Beaumont is Very Good News for Supporters
of the McCain-Feingold law In his case preview of Federal Election
Commission v. Beaumont, 539 U.S. ___ (2003) (decided today) in the Election
Law Journal, Fred Woocher wrote that "the case that was reportedly thought
to be too 'insignificant' by some FEC commissioners to warrant a petition
for certiorari to the Supreme Court may well end up providing great insight
into how the Court will rule in what is shaping up to be its most important
campaign finance reform decision since Buckley v. Valeo." Fred Woocher,
Beaumont v. Federal Election Commission: A Pre-Cursor of More Important
Things to Come?, 2 Election Law Journal 255, 260-61 (2003). When Fred wrote
those words I was skeptical, but it turns out he is absolutely right. The
opinion is very significant for the pending BCRA (McCain-Feingold dispute),
and in all ways it helps the law's defenders.
First a capsule summary, then a few initial insights on the relevance of
this case to BCRA.
Capsule summary Briefly stated, the question in the case was whether
it was constitutional to prevent ideological corporations (such as the plaintiff
in this case, the North Carolina Right to Life--NRCL) from making unlimited
campaign contributions to candidates for federal office. Federal law requires
all corporations to make any contributions or expenditures through a corporate
PAC, rather than directly, and there are limits on who can contribute, and
how much, to the PAC. In Federal Election Commission v. Massachusetts
Citizens for Life, 479 U.S. 238 (1986) (MCFL), the Supreme Court
held it unconstitutional to prohibit independent expenditures by ideological
corporations that do not take significant corporate or union money.
The lower court in Beaumont held that NRCL was entitled to an exemption
as an MCFL-type corporation, and that the rationale behind MCFL's
prohibition on independent expenditures applied to prevent the government
from limiting contributions as well. MCFL, however, had some
language distinguishing limits on contributions from limits on expenditures,
and an earlier Supreme Court case, FEC v. National Right to Work Committee,
459 U.S. 197 (1982) (NRWC), strongly suggested that a ban on contributions
by corporations was constitutional, even as applied to ideological corporations.
In Beaumont, six justices, in an opinion written by Justice Souter,
relied on MCFL and NRWC to uphold the ban on contributions
by ideological corporations.
Insights
1. Very strong reaffirmation of campaign finance laws limiting corporate
and union involvement in the electoral process. The Court could have
written a very brief opinion, primarily what appears in the opinion in Part
I.B, spelling out how MCFL and NRWC control the outcome in
the case. But the opinion does much, much more in ways that strongly suggest
the Court will uphold the electioneering communications provisions of BCRA---these
are the rules that require corporations and unions to pay for "issue ads"
featuring the name or likeness of a candidate for federal office in a certain
time period before an election using funds from a separate segregated fund
(or PAC). Beaumont's analysis strongly supports the idea that Congress
acted constitutionally in imposing this requirement.
a. The opinion extols the virtues of longstanding limits that Congress has
placed on corporations and unions. It gives a completely unnecessary "historical
prologue" (slip. op. at 8) explaining the unique purposes that corporate/labor
union separate funds requirement serves. This discussion supports Congress's
need to regulate the rise in "issue ads."
b. In setting forth the interests served by the requirements, the opinion
stresses the dangers of political war chests created with the help of the
corporate form. It also points to the law's role in protecting shareholders
or members from corporate spending on political speech that is not in line
with the shareholders' or members' interests. It then adds yet another interest
(slip. op. at 7): "restricting contributions by various organizations hedges
against their use as conduits for 'circumvention of [valid] contribution
limits.'" Again, these rationales could be used to support Congress's issue
ad provisions.
c. The opinion minimizes the First Amendment protections for corporations.
In footnote 5, the Court writes: "Within the realm of contributions generally,
corporate contributions are furthest from the core of political expression,
since corporations' First Amendment speech and associational interests are
derived largely from those of their members, and the public in receiving
information. A ban on direct corporate contributions leaves individual members
of corporations free to make their own contributions and deprives the public
of little or no material information." (Citations omitted) This language
is quite significant in that the Court in the past had, especially in Bellotti
(cited in this Beaumont footnote), had rejected the idea the corporations
were entitled to fewer First Amendment protections. Of course, this footnote
again strengthens the arguments for constitutionality of congressional provisions
regulating corporate and union issue ads.
d. Justice Souter in the opinion appears to do the impossible: he simultaneously
appears to resurrect the analysis of Austin v. Michigan Chamber of Commerce
(a case upholding a ban on corporate independent expenditures) and at the
same time do so obliquely enough to keep Justice O'Connor's vote. O'Connor
dissented in Austin, and her vote in the BCRA case on the issue ad
requirements is expected to be important, especially if the Chief Justice
retires. Souter quotes enough from Austin to suggest that the majority
believes that too much corporate wealth in the political process can be corrosive
to the system without actually quoting the key language from Austin
on this point. Perhaps a BCRA opinion upholding the issue ad provision can
be crafted the same way.
2. The case is good news for the soft money provisions of the BCRA.
There is ample language in the opinion reaffirming Congressional power to
prevent corruption through conduits and to control the perception of corruption
in the electoral process. The Court strongly reaffirms that contribution limits
are not subject to strict scrutiny, and that the legislative body
passing such limits need not provide much empirical evidence to support any
contribution limit that lacks "novelty." These statements are strong indications
supporting the rationale behind Congress's soft money ban.
In short, there is only good news in this opinion for supporters of BCRA.
--
Rick Hasen
Professor of Law and William M. Rains Fellow
Loyola Law School
919 South Albany Street
Los Angeles, CA 90015-1211
(213)736-1466 - voice
(213)380-3769 - fax
rick.hasen@lls.edu
http://www.lls.edu/academics/faculty/hasen.html
http://electionlaw.blogspot.com