Amicus Curiae Brief — McConnell v. Federal Election Commission

Supreme Court, US

FILED

AUG 5 - 2003

No. 02-1674 & Consolidated Cases | orice of THE CLERK

IN THE

Supreme Court of the United States

MITCH McCONNELL, SENATOR, et ai.,

Appellants,

v.

FEDERAL ELECTION COMMISSION, et al.,

Appellees.

On APPEAL FROM THE UNITED StaTE District Court

FOR THE DistTRICT OF COLUMBIA

BRIEF OFAMICI CURIAE COMMITTEE FOR ECONOMIC

DEVELOPMENT, WARREN E. BUFFETT, EDWARD A.

KANGAS, JEROME KOHLBERG, PAUL VOLCKER, AND

SIXTEEN OTHER BUSINESS LEADERS

IN SUPPORT OFAPPELLEES

STEVEN ALAN REIss

Counsel of Record

R. Bruce RICH

Josh A. KReEVITT

JONATHAN BLOOM

CLAIRE E. GOLDSTEIN

WeIL, GOTSHAL & MANGES LLP

767 Fifth Avenue

New York, NY 10153

(212) 310-8000

Attorneys for Amici Curiae

182238 ce

COUNSEL PRESS

(800) 274-3321 + (800) 359-6859

Argument

I.

Il.

i

TABLE OF CONTENTS

SOFT MONEY CONTRIBUTIONS ARE

EXTRACTED FROM CORPORATIONS

FEARFUL OF THE ADVERSE CONSE-

QUENCES OF NOT GIVING ...........

A.

Corporate Soft Money Contributions Are

Made to Secure Preferred Access to and

Influence over Government

GEE Kvcnnotnesiscanteheseeede

Soft Money Contributions Are Made to

Avert Perceived Retribution .........

Actual and Perceived Corruption

Engendered by Soft Money Contribu-

tions Has Eroded Confidence in Business

and Govermmemt ..........ccccces.

BCRA’S PROHIBITION ON SOFT MONEY

SOLICITATION AND CONTRIBUTION

DOES NOT SIGNIFICANTLY ABRIDGE

FIRST AMENDMENT RIGHTS .........

A. Corporate Soft Money Does Not Reflect

the Ideas of Its Contributors .........

10

15

il

Contents

Page

B. Corporate Soft Money Contributions

Distort the Marketplace of Ideas ..... 24

C. ABan on Soft Money Does Not Offend

the First Amendment Right of

aucun ess 6o00ki'seeees 26

as ccc cco cncivscceces 28

Appendix — The Individual Amici ............. la

ill

TABLE OF CITED AUTHORITIES

Page

FEDERAL CASES

Abood vy. Detroit Board of Ed., 431 U.S. 209

I ik Ghee ee eerarehes 0495005006806004 22

Austin v. Michigan Chamber of Commerce, 494 U.S.

ED. op ttnt wan eedeceseccsceeanesses 24

Buckley v. Valeo, 424 U.S. 1 (1976) ........ 4, 21, 26, 27

Federal Election Comm'n v. Beaumont, 123 S. Ct.

EE 6645 66 epee es kn hse eeeeesneeeeee 4

Federal Election Comm'n vy. Colorado Republican

Fed. Campaign Comm., 533 U.S. 431

ee 23

Federal Election Comm'n v. Massachusetts Citizens

for Life, Inc., 479 U.S. 238 (1986) ........... 24, 25

Federal Election Comm'n y. National Right to Work

Comm., 459 U.S. 197 (1982) .............05- 25

First Nat’l Bank of Boston v. Bellotti, 435 U.S. 765

a ee ee re 3

Kusper v. Pontikes, 414 U.S. 51 (1973) .......... 26

Lehnert v. Ferris Faculty Ass'n, 500 U.S. 507

RE ee ee RES ee Khe SEER ER ECE REESE: 22-23

iv

Cited Authorities

Page

NAACP y. Alabama, 357 U.S. 449 (1958) ........ 26

Pipefitters Local Union No. 562 v. United States,

TOT WE SUP CUNTED 6 uncon casceskecesnseta 25-26

United States v. Congress of Indus. Orgs., 335 U.S.

PD 4554545505050 00044 aa ae ee ewan 26

United States v. United Foods, Inc., 533 U.S. 405

FE ere a rey renee eam ar ee 23

CONGRESSIONAL MATERIALS

A 8 8 re 18

147 Cong. Rec. $2434... . cc ccc ccc cccccccces 16

147 Cong. Rec. S2446 .. 0... ccc cece cece cece 18

PP GA Ss EE 6 66 enctceceauadcesvas 8

Federal Election Campaign Act, Pub. L. No. 93-443,

Se CED 6 ibdsucneendbdauseedcee 2

OTHERAUTHORITIES

Warren E. Buffett, The Billionaire’s Buyout Plan,

N.Y. Times, Sept. 10, 2000 .................. 9

The Center for Responsive Politics, Soft Money to

EE «445-45 0bnisnnedadadedeeenes 13

Cited Authorities

Page

Francis X. Clines, Most Doubt a Resolve to Change

Campaign Financing, Poll Finds, N.Y. Times,

BO Gy TROT vc cccexscednnsecesctescusscavaces 17

Committee for Economic Development, /nvesting in

the People’s Business: A Business Proposal for

Campaign Finance Reform (1999) .......... passim

Edward A. Kangas, Soft Money and Hard Bargains,

Oe sO nc cncaneceeewndess 13

Mark Mellman and Richard Wirthin, Research of

Findings of a Telephone Study Among 1300 Adult

Americans (Sept. 23, 2002) .......cccccesees 17

Press Release, Campaign for America, Testimony of

Cheryl Perrin, Executive Director, Campaign

for America, House Administration Committee

Jp PPP ETTTeCTTPITerrrr Tiree 19

Press Release, CED, Senior Business Executives

Back Campaign Finance Reform

| eerrrrrrererey Trrerrre. 10, 11

Press Release, Public Campaign, New National

Survey Shows Robust Support for “Clean Money”

