FECA and Supreme Court Cases The day on which President Ford signed major amendments to the Federal Election Campaign Act into law setting limits on election contributions to candidates or party committees, one might wonder about campaign finance in the twenty-first century. How did the U.S. political scene go from numerous corporations making illegal campaign contributions to President Nixon’s reelection, to Federal Election Campaign Act 1974 set in stone, to allowing corporations to pay for advertisements advocating for or going against candidates for the federal office? U.S.
CampaignsAs we all know, without money, campaigns cannot go anywhere. And as it appears, the issue at heart is whether or not political campaign spending is considered as speech. If spending is considered a form of political speech, it is thus protected by the First Amendment. This was the position of the Supreme Court ruling in the case of Buckley v. Valeo (424 U.S. 1, 1976) where the Court ruled spending as speech.
First, we need to consider two aspects in particular that stand out when it comes to American political campaigns, which are lengths and expenses. All the money that gets put to use on political campaigns inevitably leads us to campaign finance regulations which were set up by Congress after 1970 and were later refined by the courts. Campaign finance legislation exists because all the financial means pouring into campaigns appear to be accelerating the potential for possible corruption. However, whether or not an individual’s campaign contributions can influence a congressman’s vote is highly debatable, but it does give the appearance of wrongdoing when a congressman who receives thousands of millions of dollars from the pharmaceutical industry works hard to weaken regulations on pharmaceutical companies so that they can make more profit.
This is certainly not to say that campaign contributions are a form of bribery per se, but they sure do look like corruption to most people. Recognizing that campaign contributions could potentially influence elections and related political processes, congress passed the Federal Election Campaign Act of 1971. Watergate ImpactIf we take a closer look at the post-Watergate timeline, it is evident that campaign finance rules were dramatically overhauled in the 1970s. The Federal Election Campaign Act was first enacted in 1971, and was signed into law by Richard Nixon on February 7, 1972. After the Watergate hearings along with Nixon’s resignation in 1974, campaign laws were toughened once again in the same respected year as well as in 1976. However, prior to The Federal Election Campaign Act, corporations and unions were legally prohibited from making monetary contributions to political candidates. These amendments brought forth a substantial change in the way that economic interest groups participate in the political process.
Now, these monetary contributions, though regulated, limited, and are disclosed as public record, are an important source of funds for politicians. Evidently, money and politics in the United States have become increasingly intertwined, and further reached new heights when the Supreme Court ruled in Citizens United v. Federal Election Commission to allow corporations and unions to spend unlimited amounts of money independently in support of or in opposition to candidates. However, Citizens United didn’t appear out of nowhere. The ruling was only the latest in a series of important court cases that have loosened campaign finance restrictions.FECA 1974 Shortly after Nixon’s resignation in 1974, most of the Watergate-related campaign finance abuses were either proved to be illegal prior to the 1974 FECA amendments or would have been illegal if sufficient evidence were available to prove the alleged abuses. The underlying issue that needed to be addressed was not the actual corruption that was already prohibited with periodic revisions to existing campaign finance reform laws. Instead, it was the systemic problems associated with the appearance of corruption.
Hence, the 1974 FECA amendments were geared towards reducing corruption and the appearance of corruption by limiting financial influence through limits on contributions and expenditures, disclosure, offering funding alternatives for presidential candidates, and providing for independent enforcement of campaign financing laws. Buckley v. Valeo In the United States, political monetary contributions are considered an exercise of First Amendment rights. The reasoning behind this was that communicating ideas required spending money. The 1976 Supreme Court case Buckley v. Valeo was the first case to establish this idea. Buckley v.
Valeo was brought forth to the Supreme Court by a group of plaintiffs, including then- U.S. Senator James Buckley, then-former U.S. Senator Eugene McCarthy, the Conservative Party of New York, the New York Civil Liberties Union, and the likes of others. The plaintiffs argued against the Federal Election Campaign Act on the grounds of its merits, and they firmly believed that the principal provisions of the Federal Election Campaign Act violated the First Amendment. In 1976, the Supreme Court struck down several key provisions of the 1974 amendments to the FECA in Buckley v.
