‘Soft Money’ Rules Upheld by Supreme Court

By Kenneth P. Doyle

In a move that surprised some observers, the Supreme Court upheld federal restrictions on “soft money” campaign contributions to state and local political parties, denying full review in a case brought by the Republican Party of Louisiana and two local GOP party committees ( Republican Party of Louisiana v. Federal Election Commission, U.S., No. 16-865, summarily affirmed 5/23/17).

A brief order from the court May 22 indicated the judgment of a lower court backing the soft-money restrictions was affirmed by a vote of 7-2. Justices Clarence Thomas and Neil Gorsuch supported noting “probable jurisdiction” and setting the case for full review and oral argument, the order said.

Soft money may include corporate and union contributions and unlimited individual contributions if allowed by state law. The federal Bipartisan Campaign Reform Act of 2002 (BCRA), also known as the McCain-Feingold law, banned soft money to national political parties and set strong limits on soft money to state and local parties if used to influence federal elections.

Challengers cited recent deregulatory court rulings to argue that the soft-money restrictions in place for the last 15 years no longer pass constitutional muster. The Trump administration Justice Department, however, supported the current campaign finance law restricting these contributions.

The Supreme Court’s latest action indicated the court may be reluctant to further roll back restrictions on campaign money, at least for now.

Narrowing Definition of Corruption

The justices rejected arguments by the challengers to soft-money restrictions, represented by veteran election law attorney James Bopp.

Bopp contended the most recent Supreme Court rulings in campaign finance and ethics cases have changed the definition of corruption subject to regulation under the First Amendment.

Only “quid-pro-quo” exchanges of specific gifts for specific favors can be targeted by limits on money in politics, Bopp said in court briefs. That definition doesn’t cover soft-money contributions collected for independent spending by a party committee in order to mobilize voters, he said.

Bopp, of The Bopp Law Firm in Terre Haute, Ind., has spearheaded numerous cases nationwide seeking to strike down campaign finance restrictions on First Amendment grounds. He brought previous cases urging the Supreme Court to overrule soft-money restrictions, arguing that the broad type of corruption recognized by the Supreme Court in McConnell has been narrowed by more recent rulings.

Bopp’s latest motion specifically mentioned the 2010 ruling in Citizens United v. FEC and the 2014 ruling in McCutcheon v. FEC, both campaign finance cases, as well as an ethics law ruling by the justices last year in McDonnell v. U.S.

In the McDonnell case, the Supreme Court overturned the corruption conviction of former Virginia Gov. Bob McDonnell (R). A federal jury had found that McDonnell and his wife accepted loans and lavish gifts from a businessman trying to market a tobacco-based dietary supplement in a corrupt exchange for the governor’s help promoting the supplement.

Trump Administration Backs Current Rules

Acting U.S. Solicitor General Jeffrey B. Wall argued that the soft-money restrictions should be left in place. Wall filed the government’s motion to dismiss the challenge or summarily affirm a lower court ruling last month on behalf of the Federal Election Commission, which administers the campaign finance rules.

The motion cited the Supreme Court ruling in 2003 in McConnell v. FEC, which said restrictions on political party contributions are justified because parties are closely tied to federal candidates, and unlimited party contributions can corrupt candidates and officeholders.

The government motion, filed nearly three months after President Donald Trump took office, reflected a decision by the Trump administration Justice Department to support the long-standing campaign finance laws restricting soft-money contributions to political parties.

Wall was appointed acting U.S. solicitor general by Trump while the president’s nominee for the permanent position of U.S. solicitor general, Noel Francisco, awaits Senate confirmation. Francisco, while in private practice at the firm Jones Day, represented McDonnell in last year’s Supreme Court corruption case that resulted in the reversal of the former governor’s conviction.

‘Voters Are Winners’

“Voters are the winners of this decision to turn back unregulated soft money and to reaffirm the importance of effective party contribution limits,” Tara Malloy, deputy executive director at the Campaign Legal Center (CLC), said in a May 22 statement. “Without these soft money limits, political parties would again become vehicles through which big donors would attempt to buy influence over elected officials and their policy decisions.”

