Columbia Law School
Before the House Judiciary Committee
Subcommittee on the Constitution
May 5, 1999
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
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.
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.
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.
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.
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
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.
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.
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.
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 articulated a test for determining when expenditures are independent. Congress can, and should, do so.
Second, Congress particularly needs to act on the question of party independent expenditures. Colorado Republican determined that some party spending could be independent; but it said nothing about when party spending would be considered independent. Colorado Republican was decided on unusual facts: neither party had nominated a candidate for the open Senate seat at issue. More commonly, one or both major parties will have a candidate who is the intended beneficiary of that party's spending.
Given the close relationship that generally exists between a party and its candidate, truly independent party spending is likely to be rare. Congress can adopt rules that spell out, and limit, the scope of the Colorado Republican exemption from FECA's controls on coordinated expenditures. For example, Congress could provide that once a party has made a direct contribution to, or a coordinated expenditure with, a candidate, then all subsequent expenditures by party committees supporting that candidate ought to be treated as coordinated, not independent. Similarly, Congress could provide that once a party has nominated a candidate then all party expenditures supporting that candidate are presumptively coordinated, not independent.
As with soft money, there is a case for allowing the parties to play a major role in funding elections. This might lead to a relaxation of the limits on coordinated expenditures. But where limits are in place or, as with the publicly funded presidential election system, the limits are basic to the existing regulatory structure, those limits ought to be honored and enforced. Congress can address Colorado Republican by specifying the circumstances in which party spending will be deemed independent.
The three phenomena I have addressed -- issue advocacy, soft money, and independent spending by individuals, groups or parties who are not truly independent of the candidates they support - each represent profound threats to the campaign finance system enacted by Congress in 1974 and sustained by the Supreme Court in 1976. Congress has power to address each of these issues. Indeed, in each of these three areas, Congressional action is both necessary and appropriate not to increase the regulation of campaign finances or to change the campaign finance system but, rather, to restore the Federal Election Campaign Act as it stood following the Buckley decision.
Thank you again for inviting me to testify today.