, to review the standards we have been propounding. I think the big question for the Commission is how far the media exemptions might extend in the case of the Internet.
Lastly, the big case the Supreme Court has now accepted for review, Shrink Missouri Government. I just like to observe that vis-a-vis the question of the $1,000 contribution limit and its constitutionality, that there is one piece of information you can pull out of Commission reports that would indicate some constitutional questions, not based on inflation, per se, that the $1,000 today is worth about one-third of what it was in 1974, but based on the pattern of violations of the law.
It is illegal under section 441(f) of the FECA to make contributions in the name of another. The Commission is seeing more and more of those cases, which could be an indicator that the $1,000 limit is so low that people are trying to circumvent the act. What is interesting in a number of these cases as you look at the details is they end up making $5,000 in contributions. In other words, it is not enough money that we would routinely think there is a big corruption problem, nor is it even enough money to raise an issue of was there favor-seeking or anything like that.
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People are simply motivated by an enthusiasm for candidates. They want to raise money; $1,000 isn't very much these days. I know it is a lot to a lot of people, but not in the context of a Presidential campaign. And so rather than preventing corruption, in a strange way the $1,000 limit may have become so effectively low that it itself becomes a source of or an inducement or an invitation to corrupt activity, which has no other corruption other than the $1,000 limit itself.
That is the kind of thing you have to watch for. As political technologies change, as realities in campaigns change, the constitutional issues may evolve as well.
That concludes my summary. Thank you very much.
Mr. CANADY. Thank you, Commissioner Mason.
[The prepared statement of Mr. Mason follows:]
PREPARED STATEMENT OF DAVID M. MASON, COMMISSIONER, FEDERAL ELECTION COMMISSION
Thank you, Chairman Canady and Members of the Subcommittee for this opportunity to testify today. There is no more important issue in public policy than the question of how we govern ourselves, and in a democratic polity the constitutional arrangements for elections are the most fundamental questions we face as a people.
This testimony represents my personal views, and does not represent the position of the Federal Election Commission, or of any of my colleagues on the Commission.
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It is worth noting at the outset that the framers of the Constitution left the primary responsibility for the governance and administration of elections to the states, casting Congress' power over elections as superior but exceptional rather than routine.
Just as in Section 4 of Article I, the Federal government could not leave itself naked to potential abuse of the electoral process by the states, through the First Amendment, Congress and the American people established certain fundamental protections for the right of self-government, stated as limitations on the power of the government itself. It is the conflict of these fundamental rights with specific positive restrictions on election activity that gives rise to many constitutional issues in campaign finance in particular. Just as state legislation must give way to federal under the time, place and manner clause, both federal and state legislation must give way to the requirements of the Constitution itself, specifically to the First Amendment.
THE COMPLEXITY AND PERSISTENCE OF CONSTITUTIONAL QUESTIONS IN CAMPAIGN FINANCE
As one Member of the Independent Agency charged with interpreting, administering, and enforcing (in a civil context) the Federal Election Campaign Act, what strikes me most is the degree to which constitutional considerations are an everyday factor in the administration of campaign finance law. For example, the Commission currently has twelve active regulations projects, seven of which directly implicate rights of speech, press or association. These range from major projects, such as our soft money rulemaking, to relatively minor ones, such as the definition of ''personal funds.''
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Our litigation case load shows a similar pattern. The Commission has twenty active litigation cases. At least 11 feature significant First Amendment issues. Among these are:
political party expenditure limits (FEC v. Colorado Republican Federal Campaign Committee)
the Commission's hard/soft money allocation rules (RNC v. FEC)
the corporate contribution ban (Mariani v. US)
disclaimer requirements for non-profit corporations (FEC v. Public Citizen)
coordination/communication with candidates and officials (FEC v. Christian Coalition, FEC v. Freedom's Heritage Forum)
political committee status (DNC v. FEC)
express advocacy (FEC v. Christian Coalition)
constitutionality of the Presidential fund act (Reform Party v. FEC)
This list does not include, since the FEC is not a party, Nixon v. Shrink Missouri Government PAC, the case which may implicate the constitutionality of the $1,000 contribution limit, which was recently accepted for review by the Supreme Court. Nor does this list include the recently dismissed case of FEC v. Forbes which involved the extent of press freedoms under the FECA.
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The overwhelming impression in reviewing these major activities of the Commission is that the question of constitutional issues in campaign finance is a constant, continuing and developing one. There are not a few major issues, but many; they arise not occasionally, but every day. Though it has been 23 years since the Buckley decision and twenty years since the FECA was amended in any significant way, the Commission continues to face multiple and significant constitutional challenges. Issues which the Commission, and even much of the regulated community, once thought settled can emerge unexpectedly and result in significant effects for the Commission and politically active groups.
The Colorado Republican case, already reviewed by the Supreme Court once, and apparently on the way to a second hearing there, provides an outstanding example of the difficulties this constitutional tumult presents. This case arose out of a 1986 Senate election. Both the FEC and the Colorado Republican Party believed, until the case reached the Supreme Court in 1996, that the central issue was a speech standard: whether the particular ads in question should be judged under an ''express advocacy'' test or under a broader ''electioneering message'' standard. The district and circuit courts issued contrary opinions. Rather than resolving this issue, the Supreme Court determined that the central issues in the case were associational rights: deciding in the first instance that political parties had a right to engage in independent expenditures and remanding for rehearing the question of whether limits on coordinated spending by political parties are constitutional. After a decade of litigation, not only have we failed to get further clarification of the express advocacy standard, but a new area of constitutionally- protected activity has been defined, and yet another area is suggested. (My own conclusion is that the electioneering message test is too vague to pass constitutional muster, but to the extent that others disagree, Colorado not only failed to clarify the issue but raised additional complex questions.)
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As the Subcommittee is aware, the District Court for Colorado has now decided that party spending limits are unconstitutional, and the case is now on appeal to the Tenth Circuit. If we are fortunate, the Tenth Circuit will hear the case and issue an opinion within a year, in time to file a cert petition in the Fall of 2000. The 1996 Supreme Court decision spawned significant political party independent expenditure efforts. Should the Tenth Circuit agree with the District Court on the question of coordinated spending by political parties, the Commission and political parties will be left in a very difficult position for the 2000 campaign cycle: should the Commission suspend enforcement of the law pending a Supreme Court decision, and should political parties violate the letter of the statute in expectation of such a decision?
One lesson from this experience is that we should not restrict our First Amendment analysis to speech rights alone. The efforts to ''ban'' soft money and broaden registration requirements which are the most prominent features of major campaign finance reform proposals display this flaw. Associational rights, press freedoms and the right to petition are all implicated in campaign finance legislation.
A second consideration is the degree to which constitutionally suspect legislation can put the executive agency administering the law and politically active citizens in difficult or even untenable positions.
The result of this plethora of post-Buckley constitutional litigation is that the Federal Election Commission sits as a sort of permanent administrative tribunal determining the degree and type of First Amendment freedoms different individuals and organizations are entitled to depending on our analysis of their purpose (political committee status), legal organization (for-profit, non-profit, LLC, partnership), FECA status (political party, press), internal structure (membership), private communications (coordination), as well as their mode of speech.
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Everyone understands that any significant campaign finance reform legislation will be subject to a judicial test. What policy makers may fail to appreciate is the degree to which even a detailed, significant and far-reaching ruling such as Buckley still leaves a wide zone of constitutional uncertainty which may subject campaigns and citizens to decades of uncertainty while inferior courts and my agency work out the practical details of landmark rulings.
The constitutional stakes, uncertainty and practical difficulties inherent in this process argue strongly in my mind for incremental rather than revolutionary reform of the campaign finance system.
THE INTERNET, THE FIRST AMENDMENT AND CAMPAIGN FINANCE REFORM
Of course, while constitutional adjudication is slowly proceeding, the real world of campaigns and public policy can change rapidly, presenting constitutional questions in completely new contexts. One of the major challenges for the FEC today is in determining how to treat the Internet for purposes of the FECA. Following a series of enforcement matters and advisory opinion requests, the Commission recently instructed its staff to draw up a regulatory Notice of Inquiry on the Internet and the FECA.
The Internet presents First Amendment questions in a new and beneficial light, especially compared with broadcast communications. The practical dominance of broadcast communication in political campaigns has led to some extremely negative consequences for the First Amendment status of political activity. Broadcast media are characterized legally, and to some degree practically, by scarcity. The fact that broadcast licenses, and therefore broadcast time, is quite limited is a far greater factor in regulation of the medium than the public nature of the broadcast spectrum. With scarcity comes high prices, and a resulting over-focus on the cost of political campaigns, and a confusing admixture of spending and speech questions.
