Supplemental Appendix — McConnell v. Federal Election Commission
Supreme Court brief2003
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No. 02-1674 et al.
IN THE
Supreme Court of the United States
MITCH MCCONNELL et ai.,
Appellants,
V.
FEDERAL ELECTION COMMISSION et al.,
Appellees.
On Appeal From The United States
District Court For The District of Columbia
SUPPLEMENTAL APPENDIX
TO JURISDICTIONAL STATEMENTS
VOLUME I
FLOYD ABRAMS KENNETH W. STARR
SUSAN BUCKLEY Counsel of Record
BRIAN MARKLEY EDWARD W. WARREN
CAHILL GORDON & KANNON K. SHANMUGAM
REINDEL LLP KIRKLAND & ELLIS
80 Pine Street 655 Fifteenth Street, N.W.
New York, NY 10005 Washington, DC 20005
(212) 701-3000 (202) 879-5000
(additional counsel on inside cover)
—_—-
RECEIVED
June 2003
WILSON-EPES PRINTING Co., INC. — (202) 789-0096 -— WASHINGTON,
OFFICE OF THE CLERK
—_—_—_-- =~» er eee
KATHLEEN M. SULLIVAN
559 Nathan Abbott Way
Stanford, CA 94305
(650) 725-9875
JAN WITOLD BARAN
THOMAS W. KIRBY
LEE E. GOODMAN
WILEY, REIN & FIELDING LLP
1776 K Street, N.W.
Washington, DC 20006
(202) 719-7000
VALLE SIMMS DUTCHER
L. LYNN HOGUE
SOUTHEASTERN LEGAL FOUNDATION, INC.
3340 Peachtree Road, N.E.
Suite 3515
Atlanta, GA 30326
(404) 365-8500
G. HUNTER BATES
1215 Cliffwood Drive
Goshen, KY 40026
(502) 473-7557
Counsel in No. 02-1674
TABLE OF CONTENTS
Volume I
Per Curiam Opinion...0..........-cccescsssesssssseescesseeeeeseeeeccccc... Isa
Opinion of Judge Henderson .............c-cccccecceeeooese-c..... 160sa
Volume II
Opinion of Judge Kollar-Kotelly..........cccccccesecceoeecesss. 479sa
Volume III
Opinion of Judge Kollar-Kotelly (continued) .............. 776sa
Volume IV
Opinion of Judge Leon eo... cecccccscecsscsssseeseeeeseecse.. 1082sa
FOS II sscccnccseninsevessevenniinvinsiinisiie tee 1381sa
a
——<—-—-- — .
lsa
UNITED STATES DISTRICT COURT,
DISTRICT OF COLUMBIA
[May 1, 2003]
No. 02-582 CKK,KLH,RJL, 02-581 CKK,KLH.RIL.
02-633 CKK,KLH,RJL, 02-751 CKK,KLH, RIL.
02-753 CKK,KLH,RJL, 02-754 CKK,KLH.RJL.
02-781 CKK,KLH,RJL, 02-874 CKK, KLH.RIL,
02-875 CKK,KLH,RJL, 02-877 CKK, KLH, RJL.
02-881 CKK, KLH, RJL
SENATOR MITCH MCCONNELL, et al..
Plaintiffs,
Vv.
FEDERAL ELECTION COMMISSION, ef al.,
Defendants.
NATIONAL RIFLE ASSOCIATION OF AMERICA, et al.,
Plaintiffs,
Vv.
FEDERAL ELECTION COMMISSION, ef al.,
Defendants.
EMILY ECHOLS, a minor child, by and through her next
friends, TIM AND WINDY ECHOLS, et ai..
Plaintiffs,
Vv.
FEDERAL ELECTION COMMISSION, et al..
Defendants.
CHAMBER OF COMMERCE OF THE UNITED STATES, et al..,
Plaintiffs,
e Vv.
FEDERAL ELECTION COMMISSION, et al..
Defendants.
NATIONAL ASSOCIATION OF BROADCASTERS,
Plaintiff,
Ve
FEDERAL ELECTION COMMISSION, et ail.
Defendants.
2sa
AMERICAN FEDERATION OF LABOR AND CONGRESS OF
INDUSTRIAL ORGANIZATIONS, e! al., 7
Plaintiffs,
Vv.
FEDERAL ELECTION COMMISSION, el al.,
Defendants.
CONGRESSMAN RON PAUL, ef al., ~
Plaintiffs,
Vv.
FEDERAL ELECTION COMMISSION, ef al.,
Defendants.
REPUBLICAN NATIONAL COMMITTEE, et al.,
Plaintiffs,
Vv.
FEDERAL ELECTION COMMISSION, ef al.
Defendants.
CALIFORNIA DEMOCRATIC PARTY, ef al., -
Plaintiffs,
V.
FEDERAL ELECTION COMMISSION, eé! al.,
Defendants.
VICTORIA JACKSON GRAY ADAMS, ef al., ;
Plaintiffs,
Vv.
FEDERAL ELECTION COMMISSION, ef al.,
Defendants.
REPRESENTATIVE BENNIE G. THOMPSON, et al.,
Plaintiffs,
Vv.
FEDERAL ELECTION COMMISSION, ef al.,
Defendants.
3sa
MEMORANDUM OPINION
PER CURIAM '
Presently before this three-judge District Court are eleven
consolidated actions challenging as unconstitutional the
Bipartisan Campaign Reform Act of 2002, Pub. L. No. 107-
155, 116 Stat. 81 (2002) (“BCRA”) and seeking declaratory
and injunctive relief to prohibit its enforcement. The wide
range of legal challenges raised by this litigation are highly
complex, interrelated, and raise issues of fundamental
importance not only to the conduct and financing of federal
election campaigns but to the other rights involved that we
enjoy under the Constitution. Because of the complexity of
our positions, this per curiam opinion, by Judge Kollar-
Kotelly and Judge Leon, includes a schematic description of
the three-judge panel’s conclusions in regard to each of
BCRA’s challenged provisions and a chart as to the rulings
on each provision’s constitutionality. The per curiam opinion
also includes: (1) a brief history of campaign finance
regulation in the United States (pp. 16-42); (2) the legislative
history behind BCRA’s enactment (pp. 42-50); (3) a proce-
dural history of the litigation in this case (pp. 50-57); (4) a
description of the specific provisions in BCRA at issue in
these lawsuits (pp. 57-80); (5) certain Findings of Fact
relating to the identities of the parties and BCRA’s disclosure
provisions (pp. 80-106); and (6) conclusions of law relating to
claims of the Paul Plaintiffs and most of BCRA’s disclosure
provisions (pp. 106-170). The separate opinions of each judge
hearing this matter follow thereafter.
I. DESCRIPTION AND CHART OF THE
COURT’S RULINGS
In light of the number of provisions in BCRA being
challenged, the complexity of the issues presented by each
' Judge Henderson does not join this opinion.
4sa
challenge, and the variety of positions and voting combina-
tions taken by the three judges on this District Court, we set
forth a brief description and a chart, on a section by section
basis, of the various rulings
A. Title 1
Section 323(a) of BCRA bans national parties from
soliciting, receiving, directing, transferring, and spending
nonfederal funds (i.e., soft money). Judge Henderson strikes
this section down as unconstitutional in its entirety. Judge
Leon, for different reasons, files a concurrence, joining with
Judge Henderson, except with respect to the ban on national
parties from using (i.e., “directing,” “transferring,” and
“spending”) nonfederal funds (i.e., soft money) for “federal
election activity” of the type defined in Section
301(20)(A)(iii). As to that type of conduct, Judge Leon
upholds the constitutionality of Congress’s ban on the use of
nonfederal funds by national parties for Section 301(20)(A)
(iii) communications. Judge Kollar-Kotelly upholds Section
323 (a) in its entirety. Accordingly, Judge Leon’s decision
regarding Section 323(a) controls.
Section 323(b) prohibits state parties from using nonfederal
money for “federal election activities” as defined in Section
301(20)(A) of BCRA. Judge Henderson strikes these sections
down as unconstitutional in their entirety. Judge Leon, for
different reasons, joins Judge Henderson in a_ separate
concurrence, but only with respect to those party activities set
forth in Subsections (i), (ii), and (iv) of Section 301(20)(A).
As to Section 301(20)(A)(iii), Judge Leon upholds the
constitutionality of Congress’s prohibition on state and local
parties from spending nonfederal funds for communications
that promote, oppose, attack or support a specific federal
candidate. In a separate opinion, Judge Kollar Kotelly finds
Section 323(b) constitutional and concurs with Judge Leon’s
discussion of Section 301 (20)(A)(i1i).
Ssa
Section 323(d) prohibits national, state, and local parties
from soliciting funds for, or making donations, to § 501(c)
organizations that make expenditures, or disbursements, in
connection with federal elections, or to § 527 national
organizations. Judge Henderson strikes this section down as
unconstitutional in its entirety. Judge Leon, for different
reasons, joins in that conclusion in a separate concurrence.
Judge Kollar-Kotelly files a separate dissent in which she
finds the entire section constitutional.
Section 323(e) prohibits, but for certain enumerated
exceptions, federal officeholders and candidates from
soliciting, receiving, directing, transferring, or spending,
nonfederal money in connection with any local, state, or
federal election. Judge Henderson and Judge Kollar-Kotelly,
for different reasons, in separate opinions uphold the
constitutionality of this section in its entirety. Judge Leon
concurs with respect to the restriction on federal officeholders
and candidates receiving, directing, transferring or spending
any nonfederal funds in connection with any federal or state
election, but files a separate dissent with regard to any
prohibitions on a federal candidate, or officeholder, from
soliciting funds for the national parties.
Section 323(f) prohibits state officeholders and candidates
from using nonfederal funds for public communications that
refer to a clearly identified candidate for federal office and
that promote, oppose, attack, or support a candidate for this
office. Judge Leon upholds this section in its entirety. Judge
Kollar-Kotelly concurs with Judge Leon’s opinion. Judge
Henderson, dissents and finds the entire section
unconstitutional.
B. Title Il
Section 201 of BCRA sets forth a primary, and “backup”
definition, of an “electioneering communication” (i.e., so-
called “issue ads”). In addition, it sets forth certain disclosure
6sa
requirements for those who fund these electioneering
communications. Judge Henderson strikes down both the
primary and backup definition as unconstitutional. Judge
Leon, for different reasons, concurs in her judgment with
respect to the primary definition. Judge Kollar-Kotelly
dissents and upholds the primary definition as constitutional
as discussed in her separate opinion. With respect to the
backup definition, Judge Leon, who writes a separate opinion,
upholds its constitutionality with its final clause severed.
Judge Kollar-Kotelly, as expressed in her opinion, concurs in
that conclusion solely as an alternative to this Court's finding
that the primary definition is unconstitutional. Finally, with
regard to Section 201’s disclosure requirements, Judge
Kollar-Kotelly and Judge Leon, for the reasons set forth in
the per curiam opinion, uphold their constitutionality with
one exception. Judge Henderson strikes down the disclosures
requirements in a separate dissent.
Section 202 provides that disbursements by persons for
electioneering communications, or contracts to purchase the
same, that are coordinated with either a federal candidate or a
candidate committee, or a political party committee will be
treated as contributions to that candidate’s campaign or
political party committee. Judge Kollar-Kotelly and Judge
Leon, for the reasons set forth in the per curiam opinion, find
this section constitutional. Judge Henderson, in a separate
dissent concludes that this Section is unconstitutionally
overbroad.
Section 203 of Title II prohibits labor unions, corporations
and national banks from using money from their general
treasury to fund “electioneering communications,” as defined
by Section 201. Instead, under Section 203, such
communications must be paid from a separately segregated
fund (“SSF”). Section 203 also includes an exception from
the SSF requirement for certain nonprofit corporations (i.e.,
the “Snowe-Jeffords exception”). Judge Kollar-Kotelly
7sa
upholds this section as constitutional. Judge Leon joins Judge
Kollar-Kotelly’s opinion upholding the constitutionality of
this section as it applies to the backup definition in Section
201. Judge Henderson strikes down this Section as
unconstitutional in its entirety. Judge Kollar-Kotelly and
Judge Leon additionally uphold the disclosure and SSF
requirements as well as the Snowe- Jeffords exemption
provision for certain nonprofit corporations organized under
Sections 501(c)(4) and 527 of the Internal Revenue Code in
their respective opinions.
Section 204 (“The Wellstone Amendment”), in effect,
withdraws the Snowe- Jeffords exception of Section 203.
Judge Henderson strikes down Section 204 in its entirety.
Judge Leon concurs in her result as it applies to MCFL
exempt organizations only. As to nonprofit corporations that
do not qualify for the MCFL exemption, Judge Leon concurs
with Judge Kollar-Kotelly’s conclusion, but for different
reasons, in upholding Section 204 as it applies to non MCFL
organizations.
Section 212 provides certain reporting requirements for
independent expenditures. Judge Kollar-Kotelly and Judge
Leon, for the reasons set forth in the per curiam opinion,
conclude that challenge to this provision is not ripe for
review, and therefore hold that the Court does not have
jurisdiction to resolve the plaintiffs’ challenges at this time.
Judge Henderson dissents from this view and finds Section
212 unconstitutional in its entirety.
Section 213 requires national parties, in essence, to choose
between making coordinated expenditures under the Party
Expenditures Provision or unlimited independent
expenditures on behalf of their federal candidates. All three
judges concur that this section is unconstitutional. Judge
Henderson’s opinion includes a discussion of her separate
reasons. Judge Kollar-Kotelly concurs in Judge Leon’s
separate opinion on this section.
8sa
Section 214 addresses coordinated expenditures paid for by
persons other than party committees and candidate
committees. Section 214 repeals the current FEC regulations
on coordinated expenditures, and directs the FEC to
promulgate new regulations that do not require “an agreement
or formal collaboration to establish coordination.” Judge
Kollar-Kotelly and Judge Leon, for the reasons set forth in
the per curiam opinion, find that the plaintiffs” challenge
under Section 214(b) and Section 214(c) is nonjusticiable and
the Court therefore lacks jurisdiction to consider their
challenge. As to Sections 214(a) and 214(d), however, they
find those sections constitutional for the reasons set forth in
the per curiam opinion. Judge Henderson dissents, finding the
Section unconstitutional in its entirety.
C. Title Ill and V
Sections 304, 316, & 319, collectively known as the
“Millionaire Provisions,” allow opponents of self-financed
candidates, and in certain circumstances, to raise money in
larger increments and accept unlimited coordinated party
expenditures. All three judges conclude, for the reasons set
forth in Judge Henderson’s opinion, that this Court lacks
standing to entertain challenges to these provisions.
Section 305 denies a candidate the “lowest unit charge” for
broadcast advertisements on radio and television unless the
candidate promises not to refer to another candidate in his or
her advertisements. For the reasons set forth in Judge
Henderson's opinion, all three judges conclude that this Court
lacks standing to entertain the plaintiffs’ challenge at this
time.
As explained in Judge Henderson’s opinion, the Court
similarly finds that the plaintiffs do not have standing to
challenge Section 307, which increases and _ indexes
contribution limits.
9sa
Section 311 establishes certain disclosure requirements for
the sponsors of electioneering communications. Judge Kollar-
Kotelly and Judge Leon, for the reasons set forth in the per
curiam opinion, uphold this provision as constitutional. J udge
Henderson, dissents, and finds this section unconstitutional
for the reasons set forth in her opinion.
Section 318 prohibits donations by minors to federal
candidates, or to a committee of a political party. All three
judges agree that this section is unconstitutional. Each judge
writes a separate concurrence setting forth his/her reasoning
as to this section.
Section 504 requires broadcast licenses to collect and
disclose records of any request to purchase broadcast time for
communications that “is made by or on behalf of a legally
qualified candidate for public office” or that relates “to any
political matter of national importance,” including
communications relating to “a legally qualified candidate,”
“any election to federal office,” and “a national legislative
issue of public importance.” Judge Henderson finds this
section unconstitutional. Judge Leon and Judge Kollar-
Kotelly, concur in that result, but not in her reasoning. Judge
Kollar-Kotelly concurs in Judge Leon’s separate opinion on
this section.
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BCRA Constitutional | Unconstitutional | Nonjusticiable
Provision
307: Judge
increased Henderson
contribution Judge Kollar-
limits and Kotelly
indexing of Judge Leon
limits :
311: Judge Kollar- | Judge
identification | Kotelly Henderson
of sponsors Judge Leon
318: Judge
prohibition Henderson
of donations Judge Kollar-
by minors Kotelly
Judge Leon
504: Judge
disclosure of Henderson
broadcasting Judge Kollar-
records Kotelly
Judge Leon
Il. BACKGROUND
It is necessary to canvass the history of federal campaign
finance regulation in order to provide the appropriate context
for understanding the structure and practices of federal
campaign finance that Congress confronted when it enacted
BCRA. See United States v. VAW-CIO, 352 U.S. 567, 570
(1957) (“UAW"’) (“Appreciation of the circumstances that
begot this statute is necessary for its understanding, and
understanding of it is necessary for adjudication of the legal
16sa
problems before us.”). Following this overview, the ae
will move to a discussion of the legislation enacted by
Congress to resolve the perceived shortcomings of the se
BCRA campaign finance structure and a procedural history 0
the litigation in this case.
“4 The Framework of Federal €ampaign Finance
Regulation
One might be tempted to agree with Plaintiffs’ annnean
that the history of federal campaign finance mp is
“relatively short,” McConnell Br. at 9, if one were ae
it to the history of Western civilization. In the poignant a
Judge Kollar-Kotelly and Judge Leon, however, the vemigtd :
federal campaign finance regulation, having tts origins In the
Administration of President Theodore Roosevelt, is a long-
standing and recurring problem that has chalenged our
government for nearly half of the life of our Republic.
