Petition for Writ of Certiorari — Citizens for Clean Government v. Russell
Supreme Court brief1998
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Cour, U.S.
Ri
) 98 807 se 2-mm
No.
In The OFFICE OF THE CLERK
Supreme Court of the Wnited States
*
October Term, 1997
CITIZENS FOR CLEAN GOVERNMENT,
Petitioner,
vs.
RON RUSSELL, KENT INGRAM, WILLIAM R. AUSTIN, and
ASSOCIATED INDUSTRIES OF ARKANSAS POLITICAL
ACTION COMMITTEE,
-and-
TROY BURRIS, in his official capacity as chairperson of the
Arkansas Ethics Commission and JACK KEARNEY, TOM
ALEXANDER, RITA LOONEY, and BEN ALLEN, in their official
Capacities as members of the Arkansas Ethics Commission,
Respondents.
On Petition for Writ of Certiorari to the
United States Court of Appeals for the Eighth Circuit
PETITION FOR WRIT OF CERTIORARI
SCOTT C. TROTTER BURT NEUBORNE
TROTTER & SKELTON Counsel of Record
103 West Capitol Avenue § E. JOSHUA ROSENKRANZ
Suite 1205, Boyle Building © NANCY NORTHUP
Little Rock, AR 72201 ELIZABETH DANIEL
(501) 376-6355 Brennan Center for Justice at
New York University School of Law
161 Avenue of the Americas
Fifth Floor
New York, NY 10013
(212) 998-6730
Attorneys for Petitioners
148343 @J Counsel Press LLC
FORMERLY LUTZ APPELLATE SERVICES
(800) 274-3321 + (800) 359-6859
i
QUESTIONS PRESENTED
1, Whether a state that provides a generous campaign subsidy
dramatically increasing a candidate’s capacity to raise campaign
funds from the general public by providing each taxpayer with an
annual $50 income tax credit ‘for political contributions may,
consistent with the First Amendment as construed in Buckley v.
Valeo, 424 U.S. 1 (1976), impose ceilings on campaign
contributions ranging from $300 to $100 per election, when ihe
history and circumstances of the state’s elections indicate that
candidates will be able to raise sufficient funds for effective
advocacy under such a regime.
~ 2. Whether the state’s interest in combating the “actuality
and appearance of corruption,” which, under Buckley v. Valeo,
justifies limits on campaign contributions:
(a) is confined to a quid pro quo arrangement that
resembles bribery or connotes a broader structural evil that includes
candidates’ granting of preferred access and paying heightened
attention to the concerns of large campaign contributors; and
(b) is an adjudicative fact that must be proven with
evidence that public officials have actually altered the performance
of their public duties in return for campaign contributions or may
be established by a showing that the appearance of corruption
linked to large contributions is not illusory.
3. Whether a state’s attempt to cap campaign contributions
in the interest of preventing the appearance or reality of corruption
should be reviewed under a balancing test that weighs the minimal
burden on speech and associational interests against the state’s
compelling interest in combating the appearance and reality of
corruption, especially in a case where the contribution cap is
structurally linked to a public subsidy.
4. Whether a state may, consistent with the First Amendment,
impose a cap of $200 per year on contributions to political action
committees (“PACs”) to prevent contributors from using PACs
as a vehicle for evading the legal limits on the amounts they can
contribute to candidates and where such limits do not prevent PACs
from amassing the resources necessary for effective advocacy.
5. Whether a state may, consistent with the Equal Protection
Clause, stimulate broader public participation in the electoral
process by permitting PACs that collect a large number of very
small contributions to contribute more to candidates than PACs
funded by fewer individuals making much larger contributions
are allowed to contribute to candidates.