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The Internet, on the other hand, has a basis of plenitude. There is literally no restriction on who can have an Internet site or on how many different sites there are. What is most salient about the Internet for First Amendment purposes is not whether 60 or 80 percent of the public has access, but interactivity. Anyone who is on the Internet can have something to say, and the financial and technical barriers to hosting a home page with substantial content are quite low. In the age of the Internet, everyone of even modest means can own a printing press.
For purposes of the First Amendment, and the FECA's media exemption, there is a real question of how extensively press freedoms should apply to the Internet. As a preliminary, if you have ever taken the opportunity to read newspapers from the early Federal period, you will note how partisan, contentious and irresponsible the press of the period marked by passage of the First Amendment was. Federal period newspapers remind me not so much of the New York Times or NBC as of the Drudge Report or ''HillaryNo.Com.''
In the specific context of the FECA, a media exemption applies to any ''periodical publication'' (unless controlled by a candidate or political committee). I am not sure why that exemption would apply any less to a regularly-updated personal homepage on the Internet as to ABCNews.com or Slate magazine.
The combination of open access and relatively low cost threatens to undermine the rationale behind the campaign finance regime. Just as Internet stock valuations appear untethered to underlying finances, the value of political communications on the Internet is driven more by innovation and presentation—that is to say by ideas—than by placement and spending. When the political impact of a site appears to far exceed its dollar cost, or when marginal costs are extremely low, it is difficult to apply a regulatory regime founded upon limits on finances, intended, we must remember, only to prevent financial corruption.
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THE $1,000 CONTRIBUTION LIMIT: PREVENTING CORRUPTION OR CAUSING CORRUPTION?
A more prosaic example of how change in the real world affects constitutional questions in campaign finance is the inflation question presented by the Shrink Missouri litigation. I think everyone would agree that at some point inflation could so erode the real value of a $1,000 contribution as to change its constitutional status. Though other questions are present, one issue in Shrink Missouri is likely to be whether the one-third diminution in the value of the $1,000 contribution since 1974 is a constitutionally- significant difference in kind.
In addition to this mathematical analysis, we should recall that the whole purpose of the $1,000 limit is to prevent corruption. The Federal Election Commission's enforcement caseload presents some evidence that this $1,000 limit may no longer advance that purpose, and may indeed itself have become a cause of corruption. It appears that this limit may be effectively so low as to induce people interested in engaging in politics to participate in illegal schemes to circumvent it with no directly corrupt purpose.
The Federal Election Commission has already released more 1996 cases involving conduit contribution allegations (section 441f of the statute) than it has had in any year in its history. The 1996 total is already over 20 percent higher than any previous year, and given our five year statute of limitations, additional 441f cases may yet be made public.
In at least some of these cases it appears that donors were motivated by little else than enthusiasm for a candidate. The sums raised in some instances are only a few thousand dollars, not enough to raise serious corruption concerns, nor in many of these cases were the recipient campaigns apparently aware of any extraordinary efforts which might give rise to suspicions of favor-seeking.
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It appears that the $1,000 limit may have become effectively so low that it has itself become a cause of corrupt activity, except that its circumvention may be motivated in some instances by nothing other than a pure desire to support favored campaigns. In judicial terms, this raises the question of whether the $1,000 limit is narrowly tailored in advancing its corruption-preventing rationale.
As with all of this testimony, I should note that several of my fellow Commissioners may disagree with my analysis, but in my view the Commission's enforcement experience raises a genuine question in this regard.
ANONYMOUS SPEECH OR EXPANDED DISCLOSURE?
Lastly, I would like to draw the Subcommittee's attention to a string of cases involving anonymous speech because they raise questions about one of the broadest areas of agreement in Campaign Finance Reform, expanded disclosure. Simply put, since the Supreme Court enunciated a right to anonymous political speech in McIntyre v. Ohio, a string of lower courts has fairly consistently applied the Supreme Court's reasoning from voter referenda to candidate elections. Most of these courts have reached the conclusion that there is no constitutional difference in the degree of First Amendment protection between referenda and candidate elections. While I would note that the Supreme Court did view the candidate-referenda distinction as significant in Belotti, as to corporations, the consistent weight and powerful reasoning of these lower court opinions do not allow us to dismiss the concept that at least some anonymous activity is protected in candidate elections. In Buckley itself the Supreme Court declared that contributors who have valid reasons to fear retribution may remain anonymous despite the FECA's reporting requirements. Following are some significant cases and precedents in this area.(see footnote 1)
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1. Talley v. California, 362 U.S. 60 (1960): Manuel Talley was convicted of violating a Los Angeles ordinance that prohibited the distribution of ''any handbill in any place under any circumstances, which does not have printed on the cover, or the face thereof, the name and address of . . . the person who printed, wrote, compiled or manufactured [it] [and] the person who caused [it] to be distributed.'' Id. at 60–61. He had distributed handbills that ''urged readers to help [his] organization [National Consumers Mobilization] carry on a boycott against certain merchants and businessmen . . . on the ground that . . . they carried products of manufacturers who will not offer equal employment opportunities . . .'' Id. at 61. The Court held that the statute was void on its face for violating the freedom of (anonymous) expression. Id. at 64–65. It noted that ''anonymous pamphlets, leaflets, brochures and . . . books have played an important role in the progress of mankind,'' including in the founding of this country (e.g., the Federalist Papers), id. at 64–65.(see footnote 2) The ordinance did not seek to identify, as the City argued, only fraudulent, false or libelous materials, but rather barred all handbills that did not have the requisite disclaimer. Id. at 64.
2. New York v. Duryea, 76 Misc.2d 948, 351 N.Y.S.2d 978 (1974) (cited in McIntyre, 514 U.S. at 348, n.11): New York prosecuted the Speaker of its State Assembly and two of his aides (his Executive and Special assistants), along with Assembly Majority Leader and an Assembly Member, for distributing letters bearing the signature of a person identified as a party official and urging members of that party to vote for its candidates, when, in fact, the letters had originated with another campaign committee (of which the Defendants were officers). The Court held that the First Amendment did not protect the Defendants' fraudulent conduct, but the statute, which prohibited anonymous distribution of campaign literature, was unconstitutionally overbroad.
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3. Wilson v. Stocker, 819 F.2d 943 (10th Cir. 1987): James Wilson was arrested for distributing unsigned handbills opposing a candidate for the state senate in violation of state statute prohibiting anonymous campaign literature (that which, inter alia, ''is designed to influence the voters on the nomination or election of a candidate''). Relying heavily on Talley, the Court held the statute was facially overbroad.
4. McIntyre v. Ohio Elections Commission, 514 U.S. 334 (1995): Margaret McIntyre distributed leaflets opposing a school bond levy in violation of state statute that prohibited the distribution of anonymous campaign literature. The United States Supreme Court held that an author's decision to remain anonymous, like other decisions concerning the content of publication, is an aspect of free speech that the First Amendment protects and outweighs the state's interest in providing the electorate with information. Id. at 341–343. The statute also could not be justified based on preventing falsehoods, as it was not limited to such material. Id. at 343–345.
5. State v. Moses, 655 So.2d 779 (La. App. 4 Cir. 1995) (first post-McIntyre decision): Napoleon Moses was indicted for violating a Louisiana statute that prohibited the distribution of campaign literature which did not contain the name (and in some cases the address) of the person distributing it. The Court held that McIntyre was sufficient authority for striking down the statute, given that, under the Louisiana Constitution and caselaw,(see footnote 3) ''the state interest required to justify even a limited prohibition on election-related anonymous literature in Louisiana should be much more compelling than that which theoretically the U.S. Supreme Court [in McIntyre] might have found sufficient in Ohio or elsewhere.'' Id. at 782.(see footnote 4) (The Court seemed to conclude that the statute was unconstitutional under both the federal and state constitutions: ''We conclude that the right to distribute anonymous campaign literature is clearly protected by the First Amendment to the United States Constitution as interpreted by the United States Supreme Court and by . . . the Louisiana Constitution. Accordingly, we declare [the statute] to be unconstitutional.'' Id. at 785.]
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6. Shrink Missouri Government PAC v. Maupin, 892 F. Supp. 1246 (E.D. Mo. 1995): Past and possibly future state candidates challenged state statute requiring any printed or broadcast matter with allegations about any other candidate contain disclaimers that candidate ''approved'' and ''authorized'' the advertisement. Court held that statue unconstitutional (not narrowly tailored).
