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

Nos. LO-288, 1-239

IN THE

Supreme Const of the Uiited States

ARIZONA FREE ENTERPRISE CLUB'S

FREEDOM CLUB PAC, et al

Petits le Is,

\

KEN BENNETT. in his official capacity as Secretary of State of

the State of Arizona, et al,

Respondents

JOHN MCCOMISH, et al.

\

KEN BENNETT, in his offteral capacity as Secretary of State of

the State of Arizona, et al,

> ’

TOPL VFR FL eee

Nes eehaliadae®

On Writ of Certiorar to the

United States Court of Appeals

for the Ninth Circuit

BRIEF OF

THE COMMITTEE FOR ECONOMIC DEVELOPMENT AS

AMICUS CURIAE IN SUPPORT OF RESPONDENTS

PACT M SMITH

( Drrnmse! of eS |

Cree EEE Oe TUN UTM

MIcHARL BO ODESANCTIS

WATHERING A FALLOW

JAMES C CON

JENNER & Brock LEP

108M New York Avenue, NW

Suite 800

Washington, DE YOO)

(2OD) GAY GBOOO

psmith. penner com

February JU. 201] Afttorneus for Anmncus Curiae

l

TABLE OF CONTENTS

TABLE OF AUTHORITIES

INTEREST OF AMICUS CURIAE

SUMMARY OF ARGUMENT

ARGUMENT

II

ARIZONA'S LAW FOSTERS MORE, NOP

LESS, COMPETLETPION IN THE

MARKETPLACE OF IDEAS

A

ti

ARIZONA'S LAW

COMPELLING

Competition in baAeculive and

Lemslative Elections, Like Competition

in the Marketplace, Leads to Better

Outcomes

The Act Allows Merit. Not Momev. to

Determine Outcomes bv Increasing

Political Speech Overall

SERVES AN

ANTE CORRUPTION

PURPOSE

A

1

The Act Reduces Corporations’

Incentive to Fund Candidates to Obtain

Political Access

The Act Promotes Pubhe Contidence in

Roth Elections and Corporations

CONCLUSION

ie

ty

10

1]

TABLE OF AUTHORITIES

CASES

Bucklev vo Valeo 424 US. 1 Ug se) S416

Caperton vi ATO Massev Coal ine. 1298

Cre VLA’ (Pood) !

Citizens l'nited 1 Federal Fleetion

Comaussion, LOS. Ct S76 W010) 1. 4, 06,9

MeConnel! vo Federal Flection Commission.

YALE. Supp. 2d 176 (DDC. 20038), ahd

in part, SANUS. 938 (2008) |. : i2

McConnell vo Federal Election Commission.

S4OU S AR oo. 210,01, 18

Red laon Broadcasting Co. vo Federal

Communmeations Commission, 305 US

367 (1969) | 4

Speetrun Sports, Inc vw McQuillan. 506

US 447 (e939) 5

STATUTES

Ariona’s Citivens Clean Eleetroms Aet. Ari

Rev Stat § 10-940 ef sey

OTHER AUTHORITIES

Janet M. Box Steffensmerer, Ao J yrnarnc

tnalivers of the Role of War Chests in

Campaign Strategy, 40 AM. do Pot. Sel

352 (19908)

Caampamn Arrance Aetorm, BUPPALO NEWS,

Feb. 7, 2011 lo

int

(itv. Chamber Must Clear Arr. Rebuild

Trust, ARIZONA REPUBLIC. Feb. 3. 2011 lo

L475 CONG. Ree 43,248 (Apr. 2. zoo) 11

Richard S. Dunham, As Power Shiths. So Do

fhe Dollars, BUSINESSWEEK, Apr 23,

O07. | Re | Met at

ROBERT KO Gore: Frat. MONrY MATTPRS

CONSEQUENCES OF CAMPAIGN FINANCE

RePORMUIN US) HouUsF ELRC PIONS (199890) | a 10

Bob Herbert, When Democracy Weakens,

NY. Times, Feb. 12, 2011 Lo

Gallup Poll, Nov 1921, 2OLO, avaeble at

http) www pollingreport comvalues. htm li

Chery] Korn, Zogby International,

Comnauttee for Koonomre Development

Qotober Business Leader Study (ct

20OL0), avarladle at http waw-eced org

Mages content issues monevinpolitics 20

LO voxbypoll2Ol0 pdt scnssae be OS, BG, 27

Damelle Kurtzleben, 2020 Set Campaign

Spending Records, US. News & Wor»