Valeo. The Court subsequently arrived at two important conclusions. First, it held that restrictions on individual contributions to political campaigns and candidates did not violate the First Amendment since the limitations of the FECA enhance the “integrity of our system of representative democracy” by guarding against unscrupulous practices. Second, the Court found that governmental restriction of independent expenditures in campaigns, the limitation on expenditures by candidates from their own personal or family resources, and the limitation on total campaign expenditures did violate the First Amendment. Since these practices do not necessarily enhance the potential for corruption that individual contributions to candidates do, the Court found that restricting them did not serve a government interest great enough to warrant a curtailment on free speech and association.
First National Bank of Boston v. BellottiSimilar to the stance of Supreme Court’s ruling in Buckley v. Valeo, the U.S. Supreme Court upheld the constitutionality of the Massachusetts state statute in the First National Bank of Boston v. Bellotti case. The state statute at the time prohibited organizations from making contributions to influence the outcome of a vote that does not materially affect their assets and holdings.
The National Bank of Boston, along with two other national banks and three corporations, argued that they should have the right to spend money to publicize their oppositions to a ballot initiative that would permit Massachusetts to implement a graduated income tax. In a five to four decision, the U.S. Supreme Court struck down Massachusetts criminal statute. In overturning the decision of the Massachusetts Supreme Judicial Court, the Court held that the corporation’s speech was safeguarded by the first and fourteenth amendments. The Court found that freedom to speak did not depend upon the identity of the speaker. And, since the first amendment was said to protect not just the speaker but also “‘the stock of information from which members of the public may draw,” the Court noted that, especially where speech was related to “the process of governing,”‘ it could not be abridged absent a “compelling” state interest. The Court acknowledged the important state interest in “sustaining the active role of the individual citizen in the electoral process and thereby preventing diminution of the citizens’ confidence in government.
“” However, the Court concluded that this interest was not sufficiently compelling to justify a restraint of the corporation’s first amendment rights. Another interest considered by the Court was that of protecting the rights of minority shareholders whose views might have been different from those aired by the corporation through its officers. That interest, in conjunction with others, also was not sufficiently compelling to justify the statute.Austin v. Michigan Chamber of CommerceIn Austin v.
Michigan Chamber of Commerce, the Supreme Court held that governments may restrict the right of corporations to make independent expenditures on behalf of political candidates. The Austin Court articulated a new constitutional standard for evaluating campaign finance regulation. Such regulation, the Court held, is constitutionally justified because of the distorting effects of corporate wealth on the marketplace of ideas. The Court’s decision to permit regulation on the basis of a speaker’s wealth and corporate form constitutes a significant departure from previous campaign finance jurisprudence and may well spark efforts to regulate other forms of speech on similar grounds.
In 1985 leaders of the Michigan Chamber of Commerce, a nonprofit corporation, decided to use funds from the Chamber’s general treasury to place a newspaper advertisement urging voters to support a particular candidate in an upcoming special election to the Michigan State House. The advertisement would have violated Michigan campaign finance laws prohibiting the expenditures.of corporate funds in state candidate elections. Arguing that these restrictions were unconstitutional under the first and fourteenth amendments, the Chamber brought suit seeking injunctive relief against enforcement of the law in federal district court.
The district court upheld the statute, but the Sixth Circuit Court of Appeals reversed on the ground that the restrictions violated the first amendment. A divided Supreme Court reversed the appellate court, holding the statute constitutional under both the first and fourteenth amendments. Justice Marshall, writing for a six-member majority, found that although the statute burdened political expression, it was constitutional because it was “narrowly tailored to further a compelling state interest.” Finally, the majority addressed the fourteenth amendment challenge to the statute. The Court noted that the same compelling state interests that supported the statute’s constitutionality under the first amendment applied to any equal protection analysis as well. Thus, Justice Marshall again rejected arguments that the statute’s restrictions were underinclusive in omitting unincorporated associations such as labor unions. Justice Marshall also dismissed arguments that the statute’s exemption for media organizations violated the equal protection clause.The new contribution and expenditure limitations, and other provisions of the Federal Election Campaign Act, were challenged in the landmark Supreme Court case, Buckley v.
Valeo. In Buckley as elaborated above, the Court struck down substantial portions of the new regulatory scheme as unconstitutional constraints on first amendment freedoms of speech and association. In particular, the Buckley Court found that while government interests in campaign finance regulation justify limitations on campaign contributions, similar restrictions on independent expenditures do not outweigh individual and societal interests in free speech and the unimpeded exchange of political ideas.