7. West Virginians for Life, Inc. v. Smith, 960 F. Supp. 1036 (S.D.W. Va. 1996): Not- for-profit corporation and individuals brought pre-enforcement challenge to state statutes prohibiting the: a) publication, distribution, or dissemination of a scorecard, voter guide, or other written analysis of a candidate's position within 60 days of an election unless the document includes the name of the party responsible for it; and b) publication, issuance, or circulation of any anonymous letter, circular, or other publication tending to influence voting at any election. The Court held the state did not meet its burden of proving that the ''anonymity provisions'' were narrowly tailored to serve the compelling interest of avoiding corruption, nor were they limited to preventing fraudulent, false or misleading statements, or to regulating anonymous express advocacy (the statutes encompassed candidate issue advocacy, which, the court held, was just as protected as the noncandidate issue advocacy in McIntyre).
8. Stewart v. Taylor, 953 F. Supp. 1047 (S.D. Ind. 1997): Candidate for township advisory board placed sign expressly advocating her election but which did not identify who paid for it, in violation of state statute requiring such identification on ''material in support of or in opposition to a candidate'' and requiring (in some instances) whether such material was approved by the candidate in support of whom it was published or circulated. Court held that statute was unconstitutional.
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9. Virginia Society For Human Life, Inc. v. Caldwell, 500 S.E.2d 814 (1998) (VSHL) (answer to certified question from United States Court of Appeals for the Fourth Circuit): non-profit group that conducted issue advocacy by preparing and distributing voter guides challenged (pre-enforcement) state statutes that, inter alia, required any writing made ''for the purpose of influencing the outcome of an election for public office'' identify the author. To avoid unconstitutional overbreadth, Virginia Supreme Court construed ''influencing election'' language so as not to apply to individuals and groups engaging solely in issue advocacy. Id. at 816–818.(see footnote 5)
10. Arkansas Right to Life State Political Action Committee v. Butler, 29 F. Supp.2d 540 (W.D. Ark. 1998): Political action committee and individual brought pre-enforcement challenge to state statute requiring any person making an independent expenditure to name and identify itself and to state that such expenditure was ''not authorized by candidate.'' Court held that while self-identification disclaimer was constitutional, there was no evidence that ''authorization'' component was narrowly tailored to advance state's interest in advising electorate of candidate's sources of support.
11. Griset v. Fair Political Practices Commission, 69 Cal. App. 4th 818, 82 Cal. Rptr.2d 25 (1999): Candidate committees of incumbent councilman sent mass mailings without identifying councilman as controlling candidate in violation of state statute requiring candidates for office and individuals or groups supporting them to identify themselves on mass mailings sent to voters. Court held statute to be unconstitutional and noted that protection for anonymous speech was not confined to referenda but included candidate speech. Id. at 30–34.
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12. Opinion of the Oregon Attorney General, Number 8266, 1999 WL 133100 (March 10, 1999): Oregon Attorney General opined that state statute prohibiting most anonymous signs, publications and broadcasts used in political campaigns violated the free speech provisions of both the United States and Oregon Constitutions. The opinion noted, however, that courts subsequent to McIntyre have disagreed on the scope of the First Amendment's protection for anonymity. Id. at 46. Comparing VSHL (narrowly construing statute to prohibit only anonymous express advocacy (thereby implicitly concluding that such prohibitions are constitutional)) with Moses (striking down statute in toto).
The only significant, somewhat contrary authority to the cases above is Kentucky Right To Life, Inc. v. Terry, 108 F.3d 637 (6th Cir. 1997) (state statute requiring ''paid for by'' disclaimer on independent expenditures was narrowly tailored to advance state interest in advising electorate of sources of support and prevent actual and perceived corruption).(see footnote 6)
I think it is fair to conclude from these cases that courts will protect at least some anonymous speech in candidate elections. Given these cases, I think Congress would be well served to consider carefully how (if at all) to expand disclosure requirements, rather than simply treating more disclosure as automatically better. The trend in court decisions indicates that we face at least some risk of having even current disclosure requirements struck down or narrowed.
CONCLUSION: EXPANDING RATHER THAN LIMITING POLITICAL PARTICIPATION
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In conclusion, we must recall that all political activity is, by definition, protected by the First Amendment. While many of us have firm opinions, which we hope are well founded, about settled areas of the law, we can expect significant constitutional issues to arise and be adjudicated in a campaign finance context, as with other areas of First Amendment law. Congress should be cognizant that it is dealing not only with speech standards (soft money and express advocacy) but with a range of other First Amendment issues. As political practices and technologies change, new First Amendment issues will arise and formerly settled distinctions will fade or become irrelevant.
For these reasons, a comprehensive but constitutionally-permissible campaign finance reform may be an impossible quest. If Congress chooses to pass sweeping campaign finance legislation without careful attention to constitutional considerations, Members should realize that they are presenting significant constitutional issues not only to the courts, but to the agency that administers the law, and to campaigns and citizens who live under it, not only as to one major case, but in a series of controversies likely to last for decades.
For these reasons, Congress might look to opportunities, such as those presented by the Internet, to expand political liberties and participation, rather than restricting campaign finances, as the most appropriate means of preventing corruption and reforming the political process.
Mr. CANADY. Ms. Murphy.
STATEMENT OF LAURA W. MURPHY, DIRECTOR, AMERICAN CIVIL LIBERTIES UNION, WASHINGTON OFFICE
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Ms. MURPHY. Thank you, Chairman Canady, and members of the subcommittee. I really appreciate the opportunity to testify today on behalf of the American Civil Liberties Union. Wholly apart from my professional responsibilities as the ACLU's chief lobbyist on this issue, I like to think about and talk about this issue, because there have been 13 runs for public office in my immediate family. And so after handing out campaign literature and going door to door since the age of 7, I have some real deep appreciation for the importance of the rules of the game, and campaign finance reform deals with the rules of the game.
But I also appreciate the fact that you are viewing this issue through a constitutional prism, because so many constitutional issues are at stake, as Commissioner Mason said.
The ACLU has been studying, litigating and lobbying on these issues for the last 25 years. We were instrumental in two cases, bringing two cases that proceeded Buckley, the National Committee on Impeachment v. The United States, and ACLU v. Jennings. And ACLU attorneys also argued in the Buckley case in the Supreme Court.
My testimony—I am going to jump around a little bit, because I wrote 13 pages of single-spaced testimony, again, evidence of my passion. But I am always—I always feel better, because there are two other people in the room who always write more than I do, Doug Johnson of the National Right to Life Committee, and James Bopp. So Jim gets the prize for the thickest piece of testimony.
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We all know the reasons why there is a mishmash of laws governing our political process, and that is because Buckley really constrained the ability of Congress to legislate and prescribe activity in this area. So we have this patchwork quilt of laws, oftentimes things that don't make sense, personal wealth that can be spent, but inability to contribute more than $1,000 to a particular candidate for people who don't have personal wealth. I mean, there is really no rhyme or reason here.
And I understand that Members of Congress feel enormous pressure to do something, but I think we should all feel some pressure to do something. The system of electing candidates to Federal office needs repair. So today we will not just state our objections to the constitutional infirmities of the most popular pill, the Shays-Meehan bill that the House is likely to consider, but we will also continue to advocate for reform of the current system, but with fidelity to the first amendment principles we hold dear and with the goal of expanding and not limiting speech.
My written testimony again focuses on three areas. It outlines what we believe to be the problems in our system, and I think talking about the problems is important, because when you listen to the House debate, in particular last year, many Members didn't agree on what the problems were, so, of course, there was no agreement on what the solution should be.
But the other two issues that I would like to talk about are what are the Civil Liberties objections to the most popular reform measures and what are our proposed solutions.
The main problems with the Shays-Meehan bill, and it has been reintroduced, it is H.R. 417, is that it restricts the right of the people to express their opinions about elected officials and issues through unprecedented limitations on the issuance of voting records and restraints on citizen commentary prior to an election. In other words, it greatly, greatly infringes on the right of the people to engage in issue advocacy. In our view, there are also constitutional problems with restrictions on contributions to and uses of soft money.
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Thirdly, it chills free expression through burdensome reporting requirements and greatly expands FEC investigative and enforcement authority. And, finally, it encourages discrimination against lawful permanent residents, and we believe this not only alienates emerging groups of citizens, but also makes people who are new citizens less likely and less willing to participate in the political process through contributions.
This bill contains a permanent year-round restriction on issue advocacy achieved through redefining express advocacy in an unconstitutionally vague and overbroad manner. What Shays-Meehan does is essentially take a lot of activities that occur before an election and turn them into forms of express advocacy so that these activities have to be reported to the FEC, so that contribution limits are put into place.
And we are very, very concerned, reporting requirements, that these limitations are likely to chill free expression right before an election, the time when people's voices need to be heard the most about issues.