CLC, along with Democracy 21 and Public Citizen, other nonprofit organizations that support restrictions on campaign money, filed a friend-of-the-court brief urging the Supreme Court to uphold restrictions on political party soft money.

“Corporate and special interest money has been swamping our elections since the 2010 Citizens United decision allowed unlimited and often undisclosed spending through outside groups,” Craig Holman, government affairs lobbyist with Public Citizen, said in a statement. “But even after Citizens United, the court has not invalidated the ban on direct corporate contributions to political parties and candidates. It is truly significant that today’s decision confirms that the ban on direct corporate contributions is constitutional.”

The Supreme Court’s latest action should “put to rest the issue of the constitutionality of the political party soft money ban,” Fred Wertheimer, president of Democracy 21, said.

“The decision…reaffirms that Congress clearly has the authority, consistent with the First Amendment, to require that money spent by state parties to influence federal elections be subject to federal contribution limits,” he said.

Test for Supreme Court

The decision means that the Supreme Court majority has again upheld the concept of limits on contributions to candidates and parties—a major area of campaign finance law that has continued to stand even as the Supreme Court has rolled back limits on campaign spending by outside groups, Wertheimer said in a statement.

Requirements for disclosure of campaign money also have been upheld by the high court against persistent challenges, Wertheimer noted in a phone interview with Bloomberg BNA.

Despite the latest victory for supporters of strong rules, Wertheimer said that the Supreme Court’s newest justice, Neil Gorsuch, opposed the court majority and favored granting full review on the soft-money case. Gorsuch’s dissent apparently confirmed fears expressed before his confirmation that he would be a strong opponent of campaign finance limits. Gorsuch has a “potentially very damaging view about the constitutionality of campaign finance laws,” Wertheimer said.

The Supreme Court hasn’t decided a major campaign finance case since the 2014 ruling in McCutcheon, which struck down aggregate limits on contributions by a single donor. In McCutcheon and several other campaign finance cases decided over the last decade, the court by a 5-4 vote rolled back restrictions on political money, finding that the rules often violated First Amendment free speech protections.

The government’s motion in the Republican Party of Louisiana case contended that the Supreme Court’s recent campaign finance rulings in Citizens United and McCutcheon explicitly upheld the McConnellruling regarding soft-money restrictions on political parties.

“This case is governed by precedent that this Court has declined to overrule,” the motion said.

Test for Congress?

The latest move by the court indicates it may be reluctant to further deregulate campaign financing by “extending the narrow views of corruption and strong reading of the First Amendment that the Supreme Court put forward in Citizens United and McCutcheon,” Rick Hasen, a law professor at the University of California Irvine who is an election law expert, said in a posting on his Election Law Blog.

“This suggests to me that the Court has really no appetite to get back into this area right now,” Hasen said. The justices may want to “save their capital in ruling on other high profile cases coming down the line” or may have seen problems in the latest case that indicated it wasn’t a good vehicle for overturning the soft money restrictions, he added.

The latest Supreme Court development was a victory for supporters of campaign finance regulation because soft money restrictions and other limits on contributions will continue for now, Hasen said.

“On the other hand,” he said, “we now have a situation where political parties (especially state and local political parties, the subject of Bopp’s petition) are limited in what they can do, while Super PACs and non-disclosing 501(c)(4)s can operate without limit…This further weakens the political parties, which many political scientists and election law scholars [believe] leads to further polarization and political dysfunction.”

There could be room for some bipartisan compromise—a trade of looser limits on party fundraising for increased disclosure of the finances of outside groups seeking to influence elections, Hasen said. He noted, though, that Senate Majority Leader Mitch McConnell (R-Ky.) is well known for opposition to any new campaign finance legislation.

“I doubt McConnell would go for the trade,” Hasen said, “but it would be a good deal all around.”

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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