FEC v. Colorado Republican Federal Campaign Committee
In April 1986-four months before the Democratic primary and seven months before the November general election-the Colorado Republican Federal Campaign Committee (the Committee) ran a $15,000 radio ad in response to a series of television ads sponsored by the Senatorial campaign committee of then-Congressman Tim Wirth, a Democrat. The ad contrasted Mr. Wirth's statements in his TV ads with his Congressional voting record, and concluded with the words: "Tim Wirth has a right to run for the Senate, but he doesn't have a right to change the facts."
Under the Federal Election Campaign Act (the Act), the Committee was authorized to spend up to a certain limit on coordinated party expenditures made "in connection with the general election campaign" of the Republican Party candidate running in the U.S. Senate race in Colorado. 2 U.S.C. §441a(d)(3). The Committee, however, had assigned its entire 1986 spending authority to the National Republican Senatorial Committee.
In its campaign finance reports, the Committee characterized the ad as a generic voter education expense that was not subject to the §441a(d) limits. The FEC, however, viewed it as a coordinated party expenditure and filed suit against the Committee for violating the Act's expenditure limits and reporting requirements for this type of expenditure. The Committee counterclaimed with a First Amendment challenge to the constitutionality of the §441a(d) limits.
District court decision
On August 31, 1993, the U.S. District Court for the District of Colorado granted summary judgment to the Committee. The court held that the Committee's $15,000 expenditure for a radio ad, because it did not contain "express advocacy," was not subject to the coordinated party expenditure limit.
The court first rejected the Committee's argument that the ad was an "independent expenditure" (rather than a coordinated expenditure)-and thus not subject to spending limits-because it was aired before the Republican candidate had been nominated. The court noted that the FEC and the courts have said that party committees are incapable of making independent expenditures. The court concluded that the Committee's expenditure "was made on behalf of the Republican candidate, whomever that might be; and it is irrelevant that no particular person had been designated."
In considering whether the ad was subject to the coordinated party expenditure limits at 2 U.S.C. §441a(d), the district court concluded that only communications that expressly advocate the election or defeat of a candidate qualify as coordinated party expenditures. The court decided that the radio ad did not contain express advocacy, and therefore was not a coordinated party expenditure.
The district court reasoned that in FEC v. Massachusetts Citizens for Life (MCFL), the Supreme Court established that the presence of express advocacy determined whether or not an independent expenditure was made "in connection with" a federal election. Although the MCFL decision dealt with independent expenditures rather than coordinated party expenditures, the district court noted that §441a(d) also includes the phrase "expenditure in connection with" a federal election. The court therefore followed a common law rule: a phrase recurring in a statute is to be interpreted consistently.
The district court then referred to the list of words and phrases, contained in the Supreme Court's Buckley v. Valeo decision as examples of express advocacy. Finding that the Committee's ad did not contain any of these words or phrases, the district court ruled that the expenditure for the ad did not constitute a coordinated party expenditure and therefore did not count toward the Committee's §441a(d) limit.
Appeals court decision
On June 23, 1995, the U.S. Court of Appeals for the Tenth Circuit reversed the district court's ruling that express advocacy is a defining feature of coordinated party expenditures. Further, it concluded that the Act's limitation of these expenditures does not violate the Committee's First Amendment rights. The court remanded the case to the district court with instructions to enter judgment in favor of the FEC and to impose on the defendant a proper civil penalty under 2 U.S.C. §437g(a)(6).
Coordinated party expenditures and independent expenditures. The court of appeals observed that both Buckley and MCFL distinguish between these two types of expenditures, "[t]he Supreme Court cases have distinguished between the potential for corruption that attaches to contributions and coordinated party expenditures, and those that might develop from independent expenditures, finding less inherent risk in the latter."
The court of appeals also noted that Buckley struck down the Act's limits on independent expenditures as an unwarranted infringement on the First Amendment rights of individuals but upheld the Act's limits on party expenditures because they served the substantial government interest of preserving the integrity of the electoral process. The validity of this interest has been reinforced in subsequent court case decisions.
In the appeals court's view, the distinctions made in these precedents indicate that the phrase "expenditures in connection with" should not be construed the same way with respect to independent expenditures and coordinated party expenditures.
