The Citizen's United case decided today, by its terms, appears equally applicable to federal and state regulation of campaign finance, although it was directed at a federal case. Colorado voters adopted comprehensive campaign finance reform in 2002 through Amendment 27. The limitations on electioneering spending in Amendment 27 which is parallel to the federal limitations at issue in Citizens United is found at Section 6 of the Amendment, which imposed a disclosure requirement on all electioneering communications, and a prohibition on electioneering communications by corporations and unions that do not do so through certain political committees.
Section 6. Electioneering communications. (1) ANY PERSON WHO EXPENDS ONE THOUSAND DOLLARS OR MORE PER CALENDAR YEAR ON ELECTIONEERING COMMUNICATIONS SHALL SUBMIT REPORTS TO THE SECRETARY OF STATE IN ACCORDANCE WITH THE SCHEDULE CURRENTLY SET FORTH IN 1-45-108 (2), C.R.S., OR ANY SUCCESSOR SECTION. SUCH REPORTS SHALL INCLUDE SPENDING ON SUCH ELECTIONEERING COMMUNICATIONS, AND THE NAME, AND ADDRESS, OF ANY PERSON THAT CONTRIBUTES MORE THAN TWO HUNDRED AND FIFTY DOLLARS PER YEAR TO SUCH PERSON DESCRIBED IN THIS SECTION FOR AN ELECTIONEERING COMMUNICATION. IN THE CASE WHERE THE PERSON IS A NATURAL PERSON, SUCH REPORTS SHALL ALSO INCLUDE THE OCCUPATION AND EMPLOYER OF SUCH NATURAL PERSON. THE LAST SUCH REPORT SHALL BE FILED THIRTY DAYS AFTER THE APPLICABLE ELECTION.
(2) NOTWITHSTANDING ANY SECTION TO THE CONTRARY, IT SHALL BE UNLAWFUL FOR A CORPORATION OR LABOR ORGANIZATION TO PROVIDE FUNDING FOR AN ELECTIONEERING COMMUNICATION; EXCEPT THAT ANY POLITICAL COMMITTEE OR SMALL DONOR COMMITTEE ESTABLISHED BY SUCH CORPORATION OR LABOR ORGANIZATION MAY PROVIDE FUNDING FOR AN ELECTIONEERING COMMUNICATION.
It appears to me that the impact of Citizen's United on this part of Colorado's constitution is simply to strike subsection 2 of Section 6. Thus electioneering communications by any person, including a corporation or a union, must be disclosed if they exceed $1,000 per calendar years, and contributions to someone to make electioneering communications must be disclosed if they exceed $250 per year (in each case with respective inflation adjustments). These electioneering communications have no dollar limitations.
Citizen's United does not change the Colorado ban on direct contributions Section 3 on Contributions to candidates by corporations or unions, of Amendment 27, which read as follows:
(4) (a) IT SHALL BE UNLAWFUL FOR A CORPORATION OR LABOR ORGANIZATION TO MAKE CONTRIBUTIONS TO A CANDIDATE COMMITTEE OR A POLITICAL PARTY, AND TO MAKE EXPENDITURES EXPRESSLY ADVOCATING THE ELECTION OR DEFEAT OF A CANDIDATE; EXCEPT THAT A CORPORATION OR LABOR ORGANIZATION MAY ESTABLISH A POLITICAL COMMITTEE OR SMALL DONOR COMMITTEE WHICH MAY ACCEPT CONTRIBUTIONS OR DUES FROM EMPLOYEES,OFFICEHOLDERS, SHAREHOLDERS, OR MEMBERS.
(b)THE PROHIBITION CONTAINED IN PARAGRAPH (a) OF THIS SUBSECTION (4) SHALL NOT APPLY TO A CORPORATION THAT:
(I) IS FORMED FOR THE PURPOSE OF PROMOTING POLITICAL IDEAS AND CANNOT ENGAGE IN BUSINESS ACTIVITIES; AND
(II) HAS NO SHAREHOLDERS OR OTHER PERSONS WITH A CLAIM ON ITS ASSETS OR INCOME; AND
(III) WAS NOT ESTABLISHED BY AND DOES NOT ACCEPT CONTRIBUTIONS FROM BUSINESS CORPORATIONS OR LABOR ORGANIZATIONS.
Citizen's United follows prior U.S. Supreme Court precedent that holds that restrictions on direct contributions to candidate committees (but allowing contributions to candidates to be made via specifically authorized political committees) are valid because they serve the legitimate governmental purpose of preventing an appearance of corruptions.
However, the part of Section 3 prohibiting a corporation or union from making expenditures expressly advocating the election or defeat of a candidate appears to be invalid.
It isn't entirely clear, at a first read, whether the ban on corporate and union contributions to political parties, created by Section 3 of Amendment 27, is still valid after Citizen's United.