GREE, By BEE. sh ccsbsecedcdindencsceseeecenes 17

VI

Cited Authorities

Page

Jonathan D. Salant, Businesses Tire of Soft Money

Contributions, Associated Press,

Nov. 23, 1999

Burt Solomon, Forever Unclean, The Nat’] J.,

Mar. 18, 2000

]

INTRODUCTION AND INTEREST OF THE AMICI'

This brief amici curiae in support of the Appellees is

submitted on behalf of the Committee for Economic

Development (CED), a nonprofit, nonpartisan, and

nonpolitical research and policy organization comprised of

approximately 250 business leaders and educators, and a

number of individual business leaders who support CED’s

position on campaign finance reform: Robert L. Bernstein,

Warren E. Buffett, William K. Coblentz, Harry L. Freeman,

Ronald Grzywinski, Edward A. Kangas, Thomas J. Klutznick,

Jerome Kohlberg, Arjay Miller, Thomas S. Murphy, Steffen

E. Palko, Raymond Plank, Sanford R. Robertson, Richard

Rosenberg, George Rupp, Donald Stone, Robert D. Stuart,

Jr., Dr. P. Roy Vagelos, A. C. Viebranz, and Paul Volcker.’

CED’s trustees set CED’s research agenda, develop policy

recommendations, and speak out for their adoption. CED has

long been an outspoken voice in favor of campaign finance

reform — particularly the need to prohibit unregulated soft

money — and argued vigorously for passage of the reforms

contained in the Bipartisan Campaign Reform Act of 2002

(BCRA).?

1. Pursuant to Rule 37.6 of the rules of the Court, counsel for

the amici discloses that counsel for the parties did not take part in

authoring this brief in whole or in part, and no persons or entities ©

other than the amici or their counsel made a monetary contribution

to the preparation or submission of this brief. All parties have

consented to the filing of this brief. A copy of the letter of consent

from the Solicitor General is being filed herewith.

2. The affiliations of the individual amici are listed in the

Appendix to this brief.

3. Asset forth more fully in a 1999 report developed by a group

of business, academic, and political leaders, CED, after careful study,

(Cont’d)

2

Amici urge the Court to sustain BCRA’s soft money

restraints. By prohibiting national parties from raising,

receiving, or spending funds that are not subject to the

limitations imposed by the Federal Election Campaign Act

(FECA), Pub. L. No. 93-443, 88 Stat. 1263 (1974), BCRA

closes the soft money loophole through which corporations

and other large contributors have been goaded into evading

FECA’s hard money limits, a phenomenon that has damaged

both the democratic process and the business environment.

With this filing, the amici seek to highlight the extent to

which prominent business leaders — those perceived to benefit

the most from the access and influence purchased with soft

money — do not wish to continue funding an unrestrained

campaign finance “arms race.” To the contrary, the amici are

deeply troubled by the distortion of both the political process

and of the free-market system that have resulted from the

forced acquiescence of business in what effectively has

_ become a corrupt soft money shakedown. There can be little

doubt that the current soft money system promotes both the

perception and reality of rampant influence peddling by both

major parties and that it has given rise to the widespread

belief that Congress routinely acts for the benefit of large

corporate contributors, rather than on the merits of issues

presented. At the same time, the taint engendered by the flood

(Cont'd)

concluded that the soft money system had become dysfunctional and

corrupt in a manner that tarnished solicitor and contributor alike and,

more broadly, impaired the health of our democracy. See Committee

for Economic Development, Jnvesting in the People’s Business:

A Business Proposal for Campaign Finance Reform (1999) (the “CED

Report”) (Exh. 1 to the Declaration of Charles E. M. Kolb (“Kolb.

Decl.”)). By 2001, this report had been endorsed by over 300

executives.

ee

3

of unregulated corporate soft money harms public confidence

in business, as the public perceives large corporations to

have secured unfair advantages and to have purchased

disproportionate influence on the outcome of elections and

on the operation of government. Businesses are also harmed

directly to the extent that politically motivated policy

decisions introduce an element of arbitrariness into the

functioning of the market.

Corporate soft money contributions are a far cry from

the issue-focused corporate speech that this Court held to be

constitutionally protected in First National Bank of Boston

v. Bellotti, 435 U.S. 765 (1978). Corporate soft money

typically is neither acquired nor given for ideological reasons.

As the amici are all too aware, and as the factual record in

these cases convincingly documents, businesses typically

make soft money contributions for one of two reasons: (1) to

secure tangible benefits in the form of access to and influence

over legislators; or (ii) to maintain access and avoid

retribution in the form of adverse governmental action on

issues that directly affect solicited businesses. Put differently,

these contributions — often made in response to high-pressure

solicitation by Members of Congress, party leaders, and

others — are motivated by stark political pragmatism, not by

ideological support for either party or their candidates.

Because the stakes are potentially so high for solicited

businesses, the reality is that soft money payments are

“voluntary” only in the narrowest sense of that term. In truth,

they are commonly made out of fear of the consequences of

refusing to give — or refusing to give enough. That corporate

soft money is calculated and functional, rather than

expressive or ideological, in nature is exemplified by the

propensity of companies to give to both parties in order to

best protect their interests.

4

Amici fervently believe that BCRA’s soft money ban

sensibly advances the compelling government interest in

protecting the political process against actual or perceived

corruption without abridging expressive and associational

rights protected by the First Amendment. Since its landmark

ruling in Buckley v. Valeo, 424 U.S. 1 (1976), this Court

repeatedly has recognized the eradication of actual and

apparent corruption in connection with campaign financing

as a compelling government interest. BCRA’s soft money

ban is an urgently needed means of advancing this interest.

Accordingly, the “deference to legislative choice” that this

Court has consistently afforded Congress’ efforts to restrict

the influence of corporate money on federal elections is fully

warranted here, as the soft money system is demonstrably

“a plain threat to political integrity and a plain warrant to

counter the appearance and reality of corruption and the

misuse of corporate advantages.” Federal Election Comm'n

v. Beaumont, 123 S. Ct. 2200, 2207 (2003).

Section I explains the reasons businesses feel compelled

to contribute soft money to the national parties and the

detrimental impact of soft money on public perception of

the role of business in the political process and on the integrity

of the political process itself.

