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STATEMENT FOR THE RECORD

 

 

COMMISSION FAILURE TO FILE AN AMICUS BRIEF IN

SUPPORT OF THE PETITIONERS IN

NIXON v. SHRINK MISSOURI GOVERNMENT PAC 

 

 

Chairman Scott E. Thomas

Commissioner Danny Lee McDonald

 

 

Nixon v. Shrink Missouri Government PAC (“Shrink PAC”) is one of the most important campaign finance cases to reach the United States Supreme Court since its landmark decision in Buckley v. Valeo, 424 U.S. 1 (1976).  In Shrink PAC, the United States Court of Appeals for the Eighth Circuit held that a Missouri statute, which placed a $1075 per election limit on contributions to statewide candidates, violated the First Amendment. By comparison, section 441a of the Federal Election Campaign Act of 1971, as amended, (“the Act” or “FECA”), places a $1,000 per election limit on contributions by individuals.          

 

Recognizing the obvious significance and importance of this matter on federal campaign finance law, numerous groups and individuals filed amicus briefs with the Supreme Court to aid in its consideration of the case.  Many of these amicus briefs discussed the ramifications which the Court’s decision in Shrink PAC may have on the Federal Election Campaign Act.  Among those filing amicus briefs were members of the United States House of Representatives, United States Senators, the Solicitor General on behalf of the United States Government, the Secretary of State of Arkansas, and the State of Ohio as well as various public interest groups such as Common Cause and Public Citizen Litigation Group.

 

Strangely missing from this roster of interested parties is the Federal Election Commission.  By a 3-3 vote, the Commission failed to approve a motion to ask the Solicitor General to file an amicus brief on its behalf.  As a result, the expert agency responsible for the administration of the nation’s campaign finance laws will have no voice in one of the most significant election law cases of the last quarter century.

 

We believe the Commission should have asked the Solicitor General to file an amicus brief supporting the constitutionality of the contribution limits at issue in Shrink PAC.  In view of the similarity between the Missouri statute and 441a of the FECA, the expertise of the Commission should have been heard and not silenced.  In this Statement, we seek to develop briefly several of those points which might have been presented to the Court.  In particular, we wish to point out Commission data which plainly demonstrate that in the years since Buckley was decided, congressional campaign fundraising and spending has outdistanced inflation.

 

I.

 

Under section 441a of the FECA, a person may not contribute more than $1,000 per election to any candidate for any federal office.  2 U.S.C. 441a(a)(1)(A).[1]  This provision, which was enacted as part of the 1974 FECA, was challenged on constitutional grounds along with numerous other provisions in Buckley v. Valeo, supra.  The Supreme Court in Buckley upheld all of the challenged contribution ceilings against first amendment attack.[2]  The Buckley Court reasoned that:

         

          such contribution restrictions did not directly infringe on the ability of contributors

          to express their own political views, and that such limitations served the important

          governmental interests in preventing the corruption or appearance of corruption of

          the political process that might result if such contributions were not restrained.

 

California Medical Association v. FEC, 453 U.S. 182, 194-95 (1981) citing Buckley, 424 U.S. at 23-28.  See also FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238, 259-260 (1986)(“We have consistently held that restrictions on contributions require less compelling justification than restrictions on independent spending.”).  In specifically upholding the $1,000 contribution ceiling, the Court found that “under the rigorous standard of review established by our prior decisions, the weighty interests served by restricting the size of financial contributions to political candidates are sufficient to

justify the limited effect upon First Amendment freedoms caused by the $1,000 contribution ceiling.”  Buckley, 424 U.S. at 29. 

 

Despite the plain ruling of Buckley that a $1,000 limit on contributions to candidates for federal elective office was constitutional, a sharply divided Eighth Circuit in Shrink Missouri Government PAC v. Adams, 161 F.3d 519 (8th Cir. 1998), cert.

granted sub nom. Nixon v. Shrink Missouri Government PAC, 119 S.Ct. 901 (1999), held that a Missouri statute which placed a higher limit of $1,075 on contributions that persons could make to candidates for state office was unconstitutional.  Contrary to Buckley, the panel majority insisted that in order to withstand constitutional scrutiny, the state must demonstrate: (1) current actual corruption and the appearance of corruption with state-specific evidence; and (2) that the contribution limit be fixed with such precision that it must demonstrate that a limit of $1075 exactly—nothing more—was needed in order to prevent this corruption.  Moreover, in dicta not joined in by any other member of the panel, Judge Bowman suggested that inflation has undermined the continuing validity of the Buckley holding regarding the $1,000 contribution limit.

