McCutcheon v. FEC
Make It Rain
On April 2, 2014, the Supreme Court issued its ruling in the landmark campaign finance case, Shaun McCutcheon v. Federal Election Commission, 572 U.S. 185 (2014). The decision removed the aggregate limits on donations to federal candidates, parties and political action committees (PACs) during an election cycle (2 year period). Citizens could now give donations to as many federal candidates as they desired. It was a staggering blow to the nation’s campaign finance laws and officially ushered in the era of dark money. The Court essentially gave its blessing to the outsized influence of large contributors. With their radical view of the First Amendment, the five conservative justices of the Court altered history for at least a generation.
The case presented a very specific question concerning the 2002 Bipartisan Campaign Reform Act (BCRA): Did the Act’s aggregate limits on the total amount that an individual may contribute to all federal candidates, political party committees, and other political committees during a two-year federal election cycle violate the First Amendment?
Prior to the decision, the federal aggregate contribution limits capped the total amount that any one contributor could donate to candidates, political parties, and political committees during an election cycle. A single donor could not give more than $5,200 to any one federal candidate per cycle. The limit ensured that individuals were not able to give the same amount to every single candidate running for a federal office. During the 2011-2012 election cycle, individuals could only contribute up to $123,200 to federal candidates and related committees combined. That meant $48,600 combined to all federal candidates and $74,600 combined to all parties and political action committees (PACs).
Once this limit was voided, mega donors got a green light to contribute up to $3.6 million per cycle to both candidates and committees of a single party. If the officeholder's leadership PAC was included, that limit rose to $5.9 million.
A Dubious Path
The Supreme Court, along with the lower courts, have been dealing with attempts at campaign finance reform since Congress passed the Federal Election Campaign Act (FECA) in 1971 (amended in ’74). By 1976, the first significant challenge to the regulation was Buckley v Valeo, 424 U.S. 1 (1976), which struck down two key components of FECA: limits on expenditures and limits on independent expenditures (funds from groups other than candidates and parties).
The Bipartisan Campaign Reform Act (BCRA), otherwise known as McCain-Feingold, was passed in 2002. It tried to expand the expenditure limitations once again. It was a monumental bill, but its key restrictions prohibited political party reelection committees from spending funds not subject to existing federal limits and a ban on issue advocacy ads within 60 days of a general election (30 days for primaries). The passage of the BCRA led to a flurry of challenges that went on for 14 years, culminating in McCutcheon.
The first major blow to BCRA was Citizens United v FEC, 558 U.S. 310 (2010). Limits on independent expenditures were declared unconnstitutional. It opened the floodgates for large contributions to flow into every federal campaign. The decision spurred on conservatives to pursue additional remedies in the federal courts.
Appellant Shaun McCutcheon
Alabama CEO Shaun McCutcheon had a passion for politics. Throughout the late 90s and into the 2000s, his activism increased and began donating heavily to conservative candidates, maxing out his contributions. After Barack Obama was elected, he became active in the Tea Party movement and grew frustrated by the campaign finance restrictions, seeing them as limiting his First Amendment rights. During this time, he met another conservative activist and attorney, Dan Backer, who urged him to pursue remedy in the courts.
In 2012, he filed a lawsuit in the District of Columbia District Court against the Federal Election Commission (FEC) challenging the aggregate limits as defined by the BCRA.
On September 28, 2012, the three-judge panel ruled in favor of the FEC, granting the motion to dismiss and stating that the aggregate limits were in the public interest. The District Court believed that the aggregate limits were a bulwark against corruption and did not violate the First Amendment because they prevented evasion of the base limits. By October, McCutcheon had filed an appeal to the Supreme Court and they agreed to hear the case in 2013.
Appearing before the Supreme Court takes special skill. Experience helps too. So McCutchen hired a new attorney, Erin Murphy, of the now defunct firm of Bancroft and Associates (later Bancroft PLLC). She was a former clerk for Chief Justice John Roberts.
Arguments began at 10am on October 8, 2013. Predictably, the questioning would break along ideological lines, with the liberal justices sensing that the end of campaign finance reform was near. Their urgency was palpable. All of them would challenge the appellant's attorneys. Breyer and Kagan would express some anger towards the logic of McCutcheon's attorney. Justice Sotomayor appeared frustrated while Justice Ginsburg tried to encapsulate the pointlessness of McCutcheon's argument.
