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In the Arena: Law and Politics Update Legal Commentary on Federal, State and Local Political Legislation

Are the Campaign Finance Laws Too Complicated For the Supreme Court?

Posted in First Amendment, The Supreme Court

Among the clearest conclusions to be drawn from the oral argument in McCutcheon v. Federal Election Commission is that the Court does not fully understand how current law affects the circumvention of contribution limits.  Justice Breyer opened the argument with the hypothetical case of Candidate Smith, whose forty supporters each open a PAC.  No longer bounded by 2 U.S.C. § 441a(a)(3)’s $48,600 cap on contributions to candidates over a two year period, nor by its $74,600 cap on giving to PACs and parties, an individual gives $5,000 to each of the PACs, who together give $200,000 to Candidate Smith.  “[W]e looked up all the rules and the regs—or my law clerk did,” said the Justice, who seemed to insist that the limits thus could be evaded.

Apparently unknown to the Court was the array of statutes that curb such circumvention schemes.  (This was through no fault of the advocates.  One of them even spied one of the law’s strangest anomalies, which is the gap between the $2,600 an individual can give to a candidate, and the $2,000 that another candidate’s campaign can give.)  The Department of Justice regards 2 U.S.C. § 441f’s prohibition on so-called “contributions in the name of another” as a “heartland” provision of the campaign finance laws.  Enforcing that statute is one of the Department’s top criminal priorities—just below anti-terrorism—which might give pause to Candidate Smith’s putative benefactor.

But 11 C.F.R. § 110.1(h) places a more explicit restriction on the Smith scheme.  A person may give to a candidate, and also to a PAC supporting that same candidate, if he or she does not give to the PAC “with the knowledge that a substantial portion will be contributed to, or expended on behalf of, that candidate for the same election ….”  Implicit in Justice Breyer’s hypothetical is that the Smith scheme would be legal, if conducted within the $48,600/$74,600 limit.  Yet the FEC relied on § 110.1(h) to obtain civil penalties from the 1996 campaign of an Alabama candidate, in a scheme echoing the Justice’s hypothetical.  The candidate’s son gave $1,000 each to five PACs, which, in turn gave to his campaign.

Are the campaign finance laws too complicated for the Supreme Court to understand, interpret and apply?  Justice Scalia seemed to think so: “I agree—I agree that—that this campaign finance law is so intricate that I can’t figure it out.”  He may have been too modest.  Listening to Justice Breyer’s hypothetical, he intuited correctly that “I would be surprised if the Federal Election Commission wouldn’t come after you for earmarking.”  And it was Justice Scalia, after all, who, as an assistant attorney general in the Office of Legal Counsel, appeared before Congress on behalf of the Ford Administration to urge action on the Federal Election Campaign Act Amendments of 1976.  Ironically, the future justice warned then that,

by enabling contributions above the established limits to be funneled into campaigns through organizations separate from the candidate himself, the post-Valeo law may sap the strength of our political party system and foster elections whose major themes are selected by issue-oriented or narrowly factional groups, rather than by the candidate or even the candidate’s political party.

Still, Justice Scalia’s comment from the bench in McCutcheon echoed the words of a federal district court judge in California, Howard Matz, who presided in 2005 over the acquittal of a Democratic fundraiser accused of causing false statements to be made to the government.  In a sidebar after the expert testimony of Bob Biersack, then an FEC employee who was called by the Justice Department to explain the reporting requirements to the jury, Judge Matz said, with visible exasperation:

But I’ll tell you something.  This March 11, 2005, letter, which has been marked as 502, was brought to my attention early on in this matter, and I could not make any sense of it.  And I don’t want to digress from the responsibilities I have, but this setup—to set up this regimen at the FEC and the reporting consequences and the transferring at least for accounting purposes of moneys and the distinctions that some of the witnesses testified to before the jurors, I’m confident that the jurors not—I would be surprised if any single juror could follow that extremely complicated evidence.  I think it would be a lot more comprehensible to read the Internal Revenue Code from start to finish than to figure out some of the evidence that was issued on the Federal Election Commission requirements.

Of course, the Supreme Court frequently does review the Internal Revenue Code, and many other complex statutory schemes besides.  In the particular case of the Federal Election Campaign Act, it is aided by statutes that concentrate litigation to some degree, and thereby subject matter expertise, in the District of Columbia Circuit.  (That was of little help to Justice Scalia, who complained: “It might have been nice to have the, you know, the lower court tell me what the law is.”)  From Buckley v. Valeo to Citizens United v. Federal Election Commission, the Court has seldom shied from evaluating technical and even comprehensive campaign finance laws.  The inherent tension between the First Amendment and these laws makes it inevitable that the Court would do so.  But one wonders whether the effective decision of McCutcheon and a full awareness of its potential consequences require a deeper understanding of the statutes than the Court displayed yesterday.