December 2, 2010
Supreme Court to Hear Political Welfare CaseBy Daren Bakst
The United States Supreme Court could soon put an end to one form of political welfare. This week, the Court decided to hear an appeal of a federal Ninth Circuit case addressing whether Arizona's "clean elections" system is constitutional.
"Clean elections," also euphemistically known as "voter-owned elections," are a specific type of public (i.e. taxpayer) financing system for campaigns. These systems are being pushed aggressively and already exist in about seven states.
The systems are designed to punish candidates who don't want to accept taxpayer dollars. Candidates who decide against raising money in a general election can receive a massive lump sum payment of taxpayer dollars to run their campaigns.
These subsidized candidates also receive what are called matching funds. If an opposing candidate doesn't accept taxpayer dollars, then any amount of money that the unsubsidized candidate spends beyond a threshold level is provided back to the subsidized candidate.
For example, if an unsubsidized candidate spends $10,000 beyond the threshold amount, the subsidized candidate receives matching funds of $10,000. The purpose is to equalize the funding between the candidates.
Further, any money spent by independent organizations, such as political action committees (PACs), that expressly support or oppose a candidate is used to calculate whether an unsubsidized candidate has exceeded the threshold limit. It makes no difference that the candidate has no control over these organizations.
The absurdities of these systems have become readily apparent. Independent organizations can spend whatever amount of money they want if they are supporting a subsidized candidate but are likely to spend little to nothing to support an unsubsidized candidate out of fear of triggering money to the opposing candidate.
This matching fund system is the constitutional flaw in these clean elections. Candidates are having their speech chilled because they don't want to spend too much money or else they will be supporting their opponent. Independent groups have the same problem, and even worse, their rights are being violated based on the content of their speech. If they supported the "right" candidate, they could spend as much as they wanted without repercussions.
Forcing candidates and organizations to choose whether to exercise their First Amendment free speech rights isn't allowing them to make a truly voluntary choice. It's a system of penalties that are so severe as to make the choices a foregone conclusion.
In a 2008 case, Davis v. FEC, the United States Supreme Court held that the government couldn't impose penalties on self-financed political candidates who wanted to exercise their free speech rights.
In that case, the Court held that a provision of the federal McCain-Feingold campaign finance law was unconstitutional because it inappropriately penalized self-financed candidates for spending beyond a threshold amount of their own money. Once the self-financed candidate exceeded the threshold amount, the opposing candidate received fundraising advantages, such as being able to accept larger contributions.
The self-financed candidates were forced to choose between spending their own money and helping their opponent or not spending their money but limiting their ability to get out their own message.
The penalties in Davis, which the Court found to be unconstitutional, aren't nearly as severe as the penalties imposed by matching funds in clean elections. In Davis, candidates received fundraising advantages but they still had to raise money. For clean elections, the subsidized candidates receive matching funds automatically.
For all practical purposes, the Davis case marked the end for clean elections. Two federal district courts, the Second Circuit, and the Eleventh Circuit have found that in light of Davis, matching funds are unconstitutional. Leave it to the often-reversed Ninth Circuit to find, in a three-judge ruling, that matching funds in Arizona were constitutional even after Davis.
In June, the United States Supreme Court took the step of blocking matching funds in Arizona until the Court either decided not to hear the case (McComish v. Bennett and Arizona Free Enterprise Club's Freedom Club PAC v. Bennett) or issued an opinion. The Court stayed the Ninth Circuit decision and decided to enforce the district court's injunction blocking matching funds. This action was a complete rebuke of the Ninth Circuit.
Now the Court has decided to hear the case and an opinion is expected in May or June. Unless the Court completely disregards Davis, matching funds should be dead. Since matching funds are such an integral part of "clean elections," the entire clean election systems also will be dead.
There always will be attempts to come up with new way to provide welfare to politicians. Many politicians would prefer to do nothing to gain public support but instead gobble up taxpayer dollars to use for their personal campaigns.
Incumbents especially would like systems where funding between candidates is equalized. In such a system, incumbents would have significant advantages because of factors like name recognition.
Regardless of the legal implications of taxpayer financing, the ethical problems are significant. Forcing taxpayers to financially support candidates who they oppose is unethical.
Soon enough, the Supreme Court may strike down a prominent form of taxpayer financing of campaigns. However, for those who oppose coerced speech and believe that political speech is a right that shouldn't be taken away by politicians to serve their self-interests, there needs to be constant vigilance against campaign finance laws that seek to destroy free and open participation in our political process.
Daren Bakst, J.D., LL.M. is Director of Legal and Regulatory Studies at the John Locke Foundation, a North Carolina-based think tank.