REPORT, dan. 7, 2011 | s

lan Lovett & Emme lachtblau.l 2’odirreea/

Netreat Draws Anger. INTL HERALD

Trin, Feb. 1, 2011 34 15

lL. SANDY MAISEL, RETHINKING Pourrical

REFORM. BEYOND SPENDING AND TERM

Limirs (1894)

lv

MEGAN MoOoRF, NATIONAL INSTITUTE ON

MONEY IN STATE Poulrics, CLEAN

ELECTIONS, ARIZONA 2006 (2008),

avatlable at http www followthemoney

org press’ ReportView phiml’r oe).

Candice J. Nelson, VMonev Matters, 85 AM

Pot. Set REV. 2138 Q2001) (book review?

PereR Quist, NATIONAL INSTITUTE ON

MONEY IN Stare Pottrics, THE Rok oF

MONEY AND INCUMBENCY IN| 2007-2005

STATE ELeertons (2010), available af

http) www followthemoney org press

ReportView phtml?’r=423

Press Release. CED. Semor Business

Executes Back Campaign Finance

Reform (Oct. 18, 2000).

Burt Solomon, Forever Unclean. NATL J..

Mar. 18, 2000.

US. Govr ACCOUNTABILITY Orrick, GAO

10-390. CAMPAIGN FINANCE REFORM

EXPERIENCES OF Two STATES THA

OFFERED Funt Pustic FUNDING POR

POLITICAL CANDIDATES O10)

Wrong Cheques, Hodsing Bets A Surge ee

Corporate Money for the Democrats, THE

ECONOMIST, Sept. TS, 2008

Ww

QQ

INTEREST OF AMICUS CURIAE:

The Committee for Economic Development

CCED” is a nonprofit, nonpartisan, and nonpolitical

pubhe pohey organization directed by approximately

“00 semor corporate executives and university

leaders. Since its inception in 1942. its mission has

been to engage the leadership of the corporate

community to support poheies that wall) promote

economic growth, CED is a leading advocate for

business interests on issues ranging from health care

to corporate povernance.

The business leaders who serve as CED's trustees

consistently have supported research, analysis, and

advocacy regarding the ground rules for poltical

elections. In addition to producing reports and

organizing surveys, CED has filed amecus curiae

bnefs in MeConnell +. Federal Election Commission,

540 US. 98 (2003), Caperton ve AT. Massev Coal

Inc, 129 8S. Ct. 2252 (2009), and Crrvens United 1

Federal Election Commission, 130 8S. Ct. S76 (2010)

CED's involvement stems from the conviction that

competitive executive and legislative elections, along

with an independent judiciary, further the interests

of American business

In this ammeus curne bmnet. CED seeks to

counteract the allegation that pubhe finance triggers,

hke those in Arizvena’s Citizens Clean Elections Act,

> The parties have consented to the filhng of this bnef No

counsel for a party authored this bref in whole or in part, and

no counsel or party made a monetary contmbution intended to

fund the preparation or submission of this brief No person

other than afueus cure or us counsel made a monetary

contribution to its preparation or submission

)

burden corporate and other donors by compelling

them to subsidize “competing” speech. Arivona’s

pubhe finance trigger does not limit the expenditures

by private individuals or corporations, nor does it

compel their speech. Instead, it encourages more

speech and more political competition, results that

are entirely consistent with the First Amendment.

CED's trustees beleve that the real danger here

would be a decision invahdating Arizona’s use ot

triggers, which would harm corporate interests by

reducing genuine electoral competition, promoting an

“arms race” mentality in electoral fundraising, and

restoring the damaging perception of corruption

between politicians and businesses that grew out of

the AzScam scandal.

Because this issue is eritically important. to

businesses in Arizona and around the country, CED

respectfully urges this Court not to disturb the

carefully cratted public financing system Arizona has

developed based on this Court’s prior decisions in

this area.

SUMMARY OF ARGUMENT

The interests of the business community are best

served not only through robust economic competition

but also through open competition in elections for

executive and legislative offices. Elections should

reflect a capitalist market where the best ideas win,

an ideal best realized if more than one candidate can

remain truly competitive. The trigger mechanism

used in Arizona's Citizens Clean Elections Act, Ariz.

