McConnell v. Fed. Election Comm'n: Supreme Court Upholds Campaign Finance Reform Law

The Supreme Court of the United States has considered First Amendment challenges to the Bipartisan Campaign Reform Act of 2002 ("Act").

The Act became effective in November 2002 after many years of Congressional debate. Among other things, the Act bars the national parties from raising millions of dollars in unregulated "soft money" contributions to finance "get out the vote" campaigns and television ads. The law also sets strict limits on "issue ads" that independent groups can air in a campaign's closing weeks. The challenges to the Act were based on the Act's alleged infringement of free speech, in violation of the First Amendment of the Constitution of the United States. An appellate court had upheld most of the Act's provisions, and its rulings were appealed to the Court.

The Court issued three majority opinions considering the validity of the Act. The first opinion considered Title I and II of the Act. Title I regulates the use of "soft money" (previously unregulated) in campaigns, while Title II prohibits organizations such as unions and corporations from using their funds to finance "electioneering communications". "Electioneering communications" are intended to influence the outcome of an election through the use of broadcast media ads referring to a federal candidate, and the Act prohibits such communications at corporate expense where the communication is made (i) within 60 days of a general election or 30 days of a primary election, (ii) using broadcast, cable or satellite transmission, and (iii) in a manner that is targeted to the "relevant electorate" in a federal election.

The Court upheld the Act's regulation of "soft money" and "electioneering communications". Employing a low level of judicial scrutiny in its review of Titles I and II, the Court held that "soft money" contributions to political parties can be restricted to protect the integrity of the political process without unconstitutionally burdening party speech and associational activities financed with "soft money". Similarly, the Court also held that regulation of "electioneering communications" was not precluded by a prior holding in Buckley v. Valeo, an earlier Supreme Court case which had limited regulation of political speech to speech employing express words of electoral advocacy. The Court determined that the "electioneering communication" provisions did not restrict protected political speech and so the Act did not conflict with Buckley. Therefore, the 30/60 day provision was not unconstitutional nor overbroad in scope.

The next opinion considered Titles III and IV. The Court determined that the challengers lacked "standing" to challenge most of the Act's provisions contained in these Titles. "Standing" is a judicially-created doctrine which requires that an actual "controversy" exist between the parties involved in the lawsuit. Therefore, the court rejected challenges to the following provisions: denial of the "lowest unit charge" requirement for a candidate ad by media broadcasters 45 days before a primary or 60 days before an election when the ad does not include a disclaimer that the candidate approved the ad; the increase of the "hard money" individual contribution limits ($2,000 per election, total of $95,000 per two year election cycle with a sub-limit of $37,500 applicable to contributions to PAC, state party committees and other committees excluding national party committees); and provisions which allows candidates facing self-financed opponents to receive contributions in excess of the normal limits. However, the Court struck down the Act's prohibition on political contributions by minors.

The final opinion considered the challenges to Title V of the Act. The Court upheld the Act's requirement that broadcasters maintain certain publicly available records or politically related broadcasting requests. These include "candidate requests," "election message requests," and "issue requests." Thus, the Court affirmed the constitutionality of most of the Act's provisions.

McConnell v. Fed. Election Comm'n, 124 S. Ct. 619 (U.S. 2003).

Impact of Court's Decision on RPAC Fundraising and Advocacy

The Act was largely intended to limit the influx and effect of "soft money" in federal election campaigns, although it includes provisions addressing other matters as well. For that reason, the Act has only a modest effect on RPAC fundraising and operations. The following is a synopsis of those provisions of the Act which have some impact on RPAC:

1. Soft Money Restrictions. As noted, a primary objective of the Act was to more comprehensively eliminate from federal election campaigns "soft money," or funds not subject to the restrictions, limitations and reporting requirements of the Federal Election Campaign Act. The Act's restrictions on the use of corporate "soft" money were upheld by the Court, so the Act will constitutionally limit certain NAR/RPAC activities. RPAC receives such soft money from State PACs, who are able to collect it and choose to provide a portion of what they raise to RPAC, and also from other sources directly, such as local boards and MLS's, affiliate chapters, and even some real estate or other incorporated firms. RPAC had previously used such soft money to make permitted contributions to the "non-federal" accounts of national party committees, and to fund the "Opportunity Race" program which consists of communications by NAR and state and local associations to members to advocate the election of specific candidates for federal office. Only the former activity is now prohibited by the Act, and therefore RPAC will be unable to make further direct contributions to non-federal accounts of national party committees. The Act does not restrict a corporation's ability to communicate with its members about federal candidates at corporate expense, so that NAR may continue to operate the Opportunity Race program and will continue to receive and use soft money contributions from state PACs and others for that purpose.

2. Electioneering Communications. Another activity that is affected to some extent is the RPAC/NAR "Political Advocacy" program. This effort consists of communications to the general public that mention particular members of Congress seeking election, but do not expressly advocate the election or defeat of such members. Prior to the Act it was believed, as noted above, that Buckley did not permit such communications to be regulated by the Federal Election Campaign Act, and thus could be and were made using corporate funds.

These provisions of the Act were upheld by the Supreme Court. Thus, any such political advocacy communications by RPAC/NAR may be made only by using other kinds of communication techniques, such as direct mail, phone banks, or email, unless made outside the 60 day/30 day prohibited time periods.

3. Contribution Limitations. The Act also raised the limits on contributions by individuals to federal candidates. These provisions were upheld by the Court. Significantly, the Act does not change the $5,000 per year limit on contributions by an individual to federal PACs such as RPAC, and the $5,000 per election limit on contributions by federal PACs to candidates.