Rather, the court held that judicial deference was due to the Commission's interpretation of its statute. Advisory Opinions 1984-15 and 1985-14 establish the Commission's criteria for determining whether or not a party expenditure counts against the §441a(d) limit: an expenditure counts against the limit if it is made for a communication that (1) clearly identifies a candidate and (2) contains an electioneering message. The presence of express advocacy is not a factor in this determination.
The court then found that the ad identified a candidate (Mr. Wirth) and "unquestionably contained an electioneering message," since it sought to diminish public support for Mr. Wirth and garner support for the then-yet-to-be-named Republican nominee. Consequently, the court reasoned that the radio ad resulted in an "expenditure made in connection with" an election and thus counted against the Committee's §441a(d) limit.
The First Amendment and the government's interest. Citing the reasoning of the Supreme Court in Buckley and subsequent cases, the court of appeals ruled that, as with contribution limits, the coordinated party expenditure limits are a justifiable infringement on the First Amendment rights of party committees.
"The opportunity for abuse is greater when the contributions (or in the instant case, coordinated party expenditures) derive from sources inherently aligned with the candidate, rather than with independent expenditures."
The coordinated party expenditure limits were adopted because of Congressional concern that unchecked party spending would give citizens who make large contributions to party committees undue influence on elected officials. The court concluded that the §441a(d) limits diminish this potential with a minimal impact on the important role of political parties. This follows the precedent set in Buckley that found that these and other contribution and expenditure limits served the overriding government interest of preserving the integrity of the electoral process.
The Commission appealed the Tenth Circuit's decision to the Supreme Court. Oral arguments were presented on April 15, 1996.
Supreme Court decision
On June 26, 1996, the U.S. Supreme Court ruled that the coordinated party expenditure limits at 2 U.S.C. §441a(d) could not be constitutionally applied to the radio ad aired by the Committee. The Court found that the ad was not coordinated with any candidate; rather it was an independent expenditure that could not constitutionally be subject to the coordinated party expenditure limit.
The FEC had concluded that political parties, because of their special function, are incapable of making electoral expenditures that are "independent" of their own candidates, since the sole reason for a political party's existence is to elect its candidates to public office.
The Court disagreed, stating that, with reference to the radio ad, there was no evidence of coordination between the Committee and the three candidates who were then seeking the Republican Senate nomination. Rather, the ad "was developed by the Colorado Party independently and not pursuant to any general or particular understanding with a candidate." The Court also found that the potential for, or appearance of, corruption, which the Buckley Court found sufficient to justify limiting contributions, was not present to the extent that would justify limiting such independent spending by political parties on behalf of their candidates. Accordingly, the Court concluded that the First Amendment precludes application of the §441a(d) limits to independent campaign expenditures by political parties.
This decision pertained to party spending in connection with congressional races. The Court warned that this opinion does not "address issues that might grow out of the public funding of Presidential campaigns."
The Court decided not to address a constitutional challenge to the §441a(d) coordinated limits brought by the Committee. Instead, the Court chose to "defer consideration of the broader issues until the lower courts have reconsidered the question in light of our current opinion."
This decision vacated the 10th Circuit Court of Appeals' judgment. The case was remanded to the lower courts for further proceedings consistent with this decision.
Concurring and dissenting opinions. Justice Breyer wrote the plurality opinion announcing the judgment of the Court. Although seven Justices concurred in the judgment, only Justices O'Connor and Souter joined Justice Breyer's plurality decision. There were also two separate concurring opinions and one dissent which the remaining Justices signed on to, as follows:
- Justice Kennedy, joined by Chief Justice Rehnquist and Justice Scalia, filed an opinion concurring in the judgment and dissenting in part. This opinion reasoned that coordinated party expenditures cannot constitutionally be limited because this would impermissibly infringe upon the parties' First Amendment right to engage in political speech.
- Justice Thomas, joined in part by Chief Justice Rehnquist and Justice Scalia, filed an opinion concurring in the judgment and dissenting in part. This opinion also reasoned that the §441a(d) limits are unconstitutional. Justice Thomas, writing for himself only, first explained that there is no constitutional difference between expenditures and contributions, and that neither can constitutionally be limited at all. For this reason, he would overrule Buckley and find unconstitutional all statutory limits on contributions and expenditures. Chief Justice Rehnquist and Justice Scalia did not join this part of Justice Thomas' opinion, but agreed with Justice Thomas' conclusion that, under Buckley, the party expenditure limits at §441a(d) are unconstitutional in their entirety because there is insufficient evidence that coordinated spending by political parties poses a substantial risk of corruption.