At the close of the nineteenth century, the concentration of
the nation’s wealth in the hands of a “small Portion of the
population” began to threaten the stability and integrity of =
political system. UAW, 352 U.S. at 570 (quoting 2 riageng
and Commager, The Growth of the American Republic al -
(4th ed. 1950)). At the time, the widely accepted view rn
that “aggregated capital unduly influenced politics, an - u-
ence not stopping short of corruption. Id. To that end, many
states began experimenting with disclosure laws requiring
candidates and their political committees to make public the
sources and amounts of contributions to their campaigns and
the amounts of their campaign expenditures. /d. at 570-571.
These laws proved to be largely futile. /d. at 571.
Concern with both the size and source of campaign a
relating to the 1904 presidential campaign — te
popular sentiment for federal action to purge nationa Pe a
of what was conceived to be the pernicious ae “ ig
money’ campaign contributions.” /d. at 571-72. President
17sa
Roosevelt’s presidential messages to Congress in both 1905
and 1906, strongly encouraged Congress to enact a law
prohibiting political contributions by corporations. 40 Cong.
Rec. 96 (1905); 41 Cong. Rec. 22 (1906). In response to these
concerns, Congress enacted the Tillman Act, Ch. 420. 34 Stat.
864, which prohibited corporations from making any
contribution in connection with any election for federal office
and which represented “the first concrete manifestation of a
continuing congressional concern for elections free from the
power of money.” UAW, 352 U.S. at 575 (internal quotation
marks and citation omitted). The Tillman Act demarcates the
beginning of the “modern era” of federal campaign finance
regulation and is the predecessor of the prohibition on
corporate and labor union contributions and expenditures in
connection with any federal election from their general
treasuries that appears in the Federal Election Campaign Act
(“FECA”). Buckley v. Valeo, 519 F.2d 821, 904 (D.C. Cir.
1975), aff'd in part, rev'd in part, 424 U.S. 1 (1976). The
“underlying philosophy” of the Tillman Act was “to sustain
the active, alert responsibility of the individual citizen in a
democracy for the wise conduct of government.” UAW, 352
U.S. at 575,
In 1909, Congress endeavored to broaden the Tillman Act
by including within the Act’s scope, state legislative races
and in-kind contributions. See id. While this effort ended in
failure, in 1910, Congress “translated popular demand for
further curbs upon the political power of wealth into a
> The ban on corporate and labor union contributions and expenditures
was eventually codified at 18 U.S.C. § 610, and later transferred to the
Federal Election Campaign Act, 2 U.S.C. 441b, when Congress _re-
evaluated the Act in the aftermath of the Supreme Court's decision in
Buckley v. Valeo, 424 U.S. 1 (1976). Federal Election Campaign Act
Amendments of 1976, P.L. 94-283, 90 Stat. 475. See also S. Rep. No.
677, 94th Cong., 2d Sess. 2-3 (1976), reprinted in 1976 U.S.C.C.AN.
929, 930-31. .
18sa
publicity law that required committees operating to poor
the results of congressional elections in two or more pemnon
report all contributions and disbursements and to i enti y
contributors and recipients of substantial sums. poke.
Act of June 25, 1910, ch. 392, § § 5-6, 36 Stat. 822, nn
(disclosure required of all transactions greater than $
The 1910 law further directed the reporting of expenditures
exceeding $50, made independently of a political ee
for the purpose of influencing congressional elections dl :
than one State. Act of June 25, 1910, ch. 392, § § 7, =
824. In 1911, Congress further amended the 1910 rn
for the first time, included overall expenditure a ne
campaigns for the House ($5,000) and for the mae
($10,000). Buckley, 519 F.2d at 904-905 (citing Act 0 z .
19. 1911, ch. 33, § 2, 37 Stat. 26). Additionally, - ‘
provisions required all candidates for the Senate — ne
House of Representatives to make detailed ee
respect to their nominating and election campugys. -
352 U.S. at 576. Hence, candidate disclosures inclu oe
primary, convention, and other pre-nomination a ) :
Buckley, 519 F.2d at 905. The 1911 law also joan —"
candidates from promising employment for ay ew i
securing an individual's support. UAW, 352 a i:
(citing 37 Stat. 25). In 1918, Congress again amendec , ‘ wd
and added criminal penalties for offering anything of va ~~
influence voting. /d. (citing Act of Oct. 16, 1918, ch. 187,
Stat. 1013).
In the only instance of a criminal prosecution mane yo
Act, Truman Newberry was convicted in Michigan boc
violating the expenditure ceiling in his “ at
campaign for the United States Senate. ew “ y
conviction was overturned by the Supreme Court in -.
The Court invalidated the law insofar as it 4 to “en
primary elections. Newberry v. United States, = US. 2 :
258 (1921) (“We cannot conclude that authority 4 angen
party primaries or conventions for designating candidates was
- i Ae 2 aus
19sa
bestowed on Congress by the grant of power to regulate the
manner of holding elections.”). Four Justices of the Court
held that primaries were intra-party affairs not amenable to
congressional regulation under the Elections Clause. /d.
Justice Joseph McKenna, who provided the crucial fifth vote
for judgment, limited the reach of the decision to the facts by
concluding that the statute under consideration was enacted
prior to the Seventeenth Amendment and. therefore, left open
the question of whether that Amendment gave Congress
authority to regulate Senate primary elections. /d.
In 1925, in the wake of Newberry, Congress passed the
Federal Corrupt Practices Act of 1925, ch. 368, tit. III, 43
Stat. 1070, which was a comprehensive amalgamation of the
surviving provisions of the existing campaign finance laws.
UAW, 325 U.S. at 576. The Federal Corrupt Practices Act
strengthened the Tillman Act by broadening the definition of
contribution, extending the ban on corporate contributions to
Delegates and Resident Commissioners that were elected to
Congress, and punishing the recipient of any_ illegal
contribution in addition to the contributor. /d. at 577. The law
also generally broadened disclosure provisions. Buckley, 519
F.2d at 905.
The Supreme Court upheld the Federal Corrupt Practices
Act in the Burroughs case of 1934:
The power of Congress to protect the election of Presi-
dent and Vice President from corruption being clear, the
choice of means to that end presents a question primarily
addressed to the judgment of Congress. If it can be seen
that the means adopted are really calculated to attain the
end, the degree of their necessity, the extent to which
they conduce to the end, the closeness of the relationship
between the means adopted, and the end to be attained,
are matters for congressional determination alone. Con-
gress reached the conclusion that public disclosure of
political contributions, together with the names of con-
tributors and other details, would tend to prevent the
20sa
corrupt use of money to affect elections. The a oe
this conclusion reasonably cannot be denied. ony
this is added the requirement contained in secon 244,
that the treasurer’s statement shall include full a.
lars in respect of expenditures, It seems plain t =
statute as a whole is calculated to discourage the making
and use of contributions for purposes of corruption.
Burroughs v. United States, 290 U.S. 534, oe nati
(internal citation omitted). As is obvious from gerne ene
the Burroughs opinion provided Congress with eer
discretion to regulate federal elections including the financing
of campaigns. |
The next instance of congressional action in the _ .
campaign finance was in 1940 when Congress pg it :
Hatch Act, a law which placed restrictions on the po ou
activities of the civil service, by making it unlawful for any
political committee to receive contributions totaling —
than $3,000,000 or to make expenditures of more than that
amount in any calendar year. UAW, 352 U.S. at 577 ae
Act of July 19, 1940, ch. 640, 54 Stat. 767). The Hatch /
amendments also limited gifts to candidates or see
committees to $5,000 in any calendar year. Buckley, 519 F.2
at 905 (citing Act of July 19, 1940, ch. 640, 54 Stat. 767).
One year later, the Supreme Court again remenyy ws a
question it had squarely addressed in Mewnerry: he y
whether congressional power under the Elections C mane
extended to the pre-election period. United States v. og
313 U.S. 299 (1941). This time, the Count upheld si
congressional enactment holding that the at hs
Congress, given by {Article I, section al. bw as
authority to regulate primary elections when, as in ——
they are a step in the exercise by the people of on c ou :
representatives in Congress.” /d. at 317. The case Invo "i |
Louisiana Democratic primary for the House of angn-yarnd
tives, which history showed was the determinant of who
Dee ecietine Mee A ener em
2Isa
would win the general election. /d. at 314. The Supreme
Court in Classic disregarded Newberry because only four
Justices in Newberry had adopted the view that the Elections
Clause forbade congressional regulation of primary elections.
Consequently, as the issue had never “been prejudged by any
decision of [the Supreme] Court,” Classic overruled the
Newberry plurality. Id. at 317; see also id. at 325 n.& (“No
conclusion is to be drawn from the failure of the Hatch Act,
to enlarge § 19 by provisions specifically applicable to
primaries. Its failure to deal with the subject seems to be
attributable to constitutional doubts, stimulated by Newberry
v. United States, which are here resolved.”) (internal citations
omitted). Under Classic, Congress was given authority to
impose criminal penalties for activities of state officials
conducting a primary election for federal candidates under the
auspices of state law. See id. at 307.
Following the rise of organized labor during World War II,
in 1943, Congress passed the Smith-Connally Act which
included a section that extended the Federal Corrupt Practices
Act to organized labor. UAW, 352 U.S. at 578 (citing War
Labor Disputes Act (Smith-Connally Act), ch. 144, § 9, 57
Stat. 163, 167) (“Wartime strikes gave rise to fears of the new
concentration of power represented by the gains of trade
unionism. And so the belief grew that, just as the great
corporations had made huge political contributions to
influence governmental action or inaction, whether covi-
sciously or unconsciously, the powerful unions were pursuing
a similar course, and with the same untoward consequences
for the democratic process.”). Congressman Gerald Landis,
the author of this provision in the Smith-Connally Act
observed that “(t]he public was aroused by many rumors of
huge war chests being maintained by labor unions, of
enormous fees and dues being extorted from war workers. of
political contributions to parties and candidates which later
were held as clubs over the head of high Federal officials.”
Id. at 579 (quoting Hearings before a Subcommittee of the
d7sa
House Committee on Labor on H.R. 804 and H.R. 1483, 78th
Cong., Ist Sess. 1, 2, 4).
Despite the provision in the Smith-Connally Act nnens
the reins on political activity of labor unions, pn oalige
prompted to investigate “enormous financial out me y
some unions in connection with the 1944 national elections.
Id. The Senate’s Special Committee on Campaign Expent-
tures investigated and concluded that while there “_ bo
clear-cut violation of the Corrupt Practices Act, i id. : ,
(quoting S. Rep. No. 101, 79th Cong., Ist Sess. 23), the a
was being evaded by large scale spending by ta poring
expenditures (as opposed to contributions), ne = “we
explicitly prohibited by the Federal Corrupt Practices wo
Congress, it appears, considered a prohibition on — es
tions to be equally applicable to expenditures. Id. * 582
("The committee is firmly convinced, after a thorough a
of the provisions of the act, the legislative history 0 m0
same, and the debates on the said provisions when it was
pending before the House, that the acl was yng ba
prohibit such expenditures.””) (quoting H.R. Rep. 9 ae
79th Cong., 2d Sess. 40). In commenting on how this morn
tion threatened to eviscerate the Federal Corrupt mrp
Act, the House Committee studying this problem stated me
“(t]he intent and purpose of the provision of the act
‘A sampling of the extraordinary size of the expenditures by maw x
federal elections demonstrates that “One [labor organization | = a oo
have an annual budget for ‘educational’ work approximating . , gorse
and among other things regularly supplies over 500 radio onacind bros
‘briefs for broadcasters.” Another, with an annual budget of eo a a
for political ‘education,’ has distributed some hyasaypaane ceo
literature, including a quarter million copies of one ve 2 a8
representing an organized labor membership of 5,000,06 2 as on
$700,000 for its national organizations in union meranpesuel ue - ~
‘education’ in a few months, and a great deal more has seen ag “ "
same purpose and expended by its local ae me , 352 US.
at 580-81 (quoting H.R. Rep. No. 2093, 78th Cong.. 2d Sess. 3).
8k ee et ete =
ee ee ane
23sa
prohibiting any corporation or labor organization making any
contribution in connection with any election would be wholly
defeated if it were assumed that the term ‘making any
contribution’ related only to the donating of money directly to
a candida’e, and excluded the vast expenditures of money in
the activities herein shown to be engaged in extensively. Of
what avail would a law be to prohibit [directly] contributing
to a candidate and yet permit the expenditure of large sums in
his behalf?” /d. at 581 (quoting H.R. Rep. No. 2739, 79th
Cong., 2d Sess. 40).
Therefore, in order to prevent further “evasion” and to
“plug the existing loophole,” Congress “again acted to protect
the political process from what it deemed to be the corroding
effect of money employed in elections by aggregated power.”
fd. at 582 (internal quotation and citations omitted). Accord-
ingly, in 1947, Congress passed the Taft-Hartley Act of 1947,
ch. 120, 61 Stat. 136, which amended the Federal Corrupt
Practices Act “to proscribe any ‘expenditure’ as well as ‘any
contribution’ [and] to make permanent [its] application to
labor organizations” in addition to corporations. /d. at 582-83.
The Taft-Hartley Act implemented Classic by applying its
provisions to primary elections. Buckley, 519 F.2d at 906.
Following the Taft-Hartley Act, from the late 1940's
through the end of the 1950's, Congress sought unsuccess-
fully to amend the dollar expenditure limits to reflect more
“realistic” costs, but no action was taken. /d. In 1960. the
Senate passed a bill that strengthened reporting requirements
for candidates and political committees. adopted individual
contribution limits, rationalized current expenditure limits,
and placed ceilings on Presidential campaigns. /d. The bill,
however, died for lack of a companion in the House of
Representatives. /d. In 1962, President Kennedy's Commis-
sion on Campaign Costs recommended “tax incentives and
credits for small political contributions, realistic ceilings, and
Suspension of the equai time provision as to media debates.”
24sa
Id. In 1966, Congress passed a one dollar tax arenes to
provide public funding for Presidential general elections,
which was later repealed in 1967. /d.
Late in 1971, Congress reinstituted the tax form agp
to finance Presidential general elections and, in early oy
passed the Federal Elections Campaign Act of 1971, Pub. , ;
No. 92-255, 86 Stat. 3 (“FECA”), requiring disclosure ot al
contributions in excess of $100 and disclosure ot nena
tures by all candidates and political committees apenaing
more than $1000 per year. /d. The 1971 law also yer
provided corporations and unions with the ability to ommeag
and administer separate, segregated funds tor the prong -
making political contributions and expenditures. a ae
Local Union No. 562 v. United States, 407 U.S. 385,
410 (1972).
Despite passage of FECA, the “infinite my :
“eviscerate|] statutory limitations on contributions and
expenditures,” which amounted to “wholesale ecerage-sne
became a source of further congressional concem. Buc ey.
$19 F.2d at 837. Congress concluded that costs for federal
elections had increased at an “‘alarming rate. ~ se
H.R. Rep. No.93-1239, 93d Cong., 2d Sess. 3 ( | (hiniadiota ,
Code Cong. & Admin. News 1974, p. 5587). gg -avadhnten
further troubled by the “interaction” between large-scale
campaign expenditures and a reliance “on large enna
from monied and special interests.” /d. In Buckley, it =
undisputed that “one percent of the people enrggeni ~s ,
percent of the dollars contributed i) federal nee “_
political parties and committees. Id. (citing | agree a
Findings of Fact). It was also undisputed that illegal pe “dl
tions to both parties were made in 1972 by Gulf Oil an ’
American Milk Producers, Inc., a large dairy conperative. Id.
at 838. Notably, the circuit court in Buckley concluded:
Large contributions are intended to, and do, gain access
to the elected official after the campaign for considera-
.
i]
:
4
2
.
:
.
25sa
tion of the contributor’s particular concerns. Senator
Mathias not only describes this but also the corollary,
that the feeling that big contributors gain special
treatment produces a reaction that the average American
has no significant role in the political process.
Id.; see also id. n.32 (“Congress found and the District Court
confirmed that such contributions were often made for the
purpose of furthering business or private interests by
facilitating access to government officials or influencing
governmental decisions, and that, conversely, elected officials
have tended to afford special treatment to large
contributors.”’) (citations omitted). Indeed, the lower Buckley
court documented the “lavish contributions by groups or
individuals with special interests to legislators from both
parties.” /d. at 840 n.37.
In 1974, in direct response to the 1972 elections which
were a “watershed for public confidence in the electoral
system,” id. at 840, and the “shock of its aftermath.” id. at
837, Congress enacted and President Gerald Ford signed the
sweeping FECA Amendments of 1974. /d. Broadly speaking,
the amendments imposed dollar limitations on contributions
by individuals and by political committees to candidates for
federal office, to political party committees, and to
independent political committees. 2 U.S.C. § 44]a(a). The
1974 amendments also imposed limits on expenditures that
individuals, candidates, political committees, and political
parties could spend to help federal candidates win elections.
Moreover, the law treated expenditures that were
“coordinated” with a candidate as contributions. 2 U.S.C.
441a(a)(7)(B)(i) (“[E]xpenditures made by any person in
cooperation, consultation, or concert, with, or at the request
Or suggestion of, a candidate, his authorized political
committees, or their agents, shall be considered to be a
contribution to such candidate.”). The amendments also
included a_ variety of recordkeeping and disclosure
requirements. See 2 U.S.C. § § 432-434. The Federal Election
26sa
Commission was also created by the amendments and ann
with monitoring and enforcing the campaign finance 9
See generally 2 U.S.C. § § 437¢e(b)C), 437d(a), 4378. Final J
the law, as amended, provided public funding primarily for
qualified presidential candidates and some pase funding tor
nominating conventions of major political parties.