Section II demonstrates that restricting soft money

contributions does not meaningfully impair political speech,

as corporate soft money is not political expression, but an

instrument with which to secure or maintain commercial

advantage. As such, soft money has, at best, an attenuated

relationship to the speech and associational rights protected

by the First Amendment.

5

ARGUMENT

I. SOFT MONEY CONTRIBUTIONS ARE EX-

TRACTED FROM CORPORATIONS FEARFUL OF

THE ADVERSE CONSEQUENCES OF NOT GIVING

CED’s trustees and the individual amici, who are past

and present chairmen, presidents, and senior executives of

major American corporations and university presidents, have

direct experience with being solicited by party leaders and

elected officials for ever-increasing corporate soft money

contributions. As such, they have “developed a particularized

understanding of how the soft money fundraising system

works and how it impacts the integrity of our elected officials,

the integrity of American business, and more generally the

health of our democracy.” Declaration of Gerald Greenwald

at ¥ 5 (“Greenwald Decl.”).*

As set forth in the Greenwald Declaration, and as echoed

by numerous other declarants, businesses generally make soft

money contributions for one of two reasons: (i) to secure

preferred access to and influence over legislators and other

government officials and/or (ii) to maintain this relationship

and avoid being disadvantaged as against competitors

that contribute. See Greenwald Decl. at J 9-10; see also

Declaration of Alan G. Hassenfeld, Chairman and Chief

Executive Officer of Hasbro, Inc. (“Hassenfeld Decl.”) at

q 15; Declaration of Senator Warren Rudman, former

4. Gerald Greenwald, Chairman Emeritus of United Airlines,

serves on the Board of Trustees of CED. See Greenwald Decl. at 1.

From 1994 through his retirement in 2000, Mr. Greenwald served as

Chairman and CEO of United Airlines. Prior to that, he was Vice-

Chairman of the Chrysler Corporation and worked at the Ford Motor

Company.

6

U.S. Senator (R-N.H.) (“Rudman Decl.”) at § 5. It is, in fact,

precisely because large soft money contributors understand

that such contributions secure or at least maintain preferred

access that many companies give substantial contributions

to both the Democratic and Republican parties — a telling

fact that exposes the cynically pragmatic, rather than

ideological, nature of soft money contributions.

A. Corporate Soft Money Contributions Are Made

to Secure Preferred Access to and Influence over

Government Officials

A full appreciation of the importance of removing soft

money from the political process requires an understanding

of the opportunistic nature of corporate soft money

contributions. The massive evidentiary record in these cases

amply supports the amici’s view of soft money solicitation

and contribution as a fundamentally commercial process in

which businesses feel compelled to participate.’ See

Declaration of Wright H. Andrews, attorney and lobbyist

(“Andrews Decl.”) at ¥ 8 (“Sophisticated political donors. . .

are not in the business of dispensing their money purely on

ideological or charitable grounds. Rather, these political

donors typically are trying to wisely invest their resources to

5. Over the past several election cycles, as the range of activities

funded with soft money has increased, party organizations have

engaged in more aggressive efforts to raise soft money, seeking larger

amounts from contributors and pursuing new contributors, especially

among members of the business community. See CED Report at 27.

The per curiam decision below notes that during the 1998 midterm

elections, the national parties spent $221 million in soft money,

or 34% of their total spending. During the 2000 elections,

the corresponding figures were $498 million and 42%. McConnell

v. Federal Election Comm'n, 251 F. Supp. 2d 176, 200-01

(D.D.C. 2003) (per curiam).

7

maximize political return.”); Declaration of Wade Randlett,

Chief Executive Officer of Dashboard Technology, an internet

technology consulting firm (“Randlett Decl.”) at 4 5 (“[M]any

soft money donations are not given for personal or

philosophical reasons. They are given by donors with a lot

of money who believe they need to invest in federal office

holders who can protect or advance specific interests through

policy action or inaction.”); Declaration of Robert W.

Hickmott, former Democratic party official and fundraiser,

at Exh. A ¥ 46 (“The majority of those who contribute to

political parties do so for business reasons, to gain access to

influential Members of Congress and to get to know new

Members.”); McConnell, 251 F. Supp. 2d at 481 (opinion of

Kollar-Kotelly, J.) (“the evidence presented in this case

convincingly demonstrates that large contributions,

particularly [soft money contributions], provide donors

access to federal lawmakers which is a critical ingredient for

influencing legislation”); id. at 489-500, 511.

The success of the two major parties in soliciting soft

money is directly attributable to the magnitude of the

commercial interests corporations perceive to be advanced

by contributing in response to such solicitations. The record

leaves no doubt that although soft money checks are written

to political parties, soft money contributors know that those

checks “open the doors to the offices of individual and

important Members of Congress and the Administration” and

give contributors a chance to argue for their position and

against alternative positions on a particular government

policy. Greenwald Decl. at § 12. As Mr. Greenwald explains:

That access runs the gamut from attendance at

events where [contributors] have opportunities to

present points of view informally to lawmakers

8

to direct, private meetings in an official’s office

to discuss pending legislation or a government

regulation that affects the company or union.

Id. at | 10. See also Declaration of Robert Rozen, a

Washington lobbyist (“Rozen Decl.”) at § 12 (“That donation

helps you get close to the person who is making decisions

that affect your company or your industry. That is the reason

most economic interests give soft money... .”’).

Members of Congress have acknowledged the crude

“access for sale” character that the soft money system has

acquired. For instance, Senator Carl Levin (D-Mich.) has

Stated:

The parties advertise access. It’s blatant- Both

parties do it. Openly. Invitation after invitation

sells access for large contributions. From 1996:

For a $50,000 contribution or for raising $100,000

a contributors gets: Two events with the President.

Two events with the Vice President . . . Monthly

policy briefings with key administration officials

and members of Congress. . . . One invitation in

1997 to a Senatorial Campaign Committee event

promised that large contributors would be offered

“plenty of opportunities to share [their] personal

ideas and vision with” some of the top leaders

and senators.