On one hand, a contribution to a political party, which is itself a private association of politically minded people, does not necessarily care the risks of an appearance of corruption that a contribution directly to a candidate might.
On the other hand, there is a good argument that contributions to political parties may lawfully be conclusively presumed to be coordinated with the candidates of that political party, and hence amount to contributions to a candidate that can never be mere independent expenditures.
One can imagine that an "as applied" challenge to the ban on contributions to a political party that is not running any candidates in the current election cycle might prevail under Citizen's United, but in general, the ban on contributions to political parties does not necessarily fall under this ruling.
Practical Impact
Corporations and unions already routinely spend large amounts on non-candidate races over ballot measures, by jumping through the hoops that in place now. They also make substantial donations to political committees, which in turn, usually make contributions to candidates.
Under the new law, there is likely to be one or more "independent committees to support Joe Candidate" for every candidate. These committees will forbidden from coordinating with the candidate or that candidate's political party, but will be able to take unlimited individual, corporate and union contributions, and to spend them as they wish to expressly support or oppose a candidate.
Large donors will probably give as much as they can, either directly, or through a political committee, to the candidate himself, and perhaps to his political party, and then give the balance to these independent committees supporting the same candidate.
This is likely to dramatically increase spending in high profile races, where many donors make maximum contributions and look for any opportunity to give more, while having a trivial impact in low profile races where few donors give the maximum amount (and would give more if they could).
This will reduce the amount of control that candidates, particular in high profile races, have over their campaigns.
For example, Andrew Romanoff's campaign for U.S. Senate has forsworn certain kind of corporate source contributions. This as been a point of pride for Romanoff supporters, and a key argument for his primary opponent, Michael Bennet, that Romanoff can not raise enough funds to be competitive. But, after Citizen's United, nothing prevents "Corporations and Unions For Romanoff" from being formed and receiving unlimited contributions from corporations and unions to spend as they see fit without any input from and control by Andrew Romanoff. This takes considerable bite out of Romanoff's promise not to take corporate source contributions and leaves Romanoff with less control over his campaign, but also brings to bear potentially much more money advocating his election.
Corporate and union Romanoff supporters, meanwhile, because independent committees are still subject to disclosure requirements, can be assured that there will be a public record that they spent money to support Romanoff which they can hope will be an asset in currying his favor if he is elected.
Time To Rethink Campaign Finance
By rendering campaign contribution limitations toothless, Citizen's United presents an urgent case of a rethink of the entire campaign finance system.
Now that the dollar limits on contributions have the sole effect of reducing the amount of money raised that candidates and their political parties can control, rather than the total amount of money raised for each side in a campaign, their intellectual power is gone. There is no strong political theory argument for giving non-candidates more of an ability to control a campaign than a non-wealthy candidate him or herself.
One could have a disclosure only regime, which, once the election law loopholes are fully navigated, is what we have in the way of Citizen's United. Gift bans also aren't effected. But, limits on donations to candidate committees and political parties seem seriously anachronistic under this new regime.
Taxes on contributions to political campaigns have been proposed, but given the fact that such a tax would be a non-content neutral regulations of political speech, I doubt that it would be found constitutional.
Public funding of campaigns, in whole or in part, is a largely untested alternative that has been knocking around in progressive circles for decades. Now may be the time to launch it, although current tight state and federal budgets place serious barriers in the way of this approach. There are states that are considering going without Congressional representation for a few months to save the money involved in calling a special election, let alone spending more money to finance a political campaign for particular candidates.
Allowing political parties to accept unlimited donations and to then use those funds to help candidates would be a helpful partial solution. Candidates often have a very short time horizon to raise money, and donors are often reluctant to give when a partisan primary is underway, narrowing the fund raising window further. Well heeled political parties could get their candidates off to good starts with funds accumulated year after year, rather than only in the heat of a political campaign.
At any rate, while the loophole filled campaign finance regulatory world has been heading there for a long time, this decision comes early enough in the 2010 election campaign, that there will be time to see its implications play out in a whole host of new political fundraising strategies.
Historically, this would have been a pure boon for Republicans. But, since corporate money has always had a strong bias towards incumbents, and incumbents are disproportionately Democrats right now, it isn't clear on a partisan basis, which party gains more from this SCOTUS ruling.
Instead, the big winners may by the business friendly wings of each of the two major political parties, at the expense of the populist wings of those parties.
UPDATE: Rick Hasen, author of the Election Law Blog guest blogging at HuffPo, goes through essentially the same list of reform options that would be constitutional that I do. Importantly, he adds that the Arizona Supreme Court recently held unconstitutional a form of public financing based upon how much is being spent by your opponent, arguing that the law's effort to equalize the result of neutral rules as they play out in a particular race is constitutionally improper.
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