 

Obviously, the Eighth Circuit’s opinion in Shrink PAC represents a serious attack not only on the analysis and result reached in Buckley, but also the core contribution limits of the FECA.  Recognizing the importance of the matter, the Commission’s Office of General Counsel properly presented a legal memorandum recommending that the Commission request the Solicitor General to file an amicus brief in the Supreme Court on behalf of the Commission, defending the continuing validity of the Buckley ruling that the Act’s contribution limits are constitutional.  By a vote of 3-3, however, a motion to approve that recommendation failed.  Commissioners Thomas, McDonald, and Sandstrom voted to approve the motion.  Commissioners Elliott, Mason, and Wold opposed.

  

 

II.

 

The Eighth Circuit’s Shrink PAC decision misconstrues Buckley in several respects.  First, the Eighth Circuit required the state to “prove that Missouri has a real problem with corruption or a perception thereof as a direct result of large campaign contributions,” 161 F.3d at 522.  Observing that the Buckley Court had referred to “perfidy that had been uncovered in federal campaign financing in 1972,” id., the Eighth Circuit was “unwilling to extrapolate from those examples that in Missouri at this time there is corruption or a perception of corruption from ‘large’ campaign contributions, without some evidence that such problems really exist.”  Id.  Not surprisingly, the state in Shrink PAC failed to meet this very heavy burden which was not placed on the government in Buckley.

 

Unlike Shrink PAC, the Buckley Court did not require extensive record evidence detailing a connection between large campaign contributions and corruption.  Rather, the Court found that the Act’s “primary purpose to limit the actuality and appearance of corruption resulting from large individual contributions. . .[is] a constitutionally sufficient justification for the [FECA’s] $1,000 contribution limitation.”  Buckley, 424 U.S. at 26.  The Court recognized, without a lengthy examination of a factual record, that “the appearance of corruption stem[s] from public awareness of the opportunities for abuse inherent in a regime of large individual financial contributions.” 424 U.S. at 27 (emphasis added).  The Court thus found “Congress was surely entitled to conclude. . .that contribution ceilings were a necessary legislative concomitant to deal with the reality or appearance of corruption inherent in a system permitting unlimited financial contributions.”  424 U.S. at 28 (emphasis added). 

 

Explaining that the mere opportunity for a quid pro quo creates the appearance of corruption, the Buckley Court determined “Congress was justified in concluding that the interest in safeguarding against the appearance of impropriety requires that the opportunity for abuse inherent in the process of raising large monetary contributions be eliminated.”  424 U.S. at 30 (emphasis added).  Similarly in FEC v. National Right to Work Committee, 459 U.S. 197 (1982), the Supreme Court indicated that Congress only has to show a compelling interest in stopping actual or apparent corruption and does not have to show a specific harm.  See 459 U.S. at 209-210 (emphasis added)(“While 441b restricts. . . corporations and labor unions without great financial services, as well as those more fortunately situated, we accept Congress’ judgment that it is the potential for such influence that demands regulation.  Nor will we second-guess a legislative determination as to the need for prophylactic measures where corruption is the evil feared.”); see also United States v. National Treasury Employees Union, 513 U.S. 454, 473 (1995)(emphasis added)(“Congress reasonably could assume that payments of honoraria to judges or high-ranking officials in the Executive Branch might generate a[n]. . . appearance of improper influence.”).  By requiring that the state must provide state-specific evidence in order to justify a compelling governmental interest, Shrink PAC ignored a central finding of  Buckley that “the appearance of impropriety” is “inherent in the process of raising large monetary contributions.” 424 U.S. at 30 (emphasis added).[3]  

    

Second, the Eighth Circuit wrongly found that, even if the state could provide specific evidence justifying a compelling governmental interest, the state must also provide “some demonstrable evidence that there were genuine problems that resulted from contributions in amounts greater than the limits in place.”  161 F.3d at 521. Moreover, in the opinion of Judge Bowman, “the [contribution] limits at issue here are so small that they run afoul of the Constitution by unnecessarily restricting protected First Amendment freedoms.” 161 F.3d at 522.  In effect, it appears that unless the state can specifically demonstrate that $1075 is the exact amount needed to stop corruption, the state has not met its burden.  And thus, it is left to the state to explain why $1075 will stop corruption and $1200 will not--a virtually impossible task.

