Respondents Brief — Arizona Free Enterprise Club's Freedom Club PAC v. Bennett

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FILED

Nos. 10-238 and 10-289

| FEB 14 2011

an The OPFICE OF THE CL TAK

Supreme Court of the United States

ARIZONA FREE ENTERPRISE CLUB'S

FREEDOM CLUB PAC, et al

KEN BENNE PT in his offical capacity as

Secretary of State of the State of Arioona. et al

— — e.—

TORN MCCOMISH, et al

KEN BENNETT. tn his offtenal capacity as

Seeretary of State ot the State of Arizona, et al

RN. SPOTS

On Writs Of Certiorari To The United States

Court Of Appeals For The Ninth Circuit

BRIEF OF STATE RESPONDENTS

Erie J. Bisrkow

Chiet Depaty Attorney General

Magy R OGRADY

Soleiter General

JaAMrs EO BAkPON I]*

THOMAS COLLINS

Assistant Attorneys General

ISS West Washington

Phoeni, Arizona SS007 AVG

MOLD) S4P SIAB

ames barton@arary pov

* ps ry _ i’ bet. adaseded De Pas

tee a a ‘ rev aN vereseres mere \

Aricona Neoretars af Sialk

Aen Bennetéi and Memaders o

the Amrooma Crlrsens Clean

*?,

Blections Comrpnission

TiS ALS LAW MN BP EP NONTONG ans a oe | \ CX

ON CALECN EP OT eo [P| AA

QUESTION PRESENTED

Does the First Amendment allow Arizona to

condition the release of a portion of government

subsidies to pubhely funded candidates on the cam-

pagn activity of privately funded candidates and

independent expenditure groups’

PARTIES TO THE PROCEEDINGS

State Respondents agree with the parties to the

proceedings that Petitioners hist, but note that Tymo

thy J.) Reckart has replaced Gary Scaramazzo on the

Citizens Clean Elections Commission and that Rovann

Jo Parker has resigned from the Comuussion and

therefore is no longer a party Sup. Ct. Ro 35

TABLE OF CONTENTS

QUESTION PRESENTED

PARTIES TO THE PROCEEDINGS

TABLE OF AUTHORITIES

STATEMENT OF THE CASE

POLITICAL CORRUPTION IN ARIZONA

AN) THE PASSAGE OF THE CLPIZENS

CLEAN ELECTIONS ACT

THE ACTS OPERATION ANT) PROV]

SIONS

MATCHING FUNDS PRINCIPLES

PETITIONERS MISLEADING STATE-

MENTS

THE PROCEEDINGS BELOW

SUMMARY OF ARGUMENT

ARGUMENT

BASED ON THE NATURE OF THE

HARM THAT PETITIONERS ALLEGE,

THE COURT SHOULD APPLY INTER

MEDIATE SCRUTINY TO THE MATCH

ING FUNDS PROVISION OF ARIZONAS

PUBLIC FINANCING SYSTEM

TABLE OF CONTENTS — Continued

Page

A. This Court’s Davis Decision Does Not

Warrant Applying Strict Scrutiny Be-

cause the Act Is Nondiser:minatory,

Does Not Limit Petitioners’ Ability to

Raise and Spend Money and Caps

Participants’ Funding Regardless of

the Petitioners’ Activities 26

B. Peeifie Gas and Tornillo Do Not

Apply Because the Act) Does Not

Compel Privately Funded Candidates

to Promote Their Opponents’ Politieal

Speech... | 2

C The Matching Funds Provision im-

poses No Ceiling oon Campaign.

Related Activity and Creates at Most

a Hypothetical, Indirect Burden on

the Speech oof Privately Funded

Speakers 35

THE CITIZENS CLEAN FLECTIONS ACT

FURTHERS ARIZONAS IMPORTANT

AND COMPELLING GOVERNMENTAL

INTEREST IN) PREVENTING COR

RUPTION AND THE APPEARANCE OF

CORRUPTION 42

A. States Have Authorny to Enact

Measures to Prevent Corruption and

the Appearance of Corruption 43

TABLE OF CONTENTS — Continued

Passe

83 The Act Does Not Level Electoral

Opportunities Unconstitutionalls 47

C The Act Does Not Uneconstitution

ally Seek to Reduce the Cost of Elee-

tions , 51

lll THE MATCHING FUNDS PROVISION

SURVIVES BOTH INTERMEDIATE AND

STRICT SCRUTINY BECAUSE IT IS

SUBSTANTIALLY RELATED AND NAR.

ROWLY TAILORED TO A SUFFICIENT

LY IMPORTANT AND COMPELLING

ANTICORRUPTION INTEREST 52

CONCLUSION ya

TABLE OF AUTHORITIES

Page

CASES

Bigelow v. Virginia, 421 US. S09 (1975). A

Buckley v. Valeo, 424 US. DIST). Passe

Burson vo Freeman, 504 U.S. 191 (1992) 0 Aa

Crreutt City Stores, Inc. v. Adams, 532 U.S. 105

(2001) , . ssiadidiadipinats tanta alesatdicnassiusedecicadetetyateee

Citizens United vo Federal Election Comm'n,

130 S. Ct. $76 (2010)................ coceee se PMESSIIM

Colo. Republican Federal Campaign Comim. v

Federal Electron Comon'’n, 518 US. 604

i 3a SESE A

Crawford «. Marton Cnty. Election Ba, 543

US. 181 (2008) 36. 44

Davenport vo Wash. Educ) Ass'n, 551 U.S. 177

ST Ba siacves disk sawsvoun | : 34

Davis vo Federal Election Comonin, 554 US

ee passim

Davo Holahan, 34 F3d 1356 (Sth Cir, 1994). 39, 54

Doe v. Reed, 130 S. Ct. 2811 (2010)......................38, 44

Ru cv. SF Cnriv. Democratic Cent. Com. , 489

US 214 (1989)... ap cokes ous 4-4

Federal Flection Comm'n vo Natl Conserva-

five Political Action Comm. 470 U.S. 480

COTES REE ERE HERERO Re Re ee eee ee at ae

Federal Election Comm'n ve Natl Rugh? to Work

Comm , 459 U.S. 197 (1982) soit 433

Vil

TABLE OF AUTHORITIES - Continued

Federal Election Comm'n vo Wise. Right to Lire,

Inc, 551 U.S. 449 (2007)... ees

Graham Cnty Sou & Water Conservetion Dist

vb US ex rel Wilson, 1808. Ct. 1396 (2010)

Johanns v. Livestock Mktg. Ass'n, 544 ULS. 550

(2005)..........

mono. United States, 355 U.S. 339 (1958)

Leavitt vo. Jane L. 518 US. 137 (199

Maher v. Roe, 432 US. 464 (1977).

McConnell o Federal Election Comm'n. 540

US. 98 (2003).

Miami Herald Pudl’g Co. ve Tornilio. 418 US

P4l (1974).

Nixon vo Shrink Mo. Govt PAC, 528 US. 377

(2POOO)

Pac. Gas & Elee Co. vo Pub) Utils. Comm'n of

RE ve Ti eT | eee des Re

Randolph vo Groscost, 9 Pld 751 Ariz. 1999).

Regan vo Taxation with Representation of

O38, 34

Wash... 461 US. 540 (1983)...

wane rds v. Forum for. Academic & Institution:

al Rights, Ine " d47 Us S. 47 (LOG)

Slate a’. Gomes, 127 P3d S73 (Ariz. LOU)

State v. Walker, 914 P2d 1820 (Ane. Ct App.

1995)

41,45

vil

TABLE OF AUTHORITIES — Continued

Turner Broad. Svs., Inc. v. FCC, 512 U.S. 622

(1994)...

U.S. Creu Serv. Comm'n ov. Natl Ass'n of Letter

Carrera, 413 UB. 54668 (1973S) ...............<..........5...... 42

lnuted States v. OBrien, 3891 US. S61 (1968). 47, 48, 32

Vinson v. Thomas. 288 F3d 1145 (9th Cir.

I ihic utc hes ccnadaaeahenicmioase ES BEESON Toa Lens WE RRR Oe a8

Vote Choice, Inc. v. DiStefano, 4 F.3d 26 (Ist

eR ho et AERO MUR Ge, eR ED LESS NOOSE a7

Wash. State Grange v. Wash. State Republican

Party, 552 U.S. 442 (2008)......... NRA Rh Ae aces

Waod v. Allen, 130 S. Ct. 841 (2010)..........................88

STATUTES

2U.B.C. § 434(aX2)..............:. SOEs bibinesthindaakaiere aia

2 U.S.C. § 434(f)........... sie aaccasuasaurehoangsseesuiwctailens aueddads 34

RR Dik PEE 6 | SSE Doreen near pre Penta aor 26

2U S.C. § 441 bibK2)........... NSE SNe T

Bipartisan Campagn Reform Act of 2002

Reassitte dt aie eine se i cletenircieadian anoie duitoleita mae

eae eee Eaae Mie iiiatan ateber 27 PALS Renee knod «EMA kaa Berd 5

A.RLS. § 16-901L.01........... Re gla Aled ene eS ectniieankielie 34

eA EEE TE. 5. 04 Iehcn don tc cdi meshahaidenensiil Ss

pT EE AS nee RO AN OR ETE AE Ber ern RD 1.7

Se I etiiccndcesancuncwieiuks v2 Bengt PMS eta eee 1S: hake ‘

TABLE OF AUTHORITIES — Continued

Page

.$ 16-905 B)......... Sis, Ragintelandd leaned aot eee

§ 16-9035(C)........... ERE R RE We tere ae Be BEd SERFS. 7

Ra ce Ta eA Pane ATER Me Peat Ble Cee 2c q

$ 16-905. E)........ a Aa AON ENG ME ee SAR Beet be ve 7

7 RRR ES IE ERA RAMADAN ZENER ]

| ERATE IT NCAP Ae SI tn SEs RE Rg ah Mi

SR RE ARSE Setar ele iela ek

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IIR conissinwidinicosinaecs ERERISeeras 29, 36, 52

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it |} \ REESE no ern seiiisiumeiasenieen 4,7, 46

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TABLE OF AUTHORITIES ~— Continued

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TABLE OF AUTHORITIES — Continued

Page

A.R.S. § 16-961(B\3) ....0 | d

I eee eee i cdasien We deal Ne wek enn

A Te IERIE? oncscccucesseunscsacenaiccs patieckadtuniyoaantae

Ee RR S

ARS. §$ 41-1092 to - 1092.12. : sash 9

1991 Ariz. Sess. Laws, 3d Spec. Sess.. ch. 2 2

OTHER AUTHORITIES

Ariz. Admin. Code R2-20-105(1)) bt ee

Ariz. Admin. Code R2-2O-LO9 BB). puseetadcevusececeensceeseugass oO]

Ariz. Admin. Code R2-20-113¢0P) 200... : 13

S. Rep. No. 93-689 (1974)... | reed 56

I IR IR ID lac 0s dastaiccpdcdangecunn cada dibebananeecasen elec

Participating Candidate Expenditure & Coniri-

bution Limits for 2010 Electrons, https www.

azsos.gov election 2010 Info CCEC Biennial

Adjustment_Charts htm ......... iciolentnzrbaiimaneitn 1.6

LOVY9-2010 Contribution Limits, httpy/ www.azsos

gov election 2010 Infa Campaign Contribution

SE HIN oh icc ca scerndantineetersesen Soyer mt

The Federalist No. 66 (Alexander Hamilton)

SI SD i ota can auetus eden pddai asndaccucsctee

The Federalist Noo 68 (Alexander Hamilton)

SN ID oc Sad cdssurceuceisevincntasenccess 22, 42

Zephyr Teachout, The Anti-Corruption Principle,

* 94 Cornell L. Rev. 341 (2009)... eee A

STATEMENT OF THE CASE

lL. POLITICAL CORRUPTION IN ARIZONA

AND THE PASSAGE OF THE CITIZENS

CLEAN ELECTIONS ACT.