The Shays-Meehan bill requires a 2-month blackout on all television and radio issue advertising before the primary and general elections. The Shays-Meehan bill contains a misleading exception for candidate voting records. So often throughout the debate last year, we heard from the sponsors of the legislation that voting records were adequately protected. They are not in the Shays-Meehan bill, because any kind of editorial comment that accompanies voting records is very constrained.
And overall, the bill redefines terms like expenditure, contribution, coordination with the candidate, so that heretofore legal and constitutionally protected activities of advocacy groups become illegal. And the fact they become illegal is no small thing because slipped into this year's bill was a 1-year mandatory minimum. I thought the ACLU had plenty to deal with in the juvenile justice bill and larger crime bills, but now here we have a mandatory minimum for failing to comply with FEC regulations and FECA.
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Well, let us suppose, for example, that Congress tried to constrain editorial boards of newspapers in a similar fashion, that they constrained issue advocacy groups as they propose in this bill. Any time a news outlet ran an editorial 60 days before an election or otherwise that mentioned the name of a candidate, the law would now require them to disclose the author of the editorial, the amount of money spent to distribute the editorial, and the names of the owners of the newspapers to the FEC or risk prosecution or imprisonment.
We would never dream of doing that in this country, and yet newspapers and broadcast outlets have tremendous bearing on how voters make their decisions in the polling booth. I have seen more people with the Washington Post rolled up under their arm going into the voting booth than I have people with issue group literature. But we would never dream of constraining the press the way we constrain issue advocacy groups.
And I think if we are going to look at all of the constitutional issues, we ought to say what is good for the goose is good for the gander. And if it is not good for the press, it certainly isn't good to even constrain less powerful groups like issue advocacy organizations.
I see that the red light is on. But let me just say one thing about—two things, and then I will end. Soft money is a conundrum for most people. The litigation isn't as clear in this area. And I think that we have to look at parties as two bodies in one. In other words, parties exist to help elect their candidates, that is true, but they also exist to be issue advocacy organizations. And to the extent we permit Congress to restrict contributions to parties, I think we are getting on a slippery slope that will lead to a justification for restricting issue advocacy groups.
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And the last thing I want to say is that most of the debate over the 1996 election problems that led to a very vigorous campaign finance reform debate last year had to do with the influence of foreign nationals on our political process. And I just think that it is important for us to treat legal, permanent residents differently. These are citizens who are waiting, these are people who can be drafted, these people who pay U.S. taxes. And I don't think it is appropriate for Congress to limit their ability to contribute to parties in a way that really makes them outsiders in the political process. And these are the people we have invited to this country for the most part, and we should not exclude them.
I will save a lot of what the ACLU is concerned about for the question-and-answer period. And again, I would like to thank the members of the subcommittee for inviting us to testify.
Mr. CANADY. Thank you, Ms. Murphy.
[The prepared statement of Ms. Murphy follows:]
PREPARED STATEMENT OF LAURA W. MURPHY, DIRECTOR, AMERICAN CIVIL LIBERTIES UNION, WASHINGTON OFFICE
Chairman Hyde, Chariman Canady, Members of the Subcommittee, my name is Laura W. Murphy. I appreciate the opportunity to testify today on behalf of the American Civil Liberties Union (ACLU). For almost 80 years the ACLU has been a nation-wide, non-partisan membership organization of nearly 300,000 members devoted to protecting the rights and principles of freedom and individual liberty set forth in the Bill of Rights and the Constitution.
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The ACLU and the ACLU Foundation are not-for-profit 501(c)(4) and 501(c)(3) organizations respectively. We are wholly supported through membership dues, private individual donations and foundation grants. Neither entity receives any federal funds, whatsoever.
I have had the privilege of serving as Director of the ACLUE Washington Office for the last six years. In addition to directing the overall legislative and Executive Branch operations for the national organization, since 1995 I have also served as the ACLU's primary lobbyist on campaign finance reform issues.
Wholly apart from my current professional responsibilities, my interest in this issue even predates my tenure with the ACLU or formal work experience in politics that started right here in 1976 as a legislative assistant on Capitol Hill. From the age of seven through the end of college, I was going door-to-door campaigning for several members of my immediate family who ran for office some thirteen times in my home town of Baltimore, Maryland. For the most part my father, mother and two eldest brothers had the means to finance their own campaigns, even ones that were city-wide. However, I know all too well the rubber chicken fund raising circuit, as well as the numerous paper cuts that can be endured when the direct mail drops are assembled on the kitchen table with volunteer and child labor. I hope that these personal experiences combined with my fealty to First Amendment freedoms helps me to be practical and principled in crafting our response to federal campaign finance proposals.
The ACLU has been studying, litigating and lobbying on the constitutional and practical implications of federal campaign finance laws for over the last twenty five years. The ACLU filed two important lawsuits that preceded Buckley v. Valeo, 424 U.S. 1 (1976)—National Committee on Impeachment v. United States 469 F. 2d 1135 (2d Cir. 1972) and ACLU v. Jennings 366 F. Supp. 1041 (D.D.C. 1973). ACLU attorneys also argued for the plaintiffs before the Supreme Court in the case of Buckley v. Valeo. These three ACLU cases created much of the constitutional framework that has constrained all federal campaign finance legislation during the past two decades. For the benefit of the newer members of Congress, I hope the Chairman will allow me to submit for this hearing record previous testimony that effectively summarizes this litigation written by Ira Glasser, ACLU National Executive Director and Joel Gora, Professor of Law, Brooklyn Law School and campaign finance counsel to the ACLU.
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Perennial congressional debates on campaign finance reform are driven by several elements:
A desire to prove to the public that Congress is willing to limit the perception or reality that corporate, personal or interest group funds disproportionately or illegally influence the outcome of elections and the fate of legislation.
A need to respond to perceived campaign abuses of the moment.
Personal frustration about the time and effort that it takes to raise money to run for Congress.
Frustration by candidates and some interest groups that, during elections, information about candidates or their positions on issues is not solely controlled by parties and candidates because of the explosion of unregulated soft money and issue advocacy.
The desire to address the unintended consequences created by the original Federal Election Campaign Act (FECA) and subsequent court rulings (placing influence on campaigns outside the sphere of ''control'' of candidates).
Rigid notions, carried over from Congress to Congress, of what constitutes legitimate ''reform'' legislation.
Related decisions by House and Senate party leaders about which proposals will make it through the legislative processes (through discharge or normal processes), and subsequent pressure on members to ''fall in line.''
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Unfortunately, efforts to engage in true problem solving have been frustrating. Congress and the so-called reform interest groups seem hardened in their approach to reform. Recent congressional debates seem more focused on immediate problems such as the 1996 soft money scandal than on fixing systemic problems in a constitutional manner. Most of my recent conversations with members of Congress and interest groups have been focused more on what is expedient and politically correct and not enough on preserving First Amendment freedoms. When constitutional issues are raised, some cynically characterized these issues only as a means by ''reform opponents'' to undermine popular ''reform'' proposals.
What is worse, some Members feel such enormous pressure to ''do something'' that they quietly say they hope the courts will overturn the very laws they are voting to enact. Sometimes voting against bills like Shays-Meehan, even if it is done to protect the First Amendment, is not worth the criticism by their colleagues, the ''reformers'' or the media back at home in the district. Other Members only recognize the First Amendment in the context of campaign finance reform and become deaf to it when it concerns flag desecration or Internet free speech or hate speech. At the end of the day—because of the certainty of filibusters and challenges to the constitutionality of the legislation too many Members are convinced that the status quo that got them here will prevail. For these survivors, the known ''evil'' of our broken system is preferable to the imaginary ''level playing field'' promised to us all by Shays-Meehan.
In case I am sounding like the ACLU is here only to point fingers, let me say that we intend to be part of the solution. The system of electing candidates to federal office needs repair. The ACLU is too often perceived as a pawn of the ''just say no to reform'' crowd rather than the engine of creative constitutional proposals to address our systemic electoral problems. The ACLU will not merely state its objections the constitutional infirmities of the popular so-called reform measures such as the Shays-Meehan bill, H. R. 417. We will continue to advocate reform of the current system, but with fidelity to the First Amendment principles, and with the goal of expanding, not limiting political speech.
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In today's testimony I will address the following three issues: What are the problems in our current system? What are the civil liberties objections to the most popular reform measures? What are our proposed solutions?
THE PROBLEMS IN OUR CURRENT SYSTEM
Most of us on this panel probably agree that we have a political financing system that is in need of reform. It is a system of unintended consequences, created by well-intentioned legislation proposed to fight corruption during the Watergate era in 1971 and 1974. Federal court rulings, most notably the Supreme Court's decision in Buckley v. Valeo and many related decisions during the last two decades, struck down much of the 1974 law.