 

Buckley recognized this and did not impose such a requirement on the Congress.  Unlike the Eighth Circuit,  the Buckley Court showed deference to the legislative judgment on the choice of amounts for contribution limits.  The Buckley Court explained: 

 

          While the contribution limitation provisions might well have been

           structured to take account of the graduated expenditure limitations

           for congressional and Presidential campaigns, Congress’ failure to

           engage in such fine tuning does not invalidate the legislation.  As

           the Court of Appeals observed, “[i]f it is satisfied that some limit on

           contributions is necessary, a court has no scalpel to probe, whether,

            say, a $2,000 ceiling might not serve as well as $1,000.

 

Buckley, 424 U.S. at 30 (emphasis added).  It is apparent that legislatures are to be given considerable discretion in affixing contribution limits.  Clearly, the approach of the Eighth Circuit is inconsistent with Buckley.

         

III.

 

In a separate section of the majority opinion unsupported by either of the other judges on the panel, Judge Bowman argued that even if the government had met its heavy burden of proof in establishing a compelling governmental interest, the Missouri contribution limits must still fall because they were “so small that they run afoul of the Constitution by unnecessarily restricting protected First Amendment freedoms.”  161 F.2d at 522.  Judge Bowman maintained that “[a]fter inflation, limits of $1,075, $525, and $275 cannot compare with the $1,000 limit approved in Buckley twenty-two years ago.”  161 F.3d at 522-523. 

 

The dissent pointed out that Judge Bowman’s inflation argument potentially affects not only the constitutional viability of the Missouri statute but also the FECA:

 

          If Buckley’s holding must wax and wane with inflation, as [Judge Bowman]

          seems to argue, then the very statute that Buckley upheld would now be

          unconstitutional, for inflation alone would render the $1,000 limit “different

          in kind” from when the Supreme Court upheld it.

 

161 F.3d at 525 (dissent of Judge Gibson).[4]

 

Campaign finance data taken from the records of the Federal Election Commission, however, disprove Judge Bowman’s assertions.  In response to concerns that the limitations on contributions approved in Buckley would preclude candidates and political committees from amassing the resources necessary for effective advocacy, the Buckley Court stated:

 

          There is no indication, however, that the contribution limitations imposed

          by the Act would have any dramatic adverse effect on the funding of

          campaigns and political associations.  The overall effect of the Act’s

          contribution ceilings is merely to require candidates and political

          committees to raise funds from a greater number of persons and to compel

          people who would otherwise contribute amounts greater than the statutory

          limits to expend such funds on direct political expression, rather than to

          reduce the total amount of money potentially available to promote political

          expression.

 

Buckley, 424 U.S. at 21, 22 (footnote omitted)(emphasis added).

 

Applying the Buckley test, FEC campaign finance records clearly demonstrate that the 441a(a)(1)(A) contribution limit has not had a “dramatic adverse effect” on the fundraising abilities of congressional candidates.  To the contrary, FEC records reveal that congressional candidates in the 1997-1998 election cycle raised more money and spent more money on an inflation-adjusted basis than their counterparts in the 1977-1978 election cycle (the first full election cycle conducted post Buckley v. Valeo).  Congressional candidates raised a total of $781.3 million and spent $740.4 million in the 1997-1998 election cycle.  FEC Press Release, April 28, 1999.  By comparison, congressional candidates in 1977-1978 raised $199.4 million and spent $194.8 million.  FEC Press Release, June 29, 1979.  Adjusted for inflation,[5] congressional candidates in the 1977-1978 election cycle raised only $594.8 million and spent $581.1 million—figures well shy of the $781.3 million raised and $740.4 million spent in 1997-1998.