Over the past twenty-five vears, Arivona voters

have attempted to address the threat of corruption

and its deleterious effects on the pubhe’s faith in

government. In L986, voters passed Proposition 200.

which established Arvona’s contribution linuts for

state-level campaigns. Ariz. Rev. Stat. CAR SO) § 16

M5 (QO1LO) Ghistorical and statutory note) Under those

orignal contmbution limits, mdividual contributors

could give up to $200 per election to a legislative

candidate and up to $500 per election to a statewide

candidate. Jd

Five vears into Arnvona’s experiment with contri

bution hmuats, Arizona voters witnessed the worst pub-

lie corruption seandal in its history. Joint Appendix

OdLAY) 122-161, GOO. The seandal, which came to be

known as AzgScam, resulted trom a police sting opera.

tion in which an undercover informant posed as a

Pursuant te ARS. $$ Le -905CR) and Y69. A) the Seecre

tary of State adjusts the dollar amounts in many Flection Code

and the Clean Elections Act provisions for inflation every two

vears For simpheity, except where otherwise indicated, the bret

will ete the current values from the relevant statutes Partic

patting Candidate Expenditure & Contribution Limits for 2070

Mections, http) www azsos pov election 2010 Inta CCRC) Biennial

Adjustment Charts btm, 2009 2070 Contridution Limits, http

www azsas gov clectron 2010 Tafa Campayga Contribution. Limits

2010 htm

Nevada businessman seeking to open a casino in

Arizona. Newspaper reports from the (me recounted

Phoenix police officers videotaping state legislators

accepling campaign contributions and bribes in ex-

change for agreeing to support gambling legislation,

HA. 122-24. Those videotapes revealed elected oth

mals accepting thousands of dollars in bribes while

evmeally prockuming that “doling|] deals” was the

way of the Legislature. d.A) 142. State Representative

Bobby Raymond scoffed that there was “net an issue

in the world that lanve a (expletive) about” JA] Lay

“LT hke the good life.” said State Senator Carolyn

Walker, “and Pm trying to position myself [so] that |

ean hve the good life and have more monev” JA. 146

47. “We all have our prices.” she told the undercover

agent afer accepting $15,000, DA) Lal. Representa:

tive Don Kenney planned to “quarterback” the etlort

to legahze gambling while serving as the judiciary

commuttee’s chairman, JA) 137-38) He brought a gym

bag to his meeting with the informant to haul in his

take of $55,000 in cash. FLA. 138. In sum, close to fen

percent of the state Lemgslature was implicated,

allegedly receming more than $370,000 ta bribes JA

Lie: see State oo Walker, 914 Pld 1820, 1824-29 (Arie

Ct. App. 1995) (detanhing allegations)

AgScam inspired another round of anticorruption

lemslation. 1991 Ariz. Sess. Laws, 3d Spee Sess. ch. 2

UmMposing more stringent restretieons on lobbving

activities). Yet despite those new laws, the appear

ance of guid pro quo corruption persisted) A seamless

interplay between fundraising and lawmaking cast a

wed of perceived corruption over the Armvona capitol

See EA T7881, 190, 206-07, 214

Wred of political scandals, Arizona voters passed

the Citizens Clean Elections Act (the “Aet") on No-

vember 3, 1998S ARS § 16-940 (historical and statu-

tory note) In approving the measure, voters declared

their intent to “improve the integrity of lan} Arizona

state government” that “lalllows Arizona elected

officials to accept large campaurn centributions from

private interests over which thev have governmental

yurtsdiction|,|" “hajndermines pubhe confidence in the

Integrity of puble oMfMeralst.)" and ultumately results

In misuse of public resources (hrough “subsidies and

special privileges for campaign contributors.” Jd It

appears that candidates welcomed the opportunity to

have a viable pubhe-financing option, as participation

in the Clean Elections system has increased from the

first vear of its implementation through 2008S, when

two-thirds of the candidates in the primarv and

general elections accepted pubhe funding dA. 982,

663-64; MeComush Pet. App. 15

tl. THE ACT'S OPERATION AND PROVI-

SIONS.

The Act combats corruption and promotes free

speech by providing an independent funding source

for those candidates wilhng to abide by several re

strichions While permitting: traditional candidates to

continue to use private funds. It establishes a finely

cahbrated system of rssuing public funds that enables

it to meet its speech-enhaneing and antieorruption

yoals by encouraging: participation without wasting

puble funds.

TO participate ino the puble-finanecing system,

candidates must first raise a certain number of five

dollar qualifving contmbutions ARS $$ 16 94608),

YOO BY, CO These contmbutions are not for the

candidate's use, but rather are nominal demonstra

tions of pubhe support that participants must turn

over to the Clean Elections Fund to quality for publhie

funding Ji? § 16-9406, A)

Next, participating candidates agree to a variety

of restrictions on ther campaign activities. Thev can

raise only a limited amount of exploratory funds, or

“seed money,” from private contributions Total pri

vate contributions are capped at ten pereent of the

mitial grant, nd § 1 S4H AX2Q) and can be raised

only from individuals and only in donations of $100 or

less, nd § 16-9454) Farthermore, pubhely funded

candidates may ratse seed money only during the ea-

ploratery and qualitving periods that end seventy-five

davs before the general election Jd $$ 16 945 A),

- ——

The number of five dollar qualifying oontmbutbons meaquined

varies based on office For example. legislative candidates must

eollect 220, candidates tor treasurer 1.650, and candidates tor go

ernor 4410 ARS §$ 1685008 Pursuant te ARS § 16 950 °F),

the Commission may adopt rules to adpast the number requuvd

Seve Anz Admin Code R2-20-108D), Citiszens Clean Rlections Act

& Nules Monual, http arcleanelections gow tfollow “Acts and

Rules Manual” hyperlink)

YELBH2), ef rad § LOLOL (setting the priomarv

eleclion on the tenth Tuesday before the general

elechon) In raising seed money, candidates may not

accept money from a political party or from political

achion committees Jd §$ LO 94L,AX1) Moreover, the

Act limits hew much partieipating candidates may

contribute to Cheir own campaigns, id § 16-940 AK),

and requires them to attend pubhe debates that the

Citizens Clean Flections Commission sponsors, td

§ 16-9568, A\ 2)

For both the primary and general elections the

Act divides the distmbutien of puble funding into two

parts: the anitial grant and subsequent matching

funds. First. participating candidates receive one

third of the total funding allotment avatable in the

form of an amttal grant. Ja $$ 16-951 A), CC) (stating

that the intial grant is equal to the orijganal spending

huts set for participating candidates), -992(F) ceap-

ping total funding at three times the ormmanal spend

ing limit) There is an exception to this rule for

candidates Who run unopposed throughout a cam

paign, including in the primary and the general clee

tions Jd §$ 16-95L AMS) For those candidates, the

Commission releases only an amount of assistance

equal to five dollars multiphed by the number of

quahifving contributions that the candidate collected

ld Vhese candidates do net quahtyv tor matching

tunds Jd § 16-952. A)

Second, capped matching funds are issued te pub-

lely funded candidates when (1) a privately funded op

ponent’s expenditures (or, during the general election,

a candidate's receipts, less expenditures made during

the primary campaign) exceed the publicly funded oan

didate’s initial disbursement amount, (2) an independ

ent expenditure committee makes an. expenditure

opposed to the publicly funded candidate, or (3) an in-

dependent expenditure commuttee makes an expen-

diture ino support of a pubhely funded candidate's

opponent. Jd $$ 1G-952AMCKI) Tf none of these

eceurs, then the partrerpating eandidate does not

receive any publ funds bevend the initial grant

Matching funds account tor two-thirds of the total

funds available to publiely funded candidates, which

is to sav they are capped at twice the imtial grant

Hd § 16-952)

The Act contains other provisions to ensure the

eMeent use of pubhe monev while providing a viable

substitute for private campanurn funding. For example,

because independent candidates do not face primary

challengers, the Act provides them with only a frac:

tion ot the imiual grant normally given to participating

candidates for primary elections. Jd §$ 16 991(,A\2)

The intial grant, and therefore full funding levels, vary

based on the office For example, lomshative candidates are on

tially issued $14,329 for the primary electron and $21,479 for the

general election Candidates ter treasurer are initially rsued

$Y1.645 tor the primary, and $137.468 tor the general election

Gubemiatonal candidates are mitially issued $707 447 for the pn

mary electen, and $12.001 2701 tor the general clection Partic:

paiing Candidate Expenditure & Contribution Lomits for 2070

Blections, Nttp) Www arsos gov election 2OLOTnfatcC kc Bieanial,

Adjustment Charts htm, see ARS $ 160616), HH) Thus. the

full funding for a partiopating candidate cunning for governor

inthe general election is $3 183 4583 ARS § 168528)

Also, candidates who campaign in one party dom:-

nant districts may reallocate funds trom the general

election to the primary elechon with ao corellary

reduction in their general election outlay, Jd § 16.

952\D) In all cases, unspent funds must be returned

to the fund at the end ot both the primary and gen

eral elections Jd § 16-943

None of the restrictions discussed above apply to

nonpartieipating candidates. The matching funds pro-

vision places no limit on the total amount of funds

that they may raise from private donors, and they are

free to raise pmvate money throughout the entire

campaign. Jd) § 16-905 (ACE) (contribution hmits tor

nonparthicipating candidates) They may also raise

private money in larger amounts than parteipating

candidates. For example, a non participating: guber-

natorial candidate may accept contributions of up to

$840 from individuals, which is enght times the limit

umposed on participating candidates. Jd $s 16-905,

M45 A) They may also accept money trom political

parties or political action committees. Jd § 16-905¢C):

(D) Finally, there is no limit on the amount of per

sonal money that non-participating candidates may

use on themown campaigns Jd § 16-205 N)

A five member, partisan Citizens Clean Flee.

trons Commission administers Che Act Jd § le AS .A)

Among other duties. the Comnussion oversees the

distribution of mommies from the Clean Elections Fund

ld $ 16-952) A). B) The Clean Elections Fund, which

the Act established, is financed by voluntary dona.

trons. tan econtmbutiens, levies on criminal and civil

fines, and qualitving contmbutions that Amvona voters

make. J 88 16-94604), -8540A1-(0C). The Comnussion

is a pubhe body that is subject to Arizona's open

meetings law, and therefore may take official action

only in pubhhe meetings. dd) § 38-431 01. Itaus empow-

ered to make rules to admimster the program after

pubhe comment, id § 16-956(C), and is responsible

for educating voters about candidates through publ

cations and debate sponsorship, :d@ § 16-956. A 1D) (2)

Although the Act gives the Commission authority

to enforce its terms, 1d § 16 She. A\ 7), it sharply lim-

its the Commussion’s discretion in issuing matching

funds When the Commission receives notice from

a report that is filed or from other information that

is brought to its attention that an event requiring

it to distribute funds te a candidate has occurred,

it must distribute these funds immediately Fog.

ad §$ 16-952. A) (stating that the Commission “shall

mmimediately pay to the campaign account of any

participating candidate”) Similarly, ino the case of

independent expenditures, matching funds are dis

tributed atler a communication expressly advocates

for or against a candidate using specific words, or

otherwise has “no reasonable meaning other than

to advocate the election or defeat of the candidates ”

ld $$ 16-90L OL ANT) 952°C) Commission actions

are subject to gudieal review. Jf $$ 41-1092 to

log. 12

itl, MATCHING FUNDS PRINCIPLES.