147 Cong. Rec. $3248 (Apr. 2, 2001). See also Declaration

of Representative Christopher Shays (R-Conn.) (“Shays

Decl.”) at | 9 (“Soft money donations, particularly corporate

and union donations, buy access and thereby make it easier

for large donors to get their points across to influential

——— i

9

Members of Congress.”’); Declaration of Senator Dale Bumpers,

former U.S. Senator (D-Ark.) at 4 18 (“I doubt there is a

politician on Capitol Hill who would deny that soft money

donations get people access.”).

The national parties exploit (i) the access they can provide

to federal officeholders and (ii) the direct influence of federal

officeholders and candidates on the interests of potential

contributors to solicit large sums of soft money. National party

leaders often ask executive branch officials and congressional

leaders to appear at soft money fundraisers, attend weekend

retreats with large soft money donors, participate in party-

sponsored policy briefings, and play a role in other events.

See CED Report at 27; Declaration of Peter L. Buttenwieser, a

major Democratic donor, at {{ 22, 25.

Solicitations from party officials are no different in kind or

effect from those by elected officials. Companies know that party

officials “inform elected officials about who has given

significant amounts; and party officials often promise access to

elected officials” to those who give laige soft money

contributions. Greenwald Decl. at 4 11. That access, in turn,

permits donors to influence legislation that affects their

businesses. As former United Airlines CEO and CED Trustee

Greenwald bluntly states: “[B]usiness leaders believe — based

on experience and with good reason — that such access gives

them an opportunity to shape and affect governmental decisions

and that their ability to do so derives from the fact that they

have given large sums of money to the parties.” /d. at {| 12.°

6. In an op-ed in The New York Times, amicus Warren Buffett

recounted a fund-raising Senator once jokingly telling him, “Warren,

contribute $10 million and you can get the colors of the American

flag changed.” Warren E. Buffett, The Billionaire s Buyout Plan,N.Y.

Times, Sept. 10, 2000, at Al7.

10

It is no accident that the largest soft money contributors

tend to be companies in industries that are heavily regulated

by the federal government or those whose profits can

be dramatically affected by government policy. These

contributors are solicited by Members of Congress who sit

on committees that consider matters directly affecting the

financial health or operations of the companies being

solicited. See Greenwald Decl. at 4 8; CED Report at 25.

Representative Shays notes that “the large soft money

contributions most [M]embers of Congress raise to meet their

committee chairmanship or ranking member obligations

come from the corporations and unions who are regulated

by those very committees.” Shays Decl. at 410.’ This is a

manifestly unhealthy state of affairs.

The blatantly opportunistic nature of the soft money

system was documented in a poll conducted by the Tarrance

Group for CED. The poll found that seventy-five percent of

business leaders believe that political contributions give them

an advantage in the shaping of legislation, while another

twenty-three percent consider soft money a currency to be

used “to buy access to influence the legislative process.” Press

Release, CED, Senior Business Executives Back Campaign

Finance Reform (Oct. 18, 2000).

B. Soft Money Contributions Are Made to Avert

Perceived Retribution

The malign and corrupting nature of the soft money

system is demonstrated by the fact that corporate executives

have felt coerced into giving ever-escalating soft money

7. See also Declaration of Senator John McCain (R-Ariz.) at

1 8-10 (giving examples of the influence of corporate soft money

contributions on bills affecting the contributors’ businesses).

11

contributions with ever-increasing frequency by subtle threats

of retribution that accompany soft money solicitations.

As Mr. Greenwald has noted, for many business executives

“experience has taught that the consequences of failing to

contribute (or failing to contribute enough) may be very

negative.” Greenwald Decl. at 4 9. See also Hassenfeld Decl. at

4 23 (noting perception by some companies that “because their

activities are so closely linked with federal government actions,

they must participate in the soft money system in order to

succeed’’).

Corporations believe that elected officials and party leaders

may shun or disfavor them if they do not “adequately” contribute

and that “competing interests who do contribute generously will

have an advantage in gaining access to and influencing key

Congressional leaders on matters of importance to the company.”

Greenwald Decl. at § 9. For example, the Tarrance Group poll

of 300 senior executives of companies that had annual revenues

of approximately $500 million or more, conducted for CED in

the fall of 2000, found that half of business executives feared

adverse legislative consequences to their companies or their

industries if they turned down requests for campaign

contributions from high-ranking political leaders and/or political

operatives, and seventy-four percent of the executives polled

felt that pressure is placed on business leaders to make large

political contributions. See Press Release, CED, supra.

Members of Congress are well aware of the leverage they

exert over solicited businesses. In this regard, Senator Rudman

testified:

By and large, the business world . . . gives money

to political parties . . . [because] they believe that

if they decline solicitations for such contributions,

elected and appointed officials will ignore their

12

views or, worse, that competing business interests

who do make large contributions to the party in

question will have an advantage in influencing

legislation or other government decisions.

Rudman Decl. at § 5.

This perceived threat of retribution underpinning the

political parties’ soft money solicitations was, ironically,

underscored by the brazen reaction of the chairman of one

of the political party committees to the issuance of the CED

Report in 1999. When the CED Report was issued on

March 18, 1999, Senator Mitch McConnell (R-Ky.),

Chairman of the National Republican Senatorial Committee

(NRSC) and a plaintiff in these actions, sent letters to various

CED trustees declaring his “concern that a serious error [that

CED prominently identifies you as a backer of its legislative

plan] has occurred, which may cause some embarrassment

to you if it is not immediately corrected.” Kolb Decl. at 4 6

and Exh. 2 thereto. After CED replied to Senator McConnell,

setting forth the basis for the report’s conclusions, the NRSC

chairman sent follow-up letters to various CED trustees

expressing his astonishment and “great concern” that these

well-known business leaders would concur with CED’s

position on campaign finance reform. Jd. at 4 8. Senator

McConnell added a personalized handwritten note urging the

corporate executive CED trustees to withdraw publicly from

CED. /d. and Exh. 4 thereto. As Mr. Kolb states in his

declaration: “Several of these executives, who worked for

companies that had significant issues pending before

Congress at the time, considered the letters a thinly-veiled

attempt to intimidate them with the implied message: Resign

13

and keep quiet, or don’t count on doing business with

Congress.” /d.*

This type of threat is an integral aspect of soft money

solicitation. A well-publicized article quotes a lobbyist for a

Fortune 500 company as saying that the reason his company

contributed soft money was “[b]Jasically, protection. ...