 

In 1976, the Buckley Court found “[t]here is no indication. . .that the contribution limitations imposed by the Act would have any dramatic adverse effect on the funding of campaigns and political associations.” Buckley, 424 U.S. at 21 (emphasis added).  In view of the fact that 1997-1998 congressional candidates raised 31.4% more money and spent 27.4% more money on an inflation adjusted basis than in 1977-1978, it is clear that the $1,000 contribution limit has not had a “dramatic adverse effect” on the funding of political campaigns.  Indeed, FEC records reveal that congressional campaign fundraising has dramatically increased beyond the level found to have passed constitutional muster by the Supreme Court in Buckley.[6]  Accordingly, the factual record plainly shows that  inflation has not undermined the analysis, conclusions or precedential weight of Buckley v. Valeo.[7]

 

 

IV.

 

The analysis and result of Shrink PAC clearly misinterpreted several key portions of Buckley v. Valeo, supra.  Application of Shrink PAC to FECA would imperil not only the constitutionality of the $1,000 contribution limit found at 2 U.S.C. 441a but also the other contribution limits found in the FECA.  See, e.g., 2 U.S.C. 441a(a)(1)(B); 2 U.S.C. 441a(a)(1)(C); and 2 U.S.C. 441a(a)(3).  Thus, the impact of Shrink PAC is palpable.

 

The Federal Election Commission is the independent agency of the United States Government established by Congress to “administer, seek to obtain compliance with, and formulate policy” with respect to the Federal Election Campaign Act.  2 U.S.C. 437c(b)(1).  As the Supreme Court recognized in Buckley v. Valeo, Congress vested the Commission with “primary and substantial responsibility for administering and enforcing the Act.”  Buckley, 424 U.S. at 109; see also FEC v. Democratic Senatorial Campaign Committee, 454 U.S. 27, 31 (1981)(“the Commission is precisely the type of agency to which deference should presumptively be afforded.”). When it created the Commission in 1974, Congress “legislated in no uncertain terms with respect to FEC dominion over the election law.”  Common Cause v. Schmitt, 512 F.Supp. 489, 502 (D.D.C. 1980)(three-judge court), aff’d. by an equally divided court, 455 U.S. 129 (1982).

 

In view of its experience and technical knowledge, the Commission has filed amicus briefs to assist the United States Supreme Court in its consideration of important election law issues.  Typically, these cases involved constitutional challenges to state statutes which might result in Supreme Court decisions affecting the Federal Election Campaign Act.  See, e.g., First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978); Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990).  Given the obvious impact which the Shrink PAC decision may have on the FECA, we believe that the Commission had an obligation to ask the Solicitor General to file an amicus brief on behalf of the Federal Election Commission in this matter.[8]

 

 

 

            5/28/99                                                            / s /

_________________                                     ____________________________________

Date                                                               Scott E. Thomas

                                                                      Chairman

 

 

            5/28/99                                                            / s /

_________________                                     ____________________________________

Date                                                               Danny Lee McDonald

                                                                      Commissioner

 



[1]  At the outset, it is important to note that under the $1,000 contribution limit contained in 2 U.S.C. 441a(a)(1)(A), an individual may actually give $2,000 to a candidate per election cycle--$1,000 for the primary election and $1,000 for the general election.

 

[2]  In particular, the Buckley Court upheld the $1,000 limit on the amount a person could contribute to a candidate or the candidate’s principal campaign committee, 2 U.S.C. 441a(a)(1)(A); the $5,000 limit on the contributions by a multicandidate political committee to a candidate or the candidate’s principal campaign committee, 2 U.S.C. 441a(a)(2)(A); and the overall $25,000 annual ceiling on individual contributions, 2 U.S.C. 441a(a)(3).  See California Medical Association v. FEC, 453 U.S. at 194 n. 15.

[3]  In its consideration of the $1,000 contribution limit, the Supreme Court referred only briefly to the “deeply disturbing examples [of campaign finance abuses] surfacing after the 1972 election,” 424 U.S. at 27, and can hardly be considered essential to the Court’s conclusion.  The Court made no mention of any specific abuses and made only a reference in a footnote to abuses discussed by the D.C. Circuit.  424 U.S.

at 27, n.28.  Moreover, the abuses discussed by the D.C. Circuit involved sums well in excess of $1,000. 