The amount of money necessary to run a viable

campaiyrn depends on how competitive the race is,

and Anizena races have vaned widely in their compet

iiveness. JA 714-15.) Research indicated that in the

years immediately preceding the Act's adoption,

campaign costs varied from $10,000 to $80,000 JA

715) Given that variance, the Act's drafters beheved

they could not set a fined amount of public assistance

tor all elections without overfunding some campaigns

and underfunding others. JA) 715-16. “[1)f we kept

the dollar amount given to the Clean Elections Act

candidates at a, say, 10,000-dollar amount, then we

could have a situation where it would be too easy to

outspend the Clean Flections candidate and no one

* Although these are not relevant to the questions presented,

Petitioner MeComish’s eflorts to discredit the Commission are

not accurate MeComush Br at 77 Petitioners’ cited statements

do not suppert Petitioners’ allegations of thas) The Arizona

Repubhe Editemal does not mention the Commission's actions,

JA 303, nor does former Governor Janet Napolitano mention

the Commission in her speech to the Brennan Center for Justice

JA 352-53 The Foothills Focus aricle details complaints bv a

person unhappy with the resul€s of decisions in taver of an

opposing partys politicians FA S05-07) Similarly, the news

reperts address only disgruntled Commission emplovees and

campaigns J A SSS, S90 9]

would run as a Clean Elections candidate. framer

Lows Hoffman testifted JA. 715-16.

On the other hand. if we set the Clean Elec

tions allocation at $30,000, so as to cover the

balk of the competitive races as well then

we would have an enormous waste of gov

ernment money [Ijin addition we would

encourage, excessively encourage candidates

to run as Clean Elections Act candidates, be

cause, you Know, they would be getting such

a large amount of money

JA 716. To provide tor an efficient, effective public

funding scheme, the Act correlates the release of pub-

lie funds to the actual campaign activity of each race.

Doing so saves the State money and ensures that no

more assistance than necessary to disseminate the

candidate's message is distmbuted

Arizona's finely calibrated system retlects the re-

alities of campaign operations. The initial disburse-

ment allows a participating candidate to make the

investment necessary to run oa credible campargn.

JA. 430, 716 And when opponents and independent

groups attack the participating candidates, the par

uioipating candidates respond, just as they would in a

purely privately funded election. Participating candi

dates and officeholders have stated that the availabil-

itv of matching funds was a critical factor in their

decision to participate in the Clean Elections program.

JA. 387-88, 429, 441, 537-39. Without matching funds,

they would have not been able to communicate with

Voters or respond to false or musleading attacks by

independent groups. d.A. 429. Participation in the

Clean Elections program would decline if matching

funds were eliminated. J.A. 5387-39, 590-91, 688.

However, the Act’s framers saw no need to provide

unlimited pubhe assistance. J.-A. 716-17. As Louis

Hoffman explained, “|Wje thought that at some point

there was — vou would have enough money to get out

your message. And if the non-participating candidate

outspent vou, so be it.” J.-A. 717.

As anticipated, matching funds have engendered

more political speech. J.-A. 591, 717. Since the Act's

adoption in 1998, Arizona has expemenced an in-

crease in both the number of candidates running for

elected office and the amount of money being spent in

state elections. J.-A. 534-37, 876, 915-16, 921-22, 942.

Historical evidence therefore disproves Petitioners’

claims that matching funds burden speech. If match-

ing funds deterred speech, then nonparticipating

candidates facing Clean Elections candidates would

spend up to but not beyond the matching funds

threshold. J.-A. 876. That has not been the case. J.A.

876-87. Anecdotally, Petitioners could not cite specific

instances in which they decided not to raise or spend

funds. Dean Martin could not recall if he actually

triggered matching funds in his 2006 race for state

treasurer. J.A. 575, 579. State Senator Burns could

not show that he had reduced his political campaign-

ing as a result of the Act. J.A. 436-38. He further

testified that he would raise and spend whatever

money was necessary to get out his message. J.-A.

434. Representative Murphy testified that he had

never turned away a campaign donation, and he could

not identify anvone who chose not to contribute to him

because of matching funds. J.A. 412. Representative

Murphy's own campaign consultant advised him to

raise as much money as he could from all sources

regardless of its effect on matching funds. J.A. 594-95.

In sum, nonparticipating candidates continue to raise

and spend money without considering their oppo-

nents’ ability to receive matching funds. J.A. 433-34.

IV. PETITIONERS’ MISLEADING STATE-

MENTS.

Petitioners’ statements regarding the Act’s pur-

poses are misleading and are in many cases belied by

the very documents and testimony upon which they

rely. First, contrary to Petitioners’ claims, the Act was

not designed to advance a particular political agenda.

Arizona Free Enterprise (“AFE”) Br. at 9-10. An

internal memo by the initiative’s campaign manager

explicitly rejected the notion that the initiative sought

particular legislative or ideological outcomes. J.A.

213. So too did the testimony of current commissioner

and Act proponent Louis Hoffman. He testified that

“|wle were trying to set a policy that would apply

globally, regardless — not against particular individu-

als.” J.A. 722. Arizona Free Enterprise Petitioners

claim that Mr. Hoffman “sought to reduce the influ-

ence and relative voice of certain business groups.”

AFE Br. at 9. Yet when Mr. Hoffman acknowledged the

perceived power of particular individuals — whether

they were involved in real estate development or

casino gaming — he did so in light of then-recent

scandals such as AzScam and the Keating Five. J.A.

719-23. Similarly, supporting arguments produced for

the Arizona Secretary of State’s ballot proposition

guide did not advocate for the Act as a substantive

policy, but as an election reform to “halt{]” or “stop[]”

corruption. J.A. 226-30. Proponents spoke from

firsthand experience of the “pervasive and corrosive

effects of lobbyist money in political campaigns.” J.A.

229. To the extent that supporters of the Act believed

that particular issues were shortchanged in the then-

existing finance system, their perceptions were fueled

by “ample evidence” of “continuing and repeated

corruption in Arizona.” McComish Pet. App. 9.°

Petitioners’ allusions to “leveling the playing field”

are not presented in an accurate manner either. See

AFE Br. at 9; McComish Br. at 38, 66. Petitioners

suggest that “leveling the playing field” means cre-

ating equal resources for candidates, but the cited

materials do not support their sweeping factual

claims. They proffer a chart of statements ostensibly

* Although not relevant to the McComish Petitioners’ alleged

burden or the matching funds’ substantial relation to preventing

corruption, McComish Petitioners assert that “gaming” of the

matching funds system is “rampant.” McComish Br. at 71-72.

Yet these allegations are isolated, rumored and/or theoretical.

What is more, Petitioners do not acknowledge that the commis-

sion has since amended its rules to prohibit matching funds in

the event of teaming tactics. Ariz. Admin. Code R2-20-113(F),

Citizens Clean Elections Act & Rules Manual, http//www.

azcleanelections.gov/ (follow “Act and Rules Manual” hyperlink).

1-4

demonstrating matching funds’ ulterior purpose in

limiting speech and equalizing resources. AFE Br. at

9 (citing J.-A. 809-55); MeComish Br. at 38, 66 (same).

First, the chart does not distinguish between post

and pre-enactment statements. Second, the chart

indiscriminately cites statements without regard to

whether the alleged speaker was involved in. the

development of the Act or was actually a proponent

For example, the chart includes news reports that do

not necessarily reflect the views of the Act’s support-

ers. Rig., dA. S13, 814, 844

Third, most of the statements relating to spend-

ing limits focus on the limits by which participating

candidates themselves choose to abide. Fig., J.-A. 810

(entry trom Frequently Asked Questions about Arizo-

na’s Clean Elections System) (explaining participants

agreements); id. (entry from Talking Points) (explain-

ing limitations on participants); dJ-AJ 813 (entry from

Why Clean Elections is Important) (notung that “Yo /an

didates who run jcJlean abide by spending limits to

keep the cost of campaigns dewn™ .emphasis added);

J.A. 815 (entry from Color of Monev: the 2004 Presi-

dential Race); JA. SIS (entry from Clean Money

Campaign Retorm),; J.A. 820 (entry trom Revitalizing

Democracy, Clean Elections Reform Shows the Way

Forward), J.A. 829 (entry from Summary of the

Anzona Clean Flections Institute); dA) S33 (entry

from Clean Elections Media Kit)

Finally, only a handful of the quotations in the

chart even address the matching funds prevision, and

even these statements demonstrate the different

contexts in which the phrase “level the plaving field”

has been used. Aig. d AJ SIL, 845, S51. The term

“plaving field” has been used in the context of promot-

ing of voter participation through qualifying contribu:

tions, ea, dA. 808, 852, and of expanding electoral

opportunities to include candidates who might other-

wise choose not run. A.g., dA S16, S19, SLL Neither

of these has anvthing to do with equalizing resources

Vv. THE PROCEEDINGS BELOW.

On August 21, 2008, MeComish Petitioners filed

their Complaint against the Anivona Secretary of State

and the Citizens Clean Election Comnusston mem

bers. J.AL 1. Thev alleged that the matching funds

provision violated their rights under the First and

Fourteenth Amendments to the US Constitution and

they sought to deny their opponents access to two

thirds of the funds made available to participating

candidates in the form of matching funds. They claumed

that conditioning the distribution of funds on the

activities of nonparticipating candidates and of those

making independent expenditures had a chilling ef-

tect on their spending because it caused them (o avoid

or delay spending to prevent participating candidates

from. receiving matching funds. Aer considerable

discovery, cross motions for summary judgment were

filed JA 81-32

On danuary 20, 2010, the distmet court granted

Petttioners’ motions for summary judgment, demed

Respondents’ motions for summary judgment, and

enjoined enforcement of the Act's matching-funds

provision, ARS. § 16-982. MeConush Pet. App. 47-80

Even in granting summary judgment for Petitioners.

the district court found no definitive evidence that

matching funds in fact deterred spending in Arivona,

it at O4, and recogmized that it was “illogical te con.

clude that the Act creating more speech is a constitu

hionally prohibited ‘burden’ on Plaintitts.” Jd at 68

(citing Buckley vo Valeo, 424 US. 1, 49 (1978) (per

curiam ))

After acknowledging there would be no question

of the Act's constitutionality if it simply provided the

full amount of available funds, the district. court

noted that “aif a single lump sum award would not

burden Plaintitts’ tree speech rights in any cognizable

way, finding a burden solely because of the incremen

tal nature of the awards seems difficult to establish.”

i. at 66-67 (footnote omitted) The district court.

however, concluded that “tdlespite the unsettling

nature of PlaintiYs’ claims, Davis (o0 Federal Election

Comimission, 994 US. 724 (2008) requires this Court

find PlainttYs have established a cognizable burden”

f2 at 67. The court also beheved that notwithstand

ing these findings Darius required it to hold that

matching funds are subject to stret scrutiny, Jd at

69 The court recognized that the “anticorruption

interest supports some aspects of the Act.” but found

that “the Acts application to self financed candidates”

Was not justified by that interest. Jd at 70-71. The

court also found that the Act did not survive strict

scrutiny because it was not narrowly tailored to the

extent i burdened the speech of self-financed cand:

