Why sharply divided Supreme Court may strike down Arizona campaign-finance law

A sharply divided US Supreme Court on Monday appeared prepared to strike down a key portion of Arizona’s system of public financing for elections –potentially dealing another major blow to campaign finance reform advocates.

The case, Arizona Free Enterprise Club v. Bennett, examines an Arizona law that provides public funding for political candidates. At issue is the provision providing matching funds to publicly-funded candidates. These candidates get dollar-for-dollar taxpayer funding equal to the campaign spending of any political opponents who choose to rely on private campaign donations.

The Arizona system is designed to encourage candidates for statewide office to reject traditional, private fund-raising efforts, in favor of a government-funded option. Under the public option, candidates who obtain a certain number of $5 donations are deemed qualified for an "initial grant" of campaign funds. No one is challenging the constitutionality of that portion of the state law.

The controversial part of the law involves the allocation of matching funds. Under the law, whenever a candidate who rejected the government-funded option spends more than that initial grant, all government-funded candidates are eligible to receive a dollar-for-dollar match, to ensure the political campaign remains competitive.

Privately-funded candidates must abide by campaign contribution and disclosure limits, but are permitted to raise and spend unlimited amounts in their campaigns. In contrast, government-funded candidates are limited to spending three times the initial grant amount.

Arguments before the Supreme Court

“This case is not about whether the State of Arizona may provide campaign financing using public funds,” William Maurer, a lawyer for candidates and groups challenging the law, told the justices.

“What this case is about is whether the government can turn my act of speaking into the vehicle by which my political opponents benefit – with direct government subsidies,” he said.

The lawyer defending the Arizona law, Bradley Phillips, told the justices the provision fosters more political speech and more political competition while simultaneously fighting the corrupting influence of money in politics.

Mr. Phillips told the court that the matching-funds provision helps fight corruption by offering candidates an effective alternative to raising campaign funds from special interests.

Mr. Maurer countered that the provision violates free speech protections of the First Amendment by punishing candidates who opt-out of the public financing program. He said the government should not use one candidate’s protected political speech as a means of triggering additional money for other, government-funded, candidates.

Maurer said there was no constitutional problem with awarding public-funded candidates the full amount of the campaign grant upfront. He said his only complaint was with the triggering mechanism.

The law also provides additional matching funds whenever an independent advocacy group runs an ad opposed to a government-funded candidate or in favor of a privately-funded candidate. In contrast, no funding is triggered when an advocacy group backs a government-funded candidate or opposes a privately funded candidate.

Questions from the justices

During the hour-long argument on Monday, the justices appeared to be divided along well-established liberal-conservative lines.

The liberal wing, comprised of Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan, appeared through their questions and comments to favor upholding Arizona’s matching funds provision.

They appeared to agree with the federal appeals court panel that said the provision was permissible because it enhanced speech, fostering more political speech rather than less.

“There’s no restriction at all here,” Justice Kagan said at one point. “It’s more speech all the way around.”

The conservative wing – Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy, and Samuel Alito – expressed skepticism about the provision.

Justice Clarence Thomas generally does not speak during oral arguments. But he has been a reliable vote among conservatives in campaign finance cases.

In general, the conservative justices appeared to view the provision as a deterrent to privately-funded candidates spending more money in their own campaigns.

“If you knew that a $10,000 expenditure … would result in $30,000, $40,000, $50,000 – depending on how many opposition candidates there were – available for them, wouldn’t you think twice about it?” the chief justice asked Phillips.

“I might think twice about it, your honor,” Phillips said. But he added that “thinking twice is not a severe burden” of a candidate's First Amendment free speech rights.

Justices Alito and Kennedy both focused on the requirement that independent expenditures trigger matching funds only when the triggering advertisement is in opposition to a publicly-financed candidate or in support of a privately-funded candidate. The result is that such contributions might end up benefiting a favored candidate's opponents more than the candidate backed by the independent group.

“Why isn’t that clear-cut discrimination based on the content of speech?” Justice Alito asked.

“Matching funds do not turn in any way on the ideas or the viewpoints … of the candidate or the independent group’s speech or the identity of the speaker,” Phillips replied. “It turns entirely on what choice the candidate made at the outset," – to participate or not in public campaign funding.

Alito replied, “But if I’m the independent expenditure-maker, I haven’t made a choice at the beginning. I haven’t decided to participate or not participate [in the campaign finance system]. What I care about is the issue that’s being debated between these two candidates.”

Previous campaign finance rulings

The court’s conservatives have handed down a series of decisions in recent years cutting back on various campaign finance reform provisions that they say violate the free speech rights of political candidates, organizations, corporations, and unions.

In 2008, the justices voted 5-to-4 to invalidate the so-called Millionaire’s Amendment, a federal law designed to level the playing field between congressional candidates using their personal wealth to fund their campaigns and those abiding by campaign contribution limits. The law raised the federal contribution limits for candidates facing wealthy opponents.

The high court struck down the measure, saying it granted special government favors to some candidates based on the identity of their political opponent.

In January 2010, the justices again voted 5-to-4, this time to invalidate a portion of the so-called McCain-Feingold law that barred corporations and unions from running political broadcasts or advertisements during election season. The conservatives said political speech by corporations and labor unions is just as protected by the First Amendment as is political speech by an individual.

The majority justices rejected the argument that sometimes restrictions on corporate and union speech were justified because they could use their economic power to dominate the airwaves in the critical days before an election and drown out other voices.

That argument is similar to a key issue that arises in the Arizona law. Opponents of the law say it was passed to “level the playing field” between candidates able to assemble a sizable campaign war chest and those who are unable or unwilling to engage in private campaign fundraising.

A decision is expected by the end of June.