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'Millionaire' case: new look at campaign finance

By Tony Mauro
First Amendment Center legal correspondent
01.14.08

WASHINGTON — A new First Amendment challenge to a single provision of the McCain-Feingold campaign-finance law could give the Supreme Court yet another opportunity to re-examine the entire law’s underpinnings.

The Supreme Court on Jan. 11 agreed to hear the case, Davis v. Federal Election Commission, a challenge to the so-called “millionaire’s amendment” to the 2002 McCain-Feingold law, officially known as the Bipartisan Campaign Reform Act. The case will likely be heard in late April and decided by July, in time for the height of the campaign season.

Under the provision, when one candidate in an election reports spending more than $350,000 of his or her own funds for a campaign, the candidate’s opponent is freed from the law’s usual $2,300 limit on individual contributions. Donors to the candidate opposing a millionaire can contribute three times as much money as other candidates can receive. The clause was aimed at blunting the advantage enjoyed by rich candidates who can fund their own campaigns.

Jack Davis, a 2006 Democratic candidate for Congress in New York, financed his own losing campaign, exceeding the $350,000 benchmark that triggered the higher limits for his opponent, the incumbent Rep. Tom Reynolds, R-N.Y.

Even though there was no evidence that Reynolds took advantage of the provision by accepting larger donations, Davis challenged it in court. He protested the millionaire amendment’s “unique and disparate treatment” of his “core political expression.” The law, he said, in effect penalized him for exercising his First Amendment right to spend his money on his own campaign by exposing him to opposition by a candidate who is “entitled to collect funds under contribution limits that are significantly higher than normal.”

But a three-judge district court panel in Washington, D.C., rejected Davis’s suit, finding that the law did not chill the speech of Davis or other self-financed candidates. The law “places no restrictions on a candidate’s ability to spend unlimited amounts of his personal wealth to communicate his message to voters, nor does it reduce the amount of money he is able to raise from contributors,” the panel found. Under BCRA, appeals involving its constitutionality go directly from three-judge panels to the Supreme Court.

In the high court appeal, lawyers for Davis note that in Buckley v. Valeo, the 1976 decision that set the standard for assessing campaign-finance laws, the justices said that “leveling the playing field” was not a sufficient justification for infringing on the free-speech right of candidates. Lawyer Andrew Herman also asserts that under past precedents, a candidate’s use of his or her own money in a campaign has been viewed as “non-corrupting.”

Significantly, Davis’s brief then argues that the “millionaire amendment” undermines the justification for the McCain-Feingold law’s most important feature: limiting the corrupting influence of campaign contributions. By allowing the opponents of self-financed candidates to receive larger campaign contributions, the law in effect fixes the perceived problem of millionaire candidates by corrupting their opponents.

“How can the answer to non-corrupting expenditures be found in higher limits made available only to those candidates most susceptible to corruption?” asks Davis’s brief.

Other opponents of the campaign-finance law are also likely to exploit that seeming contradiction. Former FEC chairman Bradley Smith, now chairman of the Center for Competitive Politics, said in a Jan. 11 press release, “There is no way to credibly argue that receiving a contribution in excess of $2,300 is corrupting when facing an opponent of ordinary financial means, but then, if your opponent happens to be rich, that same contribution amount no longer corrupts.”

Smith, author of a 2002 book, Unfree Speech: the Folly of Campaign Finance Reform, added: “This case exposes and undermines the ‘corruption rationale’ used to justify most campaign finance laws.” Smith’s group plans to file a brief in the Davis case.

Solicitor General Paul Clement, in a brief for the Bush administration opposing the petition and supporting the law, said Davis had no standing to sue because he had suffered no injury as a result of the law. The government also claims the law does not violate Davis’s First Amendment rights.

Clement’s brief also responded to the seeming irony in allowing the opponents of self-supporting candidates to receive more potentially corrupting contributions. “The modified contribution and coordinated-expenditure limits contained in Section 319 do not reflect congressional abandonment of FECA's anti-corruption purpose,” Clement wrote. “Rather, they reflect Congress's determination to adjust the balance in a subset of elections to address an additional legitimate interest that is distinctly raised in that subset.”

The administration’s brief also states, “Congress has concluded that the contribution limits — despite their fundamental importance in fighting actual and apparent corruption — should be relaxed to mitigate the countervailing risk that they will unfairly favor those who are willing, and able, to spend a small fortune of their own money to win election.”


Update
Court grills both sides in 'millionaire' case
By Tony Mauro Justices' tough questions remind spectators that this is different high court from one that upheld campaign-finance law in 2003. 04.23.08

Related

Supreme Court to review 'millionaire's amendment'

Campaign-finance law is meant to level playing field in campaigns by letting candidates facing wealthy opponents accept larger donations. 01.11.08

Justices dissect 'millionaire's amendment'
High court's conservatives appear divided over campaign-finance law allowing candidates to receive larger contributions when wealthy opponents spend heavily from personal fortunes. 04.22.08

Court strikes down 'millionaire's amendment'
Justices split 5-4; majority finds campaign-finance law violates the First Amendment. 06.26.08

Court opens term with First Amendment case
2007-08 Supreme Court term preview by Tony Mauro Justices to decide three election- or voting-related cases, consider appeal from government on Internet law. 10.01.07

2007-08 Supreme Court case tracker

Campaign finance overview


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