If you decline to give, you’re taking a risk of legislative

retribution. . .. Companies are scared that on some critical

issue, they’ll get hosed.” Burt Solomon, Forever Unclean,

The Nat’! J., Mar. 18, 2000, at 858.

The pervasive practice of giving soft money to both sides

of the aisle exposes the fundamentally self-protective motives

that drive corporate soft money contributions. According to

data released by the FEC on June 9, 2003, 120 donors made

soft money contributions totaling $500,000 or more in the

2001-2002 election cycle. More than sixty percent of those

donors contributed to both Democratic and Republican

national party committees. During that same period, a total

of 185 donors gave soft money contributions of $50,000 or

more to both Democrats and Republicans. See The Center

for Responsive Politics, Soft Money to National Parties, at

http://www.opensecrets.org/softmoney/softtop.asp (last

visited July 21, 2003). In 1996, forty of the top fifty soft

money contributors gave to both major parties, while in 2000

thirty-five did. McConnell, 251 F. Supp. 2d at 509 (opinion

of Kollar-Kotelly, J.). '

8. Amicus Edward A. Kangas, former chairman of the global

board of directors of Deloitte Touche Tohmatsu and the campaign

finance reform co-chairman of CED, noted in a newspaper editorial:

“The threat may be veiled, but the message is clear: failing to donate

could hurt your company.” Edward A. Kangas, Soft Money and Hard

Bargains, N.Y. Times, Oct. 22, 1999, at A27.

2 a——E—EEEEEEEE—E—E—EeEeEeEeEeee

14

Judge Kollar-Kotelly, in her opinion below, noted the

evidence that this practice “is a result of donors’ desire to

have special access to lawmakers from both parties, and also

out of concern that if the contributor gives to only one

political party, the other will perceive an imbalance and

punish the donor.” McConnell, 251 F. Supp. 2d at 509

(opinion of Kollar-Kotelly, J.). See also, e.g., id. at 678-80

(noting that giving to both parties is motivated by fear of

giving to a party that subsequently loses control of Congress);

Randlett Decl. at {4 11, 12 (“Giving lots of soft money to

both sides is the right way to go from the most pragmatic

perspective. ... If your interests are subject to anger from

the other side of the aisle, you need to fear that you may

suffer a penalty if you don’t give.”); Declaration of Charles

M. Geschke, co-founder and Chairman of the Board of Adobe

Systems, Inc., at §{ 10 (donors who give large amounts of

soft money to both parties “may feel that influence with one

party is not sufficient to achieve their financial or policy

goals, especially now that power in Congress is pretty evenly

balanced”). This practice of contributing simultaneously to

both parties belies any claim that contributions are

ideologically, as opposed to pragmatically, driven.

The fundamentally corrupt nature of this system led

industry leaders like General Motors and AlliedSignal

publicly to declare that they would no longer make soft money

contributions to the political parties, and dozens of corporate

executives similarly recognized the dangers to our system of

government created by soft money solicitation. See CED

Report at 33-34. But these voluntary efforts, however

laudable and courageous, cannot solve the problem of soft

money. For every large corporation that may be willing to

draw the line, there exist dozens of others, perhaps more

vulnerable, that will continue to “give large soft money

— ne

15

contributions to political parties — sometimes to both political

parties — because they are afraid to unilaterally disarm.”

Greenwald Decl. at § 12.

The access afforded by soft money contributions is

a competitive, as well as a political, reality. How many

corporations will have the fortitude not to ante up at the soft

money table knowing that their competitors are still in the game?

The solution, Congress reasonably determined, is to end the

game.

C. Actual and Perceived Corruption Engendered by

Soft Money Contributions Has Eroded Confidence

in Business and Government

The perversion of the soft money system into a widely

acknowledged “pay to play” shakedown scheme by both major

parties understandably has eroded public confidence in the

_integrity of business, and it has greatly contributed to the

cynicism and skepticism with which the public views the

involvement of business in the political process. As CED stated

in its 1999 Report: “Given the size and source of most soft

money contributions, the public cannot help but believe that

these donors enjoy special influence and receive special favors.”

CED Report at 27. See also Andrews Decl. at § 20 (“[Mlillions

of Americans are convinced that lobbyists and the interests we

represent are unprincipled ‘sleaze balls’ who, in effect, use great

sums of money to bribe a corrupt Congress.”’).

It is clear that the public perception that policy decisions

are warped by a sense of obligation to the donors of large

unregulated contributions has harmed the public trust in the

integrity of its government. As Senator McCain has observed:

In 1961, 76% of Americans said yes to the question,

“Do you trust your government to do the right

16

thing?” This year, only 19% of Americans still

believed that. Many events have occurred

in the last 30 years to fuel their distrust.

Assassinations, Vietnam, Watergate, and many

subsequent public scandals have squandered the

public’s faith in us, and have led more and more

Americans from even taking responsibility for our

election. But surely frequent campaign finance

scandals and their real or assumed connection to

misfeasance by public officials are a major part

of the problem.

147 Cong. Rec. $2434 (Mar. 19, 2001). See also Declaration

of Alan K. Simpson, former U.S. Senator (R-Wyo.), at § 14

(“Both during and after my service in the Senate, I have seen

that citizens of both parties are as cynical about government

as they have ever been because of the corrupting effects of

unlimited soft money donations.”); Declaration of Senator

David Boren, former U.S. Senator (D-Okla.) and President

of the University of Oklahoma, at 4 11 (“American’s (sic)

trust of government and political parties has fallen

precipitously over the years. I ... ask [my] students why

they think this is the case. Almost unanimously, they respond

that our government has been ‘purchased’ by special

interests.”’).

A plethora of polls and studies demonstrates the extent

of the damage wrought by the incessant solicitation and

contribution of soft money to the public’s perception of the

integrity of the political process. As the CED Report stated

in 1999 — before the business scandals of the last two years:

“The vast majority of citizens feel that money threatens the

basic fairness and integrity of our political system. . . . Fully

two-thirds of the public think that their own representative

17

in Congress would listen to the views of outsiders who made

large political contributions before a constituent’s views.”

