March 29, 2011

Thoughts on the Future Viability of Public Financing Plans After McComish

Will an adverse ruling in McComish doom future viable public financing plans?

I have now reviewed the transcript of yesterday's oral argument. News reports from oral argument are unanimous in predicting that the Court will strike down the matching fund provision of Arizona's public financing law, which provides extra funding (up to a point) for candidates who participate in the voluntary public financing system and face a high spending opponent or a high independent spending against the candidate. This is no surprise; indeed I predicted this in June, when the Court granted an extraordinary stay in the case.

More interesting at this point is the question whether there will remain other viable and constitutional public financing systems after the Arizona system falls. In Slate, I explained the logic of why a rational candidate would not choose to participate in a flat public financing system (like the way the moribund presidential public financing system works) unless there are adequate safeguards that the participating candidate won't be outspent. As I wrote at Summary Judgments back in November,

    [A ruling striking down the Arizona law] is likely to take away one of the only tools available to drafters of public financing measures to make such financing attractive to candidates. Public financing has a number of benefits, including reducing the threat of corruption and the appearance of corruption, providing a jump start for new candidates who are not professional politicians, and freeing up candidates and officeholders to have more time to interact with voters. But rational politicians who are serious candidates will not opt into the public financing plan unless they think they will be able to run a competitive campaign under the public financing system. The whole point of the extra matching funds in the Arizona plan is to give candidates assurance they won't be vastly outspent in their election. While an adverse ruling by the Supreme Court in McComish would not mean that all public financing systems would be unconstitutional, it would eliminate one of the best ways to create effective public financing systems.

    If the Court strikes down the Arizona plan, I expect reformers will push for various alternative plans (which have been proposed over the last few years) to provide public financing to candidates, along with a multiplier match (3 or 4:1) for small contributions. (Give a candidate $100? The candidate gets an additional $300 or $400 from the public financing system.) The idea here would be to provide another way that publicly financed candidates to run competitive campaigns without running afoul of the First Amendment (as likely understood by the Court in McComish). Such plans,however, face two major problems. First, it is not clear if they will actually attract such candidates to participate. Will a rational candidate expect that there will be enough money in the system from these multiplier matches to participate, when facing not only wealthy candidates, but independent spending campaigns which can now be funded by unlimited corporate or union funds through super-PACS? (All of this new funding, of course, is thanks to the big campaign finance story of 2010, the Supreme Court's decision in Citizens United.)

    Second, it will be a hard sell to enact new public finance laws during these difficult economic times. Arizona passed its current measure via initiative. It would require considerable work and resources to get a new measure before voters and passed.

Now I'm concerned that even these "multiple matching for small donors" systems could be in some constitutional trouble. In yesterday's argument, the Chief Justice noted more than once that the Arizona "clean money" website touts the matching funds system there as "leveling the playing field," an equalization rationale that the Court has rejected as permissible in the campaign finance arena. (For more details on this, see links in my Slate piece.) I've always been skeptical about relying on bad legislative intent as a reason to strike down election laws---it should be the effect, not the intent, that matters. If intent does matter, that could doom some of these programs, which no doubt are favored by some because of their equalizing effect. (In the Slate piece, I explained how public financing plans serve valid anticorruption purposes regardless of the equalization rationale.)

Perhaps even more ominous than the Chief Justice's comments in this regard, was the fact that Brad Phillips, defending the Arizona law, suggested that some "multiple matching for small donation" systems could be unconstitutional. From the transcript:
    CHIEF JUSTICE ROBERTS: Would it encourage more candidates to [take public financing] if you doubled the amount that was available for every additional amount that the privately financed candidate spends? He spends $1,000 over the amount and the publicly financed candidate gets $2,000. A lot more people are going to do the publicly financing route if that were the case.

    MR. PHILLIPS: It would encourage them more, Your Honor. It's not our contention that anything that a State or Congress did to encourage public funding would necessarily be constitutional. I think the question would be different if it were a two to one or, to make a more stark contrast, a ten to one match. I think that would raise multiple questions. One question would be, looking at the statute in its entirety, has the public funding scheme become coercive rather than voluntary? It would raise the question whether the purpose of the law were really to simply provide viable funding to candidates --

    CHIEF JUSTICE ROBERTS: But that's kind of an odd line to find in the First Amendment, isn't it? That you get a 100 percent matching as opposed to, say, 110 percent or 150 percent? Somewhere in the First Amendment the line is drawn on the amount?

    MR. PHILLIPS: I think somewhere in the First Amendment there is a line, Your Honor, implicit in Buckley, where a public funding law provides such substantial benefits without sufficient countervailing burdens to publicly funded candidates that it becomes coercive rather than voluntary, and therefore you have coerced someone into accepting a spending limit, which I believe would be certainly subject to strict scrutiny and almost surely unconstitutional. And I think that is-- the Court would need to assess that in each instance, and I think it could be done. I certainly don't think that here you have a coercive system. A third of the candidates don't accept public funding, and most of those who don't and accept -- and face publicly funded candidates actually win.

Now I understand why Brad made this argument---he was trying to fight the suggestion of Justice Alito and others that the way to deal with the problem in this case is just to give a larger grant to begin with. But it does suggest to me the next line of constitutional attack on public financing plans after the Arizona system falls.

UPDATE: A few readers have pointed out to me that the exchange between the Chief and Brad Phillips concerned a hypothetical in which a state provides matching funds based on non-participant and independent expenditure group's spending but where the match would be 2 to 1 rather than 1 to 1. I understood that to be the point of the Chief's hypothetical too, but I did not make that clear in my post above. More importantly, Brad's point about coercion and voluntariness would apply to a system that gave very generous public financing grants as well, including one that gave very generous multiple matches to small donations (not triggered at all by opposition spending). As Buckley and the First Circuit Daggett case make clear, a public financing system which is very generous--when viewed in the context of the entire plan, including contribution limits for non-participating candidates---may be unconstitutional if a candidate does not feel she can rationally choose to opt out.

Posted by Rick Hasen at March 29, 2011 08:35 AM