The first day after the FECA amendments went into anes,
the law was challenged. Buckley, 519 F.2d al _. me
lengthy opinion, the United States Court of Appeals tor on
District of Columbia Circuit found all but one of ‘ e
provisions of FECA constitutional. /d. at 843-44 ——
down disclosure provision 2 U.S.C. § 4374). In 1976, the
Supreme Court affirmed in part and reversed in ape Ye
Circuit's ruling in its decision in Buckley v. Valeo, 424 all
(1976). Generally speaking, in examining FECA s rage
against the free speech and association provisions of the -
Amendment the Supreme Court found comes FEC . ;
contribution limitations, Buckley, 424 U.S. at 23-38, on
unconstitutional those provisions of FECA that impose
expenditure limitations, id. at 39-59. The eg to
expenditure dichotomy first developed im 0 “4 )
grounded in the Supreme Court's view that ) [a] ome on
serves as a general expression of support for the candi ors
and his views, but does not communicate ine aps gi
for the support.” /d. at 21 (observing that ‘[t}he quantity 0
communication by the contributor does not ncesans parenye
bly with the size of his contribution, since the expression “4
solely on the undifferentiated, symbolic act “ recta | :
Expenditure restrictions, on the other hand, ‘while neutra Y
to the ideas expressed, limit political expression at the core «
our electoral process and of the First Amendment freedoms.
/d. at 39 (internal quotation marks and citation omitted).
er
ee Poe
27sa
In Buckley, the Supreme Court upheld as well the general
disclosure provisions contained in FECA. /d. at 60-84.* The
Supreme Court likewise found constitutional the public
funding scheme for presidential candidates. /d. at 85-109.
Finally, the Supreme Court struck down the structure of the
FEC as it was constituted under FECA in violation of the
Appointments Clause of the Constitution. /d. at 109-143.
Hence, in the aftermath of Buckley, it was FECA’s
contribution restrictions that remained intact. while its
expenditure provisions were vitiated.” Under FECA. as it
emerged from Buckley, no “person”® was permitted to
contribute in excess of $1,000 to a candidate for federal
office, 2 U.S.C. § 441a(a)(1)(A): no person could contribute
to the political committees established and maintained by a
national political party, in any calendar year which, in the
aggregate, exceed $20,000, 2 U.S.C. § 441a(1)(B): and no
person could contribute to any other political committee in
any calendar year which, in the aggregate, exceed $5,000,2
U.S.C. § 441a(a(1)(C).” In addition, no multicandidate politi-
* The D.C. Circuit's decision striking down 2 U.S.C. § 437a was not
appealed to the Supreme Court. Buckley, 424 U.S. at 11 n.7.
: Following Buckley, there have been a number of important Supreme
Court opinions that have addressed application of Buckley in other
contexts. It is more appropriate to discuss these cases in the context of
each Judge's separate opinion.
“FECA defines “person” as “an individual, partnership, committee,
association, corporation, labor organization, or any other organization or
group of persons, but such term does not include the Federal Government
or any authority of the Federal Government.” 2 U.S.C. § 431(11).
” Under BCRA, these contribution limits have been raised. Persons can
now contribute $2,000 to candidates and $25,000 to national political
party committees. BCRA § § 307(a)(1), 307(a)(2); FECA § 315(ay(1): 2
U.S.C. § 441a(a)(1). Also under BCRA, C ongress has carved s*ste party
committees out of § 44 1a(a)(1)(C) and increased the contribution limit for
state party committees from $5,000 to $10,000. BCRA § 102; FECA §
315(ay1); 2 U.S.C. § 441a(a\1). Moreover, the contribution limits
28sa
cal committee could contribute in excess ot ee " a
candidate for federal office, 2 U.S.C. § 441aaX2KA); no
multicandidate political committee could contribute in —
of $15,000 to the political committees errs and
maintained by a national political party, - US.C . 5.
441a(a)(2)(B);and finally, no multicandidate ee
committee could contribute to any other political poner
in any calendar year which, in the aggregate, mn
$5,000, 2 U.S.C. § 441a(ay(2\C). In order to proven
evasion” of these limitations Buckley upheld the ame
$25,000 limitation on total contributions during y epapagel
year. Buckley, 424 U.S, at 38. As a result, under 2 U.S.C. S
441a(a)(3), no individual was permitted to make Pe oernee
aggregating more than $25,000 in any erry year. 2 _ 7
§ 441a(ay3)." In addition, under 2 U.S.C. § =
corporations and labor unions are prohibited from etd el
general treasury funds to “make a contribution or pen —_
in connection with any election to any political rene 2
U.S.C. § 441 b(a). In sum, the Supreme Court found that:
The overall effect of the Act's contribution ceilings is
merely to require candidates and political eagle to
raise funds from a greater number ot persons an to
compel people who would otherwise contribute —
greater than the statutory limits to expend such = s a
direct political expression, rather than to reduce the tota
amount of money potentially available to promote
political expression.
applicable to candidates and national party comaniem have _— re
to the consumer price index and will increase with inflation.
§ 307(d); FECA § 315(c); 2 U.S.C. § 44 late). hi
* BCRA has increased the aggregate limit on individual Papeete
from $25,000 per year to $95,000 per two-year election cycle, a“ he a
$37,500 may be contributed to candidates. BCRA § 307(b); FE
§ 315(ay(3); 2 U.S.C. § 441 a(ay(3).
we
29sa
Buckley, 424 U.S. at 21-22. Indeed, what emerged from
Buckley was a tightly focused regime whereby contributions
(and coordinated expenditures) to candidates and political
parties and committees were limited or even banned (in the
case of corporate and union treasury funds) and independent
political advocacy was left unimpeded.
Contribution is defined in FECA as including, “any gift,
subscription, loan, advance, or deposit of money or anything
of value made by any person for the purpose of influencing
any election for Federal office.” 2 U.S.C. § 431(8)(A)(i).
Since the adoption of FECA, it is clear that the
Commission has struggled with interpreting the phrase “for
the purpose of influencing any election for Federal office.”
2 U.S.C. § 431(8)(A)(i). In 1975, the FEC examined the case
of a local party committee that had established separate
accounts for federal funds and for corporate contributions
which were permitted under state law, but which were
prohibited by federal law for use in connection with federal
elections. In Advisory Opinion 1975-21, the Commission
determined that the appropriate course was to have the local
party allocate both its administrative expenses and its voter
registration drives between the two accounts. given that these
expenses had an impact on both state and federal elections.
FEC Advisory Op. 1975-21 (allocation based on the ratio of
“the total amount which the [local party] directly contributes
to and expends on behalf of Federal candidates, to . . . the
total of all direct contributions to and expenditures on behalf
of all candidates-Federal, State, and local”). The FEC slightly
reversed course, in Informational Letter 1976-72, where it
determined that voter registration efforts could not be paid
for from an account containing funds raised from corporate
and union general treasuries. FEC Informational Letter 1976-
72 (“Thus, even though the Illinois law apparently permits
corporate contributions for State elections, corporate/union
treasury funds may not be used to fund any portion
30sa
of a registration or get-out-the-vote drive conducted by a
political party.”). |
However, in its 1977 rulemakings implementing a.
the Commission permitted any political committee to make .
choice between creating a separate federal mee - its
federal election activities, or to establish a —— an
containing only funds subject to the federal mee epesi
limits to finance all of its activities with respect to both s :
and federal elections. 11 C.F.R. § 102.6(a)(2) (1977). To t .
extent that segregated accounts were created, the asetgy
were required to “allocate administrative go :
reasonable basis between their Federal and non- meg
accounts in proportion to the amount of funds engenes , =
Federal and non-Federal elections, or on another ose “
basis.” 11 C.F.R. § 106.1(e)(1977) (emphasis sao pial one
following year, the Commission essentially reversed od pe
advisory opinion and in Advisory | ayanen : ‘
determined that “the costs of [voter] registration - aged
the-vote drives” by a state party committee —_ ‘
allocated between” federal and nonfederal accounts in =
same manner as other general party expenditures yon .
Commission’s 1977 regulations. FEC Advisory Op. ste :
In Advisory Opinion 1979-17, the Commission repeeen ee e
conclusions reached in Advisory Opinion 1978-10 —_—
separate accounts to the national party preston a
Advisory Op. 1979-17 (“[Regulations] thus woul vainpd ;
RNC to establish and administer separate, engages a
accounts through an auxiliary organization of the yer
party which accounts could be used for the vere
disbursement of funds designated specifically and exc sg
to finance national party activity limited to influencing ; e
nomination or election of candidates for public office other
than elective ‘Federal office.”*) (citation omitted).
Accordingly, by the middle of 1979, the FEC permitted
national and state party committees to solicit and accept
i. OMe caine ee ee
i
31sa
donations outside of FECA’s source and amount limitations
(“nonfederal money”)” provided that these monies were
placed in separate accounts from the federal funds. In other
words, political committees were permitted to establish two
sets of accounts-one for federally- regulated money (federal
accounts) and one for non-federally regulated money
0
(nonfederal accounts). '
” There is a degree of skirmishing in the briefs over the appropriate
terminology for “nonfederal money.” Defendants use the phrase “soft
money.” Plaintiffs refer to “soft money” as “state-regulated” or
“nonfederal” money. The Court has, for the most part, adopted the
nomenclature “nonfederal” money because that is the term that the FEC
has used during the rulemaking process implementing BCRA, Prohibited
and Excessive Contributions: Non-Federal Funds or Soft Money, 67 Fed.
Reg. 49064 (July 29, 2002) (“Because the term ‘soft money’ is used by
different people to refer to a wide variety of funds under different
circumstances, the Commission is using the term ‘non-Federal funds’ in
the final rules rather than the term ‘soft money.”*), even though BCRA
uses the term “soft money,” BCRA § 10] (entitled “Soft money of
political parties”) (emphasis added) and even though on occasion the
Supreme Court has also used the phrase “soft money,” see, e.g., Colorado
Republican Federal Campaign Committee v. FEC (“Colorado I”), 518
U.S. 604, 616 (1996) (“Unregulated ‘soft money’ contributions may not
be used to influence a federal campaign, except when used in the limited,
party-building activities specifically designated in the statute.”), Despite
the references in the case law and the statute to the term “soft money,” for
the sake of clarity in an area of law that demands absolute precision, the
Court generally eschews the phraseology “hard money” or “soft money”
in favor of “federal funds” or “nonfederal funds.” Federal funds are those
monies regulated under FECA, as amended, and nonfederal funds are
those monies that may or may not be regulated under state law, but not
federal law.
In 1979 Congress again amended FECA to exempt two new sets of
activities from the definition of contribution and expenditure. First, state
and local party disbursements for campaign materials such as pins,
bumper stickers, and yard signs used in connection with volunteer
activities on behalf of the party’s nominees were exempted from FECA’s
contribution limits provided that the activity was paid for with federal
money. 2 U.S.C. § § 431(8)(B)(ix), 9(B)(viii). The second exemption
32sa
Essentially, the FEC’s opinions and rulemakings se
state and national party committees to pay for the easrmangete
portion of their administrative costs and voter nna
turnout programs with monies raised under relevant mings
(not FECA), even if those state laws: were in weet
contravention of FECA, such as permitting rerapeas
from corporate and labor union general treasury funds. ae ~
result, national and state parties began to raise so-called so ,
money,” which described these nonfederal funds, not ye
to FECA limits and restrictions, that were used to pay for
these administrative and generic voter drive expenses.
With these developments, nonfederal funds became an
increasingly important means of party financing. During the
1980 election, the RNC spent approximately $15 million in
nonfederal funds and the DNC spent roughly $4 aresnn
constituting 9% of the national parties total sponding. a
Expert Rep. at 12.'' In 1984, the national parties spent
collectively an estimated $21.6 million in nonfederal money,
which accounted for 5% of their total spending. /d. By 1988,
related to a state party's payment for “the costs of voter magus oe
{|GOTV] activities” conducted on behalf of the party S mage - =
2 USC. § § 431(8)B)(xi), (9)(B)Ux). This mmypen was =
conditioned on the use of federal money for the activity. reap for
of these activities unlimited federal money could be used to pay fort =
because they were exempted from the definition of gence ee
“expenditure.” For state and local parties that opted to use nonfede
funds to pay for these activities, allocation was still permitted. 7
'' As Defense Expert Mann plainly concedes, “Just what amount “ “
money activity the parties pursued in the 1980s is wen certain oamaetee
‘{njonfederal’ funds were not subject to federal wansngeeend a “0
only to the disclosure laws in states where soft money ago ase
Expert Report at 12. It was not until 1992 that the oa - c oo
official data on national parties use of nonfederal funds, so ” prc
pinpointing the amount of nonfederal funds spent by the national p a
before 1992 are estimates. Notably, Plaintiffs do not pene any 0 :
pre-1992 estimates (or any of the post-1992 data collected by the
Commission). Therefore, the Court relies on these statistics.
ee ee eee ae
To
33sa
national party nonfederal money had increased to an
approximate $45 million, or 11% of national party spending.
Id.
In 1990, the FEC promulgated regulations to provide for
some consistency in the methods used to determine the
relative portions of federal and nonfederal money to be used
in financing these generic party activities. Prior to 1990, the
regulations specified that the allocation ~fate hetween
nonfederal and federal accounts was to be done on a
“reasonable basis.” 11 C.F.R. § 106.1(e) (1977). The regula-
tions promulgated by the Commission were designed to give
certainty to this subjective standard and were in response to a
district court's decision which held that the allocation rules
required specific guidance from the Commission. Common
Cause v. FEC, 692 F. Supp. 1391, 1396 (D.D.C. 1987)
(“Indeed, it is possible that the Commission may conclude
that no method of allocation will effectuate the Congressional
goal that all monies spent by state political committees on
those activities permitted in the 1979 amendments be ‘hard
money’ under the FECA. That is an issue for the Commission
to resolve on remand.”).'* Under the new regulations,
national party committees (other than Senate and House
national party committees) were required to allocate at least
65% of their administrative and generic voter drive expenses
to their federal accounts in presidential election years
° The Court observes that Common Cause v. FEC demonstrates that as
early as 1984, before any official statistics on nonfederal funds were kept
by the Commission, there was concern over the influence of these monies
on federal elections. However, the Commission in 1984 determined that,
“Common Cause has not presented evidence of instances in which ‘soft
money’ has been used to influence federal elections sufficient to justify
the stringent rules proposed in its petition.” Common Cause, 692 F. Supp.
at 1393 (citing the Commission's April 17, 1986, Notice of Disposition).
'’ The Commission permitted, inter alia, the following expenses to be
allocated: administrative expenses, which included rent, utilities, office
supplies, and salaries, 11 C.F.R. § 106.5(a)(2)i) (1991 ), the direct costs of
34sa
and 60% in non-presidential election years. I] Cre.
§ § 106.5(b)(2)(i), (ii)(1991). Senate and House cig pe
were to allocate these expenses on the basis of the oH .
federal expenditures to total federal and ae we
disbursements made by the committee during the igo
federal election cycle. 11 C.F.R. § 106.5(c)(). For “—_ ie
local” parties, the allocation between the tedera’ Pp
nonfederal accounts for these expenses were guage cd
the proportion of federal offices to all grr a seth
general election ballot. 11 C.F.R. § an a * ;
Generally, the state parties’ allocation rate was substantially
lower than the national party allocation rate. Mann —
Rep. at 14. The new rules also mandated that the oon
party committees disclose the details of their nontede
accounts. 11 C.F.R. § § 104.8(€), (f) (1991) —
national parties to report for nonfederal and oma 0H
accounts the donating individual’s name, mailing a weve
occupation or type of business, and the date ot my an
amount of any such donation). State parties, ee ee
exempted from these disclosure requirements. i
§ 104.9%(a) (1991) (reporting committees required od iscle on
information pertaining to “the committee 's federal oo
only”). The Commission's regulations, therefore, ge
the national parties with an incentive to wae —
expenditures through state party ee se “
approach generally permitted more nonfederal do yore
spent than if a national party spent the money wi
disclosing the sources of the funds.
In 1992, spending on nonfederal money by the national
parties reached $80 million, or 16% of the national parties
a fundraising program or event, where federal and pene hr ~
, 106.5(a)(2)(ii) (1991); an
; - by one committee, 11 C.F.R. § , i)
nt aa drives.” which included voter identification, —
caiman and get-out-the-vote (“GOTV”) = np ig specific
candidate was not mentioned. 11 C.F.R. § 106.5(a)(2 liv) 1 ).
sone 8
om
DOSS atata nts oy end ents bn lave ve
——
35sa
total spending. Mann Expert Rep. at 15 (citing to official
figures from the FEC). Of that total amount. the national
parties contributed only $2 million directly to state and local
candidates. Mann Expert Rep. at 16. In addition. the two
national parties transferred over $15 million to state party
committees-two thirds of which was transferred to presiden-
tial election battleground states. /d. Along these lines, the
national parties expended $14 million in nonfederal funds for
“generic” party advertising, consisting predominantly of
television advertisements that did not mention candidates
names, but urged viewers to simply vote for a particular party
or stressed themes from the presidential campaigns. /d.
Although the Commission had only approved the use of
nonfederal funds by the national parties “for the exclusive
and limited purpose of influencing the nomination or election
of candidates for nonfederal office,” by 1992, with the new
allocation rules firmly in place, national parties were using
nonfederal money to impact federal elections as permitted by
the Commission. FEC Advisory Op. 1979-17.