Id. at | (internal quotations omitted).

The CED Report’s summary of the dismaying downward

spiral of public perception of the political process is

consistent with a recent non-partisan poll conducted by

Democratic pollster Mark Mellman and Republican pollster

Richard Wirthin. The principal finding of their study was

that the American public believes that the views of large

contributors to parties “improperly influence policy and

are given undue weight in determining policy outcomes.”

See Mark Mellman and Richard Wirthin, Research of

Findings of a Telephone Study Among 1300 Adult Americans

(Sept. 23, 2002). The poll found that eight in ten Americans

believe that, at least sometimes, members of Congress vote

based on the wishes of big contributors to their political

parties. Nearly half of those polled said this happens often.

In addition, the poll found that more than three in four

Americans believe that big contributors to political parties

have at least some impact on decisions made by the federal

government, and more than half of those polled think that

big contributors have a great deal of impact. See id.’

9. Similar results were found in a poll conducted by The New

York Times and CBS News in April 1997. Seventy-five percent of

Americans said “yes” to the question “In general, do many public

officials make or change policy decisions as a result of money they

receive from major contributors.” Only 14 percent answered “no.”

See Francis X. Clines, Most Doubt a Resolve to Change Campaign

Financing, Poll Finds, N.Y. Times, Apr. 8, 1997, at Al; see also Press

Release, Public Campaign, New National Survey Shows Robust

Support for “Clean Money” (Apr. 3, 2000).

18

Members of Congress have voiced the concerns of the

American public about the corrupting influence of large

contributions on the political system. In 1999, for example,

Senator Russ Feingold (D-Wisc.) highlighted the extent to

which soft money has perverted the legislative process:

The appearance of corruption is rampant in our

system, and it touches virtually every issue that

comes before us. . . . [T]oday, when we weigh the

pros and cons of legislation, many people think

we also weigh the size of the contributions we |

got from interests on both sides of the issues. And

when those contributions can be a million dollars,

or even more, it seems obvious to most people

that we would reward our biggest donors.

147 Cong. Rec. $2446 (Mar. 19, 2001)."° |

This distrust and cynicism also threatens to have a deep

and longstanding impact on the public’s trust in the integrity

of corporate management and on the economy. As the authors

of the CED Report state:

As business leaders, we are also concerned about

the effects of the campaign finance system on the

10. Similarly, Representative Lloyd Doggett (D-Tex.) observed:

{T]he corrupting influence of money on public policy is

evident in [the] House every day. It is evident not only as a

principal concern that arises here on vote after vote,

significantly influenced by who gave how much, to whom,

when, but it is also particularly evident in the silence on

critical issues of public policy, on what is never discussed.

147 Cong. Rec. H3966 (Jul. 12, 2001).

19

economy and business. Americans identify

“special interest” principally with corporations.

A vibrant economy and well functioning business

system will not remain viable in an environment

of real or perceived corruption, which will corrode

confidence in government and business. If public

policy decisions are made — or appear to be made

— on the basis of political contributions, not only

will policy be suspect, but its uncertain and

arbitrary character will make business planning

less effective and the economy less productive.

In addition, the pressures on business to contribute

to campaigns because their competitors do so will

increase. We wish to compete in the marketplace,

not in the political arena."

CED Report at 1. CED Trustee Greenwald amplified these

concerns:

It goes without saying that maintaining

governmental integrity is critically important to

our democracy and our citizens’ faith in their

government. It is also important for American{s]

to have faith in the integrity of their business

institutions and labor unions as well. The recent

spate of deplorable corporate scandals has broadly

demoralized America and this is having

widespread and adverse political and economic

11. See also Press Release, Campaign for America, Testimony

of Cheryl Perrin, Executive Director, Campaign for America, House

Administration Committee (Jul. 22, 1999) (“[W]hile it is naive to

think that the government won't play a role in shaping the market,

the soft money system encourages companies to allow the government

to intervene in the market in an arbitrary and unfair way.”).

20

consequences. It is not good for America when

American citizens believe their business leaders

are corrupt, and one element of that regrettably

widespread perception is the appearance that

business buys government decisions by making

large political contributions.

Greenwald Decl. at ¥ 14.

At this time of widespread shaken confidence in

American corporations, restricting soft money is necessary

to help restore public confidence in the integrity of business

and government. It is also necessary to restore the fairness

of the marketplace. As Wade Randlett, CEO of Dashboard

Technology, testified:

The raising and spending of soft money in recent

election cycles has distorted the federal political

system and the commercial marketplace... .

[M]uch of the business community believes that

the federal campaign financing system is broken

and needs to be fixed. People in business look for

a reasonable, rational system and a level playing

field. The current soft money-oriented system does

not meet that standard.

Randlett Decl. ¥ 14.

21

Il. BCRA’S PROHIBITION ON SOFT MONEY

SOLICITATION AND CONTRIBUTION DOES

NOT SIGNIFICANTLY ABRIDGE FIRST

AMENDMENT RIGHTS

A. Corporate Soft Money Does Not Reflect the Ideas

of Its Contributors

This Court has held that limitations on political

contributions by individuals entail “only a marginal

restriction upon the contributor’s ability to engage in free

communication” because “a contribution serves as a general

expression of support for the candidate and his views, but

does not communicate the underlying basis for the support.”

Buckley v. Valeo, 424 U.S. 1, 20-21 (1976). Corporate soft

money has even less communicative value and, hence, less

of a claim to constitutional protection because, unlike

political contributions by individuals, it is motivated

principally by pragmatic commercial concerns.

As demonstrated in Section I, corporate soft money

contributions typically do not represent an expression of the

contributor’s identification with a political party or its

platform but are nothing more than an attempt to advance or

protect commercial interests. They are investments, not

expressions of ideological support. See, e.g., Declaration of

Steven T. Kirsch, founder and Chief Executive Officer of

Propel Software Corporation, at J 14 (“Major donors perceive

that they are getting a business benefit through their special

access, and that it is a good investment for them.”).