Some oversimplify Buckley and reduce it to a ruling that says ''money equals speech.'' But the ruling was more nuanced than that. The Court recognized that money is spent in our democratic system for speech to be heard. Flyers are printed, ads are run, consultants are hired and paid, trips are taken—all to get political and issue messages out. The Court believed that to the extent Congress placed dollar limits on the amounts of funds raised and spent, it gave the government the capacity to ration and control political speech protected by the First Amendment.
But the Court also ruled that the only reason that limits should be in place at all is to guard against the reality or appearance of corruption. Because some of the laws Congress enacted were kept in place and others were not, we have a legal mishmash of Congressional statutes and Court rulings giving us our current system that:
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Retains outdated campaign contribution limits of $1,000 per race, $2,000 per cycle and $25,000 in total;
Allows unchecked spending by candidates with personal wealth;
Forces candidates to spend much more time raising money because of contribution limits that have never been adjusted for inflation;
Gives rise to and fosters reliance upon political action committees (PACs);
Increases the importance of independent expenditures (that are used to support or oppose candidates but are not run or coordinated by the candidates);
Helps explode the raising and spending of money by political parties, known as ''soft money;''
Skews the marketplace of ideas by stifling some voices and, by default, magnifying others, such as those of the owners of major media outlets whose editorials cannot (and should not) be controlled by campaign finance legislation; and
Greatly enhances the influence of celebrity endorsements because of the restrictions on hard money funds available for campaigns.
Now that we have identified these interconnected problems in our campaign finance system, we need to focus on meaningful solutions. But let's first focus on what we should not do.
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WHAT ARE THE RISKS POSED BY THE MOST POPULAR REFORM MEASURES?
The American Civil Liberties Union believes that too many current proposals attempt to restrict issue advocacy, soft money and rights of new Americans and lawful permanent residents in a manner inconsistent with federal court holdings and constitutional rights. For the sake of today's testimony I will focus my remarks primarily on key elements of H.R. 417 the Shays-Meehan bill, because this is the bill that has the most co-sponsors and enjoys the support of President Clinton. We believe that this bill violates First Amendment rights because the legislation contains provisions that would:
restrict the right of the people to express their opinions about elected officials and issues through unprecedented limitations on text accompanying issue group voting records and restraints on citizen commentary prior to an election,
restrict contributions to, and uses of soft money, and
chill free expression through burdensome reporting requirements and greatly expanded FEC investigative and enforcement authority, and
encourage discrimination against lawful permanent residents and alienate emerging groups of citizens and potential from our political systems.
H.R. 417 creates burdensome laws that will abridge the very speech that the First Amendment was designed to protect political speech.
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ISSUE ADVOCACY
Shays-Meehan has a chilling affect on issue group speech that is essential in a democracy. H.R. 417 contains the harshest and most unconstitutional controls on issue advocacy groups.
This bill contains a permanent year-round restriction on issue advocacy achieved through redefining express advocacy in an unconstitutionally vague and over-broad manner. The Supreme Court has held that only express advocacy, narrowly defined, can be subject to campaign finance controls. The key to the existing definition of express advocacy is the inclusion of an explicit directive to vote for or vote against a candidate. Minus the explicit directive or so-called ''bright-line'' test, what will constitute express advocacy will be in the eye of the beholder, in this case the Federal Election Commission (FEC). Few non-profit issue groups will want to risk their tax status or incur legal expenses to engage in speech that could be interpreted by the FEC to have an influence on the outcome of an election.
It requires a two-month black-out on all television and radio issue advertising before the primary and general elections. The bill's statutory limitations on issue advocacy would force groups that now engage in issue advocacy—501(c)(3)s and 501(c)(4)s—to create new institutional entities PACs—in order to ''legally'' speak within 60 days before an election. Groups would also be forced to disclose or identify all contributors to the new PAC. For organizations like the ACLU, this will mean individuals will stop contributing rather than risk publicity about their gift. The opportunities that donors now have to contribute anonymously to our efforts to highlight issues during elections would be eliminated. (This is a special concern for groups that advocate unpopular or divisive causes. See NAACP v. Alabama 357 U.S. 449(1958).) For many non-profits, being forced to establish PACs entails a significant and costly burden, one that can change the very character of the organization. Separate accounting procedures, new legal compliance costs and separate administrative processes would be imposed on these groups—a high price to exercise their First Amendment rights to comment on candidate records. It is very likely that some groups will remain silent rather than risk violating this new requirement or absorbing the attendant cost of compliance. The only entities that will be able to characterize a candidate's record on radio and television during this 60-day period will be the candidates, PACs and the media. Yet, the period when non-PAC issue groups are locked out is the very time when everyone it paying attention! Further, members of Congress need only wait until the last 60 days before an election (as it often does now) to vote for legislation or engage in controversial behavior, so that their actions are beyond the reach of public comment and, therefore, effectively immune from citizen criticism.
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Shays-Meehan contains a misleading exception for candidate voting records. The voting records that would be permitted under this new statute would be stripped of any advocacy-like commentary. For example, depending on its wording, the ACLU might be banned from distributing a voting guide that highlights members of Congress who have a 100 percent ACLU voting records as members of an ''ACLU Honor Role.'' Unless the ACLU chose to create a PAC to publish such guides, we would be barred by this statute even though we do not expressly advocate the election or defeat of a candidate. Courts have clearly held that such a result is an unacceptable or unconstitutional restraint on issue-oriented speech.
It redefines ''expenditure,'' ''contribution'' and ''coordination with a candidate'' so that heretofore legal and constitutionally protected activities of issue advocacy groups would become illegal. Let's say, for example, that the ACLU decided to place an ad lauding, by name, Representatives or Senators for the effective advocacy of constitutional campaign finance reform. That ad would be counted as express advocacy on behalf of the named Congresspersons under H.R. 417 and would be effectively prohibited. If the ACLU checked with key congressional offices to determine when this reform measure was coming to the floor so the placement of the ad would be timely that would be an ''expenditure'' counted as a ''contribution'' to the named officials and it would be deemed ''coordinated with the candidate.'' An expanded definition of coordination chills legal and appropriate issue group-candidate discussion.
If these very same restrictions outlined above were imposed on the media, we would have a national First Amendment crisis of huge proportions. Yet, newspapers such as the Washington Post, the New York Times, the Los Angeles Times and other media outlets relentlessly editorialize in favor of Shays-Meehan—a proposal that blatantly chills free speech rights of others, but not their own. Let's suppose Congress constrained editorial boards in a similar fashion. Any time news outlets ran an editorial—60 days before an election or otherwise—that mentioned the name of a candidate, the law now required them to disclose the author of the editorial, the amount of money spent to distribute the editorial and the names of the owners of the newspaper to the FEC, or risk prosecution. The media powerhouses would engage in a frenzy of protest, and you could count on the ACLU challenging such restraints on free speech. Yet, the press has as much if not more influence on the outcome of elections as all issue advocacy groups combined. I've seen more people go to the polls with their newspapers wrapped under their arm than any other issue group literature.
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The Shays-Meehan bill contains misguided and unconstitutional restrictions on issue group speech and only works to further empower the media to influence the outcome of elections. None of the proposals seek to regulate the ability of the media—print, electronic, broadcast or cable—to exercise its enormous power to direct news coverage and editorialize in favor or against candidates. This would be clearly unconstitutional. It is equally unconstitutional to effectively chill and eliminate citizen group advocacy. It is scandalous that Congress would muzzle issue groups in such a fashion.
Finally, the ACLU has to be especially watchful of the Federal Elections Commission because it is a federal agency whose primary purpose is to monitor political speech. If Congress gives the FEC the authority to decide what constitutes ''true'' issue advocacy versus ''sham'' issue advocacy, the FEC is then empowered to become ''Big Brother'' of the worst kind. Already, it has been, far too often, an agency in the business of investigating and prosecuting political speech. The FEC would have to develop a huge apparatus that would be in the full-time business of determining which communications are considered unlawful ''electioneering'' by citizens and non-profit groups. Further, Shays-Meehan contains harsh penalties for failure to comply with the new laws.