- Justice Stevens, joined by Justice Ginsberg, dissented. The dissenters agreed with the FEC's view that all campaign expenditures by political parties should be treated as coordinated with the party's candidates, and concluded that the limit on party expenditures at §441a(d) is constitutional because it serves compelling governmental interests in avoiding both actual corruption and the appearance of corruption, and in leveling the playing field in election campaigns.
District court decision on remand (Colorado II)
On February 23, 1999, the district court granted the Committee's motion for summary judgment on its counterclaim, ruling that the coordinated party expenditure limits are unconstitutional and cannot be enforced against the Committee. The court denied the FEC's cross motion for summary judgment and dismissal of the amended counterclaim.
In the district court's view, the FEC needed to demonstrate that:
- §441a(d) serves a compelling government interest; and
- §441a(d) is narrowly tailored to achieve that interest.
The court said that the FEC had to show that coordinated party expenditure limits prevent corruption or the appearance of corruption. The FEC had to do more than show "the opportunity" for corruption.
The FEC argued that generous contributors could demand special favors of candidates via their party committee contributions; and that party committees could withhold or grant unlimited coordinated expenditures in order to exact a quid pro quo from candidates who needed financial assistance. The court rejected the first argument, saying that the FEC had shown that large contributors to parties had obtained access to elected officials, but such access did not constitute corruption. The court rejected the analogy to unlimited soft money donations because they may not be used to make coordinated party expenditures. Moreover, because of the limits on individual contributions, the court found the contributor-to-party-to-candidate scenario "an unlikely avenue of corruption."
As to the second argument, the court stated that party committees, by their nature, exert some influence over candidates. "[A] political party's decision to support a candidate who adheres to the parties' beliefs is not corruption. Conversely, a party's refusal to provide a candidate with electoral funds because the candidate's views are at odds with party positions is not an attempt to exert improper influence."
Furthermore, the court stated that in Buckley v. Valeo the Supreme Court's concern with corruption was related to large individual financial contributions-not contributions from party committees.
Finally, the court stated: "The FEC cannot rely on general public dissatisfaction with parties and politicians and the amount of money in the political process.to support its claim that the party coordinated expenditure limit serves a compelling purpose and is narrowly tailored to accomplish that purpose."
The court concluded that the FEC had failed to offer relevant, admissible evidence that suggested coordinated party expenditures had to be limited to prevent corruption or its appearance. The court also stated that coordinated party expenditures were "indistinguishable in substance" from the candidate's campaign expenditures. Since, under Buckley, candidate expenditures cannot be limited, coordinated party expenditures also cannot be regulated.
Appeals court decision (Colorado II)
On May 5, 2000, the U.S. Court of Appeals for the 10th Circuit affirmed a district court decision that the coordinated party expenditure limits at 2 U.S.C. 441a(d)(3) are unconstitutional.
To support the constitutionality of the 441a(d) limits, the Commission offered three principal arguments that the limits prevent corruption or the appearance of corruption:
- Section 441a(d)(3) limits the extent to which generous contributors to the party can influence the party "to either support or neglect those candidates who endorse or eschew the interests of the large contributor;"
- The cap on coordinated party expenditures reduces the ability of a small group of incumbent officeholders (the party elite) to exert improper pressure on the party's candidates by granting or withholding the use of party funds; and
- The 441a(d) limits reinforce the Act's cap on individual contributions. Without them, individuals could try to circumvent the $1,000 per candidate, per election contribution limit by giving the maximum $20,000 per year contribution to the party with the expectation that the funds would be spent to support a particular candidate.
The court, in a 2-1 decision, rejected the first of these arguments by noting, in part, that-based on the Supreme Court's earlier ruling in this case-party committees can already make unlimited independent expenditures. The court refused to consider the potential corrupting influence of unregulated "soft money" contributions, since those funds cannot legally be spent to influence federal elections.