‘

dates. Jd at 72

The Ninth Ciremt reversed. Jad) at 39. First. on

the issue of what burden matching funds imposed on

Petitioners’ speech, the court of appeals recognized

that “lallthough Plaintiffs [eould] not pornt te any

specific imstance in which their speech has been

chilled because of the Act a? at G2, there existed the

potential for “a theoretical chilling: effect on donors,”

oat 34. Such a “minimal” burden on speech, the

court concluded, is subject to intermediate serutiny

Next, the court of appeals beld that the Act

satished intermediate scrutiny Jd Arizona's “interest

in eradicating the appearance of guid pro Quo corrup-

tion to restore the electorate’s confidence in its svs-

tem of government is not illusory’ it is substantial

and compelling.” Ja at 35 (quoting Buckley, 424 US

at 26-27). The court also found that “the State has an

Interest in providing matching funds to encourage

participation ints public funding scheme” Jd) Finally,

the court rejected the district court's reasoning that

this interest was mitigated when a pubhely financed

candidate was running against a self-funded candi

date because “its not relevant under this analvsis

what the source of a nonparticipating: candidate's

campaign contributions is when he or she triggers

matching tunds.” Jd at 37. Thus, the court of appeals

held that “matching funds bear a substantial relation

to the State's antieorruption interest "dad

In reaching this conclusion, the court of appeals

rejected Petitioners’ chams that Davis dictated the

result in this case Jd at 28. The court ebserved that

“(he law in Dacrs was problematic because it singled

out the speakers to whom it apphed based on their

wentitw” 7d) Farthermore, the scheme in Doors was

designed to “level electoral opportunities’ ” between

candidates by seeking to “disadvantage the rich” ld

at 27 (quoting Davis, 554 US. at 740). The court con

claded that in contrast. Arivena’s program involves

candidates in distinet regulatory regames and does

not “singlel | out the speakers to whom it apphels]

based on ther identity” Jao at 27-28) The court recoy

mized that Arivena’s procedure does not change the

“playing field” between two candidates as the scheme

in Davis did, but rather provides funding: regard

less of the nonparticipating candidate's) financial

’

resources la

In his concurrence, dudge Kleinfeld agreed that

the Act passed constitutional muster, but reasoned

that Anvzena’s pubhe- financing system simply imposed

“no lnutations whatsoever on a [nonpartrcipating)

candidate’s speech” Jd at 39 He further reasoned

that “(the Arivena scheme does not manipulate the

huts on private donors’ contributions according te

whether a competing candidate ts participating in the

government funding scheme Had it done so. Davis

would apply bv analogy" Jd at 89-40

SUMMARY OF ARGUMENT

The court of appeals correetiv apheld Arizona's

matching funds provision agaist Petitioners’ First

Amendment challenges The matching funds pro

Vision Is an unportant part of the voter-approved

Citizens Clean Elections Act, which deters quid) pro

quo corruption and the appearance of corruption by

providing Arizona candidates with an option to run

for oMce without depending on outside contributions

Vhe matching funds provision conditions the release

of two-thirds of the total publi funds available in a

race on the aggregate campaign activity in that race

As a result, Arivona’s pubhe-funding system is tar

lored to provide candidates in competitive races with

suffioent funds to run effective campaigns. At the

same time, the pubhe funding svstem protects the

pubhke Mise by not overfunding candidates in. less

competitive races Finally, the matching funds pro

vision creates a viable publie-funding option that

does not ran the risk ef coercing any candidate into

accepting that option

1 In Davis, the Court apphed strict scrutiny to

a provision Chat yranted a diserumimatory, asvinmetrre

fundraising advantage to one privately financed can

didate when another privately financed candidate

spent a specific amount of personal tunds 554 US. at

729) The Court found this provision to be an “unprec:

edented penalty” against the privately funded candi

dates who chose te spend personal funds on their

campaigns fd at 739 Dacrs does not require strict

serutiny on the instant case because the matching

‘unds prevision is net a penalty. First, the matching

funds prevision is not apphed in a discriminatory or

asymmetric wav because it does not treat similarly

situated candidates differently Pubhely tunded

candidates accept a boast of countervailing burdens

inorder to quality for matching funds, by contrast,

the privately funded candidates in Dacrs who bene

fited from the fundraising advantage accepted no

additional restmetions or limitations. Jd at 729-30

Second, the provision at issue in Darr was a contri:

bution limut that was stricter for one privately funded

candidate than it was for another, 2 at 738; the

matching funds provision provides public funds to

pubhely funded candidates, but does not limit the

fundraising or spending of privately funded cand:

dates) Third, no matter how much personal money

the self-funded candidate in Dacrs spent ater reach-

ing the threshold, his opponent would receive a fund

raising advantage until the opponent raised funds to

natch the self-funded candidate’s Jag at 729

Conversely, the matching funds prevision ts

simply a method of allocating the total pubhe funds

available to publicly funded candidates, and is there

fore capped. allowing privately funded candidates to

outspend publely funded candidates. For these

reasons, conditioning the release of two-thirds of the

total public grant on the aggregate campaign activity

In a particular race is not a penalty against any

privately funded candidate or independent expendi

ture group in that race This is consistent with the

factual record in this case in which Petitioners have

been unable to demonstrate that the matching funds

J 1

provision has chilled their speech or the speech of

other pohtical actors in Anzona Consequently, Darrs

does not require that stmet scrutiny apply to the

matching funds provision

Crfszens United oo Federal Election Comomnission,

ISOS Ct S76, 914 (QO), ts a better analogy to this

case In that case, the Court required that disclosure

and disclaimer requirements be substantially related

governmental interest in

to a sufficiently important

order to survive a First Amendment challenge because

these requirements “may burden the ability to speak,

but they impose no cetling on campaign related

activities, and do not prevent anvone from speaking ~

I? at 914 anternal quetation marks omitted) Despite

record evidence to the contrary, Petitioners claim that

they may restrict their campaign activity in an effort

to delay or prevent their publhely tunded opponents

from receiving the matching funds portion of pubhe

funding. AFE Bro at 80, MeComish Bro at 55. So

Petitioners allege that the matching funds prevision

may burden their alihty to speak, but i imposes no

eehing on campaitn-related activities and does not

prevent Pethoioners from speaking Accerdingly, the

Court should require that the matching funds provi

sion be substantially related to a sufMicrently om

portant governmental interest m= order to survive

Petitioners’ First Amendment challenge

2 Preventing corruption and the appearance of

corruption is a suficiently important governmental

interest to justifv the matching funds provision. The

framers recogmized that ao successful government

required “that every practicable obstacle should be

“ye

opposed to cabal, intrugue, and corruphon.” The

Federalist No 68, at 364 (Alexander Hamilton)

UndvPubhsh 2002). Furthermore, this Court) has

trequentivy recognized “preventing corruption or the

appearance of corruption are legitimate and com-

pelling government interests for restricting cam

paym finances” Federal Election Common vo Natl

Conservative Political Action Comm, 470 US. 480,

49GB 97 CLYSHSNCPAC)

It as gust as well established that pubhe funding

systems serve to prevent quid pro quo corruption and

the appearance of corruption. Over thirty vears ago

the Court wrote, “It cannot be gamnsaid that pubhe

finanemy turthers ao signifeant governmental

interest.” Ruckleyv, 424 US at 96 It follows that a

system which eliminates the need for a candidate to

accept private dollars would prevent “financial guid

pro quo: dollars tor political favors.” NCPAC, 47 CLS

at 497) Indeed, in Davis, the Court recoymized that

selffunded candidates were less susceptible to cor-

ruption because they were not dependant on outside

contributions. 554 US. at 738. This reasoning apphes

equally to publicly funded candidates who are not

dependent on outside contributions. What is more,

the record demonstrates that when Arizona voters

approved the Citizens Clean Elections Act, they were

well aware of very serious corruption in their state.

3.) The matehing funds provision ts substantially

related to preventing corruption by making a pubhe-

funding program available while protecting the pubhe

fise In Buckley, this Court approved a public-funding

system that “substitutes public funding for what the

parties would raise privately” 424 US. at 96 n 12Y,

which is exactly the rele of matching funds mm Ar

zona’s publhe funding system. The matching funds

provision also prevents the public-tunding system

from providing more funds than are necessary to run

an effective campaign both because it caps total funds

at three times the imtial grant, and because it only

disburses money when campayrn activity exceeds the

mtial grant amount ARS § 16-952. Overfunding

candidates would waste public money and run the

risk of coercing candidates who would not otherwise

choose to participate in the pubhe- funding svstem to

de so

At bottom Arizona's pubhe-tunding system, which

distributes two-thirds of the total funds available only

as required by total spending in a particular race, is

substantially related and narrowly tailored to An

zona’s compelling interest in preventing guid pro quo

corruption and the appearance of corruption, and for

that reason the Court should uphold the court of

appeals’ decision rejecting Petitioners’ First Amend

ment challenge

ARGUMENT

l. BASED ON THE NATURE OF THE HARM

THAT PETITIONERS ALLEGE, THE

COURT SHOULD APPLY INTERMEDIATE

SCRUTINY TO THE MATCHING FUNDS

PROVISION OF ARIZONA'S PUBLIC

FINANCING SYSTEM.

More than thirty vears ago, this Court upheld the

constitutionality of an) optional public) campaign-

funding program ino Buckley, 424 US. at 86-108.

Bucklev’s analysis of the First Amendment and Equa!

Protection challenges to pubhe funding did not apply

strict scrutiny and deferred to congressional judg

ments regarding the funding and structure of the

public-funding program. Jd at 90-108. In rejecting

constitutional challenges based on various legal theo-

ries, this Court noted that the federal public-funding

program Was “a congressional effort, not to abridge,

restrict, or censor speech, but rather to use public

money to facilitate and enlarge public discussion and

participation in the electoral process, goals vital to a

self-governing people.” Jd) at 92-93. For that reasen,

the program “furtherled| |... First Amendment val-

ues.” dd. at 93.

In the instant case, Petitioners allege that their

speech is chilled because they may choose to delay or

avoid raising or spending money for their campaigns

in an effort to delay or prevent public funds trom

being disbursed to their publicly funded opponents.

See, og, AFE Br. at 30 (alleging that independent

expenditure groups and privately financed candidates

will avoid “spending money in support of their politi-

cal cause” to prevent triggering matching funds);

McComish Br. at 55 (alleging independent expendi-

ture groups and privately financed candidates will

“limit their fundraising and expenditures to avoid

triggering matching funds”). The case law analogies

that Petitioners ask the Court to accept do not sup-

port their position that strict scrutiny should govern

the analysis of Petitioners’ claims. First, the Court’s

Davis decision does not apply to this case because

issuing matching funds is not a penalty or a discrimi-

natory or asymmetric burden. Second, matching

funds are not a variety of compelled speech because

the provision neither requires Petitioners to fund the

speech of their opponents, nor creates any confusion

regarding the sponsorship of their opponents’ speech.

The matching funds provision places no limit on

the amount of funds that privately funded candidates

and their supporters can raise or spend. It is merely a

mechanism for allocating funds to candidates in a

public-funding system. Thus, the burden that Peti-

tioners allege is the kind of indirect, hypothetical

burden on speech that the Court reviews under inter-

mediate scrutiny. The Court’s Citrzens United deci-

sion affirming Buckley makes clear that campaign-

finance regulations that limit neither contributions

nor expenditures, such as disclosure requirements

that are triggered by a privately funded candidate

raising and spending money for political speech, are

reviewed under intermediate scrutiny. Citizens United,

1380S. Ct. at 913-14; Buckley, 424 ULS. at 64-65.

A. This Court’s Davis Decision Does Not

Warrant Applying Strict Scrutiny Be-

cause the Act Is Nondiscriminatory,

Does Not Limit Petitioners’ Ability to

Raise and Spend Money and Caps Par:

ticipants’ Funding Regardless of the

Petitioners’ Activities.

The upshot of Petitioners claim is that the Act’s

matching funds provision discriminates against them

in a manner like the statute that this Court struck

down in Davis. Not so. The provision at issue in Davis

tied the hands of self-funded candidates with respect

to their efforts to raise funds while releasing oppo-

nents from the same restrictions. The Act’s matching

funds provision does not discriminate against any

political actor’s speech, but rather distributes funds

for which participating candidates have qualified

based on aggregate activity in a race. It thus neither

discriminates on the basis of identity nor imposes any

limitations on political actors. The Court should de-

cline to adopt Petitioners’ mistaken reading of Davis.