SOFT MONEY
Congress feels compelled to stem the huge monetary contributions to the Democratic and Republican parties known as soft money. However the challenge is to approach any regulation in this area in a manner that is consistent with existing restrictions on hard money and in a way that does not undermine the parties' ability or rights to engage in issue advocacy. Congress must recognize that parties are both advocates for their candidates, dedicated to getting them elected, as well as issue groups. The typical response to this phenomenon in most reform proposals is to make all contributions to parties hard money contributions. Many allege that this is necessary because large contributions are corrupting the parties
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Has Congress proven that the candidates and the parties have been ''corrupted'' by huge corporate, individual and union gifts to parties? The risk of corruption must be established because that is the fundamental rationale that the Supreme Court has used to let stand contributions limits. In the absence of any compelling governmental interest, restrictions on corporate and union contributions to parties not only trammel the First Amendment rights of parties and their supporters, they also dry up funds for issue advocacy work of parties. Parties would be unable to support grass roots activity, candidate recruitment and get-out-the-vote efforts to the same extent they do now. Once Congress is able to place contribution limits on party issue advocacy activities, then the troublesome potential for a ''slippery slope'' is created leading to restriction on non-party issue advocacy.
The ACLU recognizes that there has been an explosion in soft money largely because hard money contributions to candidates and parties have not kept up with inflation. In addition, when the FEC issued its 1978 ruling that facilitated the use of soft money, it did not realize that soft money contributions would increase exponentially. But the problem with Congressional efforts to restrict soft money is that Congress has not put forth an adequate rationale for restriction. In Colorado Republican Federal Campaign Committee v. FEC, 116 S.Ct. 2309 (1996) the Supreme Court stated:
''We recognize that FECA permits individuals to contribute more money ($20,000) to a party that to a candidate ($1,000) or to other political committees ($5,000) . . . We also recognized that FECA permits unregulated ''soft money'' contributions to a party for certain activities, such as electing candidates for state office . . . or for voter registration and ''get out the vote'' drives . . . But the opportunity for corruption posed by these greater opportunities for contributions is, at best, attenuated. Unregulated ''soft money'' contributions may not be used to influence a federal campaign, except when used in the limited party-building activities specifically designated by statute.'' Id. At 2316.
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In addition, the ACLU is also concerned that restrictions on soft money are a potential form of incumbent protection of the most insidious kind. Congress is approaching the phenomenon of huge soft money contributions thinking only about Democratic and Republican parties. But what kinds of burdens does this create for emerging parties? How does an environmental party or a libertarian party raise enough money to get its agenda in the national media? Emerging parties often need a few very large contributions to jump-start their ability to attract media and a following on their issues.
We believe that Shays/Meehan impermissibly limits soft money. These provisions do not do anything to ''Big Money'' in politics except push money into other forms of speech that are beyond the reach of the campaign finance laws.
POLITICAL SPEECH OF NEW AMERICANS AND LEGAL IMMIGRANTS
Shays-Meehan threatens candidates and other person who accept a contribution from a foreign national with a prison term and a fine if the candidate ''should have known'' that the contribution came from a foreign national. This provision could effectively turn new Americans and legal immigrants, all of whom are now empowered to participate fully in the political process by making campaign contributions and expenditures, into political pariahs. It encourages political discrimination because it threatens those who ''should have known'' that the contribution came from a foreign national. It does not tell a candidate or a low-level volunteer who solicits contributions for them how to make that determination.
It purports to limit the chances for discrimination against citizens and legal immigrants with foreign-sounding names by saying the donor's name should not be used as the basis to discriminate. What kind of protection is this? It virtually encourages discrimination based on national origin provided that the indicia of origin is something other than the person's name, such as their ''foreign'' appearance or accent, or for that matter, their neighborhood if it is known to have a lot of people ineligible to contribute on account of their immigration status. If you think this is far-fetched, look no further than the Democratic National Committee's investigation of contributions from foreign nationals in the election before last: it put together a list of those it investigated, virtually all of whom had ''foreign sounding'' names, while proclaiming that other criteria were used to select those whom to investigate.
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Last year, the Shays-Meehan bill degenerated into an attack on the political participation of legal immigrants. Members voted overwhelmingly to bar legal immigrants from making campaign contributions and expenditures, and they did it even though nearly 100 law professors pointed out that such a bar was unconstitutional. People who live here permanently, send their children to our schools, have often married U.S. citizens, served in the Armed Forces (and, indeed, would be subject to the draft if it were reinstated), and pay taxes just like citizens do would have been stifled. H.R. 417 does not currently contain the bar on legal immigrants' contributions. However, we see no reason not to fear that the outcome would be the same this year as last as a result of a likely amendment to the Shays-Meehan bill.
WHAT ARE OUR PROPOSED SOLUTIONS?
The ACLU believes that there is a less drastic and constitutionally offensive way to achieve reform: public financing.
If you believe that the public policy process is distorted by candidates' growing dependence on large contributions then you should help qualified candidates mount competitive campaigns especially if they lack personal wealth or cannot privately raise large sums of money. Difficult questions have to be resolved about how to deal with soft money and independent expenditures. Some of these outcomes are constrained by constitutionally based court decisions.
But not withstanding the nay-sayers who say public financing is dead on arrival, we should remember that we once had a system where private citizens and political parties printed their own ballots. It later became clear that to protect the integrity of the electoral process ballots had to be printed and paid for by the government. For the same reason the public treasury pays for voting machines, polling booths and registrars and the salaries of elected officials. In conclusion, we take it as a fundamental premise that elections are a public not a private process a process at the very heart of democracy. If we are fed up with a system that allows too much private influence and personal and corporate wealth to prevail. Then we should complete the task by making public elections publicly financed.
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Mr. CANADY. Mr. Briffault.
STATEMENT OF RICHARD BRIFFAULT, COLUMBIA LAW SCHOOL
Mr. BRIFFAULT. Thank you very much, Mr. Chairman. I am honored by your invitation to testify here today on this extremely important issue. In my prepared testimony, I have given an overview of congressional regulatory authority in this area and then turn to three specific areas which have been the subject of considerable debate: express advocacy, soft money and independent expenditures.
My guess is given the red and green lights, I will be lucky to get through one of those before the red light goes on. So I thought I would give a general overview consisting of the introduction and then, hopefully, have a brief discussion of issue advocacy.
Elections: In our representative democratic system, elections play the crucial role in creating the government, in electing the officials who make and enforce the laws that bind us all. The Supreme Court has recognized that campaign finance laws can play an important role in assuring that elections actually play their role of creating a democratic representative government.
First, in Buckley v. Valeo and later cases, the Court has recognized that Congress may require the participants in the Federal election campaigns to report their contributions and expenditures and disclose the sources of campaign donations. Buckley gave great weight to the role of reporting and disclosure in informing voters.
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Disclosure, said the Court, provides the electorate with information as to where political campaign money comes from and how it is spent. It allows voters to place each candidate in the political spectrum more precisely than is often possible solely on the basis of party labels and campaign speeches.
In Buckley, the Court also recognizes that campaign contributions do raise the prospect of undue influence on the behavior of government officials after the election, and more accurately between the elections; that is that campaign contributions can create an appearance of corruption that can undermine the legitimacy of government in the eyes of the people.
The Court indicated that Congress can deal with the problem of the potential for corruption and the appearance of corruption by imposing limits on campaign contributions, including dollar limits on the amounts individuals can make to candidates through political action committees and parties, and limits on the amount that intermediate organizations can also make to candidates, as well as aggregate limits on the total any individual can contribute.
The Court has also sustained laws that completely prohibit business corporations from making contributions or expenditures from their treasury funds. And, finally, in the area of dealing with the potential for corruption or the appearance of corruption, the Court has indicated that Congress can provide public funds to candidates and parties with accompanying restriction. It can require those who accept those funds to also accept certain limitations, again, the provision of public funding being something which can reduce the danger of corruption or the appearance of corruption.
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Against that backdrop it may be worth thinking about the issues posed by express advocacy and so-called issue advocacy. Recent elections have witnessed an explosion of so-called issue advocacy; that is, electoral communications that avoid literal words of advocacy, such as words like ''vote for,'' ''elect'' or ''vote against,'' but contain electioneering messages.
An estimated $135 to $150 million was spent on so-called issue advocacy in 1996, and between $275 million and $340 million was spent on issue advocacy in 1998. In some races, issue advocacy swamped spending by the major party candidates. These are all estimated numbers in part because issue advocacy need not be reported.
Issue ads are often indistinguishable from advertising that contains literal words of advocacy. The vast majority of issue ads refer to candidates by name; very few refer to pending legislation. Yet the contributions that fund issue advocacy campaigns are exempt from the Federal Election Campaign Act's reporting and disclosure requirement, are exempt from the dollar limits on individual and PAC donations, and are exempt from the prohibition on the use of corporate and union treasury funds. The dramatic growth of so-called issue advocacy makes a mockery of the Federal Election Campaign Act's requirements and restrictions.
