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Dollar Democracy

News & Features | April 28, 2014

The McCutcheon decision.

The Supreme Court is dismantling campaign finance regulations one decision at a time.

On April 2, the Supreme Court ruled in McCutcheon v. Federal Election Commission to strike down aggregate limits on individual donations to political campaigns, continuing the Roberts court’s trend of deregulating campaign finance. In a 5-4 decision, the Court ruled that, under the First Amendment, aggregate limits on individual donations were unconstitutional.

While the $2,600 base limit on individual contributions per candidate was left unaltered, the elimination of aggregate limits means that donors can now contribute that maximum amount to an unlimited number of candidates.

Larry Noble, a former general counsel of the FEC currently working for the Campaign Legal Center in Washington, D.C., told the Observer that he sees the decision as significant on the state level: “You may see more money going into local elections. What you’re gonna [sic] see is more money coming in from out of state; you’ll see a wealthy donor giving to these joint fundraising committees and Massachusetts candidates will get money out of this one large donation being made.”

Even before the McCutcheon decision, out of state donors were significantly influential in Congressional elections. According to Opensecrets.org, in the 2012 Senate race, Elizabeth Warren received 97 percent of her funding from individual donors, and the top three zip codes of those donations came from California and New York, not Massachusetts. The same goes for her opponent, Scott Brown, who received 49 percent of his funding from out of state donors.

Teresa Walsh, a political science professor at Tufts, thinks that this influence will become instrumental in local elections as well: “My prediction is that 11 attorney generals are going to release letters to the various state organizations and say to them, under the recent holding, aggregate limits should be struck down.”

This has already happened in Massachusetts. On April 2, the same day McCutcheon was decided, the Massachusetts Office of Campaign and Political Finance released a statement saying it “will no longer enforce the $12,500 aggregate limit on the amount that an individual may contribute to all candidates.”

McCutcheon follows a series of rulings over the past four decades that have altered federal regulations of campaign finance. The first of those rulings was Buckley v. Valeo in 1976.

Professor Walsh explained the legal history to the Observer: Buckley held that base limits were constitutional because the State had demonstrated a ‘sufficiently important interest’ in limiting quid pro quo corruption and the appearance of such corruption.” Walsh went on to explain that Buckley “found that [aggregate limits] were a permissible corollary to base limits because they prevented evasion of the base limits.”

The decision in McCutcheon didn’t make changes to those base limits, but it did revisit the idea of quid pro quo corruption as it relates to aggregate limits. Larry Noble said,“The rationale for Congress to impose aggregate limits was to stop large campaign contributions which gave rise to real or apparent corruption; at least that’s what the court said in Buckley.” However, according to Noble, McCutcheon “narrowed the definition of corruption so that it only applies when someone directly bribes a member of Congress.” It was this redefinition of quid pro quo corruption that led to the elimination of aggregate donation limits.

Paul Sherman, a senior attorney at the Institute for Justice in Virginia, was the counsel of record foran amicus curiae brief in favor of McCutcheon, submitted to the Supreme Court before oral arguments. According to Sherman, “The Supreme Court has said you can only regulate campaign finance to prevent corruption or the appearance of corruption. The thing is that, historically, all the weight has been on the appearance of corruption standard because there is no systematic evidence that contributions actually lead to increases in corruption.”

In the majority opinion, Chief Justice Roberts agrees with Sherman and his colleagues who submitted similar briefs: “Spending large sums of money in connection with elections, but not in connection with an effort to control the exercise of an officeholder’s official duties, does not give rise to…quid pro quo corruption. Nor does the possibility that an individual who spends large sums may garner ‘influence over or access to’ elected officials or political parties.”

However, for many critics of the decision, there is something much larger at issue: the use of the First Amendment to justify lifting aggregate limits. A letter to the editor in the Washington Post calls the Court’s decision “a perversion of the First Amendment.” Justice Breyer explains in his dissent, “the First Amendment advances not only the individual’s right to engage in political speech, but also the public’s interest in preserving a democratic order in which collective speech matters. Corruption…derails the essential speech-to-government-action tie. Where enough money calls the tune, the general public will not be heard.”

Paul Sherman thinks the Court interpreted the First Amendment correctly. He told the Observer, “The First Amendment protects the right not just to speak but to speak effectively, and to speak effectively to a mass audience you have to raise money. You can’t run an effective campaign without raising money. So when the government restricts campaign finance it is limiting speech.”

Larry Noble sees things differently: “Clearly money is used for speech, but money is not speech, and my other problem…is that it really puts the democracy for sale. The First Amendment means everyone has the right to speak, not that the wealthy can speak the loudest.”

Sherman sees this disparity as “relatively minor.” He went on to say, “There were only a small number of people who were hitting the aggregate limit in the first place.”

But for Professor Walsh, this is precisely the problem. “Its been estimated there are about 159 extraordinarily wealthy donors who can write checks for over $1 million, and this [ruling] will give those donors the ability to do so in an unfettered way. It marginalizes, arguably, the voice of someone who cannot give these large amounts.” 

For many people, giving the maximum allowed amount, $2,600, to even one candidate is less than feasible. Paul Sherman characterized this base limit as “not that much,” but in Massachusetts, $2,600 is nearly half of the average family’s monthly income. Paul Kamenar, the counsel of record for another amicus curiae brief filed in favor of McCutcheon, suggested to the Observer that perhaps people who couldn’t afford to donate could volunteer instead: “You can knock on doors and pass out fliers…that kind of human labor is very valuable to campaigns.”

Kamenar went on to say, “Sure, there are arguments that say the little guy’s being forced out, but basically it’s the little guy who has the same kind of voting power as the billionaire: they both have one vote…right?”