‘Soft Money’ Challenge Heads to Supreme Court

By Kenneth P. Doyle

The Supreme Court has been asked formally to review a challenge to restrictions on “soft money” contributions to political parties—the last remaining major element of the McCain-Feingold campaign finance law passed in 2002.

The filing of a “jurisdictional statement” appealing to the high court had been expected since a lower court ruling last fall, which rejected the soft money challenge launched by the Republican Party of Louisiana. The party committee sued the Federal Election Commission, the agency that enforces restrictions on campaign money to national, state and local parties.

The McCain-Feingold law—formally known as the Bipartisan Campaign Reform Act, or BCRA—requires party committees to use FEC-regulated “hard money” for activities affecting federal elections. Hard money includes only limited contributions and no corporate or union money for these activities.

The new appeal—announced Jan. 6 but not yet docketed by the Supreme Court—gives the court an opportunity to scrap or uphold the restrictions on political party funding that have been in place for nearly 15 years. The case is being considered under streamlined procedures for constitutional challenges to campaign finance laws, meaning that the Supreme Court must issue some type of ruling on the merits, though there’s no guarantee of an oral argument or written opinion.

Parties and Super PACs

James Bopp, Jr., the lead counsel for the Louisiana Republican Party and two local GOP party committees challenging the soft money restrictions, said in a statement that the case is about equalizing the fundraising power of parties and super political action committees—non-party campaign spending groups that have risen to prominence since passage of the McCain-Feingold law and recent court decisions rolling back limits on independent political spending.

“While super-PACs may receive unrestricted funds to do independent activities, political parties are severely limited in their participation by funding restrictions,” Bopp said in a statement announcing the Supreme Court appeal. “Fairness and the First Amendment require that political parties be liberated from the ‘soft money’ restrictions on their independent activities so they can effectively participate in our political system by resuming their traditional voter-mobilization activities.”

Bopp, of The Bopp Law Firm in Terre Haute, Ind., has spearheaded numerous challenges of campaign finance laws nationwide. His latest appeal to the Supreme Court seeks to overturn the November ruling on the soft money challenge by a special three-judge panel of the U.S. District Court for the District of Columbia ( Republican Party of La. v. FEC, D.D.C., No. 15-cv-1241, 11/7/16).

Lower Court Upheld Soft Money Limits

The lower court ruling, which was written by U.S. Circuit Judge Sri Srinivasan, said courts have upheld soft money restrictions of the McCain-Feingold law in a series of cases going back to the 2003 Supreme Court ruling in McConnell v. FEC. The campaign finance law was passed in 2002 and is named for its primary sponsors, Sen. John McCain (R-Ariz.) and former Sen. Russ Feingold (D-Wis.).

“We are not the first court to consider First Amendment challenges to BCRA’s limits on state and local political parties’ use of soft-money donations,” Srinivasan wrote in a 20-page opinion. “We see no salient distinction between the First Amendment claims rejected in those cases and the challenge presented here.”

Srinivasan’s decision was joined by the other members of the court panel: U.S. District Judges Christopher Cooper and Tanya Chutkan. The ruling upheld BCRA provisions that set a $10,000 “hard money” annual limit per contributor on the amount a state party committee can raise for activities that could impact a federal election.

Party-Candidate Links

Bopp has argued that the Supreme Court’s McConnell ruling upholding BCRA has been undermined by more recent Supreme Court cases, including the 2010 ruling in Citizens United v. FEC and the 2014 ruling in McCutcheon v. FEC. The Citizens United ruling rolled back BCRA restrictions on campaign spending by corporations, while McCutcheon struck aggregate limits campaign contributions by an individual.

The decisions left in place limits the direct campaign contributions to candidates and political parties, but Bopp has contended that the logic of these recent cases argues for rolling back funding restrictions on parties, as well.

Srinivasan’s ruling for the lower court said that even if some campaign money, such as contributions to super PACs and other independent groups, presents no potential for quid pro quo corruption, contributions to political parties still have that potential. That is because of the close links between candidates and parties cited in the Supreme Court’s McConnell decision, which remain a concern, the ruling said.

Lawyers for the FEC defended the BCRA’s soft money provisions before the lower court, emphasizing that the previous court rulings upholding the law were based on an extensive record of apparent corruption of the legislative process due to the influence of large soft money contributions to political party committees. Such concerns have continued, the FEC contended, citing a recent indictment of Sen. Robert Menendez (D-N.J.), in part for allegedly trading official favors for a contribution to New Jersey’s state Democratic Party.

While the FEC defended the law in the lower court, the task of defending the BCRA soft money restrictions before the Supreme Court in the coming months will fall to U.S. Solicitor General’s Office, an arm of the Justice Department.

How DOJ handles this case under the administration of President-elect Donald Trump could provide an early indication of whether the new administration is prepared to uphold and enforce campaign finance restrictions, which many Republicans have criticized in the past.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Paul Hendrie at phendrie@bna.com

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