When the Supreme Court upheld the constitutionality of large parts of the Federal Elections Campaign Act in Buckley vs. Valeo (1976), he launched what is now a nearly half-century experiment with tight regulation of political speech and campaign finance.
At the time, this newspaper wrote that the law “will probably act like the Frankenstein monster that it really is.” He will be terribly difficult to kill, and the more you hurt him, the more havoc he will create.
The problem with FECA and its 2002 appendix, the Bipartisan Campaign Reform Act, is that they regulate discussions about candidates, elections, and public affairs, precisely the speech the First Amendment was intended to protect. The result is that the Supreme Court has spent years embroiled in campaign finance disputes, as this newspaper predicted.
On January 19, the judges hear the last case, Cruz v. Federal Election Commission. In Buckley, the court upheld much of the FECA due to what it saw as a compelling government interest in preventing “corruption”. In Cross, the central question is: is it “corruption” when a civil servant receives what is legally due to him?
Under FECA, a candidate cannot accept a campaign contribution from anyone that exceeds $2,900, a limit that tends to benefit incumbents. Raising money to run a political campaign in $2,900 increments takes time, one of the reasons elected officials always fundraise. Incumbents usually know if they want to be re-elected the day after the election; challengers usually only decide to run much closer to the election and have less time to hoard cash. Incumbents also typically enjoy better name recognition and a list of supporters from previous campaigns.
One type of candidate who can offset these fundraising advantages is a wealthy candidate, who can lend a large sum to their own campaign committee. By the early 2000s, members of Congress and incumbent senators had become almost paranoid about facing a “self-funded” challenger.
Thus, in the BCRA case, Congress sought to “level the playing field”, that is to say, to benefit incumbents. The so-called Millionaire’s Amendment stated that if a candidate spent a large portion of his own money to run for office, his opponent’s contribution limit, but only his opponent’s, would be tripled. The apparent theory was that contributions over the limit corrupted officials unless they faced a strong challenger and really needed more money.
The Millionaire’s Amendment also limited a campaign committee’s ability to reimburse a candidate for personal campaign loans. Campaigns can normally raise funds after an election to pay off debts, but under the amendment they cannot use funds raised after the election to repay more than $250,000 in candidate loans. As the late Sen. Harry Reid (D., Nev.) said in the Senate, the amendment was “a measure of incumbent benefit.”
The various campaign contribution limits, under which a candidate could accept contributions three times larger than his opponent, were struck down by the Supreme Court in 2008. But the provision on loan repayments remains, and that is the problem in Cruz.
Finding the unconstitutional loan repayment provision should be easy for judges. The provision was clearly based on the constitutionally impermissible motivation of trying to favor certain types of candidates over others. And this is absurd at first sight. The provision does not increase contribution limits – a donor who has already given the campaign the legal maximum cannot contribute more to help the campaign repay the candidate’s loan. So how is a public servant “corrupt” when he is reimbursed for what is owed to him?
The government responds that loan repayments personally benefit the candidate, because otherwise the candidate would have to cancel the debt. This is a strange notion of a “loan”, but any merit this argument may have is undermined by the fact that the campaign can reimburse the candidate the full amount if they use the funds raised before Election Day and reimburses up to $250,000 from funds raised after the ballot. Day.
More importantly, the law limits speech. Since the amendment’s passage, candidates’ loans to their own campaigns have tended to stop at $250,000, limiting a campaign’s resources and therefore its public discourse. You might think this works against wealthy applicants, but in fact it works in favor of extremely wealthy applicants, who can afford to set aside large sums of money.
Interestingly, given the provision intended to help incumbents, the plaintiff in this case is Senator Ted Cruz of Texas. In his 2018 run, in which Democratic challenger Beto O’Rourke topped him by $33 million, the incumbent Republican senator loaned his campaign $260,000. Mr. Cruz won the tightest Texas Senate race in 40 years. Now his campaign is limited in its ability to repay the senator.
Although campaign finance is often described as a Wild West, it is in fact a highly regulated industry. Campaigns must rely on a select and highly specialized bar to sift through hundreds of pages of statutes, hundreds of arcane regulations and thousands of administrative law decisions. This is fundamentally inconsistent with a First Amendment designed to prevent the government from censoring or manipulating speech about politicians, elections, and public affairs. The court should do everything it can to put an end to this Frankenstein.
Mr. Smith is a professor at Capital University Law School in Columbus, Ohio, and president of the Institute for Free Speech. He served as Commissioner of the Federal Election Commission from 2001 to 2005.
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