Highlights of Campaign Finance History – Part 2

by Kellye

After the Supreme Court overturned several of the major campaign finance reforms that had been put into place by the Federal Election Campaign Act (FECA) and its amendments (see Part 1), another attempt was made to reform campaign finance in 2002.  This time Senator John McCain and Senator Russ Feingold worked together to amend FECA once again with the passage of the Bipartisan Campaign Reform Act (BCRA), also known as McCain-Feingold. The two main issues that were addressed were the contributions of soft money to political parties and the proliferation of political ads that were disguised as issue advocacy ads.

In dealing with the first issue, BCRA prohibited national political party committees from raising or spending soft money and prohibited state and local party committees from using soft money for activities that affected federal elections (see the last paragraph of Part 1 for more info on soft money).

In dealing with the second issue, BCRA extended certain campaign finance limitations to include “electioneering communications” and prohibited organizations that received funds from corporate and union treasuries from running “electioneering communications.” Electioneering communications are broadcast ads that clearly identify a federal candidate, are targeted to the candidate’s electorate and are broadcast within 30 days of a primary or 60 days of a general election.

BCRA was immediately challenged by Senator Mitch McConnell. In McConnell v. FEC (2003), the Supreme Court upheld most provisions of BCRA. However, the Court exempted certain nonprofit corporations (QNCs) from the restrictions on “electioneering communications,” provided that they did not accept donations from labor unions or for-profit corporations. A Qualified Nonprofit Corporation (QNC) must meet 5 criteria; one criteria is that it be a 501(c)(4).

In FEC v. Wisconsin Right to Life (2007), the Supreme Court made it easier for ads to pass as issue ads and not “electioneering communications,” thereby limiting the reach of BCRA.

In Davis v. FEC (2008), the Supreme Court struck down a provision of BCRA that was known as the “millionaires amendment.” This provision was an attempt to “equalize” campaigns by increasing the legal limit on campaign contributions to a candidate who was being substantially outspent by an opposing candidate who used his or her personal wealth.

When the Supreme Court made its decision in Citizens United v. FEC (2010), the Court not only struck down BCRA’s ban on “electioneering communications” paid for by independent groups accepting corporate or union treasury money, but ruled, on constitutional grounds, that corporations and unions could use their general treasuries to make unlimited “independent expenditures” in federal elections. Specifically, the Court ruled that political spending by corporations and unions was protected speech under the First Amendment.

Two months later, in SpeechNow.org v. FEC, the U.S. Court of Appeals for the D.C. Circuit ruled that Congress could not limit donations to PACs that only made independent political expenditures. The Supreme Court refused to hear the case on appeal and the lower court’s ruling stood. This decision gave rise to the formation of independent expenditure-only committees known as Super PACs.

There is now a case pending at the Supreme Court (McCutcheon v. FEC) that challenges the constitutionality of limits on campaign contributions. The Court will hear the case in October 2013. It will be interesting to see if the Court will strike down the last remaining leg of campaign finance law.

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