With the 1996 election cycle, the national parties’ total
nonfederal funds spending reached $272 million, which was
30% of the national party committees’ total spending. Mann
Expert Rep. at 21. Starting in the Fall of 1995 and continuing
through 1996, Democratic party committees used soft money
to fund advertisements that either promoted President
William J. Clinton by name or criticized his opponent by
name, while avoiding words that expressly advocated either
candidate's election or defeat.'* /d. at 18. In May of 1996, the
‘The argument that such advertisements could be paid for with
nonfederal funds had its origins in Buckley. The Supreme Court in
Buckley, in an attempt to save from unconstitutional vagueness the
independent expenditure prohibitions, narrowed them to apply “only to
expenditures for communications that in express terms advocate the
election or defeat of a clearly identified candidate for federal office.”
Buckley, 424 U.S. at 44. In a footnote. the Buckley Court found that “(this
[narrowing] construction would restrict the application of § 608(e)(1) to
36sa
Republican National Committee announced its plans to spend
$20 million onan “issue advocacy” campaign. /d. at 20.
Although many of the advertisements featured the
presidential candidates, none of the costs of these advertise-
ments were charged as coordinated expenditures on behalf of
the candidate’s campaign, which would have subjected the
expenditure to FECA’s contribution limits. Instead, the
parties paid the full cost, with a mix of federal and nonfederal
funds as permitted by FEC allocation rules. Often the
advertisements were paid for by state party committees,
where the allocation rules permitted greater spending of soft
money. Mann Expert Report at 22 (noting over $115 million
was transferred from the national parties to the state party
committees). In fact, state party nonfederal funds for political
communication/advertising went from $2 million in 1992 to
communications containing express words of advocacy of election or
defeat, such as ‘vote for,’ ‘elect,’ ‘support,’ ‘cast your ballot for,’ ‘Smith
for Congress,” ‘vote against,’ ‘defeat,’ “reject.” Id. at 44 n.52. oan
though the Supreme Court narrowed the provision of the law, it wen
down the expenditure provision as unconstitutional as written and as
narrowed by the Court. /d. at 44.
It was based on this language that the national parties in 1995 and 1996
argued that as long as they ran advertisements that did not mention
“express words of advocacy of election or defeat,” they could use
nonfederal money to run advertisements that supported their presidential
candidate or attacked his opponent.
'’ The FEC had previously ruled that party committees could sponsor
issue advocacy advertisements that did not feature a federal candidate and
pay for these advertisements with a combination of federal and nontederal
dollars as permitted under the allocation regulations. FEC Advisory Op.
1995-25 (discussing that allocation rules were permissible to allocate
funding for “RNC plans to produce and air media advertisements on a
series of legislative proposals being considered by the U.S. Congress,
such as the balanced budget debate and welfare reform”). The national
parties used this advisory opinion as justification for their issue advocacy
campaigns featuring candidates for federal office and paid for with
nonfederal money.
A Nt
37sa
$65 million in 1996. /d. at 22; see also La Raja Expert Report
at 18. A similar strategy was also used by the parties to
Support their candidates for congressional office. Mann
Expert Report at 20. Following the 1996 election, the FEC
began a series of investigations over the parties’ 1996
election practices. Statement of Reasons of Commissioner
Scott E. Thomas for MURs 4553 and 4671, 4713, 4407 and
4544 at 2-5 [DEV 51]. In 2000, the FEC deadlocked over
whether there was reason to believe that the national parties
advertising program constituted an excessive in-kind
contribution to the presidential campaigns. /d. at 5.
The Senate and House also conducted extensive
investigations into the 1996 federal elections. Both the
majority and minority reports in the Senate investigation
concluded that permitting nonfederal donations to political
parties eviscerated FECA’s longstanding ability to prevent
corporate and labor union treasury funds from influencing
federal elections. Investigation of Illegal or Improper
Activities in Connection with 1996 Federal Election
Campaigns, S. Rep. No. 105-167 (6 vols.), Mar. 10, 1998.
(“Thompson Committee Report”); id. at 4468 (majority
report) (“[S]oft money spending by political party committees
eviscerates the ability of the FECA to limit the funds
contributed by individuals, corporations, or unions for the
defeat or benefit of specific candidates.”); id. at 4572
(minority report) (“The soft money loophole undermines the
campaign finance laws by enabling wealthy private interests
to channel enormous amounts of money into political
campaigns.”). In the House, the Committee on Government
Reform and Oversight conducted a wide ranging
investigation, which culminated in public hearings during
1997, into, inter alia, campaign fundraising by political
parties from foreign sources. See Campaign Finance
Investigation: Hearings Before the House Committee on
Government Reform and Oversight, 105th Cong. 6 (October
8, 1997) (statement of Chairman Dan Burton) (“This
38sa
Committee’s hearings will cover many subjects . . . . Our
initial focus has been how political parties took or raised
contributions from foreign sources. I am gravely concerned
about foreign governments, foreign companies or foreign
nationals trying to influence our electoral processes.”);
Conduit Payments to the Democratic National Committee:
Hearings Before the House Committee on Government
Reform and Oversight, 105th Cong. 6 (October 9, 1997)
(statement of Chairman Dan Burton) (“Today, marks the first
day of hearings into illegal foreign fundraising and other
violations of law during recent campaigns.’’).
Nevertheless, without any congressional action, nonfederal
funds emerged as a significant source of party resources.
With these strategies firmly in place, the national parties
spent $221 million of nonfederal money on the 1998 midterm
elections, or 34% of their total spending, which was more
than double the amount of nonfederal funds spent during the
previous midterm election. Mann Expert Report at 23. With
the 2000 elections, the national parties spent $498 million
worth of nonfederal funds,which was 42% of their total
spending. /d. at 24.
The use of nonfederal funds by the political parties was
paralleled to some degree by a similar development in the rise
of issue advocacy by corporations and labor unions. Aside
from the political parties making advertisements that
supported their candidates or attacked the opponent without
using words of direct “express advocacy,” unions and
corporations began to mount “issue advocacy” campaigns,
particularly beginning with the 1996 election, that were paid
directly from their general treasuries. For example, in 1996
the AFL-CIO ran the following advertisement from
September 26 to October 9 in the district of House
Republican incumbent Steve Stockman:
[Narrator] What’s important to America’s families?
[Middle-aged man] “My pension is very important
ae en ee
ee
39sa
because it will provide a significant amount of my
income when I retire.” [Narrator] And where do the
candidates stand? Congressman Steve Stockman voted
to make it easier for corporations to raid employee
pension funds. Nick Lampson opposes that plan. He
Supports new safeguards to protect employee pension
funds. When it comes to your pension, there is a
difference. Call and find out.
AFL-CIO 000593; [DEV 124] (emphasis added); see also
AFL-CIO 000602.
Advertisements such as the above illustration were
permitted by the Supreme Court’s ruling in FEC v. Massa-
chusetts Citizens for Life, Inc. In that case, the Supreme Court
found that the prohibition on corporate and union treasury
spending on expenditures found in 2 U.S.C. § 441(b) needed
to be narrowly construed to only apply to express advocacy.
FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238,
249 (1986) (“MCFL’’) (“We therefore hold that an expendi-
ture must constitute ‘express advocacy’ in order to be subject
to the prohibition of § 441b.”). As a result, corporations and
labor unions were free to use general treasury funds to
finance issue advocacy campaigns. It does not appear that
prior to 1996, the practice of using issue advertising to
influence federal elections was a widespread practice.
In addition, the issue advocacy campaigns by corporations
and labor unions were. free from the disclosure provisions
upheld in Buckley because they were considered outside of
FECA’s regulatory purview. This lack of disclosure permitted
various interest groups to conceal the true identity of the
source behind the advertisement. Thus, following both the
1996 and 2000 elections, corporations and unions used their
general treasury funds to run advertisements apparently
aimed at influencing federal elections and avoiding FECA’s
longstanding disclosure provisions.
40sa
With regard to both political party spending of nonfederal
funds and political party, corporate, and labor union issue
advocacy, there does not appear to be any dispute among the
litigants to the fact that much of this behavior was not
regulated or was permitted by the FEC. Rather, the dispute
between the parties centers around the effect of engaging in
these tactics, whether the measures needed addressing, and
how Congress ultimately remedied what it perceived to be a
problem. It is the congressional response to which the Court
now turns.
B. The Bipartisan Campaign Reform Act of 2002
In response to what it perceived were burgeoning problems
with federal campaign finance laws, Congress began to
consider reform legislation over six years ago, during the
105th Congress.'® The overhaul of our Nation’s existing
campaign finance laws—culminating with the enactment of
BCRA—would consume the attention of three separate
Congresses '7 and require navigation through atypical
parliamentary procedures. .
During the 105th Congress, the House of Representatives
considered House Bill 2183, the Bipartisan Campaign Integ-
rity Act of 1997, offered by Representative Asa Hutchinson.
The bill was first considered on May 22, 1998. 144 Cong.
'° See Bipartisan Campaign Finance Reform Act of 1998, H.R. 2183,
105th Cong. (1998), available at http://thomas.loc.gov.
'’ See id.; Bipartisan Campaign Reform Act of 1999, H.R. 417, 106th
(1999); Bipartisan Campaign Finance Reform Act of 2002, H.R. 2356,
116 Stat. 81 (2002).
'* According to Congressional Quarterly reporter David Mark, the
House Leadership only allowed floor consideration of House Bill 2183
after it appeared that supporters of the bill had nearly secured the requisite
218 signatures on a discharge petition to automatically bring the bill to the
floor, which did not require the consent of the leadership. See David
Mark, Campaign Finance Discharge Petition Off to Fast Start,
Congressional Quarterly Daily Monitor (July 31, 2001).
4lisa
Rec. H3774 (daily ed. May 22, 1998). On August 3, 1998,
during consideration of Representative Hutchinson’s bill on
the House floor, the Committeé of the Whole '” adopted an
amendment in the nature of a substitute offered by
Representatives Christopher Shays and Martin Meehan.’ 144
Cong. Rec. H6947 (daily ed. Aug. 3, 1998). Finally, on
August 6, 1998, the House passed House Bill 2183, as
amended (the Bipartisan Campaign Reform Act of 1998), by
a vote of 252-179. 144 Cong. Rec. H7330 (daily ed. Aug. 6,
1998). The bill was referred to the Senate on September 9,
1998, 144 Cong. Rec. $10, 114 (daily ed. Sept. 9, 1998), but
was not considered prior to adjournment, sine die, on October
21, 1998. As a result, the Bipartisan Campaign Reform Act of
1998 died in the Senate during the 105th Congress.
When considering most major legislation, the House of
Representatives typically adopts a rule, in the form of a House Resolution,
that governs, and generally limits, debate on the underlining bill. In order
to expedite consideration of the underlining bill, the rule suspends the
proceedings of the House of Representatives, and the body operates as one
large committee, the Committee of the Whole House on the State of the
Union (“Committee of the Whole”). Walter J. Oleszek, Congressional
Procedures and the Policy Process 151-53 (Sth ed., CQ Press 2001). This
parliamentary mechanism enables the House to act with a quorum less
than the requisite 218 members; only 100 members are needed to
constitute a quorum in the Committee of the Whole. /d. at 152. (There are
numerous other technical distinctions between the Committee of the
Whole and the House of Representatives that enable expeditious
consideration of legislation). /d. at 152-53. After the Committee of the
Whole considers the underlining legislation, generally, the rule governing
debate automatically dissolves the Committee of the Whole, and the
House of Representatives reconvenes to vote on the underlining bill for
final passage.
- Beyond making numerous substantive changes to the underling bill,
the Shays-Meehan substitute amendment changed the title of the bill from
the “Bipartisan Campaign Integrity Act of 1997,” 144 Cong. Rec. H3774
(daily ed. May 22, 1998), to the “Bipartisan Campaign Reform Act of
1998,” 144 Cong. Rec. H4790-96 (daily ed. June 18, 1998).
° 42sa
On January 19, 1999, during the 106th Congress,
Representative Shays introduced House Bill 417, the
Bipartisan Campaign Reform Act of 1999, which attracted
the support of 96 original cosponsors. See H.R. 417, 106th
Cong. (1999). Upon introduction, the bill was referred to the
Committee on House Administration, where it received an
unfavorable report. H.R. Rept. 106-297, pt. 1, at 17 (1999).
Nonetheless, the proponents of campaign finance reform
secured floor consideration through the threat ofa discharge
petition. See David Mark, Campaign Finance Discharge
Petition Off to Fast Start, Congressional Quarterly Daily
Monitor (July 31, 2001). When the Bipartisan Campaign
Reform Act of 1999 reached the floor for a vote, it passed
comfortably, by a vote of 252-177. 145 Cong. Rec. H8286
(daily ed. Sept. 14, 1999). On September 16, 1999, the Senate
received House Bill 417, and on September 29, the Senate
referred it to the Senate Committee on Rules and
Administration, 145 Cong. Rec. $11,638 (daily ed. Sept. 29,
1999), where it would remain for the balance of the 106th
Congress. The Senate responded to the House's action by
considering Senate Bill 1593, also titled the Bipartisan
Campaign Reform Act of 1999, which was introduced on
September 16, 1999, by Senators McCain and Feingold,
shortly after House Bill 417 secured passage. S. 1593; see
also 145 Cong. Rec. H8286 (daily ed. Sept. 14, 1999). The
Senate, however, failed to invoke cloture,”’ thereby failing to
2! While debate on the Senate floor does not always lead to an all-out
filibuster, on conttoversial legislation, the Senate typically invokes cloture
to end the threat of unlimited debate or simply to gauge support for the
underlining bill. See Walter J. Oleszek, Congressional Procedures and the
Policy Process 231-34 (Sth ed., CQ Press 2001). Under Rule XXII of the
Standing Rules of the Senate, if “three-fifths of the Senators duly chosen
and sworn” (60 Senators if the Senate is at its full membership) vote in the
affirmative on a motion for cloture, further debate on the question shall be
limited to no more than one hour for each Senator, and the time for
consideration of the matter shall be limited to 30 additional hours, unless
~~.
EE ———CiCitCeencna
43sa
limit debate on two separate amendments to Senate Bill 1593,
and the bill floundered. 145 Cong. Rec. $12,800 (daily ed.
Oct. 19, 1999); id. at $12,803. As a result, for the second time
in as many years, the campaign finance reform bill died in the
Senate.
. Circumstances changed during the 107th Congress; this
time it was the Senate that acted first and passed campaign
finance reform legislation, Senate Bill 27,7 by a vote of 59-
41. 147 Cong. Rec. $3258 (daily ed. Apr. 2, 2001). The bill
was then transferred to the House of Representatives.
Representatives Shays and Meehan had already introduced
House Bill 380, the Bipartisan Campaign Reform Act of
2001, when the Senate secured passage of Senate Bill 27. See
H.R. 380, 106th Cong. (1999). On June 28, 2001, in an effort
to make their legislation conform with the Senate-passed
bill, Representatives Shays and Meehan introduced new
legislation, House Bill 2356, also titled the Bipartisan
Campaign Reform Act of 2001. The House Leadership
which, through the Speaker of the House, controls access to
_—
increased by another three-fifths vote. See Standing Rules of the Senate,
Rule XXII, available at http:// rules.senate.gov/senaterules/rule22.htm.
2p:
Bipartisan Campaign Reform Act of 2
pm. of 2001, S. 27, 107th Cong.
*’ Raced with the fact that Senate Bill 27 was unlikely to garner the
support of a majority of the House, and given the fact that House Bill 380
differed from Senate Bill 27, Representatives Shays and Meehan met with
members of the Senate to work out a compromise bill. The agreement
they reached was reflected in House Bill 2356. See David Mark & John
Cochran, House Panel to Mark Up Dueling Campaign Finance Bills
Congressional Quarterly Daily Monitor (June 27, 2001) (“The revisions
are designed to encourage the Democratic-controlled Senate to accept a
House-passed bill, thus avoiding the need for a conference committee
We re trying to pre- conference with supporters of the bill, rather than
going to conference with opponents,’ Shays said.”).
44sa
the House floor,’ agreed to consider House Bill 2356.
However, in a last minute effort to tseak the legislation,
Representatives Shays and Meehan proposed several
amendments. John Cochran, Not Victory but Vitriol for
Campaign Finance Bill, Congressional Quarterly Weekly
(July 13, 2001). The package of amendments offered by
Shays and Meehan reflected the need for additional changes
to ensure that House Bill2356, if passed by the House, would
be considered without amendment by the Senate, thereby
eliminating the need for a conference committee.” See id. In
addition, Shays and Meehan requested that the Rules
Committee write a rule for consideration and debate on the
House floor that would treat this package as a single
amendment, which could be considered in one vote. /d. The
Rules Committee refused, drafting a resolution for
consideration and debate that would treat each change,
“* The Speaker of the House picks the 9 majority-party members that
serve on the powerful House Committee on Rules—the gateway to the
House floor. The Rules Committee writes the rules that govern debate and
determines which amendments will be considered. The committee
currently consists of 13 members, 9 majority-party members chosen by
the Speaker of the House and 4 minority-party members chosen by the
House Minority Leader. See Walter J. Olsezek, Congressional Procedures
and the Policy Process 119 (Sth ed., CQ Press 2001).
5 Members of a conference committee are formally appointed by the
Speaker of House and the presiding officer of the Senate. Walter J.
Oleszek, Congressional Procedures and the Policy Process 252-54 (Sth
ed., CQ Press 2001). In the House, after initial appointment, the Speaker
retains the authority to add and remove members. /d. at 254. Although the
House rules provide that the Speaker shall “appoint no less than a
majority [of conferees] who generally supported the House position [on
the legislation] as determined by the Speaker,” Rules of the House of
Representatives, 108th Cong. (2003) available at http://www. house.gov/
rules/house_rules.htm, in practice, the Speaker is vested with significant
discretion to ensure that the House delegates are amicable to the
leadership’s position. See Walter J. Oleszek, C ongressional Procedures
and the Policy Process 252-54 (Sth ed., CQ Press 2001).