With respect to the FEC's second argument, the court concluded that "there is nothing pernicious" about a party "shaping the views of its candidates." The court added that, "Parties are simply too large and too diverse to be corrupted by any one faction."
The court dismissed the Commission's final argument by noting that 2 U.S.C. 441a(a)(8) requires that contributions earmarked for a particular candidate (i.e., that pass through an intermediary) be treated as contributions from the original source to the candidate.
Having found no persuasive evidence that coordinated party expenditures corrupt, or appear to corrupt, the electoral process, the appeals court upheld the district court's decision. The court concluded that "441a(d)(3)'s limit on party spending . . . constitutes an 'unnecessary abridgment' of First Amendment freedoms." The court stated explicitly that its analysis and holding apply only to party spending in connection with Congressional races.
In dissent, Chief Judge Seymour found the "majority opinion fundamentally flawed in several respects." In her view, the panel majority "substitute[d] its judgment for that of Congress on quintessentially political matters the Supreme Court has cautioned courts to leave to the legislative process. In so doing, the majority creates a special category for political parties based on its view of their place in American politics, a view at odds with history and with legislation drafted by politicians."
Supreme Court decision (Colorado II)
On June 25, 2001, the U.S. Supreme Court, overruling the Court of Appeals for the 10th Circuit, held that the coordinated party expenditure limits at 2 U.S.C. §441a(d)(3) are constitutional. The Court ruled that party coordinated expenditures, unlike party expenditures made independently of any candidate or campaign, may be restricted to "minimize circumvention of [individual] contribution limits."
In arguments before the Supreme Court, the Committee maintained that financial support of candidates was an inherent function of political parties. Therefore, any limitation of Committee expenditures coordinated with its candidates would be a serious infringement of its speech and associational rights. The Committee argued that such a limitation would impose a unique First Amendment burden on the Committee, and such a burden could not be justified by any benefits gained in preventing corruption or the appearance of corruption.
The Commission argued that coordinated expenditures should be limited not only because they are equivalent to contributions, but also because unlimited coordinated party expenditures would allow individuals to evade the contribution limits applicable to their direct contributions to candidates. Because individuals can give much larger contributions to parties than to candidates, if parties' coordinated spending were unlimited, individuals would have an incentive to make large contributions to parties, who would then be able to spend more of those contributors' dollars on a particular candidate than the individual contribution limits would allow. This circumstance would allow individuals and other contributors to circumvent the contribution limits upheld in Buckley v. Valeo.
In upholding the constitutionality of coordinated party expenditure limits, the Court:
- Rejected the Committee's argument that unrestricted coordinated spending is essential to the nature of parties, finding that parties have functioned effectively during the previous three decades, during which the coordinated expenditure limits were in place.
- Rejected the Committee's argument that parties primarily act to elect particular candidates, finding that "parties are [also] necessarily the instrument of contributors . . . whose object is not to support the party's message or to elect party candidates, but rather to support a specific candidate for the sake of a position on one, narrow issue, or even to support any candidate who will be obliged to contributors."
- Found that a party committee is not in a unique position vis-à-vis other political spenders, such as wealthy individuals, PACs and media executives, all of whom could coordinate expenditures with a candidate's campaign. Instead, precisely because political parties can efficiently amplify their members' power through aggregating contributions and broadcasting messages, they are in a position to be used to circumvent contribution limits.
Citing testimony provided by political scientists in friend-of-the-court briefs, the Court agreed with the Commission that there was a serious threat of abuse from unlimited coordinated party expenditures. The Court concluded: "Despite years of enforcement of the challenged limits, substantial evidence demonstrates how candidates, donors, and parties test the limits of the current law, and it shows beyond serious doubt how contribution limits would be eroded if inducement to circumvent them were enhanced by declaring parties' coordinated spending wide open."
Source: FEC Record—August 2001; October 2000; July 2000; April 1999; August 1996; August 1995; November 1993. FEC v. Colorado Republican Federal Campaign Committee, 839 F. Supp. 1448 (D. Colo. 1993); 59 F.3d 1015 (10th Cir. 1995), rev'd, 116 S. Ct. 2309 (1996), on remand, 41 F. Supp.2d 1197 (D. Colo. 1999); Supreme Court decision, 533 U.S. 431, 121 S.Ct. 2351.