Campaign finance reform foe Scalia made his views known through sarcasm and occasional humor, while Chief Justice Roberts tried to keep the arguments on track.
Erin Murphy presented first. She began her argument by claiming that McCain Feingold was an unnecessary attempt to fight corruption and level the playing field in politics, stating, "BCRA's aggregate contribution limits are an impermissible attempt to equalize the relative ability of individuals to participate in the political process." Forced equalization is a favorite trope of conservatives and Murphy subtlety hints at it here. The argument then devolved into the minutiae of circumvention and earmarking, with Breyer and Kagan coming at Murphy hard. They got very specific about restructuing of donations and how circumvention could be accomplished; essentially trying to point out that money can be a corruptible influence on politics.
But it was Ginsburg who took the most practical points and ran with them. After Murphy stated her concern about "everybody else" not being allowed to participate in the process, Ginsburg asked for clarification:
"Ms. Murphy, on the 'everybody else,' can you give us an idea of whose expression is at stake? I mean most people couldn't come even near the limit."
Murphy conceded that she was not talking about a large group, then pivoted to concern about their First Amendment rights. Then she was helped along by Justice Scalia who added sarcastically, "I assume that a law that only prohibits the speech of two percent of the country is okay?" That is not what Ginsburg implied and it's hard to imagine that someone with Scalia's intellect did not understand her point.
Ginsburg continued her questioning with a vengeance as Mitch McConnell's attorney, Bobby Burchfield, took the floor. McConnell had filed an amicus curiae brief in support of McCutcheon. Burchfield's theme was the First Amendment. She interrupted him almost immediately by pointing out the purpose of the aggregate limits. They existed to promote democratic participation and force candidates to seek contributions from a wider slice of the electorate. Burchfield countered that the limits force like-minded individuals or parties to compete against each other. He went even further in stating that only incumbents are helped by these artificial limits. A nutty argument that Ginsburg challenged:
"Has it worked out that way in practice? Has it worked out... because there was one brief at least saying no, that that's wrong. In fact, it's the challengers who are aided."
Burchfield stuck to his theme of the entrenched power of incumbents, while Scalia was so talkative it appeared he was acting as co-counsel. But recognizing the real world implications of their decisions is a hallmark of Ginsburg's jurisprudence. Entrenched beliefs, along with a fundamentalist view of the Constitution, keep the powerless in a perilous state,
The Government's Case
Solicitor General Donald Verilli had been highly successful during his tenure at the office, having won the landmark Obamacare case, National Federation of Independent Business v. Sebelius in 2012. After the arguments in that case, Verilli was roundly criticized by legal experts for a weak performance. Some were scathing, saying he had blown the case. After the decision was made public, many had to publicly apologize.
He began his argument by simply stating the obvious: money corrupts and aggregate limits seek to offset a person's natural tendency to favor those who give large gifts.. He then poked holes in McCutcheon's argument that base limits do all the work of limiting the chance of corruption.
Chief Justice Roberts challenged Verilli by regurgitating the appellant's case that contributors would have to limit their donations, making so called "tough choices" between causes. Verrilli very effectively countered with the possibility of a $3.6 million check going to just one elected offcial.
Before wrapping up his case, the Solicitor General would have to tangle with Scalia, Kennedy and Alito in rapid succession. Alito, in particular, charged that there were too many hypotheticals in the arguments of both the lower court and Verilli.
It was another impressive display by Verilli, but ultimately he had to know the cards were stacked against him.
The 5-4 decision in favor of McCutcheon was not a shock to veteran campaign finance reformers and Court watchers. The Court had condoned a free-for-all; the federal government could no longer prevent citizens from giving money to as many different candidates and parties as they want. Thought the base limits remained in place, any real restraint was gone. In writing for the majority, Chief Justice Roberts's opinion was detailed, but ultimately made a lot of assumptions, that in hindsight, seem ridiculous.
While he began by referencing Buckley as an example of precedent and existing controls on campaign finances, he concluded that the case really had no relation to McCutcheon:
"There is no need in this case to revisit Buckley’s distinction between contributions and expenditures and the corresponding distinction in standards of review."
And he continued:
"Buckley’s ultimate conclusion about the constitutionality of the aggregate limit in place under FECA does not control here."
Ominously, he then referenced their notorious decision in Citizens United:
"Ingratiation and access are not corruption."
Then came his two most audacious conclusions. First, he referenced the First Amendment:
"Significant First Amendment interests are implicated here. Contributing money to a candidate is an exercise of an individual’s right to participate in the electoral process through both political expression and political association."