The rationale behind the Buckley Court’s distinction between contributions and independent expenditures was twofold. First, though firmly stating that all campaign-connected spending constitutes protected speech, the Court asserted that restrictions on independent expenditures “necessarily reduce the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached.”‘ In contrast, the Court classified contributions as a significantly more symbolic form of speech, the limitation of which entails only marginal restrictions upon the contributor’s ability to communicate.
The Court concluded that “although the Act’s contribution and expenditure limitations both implicate fundamental First Amendment interests, its expenditure ceilings impose significantly more severe restrictions on protected freedoms of political expression and association than do its limitations on financial contributions.” By far the more significant aspect of the Court’s analysis is its exploration of government interests that might justify limitations on campaign spending. Concerning restrictions on contributions, the Court had little trouble upholding the statute on the basis of its “primary purpose,” that of “limiting the actuality and appearance of corruption.” The Court reasoned that large contributions “given to secure a political quid pro quo from current and potential office holders” clearly threaten the integrity of representative democracy.
Additionally, the Court expressed serious concern for “the impact of the appearance of corruption stemming from public awareness of the opportunities for abuse inherent in a regime of large individual financial contributions. The Court found these governmental interests insufficient to support the restrictions on independent expenditures, however. These limitations, the Court held, constrain political expression “‘at the core of our electoral process and of the First Amendment freedoms.
‘ Moreover, the Court reasoned that the potential difficulty in coordinating independent expenditures with the candidate’s campaign would hamper the effectiveness of these expenditures, which might, in fact, prove counterproductive. For these reasons and others, the Court concluded, “the governmental interest in preventing corruption and the appearance of corruption is inadequate to justify the ceiling on independent expenditures.” The Court also rejected arguments that the government interest in equalizing the relative ability of individuals and groups to influence elections could justify the statute. Such a concept, the Court held, “is wholly foreign to the First Amendment.”‘ Though the Buckley decision did not address regulation of campaign spending by corporations specifically, it laid the groundwork for consideration of the corporate spending question in the Court’s next major campaign finance decision, First National Bank v. Bellotti.
The Court noted that the first amendment protects corporate speech if its impairment would undermine society’s interest in free and open discussion. Holding that the expression barred by the Massachusetts law was clearly “the type of speech indispensable to decision-making in a democracy,” the Court concluded that the statute offended the first amendment. Further, the Court noted that Massachusetts could not deny corporations this protection merely on the basis that as creatures of statute, the corporations possess only rights granted them by the state. The Bellotti Court rejected arguments that Massachusetts had a compelling state interest in protecting the rights of shareholders who disagree with views expressed by the corporation. The statute, the Court concluded, was underinclusive for this purpose because it did not bar other forms of corporate political expression, such as lobbying or discussion of public concerns not connected with a particular election. The Bipartisan Campaign Reform Act (BCRA) Campaign finance became a big issue in 2001, this was mainly caused by several scandals at that time and the campaign for the presidency of McCain in 2000. These scandals were the Tyco scandal, Global Crossing scandal, and the Enron scandal, those had a great impact on the financial landscape in the US.
(Gitell, Seth.) This act is also known as the McCain-Feingold act because McCain and Feingold initiated the bill in the Senate. The act is mainly focused on the reduction of special interest influence. Title 1 of the bill states that indirect contributions made tough national committees of political parties were prohibited in the future.
Furthermore, it prohibited to spend any funds that are not subject to hard money statutory restrictions and reporting requirements. ‘Electioneering communications’ became also more restricted by the fact that this act broadened coordination expenditure rules.The term ‘electioneering communications’ is defined in the act as:”any broadcast, cable, or satellite communication which-(I) refers to a clearly identified candidate for Federal office; (II) is made within (aa) 60 days before a general, special, or runoff election for the office sought by the candidate; or (bb) 30 days before a primary or preference election, or a convention or caucus of a political party that has authority to nominate a candidate, for the office sought by the candidate; and (III) in the case of a communication which refers to a candidate for an office other than President or Vice President, is targeted to the relevant electorate.” (H.R. 2356)