Rev. Stat. § 16°940 ef seg.. promotes competition in

public elections by providing a meaningful

3

opportunity to compete for candidates who opt to

receive public campaign financing in lieu of private

funding. The result is a welcome increase in speech,

not a limitation on speech.

The Act does not limit the speech of any

candidate, or discriminate against candidates based

on their identity. Nor does it discourage corporations

from spending money to express their genuine

electoral preferences. To the contrary, the funding

trigger counteracts significant concerns about the

role of corporations in elections that have only

increased since this Court's decision in Citizens

l’nited. The American business community suffers

from the negative perception that corporate spending

corrupts the political process. This problem is

exacerbated by the prevailing perception § that

donations are made in furtherance of a company’s

arms race with competitors to secure political access,

rather than to further a genuinely expressive

objective. A successful public financing model like

Arizona’s creates a compelling alternative to this

type of arms race.

ARGUMENT

1. ARIZONA’S LAW FOSTERS MORE, NOT LESS,

COMPETITION IN THE MARKETPLACE OF IDEAS.

The Citizens Clean Elections Act encourages the

development and discussion of new ideas by inviting

new voices to engage in the political dialogue in

Arizona. In so doing, the Act accomplishes the First

Amendment's aspiration to “secure the widest

possible dissemination of information from diverse

and antagonistic sources.” Buckley v. Valeo, 424

4

US 1,49 976). As the Court remarked in Buckles,

an effort “not to abridge, restrict, or censor speech,

but rather to use pubhe monev to facilitate and

enlarge pubhe discussion and participation ino the

electoral process” furthers First Amendment values

that are vital to a self governing people. Za at 92-98

A. Competition in Executive and

Legislative Elections, Like Competition

in the Marketplace, Leads to Better

Outcomes.

This Court's First Amendment jurisprudence is

rightfully focused on promoting an “uninhibited

marketplace of ideas” Crtivens Unatted vo Fed

Mlection Conn n. 180 8. Ct. S78, S96 (2010) (queting

Virginia ve Aticks, S89 US. 113, 119 (2003), “Tt is

the purpose of the First Amendment to preserve an

uninhibited marketplace of ideas in which trath wall

ultimately prevail’ and in which that marketplace is

not monopolized. See Red Lion Broad vo Fed

Commelns Comin, 38988 US. 867, 390 C1969). As

business leaders. CED's trustees appreciate the

importance of an uninhibited marketplace. it is the

freedom of the marketplace that dmves Amerean

Ingenuity and success 1n the business sector.

Competition is the basis of our. system. ot

commerce. Competition produces innovation and

Motivation it testers new ideas and advances in

technology. It creates wealth. Simply put, business

competition is the backbone of our economy. — As

business leaders, CED's trustees understand that

sometimes the free market fails, and the government

must step in te ensure competition. Not too long age,

a?

the Supreme Court explaimed one such important

government regulation the Sherman Antitrust Act

“The purpose of the Act is not to protect busimesses

from the working of the market. i is to protect the

pubhe trom the taillure of the market The law

directs itself not oagamst conduct which ts

competitive. even severely so, but against conduct

which untairly tends to destrov competition itseit”

Speetrun Sports, Ine vo MeQuillan, S06 US. 447, 458

(1998) Ttas this umque American approach—a free

market svstem where the government works to

promote competition that has led to unmatched

Ingenuity and commerce in our country

Like anv marketplace, the political marketplace

must foster competition if woas to thrive. Anvena

voters passed the Citizens Clean Elections Act in

order to revive ats) political marketplace by

encouraging participation in the political process and

thereby decreasing the opportunities for corruption

See MeConish vo Brewer, 2010 WL 2292218, at *1

(D. Ariz. dan. 20. 2010) The trigger system fosters

political competition and pohtical speech ina

uniquely efficient manner. In some races, a pubhe

financing system in which a candidate receives only

a fixed initial distribution fails to provide a realistic

alternative to oa privately financed campanutn,

because the fixed distribution will be too low to allow

a publicly financed candidate to compete: mn other

races, such a system will unnecessarily drain the

pubhe treasury by giving candidates who opt im more

money than they would need to accomplish the Act's

woals. Arivena’s public financing trigger avoids this

inefficieney through a careful calibration that allows

candidates who do not wish to participate ino the

i»