The fact that corporate soft money contributions are made

for commercial purposes — by entities that do not, after all,

vote — weakens any argument that such contributions

22

implicate core First Amendment values. Moreover, to the

extent that corporate soft money is given to protect against

ur vorable treatment, it does not even constitute a voluntary

expression of support; rather, it is merely, in essence, a

coerced pay-off to avoid retribution. As Representative

Christopher Shays explained, a soft money contribution is

“really like protection money. . . . It guarantees you a place

at the table. They know you are a friend and you don’t hurt

friends, but in order to be a friend, you’ve had to buy that

protection.”'’? See also Randlett Decl. at ¥ 14 (“[MJany

members of the business community recognize that if they

want to influence what happens in Washington, they have to

play the soft money game. They are caught in an arms race

that is accelerating, but that many feel they cannot afford to

leave or speak out against.”).

Although soft money contributions are not compelled

by law in a manner that would warrant literal application of

the compelled speech doctrine, to the extent that soft money

does have communicative value or subsidizes political

speech, the coercive nature of the soft money system warrants

analogizing soft money to constitutionally disfavored forms

of coerced expression, such as compelled dues payments.

See, e.g., Abood v. Detroit Bd. of Ed., 431 U.S. 209, 235-36

(1977) (First Amendment requires that labor union

expenditures to express political views not germane to its

duties as collective-bargaining representative not be financed

by employees “coerced into doing so against their will”);

Lehnert v. Ferris Faculty Ass'n, 500 U.S. 507, 522 (1991)

(“[T]he State constitutionally may not compel its employees

to subsidize legislative lobbying or other political union

12. Jonathan D. Salant, Businesses Tire of Soft Money

Contributions, Associated Press, Nov. 23, 1999.

a

23

activities outside the limited context of contract ratifications

or implementation.”). See also United States v. United Foods,

Inc., 533 U.S. 405, 413 (2001) (mandated support for speech

“is contrary to the First Amendment principles set forth in

cases involving expression by groups which include persons

who object to the speech, but who, nevertheless, must remain

members of the group by law or necessity”). The compelled-

speech doctrine offers a useful analogy that underscores

the low level of constitutional protection to be accorded to

soft money contributions made in response to coercive

solicitation.

The disassociation of soft money from political

expression is starkly illustrated by the fact, noted above, that

many soft money contributors “express their narrow interests

by contributing to both parties during the same electoral

cycle, and sometimes even directly to two competing

candidates in the same election.” Federal Election Comm'n

v. Colorado Republican Fed. Campaign Comm., 533 U.S.

431, 451-52 (2001) (emphasis added) (citing FEC disclosure

reports documenting that many large corporations give to

both parties). Those who give soft money to both parties do

so not to express support for political ideas but “because

they want to make sure they have access regardless of who’s

in the White House, filling the Senate seat, or representing

the Congressional District.” Declaration of Arnold Hiatt,

former President and Chief Executive Officer of the Stride

Rite Corporation, at ¥ 12.

Finally, the nexus to political expression is weakened

further still in those instances where soft money contributors

give to the political party committees without knowledge of

how the contribution will be used, for whom it will be used,

or what message it will be used to promote. See Rozen Decl.

24

at § 12 (“From [the contributor’s] perspective, what account

the money goes into or how it’s used is not important.”);

see also Hassenfeld Decl. at § 15 (“Donors know that if they

give $100,000 in soft money to the Republicans or $100,000

to the Democrats, that will entitle them to some type of

access. They are not concerned with how that money is

used.”’).

B. Corporate Soft Money Contributions Distort the

Marketplace of Ideas

Corporate soft money contributions do not contribute to

the “marketplace of ideas” protected by the First Amendment.

Instead, they reflect wealth amassed in the marketplace, not

the ideas of investors and employees, who have no control

over contributions made to political parties from the

corporation’s general treasury funds. More troubling, as

Senator Rudman testified, is that “large soft money

contributions in fact distort the legislative process. They

affect what gets done and how it gets done.” Rudman Decl.

at 9 9.

This Court has held that the “unique legal and economic

characteristics of corporations” and “special advantages”

granted by state law “not only allow corporations to play a

dominant role in the Nation’s economy, but also permit them

to use ‘resources amassed in the economic marketplace’ to

obtain ‘an unfair advantage in the political marketplace.’”

Austin v. Michigan Chamber of Commerce, 494 U.S. 652,

658-59 (1990) (quoting Federal Election Comm'n vy.

Massachusetts Citizens for Life, 479 U.S. 238, 257 (1986)).

“This concern over the corrosive influence of concentrated

corporate wealth reflects the conviction that it is important

to protect the integrity of the marketplace of political ideas.”

Massachusetts Citizens for Life, 479 U.S. at 257.

EE

25

The size of the treasury amassed by a corporation does

not reflect popular support for the corporation’s political

ideas. Rather, it reflects “the economically motivated

decisions of investors and customers.” Massachusetts

Citizens for Life, 479 U.S. at 258. These resources may be

used to make a corporation a formidable political presence

“even though the power of the corporation may be no

reflection of the power of its ideas.” /d.

Indeed, these resources may make the corporation a

political presence that runs counter to the ideas of its investors

and employees, just as a union may engage in political activity

that some members may not support. Courts have voiced

concern for individuals who have paid money into a

corporation for purposes other than the support of candidates

from having that money “used to support political candidates

to whom they may be opposed.” Federal Election Comm'n

v. National Right to Work Comm., 459 U.S. 197, 207-08

(1982).

[Stockholders and union members] contribute

investment funds or union dues for economic gain,

and do not necessarily authorize the use of their

money for political ends. Furthermore, because

such individuals depend on the organization for

income or for a job, it is not enough to tell them

that any unhappiness with the use of their money

can be redressed simply by leaving the corporation

or the union.

Massachusetts Citizens for Life, 479 U.S. at 260; see also

Pipefitters Local Union No. 562 v. United States, 407 U.S.

385, 416 (1972) (citing concerns about the voluntariness of

contributions and protecting the minority stockholder or

26

union Member as reasons underlying congressional

regulation of contributions made in connection with federal

elections).