: 45sa
fourteen in total, as separate amendments. /d.; see also
Res. 188, 107th Cong. (2001). Shays, Meehan, and “"
supporters opposed the rule, claiming that the House
Leadership used “technicalities” to defeat the bill, and called
upon their colleagues to reject the rule. 147 Cong. Rec
H3984 (daily ed. July 12, 2001) (statement of Rep. Meehan).
The House voted and the rule failed.”° In the aftermath
however, the bill’s proponents and the House Leadership
were unable to come to an agreement over a compromise rule
for the consideration and debate of House Bill 2356. John
Cochran, Not Victory but Vitriol for C ampaign F inance Bill
Congressional Quarterly Weekly (July 13, 2001), and the bill
was pulled from the House Floor.
On July 30, 2001, Representative Jim Turner filed a
discharge petition to bring House Bill 2356 to the floor for
consideration. H.R. Discharge Pet. No. 3, available at
http://clerkweb.house.gov/107/Irc/pd/Petitions/Dis3.htm. As
congressional procedure scholar Walter J. Oleszek noted:
[t]he discharge procedure, adopted in 1910, provides th:
if a bill has been before a standing smntien for hoy
legislative . .. days, any member can introduce a motion
to relieve the panel of the measure . . . . If the requisite
number of members (218) sign the petition, this
procedure permits a majority of the House to bring a bill
to the floor even if it is opposed by the committee that
has jurisdiction over the measure, the majority
leadership, and the Rules Committee.
Walter J. Oleszek, Congressional Procedures and the
Policy Process 138 (Sth ed., CQ Press 2001). While the
discharge petition permits a majority of the House to
circumvent a stacked committee or the House Leadership, it
26 ry
This marked the first occasion in which Speaker J. Dennis Hastert
lost a vote on a rule during his first two years as Speaker of the House.
Karen Foerstel, A Bitter Da ;
: 'y for the GOP, Co '
Weekly (July 13, 2001). Congressional Quarterly
46sa
has not been a highly effective tool for passing legislation, let
alone securing its enactment into law. As Walter Oleszek
went on to observe:
Few measures are discharged from committee. From
1931 through 1994 (approximately the period during
which the modern version of the rule has been in effect),
more than five hundred discharge petitions were filed,
but only forty-six attracted the required signatures
and only nineteen bills were discharged and passed by
the House. Of those, only two became law: the Fair
Labor Standards Act of 1938 and the Federal Pay Raise
Act of 1960.
Id. at 139. Despite this history of failure, on January 24, 2002,
Representative Turner’s petition attracted 218 signatures, the
requisite number to achieve discharge. See H.R. Discharge
Pet. No. 3. Consequently, the bill was sent to the floor and
scheduled for debate. See H.R. Res. 203, 107th Cong. (2001);
H.R. Res. 344, 107th Cong. (2002); 148 Cong. Rec. wane
(daily ed. Feb. 12, 2002). On February 13, 2002, the House
began to consider House Bill 2356. During consideration,
the House rejected three substitute amendments—one
offered by House Majority Leader Dick Armey and two
offered by House Administration Committee Comsman
Robert Ney **—before agreeing to Representative Shays
substitute amendment by a vote of 240-191, 148 Cong. Rec.
H411 (daily ed. Feb. 13, 2002). Like the earlier ements
package, the Shays Substitute was designed to avoid a
conference committee, where opponents would have
2” The Armey Substitute, Amendment 415, failed by a vote of 179-249.
148 Cong. Rec. H376-77 (daily ed. Feb. 13, 2002).
°* The first Ney Substitute, Amendment 416, failed by a vote of 53-
377. 148 Cong. Rec. H392 (daily ed. Feb. 13, 2002). The second Ney
Substitute, Amendment 430, failed by a vote of 181-248. /d. at H464-65.
;
|
’
:
:
47sa
another opportunity to scuttle the bill,” by making changes
likely to garner the support of a majority of the Senate
without forcing them to alter the text of the House-passed
bill. See 148 Congr. Rec. H402 (daily ed. Feb. 13, 2002)
(statement of Rep. Shays) (observing that the Shays substitute
amendment was drafted after having “met with Senators from
both sides of the aisle to learn what was needed in that bill in
order to pass [BCRA]"’).*’ After considering a series of
amendments to the newly amended, underlining bill (House
Bill 2356), the House passed BCRA by a vote of 240-189.
148 Cong. Rec. H465-66 (daily ed. Feb. 13, 2002). On March
20, 2002, the Senate followed suit, passing BCRA by a vote
of 60-40. 148 Cong. Rec. $2160-61 (daily ed. Mar. 20, 2002).
On March 27, 2002, President George W. Bush signed
BCRA into law; the first major overhaul of the Federal
Election Campaign Act since the 1974 Amendments and their
revision following Buckley. Broadly speaking, Title |
attempts to regulate political party use of nonfederal funds.
while Title II seeks to prohibit labor union and corporate
treasury funds from being used to run issue advertisements
that have an ostensible federal ciectioneering purpose.
C. Procedural History of the Litigation of this Case
On the morning of March 27, 2002, President Bush signed
BCRA into law. Within hours, Senator McConnell and the
” The process of going to conference creates three additional hurdles
to the enactment of legislation. First, the conferees must come to an
agreement, and in addition, the Conference Report must pass both the
House and the Senate. Moreover, the House and Senate Leadership
appoint members to the conference committee and enjoy considerable
discretion over its composition. See Walter J. Oleszek Congressional
Procedures and the Policy Process 252-54 (5th ed., CQ Press 2001); see
also supra note 25.
” The Shays Substitute, Amendment 417, also amended the title of the
bill to its present form: the “Bipartisan Campaign Reform Act (BCRA) of
2002.” 148 Cong. Rec. H393 (daily ed. Feb. 13, 2002).
48sa
National Rifle Association (“NRA”) filed complaints chal-
lenging the constitutionality of various provisions in BCRA.
On April 16, 2003, pursuant to Congress’s directive, BCRA
§ 403(a)(1),°' those cases were assigned to a district court of
three judges consisting of District Court Judge Colleen
Kollar-Kotelly, District Court Judge Richard J. Leon, and
Circuit Court Judge Karen LeCraft Henderson. A week later,
on April 23, 2002, the three-judge court held a status confer-
ence, in which it heard the parties’ proposals on consolida-
tion, intervention, discovery, and the filing of motions.
The primary issue confronting the Court at the status
conference was the scope of discovery required to develop a
satisfactory factual record. The defendants, in their pleading,
argued that “wide-raging discovery” was necessary “even in
the context of a facial challenge, . . . [in order to] look to
the record of the case for evidence substantiating the
governmental interests asserted in support of legislation said
to violate the First Amendment.” Def.’s Report in Response
to the Court’s Order of April 16, 2002, at 9 (quoting Turner
Broadcasting Sys. v. FCC, 512 U.S. 622, 664-68 (1994);
Colorado Republican Fed. Campaign Comm. v. FEC
(“Colorado I”), 518 U.S. 604, 618-19 (1996) (plurality
opinion)).° ? Mindful that the Supreme Court remanded a First
*' BCRA § 403(a)(1) states: “The action shall be filed in the United
States District Court for the District of Columbia and shall be heard by a
3-judge court convened pursuant to section 2284 of title 28, United States
Code.”
° The plaintiffs did not disagree that some discovery was necessary:
JUDGE KOLLAR-KOTELLY: So, as I understand it, then,
everybody wants to do depositions, everybody wants to do some
exchange of expert reports, and everybody wants to have some sort
of lay statement, affidavits or statements. Is that accurate? .. . If
somebody disagrees with that, let me know.
MR. ABRAMS: That’s entirely accurate from our point of view,
Your Honor.
49sa
Amendment case to a three-judge district court in Turner
Broadcasting to “permit the parties to develop a more
thorough factual record,” 512 U.S. at 668,** this Court agreed
with the defendants that extensive discovery was necessary“
to review the evidentiary grounds for BCRA, and in part, to
avoid the “disaster” of remand. Status Conference Tr., April
23, 2002, at 51 (statement of James Gilligan).*° Notwith-
Status Conference Tr., April 23, 2002, at 13; see also Status Report and
Proposed Schedule of Plaintiffs Senator Mitch McConnell et al., April 22,
2002 (stating that their proposed schedule “is designed to ensure that a
full record is compiled for submission to this Court, and ultimately to the
United States Supreme Court”).
** At issue in Turner was a constitutional challenge to the “must-
carry” provisions that required carriage of local broadcast stations on
cable systems. The Supreme Court remanded the case to the three-judge
district court, explaining that in order to assure that Congress drew
“reasonable inferences based on substantial evidence” that a harm truly
existed, the Court needed “substantial elaboration in the District Court of
the predictive or historical evidence upon which Congress relied, or the
introduction of some additional evidence.” Id. at 667 (emphasis added).
Because of the “paucity of evidence” and “lacking” of findings on the
effect of the regulations, the Court could also not undertake the narrow
tailoring step: “unless we know the extent to which the must-carry
provisions in fact interfere with protected speech, we cannot say whether
they suppress ‘substantially more speech . . . than necessary’ to ensure the
- viability of broadcast television.” Jd. at 667-68. What followed was
“another 18 months of factual development on remand” to the three-judge
panel, Turner Broadcasting Sys., Inc. v. FCC, 520 U.S. 180, 187 (1997)
(citation and internal quotations omitted), and, here, the defendants in this
case warned that “[t}he factual inquiry . . . could be on a scale similar to
that of Turner,’ Status Conference Tr., April 23, 2002, at 48 (statement of
James Gilligan).
“ This Court recognizes that “we've got to have an adequate factual
record.” Status Conference Tr., April 23, 2002, at 10 (statement of Judge
Henderson).
** In Colorado 1, the Supreme Court remanded the issue of whether
coordinated party expenditures are constitutional, Colorado 1, 518 U.S. at
623-26; see also 2 U.S.C. § 441a(d)(3), and the Tenth Circuit subse-
quently passed the case on to the district court, stating that
5Osa
standing Congress’s directive “to expedite to the greatest
possible extent the disposition of the action and appeal,
BCRA § 403(a)(4), it was also clear from the legislative re-
cord that Congress did not want this Court to “compromise
informed and deliberate judicial decision-making in the
process.” See Def.’s Report in Response to the Court's Order
of April 16, 2002, at 8. Indeed, Senator Feingold, one of
the principal Senate sponsors, explained during the
Senate debate:
Finally, and most importantly, | although [Section
403(a)(4)] provides for the expedition of these cases to
the greatest possible extent, we do not intend to suggest
that the courts should not take the time necessary to
develop the factual record . . . This case will be one e
the most important that the Court has heard in decades,
with ramifications for the future of our political system
for years to come. By expediting the case, we in no way
want to rush the Court into making its decision without
the benefit of a full and adequate record.
147 Cong. Rec. $3189 (March 30, 2001) (statement of Sen.
Feingold); see also id. at S3189-90 (statement of Sen. Dodd)
(supporting the expedition provision, but stating “I do not
[T]he issues are too important to be resolved in haste. It seems
inevitable that not only this court but the Supreme Court itself will
have to address these issues. We will both benefit by the parties
fleshing out the record with any evidence they and the district court
deem relevant to the issues’ resolution.
FEC y. Colorado Republican Fed. Campaign Comm., 96 F.3d 471, 473
(1996). The district court then allowed the parties to conduct discovery for
eleven and a half months, significantly longer than our total discovery
schedule for many issues of similar complexity. Status Conference Tr.,
April 23, 2002, at 63 (statement of James Gilligan); cf. F EC v.C magend
Republican Fec Campaign Comm., 41 F. Supp.2d 1197 (D.Co. 1999); see
also 213 F.3c 1221, 1225 (10th Cir. 2000) (stating that the parties
“compiled an extensive record”).
Slsa
want to suggest that the Court should not take adequate time
to review any such challenge”).*©
Accordingly, the next day, the Court issued a unanimous
order outlining a discovery and briefing schedule, which
allowed for over five months of discovery and almost an
additional month for cross-examination of fact and expert
witnesses; set May 7, 2002, as a deadline by which all other
actions would be filed; and decided that briefing was to take
place between November 4 and November 25, 2002. In a
highly unusual accommodation to Congress’s request for
expedition, the Court set oral arguments to begin on
December 4, 2002, just over a week after the parties
submitted their final briefs. See Scheduling Order of April 24,
2002. By May 10, 2002, 101 parties were involved in the
consolidated action, with the eighty-four plaintiffs
challenging twenty-three provisions of BCRA.’ After the
* Judge Henderson maintains that the Buckley case was handled with
much greater efficiency than the three-judge pane! here. Henderson Op. at
6 n.1. In Buckley v. Valeo, the lawsuit was filed on January 2, 1975, but a
decision was not issued by the D.C. Circuit until seven and a half months
later on August 15, 1975. Buckley, 519 F.2d at 821, 901. While this case
required thirteen months from filing to disposition, the parties also under-
took six months of discovery-at least four months of discovery and fact-
finding more than that undertaken in Buckley. Id. at 902-03. That four
months of discovery alone accounts for most of the discrepancy in the
two expedited, yet complicated, campaign finance cases. Moreover, given
the vast record developed through the six months of discovery in this case,
it is not surprising that this Court required a few more months than
the Buckley court to arrive at a decision after the arguments-for only
careful consideration of the record before us could reduce the risk of
committing clear error in our findings. See Easley v. Cromartie, 532 U.S.
234, 242 (2001).
” On May 10, 2002, the Court consolidated all cases that were not
consolidated on April 24, 2002, see Order, May 10, 2002: Order
Consolidating Cases, April 24, 2002, and also permitted Senator John
McCain, Senator Russell Feingold, Representative Christopher Shays,
Representative Martin Meehan, Senator Olympia Snowe, and Senator
52sa
Court dismissed seven plaintiffs from the suit without
prejudice, see infra note 55, seventy-seven plaintiffs and
seventeen defendants remained. See id. (listing all plaintiffs
and defendants).
During the discovery process, the parties filed a total of
twenty-three motions with the Court, including motions to
compel responses to document requests,. motions to compel
responses to interrogatories, and motions for protective
orders. At a hearing on. July 25, 2002, the Court heard
arguments as to many of the discovery disputes. Thereafter,
the Court resolved the disputes with memorandum opinions.
See, e.g., Order Denying Federal Election Commission's
Motion for Entry of Protective Orders, August’ 12, 2002;
Order Denying in Part and Granting in Part Plaintiffs’
Motions to Compel Interrogatory Responses, August 15,
2002; Order Denying Adams Plaintiffs’ Motion to Compel
Intervenors to Respond to Interrogatories and Produce
Documents, September 10, 2002.
On October 7, 2002, the Court ordered the parties to meet
and confer and to deliver a proposed format on the briefing
and proposed findings of fact. See Order, October 7, 2002. In
their joint response, the plaintiffs (absent the Adams and
Thompson plaintiffs) requested 751 pages, the Adams
Plaintiffs requested 115 pages, and the defendants requested
750 pages. See Joint Submission in Response to the Court's
Order of October 7, 2002. The Court ordered that the
plaintiffs, including the Adams and Paul plaintiffs, submit
three rounds of briefs not to exceed 840 pages and that the
defendants’ briefs submit three rounds of briefs (/.e., opening,
opposition, and reply) not to exceed 820 pages.» The Court
James Jeffords to intervene as defendants supporting the constitutionality
of BCRA, see Order, May 10, 2002.
* Each side was originally given an aggregate of 820 pages, however,
the Court, in an Order dated October 29, 2002, granted the Adams and
“a
Tore ©
53sa
also directed the plaintiffs collectively, and the defendants
collectively, to each submit proposed findings of fact of no
more than 300 pages. Briefing Order, October 15, 2002;
Order, October 19, 2002.
On November 25, 2002, a little over a week before oral
arguments were scheduled to begin, the parties filed their last
round of briefs, bringing the total briefing to 1,676 pages (not
including amicus curiae briefs). A day later, the parties
submitted 576 pages of proposed findings of fact. The eviden-
tiary submissions themselves included forty-one boxes (plus
thirteen additional binders), which, by a conservative estima-
tion, comprised the testimony and declarations of over 200
fact and expert witnesses and over 100,000 pages” of
material.“” With the record and pleadings before it, the Court
commenced oral arguments on December 4, 2002. The Court
heard six hours of arguments that day, and three hours of oral
Thompson Plaintiffs the ability to file their own independent briefing
which increased the aggregate page amount for Plaintiffs.
” See Joint Submission in Response to the Court’s Order of October 7,
2002.
“The record in this case was described by one advocate during the
oral argument as “elephantine.” Oral Argument Tr. at 152 (statement of
Floyd Abrams); see also id. at 279-80. We agree. Both sides should be
commended for their extraordinary efforts in gathering and organizing the
evidence in such a short period of time. We agree with Seth Waxman,
attorney for the Intervenor-Defendants, who urged us to carefully review
the record before us:
I think it’s very, very important for the court to look carefully at the
record... . We have worked, all of us on both sides of this case
have worked harder than I ever believed I could be made to work in
order to give you this record .. . . I think the ads itself and the
reports and affidavits that have been submitted I think are very, very
important. I know everybody feels that way.
Id. at 279-80 (statement of Seth Waxman).
54sa
arguments the following day, from a total of twenty-
four attorneys.”