puble svstem to spend as much as thev want, while

at the same time providing a defined and limted

amount of additional funding to candidates accepting

pubhe financing to ensure that those candidates are

not prevented from participating ino the political

marketplace bv an opponent’s monopolivation of the

UUPWaves

The reality of our modern political svstem us that

financial resources determine a candidate's ability to

communicate a message to the public But ne one

has a First Amendment right to have his or her ideas

unchallenged. Qur political discourse must be an

“open marketplace” Crtrvens Unmrred. 30S) Ct at

SS4 When only one candidate has) sutherent

financial resources to transmit his or her message

broadly, there can be no open marketplace. As they

are in the business markets, monopoles are a cancer

on political markets The trigger mechanism

provided bv the Citivvens Clean Elections Act

responds in a narrowly drawn wav to this problem,

consistent with the core goal ot the First

Amendment. From a corporate perspective, such an

agile and cost-effective mechanism is an obviously

sound approach By placing neo limuat on one’s ability

to spend, the law fosters competition while

encouragins more speech about competing ideas and

policies

B. The Act Allows Merit, Not Money, to

Determine Outcomes by Increasing

Political Speech Overall.

Pubhe finance laws enable ao wider array of

individuals to enter mte, and compete im, evecutive

-

and lemslative elections and the open political

dialogue surrounding them = Individuals whe would

be Limited by comparatively low personal wealth, or

relatively small donor networks, are able to become

viable candidates, reaching manv more voters with

their message than thev coulda wathout the ard of

pubhe finaneing. See Lo SANDY MASEL. RETHINKING

POLITICAL REPORM. BEYOND SPENDING AND TRRM

Limits 37 (19984) (inding that financial obstacles are

“the kev factor” limating potential candidates’ entry

decisions) danet Mo Box StefYensmemer, A Ds nesnic

Analvsis of the Role of War Chests ino Campaign

Srratesv, 40 AM Pot Ser 342 Chea) (presenting

evidence that incumbent campainzn “wari chests”

deter quahtyv candidates) from running against

incumbents) In Amvona, iw ois working more

candidates have entered political races there since

the advent of publhhe funding In 2OOG, there were 14

pereent more House candidates and 16 percent more

Senate candidates than there were in 1989S, the last

election before the Aet went into effect MEGAN

Moorr, NATIONAL INSTIFUTE ON MONEY INO STATE

Poutrics, CLEAN ELECTIONS, ARIZONA 2OOK 2 (2008),

avavable at http www followthemoney org press

ReportView phtml reas i&ext= 1

Furthermore, even candidates with the abilitv to

run viable privately funded campaigns may opt inte

public funding programs in order to free themselves

from the pressure to tailor their messages to what

donors and prospective donors want to hear US

GOVT ACCOUNTABILITY OrRICE, GAO TO 390,

CAMPAIGN FINANCE RePORM. EAPERIENCRS OF Two

STATES THAT OFFERED FULL PUBLIC FUNDING POR

POLITICAL CANDIDATES 27 @OTO) (citing, among the

s

most common reasons candidates stated tor

partioipating ino pubhe financing program, “You did

not want to feel obligated to special interest groups

or lobbvasts.”” “Recewing publi funds allowed vou to

spend more time discussing issues.” and “You belbeve

the pubhe financing program promotes — the

accountability of legislators to the public”) The

percentage of legislative candidates participating: in

Arnivona’s) public financing system has steadily

increased since the Act's passage. from V6 percent in

general elections in 2ZOOO to G4 percent in LOOS | Ju

at 260 Whatever the purpose tor opting: into a publhe

finance program, the result iw more, rather than less,

speech

Ariwona’s Citizens Clean Elections Act) provides

those candidates choosing to opt inte the publhe

financing svstem a more meaningtual opportunity to

compete in the politeal arena than they would

otherwise have. Campaign spending ts on the rise in

Arivona, as of as across the country Danielle

Kurtzleben, “LOLO Set Campaign Spending Records.”