[4]  The dissent also properly points out  Buckley did not establish $1,000 as the constitutional floor for permissible contribution limitations” and that “[d]espite ample opportunity to modify Buckley, the Supreme Court has never added the ‘inflation proviso’ that [Judge Bowman] relies upon.”  Id.

[5]  The inflation adjustment is based upon the United States City Average All Items Consumer Price Index for All Urban Consumers.  This data is compiled by the Bureau of Labor Statistics of the Department of Labor and provided to the Federal Election Commission pursuant to 2 U.S.C. 441a(c).  The inflation adjustment factor applied here is 2.983.  This adjusts 1978 election cycle dollars to 1998 election cycle dollars.

 

[6]  There are, of course, other instances where federal political fundraising and spending has outpaced the rate of inflation.  For example, major political party activity has likewise exceeded the rate of inflation by a considerable margin.  The major political parties raised a total of $445.0 million and spent $431.2 million in the 1997-1998 election cycle.  FEC Press Release, April 9, 1999.  By comparison, major party political activity in 1977-1978 raised $110.9 million and spent $112.8 million.  Id.  Adjusted for inflation, major political parties in the 1977-1978 election cycle raised only $330.8 million and spent $336.5 million.  Thus, the major political parties raised 34.5% and spent 28.1% more on an inflation adjusted basis that they did in the 1977-1978 election cycle.

[7]  Even if there had been a decrease in campaign fundraising and spending, this would not be constitutionally significant unless the decrease was so severe as to result in a “dramatic adverse effect” on campaign fundraising.  Buckley, 424 U.S. at 21.  As the Buckley Court emphasized, “[t]he quantity of communication by the contributor does not increase perceptibly with the size of his contribution, since the expression rests solely on the undifferentiated, symbolic act of contributing.  At most, the size of the contribution provides a very rough index of the intensity of the contributor’s support for the candidate.”  Buckley, 424 U.S. at 21 (emphasis added).

 

[8]  The reasons given by Commissioners opposing the filing of an amicus brief were not compelling. 

Despite the Commission’s participation in Bellotti and Austin, supra, it was argued that there was no reason to become involved in Shrink PAC since the case involved a state statute and did not involve a direct attack on the FECA.  Not only is this argument willfully blind to what all others see and recognize regarding the significance of the case, but also we have little doubt that those making this argument would contend that the case would matter if the Supreme Court struck down the Missouri contribution limits as too low.

    It was also argued that the $1,000 contribution limit is so low that the limit has itself become a cause for corrupt activity.  Essentially, the argument asserts that individuals are so highly motivated to support campaigns beyond the $1,000 contribution limit, that they will knowing and willfully engage in contributions in the name of another schemes (prohibited by 2 U.S.C. 441f) or the use of corporate money (prohibited by 2 U.S.C. 441b).  There is no case or evidence cited in support of this contention.  Indeed, we cannot find one instance in the FEC’s 24 year enforcement history where a respondent sought exculpation or mitigation because the $1,000 contribution limit was too low.  See also Dennis v. United States, 384 U.S. 855, 857 (1966)(“a claim of unconstitutionality will not be heard to excuse a voluntary, deliberate and calculated course of fraud and deceit.”).  Moreover, this argument ignores the many avenues of political expression which exist in addition to the 441a(a)(1)(A) contribution limit.  Among other things, individuals may also give up to $1,000 worth of food, beverage and invitations on behalf of a candidate for each election, 2 U.S.C. 431(8)(B)(ii); up to $1,000 worth of travel expenses on behalf of a candidate for each election, 2 U.S.C. 431(8)(B)(iv); up to $5,000 to political action committees, 2 U.S.C. 441a(a)(1)(C); and up to $20,000 to national party committees, 2 U.S.C. 441a(a)(1)(B); as well as make unlimited independent expenditures in support of or in opposition to federal candidates (Buckley, 424 U.S.at 44-48), and provide unlimited volunteer services on behalf of a candidate, 2 U.S.C. 431(8)(B)(i).