D. Description of the Specific Provisions in BCRA At Issue
in These Lawsuits
The Court briefly next sets forth the provision of the law
that are at issue in the litigation.
1. Title I: Reduction of Special Interest Influence
a. The National Party Soft Money Ban: Section 323(a)
The first provision of Title I involves the addition of a new
section to FECA, section 323, entitled “Soft Money Of
Political Parties.” Section 323(a) states that national party
committees (including national congressional campaign
committees) “may not solicit, receive, or direct to another
person a contribution, donation, or transfer of funds or any
other thing of value, or spend any funds, that are not subject
to the limitations, prohibitions, and reporting requirements of
this Act.” BCRA § 101(a); FECA § 323(a)(1); 2 U.S.C.
§ 441i(a)(1). The law applies to “any . . . national committee,
any officer or agent acting on behalf of such a national
committee, and any entity that is directly or indirectly
established, financed, maintained, or controlled by such a
national committee.” BCRA § 101(a); FECA § 323(a)(2);
2 U.S.C. § 441i(a)(2). The clear import of this provision is
*' We disagree with Judge Henderson’s statement that “there was a
consensus [at the hearing] that the [Supreme] Court had to receive the
case no later than early February.” Henderson Op. at 6 n.1. A fair reading
of former Solicitor General Waxman’s colloquy with Judge Henderson,
prompted by her questions, in our judgment, would be that the Supreme
Court has the ability to adjust the briefing and oral argument schedule,
and has done so in the past, to hear cases exactly such as this one. In short,
neither former Solicitor General stated his conclusion in categorical
terms, and neither provided an estimate of how long after a hearing the
Supreme Court would need to issue its opinion. See generally Tr. at 18-
20; 277-280.
55sa
that national party committees are banned from any
involvement with nonfederal money.
b. The State and Local Party Soft Money Ban: Section
323(b) ,
In summary terms,-Section 323(b) provides, that subject to
certain exceptions, a State, district, or local committee of a
political party may not use nonfederal funds to pay for
“Federal election activity.” BCRA § 101(a); FECA § 323(b);
2 U.S.C. § 441i(b).
In general, section 323(b)(1) prohibits state and local
political parties from spending any money not raised in
accordance with FECA on “Federal election activity.” BCRA
§ 101(a); FECA § 323(b)(1); 2 U.S.C. § 441i(b)(1). Federal
election activity is defined by the Act as:
(i) voter registration activity during the period that
begins on the date that is 120 days before the date a
regularly scheduled Federal election is held and ends on
~ the date of the election; (ii) voter identification, get-out-
the-vote activity, or generic campaign activity conducted
in connection with an election in which a candidate for
Federal office appears on the ballot (regardless of
whether a candidate for State or local office also appears
on the ballot); (iii) a public communication that refers to
a clearly identified candidate for Federal office
(regardless of whether a candidate for State or local
office is also mentioned or identified) and that promotes
or supports a candidate for that office, or attacks or
opposes a candidate for that office (regardless of
whether the communication expressly advocates a vote
for or against a candidate); or (iv) services provided
during any month by an employee of a State, district, or
local committee of a political party who spends more
than 25 percent of that individual’s compensated” time
during that month on activities in connection with a
Federal election.
56sa
BCRA § 101(b); FECA § 301(20)(A); 2 U.S.C.
§ 431(20)(A). Federal election activity does not include:
(i) public communication that refers solely to a clearly
identified state or local candidate (unless the
communication otherwise qualifies as Federal election
activity, for instance, as GOTV); (ii) a contribution to a
state or local candidate (unless designated to pay for
some other kind of Federal election activity); (iii) a state
or local political convention; or (iv) grassroots campaign
materials (stickers, buttons, etc.) that name only a state
or local candidate.
BCRA §& 101(b); FECA § 301(20)(B); 2 U.S.C. § 431(20)(B).
1) The Levin Amendment
Section 323(b)(2)-commonly referred to as the “Levin
Amendment’’-carves out an exception to the general rule in
section 323(b)(1). BCRA § 101(a); FECA § 323(b)(2); 2
U.S.C. § 441i(b)(2). Section 323(b)(2) permits state and local
parties to use an allocation of nonfederal money (“Levin
money” or “Levin funds”) for voter registration, voter
identification, and GOTV activities provided that certain
specified conditions are met. First, the permitted activities
may not refer to a clearly identified federal candidate.
Second, those activities may not involve any broadcast
communication except one that refers solely to a clearly
identified state or local candidate. Third, no single donor may
donate more than $10,000 to a state or local party annually
for those activities. Finally, all money (federal and Levin
money alike) spent on such activities must be “homegrown”-
i.e., raised solely by the spending state or local party-and may
not be transferred from or raised in conjunction with any
national party committee, federal officeholder or candidate,
_or other state or local party. See BCRA § 101(a); FECA
§ § 323(b)(2)(B), 323(b)(2)(C); 2 U.S.C. § § 441i(b)(2)(B),
4411 (b)(2)(C).
57sa
_ ¢. Fundraising Costs: Section 323(c)
Section 323(c) requires national, state, and local parties to
use federally- regulated funds to raise any money that will be
used on “federal election activities,” as defined in the statute.
BCRA § 101(a); FECA § 323(c); 2 U.S.C. § 441i(c).
d. Tax Exempt Organization Soft Money Ban: Section
323(d)
Section 323(d) prohibits any political party committee-
national, state, or local-or its agents from “solicit[ing]’’ funds
for or “mak[ing] or direct [ing]’’ any donations to either: (i)
any tax-exempt section 501 organization, see 26 U.S.C.
§ S5O0l(c), that spends any money “in connection with an
election for Federal office (including expenditures or
disbursements for Federal election activity)”; or (ii) any
section 527 organization, see 26 U.S.C. § 527, (other than a
state or local party or the authorized campaign committee of a
candidate for state or local office). BCRA § 101(a); FECA
§ § 323(d)(1), 323(d)(2); 2 U.S.C. § § 441i(d)(1), 441i(d)(2).
A section 501(c) organization is an organization that is tax
exempt as described in that section of the tax code-a good
example of which is a charity. A section 527 organization is a
political committee that is exempt from taxation. See 26
U.S.C. § 527(a) (“A political organization shall be subject to
taxation under this subtitle only to the extent provided in this
section. A political organization shall be considered an
organization exempt from income taxes for the purpose of
any law which refers to organizations exempt from income
taxes.”); see also 26 U.S.C. § § 527(e)(1) and (2) (defining a
“political organization” as an organization that is “organized
and operated primarily for the purpose of directly or
indirectly accepting contributions or making expenditures, or
both, for . . . the function of influencing or attempting to
influence the selection, nomination, election, or appointment
of any individual to any Federal, State, or local public office
a
58sa
or office in a political organization, or the election of
Presidential or Vice- Presidential electors”).
e. Federal Officeholder and Candidate Soft Money
Ban: Section 323(e)
Section 323(e) generally prohibits federal officeholders and
candidates from soliciting, receiving, directing, «transferring,
or spending any soft money” (i) in connection with a federal
election or (ii) in connection with a state or local election.
BCRA § 101(a); FECA § 323(e)(1); 2 U.S.C. § 441(e)(1).
There are, however, several exceptions to the general
prohibition in section 323(e). First, a federal officeholder or
candidate may solicit money for state and local candidates
from sources and in amounts that would be allowed by
Federal law. BCRA § 101(a); FECA § § 323(e)(1)(B)(i),
323(e)(1)(B)(ii); 2 U.S.C. § § 441i(e)(1)(BYD, 441i)
(B)(ii). Second, the federal officeholder or candidate ban on
nonfederal funds does not apply to the solicitation, receipt, or
spending of funds by an individual who is also a candidate for _
state or local office solely in connection with such election.
BCRA § 101(a); FECA § 323(e)(2); 2 U.S.C. § 441i(e)(2).
Third, a federal officeholder or candidate may attend or speak
at a fundraising event for a state or local political party.
BCRA § 101(a); FECA § 323(e)(3); 2 U.S.C. § 441i(e)(3).
Fourth, a federal officeholder or candidate may solicit such
funds on behalf of any tax- exempt section 501 organization
that spends money in connection with federal elections in
“If the federal candidate or officeholder is soliciting, receiving,
directing, transferring, or spending funds in connection with an election
for federal office, the funds must “be subject to the limitations,
prohibitions, and reporting requirements of this Act.” 2 U.S.C. § 441(e)
(1)(A). However, if the candidate is doing so in connection with a state or
local election, then the funds must be “not in excess of the amounts
permitted with respect to contributions to candidates and political
committees” and “not from sources prohibited by the Act from making
contributions in connection with an election for Federal office.” 2 U.S.C.
§ 441(e)(1)(B).
59sa
either of two instances: (i) he or she may solicit unlimited
funds for a section 501 organization whose “principal
purpose” is not voter registration, voter identification, or
GOTV activity, so long as the solicitation does not specify
how the funds will be spent; and (ii) he or she may solicit up
to $20,000 per person per year specifically for voter
registration, voter identification, or GOTV activity, or for an
organization whose “principal purpose” is to conduct any or
all of those activities. See BCRA § 101(a); FECA § § 323(e)
(4); 2 U.S.C. § 441i(e)(4).
f. State Candidate Soft Money Ban: Section 323(f)
Lastly, Section 323(f) generally prohibits state office-
holders or candidates from spending soft money (that is,
money not raised pursuant to FECA’s regulations) on any
public communication that “refers” to a clearly identified
candidate for federal office and “promotes,” “supports,”
“attacks,” or “opposes” a candidate for that office. BCRA
§ 101(a); FECA § 323(f); 2 U.S.C. § 441i(f).
2. Title Il: Noncandidate Campaign Expenditures
a. Definition of Electioneering Communication:
Section 201 -
Section 201*° of BCRA amends section 304 of FECA by
adding the following definition of an “electioneering
communication”:
(i) The term “electioneering communication” means any
broadcast, cable, or satellite communication which—
(I) refers to a clearly identified candidate for Federal
office;
(II) is made within—
(aa) 60 days before a general, special, or runoff
election for the office sought by the candidate; or
** Section 201 also contains disclosure provisions which are
discussed infra.
60sa
(bb) 30 days before a primary or preference
election, or a convention or caucus of a political
party that has authority to nominate a candidate, for
the office sought by the candidate; and
(III) in the case of a communication which refers to a
candidate for an office other than President or Vice
President, is targeted to the relevant electorate.
BCRA § 201(a); FECA § 304(f)(3)(A); 2 U.S.C. § 434(f)
(3)(A).** Under this definition, in order to constitute an
electioneering communication, therefore, the communication
(a) must be disseminated by cable, broadcast, or satellite,
(b) must refer to a clearly identified Federal candidate, (c)
must be distributed within certain time periods before an
election, and (d) must be targeted to the relevant electorate.
Id. The fact that the communication must be “targeted to the
relevant electorate,” means that, in the case of House and
Senate races, the communication will not constitute an
“electioneering communication” unless 50,000 or more
individuals in the relevant congressional district or state that
the candidate for the House or Senate are seeking to represent
can receive the communication. BCRA § 201; FECA
§ 304(f)(3)(C); 2 U.S.C. § 434(f)(3)(C). For example, if a
broadcast advertisement refers to a federal House candidate
within 60 days of the general election, but can only be
received by 30,000 individuals, it is not an electioneering
communication and permissibly could be made with- funds
from the general treasury of a corporation or labor union.
“The regulations implementing this definition clarify that the
operative event for making an electioneering communication is the
“dissemination of the communication, rather than the disbursement of
funds related to creating a communication.” Electioneering Communica-
tions, 67 Fed. Reg. 65190, 65191 (Oct. 23, 2002).
61sa
In the event that a court of competent jurisdiction finds the
definition of electioneering communication to be constitution-
ally infirm, the statute provides a backup definition:
(ii) If clause (i) is held to be constitutionally insufficient
by final judicial decision to support the regulation
provided herein, then the term “electioneering commu-
nication” means any broadcast, cable, or satellite
communication which promotes or supports a candidate
for that office, or attacks or opposes a candidate for that
office (regardless of whether the communication ex-
pressly advocates a vote for or against a candidate)
and which also is suggestive of no plausible meaning
other than an exhortation to vote for or against a
specific candidate.
BCRA § 201(a); FECA § 304(f)(3)(A)(ii); 2 U.S.C.
§ 434(f)(3)(A)(ii). With the exception of the final clause, the
fallback definition essentially tracks the language found in
section 301(20)(A)(iii) of FECA which addresses one of the
four activities which fall within the definition of the term
Federal Election Activity. BCRA § 101(b); FECA § 301(20).
(A)(iii); 2 U.S.C. § 431 (20)(A)(iii).
b. Prohibition of Corporate and Labor Union General
Treasury Fund Disbursements for Electioneering
‘Communications: Section 203 Rules Relating to
Certain Targeted Electioneering Communications:
Section 204
Section 203 of BCRA extends the prohibition on corporate
and labor union general treasury funds being used in
connection with a federal election to cover electioneering
communications. BCRA § 203; FECA § 316(b)(2); 2 U.S.C.
§ 441b(b)(2) (“[T]he term ‘contribution or expenditure’
includes a contribution or expenditure, as those terms are
defined in [FECA], and also includes any direct or indirect
payment, distribution, loan, advance, deposit, or gift of
money, or any services, or anything of value . . . to any
62sa
candidate, campaign committee, or political party or organi-
zation, in connection with any election to any of the offices
referred to in-this section or for any applicable electioneering
communication.”’ (emphasis added). The prohibition on elec-
tioneering communications only applies to the general
treasury funds of national banks, corporations, and labor
unions, or any other person using funds donated by
these entities.
Like the original prohibition in section 441b, Section 203
of BCRA, is not an absolute ban on corporate and labor union
spending on “electioneering communication.” FECA ex-
pressly permits corporations and labor unions to create
“separate segregated fund[s] to be utilized for political
purposes.” 2 U.S.C. § 441b(b)(2)(C). These segregated funds
are known as political committees under the Act (or PACs). 2
U.S.C. § 431(4)(B) (A political committee is “any separate
segregated fund established under the provisions of section
441b(b) of this title.”). These segregated accounts are subject
to the source and amount limitations contained in FECA. See,
e.g., 2 U.S.C. § 441a(a)(1)(C) (providing that no person shall
make contributions “to any other political committee in any
calendar year which, in the aggregate, exceed $5,000"). To
fund the segregated account, a corporation is permitted to
solicit contributions from “its stockholders and their families
and its executive or administrative personne! and their
families.” 2 U.S.C. § 441b(b)(4)(A)(i).” Likewise, in estab-
lishing their segregated funds, labor unions are allowed to
solicit contributions to the fund from their members and their
families. 2 U.S.C. § 441b(b)(4)(A)(ii). From these accounts,
corporations and labor unions are permitted to make
contributions to federal candidates and spend unlimited
amounts of segregated funds on electioneering communica-
*° For membership organizations, cooperatives, or corporations without
capital stock, solicitations of the membership are permitted to fund the
segregated account. 2 U.S.C. § 441b(b)(4)(C).
63sa
tions and independent expenditures, provided that federal
funds are used to pay for these activities.
Snowe-Jeffords Provision
BCRA Section 203 provides an exception to certain types
of nonprofit corporations from the requirement that
corporations, labor unions, and national banks must use
separately segregated funds*°—and not general treasury funds
to pay for electioneering communications. However, this
exception, commonly known as the “Snowe-Jeffords
Provision” after its sponsors, was later, in effect, withdrawn
by Section 204, known as the “Wellstone Amendment,” see
infra at 69; compare BCRA § 203; FECA § 316(c)(2);
2 U.S.C. § 441b(c)(2) (Snowe-Jeffords Provision) with
BCRA § 204; FECA § 316(c)(6)(a); 2 U.S.C. § 441b(c)(6)(A)
(Wellstone Amendment).
The Snowe-Jeffords Provision permits nonprofit
organizations to use their general treasury funds to pay for
electioneering communications if they are incorporated under
Section 501(c)(4) and/or Section 527(e)(1) of the Internal
Revenue Code. This exception for nonprofit corporations is
“As discussed supra, FECA section 304(f)(2)(E) refers to a
segregated bank account made up of contributions for electioneering
communications from United States citizens, nationals, or permanent
residents where all the names and addresses of all contributors who
contribute an aggregate amount of $1,000 or more to the account is
disclosed. Also as discussed supra, FECA section 304(f)(2)(F) refers to
electioneering communications paid from a general treasury. If an
electioneering communication is paid for with general treasury funds
under section 304(f)(2)(F), then all contributors f more than $1,000 in a
calendar year have to disclose their name and address. Hence, under the
Snowe-Jeffords Provision, SOl(c)4) organizations and 527(e)(1)
organizations, who are permitted to make electioneering communications
with money contributed by individuals, must disclose the names and
addresses of those individuals who contributed the funds to pay for the
electioneering communication. BCRA § 203; FECA § 316(c)(2); 2 U.S.C.
§ 441 b(c)(2).
64sa
an expansion of the law as it existed prior to BCRA. While
FECA did not provide an exception from its separately
segregated fund requirement for nonprofit corporations, the
Supreme Court in FEC v. Massachusetts Citizens for Life,
Inc., 479 U.S. 238 (1986)(“MCFL’’) had provided an as-
applied exception for nonprofit corporations which satisfied
certain criteria set forth by the Suprerm:e Court.*’ Under
BCRA, it is not necessary that a nonprofit corporation
establish that it has met the three criteria of MCFL in order to
use its general treasury funds to pay for electioneering
communications; instead, it may do so under Snowe- Jeffords
simply by virtue of being incorporated under Sections
501(c)(4) or 527(e)(1).