In urging the Court to expand Davis, Petitioners

oversimplify the Court’s analysis and the details of

the Bipartisan Campaign Reform Act. of 2002 § 319(a)

(“Millionaire’s Amendment”). The Court noted in Davis

that “[uJnder the usual circumstances, the same re-

strictions apply to all the competitors for a seat.” 554

U.S. at 728; see also 2 U.S.C. § 441a(a)(1) (subjecting

all congressional campaigns to the same contribution

limits); 2 U.S.C. § 434(a)(2) (subjecting all congression-

al campaigns to the same disclosure requirements).

The Millionaire’s Amendment replaced the normal rule

in congressional elections with “a new, asymmetrical

regulatory scheme.” Davis, 554 U.S. at 729. In partic-

ular, § 319{a) provided that, once one of two or more

privately funded candidates in a race spent more than

$350,000 of personal funds on his campaign (subject

to certain adjustments), the initial contribution limits

were tripled and the limits on coordinated party/

candidate expenditures were eliminated entirely —

but only for that privately financed candidate’s pri-

vately financed opponent. Id. at 729. Because the

Millionaire’s Amendment subjected otherwise similar-

ly situated candidates to “asymmetrical” and “dis-

criminatory” fundraising limitations based solely on

one candidate spending personal funds, the Court

concluded that the law resulted in an “unprecedented

penalty” that was subject to strict scrutiny and

was unsupported by any compelling interest. Id. at

739-40.

The matching funds provision of Arizona’s public-

financing system is not discriminatory or asymmet-

rical. First, consistent with Buckley, the Act offers all

candidates a choice between two entirely different

systems of financing, each with its own separate and

distinct set of regulatory benefits and burdens. 424

U.S. at 87-90. The Act is not “discriminatory” or

“asymmetrical” merely because only publicly funded

candidates receive public funds, including matching

funds. See id. at 97-98. Holding that issuing public

funds to publicly funded candidates is somehow

discriminatory or asymmetric would lead to the

> 7 ea

‘

“grossest™ kind of discrimination because publicly

funded candidates are subject to an entirely separate

and distinct regulatory scheme. Jd. (“Sometimes the

grossest discrimination can lie in treating things that

are different as though they were exactly ahke....”)

(internal quotation marks and citation omitted)

Unhke the Milhonaire’s Amendment, the match-

ing funds provision does not impose any limit either

on privately funded candidates or on their supporters.

Rather, it empowers such entities to impact. the

timing and amount of money that will be disbursed to

publicly funded candidates, potentially preventing

publicly funded candidates from receiving up to two-

thirds of the total funds available to them. In his

deposition, campaign consultant Constantin Querard

recognized that a publicly funded candidate must

wait “for matching funds where your opponent can

wait so long to spend that they give it to you at the

last minute. You can’t spend it.” JA. 597. Although

empowered to do so, 1t 1s rarely wise for the privately

tunded candidate to suppress an opponent's speech by

limiting the privately funded candidate’s campaign

activity. Dr. Kenneth Maver stated in his declaration

that “(t]he hterature on campaign finance 1s nearly

universal on this point: other things being equal, it is

always in the candidate's interest to spend more

money,” and tor that reason, he “would advise prt-

vately-funded candidates that it is unreasonable for

them not to spend money on his or her campaign,

solely because this might result tn increased expend.-

tures for the competing candidates.” J.A. 539. Even if

Te)

the Court views this incentive to prevent one's oppo-

nents from speaking as a disincentive for privately

funded candidates to speak. it is not the unprece

dented penalty that the Court considered in) Dacrs

because it is neither disernminatory nor asvmmetrie.

In Daors, other privately funded candidates

enjoyed higher contribution limuts based solely on

Davis's spending. The federal provision penalized pri-

vately funded candidates who chose to use personal

monies to support their campaign and did not present

self-financed candidates with a genuine choice be-

tween financing options as the pubhe-funding scheme

had in Buckley. 554 US. at 739.

In Buckley, the publicly funded candidates’ coun-

tervatling burden of an expenditure limit offset any

potential disadvantage that public funding imposed

on the privately funded candidates. 424 US. at 98.

The voluntary expenditure cap meant that nonpartic-

ipating “candidates [would] be able to spend more in

relation to the (participating) candidates.” Jd. at 99.

Because of this tradeoff, the public-funding scheme did

“not unfairly er unnecessarily burden|] the political

opportunity of any party or candidate.” dd at 95-96

Likewise, Arizona provides public funding of political

campaigns, but only if participants agree to all of the

following countervanling burdens: limits on their

expenditure of personal funds, A.RS. § 16-941, A2),

limits on overall expenditures, id) § 16-941 ,A); lower

contribution limits, fd. § 16-945 A\1) a require.

ment of collecting a minimum number of qualifving

contributions, id § 16-9500B), (D): a requirement of

participating ino at least one public debate, id § 16

M956(A\ 2): and a requirement of returning all unspent

money to the Commission following the election, id

$ 16-953) When compared to the gratuitous benetit

granted to privately funded candidates in Dovrs who

were not. self-funded, the trade offs and counter

vailing burdens required betore a candidate becomes

ehimble for matching funds demonstrate that the

provision does net grant publicly funded candidates a

discriminatory or asymmetrie advantage

Petitioners acknowledge that “[:]nstead of rmpes

ing different fundraising limits on candidates in the

same race, the Matching Funds Provision provides

direct subsidies to candidates who participate in Ar

zona’s public financing svstem.” AFF Br. at 24. The

Court recognizes the “basic difference between direct

state interference with a protected activity and state

encouragement of an alternative activity consonant

with legislative pohey” and reviews the latter less

strictly because “[clonstitutional concerns are great-

est when the State attempts to impose its wall by

force of law; the State's power to encourage actions

deemed to be in the public interest is necessarily tar

broader.” Maher oo Roe, 4382 US. 464, 475 & 19. 476

(1977) certing Bucklev, 424 US. at 94-95). Through

the asymmetrical contribution limits in) Decrs, the

government imposed its will by force of law A public

campaign-financing system provides funding to en-

courage actions deemed to be in the public interest

This distinction underhes dudge Wleinfeld’s concur-

“)3,)

ring opinion where he observed that “[blecause the

challenged scheme imposes no contribution or spend

ing limits, at does not restrict speech at al! Lhe!

cannot see why heightened scrutiny would apply”

MeComish Pet. App. 41

Under Arivena’s system, privately: financed can-

didates and independent expenditure groups “retau

the untettered mght to make unhmited |. expend

tures,” while recipients of matching funds agree to

strict limitations, including an absolute cap on expen-

ditures. Compare Davis, 554 US at T3Q with ARS

§ 16-9520R) As was the case in Buckley, the concomn

taunt expenditure limit enhances privately funded

candidates ability to outspend participating cand

dates. 424 US at 104 The expenditure limitations

on Mayor parties participating ino publhe financing

enhance the ability of nonmagjer parties to increase

their spending relative to the major parties”). Like

the pubhe-funding program ino Bucklev, Arzona’s

pubhe- funding program with matching funds may

facilitate the ability of nonparticipating candidates to

raise funds by making more private money avanable

for political donations Jd. at 94 n 128; see alse rd at

94-95 (noting that uf privately funded candidates are

unable to wage effective campaigns, it would not

result from the pubhe funds disbursed to their oppo

nents but because of “Cheir (own) inability to raise

private contrmbutions: }

Once a pubhelyv tinanced candidate reaches the

matching funds cap. he or she receives no more

funding, cannot raise additional funds, and is never

reheved from other restmciions based on his or her

opponents achons ARS. § Te 920R) The privately

funded candidates in Davis who benefited from the

Millionaire's Amendment, on the other hand, did not

have to abide by any program restrictions and were

tree to outraise and outspend their privately funded,

self-financed opponents even before the Chreshold was

reached Thus, Davis's unique penalty on privately

funded candidates who used personal momes does

not control the analvsis of Amzena’s pubhe-tunding

program

B. Pacific Gas and Tornillo Do Not Apply

Because the Act Does Not Compel Pri-

vately Funded Candidates to Promote

Their Opponents’ Political Speech.

This is also not a compelled speech case. No can

didate or independent expenditure group is “obliged

personally to express a message he disagrees with,

imposed bw the government” dohanns vo Livestock

Mkts. Ass'n, 544 US. S50, SAT (2005) coutungs exam

ples such as requirmng students to recite the Pledge of

Allemance or license plates to bear the state's motto)

Nor is any candidate or independent expenditure

group “required by the government to subsidize a

message he disagrees with, expressed bv a private

entitw” Jd at SS7-58 adentiftving: examples such as

the use of mandatory bar fees or men dues to finance

pohtical speech unrelated Co the private association's

principal role tor which membership is) required)

Finally, no candidate or independent expenditure

yroup is foreed to give others access to its own media

oe |

“are

or to associate with a messare with which at: dis

agrees Cf Pac Gas & Flee Cone Pub) Utils. Corum'n

of Cal, 475 US. 1 198 6) (plurality epinien), Mirae:

Herald Publ’g Coo cv Tornillo, 4S US 240 (1974)

Compelled access cases, a subset of compelled

speech cases, are distinguishable from the publhe

campaign funding program at issue here First, in the

compelled access cases, a utility cempany and a

newspaper were required to directly assist — threugh

bilhng envelopes and column space, respectively -

i disseminating the speaker's message. Pac Gas,

475 US. at 6-7: Tornoe, AIS US. at 244. That is not

the case here The pubhe funding program is financed

through voluntary donations, tax contributions, levies

on erminal and civil fines, and qualifving contr

butions from Amvona voters ARS. 88 16-946.A),

954, A)-0C) Arizona does not require privately funded

candidates to contmbute air time or tillboard space to

disseminate the views of their publicly funded oppo-

nents Thus. in addition to not requiring privately

funded candidates and independent expenditure groups

to finance the speech of publicly funded candidates,

the Act does not create an impression that privately

funded candidates or independent expenditure groups

endorse the message of pubhiely funded candidates

Second, the compelled access in Pacific Gas and

Torniilo were content-based. Pac Gas, 475 US. at 14-

1S corting Buckley, 424 US. at 97-105, and Regan vo

Taxation with Representation of Wash . 461 US) 540,

946.50 (1983)) In contrast, matching funds are avail

able to candidates regardless of either the content or

medium of the message thev produce with the tunds

See Regan, ASL US at 548 cholding that government

subsidies of veterans orgamivations lobbying was

content-neutral because the groups received the sub

sidv “regardless of the content of any speech they may

use, including lobbying”) Furthermore, the matching

funds provision provides funding based on disclosures

of electloneering: communication required by eircum-

stances analogous to those required by federal elee-

tion law. Compare ARS. $$ 16-901 01, -958 wath 2

USC. $4340). see also Federal Election Comm'n:

Wise Right to Life, Inc, 551 US. 449 (2007) This

Court has expressiv held that stmet serutiny does not

apply to such regulations. Crucens United, 13808. Ct

at 914; see also Davenport vo Wash) Educ. Assn, O91

US. 177, ISS-8S9 2007) cstating that striet scrutiny is

not Warranted where the rsk that government might

drive certain ideas from the marketplace is “inconse

quential” and noting that “itis well established that

the government can make content-based distinetions

when it subsidizes speech”). In addition, Arizena tre

quently disburses matching funds to eandidates in

the same race who have opposing viewpomnts See es ,

JA, 756 tmatehing funds issued to Corporation

Commission candidates of both parties), 760 (same

tor State Representative District 8) Hence the

matching funds provision ts content-neutral,

Finally, even though the Court cited Pacific Gas

in Davis, the Court has made clear that the “[t.acih-

tation of speech to which a... party may choose to

respond does not amount to forcing the ... party to

speak.” Wash State Grange o Wash State Republican

Party, 552 US. 442, 457 n 10 (2008); see also Rums-

feld v. Forum for Academie & Institutional Rights,

Inc... O47 US. 40, 6S (2006) The compelled speech

violation in each of our prior cases, however, resulted

from the fact that the complaining speaker's own

message Was affected by the speech i was forced to

accommodate”). Nothing in the record supports the

conclusion that anv candidate's or independent ex-

penditure committees “own message” was affected by

the issuance of matching funds Petitioners do not

“have the mght to be free from vigorous debate.” Pac

Gas, 475 US. at 14, which is exactly the remedy that

they seek here

C. The Matching Funds Provision’ Im-

poses No Ceiling on Campaign-Related

Activity and Creates at Most a Hypo-

thetical, Indirect’) Burden = on the

Speech of Privately Funded Speakers.

