Testimony of Joseph Remcho

May 5, 1999

Mr. Chairman and Members. I appreciate the opportunity to appear today to provide my perspective on the substantial constitutional issues that are always present when the federal government or any government regulates the participation of citizens in the political life of the nation. My experience is primarily with campaign laws in the State of California. I understand that other members of the panel will provide information about the unsettled state of the law in this area and I, too, would be happy to address recent state and federal court decisions. But I want to focus primarily on the real world effect of the restrictions that inevitably affect all of us who participate in the political process. Although I have represented many past and current politicians and groups in California politics, I, of course, am speaking solely for myself today.

For the past twenty-five years I have engaged in the practice of law in California with a primary interest in the practice of constitutional law and a particular interest in the First Amendment and what we call political law. Politics is now one of the most highly regulated industries in the State of California. Since the Political Reform Act of 1974, California has had a highly complex and intrusive regulatory system, backed by administrative, civil and criminal penalties, to control the behavior of candidates, officeholders and other participants in the political process. Over the past decade it has also had several statewide initiative measures, drafted and supported by those who would take the money out of politics, each of which has placed the perceived need to reduce money in politics over the free flow of political communication.

For me, a central problem with most campaign contribution limit schemes has been that the effect is usually and quite often contrary to that intended by the drafters. In virtually all cases, speech, usually the direct speech of the candidate, is sharply curtailed, while the stated goals of the proponents are poorly served or indeed thwarted. In short, the cost in political speech and association is high; the benefits are often relatively low. The most recent example is Proposition 208, passed by the voters in 1996 and currently stayed by the United States District Court for the Eastern District of California. Proposition 208 set up an elaborate scheme of low contribution limits, so-called "voluntary" but in fact highly coercive limits on political expenditures, and a regulatory system that puts tremendous and expensive burdens on candidates, officeholders and their supporters. The measure is best understood by envisioning oneself as a candidate for office, someone new to politics, running against an incumbent.

Imagine that I want to run for the Assembly against the incumbent, a well-known officeholder. If neither of us can spend a cent on the campaign, he is known to the voters and I am not. No one knows me and I have no way of informing the voters of who I am and what it is that I stand for. Proposition 208 does not bar all spending, but under its "voluntary" limits, we can each spend $150,000 in the primary, but no more. I cannot spend enough so that people know who I am and what I stand for. He wins.

If I refuse to abide by the voluntary limits, I can only raise money at $250 per person. My opponent, however, then gets to spend $450,000 on the primary, can raise at $500 per person and take unlimited funds from his political party. And the state also gives him free space in the ballot pamphlet. He wins.

If my friends are union people who can only give a few dollars each to a union committee, the committee is limited to one $1000 contribution, no matter how many members it has. Not only am I limited to one contribution from their local union, but no other affiliated union can give anything. There may be hundreds of local unions who believe in my philosophy and want me elected, but only one is allowed to give me anything after any of them, or the statewide union, gives me $1000. If my opponent is a businessman or an incumbent with connections, he can reach a hundred people who will each give $500. He can raise $50,000 from them. The most I can get from a union PAC is $1,000 total. He wins.

If a group of my friends wants to spend money on my behalf, they are prohibited from discussing what they are doing with me or anyone working on my campaign. They can pool their resources to help me, but only to the extent of $250 per person. If one of them has given me a contribution of $100, he cannot participate in the independent effort. If a major corporation wants to spend $1,000,000 on its own to oppose me, however, it can do so. My opponent wins.

If my opponent has personal wealth, he can contribute unlimited amounts to his campaign and spend unlimited amounts. I still am limited to raising funds at $500 per person. He wins.

This is not a fair system. More importantly, it is not a constitutional system. It depresses political speech, it oppresses political association, and it discriminates in favor of incumbents, the wealthy and the well-known. It is, in the name of reform, antithetical to everything that the architects of our Constitution believed essential to a free and fair political system.

In California Pro Life Council v. Scully, 989 F.Supp. 1282 (E.D. Cal. 1998), the court enjoined enforcement of Proposition 208 because it found

myriad facts which, taken together, require the court to conclude that on the record made at trial the effect of the initiative is not only to significantly reduce a California candidate's ability to deliver his or her message, but in fact to make it impossible for the ordinary candidate to mount an effective campaign for office.

Id. at 1297.

Testimony adduced at the three-week trial strongly suggested a reverse arms war between two factions supporting competing ballot measures. The proponents of Proposition 208 originally proposed limits of $1,000 in state legislative races, but in response to competition from drafters of the other initiative, they eventually settled on a limit of $500 for those who agreed to accept limits on total spending and $250 for those who did not. The obvious problem was that each wanted to go to the voters claiming they would do the most to take money out of politics.