Who was stopping McCutcheon or anyone else from contributing to a candidate or participating in the process? No one. There were just regulatory limits in place to prevent the massing of funds. Throughout the history of the United States, both the Court and Congress came to see money as a corrupting influence. Large donations could make an elected official rule in your favor on a particularly piece of legislation, to the detriment of your poorer fellow citizens. That is more than a reasonable assumption. The rap sheets of felonious officials who have succumbed to the influence of cash are more than enough proof.
Roberts attitude towards this line of thinking was dismissive:
"The aggregate limits do not further the permissible governmental interest in preventing quid pro quo corruption or its appearance."
This twisted logic was pervasive among the entire slate of conservative Justices. Roberts even cited Justice Kennedy's flawed logic from McConnell v. Federal Election Commission, 540 U. S. 93, which was a failed attempt to overturn parts of the BCRA:
"...the risk of quid pro quo corruption is generally applicable only to “the narrow category of money gifts that are directed, in some manner, to a candidate or officeholder.” , (at 310 opinion of KENNEDY, J.).
The Justices have turned a blind eye to the obvious, expecting the Congress, who benefit the most from the removal of aggregate limits, to restructure a framework that will protect the system. It is laughable.
Ironically, Roberts stressed his respect for stare decisis during his 2005 confirmation hearing; the doctrine that a court should not overturn its own decision unless there is a strong reason to do so. His so called "measured tone" he exhibited was applauded from both sides of the aisle. He firmly stated to the Senate Judiciary Committee, "It is not enough that you may think the prior decision was wrongly decided."
Justice Breyer, the senior Justice in the minority, assigned himself the dissent. While initially referencing decisions in Buckley and Citizens, he wasted no time in his criticism, declaring the majority's legal analysis as faulty, devaluing political integrity and unnecessarily creating loopholes. But most ominously, he provided a grim outlook for the future of the political process:
"... today’s decision eviscerates our Nation’s campaign finance laws, leaving a remnant incapable of dealing with the grave problems of democratic legitimacy that those laws were intended to resolve."
Breyer is consciously using violent imagery here to describe the impact of the decision. This was an act of political violence by the Court's majority. Who really benefited from this decision? The average voter did not; their ability to influence has been greatly diminished again.
The conservative Justices claim to be "originalists," adhering to the Founders' original meaning of the Constitution. But where in the text did the Founders equate free speech with cash donations? They did not; their desire was for citizens to be linked by common ideological bonds and goals. Breyer points this out very effectively by referencing a chain of communication between voters and their government:
"This chain” would establish the necessary 'communion of interests and sympathy of sentiments' between the people and their representatives, so that public opinion could be channeled into effective governmental action."
The First Amendment not only protects the individual’s right to engage in political activities, but also the public’s interest in preserving a democratic order in which collective speech matters. Breyer is pointing out the obvious: rich donors can now subvert the will of millions of voters.
Most importantly, the dissent references the long history of the Court in upholding campaign finance reform legislation, until Citizens United in 2010. It was the public's fear of corruption that drove the Justices in those previous cases. But with McCutcheon, the definition of corruption had narrowed so much as to be insignificant.
McConnell v FEC was noted as an example of how the Court sought to strengthen public discourse, that constitutional interests lie on both sides of the legal equation:
"...the anticorruption interest that drives Congress to regulate campaign contributions is a far broader, more important interest than the plurality acknowledges. It is an interest in maintaining the integrity of our public governmental institutions. And it is an interest rooted in the Constitution and in the First Amendment itself."
Citizens want their First Amemdment rights to matter. The economic disparity between the average voter and rich donors is not something that can be overcome easily.
"Speech does not exist in a vacuum. Rather, political communication seeks to secure government action. A politically oriented “marketplace of ideas” seeks to form a public opinion that can and will influence elected representatives."
You can feel Breyer's pain while reading through the opinion. The Court had now made our representatives ability to hear us much harder. HIs predictions have all come true. Voters now doubt the system more than ever.
In an extraordinary move, Breyer also included a multi-part appendix which featured statements about campaign finance reform from various Senators and Congressmen as well as election spending tables. These tables broke down spending by PACs, Joint Fundraising Committees and party donations in the years leading up to McCutcheon. Most fascinating of all was a table showing the possible influence of a donor giving a $3.6 million check.