Why has so-called issue advocacy become such an important factor in Federal election campaigns? Buckley v. Valeo upheld the power of Congress to limit contributions. The Federal Election Campaigns Act requires the reporting and disclosure of contributions and expenditures. But the broad language Congress used in the original Federal Election Campaign Act to define election-related financial activity appeared to the Court to raise the danger of regulating political activity generally.
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To save FECA from invalidation, the Court limited its scope by drawing a line between elections and other political activity. The Court sought a standard that would both, one, clearly distinguish between election campaigning and other political speech, and, two, be based on the content of the communication, rather than administrative or judicial probing of the intention of the speaker.
The Court interpreted the Federal Election Campaign Act to apply only to express advocacy of the election or defeat of a clearly identified candidate for Federal office, but the Court gave little attention to the meaning of express advocacy.
Since then, the lower Federal courts in most cases have insisted on an extremely literal definition of the term. As a result, the phrasing commonly used is a so-called ''magic words'' test. Most lower courts have insisted on so-called magic words of advocacy; that is ''vote for,'' ''vote against,'' ''elect,'' in order to treat an ad as express advocacy. Such a test is an open invitation to evasion.
It is child's play for campaign professionals to develop ads that effectively advocate or oppose the cause of the candidate but fall short of literal advocacy. The most common tactic is to include some language calling for the listener or viewer to respond to the message by doing something other than voting. By combining sharp criticism of a candidate with an exhortation to call the sponsor or the candidate criticized, these ads can inoculate themselves from regulation.
What, if anything, constitutionally can be done about so-called issue advocacy? Congress can redefine express advocacy to deal with many of the instances of so-called issue advocacy that have occurred in recent years provided it addresses the Supreme Court's principal concerns in this area, the avoidance of vagueness, the avoidance of overbreadth, and the avoidance of probing the intentions of the speaker or sponsor of a message. The congressional definition of express advocacy must be clear, tightly focused on election-weighted activity and based on objective criteria.
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This suggests two possible statutory approaches. First, Congress could determine that all advertising that clearly identifies a candidate for Federal office within a tightly defined time period before Election Day is express advocacy. Such a definition avoids vagueness, is focused on election-related activity and is entirely objective.
Is it proper to define a message as election-related because of timing? Surely the timing of the message affects its meaning. An election eve advertisement that refers to a candidate is likely to be perceived by the voters as election-related, even if the message refrains from the magic words of literal advocacy. The immediate preelection period is the high point of the election campaign, and voters are most likely to be considering their Election Day decisions, when most political activity is focused on the election. It is unlikely that an advertisement in this period would have any impact on political activity other than on the election itself, even if the ad fails to literally advocate a voting result.
Second, Congress can provide that any communication coordinated with a candidate's campaign is subject to reporting and disclosure requirements and contribution restrictions even if the communication avoids literal words of advocacy.
As a constitutional matter, coordinated communications are tantamount to contributions to a candidate's own campaign and can be treated as express advocacy regardless of their content.
I will stop at the red light. I will be happy to answer any questions later.
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Mr. CANADY. Thank you very much.
[The prepared statement of Mr. Briffault follows:]
PREPARED STATEMENT OF RICHARD BRIFFAULT, COLUMBIA LAW SCHOOL
Mr. Chairman, I am honored by your invitation to testify before the Subcommittee concerning the authority of Congress to regulate federal election campaigns.
By way of introduction, I am Vice-Dean and Joseph P. Chamberlain Professor of Legislation at Columbia Law School, where I am also Executive Director of the Legislative Drafting Research Fund. From January 1997 to the present, I have served as the Executive Director of the Special Commission on Campaign Finance Reform of the Association of the Bar of the City of New York. The testimony I am about to give reflects my views and not those of the Special Commission or of the City Bar Association.
You have asked me to focus my testimony on the authority of Congress to regulate federal election campaigns. I will begin by providing an overview of Congressional regulatory authority and then turn to three specific areas that have been the subject of considerable debate in recent years: the definition of express advocacy, soft money, and independent expenditures.
I. CONGRESSIONAL AUTHORITY IN GENERAL
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Congressional authority to regulate federal election campaigns is framed by the Supreme Court's 1976 decision in Buckley v Valeo and by later cases, dealing with state and local campaign finance laws as well as the Federal Election Campaign Act (FECA). The Supreme Court has affirmed four broad Congressional powers to regulate campaign finance activities.
First, Congress may require the participants in federal election campaigns to report their contributions and expenditures and disclose the sources of campaign donations. Buckley gave great weight to the role of reporting and disclosure in informing voters. ''Disclosure,'' said the Court, ''provides the electorate with information 'as to where political campaign money comes from and how it is spent by the candidate' in order to aid the voters in evaluating those who seek . . . office. It allows voters to place each candidate in the political spectrum more precisely than is often possible solely on the basis of party labels and campaign speeches.''
Second, Congress can limit campaign contributions. Specifically, the Court has upheld dollar limits on the contributions an individual can make to candidates, political action committees (PACs), and political parties; limits on the contributions that PACs can make to parties and candidates; limits on the contributions that parties can make to candidates; and limits on the contributions an individual can make to candidates, PACs and parties in the aggregate.
Third, Congress may completely prohibit business corporations from making contributions or expenditures. In Austin v Michigan Chamber of Commerce, the Court found that limits on corporations are justifiable ''to ensure that substantial aggregations of wealth amassed by the special advantages which go with the corporate form of organization . . . [are] not converted into political 'war chests.'' ' The Court has never considered the comparable limitations on labor unions, but it has generally been assumed that such restrictions are constitutional.
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In this context, the Court has also upheld Congressional regulation of the relations between corporations and unions and their PACs. In particular, the Court has upheld the Congressional power to limit the persons who can be solicited by a PAC sponsored by a corporation or a union and to limit the amount individuals can contribute to a PAC.
Fourth, Congress can provide public funds to candidates or parties. Congress can limit public funding to those candidates who raise a threshold level of contributions, and can vary the level of public funding according to a candidate's ability to raise private funds or according to past political success of the party that nominated the candidate. More importantly, Congress can require a candidate to accept spending limits as a condition for the receipt of public funds.
II. EXPRESS ADVOCACY AND SO-CALLED ISSUE ADVOCACY
Recent elections have witnessed an explosion of so-called issue advocacy, that is, electoral communications that avoid literal words of advocacy—that is, words like ''vote for,'' ''elect'' or ''vote against''—but contain electioneering messages. The Annenberg Public Policy Center estimated that between $135 and $150 million was spent on so-called issue advocacy in the 1996 elections, and that between $275 million and $340 million was spent on issue advocacy in the 1998 elections. In some races, issue advocacy spending swamped spending by the major party candidates.
Issue ads are often indistinguishable from advertising that contains literal words of advocacy. The vast majority of issue ads refer to candidates by name; very few refer to pending legislation. Most ads are closely aligned with the interests of the major party candidates. Indeed, in the last two elections, the two major parties accounted for more than half of the issue advocacy spending, with party issue advocacy accounting for 70% of total issue advocacy advertising in the two months preceding the 1998 general election.
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The contributions that fund issue advocacy campaigns are exempt from FECA's reporting and disclosure requirements, exempt from the dollar limits on individual and PAC donations, and exempt from the prohibition on the use of corporate and union treasury funds. The dramatic growth of such issue advocacy makes a mockery of FECA's requirements and restrictions.
Why has so-called issue advocacy become such an important factor in federal election campaigns? Buckley determined that Congress could impose limits on contributions for federal election campaigns and could require the reporting and disclosure of contributions and expenditures in federal elections. The broad language Congress used in FECA to define election-related financial activity, however, appeared to the Court to raise the danger of regulating political activity generally. To save FECA from invalidation, the Court sought to limit its scope. Acknowledging the difficulty of drawing a line between elections and other political activity, the Court nevertheless sought a standard that would both (i) clearly distinguish between election campaigning and other political speech and (ii) be based on the content of the communication, rather than administrative or judicial probing of the intention of the speaker.
The Court interpreted FECA to apply only to ''express advocacy'' of the election or defeat of a clearly identified candidate for federal office. But the Court gave little attention to the meaning of ''express advocacy.'' Nor has Congress returned to the question to provide a definition of ''express advocacy'' that would address the Court's constitutional concerns. The definition of express advocacy has been left to the lower federal courts. They have in most cases insisted on an extremely literal definition of the term.