But what happens when limits are set that low in a state the size of California? California's Senate Districts are larger than those of members of the House of Representatives. Its Assembly districts have more than 350,000 thousand people. As the Court found, at limits of $250 per candidate, it is virtually impossible to raise the funds to reach people. Indeed, even without the voluntary spending limits, "the reduction in fundraising ability caused by the contribution limits of Proposition 208 operates to make those contribution limits effectively operate as expenditure limits." (Id., Findings of Fact at 62, No. 283.)

Perhaps the most telling comparison was that provided by Professor Gary Jacobson of the University of California at San Diego. He compared the $1,000 contribution limit upheld for federal races in Buckley v. Valeo, 424 U.S. 1 (1976) with the $250 limits in Proposition 208. The United States Supreme Court found, in deciding Buckley, that banning contributions over $1,000 would have little effect on fundraising ability at that time, because little more than 4% of all contributions in the election preceding the decision came in amounts of $1,000 or more. That is, the limits it approved in Buckley did not affect 96% of the total funds received by candidates. By contrast, Professor Jacobson's studies demonstrated that the limits of Proposition 208 would have made more than two-thirds of contributions to Assembly races illegal. Unlike the situation in Buckley, this measure would have had a profound impact on the speech of candidates and their supporters. Indeed, Professor Jacobson testified that virtually no California candidate had been elected, running against an incumbent, who had spent what Proposition 208's expenditure limit allowed or less.

Professor Jacobson and other experts also testified that in California, money would still stay in politics, but it would be spent by outside groups acting independently of candidates. That is, money would still be in politics, but no longer would the candidates be accountable for how it was spent. The goal of the proponents to reduce the total amount of political speech would be thwarted, but the candidates themselves would lose control over their own message, because the funds that they had to spend would be far less than the independent operators.

Although California is large, it is not unique in what it costs to run a campaign in that state. Campaigns are increasingly expensive everywhere for a variety of reasons, not least of which is the cost of complying with so many campaign finance laws.

Although the proponents of this and other campaign finance measures across the nation usually candidly state that their goal is to reduce the influence of money in politics, the truth is that the United States Supreme Court has never sanctioned and has expressly disavowed the legitimacy of that goal as a justification for reducing the flow of political speech. See, Buckley v. Valeo, 424 U.S. 1 (1976). Money given to political candidates is not used for exotic trips or castles in Spain. It is used for one purpose: to get out, by whatever means possible, the political message of the candidate. It pays for television, radio, mailings and personal appeals. If those messages crowd out commercials for soap, beer and perfume, then so be it.

The practical consequences are that limits such as those adopted in California and elsewhere favor and institutionalize the advantages of at least the following:

1. Wealthy individuals of whatever political views who can afford to spend what they feel is necessary. In California last year, Al Checchi spent more than $40 million of his own money in the primary. Representative Jane Harmon spent at least $15,000,000 of her own money.

2. Incumbents, sports figures and others with well-established names and reputations who do not need to spend substantial funds to gain name recognition and understanding of what they stand for.

3. Those candidates with the simplest of messages. Candidates with carefully thought-out, nuanced views of issues will always have a hard time getting their message out. But if they are to have any chance of doing so, they will need to spend more and get more information before the voters to explain positions that might be correct, important for the state in the long run, yet not immediately evident to voters.

4. Those candidates whose fund-raising base is consistent with the campaign laws in effect -- namely, those whose base is highly-paid professionals.

An example of the latter is the effect of California's $250 per candidate limit on contributions to state legislators. Let us assume for example that a hotly contested issue in the California Legislature pits my clients, the Service Employees International members in California, many of whom work at low wages in California's hospitals, against California's physicians, who typically are far better paid. Both groups have a strong interest in electing legislators sympathetic to their views. Getting representatives who are sympathetic to your views is the very essence of representative democracy.

Under California's Proposition 208, which is not unusual in campaign finance laws, the 250,000 service employees may band together, as they have, each giving something less than 25 cents a month to their political action committee. And if they structure correctly and have informed counsel, they may in combination give a total of $1,000 to a candidate for the California Assembly or Senate.

What of the physicians? If they pool their funds in a political action committee, they too may give only $1,000 jointly. But each may give the $1,000 to the candidate of choice. And the physicians, unlike the hospital workers, are in a position to do so if the issue is important enough to them. Fifty physicians can give $50,000. Two hundred fifty thousand hospital workers together can give $1,000.

No one disputes that the current system -- with no contribution or expenditure limits -- provides built-in advantages to some sectors. By its nature, it benefits incumbents and it certainly benefits the wealthy. A system of public finance with funding substantial enough to allow messages to get out and qualifying requirements that do not put the government in the business of funding some, but not all, candidates may be the answer. But it is also true that any imposition of restrictions on speech will have profound effects and disparate benefits and disadvantages. No system that depresses speech can fairly be said to be consistent with a nation that cherishes the free exchange of ideas, no matter how foolish they may appear to some. Unless one can create a system that does not itself skew the system and further institutionalize advantages some already have, sound policy suggests that the government require full disclosure of the sources of funds and let the voters make their own judgments about the candidates and the validity of their message.