Show me the Money
Campaign coffers soon swelled. Within six months, a group of approximately 300 donors had contributed $11 million to various campaigns and organizations. That group represented just a tiny portion of the total donors during the 2014 elections. The top 100 donors during this same period gave the equivalent of nearly 5 million donors. A smaller portion of the electorate was now financing elections, leading to the exclusivity of access so feared by reformers. Would Justice Roberts stand by his statement that those donors would not have excess influence over the candidates and office holders?
By 2015, more than 60% of all super Pac funding came from less than 200 individuals. Super PACs are independent-expenditure only political committees that may accept unlimited contributions. Large corporations, awash with foreign capital, are their biggest donors.
Dark money, funds spent without the requirement of donor disclosure, now proliferates. The biggest problem about nondisclosure is that voters are inundated with political advertising and do not get the chance to consider the motives behind the ad. Many PACs have names that obscure their true intentions.
Joint Fundraising Committees
The biggest winners were joint fundraising committees (JFCs). Funds donated to JFCs were no longer subjected to the aggregate limits. These committees are formed by two or more candidates, party committees or PACs banding together and raising large sums of cash. While individual members of a JFC cannot accept more money from a donor than they could if the money was given directly, a contributor can now write one large check to the group. The funds then get split up between several beneficiaries. Both President Obama and his challenger Mitt Romney used the committees in 2012, but the funds were paltry compared to what they've become.
Donors can only give a maximum of $35,500 (as of 2019) directly to a national party committee. But party national committees are now forming joint fundraising operations with their Senatorial and Congressional Committees, which can receive triple that amount. The parties can also form JFCs with a particular candidate. The top JFCs in 2020 so far are: Trump Make America Great Again Committee, Trump Victory, and Take Back the House 2020, with a combined war chest of $279,679,479.
The New Standards
During the 2016 Presidential election, candidates and their interest groups spent $2.6 billion. If you add in spending on House and Senate races, that figure rises to $6.5 billion.. The 2020 elections promise to be even more expensive. As of May 2020, 1,783 super PACs have reported total receipts of $745,165,617 and total independent expenditures of $126,499,499 in the 2020 cycle.
In American politics, saying that money is the root of all evil has never been truer. Only Congress can repair this damaged system, built on greed. But they are in no rush to turn off the spigot of easy cash.
- Allison, Bill and Bloomberg. "The 2020 Presidential race might be rembered as when the dam broke on money in U.S. politics." Fortune, February 13, 2020.
- Beckel, Michael. “The McCutcheon Decision Explained – More Money To Pour Into Political Process.” Center for Public Integrity, April 22, 2014. Publicintegrity.org.
- Billig, Avram. “A Year Later, McCutcheon Has Invited More Money from Fewer Donors.” Brennan Center for Justice, April 2, 2015. Brennancenter.org.
- Foust, MIchael. "Roberts refuses comment on Roe but gives views on precedent." Baptist Press, September 13, 2005. bpnews.net.
- Hartobey, Patrick. "Money, Money, Money: How the Supreme Court's Decision in McCutcheon V. FEC Could Impact Shareholders and Corporations. Emory Corporate Governance and Accountability Review, 2014. (Emory Law School)
- Kroll, Andy. “The Supreme Court Just Gutted Another Campaign Finance Law. Here’s What Happened.” Mother Jones, April 2, 2014. Motherjones.org.
- Knott, Alex. “McCutcheon v. FEC: Supreme Court finds aggregate biennial limits unconstitutional.” Federal Election Commission, April 15, 2014.
- “McCutcheon v. FEC.” Brennan Center for Justice (Court Case Tracker). April 2, 2014. www.brennancenterorg.
- Petoskey, Rose Nimkiins, & Hinderlie, Katherine. “McCutcheon v. Federal Election Commission.” Cornell Law School Legal Information Institute.
- "Why the 2020 Presidential Race Will Be Costliest in History." Voice of America, February 14, 2019. voanews.com
- Buckley v. Valeo, 424 U.S. 1 (1976)
- Citizens United v. Federal Election Commission, 558 U.S. 310 (2010)
- McConnell v. Federal Election Commission, 540 U.S. 93 (2003)
*Full text decisions can be found at supremecourt.gov or other related sites listed below
- Brennan Center for Justice (Controlling Opinion and Dissent)
- Center for Responsive Politics
- Cornell Law School
- Federal Election Commission
- Public Integrity
- Surpremecourt.gov (Oral argument transcript)