The heart of Petitioners’ claim is that the manner

in Which the State distributes two-thirds of the public

funding: avaalable to participating candidates may,

hke the compelled disclosure requirements ino Buck

ley, “deter some individuals who otherwise might

contribute” from contmbuting to campaigns 424 US

at 65-68. The Court should analyze the funding: pro-

Vision under intermediate scrutiny, as it does other

hypothetical, indirect burdens on speech. The Ninth

Cireurt explained that “lallthough Plaintiffs cannot

point to any specific instances in which their speech

O68

has been chilled because of the Act, we recognize that

under the Supreme Court's jurisprudence, even laws

that create only potential chilling effects impose some

First Amendment burden.” MeComish Pet) App. 32

Although the Acts structure and purpose support

Judge Kleinteld’s view that Anvzona’s law imposes no

burden at all on the speech of privately funded can-

didates and their supporters, :? at 39, the majority's

analysis 1s also consistent with this Court's prece

dent.

In Buckley, this Court drew the analogy between

campaign finance and other electoral regulations. 424

US. at 95. Thus in campaign finance regulation, as in

other electoral regulations, the Court should apply a

“flexible standard” that assesses whether state inter-

ests are “sufflmently weighty to justify the limitation”

and “rejgect] ] the argument that strict serutiny ap

plies to all laws imposing a burden.” Crawford ov

Marion Cnty. Election Ba., 553 US. 181, 190-91 & ns

(2008) (plurality oprmen) canternal quotation marks

and citations omitted). Arizena’s matching funds pro-

Vision umposes po direct limits on either contributions

or expenditures of non-participating candidates and

their supporters. A.RUS. §$ 16-952. Indeed. as was true

in the law upheld in Buckley, the candidates choosing

to accept public funding are subject to strict contribu

tion and expenditures limits that do not apply to non-

participating candidates. Compare id. § 16-941(A)

(restriciions on candidates participating ino Clean

Elections program), with Buckley, 424 US. at 94-95.

The matching funds prevision at issue here is merely

oe ed

a mechanism for determining how much public fund

ing to release to participating candidates from the

preset allocation. Cf Buckley, 424 U.S. at 91 n 124

“The... check-offis simply the means by which Con-

gress determines the amount of its appropriation.”).

The burden that Petitioners postulate ts similar

to the burden associated with disclosure require

ments. In considering the constitutionality of the

disclosure provisions in the Federal Election Cam-

paign Act (“FECA”), the Buckley Court assumed that

“compelled disclosure hald] the potential for substan-

tially infringing the exercise of First Amendment

rights” and that it would “deter some individuals who

otherwise might contribute.” Jd. at 66, 68. Buckley,

however, did not apply strict scrutiny to FECA’s dis

closure provisions. Instead, it inquired whether those

provisions exhibited a “substantial relation between

the governmental interest and the information re

quired to be disclosed.” Jd. at 64 Unternal quotation

marks, citations, and footnote omitted). In applying

this intermediate level of scrutiny, the Court recog-

nized that the burdens of disclosure were not equiva.

lent in magnitude to the burden of an expenditure

limit because “disclosure requirements impose no

ceiling on campaign-related activities.” /d. Requiring

disclosure of independent expenditures, the Court

held, “is no prior restraint, but a reasonable and

minimally restrictive method of furthering First

Amendment values by opening the basic processes of

our federal election system to public view.” Jd. at 82

(footnote omitted)

The Court recently reaffirmed the appropriate.

ness of applying intermediate scrutiny to campaign-

finance laws that may indirectly burden campaign

expenditures. In Crfrzens United, the Court upheld

disclaimer and disclosure provisions of the BCRA.

130 S.Ct. at 913-14. The disclaimer provision re-

quired, among other things, that a televised elec-

tioneering communication include a statement that

. is responsible for the content of this advertis-

ing, While its disclosure provision compelled those

spending above $10,000 on electioneering commun-

cations to report their expenditures to the Federal

Election Commission. /d. This Court in Citizens

United as it had in Buckley found that disclaimer and

disclosure requirements may burden speech, but that

they impose no ceiling on campaign-related activities

and do not prevent anyone from speaking. /d. at 914;

see also Doe v. Reed, 130 8. Ct. 2811, 2818 (2010)

intermediate scrutiny applies to disclosure of refer-

endum petition information). The Court has subjected

these requirements to exacting scrutiny, which re-

quires a substantial relation between the disclosure

requirement and a sufficiently important governmen-

tal interest. Doe, 1380 S. Ct. at 2818; Citizens United,

130 8S. Ct. at 914.

Like disclosure requirements, matching funds do

not impose a ceiling on campaign activities and do not

prevent anyone from speaking. They do not operate

as expenditure limits. Candidates may choose to ex-

ceed the threshold for triggering matching funds and,

as the record demonstrates, have done so repeatedly

in the past. See, e.g., J.A. 479-529 (CCEC 2002 Dis-

bursement Summary indicating numerous matching

payments), 876-77 (dentifving 2006 candidates that

triggered matching funds), 974-75 (Lang Declaration

reporting matching funds triggered by Petitioners).

Even if matching funds pose a “potentially signit-

icant burden” in some circumstances as the Court

suggested by citing Day v. Holahan, 34 F.3d 1356 (8th

Cir. 199-4), in Davrs, 55a ULS. at 739, that does not

mean that the Court must apply strict scrutiny in

this case. For example, in Buckley this Court assumed

that “compelled disclosure has the potential for sub-

stantially infringing the exercise of First Amendment

rights,” but it still reviewed the disclosure require-

ments under intermediate scrutiny. Buckley, 424 U.S.

at 66. The Court characterized the harm in Davts as

more than a “potentially significant burden”; it de-

scribed the provision at issue there as an “unprece-

dented penalty” on the candidate who chose to use

personal funds to support his campaign. 554 ULS. at

739. The matching funds provision imposes no penal-

ty on privately funded candidates; it merely estab-

lishes the timing and allocation of limited public

funds based on aggregate campaign activity.

The record below confirms that Arizona’s public-

funding program has not resulted in less speech.

Spending by privately funded candidates has not clus-

tered just below the matching funds threshold as one

would have expected it to if matching funds discour-

aged expenditures. J.A. 876-77. As the district court

found, “[ijt is undisputed that campaign spending has

increased since the Act’s passage,” and “[p]laintiffs’

testimony is somewhat scattered and shows only a

vague interpretation of the burden of the Act.”

McComish Pet. App. 53-54. Some Plaintiffs could not

even recall whether they had triggered matching

funds in their campaigns. See, e.g., J.A. 433-34 (Rob-

ert Burns Deposition), 575 (Dean Martin Deposition).

“Plainly, campaigns can be successfully carried out by

means other than public financing; they have been up

to this date, and this avenue is still open to all candi-

dates.” Buckley, 424 U.S. at 101. This has remained

true in Arizona. From 2002 to 2008, between thirty-

three and forty-eight percent of candidates for state

office have privately financed their campaigns.

McComish Pet. App. 15-16.

Petitioners claim that the Ninth Circuit was

wrong to rely on this Court’s approval of public cam-

paign-financing in Buckley but recognize that “the

system in Buckley was designed to provide an alter-

native to candidates who wished to lessen their

reliance on private funds.” AFE Br. at 36. Arizona

voters provided an alternative to candidates who

wish to lessen their reliance on private funds by

approving a law that explicitly declared the “intent to

create a clean elections system that will improve the

integrity of Arizona state government by diminishing

the influence of special interest money.” A.R.S. § 16-

940(A).

The exercise of free speech has increased since

the Act’s passage. Again, the district court found, “(i]t

is undisputed that campaign spending has increased

since the Act’s passage.” McComish Pet. App. 53. By

providing for increased debate about issues of public

concern that privately funded candidates raise, the

Act’s matching funds promote the free and open de-

bate that the First Amendment was intended to

foster. Like the federal program at issue in Buckley,

Arizona voters did not adopt the Act “to abridge,

restrict, or censor speech, but rather to use public

money to facilitate and enlarge public discussion and

participation in the electoral process, goals vital to a

self-governing people.” 424 U.S. at 92-93. Striking

down the matching funds provision would reduce “the

quantity of expression by restricting the number of

issues discussed, the depth of their exploration, and

the size of the audience reached.” /d. at 19. This

would ultimately undermine the First Amendment’s

purpose. See Bigelow v. Virginia, 421 U.S. 809, 829

(1975) (“(Tjhe First Amendment favors dissemination

of information and opinion.”); see also Citizens United,

130 S. Ct. at 911 (heralding “our Jaw and our tradi-

tion that more speech, not less, is the governing

rule”). “[T}here is no such thing as too much speech.”

McConnell v. Federal Election Comm’n, 540 U.S. 98,

259 (2003) (Scalia, J., concurring in part and dissent-

ing in part), overruled in part on other grounds by

Citizens United, 130 S. Ct. at 913.

Because the Act only indirectly burdens privately

funded candidates and independent expenditure

groups, and because it, like the program approved in

Buckley, promotes free speech, the Court should

review the Act’s matching funds provision under

intermediate scrutiny.

ll. THE CITIZENS CLEAN ELECTIONS ACT

FURTHERS ARIZONA'S IMPORTANT AND

COMPELLING GOVERNMENTAL INTER-

“ST IN PREVENTING CORRUPTION AND

THE APPEARANCE OF CORRUPTION.

The Act furthers Arizona’s interest in preventing

corruption and the appearance of corruption. Corrup-

tion strikes at the core of self-government — it is an

attack on democracy itself. Accordingly this Court has

long recogmized that fighting corruption and = the

appearance of corruption ts “‘critical it confidence

in the system of representative Government ts not to

be eroded to a disastrous extent” Buckley, 424 ULS

at 27 (quoting U.S. rin Ser rv. Comm'n v. Natl Ass'n

of Letter Carriers, 413 U.S. 548, 565 (1973). The

structure of the Constitution itself is a bulwark

against corruption. The Framers recognized that a

successful government required “that every practica-

ble obstacle should be opposed to cabal, intrigue, and

corruption.” The Federalist No. 6S, at 364 (Alexander

Hamilton). Elections themselves are part of the

Constitution's anticerruption structure, because “if

the proofs of that corruption should be satisfactory,

the usual propensity of human nature will warrant us

in concluding that there would be commonly no detec

of inclination in the body to divert the public re-

sentment from themselves by a ready sacrifice of

the authors of their mismanagement and disgrace.”

The Federalist No. 66, at 356 (Alexander Hamilton);

see generally Zephyr Teachout, The Anti-Corruption

Principle, 94 Cornell L. Rev. 341 (2009) (reviewing

the evolution of the concept of corruption since the

framing of the Constitution) In passing the Citizens

Clean Elections Act, the citizens of Amzona were

participating im the long American tradition of form-

Ing a system of government that would be resistant to

cabal, intrigue, and corruption

A. States Have Authority to Enact Meas-

ures to Prevent Corruption and the

Appearance of Corruption.

