Like many people, professor of law and former congressional candidate James L. Huffman had always assumed that public disclosure of political contributions was a good thing. But as Huffman recounts in The Wall Street Journal, his opinion changed when he ran for office as the Republican nominee for the U.S. Senate seat in Oregon in 2010. As Huffman puts it, “The reality is that public disclosure serves the interests of incumbents running for re-election by discouraging support for challengers.”
How does it work? By giving incumbents the power to intimidate even small-dollar donors:
A challenger seeks a contribution from a person known to support candidates of the challenger’s party. The potential supporter responds: “I’m glad you’re running. I agree with you on almost everything. But I can’t support you because I cannot risk getting my business crosswise with the incumbent who is likely to be re-elected.”
. . .
Disclosure makes threats possible, and fears of retribution plausible. Within weeks of a contribution of $200 or more, the contributor’s name appears on the public record. Contributors know this, and they know that supporting the challenger can, should the challenger lose, have consequences in terms of future attention to their interests. Of course no incumbent will admit to issuing threats or seeking retribution, but the perception that both exist is widespread.
The U.S. Supreme Court has become increasingly hostile to campaign finance laws that protect incumbents from competition. At the same time, the Court has often been more forgiving of disclosure laws. This is perplexing, because the argument for anonymity in political speech is the same argument that is widely accepted as a justification for the secret ballot: It prevents public officials from intimidating citizens on the basis of their political activity.
It would be nice if courts expressed as much concern about “intimidation and the appearance of intimidation” as they do for “corruption and the appearance of corruption.”
Hopefully experiences like Huffman’s—along with the growing body of evidence that disclosure laws empower political elites by tying up grassroots activities in red tape—will cause the Supreme Court to reexamine the artificial distinction it has made between disclosure laws and other campaign finance laws. Both burden speech, both protect incumbents and both are unconstitutional.
Last week, I argued the case of Arizona Freedom Club PAC v. Bennett to the U.S. Supreme Court concerning the constitutionality of the “matching funds” provision of Arizona’s public financing system. One of the issues was whether this law was implemented in order to “fight corruption” in politics. The proponents of the law argued that the law was essential to remove the corrupting influence of private money, thus freeing candidates to act ethically without compromising their ability to raise campaign funds.
New York City has a public financing system that provides some useful examples of just how ethical and incorruptible politicians are when they have extra taxpayer money left over after their publicly financed campaigns are finished. NBC-TV in New Yorkreported last week that “[o]ut of 140 candidates who accepted taxpayer dollars to boost their 2009 bid for office, [Councilmember Erik] Dilan was the only one to refund the entire balance [of excess funds] to taxpayers. Only 11 candidates returned any money at all. Out of $27.3 million in public matching funds, candidates have paid back just over $51,000.”
On what have these incorruptible politicians been spending their excess taxpayer subsidies? Bill de Blasio is New York City’s Public Advocate and was last seen on this blog bullying corporations into foregoing political activity. He and John Liu, the New York City Comptroller, wrote in the Huffington Post following the Citizens United decision, “We now need to use every available avenue to hold corporations and their boards of directors accountable for their political spending.” How did de Blasio spend his excess taxpayer funds? “[de Blasio] used surplus campaign funds to pay for nine parking tickets and a $1,083 trip to Puerto Rico. So far, he has not paid back any of the $2.2 million dollars in matching funds he received in 2009.” And Comptroller Liu? “[He] spent more than $20,000 on three volunteer and victory dinners.”
Apparently, “accountability” is important to these politicians when it comes to corporations spending their private money on free speech, but not so much when it comes to their spending the money of hard-working New Yorkers on their own political speech and questionable perks.
So, congratulations to Councilmember Dilan, the only one out of 140 recipients of New YorkCity’s political welfare system who actually appears to care about the people who earned that money. Unfortunately, he is far outnumbered by politicians like de Blasio and Liu, who are dedicated to ceaselessly fighting the corrupting influence of big private money—once they get back from their latest taxpayer-financed trip to Puerto Rico or lavish victory dinner, of course.
One of the more persistent myths of government campaign financing programs is that their purpose is to enhance First Amendment values. Justice Kagan made that claim on Monday when she said during the oral argument in the IJ/Goldwater challenge to Arizona’s system that with government financing, “it’s more speech all the way around.” The Huffington Post repeats this argument.
But government funding in any area never measures up to its proponents rosy predictions. Social Security, Medicare and Medicaid were supposed to provide retirement funds and medical care for a small segment of the population. All three are now gigantic bankrupt welfare programs that provide fewer and fewer benefits at a higher and higher cost. Government meddling in the housing industry certainly provided more homes, but, as the ensuing housing crash and depressed market have shown, it turned out they were homes that no one wanted. The list of government failures of this type is almost endless.
Why would we expect government campaign funding to be any different?
