Supreme Court: Matching funds in Arizona election law violate free speech

In another major setback for campaign finance reform advocates, the US Supreme Court on Monday struck down a key portion of a government-funded system for elections in Arizona.

In a 5-to-4 decision, the justices invalidated a key part of the law that triggered state payments of matching funds for publicly financed candidates whenever their privately funded opponents outspent them.

The high court said the nearly dollar-for-dollar matching-funds mechanism violated the free speech protections of the First Amendment by deterring or diminishing the effectiveness of the speech of candidates who opt out of Arizona’s public finance system.

“The whole point of the First Amendment is to protect speakers against unjustified government restrictions on speech,” Chief Justice John Roberts wrote in the majority opinion. “When it comes to speech, the speaker is sovereign.”

The decision marks the third time in four years that the high court’s conservatives have invalidated campaign finance reform laws that the court found were designed to “level the playing field” among competing political candidates.

In 2008, the court struck down the so-called “Millionaire’s Amendment” that raised contribution limits for congressional candidates when facing a wealthy opponent who was using his or her own money to fund their campaign.

In 2010’s Citizens United decision, the justices struck down a law that barred corporations and labor unions from placing political advertisements during election season. Advocates justified the law, in part, as an attempt to level the playing field by preventing corporations from using their wealth to drown out other voices in the critical days before an election.

“Leveling the playing field can sound like a good thing,” Chief Justice Roberts wrote in the Arizona decision. “But in a democracy, campaigning for office is not a game. It is a critically important form of speech.”

He added: “The First Amendment embodies our choice as a nation that, when it comes to such speech, the guiding principle is freedom – the ‘unfettered interchange of ideas’ – not whatever the State may view as fair.”

Justice Kagan dissents

In a dissent, Justice Elena Kagan said the majority was wrong in finding that the Arizona provision posed a burden on political speech. She said the matching-funds mechanism provides a viewpoint-neutral subsidy to political candidates and that it fosters more speech, not less.

“We have never, not once, understood a viewpoint-neutral subsidy given to one speaker to constitute a First Amendment burden on another,” Justice Kagan said. “Yet in this case, the majority says that the prospect of more speech – responsive speech, competitive speech, the kind of speech that drives public debate – counts as a constitutional injury.”

Kagan also disputed the majority’s emphasis on the issue of “leveling the playing field.”

“The majority claims to have found three smoking guns that reveal the state’s true (and nefarious) intention to level the playing field,” she wrote. “But the only smoke here is the majority’s, and it is the kind that goes with mirrors.”

She said the state’s real interest in passing the campaign finance measure was to fight corruption.

Split along recognized lines

The decision split the justices along well-recognized conservative-liberal lines. Justice Kagan’s dissent was joined by Justices Ruth Bader Ginsburg, Stephen Breyer, and Sonia Sotomayor.

The chief justice was joined in the majority by Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas, and Samuel Alito.

At issue in Monday’s consolidated cases, Arizona Free Enterprise Club v. Bennett (10-238) and McComish v. Bennett (10-239), was a provision of Arizona law that provided a near dollar-for-dollar match to candidates participating in the public-finance system whenever a nonparticipating candidate outspent the initial public funding to his or her opponent.

The matching funds were meant to keep elections competitive between privately-funded and public-funded candidates.

Under Arizona’s 1998 Citizens Clean Elections Act, candidates who are willing to forego private fundraising may finance their campaigns with state money. First they must qualify by demonstrating a certain level of support by raising a required number of $5 donations.

Once qualified, the publicly funded candidate receives a lump sum grant to pay for election expenses. This portion of the law was not under challenge.

The public funding option is available to all candidates, and it is up to each candidate to decide whether to abide by the public-funding system or rely instead on private sources of campaign money.

The controversial part of the law deals with the mechanism enacted to ensure that privately funded candidates do not automatically outspend their competition.

How funds were awarded

The matching funds were awarded to every candidate who agreed to participate in the public-funding option – not just the most competitive candidates. In addition, under the Arizona law, publicly funded candidates were to receive matching funds whenever an independent advocacy group spent money in support of a privately funded candidate or spent money in a way that opposed a publicly funded candidate.

Opponents of the law said it penalized privately funded candidates and created a disincentive for their political speech by offering a campaign money windfall to his or her opponents whenever spending levels in the campaign rose above a certain government-authorized level.

Supporters countered that the law fostered more political speech by providing more money to a range of other campaigns. They also said it helped break the corrupting link between politics and wealthy special interests in elections by providing a single source of campaign money from the government itself.

Chief Justice Roberts said the majority was not questioning the wisdom of public funding of political elections. “That is not our business,” he said. But he added that states seeking to enact public finance scheme must do so in a manner consistent with the First Amendment.

“Laws like Arizona’s matching funds provision that inhibit robust and wide-open political debate without sufficient justification cannot stand,” he said.

Kagan disagreed. She said the measure is the way Arizonans sought to fight the problem of political corruption and scandal.

“Less corruption, more speech. Robust campaigns leading to the election of representatives not beholden to the few, but accountable to the many. The people of Arizona might have expected a decent respect for those objectives,” Kagan wrote.

"Today, they do not get it.”