States have a “legutuumate and compelling” inter-

est in preventing corruption and its appearance

NCPAC, 470 U.S. at 496-97; accord Colo. Republican

Federal Campaign Conumn. uv. Federal Election Conim’n,

S18 U.S. 604, 641 (1996) (Thomas. J.. concurring)

(noung that in “the context of campaign finance

reform, the only governmental interest that we have

accepted as compelling is the prevention of corruption

or the appearance of corruption’), see also Wise. Right

to Life. Inc., 551 U.S. at 47

recognition of government's interest ino preventing

S «noting Court's long

corruption or the appearance of corruption) Accord

ingly, the Court has appreved state actions that

punish cerruption, such as bmbery laws, and prevent

such abuses, such as campaign finances laws, and

will not “second guess a legislative determination as

to the need for prophylactic measures where corrup

tion is the evil feared.” Federal Flection Corirn'n

Natl Right to Work Comom., 499 U.S. 197, 210 (1982)

In Crfreens United, the Court upheld disclosure re-

quirements because they addressed the practice of

independent groups “running election-related adver-

tisements while hiding behind dubious and mislead.

Ing names.” noting that disclosures “help citivens

make informed choices in the political marketplace ”

180 S.Ct. at 914 anternal quotation marks and

eitations omitted)

The Court has similarly recogmved the state's

strong interest in undertaking prophylactic measures

to protect the integrity of the election process itself

See Crawford, 553 US. at 194-95, 203 (upholding

photo-identification to deter voter fraud); Burson v

Freemian, 504 U.S. 191, 199 (1992) (plurality opimen)

(upholding prolubitien on campaigning within 100

feet of polling place and explaining that “\t’he Court

has recognized that a State ‘indisputabiv has a

compelling interest in preserving the integTity of its

election process ”) (quoting Fu o SOE Crtvw Democratic

Cent. Comm , 489 U.S. 214, 231 (1989)); see also Doe,

180 S.Ct. at 281M (states may disclose signatory

information of referendum petitions to preserve “the

integrity of the electoral process by combating fraud,

detecting invahd signatures, and fostering govern

mont transparency and accountability”)

The voters in Arizona whe enacted the Act were

cogmuzant of actual and apparent political cerrup-

tion of all kinds. ARS. §$ 16-940; see Buckley,

US. at 27 (noting “the impact of the appearance of

corrupuion stemming trem public awareness of the

opportunities for abuse inherent in” campaign finane:

ing) As the Ninth Circurt explained, Arizona citizens

endured images of lemstators and lobbyists scoffing at

contributions hmits and literally taking duMe bags

full of cash in exchange fer sponsering legislation

Pet. App. 8-9 (desenbing AvScam as [a] sting opera

tion [that] caught state lemslators on videotape accept

Ing campaign contributions and bribes in exchange

for agreeing to support gambling legislation”); sce ads

J.A. 138, 150; see generally JA. 122-212, 214-25

These examples demonstrate that, as was the case

in Buckley, “the problem is not an iiuserv one” 424

U.S. at 27

Providing a publhe-funding option to candidates

is a powerful tool in preventing what the Court has

deseribed as “[thhe hallmark of corruption finan-

jal guid pro quo. dollars for political favers ”" NCPAC

ATO US. at 497; see Bucklev, 4224 US. at 96 Odentity-

ing “public financing as a means of chminating the

improper influence of large pmvate contmbutions”)

The Act expheitly seeks to reform Arizena’s election

financing system to eliminate dollars tor politieal

favors, or in the words of the Act. “subsidies and

special privileges for campaiuzn contributors.” AROS

$ 16-940 BX6). The Act offers an avenue tor cand-

dates to avoid “receipt of what we can call the ‘quids’

in the quid pro quo formulation.” McConnell’, 540, US

at 292 UNXennedy, J.. concurring in part and dissenting

in part) Indeed. publicly funded candidates may

not accept any ‘quids, except for an extremely lim

ited number of small private contributions. ARS

$ 16-945 AN) As this Court explained in Daris, “the

use of personal funds .. reduces the candidate's de

pendence on outside contributions and thereby coun-

teracts the coercive pressures and attendant msks of

abuse to which contmbution limitations are di

rected " S554 US at 738 cnternal quotation marks

omitted) (quoting Buckley, 424 US. at 53). Likewise,

the use of public funds eliminates the candidate's de

pendence on outside contributions and thereby coun-

teracts the coercive pressures and attendant risks of

abuse to which contrbution limits are directed —

The matching tunds provision is an important

part of Amzona’s public campaign-financing system,

making it possible to offer a viable pubhe-financing

option within the constraints of scarce government

resources. See Buckley, 424 US. at 103 (recegnizing

governments interest in placing limits on publhe finane-

ing to protect the public fise! The record supports the

conclusion that the matehing funds provision enables

" To the extent petitioners seck te controvert the State's

asserted interest, their anruments surely fan) “The quantum of

evidence needed to satisty heightened pudicial scrutiny of legis

latiwwe gudgments wall vary up er down with the iooelty and

plausr dirty of the justification raised " Naron co SAring Mo Govt

PAC, S28 U.S) 377, 391 (2000) cemphas:s added). Like the

contmbutien limits at issue in Niaon, the Act is net rustified on a

novel theory, and “jaon any event, this case does not present a

close call requiring further definition of whatever the State's

evidentiary obligation may be "dd at 393

candidates to partiapate in publhe financing Fog,

JA 429-30, 542-48. And the record demonstrates

that campayrn consultants and the Act's opponents

recognize that without the matching funds prevision

parhempation “probably would stop.” dA. 590-92, 63s.

Likewise, expert testimony establishes that matching

provisions are key to encouraging participation dA

-~.ym™ «

‘ren 34M

B. The Act Does Not Level Electoral Op-

portunities Unconstitutionally.

Attempting to avoid these settled principles con-

cerning the State’s legitimate anticorruption inter

ests, Petitioners claim that the “true” purpose of the

matching funds provision is to “level the playing

field.” and that such an interest is illemtimate Fig.

AFE Br at 457-58. However, if one interest is sutt-

cent to pustify a statute, the Court need not examine

the suthciency of each interest promoted by a statute

See, eg, Citizens United, 1380 8. Ct. at 915-16 U'Be

cause the intormational interest alone ts sufficient to

justify appheation of $201 to these ads, it is not

necessary to consider the Government's other assert

ed interests.”). Furthermore, “[it as a famnhar prince

ple of constitutional law that this Court wall not

strike down an otherwise constitutional statute on

the basis of an alleged aheit lemslative motive”

United States vo O'Brien, 391 US. 361, 383 (1968)

While legislative history may assist in the construc

tion of an act, “lajtis entirely a different matter when

[the Court is] asked to void a statute that is. under

well-settled eritema, constitutional on its face, on the

basis of what fewer than a handful of [people] said

about it.” Jd) This is particularly so, where, as in this

case, Petiuioners rely principally on statements not of

lesnslators or voters who enacted the measure, but

“the motives of a particular group that lobed for or

against a certain) proposal even assuming the

precise intent of the group can be determined, a pont

doubtful both as a general rule and in the instant

case.” Crreuul City Stores, Inc. v. Adams, 5382 U.S

105, 120 (2001). In any event, as the Ninth Cireuit

acknowledged, legitimate concerns about quid pro

quo corruption and the appearance of corruption in

Arizona politics motivated voters to approve the Act

MeComish Pet. App. 9-11

Petitioners attempt to leverage any use of the

phrase “level the plaving field” into a statement of

het intent is mnsleading in the context of their

challenge to the matching funds provision As noted

above, Petitioners rely on numerous statements by

purported proponents of the Act in an attempt to suss

out some ilemtimate motive. However, isolated claims

made during the Act's drafting and passage by sup-

porters are not probative of the electorate’s intent.

Arizona courts interpret the view of the electorate

with reference to the State-issued materials provided

to voters. See, e.g., State v. Gomez, 127 P.38d S738, 877

(Ariz. 2006) examining findings in State publicity pam-

phlet to determine purpose). Further, post-enactment

statements are of no value whatever. Graham Cniy

Sou & Water Conservation Dist. v. US. ex rel. Wilson,

1380 S.Ct. 1396, 1409 (2010) (Needless to say, this

material] does not quahfv as legislative “history,

given that it Was written 13 vears after the amend-

ments were enacted. It is consequently of scant or no

value for our purposes”)

Petitioners argue that the term “level the plaving

field” is always the equivalent of the Court’s use of

the phrase “level electoral opportunities.” See, e.g,

MecComish Br. at 38, G4 (suggesting that use of the

phrase “level the playing field” is always equivalent

to its usage in Davrs), AFB Br. at 8-12 (same), see a/so

Davis, 554 US. at 741-42 (rejecting the notion that

one may level electoral opportunities by “restrmetling!

the speech of some elements of our society in order to

enhance the relative voice of others”) (quoting Buck-

lev, 424 US. at 48-49). But contrary to Petitioners’

claim, the term “level the plaving field” has been used

In a vanety of ways by the Commission and others

and not synonymously with the Court's deseriptien of

“level electoral opportunities.”

The promotion of participation by voters through

qualifving contributions, J.-A. 308, 852, or expanding

electoral opportunities to candidates who might

otherwise choose not run, J-A. 816, 819, 821, does not

imply that the matching funds provision was de-

signed to limit the expenditures of non-participants,

AFE Br. at 9. See Turner Broad. Sys., Ine. v. FOC, 512

U.S, 622, G48 (1994) (finding that the government's

recognition of the “intrinsic value” of speech does

not demonstrate purpose of the must-carry provision

was to discriminate against other speech). Nor do

statements from unrelated administrative hearings

conducted more than a decade ago support Peti-

tioners, but contirm that the Commission's position

Was to oppose matching funds grants that penalized

nonparticipating candidates. J.A. 2386. Likewise, to

the extent the term “level the playing field” has been

used to describe the matching funds provision, the

statements relied upon by Petitioners make clear that

the provision operates to allay candidate concerns

that choosing public financing will prevent them from

running a viable campaign. J.-A. 811, 845, 851. In

other words, the term “level the playing field” in the

context of the matching funds provision only speaks

to the very real concern that absent a mechanism

that reflected the operation of campaigns, the public

financing system simply could not operate.

Petitioners’ reliance on Davis in this context is

particularly misplaced. See, e.g.. MeComish Br. at 64,

AFE Br. at 24-25. The statutory provision in Davrs

did not prevent corruption, but “levelfed] electoral

opportunities for candidates of different personal

wealth.” 554 U.S. at 741. The Milhonaire’s Amend-

ment discouraged wealthy candidates from using their

vealth to contmbute to the outcome of the election by

first requiring such candidates to declare within

fifteen days of entering the race by how much they

intended to exceed the threshold, then requiring re-

ports within twenty-four hours of expenditures, and

finally, based on reports from the self-funded candh-

date, and only the self-funded candidate, allowing the

privately funded candidates that were not self-funded

to raise funds “pursuant to the asymmetrical limita-

tions.” 7d. at 730-31. By contrast, the Act does not

require those who intend to engage in express advo-

cacy to announce their intentions at the beginning of

the campaign and all privately funded candidates have

the same reporting requirements. See, e.g., ARS.

§$ 16-958. Under the Commission's rules, publicly

funded candidates have additional reporting require-

ments. Ariz. Admin. Code R2-20-109.B), Crizzens Clean

Rlections Act & Rules Manual, http:/azcleanelections.

gov/ (follow “Acts and Rules Manual” hyperlink).

Most importantly, in issuing funds pursuant to the

matching funds provision, the Act does not discrimi-

nate based on the source of the campaign activity.

