Rick Hasen's web log
January 17, 2004
The constitutionality of regulating 527 organizations that make only independent expenditures (or electioneering communications) favoring or opposing federal candidates
As this blog has covered, one of the big issues facing the FEC (and probably soon thereafter, the courts) is the extent to which so-called "527 organizations" may be regulated under the FECA. One of the key questions will be whether such organizations that take only individual donations to engage in electioneering communications soon before an election may be subject to FECA rules limiting donations to $5,000 from individuals and non-incorporated associations. So far, analyses have suggested that such groups with a "major purpose" of influencing the outcome of federal elections may be regulated as "political committees" under the FECA and therefore subject to the $5,000 cap. That means not only no huge contributions from George Soros or other billionaires but also no corporate or union money.
Is such a requirement constitutional for a group that does not coordinate with candidates or make any contributions to candidates? Before McConnell, there was a strong argument that the answer was no under a 1981 Supreme Court case, California Medical Association v. FEC. In CMA, the Court upheld the $5,000 requirement as to political committees that made campaign contributions. There was no majority opinion. The crucial fifth vote came from Justice Blackmun, who said it would not be constitutional to limit contributions to such groups if they made only independent expenditures.
In McConnell's footnote 48, however, the Court stated that the statute at issue in CMA was justified not only to prevent “pass-throughs” of contributions to federal candidates but also as an appropriate measure "to limit contributions funding 'express advocacy and other noncoordinated expenditures."
I explain here at 34-35 why this reinterpretation of CMA might mean that may now be unconstitutional to regulate such 527s if they engage in electioneering communications.
[Update: Thanks to Marty Lederman for pointing out a typo and some imprecision in what I wrote in this post:
I wrote:
> "I explain here at 34-35 why this reinterpretation of CMA might mean that may now be unconstitutional to regulate such 527s if they engage in electioneering communications."
What I should have said is:
> "I explain here at 34-35 why this reinterpretation of CMA might mean that it may now be constitutional to regulate individuals' contributions to 527s if those organizations engage in electioneering communications."]
(To the extent that they engage in express advocacy, there may be a good argument that it is constitutional to limit corporate and union activity because it is in connection with a federal election.) Footnote 48 may have other important consequences. For example, depending upon what the Court meant (I offer different interpretations in my paper), it also might lead the Supreme Court (or lower courts interpreting McConnell) to uphold some expenditure limits, even in ballot measure campaigns. That would be the nail in the coffin for the Buckley distinction between contributions and expenditures.
For other analyses of the 527 issues, see Marty Lederman here and Foley and Tobin here.
There is also a potential partisan aspect to all of this, as suggested in yesterday's Washington Post article on the subject:
- The legal assault on the 527s has gained momentum from a shift by the Republican Party -- and, probably, the three Republican members of the six-member FEC -- to a policy of aggressive enforcement of campaign finance law.
Traditionally, Republicans have opposed the regulation of political money, viewing it as an infringement on market competition and free speech. But the Supreme Court's ruling last fall upholding the McCain-Feingold law has made strict enforcement of it decisively advantageous to the GOP, which has been able to do without soft money.
The GOP's shift, and the Supreme Court's pointed criticism of the FEC's past lax enforcement, dramatically changed the dynamics of campaign finance regulation in favor of watchdog groups, which were repeatedly frustrated in the past.