While a nonprofit corporation under Snowe-Jeffords is
permitted to use general treasury funds for electioneering
communications, it is important to note that these
corporations are not permitted to use funds donated by a
corporation, labor union, or national bank to purchase them.
Under Snowe-Jeffords, a nonprofit corporation may only use
funds donated by individuals to pay for electioneering
communications. If a nonprofit corporation, for example, has
accepted corporate contributions and mixed _ those
contributions with general treasury funds that contained
individual donations, the nonprofit corporation would not be
permitted to use their general treasury funds to engage in
electioneering communications. -
Finally, although Snowe-Jeffords exempts nonprofit
corporations from the separately segregated fund require-
“That is, 1) whether the corporation is “formed for the express
purpose of promoting political ideas, and cannot engage in business
activities”; 2) “has no shareholders or other persons affiliated,” so that
members have “no economic disincentive for disassociating with it if they
disagree with its political activity; and 3) the corporation “was not
established by a business corporation,” and has a policy of refusing
“contributions from such entities.” MCFL at 264.
65sa
ment, they are not similarly exempted from the disclosure
requirements set forth in Section 201. Nonprofit corporations,
like any other entity engaging in electioneering communica-
tions, must make public the names and addresses of all
contributors who contributed over $1,000 to the account from
which the corporation paid for the communications.
The Wellstone Amendment
Despite drafting and including the Snowe-Jeffords’
provision in the Act, an amendment offered by Senator Paul
Wellstone and adopted by the Senate effectively eviscerates
the Snowe-Jeffords’ Provision from the Act. The “Wellstone
Amendment,” codified in section 204 of BCRA states that the
exemption created by the Snowe-Jeffords Provision for
section 50l(c)(4) corporations and section 527(e)(1)
corporations is inapplicable “in the case of a targeted
communication.” BCRA § 204; FECA § 316(c)(6)(A);
2 U.S.C. § 441b(c)(6)(A). The Wellstone Amendment
describes a “targeted communication” as “an electioneering
communication” that is “distributed from a television or radio
broadcast station or provider of cable or satellite television
service and, in the case of a communication which refers to a
candidate for an office other than President or Vice President,
is targeted to the relevant electorate.” BCRA § 204; FECA
§ 316(c)(6)(B); 2 U.S.C. § 441b(c)(6)(B). The direct conse-
quence of the Wellstone Amendment is that organizations
organized under section 501(c)(4) and section 527(e)(1) of
the Internal Revenue Code, or those entities who have re-
ceived funds from corporations, are not permitted to use their
general treasury funds for electioneering communications.
The Wellstone Amendment was codified in a separate
section of BCRA in order to preserve severability: hence, if
the Court finds the inclusion of section SOI(c)(4)
organizations and section 527 organizations within the ban on
electioneering communications to be unconstitutional, the
Wellstone Amendment can be cleanly struck from the law
66sa
and the original Snowe-Jeffords exception for these groups
will be restored. See BCRA § 401 (discussing that BCRA is
subject to severability).
* * *
To briefly summarize, section 201 provides two definitions
of “electioneering communication,” a primary one and a
backup definition in the event a court finds the main
definition unconstitutional. Section 203, in conjunction with
section 204, prohibits corporations and unions from using
general treasury funds to pay for an_ electioneering
communication, Corporations and unions need to establish
political action committees if they want to engage in
electioneering communication.
c. Disclosure of Electioneering Communications:
Section 201
Section 201 amends Section 304 of FECA, 2 U.S.C. § 434,
by requiring disclosures related to electioneering
communications. Section 201’s disclosure requirements
mandate the reporting of “disbursements” for the “direct costs
of producing and airing electioneering communications”
aggregating more than $10,000 during any calendar year.
BCRA 201(a); FECA § 304(f)(1); 2 U.S.C. § 434(N(1). The
reports must be made to the Commission within 24 hours of
each “disclosure date.” /d. The statute defines “disclosure
date” as the first time during the calendar year a person's
electioneering communication disbursements exceed $10,000,
and each subsequent aggregation of $10,000 in electioneering
communication disbursements made in the same calendar
year. BCRA § 201(a); FECA § 304(f)(4); 2 U.S.C.
§ 434(f)(4). “Disbursements” under Section 201 include
executed contracts to make disbursements for electioneering
67sa
communications. BCRA 201(a); FECA § 304(f)(5); 2 U.S.C.
§ 434(f)(5).""
The section requires the reports, made under penalty of
perjury, to include the following information:
* the identities of the person making the disbursement,
any person sharing or exercising direction or control
over that person, and the custodian of the books and
accounts of the person making the disbursement;
*the person's principal place of business, if not an
individual;
* the amount of each disbursement over $200 during the
statement’s period and the identity of the person who
received the disbursement;
* the elections to which the electioneering communica-
tions pertain and the names of the candidates identified
in the communications, if known;
*if the disbursements are made from a segregated
account funded solely by direct contributions by
individuals for the purpose of making electioneering
communication disbursements, the names and addresses
of all persons who contributed over $1,000 to the
account during the calendar year; and
¢ if the disbursements are made from a different source,
the names and addresses of all contributors to that source
who contributed over $1,000 during the calendar year.
BCRA 201(a); FECA § 304(f)(2); 2 U.S.C. § 434(f)(2).
“ The provision states, “For purposes of this subsection, a person shall
be treated as having made a disbursement if the person has executed a
contract to make the disbursement.” BCRA 201(a); FECA § 304(f)(5);
2 U.S.C. § 434(f)(5).
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d. Coordinated Communications as Contributions:
Section 202
Section 202 of BCRA amends Section 315(a)(7) of FECA,
2 U.S.C. 441 a(a)(7) by adding the following language:
If—
(i) any person makes, or contracts to make, any
disbursement for any electioneering communication . . . ; and
(ii) such disbursement is coordinated with a candidate or arr
authorized committee of such candidate, a Federal, State, or
local political party or committee thereof, or an agent or
official of any such candidate, party, or committee;
such disbursement or contracting shall be treated as a
contribution to the candidate supported by the electioneering
communication or that candidate’s party and as an
expenditure by that candidate or that candidate’s party
BCRA § 202; FECA § 315(a)(7)(C); 2 U.S.C. § 441a(a)
(7)(C). Section 202 essentially makes clear the import of the
definitions of “electioneering communication” and “coordi-
nation” in Sections 201 and 214; coordinated electioneering
communications constitute contributions.
e. Reporting Requirements for Certain Independent
Expenditures: Section 212
Section 212 amends Section 304 of FECA (2 U.S.C. § 434)
by adding certain disclosure requirements for independent
expenditures.” The provision requires persons, including
* Section 211 defines “independent expenditure” as:
an expenditure by a person—
(A) expressly advocating the election or defeat of a clearly
identified candidate; and
(B) that is not made in concert or cooperation with or at the
request or suggestion of such candidate, the candidate s
69sa
political committees, to report independent expenditures, or
contracts to make such expenditures, aggregating $1,000 or
more after the twentieth day before the date of an election.”
BCRA § 212; FECA § 304(g)(1)(A); 2 U.S.C. § 434(g)
(1)(A). These reports must be made within 24 hours of
making the expenditure. or the contract to make the
expenditure. /d. Such reports must be supplemented within 24
hours of making additional expenditure contracts or
expenditures aggregating an additional $1,000 toward the
same election. BCRA § 212; FECA § 304(g)(1)(B); 2 U.S.C.
§ 434(g)(1)(B). For expenditure contracts or expenditures
made more than twenty days berore an election, persons must
also file reports but only after the expenditures aggregate to
$10,000 or more and they have 48 hours in which to file their
disclosure. BCRA § 212; FECA § 304(g)(2)(A); 2 U.S.C.
§ 434(g)(2)(A). These reports must also be supplemented
authorized political committee, or their agents, or a political
party committee or its agents.
BCRA § 211; FECA § 301; 2 U.S.C. § 431(17).
“ The reports must be filed with the FEC and must include “the name
of each candidate whom an expenditure is intended to support or oppose,”
BCRA § 212; FECA § 304; 2 U.S.C. § 434(g)(3)(B), as well as the name
and address of each
person who receives any disbursement during the reporting period
in an aggregate amount or value in excess of $200 within the
calendar year (or election cycle, in the case of an authorized
committee of a candidate for Federa! office), in connection with an
independent expenditure by the reporting committee, together with
the date, amount, and purpose of any such independent expenditure
and a statement which indicates whether such independent
expenditure is in support of, or in opposition to, a candidate, as well
as the name and office sought by such candidate, and a certification,
under penalty of perjury, whether such independent expenditure is
made in cooperation, consultation, or concert, with, or at the request
or suggestion of, any candidate or any authorized committee or
agent of such committee
2 U.S.C. § 434(b)(6)(B (iii).
70sa
whenever additional expenditure contracts or expenditures
aggregate an additional $10,000 toward the same election.
BCRA § 212; FECA § 304(g)(2)(B); 2 U.S.C. § 434(g)(2)(B).
f. Coordination with Candidates or Political Parties:
Section 214
The Supreme Court has found treating coordinated
expenditures as contributions constitutionally justifiable
under the rationale of preventing circumvention. Buckley, 424
U.S. at 47 (“[C]Jontribution ceilings . . . prevent attempts to
circumvent [FECA] through prearranged or coordinated
expenditures amounting to disguised contributions.”). Section
214 makes changes to FECA’s coordinated expenditure
regime.
Section 214(a) amends Section 315(a)(7)(B) of FECA, 2
U.S.C. § 441a(a)(7)(B), by adding the following provision:
(ii) expenditures made by any person (other than a
candidate or candidate’s authorized committee) in
cooperation, consultation, or concert with, or at the-
request or suggestion of, a national, State, or local
committee of a political party, shall be considered to be
contributions made to such party committee
BCRA § 214(a); FECA § 315(a)(7)(B)(ii); 2 U.S.C.
§ 441a(a)(7)(B)(ii). This language is virtually identical to that
in 2 U.S.C. § 441a(a\(7)(B)(i) *', passed in 1976 as an
amendment to FECA, which defines expenditures made in
coordination with candidates.”
71sa
Section 214 also repeals the FEC’s regulations “on
coordinated communications paid for by persons other than
candidates, authorized committees of candidates, and party
committees,” and requires the FEC to promulgate new
regulations. BCRA § 214(b), (c). Congress instructed that the
new regulations “shall not require agreement or formal
collaboration to establish coordination.” BCRA § 214(c);
2 U.S.C. § 441la note. Congress also instructed that the
regulations should address
(1) payments for the republication of campaign
materials;
(2) payments for the use of a common vendor;
(3) payments for communications directed or made by
persons who previously served as an employee of a
candidate or a political party; and
(4) payments for communications made by a person
after substantial discussion about the communication
with a candidate or a political party.
Id.
Lastly, Section 214 amends Section 316(b)(2) of FECA, 2
U.S.C. 441b(b)(2), to include within the meaning of
“contributions or expenditures by national — banks,
corporations, or labor organizations,” the definitions of
“contribution or expenditure” found in Section 301 of FECA,
2 U.S.C. § 431(8), (9). BCRA § 214(d).
‘' In FEC v. Colorado Republican Federal Campaign Comm., 533 U.S.
431 (2001) ("Colorado I), the Supreme Court considered the
applicability of Section 441a(a)(7)(B)(i) to political party expenditures.
Despite the fact that four Justices found the provision overbroad,
Colorado I, §33 U.S. at 467 (Thomas, J., dissenting), the majority found
that Section 441a(a)(7)(B)(i) applied to political party expenditures
coordinated with candidates, id at 465.
Or suggestion of, a candidate, his authorized political committees, or their
agents, shall be considered to be a contribution to such candidate”.
2 U.S.C. § 441a(ay(7)(B i).
* As presently codified, the provision states: “expenditures made by
any person in cooperation, consultation, or concert, with, or at the request
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3. Title III: Miscellaneous
a. Use of Contributed Amount for Certain Purposes:
Section 301
Section 301 sets forth the permitted and prohibited uses of
contributions. For example, a candidate can transfer contribu-
tions to political parties but cannot convert contributions to
personal use. BCRA § 301; FECA § 313; 2 U.S.C. § 439a.
b. “The Millionaire Provisions”: Sections 304, 316,
& 319
In Sections 304, 316, and 319 of BCRA, Congress allowed
opponents of self-financed candidates to raise money in larger
increments and, in certain circumstances, to accept unlimited
coordinated party expenditures. Specifically, the provisions
state that if a self-financed candidate’s “opposition personal
fund amount” >? exceeds a threshold amount,” then the
candidate’s opponent can raise funds through increased
contribution limits. BCRA § 304(a); FECA § 315(i); 2 U.S.C.
§ 441a(i); BCRA § 319; FECA § 315A; 2 U.S.C. § 44la-l.
Moreover, if the opposition personal fund amount is ten times
the threshold amount in Senate races, or merely exceeds the
*’ The “opposition personal funds amount” is not simply the amount of
personal funds expended by a self-financed candidate. It also takes into
account the gross receipts advantage of both candidate’s authorized
committees so that incumbents with large war chests will not be able to
take advantage of the new law unless the self-financed candidate expends
an even greater amount of personal funds. BCRA § § 304(a)(ii); FECA
§ 315(i(1(D); 2 U.S.C. § 441a(i1(D); BCRA § 316; FECA
§ 315(i 1 (E); 2 U.S.C. § 441 a(i)(1)(E); see also BCRA § 319(a); FECA
§ 315A(a)(2); 2 U.S.C § 441a-1(a)(2).
“The threshold amount in Senate races is equal to the sum of
$150,000 plus $.04 multiplied by the voting age population in the
candidate’s state, BCRA § 304(a)(2); FECA § 315(i)(1)(B); 2 U.S.C.
§ 441a(i)(1)(B), while in House races the threshoid amount is simply
$350,000. BCRA § 319(a)(1); FECA § 315A(a)(1); 2 U.S.C. § 441a-
1(a)(1).
73sa
$350,000 threshold for House races, the self-financed
candidate’s opponent can also be exempted from limits on
coordinated party expenditures imposed by 2 U.S.C.
§ 441a(d). Any contributions or party expenditures under the
increased limits is capped to the amount spent by the self-
financed candidate: the enhanced contributions cannot exceed
110% and 100% of the opposition personal funds amount for
Senate and House races respectively.
c. Lowest Unit Charged: Section 305
In the 1972 FECA legislation, Congress added the “lowest
unit charge” provision to the Communications Act of 1934.
The provision states that, for forty-five days before a primary
or sixty days before a general election, the broadcast stations
have to sell a qualified candidate the “lowest unit charge of
the station for the same class and amount of time for the same
period.” 47 U.S.C. 315(b)(1). BCRA Section 305, however,
denies a candidate the lowest unit charge for broadcast
advertisements on radio and television unless the candidate
“provides written certification to the broadcast station that the
candidate (and any authorized committee of the candidate)
shall not make any direct reference to another candidate for
the same office” in any broadcast. BCRA § 305; FECA
§ 315(b); 47 U.S.C. § 315(b). The candidate can be exempted
from this provision, and thus be eligible for the lowest unit
charge without such a promise, if the candidate clearly
identifies himself at the end of the broadcast and states that he
approves of the broadcast. In a television broadcast, this
message must include the candidate’s image for at least four
seconds. /d.
d. Increased Limits for Contributions and Indexing of
Limits: Section 307
Section 307(a)(1) increases the amount individuals can
contribute to candidates per election from $1000 to $2000.
BCRA § 307(a)(1); FECA § 315(a)(1)(A); 2 U.S.C. § 441a(a)
74sa
(1)(A). It also changes the aggregate amount of contributions
a donor can give to candidates and political committees
(including parties) from $25,000 in a calendar year to
$37,500 in a two-year period to candidates and $57,500 in a
two-year period to political committees. BCRA § 307(b);
FECA § 315(a)(3)(A); 2 U.S.C. § 441a(3)(A). Congress also
increased the limits to a national party committee by $5,000
and doubled the amount of money individuals can donate to a
state party committee, so that individuals may now contribute
no more than $25,000 per calendar year to a national party
committee, no more than $10,000 per calendar year to a state
committee, and no more than $5,000 per calendar year to a
local committee. BCRA § § 102, 307(a)(2); FECA § 315(a)
(1)(B), (D); 2 U.S.C. 441a(a)(1)(B), 441 a(ay(1(C), 44 1a(a)
(1)(D). Finally, Congress also indexed all contributions for
inflation, except for limits on contributions to state and local
party committees. BCRA § 307(d); 2 U.S.C. § 44 1a(c).
e. Identification of Sponsors: Section 311 —
Section 311 requires that “whenever any person . . . makes
a disbursement for an electioneering communication,” the
communication, if it was authorized by a candidate or the
candidate’s political committee, must clearly identify the
candidate or the candidate’s political committee. If the
communication was not authorized by the candidate or the
candidate’s political committee, then the communication
“shall clearly state the name and permanent street address,
telephone number, or World Wide Web address of the person
who paid for the communication and state that the
communication is not authorized by any candidate or
candidate’s committee.” BCRA § 311; FECA § 318(a)(3);
2 U.S.C. § 441d(a)(3).
f. Prohibition of Donations by Minors: Section 318
In Section 318, Congress prohibited minors, defined as any
children under eighteen years of age, from making donations,
75sa
regardless of the amount, to candidates or politi ies
, political parties.