In fact, the purpose of state funding isn’t to increase speech at all, but to reduce it by limiting campaign spending. Proponents of Arizona’s system made this perfectly clear when the law was being debated. As one document said at the time, state funding will
GIVE AVERAGE CITIZENS MORE PRESENTATION! REDUCE AND LIMIT CAMPAIGN SPENDING! STOP THE ENDLESS MONEY CHASE! STOP SPECIAL INTEREST MONEY! LEVEL THE PLAYING FIELD!
The structure of the law leaves no doubt about its purpose. In exchange for state money to run their elections, candidates may not accept private funds and must limit their spending to the amount of the grants the state provides. Less spending necessarily means less speech during the election. How exactly does that serve First Amendment “values”?
And not just anyone can receive state funds. If they could, every crackpot with an axe to grind would run for office on the government’s dime. So the law requires candidates to qualify by raising a sufficient number of $5 contributions—4410 for governor, 2755 for attorney general and so on. Most “average citizens” are not going to convince thousands of people to give them $5 to run for public office. In fact, the type of person who is likely to do that is the same type who would run without public financing. That has often been the case in Arizona, as many candidates who formerly raised private funds just switched to the state-funded system. If these people were willing to sell their souls for a few private campaign contributions, what is the likelihood that they suddenly became virtuous when they accepted state funding? And the qualifying contribution requirement places a premium on connections to groups, like unions, that can produce a lot of individual $5 contributions in a hurry. So much for getting “special interests” out of campaigns.
Under state-funded campaigns, the main difference from what we have now is that candidates have less reason to meet with supporters, who previously funded their campaigns, and will definitely have to limit their spending and thus the speech their campaigns produce.
As my colleague Bill Maurer aptly put it during his argument to the Supreme Court, “This case is about whether the government may insert itself into elections and manipulate campaign spending to favor its preferred candidates.” These programs deserve to die a hasty death.
Audio from the oral argument in Arizona Free Enterprise Club v. Bennett is now available.
IJ-WA Executive Director Bill Maurer leads off the argument, followed by Bradley Phillips, defending the law, at 25:40. William Jay, defending the law on behalf of the United States as amicus curiae, follows at 46:00. Maurer’s rebuttal begins at 56:20.
Earlier news coverage of the argument is available here.
One of the favorite, and most incredible, tactics of those defending Arizona’s Clean Elections scheme is to close their eyes to evidence that its matching funds provision has deterred the speech of privately funded candidates and independent groups and then assert such evidence doesn’t exist. I pointed this out in an earlier post, and in yesterday’s Supreme Court argument, Bradley Phillips, defending matching funds, predictably tried this line of attack.
There was testimony in the, in the district court from individuals who said that they withheld their contributions because of this. It’s – it’s obvious statistically also that many of the expenditures were made late in the game, where perhaps they were not as effective, in order to be unable to trigger the matching funds in time for the opposing candidate to do anything about it. I do not understand how you can say that there is no evidence. I mean, maybe you might say I do not find the evidence persuasive, but don’t tell me there’s no evidence.
Later in the argument, our colleague Bill Maurer pointed to the specific examples of candidates and independent groups declining to do mailings or raise funds or get involved in particular races because matching funds would kick in. You can read about some of those here.
Justice Scalia is referring to the original research done in the case by political scientist David Primo, who found that privately funded candidates—especially in competitive races—would delay speaking until “late in the game” to avoid triggering matching funds to taxpayer-funded opponents. That means less time for candidates to speak and less time for voters to consider the message. The First Amendment does not tolerate such government interference in what ought to be free speech in the time and manner of the candidate’s or group’s own choosing.
Incidentally, Primo’s statistical research is backed up by interviews by political scientist Michael Miller and the GAO. Miller finds that such delay is commonplace among privately funded candidates, and the GAO adds that independent groups act similarly. That’s rather a lot of evidence to deny and makes Clean Elections’ defenders’ tactic look not only like a poor strategic choice, but also downright misleading.
Congratulations to our colleague Bill Maurer, who did an outstanding job arguing before the U.S. Supreme Court today in Arizona Free Enterprise Club v. Bennett. As the early news coverage notes, the conservative members of the Court were skeptical of the government’s arguments and seemed inclined to hold Arizona’s law unconstitutional. That’s good news for free-speech advocates.
For more information on the case, be sure to check out Maurer’s op-ed in today’s edition of USA Today and my colleague Steve Simpson’s op-ed at Townhall.com. Additional pre-argument coverage by John Lott and Brad Smith is available at National Review Online and the Wall Street Journal.
We will continue to provide links to news coverage of the argument, and will provide a link to the argument transcript as soon as it becomes available.
UPDATE:Click here to read the transcript of Monday’s argument.
Charles Fried and Cliff Sloan argue in the New York Times that the U.S. Supreme Court’s ruling in Citizens United should lead the Court to uphold Arizona’s system of government-funded political campaigns. To the contrary, Citizens United held that government cannot burden speech based on the identity of the speaker. But that is exactly what Arizona’s law does: It was designed—and sold to the public—as a way to discourage speech by privately funded candidates and the groups that support them.