As far back as 1907, Congress, in regulating political

contributions by corporations, was motivated by “the feeling

that corporate officials had no moral right to use corporate

funds for contribution to political parties without the consent

of the stockholders.” United States v. Congress of Indus.

Orgs., 335 U.S. 106, 113 (1948). Accordingly, restricting the

use of corporate funds in elections prevents corporations

from, in effect, being pressured into allocating for purposes

for which they were not intended general treasury funds

which may not have been given by investors in the first place

had they known how they would be used.

C. A Ban on Soft Money Does Not Offend the First

Amendment Right of Association

The First Amendment protects political association as

well as political speech. Buckley, 424 U.S. at 15; see also

NAACP vy. Alabama, 357 U.S. 449, 460 (1958). “[F]reedom

to associate with others for the common advancement

of political beliefs and ideas” is protected by the First

Amendment. Kusper v. Pontikes, 414 U.S. 51, 56 (1973).

The right to associate with the political party of one’s choice

“is an integral part of this basic constitutional freedom.”

Id. at 57.

In Buckley, however, the Court held that even a

significant interference with associational rights could be

outweighed by a campaign finance restriction closely drawn

to advance a sufficiently important government interest.

424 U.S. at 25. Because the associational rights implicated

27

by BCRA’s soft money ban are (like the free speech rights

implicated) weak at best, they are easily outweighed by the

important public interests advanced by BCRA’s soft money

restraints.

First, as discussed above, corporate soft money

contributions typically are not expressions of support for the

ideological platform of a political party. Second, even where

that is not the case, because contributors have no way of

knowing where and for what their soft money is being used

— and often do not care — the contributions are not linked in

any meaningful way to any specific political ideas.

Accordingly, even to the extent such contributions may

express support for the platform (or elements of the platform)

of the party to which they are given, they do not further the

values secured by the right of association, namely the

“pool[ing] of resources in furtherance of common political

goals.” Buckley, 424 U.S. at 22. Rather, they represent, at

bottom, commercially motivated payments.

Third, despite no longer being able to contribute soft

money, donors still will be able to associate with and

demonstrate public support for a political party and a political

party’s ideological platform in traditional and far

more meaningful ways. See, e.g., Buckley, 424 U.S. at 22

(“[FECA’s] contribution ceilings thus limit one important

means of associating with a candidate or committee, but leave

the contributor free to become a member of any political

association and to assist personally in the association’s efforts -

on behalf of candidates”). Corporate executives still can —

and certainly will — continue to contribute to political parties

as individuals.

28

Given the limited degree, if any, to which soft money

evinces a contributor’s genuine interest in associating with a

political party for ideological reasons and the multitude of

other avenues of more meaningful association with a political

party and its platform, a restraint on soft money will have

only minimal, if any, impact upon the associational rights

protected by the First Amendment.

CONCLUSION

The coercive soft money system that BCRA eliminates

has corrupted solicitor and contributor alike. It has

engendered understandable public cynicism regarding both

business and government. It has interfered arbitrarily in the

functioning of the economy. Business leaders increasingly

wish to be freed from the grip of a system in which they fear

the adverse consequences of refusing to fill the coffers of

the major parties. The coerced and, at bottom, wholly

commercial nature of corporate soft money contributions

distinguishes them from political speech, as well as from

the type of ideological association protected by the First

Amendment. Given the compelling government interest in

eliminating both actual and perceived corruption from the

political process, BCRA’s ban on soft money in federal

elections should be sustained.

29

Respectfully submitted,

STEVEN ALAN REIss

Counsel of Record

R. Bruce RICH

JosH A. KreEvitTT

JONATHAN BLOOM

CLAIRE E. GOLDSTEIN

Welt, GoTsHAL & Mances LLP

767 Fifth Avenue

New York, NY 10153

(212) 310-8000

Attorneys for Amici Curiae

Committee for Economic

Development, Robert L.

Bernstein, Warren E. Buffett,

William K. Coblentz, Harry L.

Freeman, Ronald Grzywinski,

Edward A. Kangas, Thomas J.

Klutznick, Jerome Kohlberg,

Arjay Miller, Thomas S.

Murphy, Steffen E. Palko,

Raymond Plank, Sanford R.

Robertson, Richard Rosenberg,

George Rupp, Donald Stone,

Robert D. Stuart, Jr., Dr. P.

Roy Vagelos, A. C. Viebranz,

and Paul Volcker

la

APPENDIX — THE INDIVIDUAL AMICI

Robert L. Bernstein

Former Chairman/President

Random House, Inc.

Warren E. Buffett

Chairman & CEO

Berkshire Hathaway Inc.

William K. Coblentz

Attorney at Law

Coblentz, Path, Duffy & Bass

Harry L. Freeman

Chair

The Mark Twain Institute

Ronald Grzywinski

Chairman

Shorebank Corporation

Edward A. Kangas

Chairman and CEO (retired)

Deloitte Touche Tohmatsu

Thomas J. Klutznick

Chairman

Thomas J. Klutznick Company

Jerome Kohlberg

Chairman

Kisco Management Corporation

2a

Appendix

Arjay Miller

Dean Emeritus, Graduate School of Business,

Stanford University

Former President, Ford Motor Company

Thomas S. Murphy

Chairman & CEO (retired)

Capital Cities/ABC, Inc.

Steffen E. Palko

President

XTO Energy Inc.

Raymond Plank

Chairman/Founder

Apache Corporation

Sanford R. Robertson

President

S.R. Robertson & Company, LLC

Richard Rosenberg

Chairman & CEO (retired)

Bank of America, N.A.

George Rupp

President

The International Res se Committee

Donald Stone

Former Chairman & CEO

Merrill Lynch Specialists, Inc.

Appendix

Robert D. Stuart, Jr.

Chairman Emeritus

The Quaker Oats Company

Dr. P. Roy Vagelos

Chairman & CEO (retired)

Merck & Co., Inc.

A. C. Viebranz

Former Sr. V. President

GTE Corporation

Paul Volcker

Former Chairman

The Federal Reserve

3a