Court clips campaign-finance law

In a 5-to-4 ruling, the Supreme Court justices say Wisconsin issue ads did not violate McCain-Feingold act.

The Federal Election Commission violated the free-speech rights of a Wisconsin advocacy group when the commission censored election-eve issue advertisements under the 2002 McCain-Feingold campaign-finance law.

In an important decision upholding First Amendment protections of corporations and unions to engage in certain kinds of political activity, the US Supreme Court on Monday ruled 5 to 4 that a key portion of the McCain-Feingold law had been unconstitutionally applied to the group, Wisconsin Right to Life Inc.

The group was barred by the FEC from airing certain television and radio advertisements prior to the 2004 federal election in Wisconsin because the advertisements were viewed as the functional equivalent of direct electioneering advertisements, which are regulated under the campaign-finance law.

The majority justices said the group's ads were not the functional equivalent of electioneering ads and should not have been blocked.

"Discussion of issues cannot be suppressed simply because the issues may also be pertinent in an election," Chief Justice John Roberts wrote for the majority. "Where the First Amendment is implicated, the tie goes to the speaker, not the censor."

Three members of the majority, Justices Antonin Scalia, Anthony Kennedy, and Clarence Thomas would have gone further and overruled the issue-advertising section of the McCain-Feingold law.

Instead, the court declared that the law was unconstitutional only as it had been applied to the Wisconsin group. The high court ruling yanks a few teeth out of the law, officially known as the Bipartisan Campaign Reform Act of 2002 (BCRA).

In a dissent, Justice David Souter said the decision "effectively and unjustifiably" overturns an earlier high court ruling upholding regulations of corporate and union issue ads.

"After today, the ban on contributions by corporations and unions and the limitation on their corrosive spending ... are open to easy circumvention," Justice Souter wrote. "The ban on contributions will mean nothing much," he added, "now that companies and unions can save candidates the expense of advertising directly, simply by running 'issue ads' without express advocacy."

Monday's decision will make it easier for unions and corporations to use unregulated money to fund last-minute issue ads that may help or hurt certain candidates for federal office. It will also permit unions and corporations to continue to engage in grass-roots lobbying of elected officials even during election campaigns.

In passing BCRA, Congress had sought to close what campaign-finance reformers called a loophole in existing election laws. That loophole, they argued, permitted corporations, unions, and other wealthy special interests to influence federal elections by spending millions of dollars on so-called issue ads. For example, in the 2000 election cycle 130 groups spent more than $500 million on 1,100 different ads.

US election law has long banned corporations and unions from spending money on electioneering ads – commercials designed to promote or target a specific candidate. But many corporations and unions bypassed the law by running ads discussing issues instead of candidates. Political experts say the more subtle issue ads can sometimes play a powerful role in swaying voters and are often more effective than more blatant electioneering ads.

The concern among sponsors of BCRA was that wealthy interest groups were subverting the democratic process by drowning out the voices of those with fewer financial resources in the critical weeks leading up to federal elections. Elections should be about the free flow of ideas rather than the power of money, reform advocates say.

But some groups complained that BCRA's issue-advertising restrictions went too far by censoring free speech in a way that favors incumbent candidates.

In 2004, the advocacy group Wisconsin Right to Life sought to run three radio and television advertisements urging voters to contact their senators to tell them to oppose an effort by Senate Democrats to filibuster President Bush's judicial nominees (see sidebar).

One of Wisconsin's senators, Democrat Russ Feingold, was up for election in 2004 and since the advertisements were related to a policy position he had taken and mentioned him by name, the ads were deemed to be part of an electioneering effort. The FEC said such ads were banned under BCRA. The law prohibits corporations and labor unions from using general treasury funds for communications "that are intended to, or have the affect of, influencing the outcome of federal elections."

Lawyers for Wisconsin Right to Life said their ads were grass-roots lobbying designed to persuade Wisconsin's senators to oppose filibustering President Bush's judicial nominees.

The FEC disagreed. Such an ad might influence Senator Feingold’s reelection bid by persuading voters that he was unworthy of being reelected. The Wisconsin group was no supporter of Feingold and the intent of the ad appeared to be aimed at hastening his political defeat, the FEC concluded.

The case highlights the murky middle ground between so-called genuine issue ads and “sham” issue ads that are designed to bypass campaign finance restrictions.

After passage of BCRA in 2002, the question of how precisely the law would be enforced was left to the FEC. The agency adopted a broad set of rules that ban most non-PAC ads during election season.

Wisconsin Right to Life challenged the ban in federal court. After several rounds of litigation, a three-judge panel ruled that the issue-ad portion of BCRA was unconstitutional as it had been applied to the group’s ads.

In upholding that ruling, the high court said Wisconsin Right to Life’s ads were neither direct political advocacy or the functional equivalent. The majority justices said the government had identified no reason compelling enough to justify blocking the group’s ads.

“When it comes to defining what speech qualifies as the functional equivalent of express advocacy subject to such a ban ... we give the benefit of the doubt to speech, not censorship,” Chief Justice Roberts wrote. “The First Amendment’s command that ‘Congress shall make no law ... abridging the freedom of speech’ demands at least that.”