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Democracy Amendments

April 2 is the five-year anniversary of the Supreme Court’s decision in McCutcheon v. Federal Election Commission. In that case, the Court struck down contribution limits that limited any one person from giving more than $123,200 to all federal campaigns, parties, and political committees combined. The Court dismissed as “divorced from reality” concerns about how campaigns and parties would exploit this opening by creating joint fundraising committees. But in less than two years, campaigns and parties exploited the decision to use the very mechanism that the Court said was “divorced from reality.”

Courts often misunderstand how money works, or can work, in politics, confidently proclaiming what cannot happen just as they enable it to happen. For example, in the D.C. Circuit’s decision in SpeechNow v. FEC, which created super PACs, the court thought it was impossible for a contribution to a super PAC to result in quid pro quo corruption—and then a federal grand jury indicted a sitting U.S. senator for bribery on a charge of doing exactly that. (The case was eventually dismissed after a jury trial, but the judge in the criminal case expressly affirmed that the charge was not legally defective.) 

This blog post about McCutcheon and the Supreme Court’s fact-free decision-making in campaign finance cases was drafted by Robert Joynt, a law student at Harvard Law School and former legal intern at Free Speech For People.

Five years ago today, the Supreme Court decided McCutcheon v. FEC. The decision struck down “aggregate limits”—restrictions on the total amount of money any one donor could contribute to all candidates and political committees during a two-year election cycle—in the Bipartisan Campaign Reform Act of 2002 (BCRA). The popular bill was the last major federal attempt to push back against the influence of money in politics.

Last in a long line of cases (Wisconsin Right to Life; Davis; Citizens United) carving away at the law, McCutcheon finally gutted it. In doing so, the Court not only thwarted the public’s attempt to protect elections from big money, but also did so without considering the facts of how the law worked in practice.

Case Background: Limits on Spending as Limits on Speech

Specifically, the case concerned a First Amendment challenge to BCRA brought by Scott McCutcheon, a prominent political donor, and the Republican National Committee. In the 2011–12 election cycle, McCutcheon contributed a total of $33,088 to 16 different candidates and $27,328 to various political committees. He alleged that he wanted to contribute almost another $100,000 more, but was prevented from doing so by the law’s aggregate limits. Stopping him from spending this money, McCutcheon claimed, violated his free speech right to “participate in democracy through political donations.”

Five Justices of the Supreme Court agreed. Writing for a four-Justice plurality, Chief Justice Roberts held that BCRA’s aggregate limits failed to advance the only permissible government interest in regulating campaign finance: preventing quid pro quo corruption or the appearance of it. In other words, the aggregate limits did not prevent the “the direct exchange of an official act for money” (or its appearance), even though the Court had upheld similar limits in the seminal campaign finance case Buckley v. Valeo. In the plurality’s view, BCRA’s “base limits,” limits on the amount a donor could give to any one candidate or political committee, which were not challenged in the case, adequately removed any threat of corruption posed by large individual donations to candidates. Government lawyers defending the aggregate limits argued they were necessary to prevent circumvention of the base limits: without aggregate limits, donors could contribute additional funds to committees who would regift them to the donor’s preferred candidates.

But the plurality dismissed this worry. Not only is regifting rare, it asserted, but preventing circumvention could be accomplished by less restrictive laws, like limits on transferring money between campaigns or political action committees.

(Campaign) Finance Without Facts

Notably, McCutcheon was decided without the benefit of an evidentiary record. That is, the Court had no factual evidence from the lower court on which to base its decision. At oral argument, Justice Sonia Sotomayor raised this point in response to McCutcheon’s lawyer when argued that BCRA’s base limits adequately prevented corruption:

JUSTICE SOTOMAYOR: You’re taking a position — you’re taking a position that the law stops corruption. And you’re suggesting that the government is incapable of showing facts that the law doesn’t work?

MURPHY: I’m suggesting that –­

JUSTICE SOTOMAYOR: As it is? Don’t you need facts to prove or disprove that proposition?

You would think so. Whether or not a campaign finance law prevents corruption often depends on how the law works in practice. The plurality implicitly acknowledged this point by using numerous factual assertions to defend its conclusion that BCRA’s aggregate limits do not “in any meaningful way” prevent the circumvention of the base limits. Chief Justice Roberts claimed that the “vast majority of contributions in excess of the aggregate limits are likely to be retained and spent by the recipients rather than rerouted to [other] candidates.” Along the same lines: “[the] fact is that candidates who receive campaign contributions spend most of the money on themselves, rather than passing along donations to other candidates.”

But without facts from a record, how did he know? As Justice Breyer’s dissent pointed out, the plurality opinion offers no evidence that limits on regifting contributions would be a better way to prevent circumvention of the base limits. Instead, in a factual prediction of its own, the dissent warned that the “methods for evading the [base limits] . . . will become well known [] to party fundraisers.”

And they did. According to the Sunlight Foundation, in the six months after McCutcheon political groups immediately formed at least 11 new “joint fundraising committees”—PACs with the sole purpose of taking single large checks from donors and distributing them (in accordance with the base limits) to different campaigns. The Sunlight Foundation further estimated that McCutcheon allowed for an increase of over $39 million in contributions from the 2012 to the 2016 presidential elections. Had the lower court heard expert testimony about the likely effects of removing the aggregate limits, the case at least would have been decided on the basis of facts, not conjecture.

Recent work by Free Speech For People has taken up the charge of asking the courts to consider the facts in campaign finance. Our case in Lieu v. FEC asks the courts to revisit, in light of new facts, the D.C. Circuit’s 2010 decision in SpeechNow v. FEC, which permitted unlimited contributions to super PACs. Then-Attorney General Eric Holder declined to appeal SpeechNow to the Supreme Court because he thought the case would “affect only a small subset of federally regulated contributions.” To put it gently, that belief was wildly incorrect. Independent expenditures by super PACs now make up the bulk of spending in many federal campaigns. For instance, super PACs spent over $1.4 billion during the 2016 election cycle, up from $1 billion in 2012 and $338 million in 2008. The number is only expected to grow in 2020. And those are not the only facts about super PACs that need a clear-eyed assessment.

This is all to say that the facts matter. And when the Court ignores the facts, democracy suffers.

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