Fried and Sloan seem untroubled by this. Indeed, they argue that there are no limits on the government’s power to selectively fund its preferred speakers. Thankfully, the current Court is skeptical of campaign finance laws precisely because of the risk that they will be used to rig elections. We hope this skepticism will lead the Court to strike down Arizona’s unconstitutional “clean elections” system.
Writing for Slate, election-law scholar Rick Hasen previews IJ’s upcoming argument before the U.S. Supreme Court in Arizona Free Enterprise Club v. Bennett, which along with the consolidated case McComish v. Bennett, challenges Arizona’s unconstitutional system of publicly financed “matching funds.” Hasen—a staunch proponent of campaign finance restrictions—is no fan of our work on the case, which he claims boils down to “wealthy candidates and outside groups” arguing that “more speech is unfair.” But Hasen’s criticisms badly miss the mark.
Much of Hasen’s argument is framed in terms of hostility towards “wealthy candidates and outside groups.” Of course, these groups are entitled to First Amendment protection, just like anyone else. But more importantly, this framing is based on two false assumptions: that only wealthy candidates and groups will benefit if Arizona’s law is struck down, and that Arizona’s law does not currently disproportionately benefit wealthy groups. Neither of these assumptions is correct.
First, Arizona’s law is designed to discourage all privately funded candidates—both rich and poor—from raising more than an arbitrarily set amount of money to get their messages out to the public. The fact that the law destroys the incentive to raise and spend private money on political campaigns was one of the major selling points used by the laws proponents. A victory for our clients in Arizona would certainly help candidates who can afford to bankroll their own campaigns. But it will also help candidates of modest means who exercise their constitutional right to raise private funds. And it will help all independent groups—whether well-financed or not—that wish to spend money supporting privately financed candidates.
Second, some of the biggest beneficiaries of the current law are wealthy “outside” groups. Under Arizona’s law, if an independent group spends money supporting a privately funded candidate who is facing a government-funded opponent, the government will cut a check for an equal amount to the government-funded candidate. This is true even if another, wealthier independent group has spent a vastly larger amount of money supporting the government-funded candidate. In other words, independent groups of modest means who support privately funded candidates face a drag on their First Amendment rights that wealthy groups supporting government-funded candidates are not subject to. Striking down Arizona’s matching-funds law would put all independent groups—rich and poor alike—on the same legal footing.
Hasen also claims that our argument that matching funds violate the First Amendment is “at odds with the ‘more speech is better’ mantra of the court in Citizens United.” This argument reveals that Hasen’s view of the First Amendment is, on a fundamental level, very different from ours. More importantly, it is different from the view held by the five Justices in the Citizens United majority.
It is questionable whether Arizona’s law increases the overall amount of speech, but it doesn’t matter either way. Any such effect is totally irrelevant to the First Amendment question, which is: Does the law unconstitutionally chill speech by privately funded candidates and the independent groups that support them? Simply put, the government cannot defend a law that chills one speaker on the grounds that it encourages a different speaker. The First Amendment, after all, is not a mandate for government to increase the aggregate amount of speech in society. It is a negative command: “Congress shall make no law . . . .” It constrains the government’s ability to interfere in the marketplace of ideas, as Arizona has sought to do with its so-called “Clean Elections” system.
Finally Hasen attempts to distinguish the Supreme Court’s 2008 ruling in Davis v. FEC, which controls the outcome of this case. In Davis, the Supreme Court struck down the so-called Millionaire’s Amendment, a provision of the McCain-Feingold campaign finance law that increased the maximum amount of money a political candidate could accept from contributors if he was running against a self-financed opponent. The Court held, correctly, that the Millionaire’s Amendment unconstitutionally burdened the right of self-financed candidates to robustly fund their own campaigns, because doing so triggered a benefit to their opponents.
Arizona’s law is even worse than the law in Davis. In Davis, favored candidates were only given the opportunity to raise additional money. In Arizona, the government gives them a direct subsidy. Hasen attempts to distinguish Davis, arguing that “Arizona did not enact its system to ‘level the playing field,’” but this critique simply doesn’t match up with the facts. In reality, the proponents of Arizona’s law expressly sold it to the public as a means of leveling the playing field.
In short, Hasen’s article does little more than express frustration at what we hope will be the imminent demise of Arizona’s matching-funds system. Hasen’s frustration is undoubtedly shared by many proponents of campaign finance laws who, over the last five years, have seen many of those laws struck down. But the fact that Hasen and others are frustrated, and would prefer that government have the power to micromanage political speech—amplifying some speakers and muting others—is not an argument that the First Amendment gives government that power. It does not, which is precisely why we have challenged Arizona’s law for over a decade, and why the Supreme Court should strike it down.
By Paul Sherman
By Bill Maurer
By Steve Simpson
By Lisa Knepper
Much of Hasen’s argument is framed in terms of hostility towards “wealthy candidates and outside groups.” Of course, these groups are entitled to First Amendment protection, just like anyone else. But more importantly, this framing is based on two false assumptions: that only wealthy candidates and groups will benefit if 