US. News & WoRLD Report, dan 7. 2011 Even

after the implementation of the Citizens Clean

Elections Aet, total campayin spending has

continued to imerease. US GoW r ACCOUNTABILIPY

Orrick, GAO LO 890, at 24 By providing pubiely

financed candidates with addtional resources as

needed based on the political feld, more intormation

becomes available to a broader audience allowing

the merits of each candidate's positions to drive the

debate

As this Court recently noted, the abilitw to speak

freelv “is an essential mechanism of democracy, for i

is the means to hold offictals accountable to the

“a

people” Ciazens United. 1380 S. Ct at SYS

Arnivona’s pubhe funding trigger svstem ensures that

entrenched pubhe offierals with whose donor

networks few could compete — are subject — to

competitive races and thus ultimately held

accountable for ther pohev decisions and political

stands Incumbents generally: emev oa large

advantage oan campaign fundraising: due — to

established fundraising and commumention

networks, and as such tend to be capable. of

outspending their opponents by substantial margins

Phas combination is a nearly impossible barrier for

political challengers to overcome. In the 2007-2008

state legislative election evele. for example,

Incumbents across the country emoved a 4 percent

success rate. candidates who emoved the dual

advantages oof imeumbency and fundraising

dominance produced a success rate of 96 percent

PETER QUIST, NATIONAL INstirorke ON MONEY IN

STATE Potties, THe Rouk oF Monrey AND

INCUMBENCY IN 2OO7 2OOS STATE Errevrions (2010),

avevadle at http www followthemoney org press

Report View phtml’rs423

Pubhely financed challengers im Arivona, on the

other hand, have won between 23 percent and 40

percent of legislative elections in each election vear

since LOOO US.) Gover ACCOUNTABILITY OFFICE,

GAO 10 390, at S000 That is because an effective

pubhe finaneciay oregame osursmificantly omatiyrates

Incumbency advantages bv reducing barriers to

challenger entry and therefore promoting genuine

competition among ideas and among candidates See

senerad/y ROBERT KOGOIDEL ET AL. MONEY MATTERS

CONSFQUENCES OF CAMPAIGN FINANCE RERORM IN

ld

US. Housr ELReTIONS 70-01, 74 76 C999). soe also

Candice | Nelson, Money Marters, 99 AM Pow Set

REV PIS. VIS (OO) (book review? (noting that

sumulations by Godel and his coauthors establish

“that some form oof pubhe tunding.” meluding

“through matehing funds.” “would help candidates of

the minorty party, except at the very lowest levels of

funding: ) Thus, the Act serves the First

Amendment's fundamental purpose of publhe offieral

accountabilitw by providing a meaningful opportunity

tor new political vores and ideas to penetrate the

dialogue

ll. ARIZONA'S LAW SERVES A COMPELLING ANTE

CORRUPTION PURPOSE.

Bevond promoting open elections and the open

exchange of ideas, the Act also provides an umportant

constraint on real and perceived corruption. As this

Court: recogmized ano MeConrne/, “many. corporate

contributions lare! motivated by a desire for access to

candidates and oa fear oot being placed at a

disadvantage im the legislative process relative to

other contmbutors, rather than bv ideological support

tor the candidates and parties ~ 540 US at 124 25

In order to remain competitive in the marketplace,

business leaders are forced into a veritable arms race

of political spending That arms race harms business

in two wavs. Directly, the pressure to donate drains

corporate treasumes to fund candidates thev may or

may not support. Indirectly, the pereetwed guid pro

Quo with politiaans damages corporate standing

among the Amenmean people Arivona’s law supports

corporate interests, and the pubhe interest. bv

11

breaking the permeius evele of reluanee on private

funding

A. The Act Reduces Corporations’

Incentive to Fund Candidates to Obtain

Poltical Access.

In order to CHMSUPE BeCess regardless of the

pohtical chmate, corporations must contmbute to

both parties The competitwwe meed to maintain

access to and avoid retribution from elected offers

of both parties forces businesses to allocate valuable

resources toward the political process Such coercion

Is Inconsistent with the genuine expression of ideas.

and roinforees the perception—and = often the

unfortunate realitw that corporate donations are

themselves ultimately business transactions In this

environment, corporate campaign donations amount

to nothing more than an admussion fee

Pohticans openly acknowledge the connection

between money and access Senator Carl Levin (D

Mich) states “The parties advertise access t's

blatant. Both parties doit” 147 CONG Ree. a3.248

(Apr. 2. 2001) To ensure access regardless of the

political chmate, corporations must contribute to

both parties In the 2000 election evele, 35 of the 50

largest soft} money donors gave to both parties, and

2S of the S0 gave more than $100,000 to both parties

See MeConnell, 540 US) at W4 ni? Another

netable trend is how corporate political spending

tracks changes ain the partisan makeup of

lesnslatures For example. in YOO8, business PACS

Have SINCV SIN percent of their political donations to

Repubheans | See Richard So Dunham. As Power

le

Shifts, So Do the Dollars, BUSINESSWEEK, Apr. 23,

YOO7 Bat Democrats gained control of Congress

that vear, and during the next campaign evele, tor

the first time in two decades, corporate political

donations were split evenly between the parties. See

Mrtne Cheques. Hedging Bets A Surge on

Corporate Monev for the Democrats, THe

ECONOMIST, Sept. 18, 2008) “Darrell West. a vice

president of the Brookings Institution, a think tank,

says that because many corporations anticipate a

victory tor Mr Obama, thev consider their mifts to

Democrats an investment in them company’s future”