A.R.S. § 16-952. All in all, the operation of the Mil-

hionaire’s Amendment was focused completely on the

self-funded candidate and discouraging his or her

spending; the operation of the matching funds provi-

sion is focused on the publicly funded candidate and

allocating the remaining public funds to him or her.

C. The Act Does Not Unconstitutionally

Seek to Reduce the Cost of Elections.

Sunilarly, Petitioners’ argument that the purpose

of the Act and the matching funds provision is to

unconstitutionally limit campaign spending misstates

the history of the act. AFF Br. at 37-39; MeComish

Br. at 65-66. There is no dispute that a problem

identified in the Act with Arizona’s election-financing

system was that it “[d]rives up the cost of running

for state office, discouraging otherwise qualified

Ps |

candidates who lack personal wealth or access to

special-interest funding.” A.R.S. §$ 16-940(B\7). And,

indeed, the Act explicitly limits campaign spending of

participating candidates — it is central to the agree-

ment that participating candidates make. /d. § 16-

941(A). The Act does not, however, address the rising

cost of running for state office through compelling all

parties to spend less; rather, it provides a viable, vol-

untary alternative to private funding. And, as noted

above, the matching funds provision wholly grants

privately financed actors control over the amount of

spending in a race — it does not limit their expendi-

tures and gives them authentic power over the

amount of money a participating candidate will ac-

tually receive. Further, even if an isolated statement

by Act supporters ties the matching funds provision

to the idea of creating disincentives to speech by

privately funded actors, “what motivates one [person]

to make a speech about a statute is not necessarily

what motivates scores of others to enact it.” O'Brien,

391 U.S. at 384.

Ill. THE MATCHING FUNDS PROVISION

SURVIVES BOTH INTERMEDIATE AND

STRICT SCRUTINY BECAUSE IT IS SUB-

STANTIALLY RELATED AND NARROWLY

TAILORED TO A SUFFICIENTLY IM-

PORTANT AND COMPELLING ANTI-

CORRUPTION INTEREST.

As discussed above, Arizona has a sufficiently

important, even compelling, anticorruption interest

that is served by its public-financing system. Buck/ey,

424 U.S. at 96 (noting that “[iJt cannot be gainsaid

that public financing ... furthers a significant gov-

ernmental interest”). A public-funding system “substi-

tutes” for a private-funding system. See td. at 96

n.129. The matching funds provision allows for funds

to be distributed based on activity in a particular

race. A.R.S. § 16-952. In races that are very competi-

tive, as indicated by significant spending by inde-

pendent expenditure groups or privately financed

candidates, the public-funding system must provide

sufficient funds for a viable publicly funded cam-

paign. As the Ninth Circuit found, removing this

funding “would substantially diminish the Act's

ability to attract participants, thereby undermining

its ability to prevent corruption.” McComish Pet. App.

38.’ Of course, the Act need not, and does not, provide

* Petitioner McComish reaches outside the record to note that

participation in the program continued to be about 50 percent.

for the 2010 election cycle after the matching funds provision

was enjoined in June of that election year. McComish Br. at 85

n. 5. They argue that this shows that participation will continue

even without the funds. Jd. This speculation is inappropnate for

two reasons. First, this Court's review of the Ninth Circuit decision

should be based on the summary judgment record, not informa-

tion that is outside the record and untested through the discovery

process. Lawn v. United States, 355 U.S. 339, 354 (1958) (noting

that the Court “must look only to the certified record in deciding

questions presented”). Second, the participation level] found at the

cite provided by Petitioners is actually lower than the participa-

tion rates since 2002, McComish Pet. App. at 15-16, and match-

ing funds were available until June 2010, meaning some

campaigns that might have otherwise decided not to participate

did not have time to change strategy for the 2010 elections.

equality of funding. A publicly funded candidate fac-

ing privately funded opponents that spend in aggre-

gate more than three times the initial grant will have

no additional resources to respond. A.R.S. § 16-952(E).

Nonetheless, the citizens of Arizona determined that

three times the initial grant was sufficient to create a

viable public-funding option even in the most compet-

itive races. See J.A. 716 (Hoffman Deposition discuss-

ing the basis of setting funding limits).

As the Court of Appeals explained, “(t]he more

candidates that run with public funding, the smaller

the appearance among Arizona elected officials of

being susceptible to quid pro quo corruption, because

fewer of those elected officials will have accepted a

private campaign contribution and thus be viewed as

beholden to their campaign contributors or as suscep-

tible to such influence.” McComish Pet. App. 37. Dr.

Mayer's expert report provides empirical evidence to

support the logical connection between matching

funds and participation in the public-funding system.

J.A. 537-39. In Wisconsin, where candidates receive

an initial grant comparable to that issued in Arizona,

but where there are no matching funds, participation

in 2006 was only 15%, as compared to 60% in Arizona

that year. Jd. 537-38.* Arizona’s interest in keeping its

* In contrast, the court in Day did not address whether the

law at issue served an anti-corruption purpose because partici-

pation in the public finance system was nearly 100% without

matching funds. See Day, 34 F.3d at 1361. Further, the State in

that case did not develop a factual record as to whether partici-

pation would decline absent the matching funds provision,

which is not the case here. /d. at 1361 n.6.

matching funds provision in place is compelling and

not at all abstract and it is substantially related to

the Act’s purpose.

Petitioners argue that the Act “does not directly

serve anticorruption purposes,” and should, thus, be

subjected to the same level of scrutiny as BCRA’s

provision that made “it a crime for any labor union or

incorporated entity ... to use its general treasury

funds to pay for any ‘electioneering communication,’”

Wisc. Right to Life, 551 U.S. at 457 (quoting 2 U.S.C.

§ 441b(b)(2)); see McComish Br. at 81-83; AFE Br. at

54. This argument is incorrect as it removes Wiscon-

sin Right to Life from its contextual moorings. In that

case, the government argued that an “expansive defi-

nition of ‘functional equivalent’ is needed to ensure

that issue advocacy does not circumvent the rule

against express advocacy, which in turn helps protect

against circumvention of the rule against contribu-

tions.” 551 U.S. at 479. In other words, the govern-

ment argued that one speech restriction was required

to enforce another speech restriction. By contrast,

public financing is a direct effort to fight corruption

that does not in and of itself burden speech. The

matching funds provision directly serves the anti-

corruption interest because without it, candidates

would not participate in the public financing system.

Further, to the extent that it burdens speech at all, a

point which the State does not concede, the burden is

functionally identical to burdens this Court has

routinely upheld.

ala)

The district court noted that “lijf a single lump

sum award would not burden Plaintiff's tree speech

in anv cognizable way, finding a burden solely be-

cause of the incremental nature of the awards seems

dificult to establish.” McComish Pet. App. 66-67.

Petitioners do not, and cannot, claim that a single

lump sum payment to publicly funded candidates

burdens the speech of privately funded candidates

and independent groups. In Bucéley, the Court up-

held a sermes of laws providing “|fJull funding tor

major party candidates” and partial “funding tor

miner party, new party, and independent candidates

. based upon their performance in the last election

or showing.” S. Rep. No. 93-689, at 2 (IS7T4), reprinted

in 1974 U.S.C.C AN. 5587, 5589. Congress mani-

fested its intent to provide complete support bv es-

tablishing “public financing equa! te the full amount

of expenditures permitted to be made in a campaign.”

Id. at §, 1974 U.S.C.C.AN. at 5592. Public funding

served to guarantee semous candidates the “adequate

financing to run a fully informative and effective

campaign.” Jd. at 6, 1974 USCCAN. at 5592:

see Buckley, 424 US. at 85-109 Vaphoelding public

funding’.

Arizona’s public-funding system provides full

funding to candidates only when necessary to run a

“fully informative and effective campaign.” S. Rep.

No. 93-689, at 6. 1974 USCCAN, at 5592. These

piecemeal grants distributed throughout the cam-

paign are more closely drawn to the Act's interest in

preventing corruption while protecting the public fise

than a single lump-sum payment.

The matching funds prevision along with other

provisions of the Act, such as the requirement that

pubhely funded candidates return all unspent meney

to the Commission following the election, ARS. § 16-

953, and ne only limited funds te unopposed

candidates, id. §$ 16-951(A\3), ensure that the Act

does not grant publicly funded candidates more funds

than necessary to encourage participation. If Arizona

is prohibited from tailoring the timing and amount of

funds to the needs of individual races, it will neces-

samlv run the risk of underfunding competitive races

— thus limiting the Act's anticorruption impact - or

overfunding uncompetitive races - thus Wasting pub-

he money and running the risk of making the pro-

gram impermissibly coercive, cf Vote Chorce, Inc:

DiStefono, 4 F.3d 26. 38 (ist Cir. 1993) ¢ [| Tihere is a

point at which regulatory incentives stray bevond the

pale, creating disparities so profeund that they be-

come rnpermissibly coereive.”).

The Act, including its matching funds prevision,

represents the least restrictive means tor the citizens

of Arizona to discourage quid pro guo corruption

within their state. In Buckley, the Court rejected the

assertion that campaign contmbution limits were a

More restrictive alternative to fighting the corruption

of large campaign contributions than entoreing emmi-

nal bribery laws or disclosure requirements. 424 U.S

at 27-28. The Court explained that bribery laws “deal

with only the most blatant and specific” examples of

corruption and “Congress was surely entitled to con-

clude that disclosure was only a partial measure” J@

Accordingly, the Court upheld contmbutien limits as a

means to address the corruption associated with large

donations. 7d Whatever claims Petitioners can make

about a ope effect when funds are issued to pub-

hely funded candidates, such action is less restmetive

than directly limiting the contributions to Petitioners

or expenditures made by Petiheners. Furthermore,

given Arizona’s history of political corruption even

within a system of contribution limits, the Act and its

matching funds provision precisely address the issue

of guid at Quo corruption. A voluntary pubhe-

financing system, which conditions the release of pub-

he funds on the aggregate campaign activity in a race,

is the least restrictive, effective means for the State

to fight quid pro quo corruption

McCenmush Petitioners argue the Court may affirm the dis

tet court based on the Ninth Cireunt’s treatment of the summary

sudgment evidence MeConush Br at S6n6 This is distanct from

the constitutional claims asserted in their petition and is not

fairly included in the question presented See Sup Ct Ro 141:

sve also Want oy Aden, 180 8S Ct. $41, 851 (2010) Further, the

Ninth Cirewt correctly concluded the distnet oourt’s rehng did not

approve, sub srlentie. plaintul’s evidentiary olyections. MeComish

Pet. App. 21 & n 8; Vinson co TRhoenas, ISS Fad 1145, 1182 & 1 8

(Sth Cir. 2002)

Continued on following page)

CONCLUSION

Based on the foregoing, Respondents request that

the Court affirm the decision of the Ninth Cireuit

Court of Appeals.

Respectfully submitted,

Eric Jd. Bisrrow

Chief Deputy Attorney General

Marky O'GRADY

Soheitor General

JAMES E. Barton I1*

THOMAS COLLINS

Assistant aeahans s General

Counsel for Respondents

ad ~~

. ._. \ a -«

pare Seeretary of Stat

Aen Bennett and Members

of the Arizona Citizens

(Vean Eleetirons Corinission

ba ‘ . . st ¥ i >. }

( OsNSCi OF Re cord

February, 2011

MecComish Petitioners also argue if the Court invalidates

$ 16-952 1 should “stmke down the entire system.” McoComish

Br at 80.) If mached, the Court should reject this anniment

Under ARS §$ 16960, “Lf a prevision of this act is held

mvahad the onmvahdiuty does not affect other provisions 9

Tanzi itt fame FF SIS US. 137, 139 (1996) “Severability us of

cours € itter of state law”), Aandoiph & Grascost, 989 Pld

Ph. TSS (Anz 1999) lors that the vahd portion of a voter-

approved measure will be upheld unless doing so would produce

an absurd result

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