Justices Strike Down 'Rescue Funds' Provision in Public Campaign Financing Laws

This op-ed was originally published by the Los Angeles Daily Journal.

By Associate Clinical Professor Jessica A. Levinson

This week, the U.S. Supreme Court took away the power of lawmakers on all levels of government to craft public campaign financing programs that best meet their needs. In Arizona Free Enterprise Club's Freedom Club PAC v. Bennett (aka McComish v. Bennett), Chief Justice John G. Roberts Jr., writing for a 5-4 majority, struck down the constitutionality of so-called "rescue" or "trigger" funds provisions. The case focused on Arizona's public campaign financing law, but has implications for jurisdictions throughout the nation.

Rescue provisions provide publicly financed candidates with additional taxpayer funds in the event that their privately financed opponents or independent expenditure groups spend over a threshold amount of money. One purpose of these provisions is to allow publicly financed candidates to remain competitive when they are faced with relatively high spending privately financed opponents, or independent expenditure groups that spend money against privately financed candidates or in favor of their opponents.

The Court's only analysis of public campaign financing programs came in its seminal 1976 decision in Buckley v. Valeo. The Buckley Court upheld the public campaign financing program at issue - which provided taxpayer funds for party nominating conventions, and primary and general election presidential candidate campaigns - finding that public financing can serve many important governmental purposes.

The Buckley Court famously found that the voluntary presidential public campaign financing program was "a congressional effort, not to abridge, restrict, or censor, but rather to use public money to facilitate and enlarge public discussion and participation in the electoral process, goals vital to a self-governing people." Therefore, public financing programs were seen to promote First Amendment values. In her dissent, Justice Elena Kagan, writing for the four-member minority, similarly echoed that finding, stating, "Arizona's matching funds provision does not restrict, but instead subsidizes, speech." The Buckley Court further held that in enacting voluntary public campaign financing for presidential campaigns, Congress acted to "reduce the deleterious influence of large contributions on our political process, to facilitate communication by candidates with the electorate, and to free candidates from the rigors of fundraising."

Since then, state and local jurisdictions throughout the country have enacted public campaign financing programs with varying degrees of success. These programs essentially come in two forms - full and partial. Under full public campaign financing, candidates raise a certain number of small contributions and then qualify to receive a lump sum grant, in exchange for the taxpayer dollars candidates cannot raise or spend any additional private funds. Under partial public campaign financing programs, candidates raise contributions, which are then matched with public funds. The ratio of the match varies by jurisdiction, some give a one to one match, while others provide a more generous match. Candidates participating in partial public campaign financing programs are typically prohibited from raising and spending over certain amounts. Many jurisdictions - which have implemented either full or partial public campaign financing programs - have opted to include rescue funds provisions in their laws.

Prior to the Supreme Court's decision in Arizona Free Enterprise Club, jurisdictions were free to use a number of tools to develop the public campaign financing program that best fit the needs of political candidates in that area. However, the Court has now taken the power away from jurisdictions to determine whether, when and how to give candidates additional funds in competitive and expensive races.

Rescue funds provisions were generally understood to stand on constitutionally firm ground until the Court's 2008 decision in Davis v. FEC. That case did not address a public campaign financing law, but it spelled the end for rescue funds. The Davis Court struck down the so-called "Millionaire's Amendment" in the Bipartisan Campaign Reform Act (popularly known as McCain-Feingold). The law provided that the contribution limit applicable to a candidate who ran against a self-financing candidate tripled (rising from $2,300 to $6,900) if the self-financing candidate spent over a threshold amount of his own money, $350,000.

Despite the fact that the law did not impose any limit on the amount that a self-financed candidate could spend, the Court found that the provision acted like an expenditure limit, and was therefore impermissible. The law, however, arguably did no more than allow the opponent of a self-financed candidate to raise larger contributions.

The law at issue in Davis, which did not deal with a system of public campaign financing, was different from the law addressed by the McComish Court in a number of additional ways. In Davis, similarly situated candidates - two privately financed candidates - were treated differently and subject to an asymmetrical contribution limit scheme. In McComish, two differently situated candidates - one publicly financed and one privately financed - were treated differently.

Further, the purpose behind the two laws is different. The goal of the Millionaire's Amendment was to level the playing field - an interest long held to be insufficient to support contributions limits. The goal of the trigger funds provision was to encourage participation in public campaign financing laws, which are themselves aimed in part at reducing corruption or its appearance - an interest long held to be sufficiently compelling to uphold contribution limits and public financing programs.

Reading the quite obvious tealeaves left by the Davis decision, a number of past and future candidates, and a political committee, challenged the constitutionality of the rescue funds provisions contained in Arizona's public campaign financing law. Based on Davis, the petitioners claimed that the rescue funds acted as an impermissible expenditure limit that chilled their speech. Specifically, the petitioners claimed that they would stop spending money over the threshold amount that triggered the granting of additional public funds for the publicly financed candidate.

The Court has sided with petitioners. Relying heavily on Davis, the majority first found that the rescue funds provision impermissibly burdened the speech of privately financed opponents and independent expenditure groups. As Justice Kagan noted, "except in a world gone topsy-turvy, additional campaign speech and electoral competition is not a First Amendment injury."

The majority next concluded that no compelling governmental interest was sufficiently served by the rescue funds provisions. The Court initially pointed out that there was evidence indicating that the purpose of the rescue funds provision was to "level the electoral playing field." Even assuming the purpose of the provision was to reduce corruption or its appearance, the Court noted that interest was not served because the provision burdened the free speech rights of self-funded candidates (whose spending of their own funds reduces a candidate's dependence on outside contributions and therefore reduces potential for actual or apparent corruption), and independent expenditure groups (whose spending the Citizens United Court said cannot give rise to corruption or its appearance). The Court concluded that the claim that the rescue funds provision fights corruption or the appearance of corruption by ensuring that candidates opt into public campaign financing programs was too attenuated to bear the weight of the burden imposed by the rescue funds provision.

Unfortunately the Court has ignored the fact that if money is speech, then trigger funds actually provide more speech. However, as Justice Kagan argued, rescue funds provisions "subsidize...and so produces more political speech."

In striking down the constitutionality of rescue funds provisions throughout the nation, the Supreme Court has eroded the ability of jurisdictions to fashion public campaign financing laws that best fit their needs.