lad

As the VMoeConne?// Court recognized, this pattern

Is Meonsistent with the genuine expression of ideas

The record in MeConne// was replete with examples

of cash for access See eg. MeConnel] vo Fed

Ekvcaon Commn, 251 F. Supp. 2d 176. 555-60

WDC. 2008, alrdoin par, 540 US. 93 (2008).

Declaration oof Gerald) Greenwald, Chairman

KE merntus of Umted Airlines and CED trustee, © 12,

MoConneld, 540 US. 8S (No 02-1674) CGreenwald

Decl”) ClBlusiness leaders beheve—based 9 on

expertence and with good reason that access (to

politicians} gives them an opportunity to shape and

affect governmental decision”). Press Release, CED,

Senor Business Evecutives Baca Campaign Finance

Reform (ect. 18, 2000) (showing that 75 6 of business

leaders beheve political contributions give them an

advantage in shaping legislation)

The VeConnel/ record also showed the danger ot

retribution for corporations that do not participate

One Fortune S00) lobbyist deserbed corporate

spending on political campaigns inoone simple word

13

“protection” Burt Solomon, Forever Unelean, NAVI

Jd. Mar 18, 2000, at S58 C1f vou decline to give.

youre taking ao risk of legislative retribution

Compantes are scared that on some eritieal issue,

thev ll get hosed) [tll happen quickly, in the dead of

might") Thais Court also approvingly quoted Mr

Greenwald's statement that “[blusiness and labor

leaders beheve, based on their experience, that

disappomnted Members, and their party colleagues,

may shun or disfavor them because they have not

contmbuted” MeConnel, 540 US. at WA ns

(quoting Greenwald Decl.)

The relationship between contmbutions and

political access has had a protound effect on how

corporations View political contributions = Ao recent

poll of SOT business oprmon leaders confirmed that

most beheved contributions served a non ideological

function

Wack of the following comes closest to vour

own opumon about why corporate America

contributes to pohtical campaigns”

To gain aceess to influence the legislative

process Da" o

To avoid adverse legislative consequences

Wha

To promote a certarn ideological position

LO’ o

Chervl Korn, Zogby International, Committee for

Kconomie Development October Business Leader

Study (et LOL) (poll) results), avarlable at

|

http www cedorg images content issues monevinpol

ics VOLO zogbypoll2OlO pdt, at S The volume of

corporate political spending proves the point—for

profit orgamivations would hardly allocate scarce

resources without some anticipated return. = The

histery of poltical corruption ino Arnvona offers a

particularly glaring example of the potential for

corruption when political contributions turn into

business transactions

B. The Act Promotes Pubhe Confidence in

Both Elections and Corporations.

The perception that) corporate donations are

made primarily to gain political favor or favoritism

undermines the puble’s faith in thew government

and in their local and state businesses In a ZO10

Gallup poll, only L2 percent of respondents rated the

honesty and ethieal standards of state officeholders

ugh or verv high. For business executives, that

number was only 15 pereent. Both groups barely

eclipsed the approval rating of car salespeople (seven

percent). Gallup Poll, Nov. 1921, 2010, avaladle at

http) www pollingreport com values htm. The record

in this case amply demonstrates why. Before the

passage of the Act, Arizona citizens expenenced a

string of political corruption scandals, including the

V9. AgScam controversy that saw legislators

stuffing bribes in gym bags and taking quid pro que

donations to support gamblng — legislation

MoComush, 611 F.3d 510, 514. Later, then-Governor

Symington was forced to resign after being indicted

for extorting a pension fund. As the Ninth Correuit

15

stated below, “the State's interest in eradicating the

appearance of quid pro quo corruption to restore the

electorate’s confidence 1n its system of government ts

not ‘illusory, it is substantial and compelling.” a. at

525 (quoting Buck/ev, 424 ULS. at 26°27). Given the

history of guid pro quo corruption in Arizona, and

the appearance of corruption that noncompetitive,

unmatched political donations creates, Arizona had a

most compelling interest in enacting pubhe finance

triggers.