This tendency is well-illustrated by Federal Election Commission v Christian Action Network—a case that considered a 1992 television advertisement that referred to candidate Bill Clinton's support for ''radical homosexual causes,'' presented ''a series of pictures depicting advocates of homosexual rights . . . demonstrating at a political march,'' and combined ''the visual degrading of candidate Clinton's picture into a black and white negative,'' ''ominous music,'' and ''unfavorable coloring'' in a manner that ''raised strong emotions [among] viewers.'' The ad named Clinton, used his picture, and was aired immediately before the 1992 general election. The district court determined the message was ''openly hostile'' to the gay rights positions it attributed to Clinton. But the district court and the Fourth Circuit court of appeals both concluded that the ad did not constitute express advocacy of Clinton's defeat because the ad did not expressly exhort the public to vote against him. The Court of Appeals even slapped the Federal Election Commission with attorneys' fees and costs for bringing the case.
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Most of the lower federal courts have followed the Fourth Circuit in requiring ''magic words'' of advocacy in order to treat an ad as express advocacy. Such a test is an open invitation to evasion. It is child's play for campaign professionals to develop ads that effectively advocate or oppose the cause of a candidate but fall short of literal advocacy. The most common tactic is to include some language calling for the listener or viewer to respond to the message by doing something other than voting. In Christian Action Network, for example, the ad called on viewers to telephone the sponsor for more information. Other ads urge voters to telephone the candidate targeted by the sponsor. By combining sharp criticism of a candidate with an exhortation to call the sponsor or the candidate criticized, these ads can inoculate themselves from regulation.
The express advocacy/issue advocacy problem cries out for Congressional action. The Federal Election Commission has attempted to develop rules in this area, but the FEC advisory opinions and regulations lack the legitimacy and constitutional weight of an act of Congress.
What, constitutionally, can be done about so-called issue advocacy? Any legislation should reflect the Supreme Court's principal concerns in this area: the avoidance of vagueness, the avoidance of overbreadth, and the avoidance of probing the intentions of the speaker or sponsor of a message. The Congressional definition of express advocacy should be clear, tightly focused on election-related activity, and based on objective criteria. This suggests two possible statutory approaches.
First, Congress could determine that all advertising that clearly identifies (by name or likeness) a candidate for federal office within a tightly defined time period before Election Day, such as thirty days, is express advocacy. Such a definition avoids vagueness, is focused on election-related activity, and is entirely objective.
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Is it proper to define a message as election-related because of its timing? Surely the timing of a message affects its meaning. An election-eve advertisement that refers to a candidate is likely to be perceived by the voters as election-related even if the message refrains from literal words of advocacy. The immediate pre-election period is the high point of the election campaign, when the voters are most likely to be considering their Election Day decisions, and when most political activity is focused on the election. It is unlikely that a communication referring to a candidate that is disseminated in this period will have any impact on political activity other than the election itself, even if the communication fails to literally advocate a voting result.
Second, Congress can provide that any communication coordinated with a candidate's campaign is subject to reporting and disclosure requirements and contribution restrictions even if the communication avoids literal words of electoral advocacy. Coordination provides an objective indication that the message is election-related. Buckley stated that ''[t]he absence of prearrangement and coordination of an expenditure with the candidate or his agent not only undermines the value of the expenditure to the candidate, but also alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate.'' Conversely, a coordinated communication, even one that avoids literal words of advocacy, can be quite valuable to the candidate and can be the basis for an improper commitment. As a constitutional matter, coordinated communications, like communications from the candidate's own campaign, can be treated as express advocacy regardless of their content.
III. SOFT MONEY
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Soft money is largely a product of the advisory opinions of the FEC that permit political party committees to accept funds that would violate FECA's contribution restrictions as long as those funds are allocated to the support of nonfederal candidates.
Soft money is also, to some extent, an artifact of federalism and of the gap between federal and state campaign finance restrictions. Parties may support both federal and nonfederal candidates. Federal law is appropriately focused on campaigns for federal office, yet some activities on behalf of state candidates will inevitably affect federal election campaigns. Moreover, many states have no limits on contributions by individuals, PACs, corporations and unions, and some state limits are much higher than the federal. This means that money that could not be used in federal election campaigns may have an impact on those campaigns.
Soft money has increased dramatically in recent elections. Federal officeholders, federal candidates and the national party committees have become aggressively involved in soliciting contributions for party soft money accounts and in steering donations to state party committees.
What, constitutionally, can be done about soft money? Congress may prohibit national party committees and their officials and agents from soliciting, receiving or directing to another person a contribution—or making an expenditure—that is not subject to the limits, prohibitions, and reporting requirements of FECA. The Supreme Court has upheld Congress' power to regulate contributions to candidates, and to regulate contributions to organizations that contribute to candidates. The central purpose of the national party committees is the election of party candidates. Donations to a national party committee can be an indirect way of supporting and of seeking to influence the party's candidates. Consistent with Buckley, such donations need to be reported and disclosed, and may be limited to avoid corruption or the appearance of corruption.
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Similarly, Congress may prohibit federal officeholders and candidates for federal office s from soliciting, directing, transferring or spending funds for federal election activity unless those funds satisfy the limitations, prohibitions, and reporting requirements of FECA. The dangers of corruption and the appearance of corruption are particularly acute when federal officeholders and candidates are directly involved in fundraising.
The regulation of state and local party activity is more problematic. Barring soft money contributions to the national parties is likely to lead to a shift in soft money donations to state and local parties. Indeed, more and more soft money consists of national party transfers to state and local parties. This is because the FEC's allocation rules usually permit a state or local party committee to pay for a higher percentage of its activities that benefit both federal and nonfederal candidates with soft dollars than it allows the national party committees. Although Congress can certainly regulate state party activity on behalf of candidates for federal office including activities that benefit both federal and nonfederal candidates, considerations of federalism militate against extensive federal regulation of state and local party activities that benefit nonfederal candidates.
Rather than a complete ban on the use of soft money for the funding of shared federal/nonfederal activities, Congress might want to legislate a formula for determining the portion of shared activities that can be funded by soft dollars. Currently, the FEC relies on the ''ballot composition'' method, which determines the federal and nonfederal (or hard dollar/soft dollar) allocation of state party spending according to the percentage of positions on the ballot which are for federal and for nonfederal offices. This tends to grossly overweight the nonfederal share. Congress can adopt a formula, or direct the FEC to do so, that more effectively limits state party use of soft money for mixed federal/nonfederal activities without prohibiting use of soft money completely.
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To say that Congress may regulate soft money is not to disparage the critical role that political parties play in our system. Parties register and mobilize voters, and provide valuable campaign resources to candidates. The major parties have a broader base and broader interests than most other groups. Indeed, as a policy matter there is much to be said for a significant party role in the campaign finance process. This could justify, for example, raising the limits on hard money donations to parties or exempting donations to parties from the aggregate ceiling on individual donations.
Nonetheless, the existing system for channeling funds to parties—tight hard money limits accompanied by unlimited soft money donations—makes a mockery of the Federal Election Campaign Act, and undermines the legitimate goals of campaign finance regulation, particularly the limitations on special interest influence. In addition, the extreme complexity of the existing system, with parties creating multiple federal and nonfederal accounts, and transferring funds among these accounts and to state and local parties, undermines the goal of providing the public with a clearer understanding of the sources of funding for elections.
IV. INDEPENDENT SPENDING
Buckley held that Congress may not limit independent expenditures, that is, expenditures not in ''cooperation, consultation, or concert'' with a candidate. At the time Buckley was decided independent expenditures were quite rare. They have become far more common in the past two decades. In the process, independent expenditure campaigns have demonstrated that despite Buckley's presumption that such expenditures were likely to be of little benefit to a candidate, such expenditures can, in fact, be quite valuable to the candidates they are intended to assist. The last two decades have also shown that there can be relations between candidate committees and independent committees that fall short of ''cooperation, consultation, or concert'' but that enable independent committees to undertake spending programs that benefit those candidates.
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In 1996 in Federal Election Commission v. Colorado Republican Federal Campaign Committee a fragmented Supreme Court determined that a party committee expenditure that was not in fact coordinated with a candidate is a constitutionally protected independent expenditure. Colorado Republican led to an immediate surge in party independent spending in 1996, but ultimately its role was limited because the parties chose to channel more of their candidate-oriented activity into issue advocacy rather than independent spending. Should Congress decide to regulate issue advocacy, the role of independent spending, particularly party independent spending, would most likely grow.
What, constitutionally, can Congress do about independent expenditures? First, Congress can clarify which expenditures are considered to be independent. Individuals and groups have a constitutional right to engage in unlimited independent spending in support of or opposition to a candidate because the independence of the speaker is said to remove the danger of a quid pro quo. But that is only true when the speaker is truly independent of the candidate benefitted by the campaign activity. If there is tacit or informal coordination between a candidate and an independent individual or group, the spending is no longer ''independent'' but ought to be treated as a contribution. Neither the Supreme Court nor Congress has arti