BCRA § 318; FECA § 324; 2 U.S.C. § 441k. P
4. Title V: Additional Disclosure Provisions
a. = Access to Broadcasting Records: Section
In Section 504, Congress requires broadcast licensees to
collect and disclose records of any “request to purchase
broadcast time” that “is made by or on behalf of a legally
qualified candidate for public office” or that relates “to any
political matter of national importance,” including
communications relating to “a legally qualified candidate,”
“any election to Federal office,” and “a national legislative
issue of public importance.” BCRA § 504; FECA § 315(e)(1):
47 U.S.C. § 315(e)(1). The record must include whether the
request to purchase was accepted or rejected; the rate charged
for the broadcast; the date and time on which the
communication aired; the class of time that is purchased; the
name of the candidate to which the communication refers and
the office to which the candidate is seeking election, the
election to which the communication refers, or the issue to
which the communication refers; in the case of a request on
behalf of a candidate, the name of the candidate, the
authorized committee, and the treasurer of the committee: and
in the case of any other request, the name of the person
purchasing the time, the name and contact’ information for
such person, and a list of chief executive officers or members
of the executive committee or board of directors. /d.
III. FINDINGS OF FACT
The Findings of Fact include a description of the identities
of the parties and include findings related to the disclosure
provisions included in this per curiam opinion.
76sa
A. Parties to the Litigation ”
* As of the May 7, 2002, deadline for amendment of pleadings,
intervention orjoinder of additional parties and consolidation of additional
cases, see Scheduling Order of 4/24/02, 84 plaintiffs were parties to the
consolidated actions. Since then, seven plaintiffs-the Alabama Republican
Executive Committee, Martine J. Connors, the Jefferson County
Republican Executive Committee, the Christian Coalition of America,
Inc., the Libertarian Party of Illinois, Inc., the DuPage Political
Action Council, Inc., and the National Association of Wholesaler-
Distributors-have been dismissed from the suit without prejudice. See
generally Orders of 8/15/02, 9/13/02, 9/18/02, and 9/30/02 Dismissing
Pls. Without Prejudice.
Remaining in the suit are 77 plaintiffs in 11 actions: in No. 02-CV-
0582 are Senator Mitch McConnell, Representative Bob Barr,
Representative Mike Pence, Alabama Attorney General William H. Pryor,
the Libertarian National Committee, Inc., the American Civil Liberties
Union, Associated Builders and Contractors, Inc., Associated Builders
and Contractors Political Action Committee, the Center for Individual
Freedom, Club for Growth, Inc., Indiana Family Institute, Inc., the
National Right to Life Committee, Inc., National Right to Life
Educational Trust Fund, National Right to Life Political Action
Committee, the National Right to Work Committee, 60 Plus Association,
Inc., Southeastern Legal Foundation, Inc., U.S. d/b/a ProEnglish, Thomas
McInerney, Barret Austin O’Brock and Trevor M. Southerland
(collectively, the McConnell plaintiffs); in No. 02-CV-O581 are the NRA
and National Rifle Association Political Victory Fund (collectively, the
NRA plaintiffs); in No. 02-CV-0633 are Emily Echols, Hannah McDow,
Isaac McDow, Jessica Mitchell, Daniel Solid and Zachary C. White
(collectively, the Echols plaintiffs); in No. 02-CV-0751 are the Chamber
of Commerce of the United States, the National Association of
Manufacturers, National Association of Wholesaler-Distributors, and U.S.
Chamber Political Action Committee (collectively, the Chamber of
Commerce plaintiffs); in No. 02-CV-0753 is the National Association of
Broadcasters; in No. 02-CV-0754 are the American Federation of Labor
and Congress of Industrial Organizations and AFL-CIO Committee on
Political Education Political Contributions Committee (collectively, the
AFL-CIO plaintiffs); in No. 02-CV-0781 are Congressman Ron Paul, Gun
Owners of America, Inc., Gun Owners of America Political Victory Fund,
RealCampaignReform.org, Citizens United, Citizens United Political
Victory Fund, Michael Cloud and Carla Howell (collectively, the Paul
77sa
1. Senator Mitch McConnell is the senior United States
Senator from the Commonwealth of Kentucky and is a
member of the Republican Party. McConnell Aff. J 1. He has
long been active in the Republican Party at the national, state
and local levels. /d. § 2. Senator McConnell was first elected
in 1984, was reelected in 1990, 1996, and was a candidate for
election in 2002. /d. 4 7.
plaintiffs); in No. 02-CV-0874 are the Republican National Committee,
Mike Duncan, Republican Party of Colorado, Republican Party of Ohio,
Republican Party of New Mexico, and Dallas County (lowa), Republican
Central Committee (collectively, the RNC plaintiffs); in No. 02-CV-0875
are the California Democratic Party, Art Torres, Yolo County Democratic
Central Committee, California Republican Party, Shawn Steel, Timothy J.
Morgan, Barbara Alby, Santa Cruz County Republican Central
Committee, and Douglas R. Boyd, Sr., (collectively, the CDP plaintiffs);
in No. 02-CV-0877 are Victoria Jackson Gray Adams, Carrie Bolton,
Cynthia Brown, Derek Cressman, Victoria Fitzgerald, Anurada Joshi,
Nancy Russell, Kate Seely-Kirk, Peter Kostmayer, Rose Taylor,
Stephanie L. Wilson, California Public Interest Research Group,
Massachusetts Public Interest Research Group, New Jersey Public Interest
Research Group, United States Public Interest Research Group, the Fannie
Lou Hamer Project, and Association of Community Organizers for
Reform Now (collectively, the Adams plaintiffs); and in No. 02-CV-0881
are Representative Bennie G. Thompson and Representative Earl F.
Hilliard (collectively, the Thompson plaintiffs).
The 17 defendants in these consolidated actions are the Federal
Election Commission; the United States of America; the United States
Department of Justice; the Federal Communications Commission; John
Ashcroft, in his official capacity as Attorney General of the United States
of America; David M. Mason, Karl J. Sandstrom, Danny L. McDonald,
Bradley A. Smith, Scott E. Thomas and Michael E. Toner, in their official
Capacities as Commissioners of the FEC; and Senators John McCain,
Russell Feingold, Olympia Snowe and James Jeffords and Representatives
Christopher Shays and Martin Meehan (collectively, the Intervenors), as
intervening defendants.
The Court finds it unnecessary to make findings with respect to all 77
Plaintiffs and 17 Defendants in these actions and therefore the Findings of
Fact reflect the primary parties in this litigation.
78sa
2. William H. Pryor, Jr. is Alabama Attorney General and
was a candidate for reelection as Alabama Attorney General
in 2002. Pryor Decl. § 2.
3. The Libertarian National Committee, Inc. (“LNC’) is the
governing body of the Libertarian Party at the national level.
Dasbach Decl. § 4. The LNC is a non-profit corporation
incorporated in the District of Columbia and governed by
section 527 of the Internal Revenue Code. /d. The LNC
represents and advocates the principle that all individuals
have the right to live in whatever manner they choose so long
as they do not forcibly interfere with the right of others to do
the same. /d.
4. The American Civil Liberties Union (“ACLU”) is a tax-
exempt corporation incorporated in the District of Columbia
and is governed by section 501(c)(4) of the Internal Revenue
Code. Romero Decl. ¥ 1. The ACLU is a nationwide, non-
profit, non-partisan organization with approximately 300,000
members “dedicated to the principles of liberty and equality
embodied in the Constitution.” /d.
_
5. Associated Builders and Contractors, Inc. (“ABC”) is a
non-profit tax- exempt organization governed by section
50l(c)(6) of the Internal Revenue code, incorporated in
Maryland, and is funded primarily by membership dues.
Monroe Direct Test. § 3. It is a national trade association
representing more than 23,000 contractors and related firms
in the construction industry. /d.. ABC’s members, which
include both unionized and non-union employers, “share the
philosophy that construction work should be awarded and
performed on the basis of merit, regardless of labor
affiliation.” /d.
6. Associated Builders and Contractors Political Action
Committee (“ABC PAC”) is a connected political committee
governed by 2 U.S.C. § 431(4) and section 527 of the Internal
Revenue Code and is a separate segregated fund of ABC
79sa
pursuant to 2 U.S.C. § 441b(b). /d..4 22. ABC PAC makes
contributions to federal candidates who support the principles
of ABC and funds independent expenditures for communica-
tions on their behalf. /d.
7. The Club for Growth, Inc. (“The Club”) is a nationwide
membership organization dedicated to advancing public
policies that promote economic growth. Keating Decl. § 5.
The Club is a Virginia corporation organized under section
527 of the Internal Revenue Code. McConnell Second Am.
Compl. 4 29. The Club “is dedicated to promoting the
election of pro-growth, pro-freedom candidates through the
bundling of political contributions and issue advocacy
campaigns.” Keating Decl. | 6. The Club for Growth advo-
cates tax rate reduction, fundamental tax reform, tax
simplification, capital gains tax reduction, estate tax repeal,
overall reduction in government spending, school choice, and
personal investment of Social Security. /d. 4 5.
8. The National Right to Life Committee (“NRLC”) is a
tax-exempt corporation incorporated in the District of
Columbia and is governed by section 501(c)(4) of the Internal
Revenue Code. O’Steen Decl. § 4. The NRLC is a nation-
wide, non-profit, non-partisan organization with approxi-
mately 3,000 local chapters and fifty state affiliates dedicated
to “promoting respect for the worth and dignity of all human
life from conception to natural death.” /d. 4 4 5, 3.
9. The National Right to Life Educational Trust Fund
(“NRL-ETF”) is an organization governed by section
501(c)(3) of the Internal Revenue code. /d. § 16. NRL-ETF
sponsors educational advertising and develops materials
detailing “fetal development, abortion’s impact on America,
and the threat of euthanasia.” /d. 4 17.
10. The National Right to Life Political Action Committee
(“NRL PAC”), organized in 1979, is an internal § 527 fund of
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NRLC that is registered with the FEC as a PAC subject to
FECA. O’Steen Decl. ¥ 24.
11. Thomas E. McInerney is a U.S. citizen, a registered
voter in the State of New York and a member of and
contributor to various Republican Party organizations and
committees at the national, state and local levels. McInerney
Aff. 4 1.
12. Barret Austin O’Brock is a U.S. citizen and a resident
of the State of Louisiana. O’Brock Decl. { |. He is fourteen
years of age and intends to make contributions to federal
candidates in future elections, including the 2004 election. dd.
q § 2-3.
13. The National Rifle Association (“NRA”) is a tax-
exempt corporation governed by section 501(c)(4) of the
Internal Revenue Code and incorporated in the State of New
York. NRA Compl. § 8. The primary purpose of the NRA is
to preserve and protect the Second Amendment's guarantee
that individuals shall have the right to “keep and bear arms.
LaPierre Decl. § 2. In addition, the NRA promotes public
firearm safety, trains law enforcement agencies In the use “
firearms, sponsors shooting competitions, and advances
hunter safety. Jd. The NRA has approximately four million
members and represents their views on legislative and public
policy issues before federal, state and local officials and the
general public. NRA Compl. { 8.
14. The National Rifle Association Political Victory Fund
(“NRA PVF”) is a connected political committee governed by
2 U.S.C. § 431(4) and section 527(e)(1) of the Internal
Revenue Code and is a separate segregated fund of the NRA
pursuant to 2 U.S.C. § 441b(b). NRA Compl. q 9.
13. Emily Echols, Hannah and Isaac McDow, Zachary
White, Daniel Solid and Jessica Mitchell are U.S. citizens
who range in age from twelve to sixteen. Echols Pls.
Proposed Findings of Fact § 45. They intend to seek out
8lsa
and contribute to federal candidates “who represent their
views and beliefs on important questions like the right to life
of children before birth, and on the size of government.”
Id. 4 44.
14. The Chamber of Commerce (“The Chamber”) is a tax-
exempt corporation governed by section 501(c)(6) of the
Internal Revenue Code. Josten Direct Trial Test. q 3. The
Chamber is the world’s largest not-for-profit business federa-
tion, representing over 3,000,000 businesses and business
associations. /d.
15. The U.S. Chamber Political Action Committee (“U.S.
Chamber PAC”’) is a connected political committee organized
under section 527(e)(1) of the Internal Revenue Code and is
registered with the FEC. Josten Direct Trial Test. 4 26. U.S.
Chamber PAC is funded by contributions voluntarily made by
individual Chamber of Commerce executives, administrative
employees, members and their families. /d. § 27.
16. The National Association of Manufacturers (“NAM”)
is a tax-exempt corporation governed by section 501(c)(6) of
the Internal Revenue Code and is the oldest and largest broad-
based industrial trade association in the United States. Huard
Direct Trial Test. § 2. Its membership comprises 14,000
companies and 350 member associations. /d.
17. The National Association of Broadcasters (“NAB”) is a
non-profit corporation that serves as a trade association of
radio and television stations and broadcasting networks in the
United States. Goodman Decl. § 3. NAB serves and repre-
sents the American broadcasting industry, composed of
approximately 7,300 member stations. /d. All of NAB’s
voting members are broadcast licensees within the meaning
of the Communications Act. /d.
i8. The American Federation of Labor and Congress of
Industrial Organizations (“AFL-CIO”) is a national labor
federation comprised of 66 national and international labor
82sa
unions that, collectively, have a total of approximately 13
million members. G. Shea Decl. § 3. The AFL-CIO is a tax-
exempt organization under Section 501(c)(5) of the Internal
Revenue Code. Id. The AFL-CIO also includes 51 state labor
federations, nearly 580 area and central labor councils and
numerous trade and industrial departments. /d. ¥ § 6,7, 9. One
of the four major missions of the AFL-CIO is to provide “an
effective political voice to workers on public issues that affect
their lives.” /d. ¥ 4b.
19. Congressman Ron Paul is a Member of the United
States House of Representatives from the Fourteenth
Congressional District of Texas and is a member of the
Republican Party. Paul Decl. § 1. He was first elected to
represent the Fourteenth Congressional District of Texas in
1996, id., and also served as a Member of the House of
Representatives for the Twenty-Second Congressional
District of Texas, first elected in 1976 and to successive terms
until 1984, id. ¢ 2. Congressman Paul is a registered voter in
the state of Texas, a donor to the campaigns of candidates for
federal office, and a fundraiser and recipient of campaign
contributions. Paul Pls.” Compl. § 11. He will face reelection
in 2004. Paul Decl. ¢ 1.
20. Gun Owners of America, Inc. is a not-for-profit, tax-
exempt corporation governed by section 501(c)(4) of the
Internal Revenue Code. Pratt Decl. § 2. It is dedicated
primarily to defending the rights that its members believe are
guaranteed by the Second Amendment to the Constitution; its
principal function is the dissemination of information
concerning such rights through educational programs and
advocacy. Id. ¥ 3.
21. Gun Owners of America Political Victory Fund is a
connected political committee governed by 2 U.S.C. § 431
and is a separate segregated fund of Gun Owners of America.
Id. 4 4.
83sa
22. RealCampaignFinance.Org is a not-fo
exempt corporation governed by section mene a he
Internal Revenue Code. Babka Decl. { 2. It is dedicated to
defending the campaign and election-related rights its
members believe are guaranteed by the First Amendment to
the Constituti
14.93. itution through educational programs and advocacy.
23. Citizens United is a not-for-profit
corporation governed by section S010cK4) of ra Sales
Revenue Code. Bossie Decl. 4 2. It is dedicated to the
principles of limited government and national soverei nt
and to defending the rights its members believe are aa in
the United States Constitution: its principal function is in
dissemination of informatio ;
advocacy. Id. ¥ 3. © conceming such beliefs and
24. Citizens United Political Vic i
4 tory Fund is a
political committee governed by 2 U.S.C. § as aid toe
separate segregated fund of Citizens United. /d. 4 4. |
25. Michael Cloud was the Libertarian Party’s candidate
or United States Senate from the Commonwealth of
Massachusetts in t : : ;
Cloud Decl. 4 7 ne 2002 election and is 2 registered voter.
26. Carla Howell was the Libertari
arian Party’s candidate f
ye of the Commonwealth of Massachusetts in the 2002
: or and is a registered voter. Howell Decl. § § 1-2. She
ee - the Libertarian Party’s candidate for election to the
a States Senate for the Commonweaith of
assachusetts in the 2000 election. /d. qq 2-3.
27. The Republican National Commi : ") i
unincorporated association created vi palace “The
a of te Republican Party. Josefiak Decl. q 13. It A
- three members from the Republican Party in each of the
ifty States, the District of Columbia, Puerto Rico, America
Somoa, Guam, and the U.S. Virgin Islands. Duncan Decl. 4 4:
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see also Josefiak Decl. 9 15. Each state and territorial
Republican Party elects a national commitieeman and a
national committeewoman. Duncan Decl. 4 4; Josefiak Decl.
q 15. In addition, the state and territorial Republican Party
chairmen serve as members of the RNC. Duncan Decl. at 4 4;
Josefiak Decl. 4 15.
28. Mike Duncan is a member of the RNC from the State
of Kentucky and currently serves as the General Counsel of
the RNC. Duncan Decl. 4 5. Prior to becoming General
Counsel, he was Treasurer of the RNC and in that capacity
signed all RNC reports filed with the FEC. See id. In both his
official capacity as an officer of the RNC and in his personal
capacity, Duncan has participated in and (unless prohibited
by BCRA) will continue to participate in national, state and
local political party activities. /d. | ¥ 6, 9. He will also (unless
prohibited by BCRA) continue to solicit, receive, or direct
non- federal funds to other persons. See id. 4 { 8-9.
29. The Republican Party of New Mexico is the state party
committee of the Republican Party in New Mexico. See
Dendahl Decl. § § 3-4. It supports federal, state and local
candidates for office in New Mexico and promotes
Republican positions on public policy issues. /d. Under New
Mexico law, the Republican Party of New Mexico is
permitted to raise and spend corporate, labor union and
individual funds in unlimited amounts in support of state and
local candidate
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