The pervasive behet that there is a “corporate

stranglehold on American Democracy” has only

increased since this Court's decision ino Citizens

l’mted Bob Herbert, “When Democracy Weakens,”

N.Y. Times, Feb. 12. 2011 (Cravens United “greatly

enhanced the already overwhelming power of

corporations in polities. ... When the game is rigged

in vour favor, vou win.) see a/so, eg. “Campaign

Finance Reform.” BUFFALO NekEws, Feb. 7, 2011

(deseribing the “infamous (Citizens United case that

made it even easier for umons and corporations to

bribe politicians”): “City, Chamber Must Clear Air,

Rebuild Trust,” ARIZONA REPUBLIC, Feb. 3, 2011

(asserting that increased spending permitted by

(vozens l'nited has spread “distrust” and “suspicion”

between Scottsdale, Arizona residents and the

Chamber of Commerce): lan Lovett & Eric Lichtblau,

“Political Retreat Draws Anger,” INT'L HERALD TRIB.,

Feb. 1, 2011 (describing an anti-business protest in

which the organizers depicted the target business

leaders “as symbols of the ‘unbrndled corporate

power that they maintain was loosed by a Supreme

Court ruling last vear... .”).

16

American business leaders understand that the

perception of corruption hurts their companies’

bottom lines. In a recent poll conducted for CED,

two-thirds of business leaders said that the lack of

transparency and oversight in corporate political

activity puts corporations at legal msk and

endangers corporate reputations. See Committee for

Economie Development: October Business Leader

Study, at 16. This Court has recognized the

importance of combating those problems, and the

value of effective public financing systems in doing

so: “It cannot be gainsaid that public financing as a

means of eliminating the improper influence of large

private contributors furthers a significant

governmental interest.” Buckley, 424 U.S. at 96.

Pubhe finance triggers counteract this erosion of

pubhe confidence in business. By creating a means

to compete without relying on private contributions,

such triggers ease both the perception that business

interests control the political process and the

coercive pressure on corporations to donate. Second,

they create a realm free of coercive corporate

political donations. The “sleaze ball” perception is

bad for the political system, and as leaders of the

business community, the CED trustees believe this

perception is harmful to American businesses. By

fostering competition while permitting unlimited

donations outside the public financing program, the

triggers in the Arizona law provide a cost-effective

way to ensure competitive, free, and fair elections

where public confidence in the political system and

in corporations is bolstered.

Moreover, when public policy decisions appear to

be made on the basis of political contributions,

17

business planning becomes less effective, leading to a

less efficient and productive economy. See

Committee for Economic Development: October

Business Leader Study (poll results) at 8-9 (48% of

business leaders state that the level of pressure

placed on them to make political contributions has

increased since 2008, with 28% saying it has

“increased a lot”; 29% describe the amount of money

solicited as “excessive” and another 22% say it is

“high, but not excessive”). Especially in these

economic times, such “high” or “excessive” pressure

to contribute is an unwelcome drain on corporate

resources.

As past and present executives of some of the

nation’s largest companies, CED's trustees have

direct experience with solicitations for financial

support from party leaders, elected officials, and the

officials’ influential backers. Their experience

teaches a_ simple lesson: without innovative

regulatory systems, corporate participation in

elections is more transactional than ideological. The

trigger component of Arizona’s public finance law

gives corporations an alternative to a forced pressure

to donate. If they truly wish to engage in political

speech through campaign donations or independent

expenditures, they may do so. But the incentive to

coerce corporate political donations is_ greatly

decreased. Free speech, free of coercion is the

ultimate First Amendment goal.

1s

CONCLUSION

For the foregoing reasons. avucus urges this

Court to affirm the decision of the Ninth Cireuit and,

In any event, not to restrict the abhaty of Arizona and

other states to adopt practical measures designed to

promote both open discourse and competition in

executive and legislative elections

Respeettuily submitted,

PAUL MoSMiTH

Counse! of Record

MICHAL BO DESANCTIS

KATHERINE AO PALLOW

JAMES Co CON

JENNER & BLOCK LLP

1029 New York Avenue, NW

Suite 800

Washingten, DC 20001

(DOD) G8Y-GBO00

psnuth@ennercom

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February 22, 2011 Attornevs for Amicus Curiie