TABLE OF CONTENTS
Page
Questions Presented ........ pik iene Se bweweesicd é i
EE SEs S000 biiek65 we betes s evens iti
pac ck ei ce hbo hs heeeae none iv
RE a 1
Statement of Jurisdiction ..................eeeee- 1
Constitutional and Statutory Provisions Involved .... 1
i ech ese e whe ad ashae rece vs 4
ee 6
ee EE UY. oo. oi bcc wwcnsscenseess 8
EE ere ee eer 8
EE ccc areccvacdeansacenys 10
Reasons for Granting the Writ .................... 12
Introduction: Three Unresolved Issues Posed by
EE eo ee 12
I. Unless Reviewed, the Eighth Circuit’s Misreading
of Buckley v. Valeo Will Dramatically Inhibit the
Capacity of State and Local Governments to Seek
Imaginative Solutions to the Most Important
Contemporary Challenge Facing American
Democracy — Dealing with the Impact of
Significant Wealth Disparities on the Democratic
I Rae RG 6.50 hn thins ko 444s ese 15
iv
Table of Contents - Continued
Page
II. While Lower Courts Are Hopelessly Divided on
the Issue of the Proof Required Under Buckley to
Justify Limits on Campaign Contributions, the
Eighth Circuit’s Draconian Requirement That the
State Prove Actual Corruption Is in Direct
Conflict with Buckley and Would Have the Effect
of Invalidating All Existing Limits on Campaign
COMME. oi 6 Pic iv'g ebb keeer eens 19
Ill. The Circuits Are Split on the Appropriate Standard
of Review for Contribution Limits. ......... 24
IV. This Court Should Consider the Small Donor Pac
Provision As Another Way That Act I Enhances
Political Participation Without Violating the
Fourteenth Amendment. ...........cccccee: 28
EE Goh kc eee ecaci se Peek eek ene ance 30
TABLE OF AUTHORITIES
Page
Cases:
Austin v. Michigan Chamber of Commerce, 494 U.S. 652
SE 66:0 kn a tie chgatinde dndtene tn Vien she 4+ 12, 19
Buckley v. Valeo, 424 U.S. 1 (1976) ............... passim
Burdick v. Takushi, 504 U.S. 428 (1992) ........... 26
California Medical Ass'n v. FEC, 453 U.S. 182 (1981)
Giad Bda < he 486K< § DERE ah wa ES 10, 12, 24, 25, 28, 29
California ProLife Council PAC v. Scully, 989 F. Supp.
SP he BOOED nos 05 6a dak Hb GR dvisie bannws 13,23
Carver v. Nixon, 72 F.3d 633 (8th Cir. 1995), cert.denied,
oe Ea re 9, 13, 26
Citizens Against Rent Control v. Berkeley, 454 U.S. 290
ee Cl a Sa lean se enea ven anes 12
Colorado Republican Federal Campaign Comm. v. FEC,
ee nes 12, 19, 25, 26
CSC v. Letter Carriers, 413 U.S. 548 (1973) ........ 21
Driver v. DiStefano, 914 F. Supp. 797 (D.R.I. 1996)
is ai i a ois has ls Rha cbs ek cee aie pan ss 27
FEC v. Massachusetts Citizens for Life, 479 U.S. 238
SR MR Os £6 ct spate ich ie 90% 2 CE dale Hk 0% or '¥ik « 12, 25, 26
vi
Table of Authorities
Page
FEC v. National Conservative Political Action Comm.,
CHO Th Se ee. 0. ns 6500.5 4404 denne ieee 12, 25
First Nat'l Bank of Boston v. Bellotti, 435 U.S. 765
COPPEE ka skda ids Kaayeden Reed ieenthaies ces 12
Gard v. State Elections Bd., 456 N.W. 2d 809 (Wisc.
Meee ee eee PERT ET eee ee OP Ors eee Pe 27
Kentucky Right to Life v. Terry, 108 F.3d 637 (6th Cir.),
cert. denied, 118 S. Ct. 162 (1997) .............. 13, 23
National Black Police Ass'n v. District of Columbia Bd.
of Elections and Ethics, 924 F. Supp. 270 (D.D.C.
1996), vacated as moot, 108 F.3d 346 (D.C. Cir. 1997)
» 0b sae SERRE s CUR RERERT 4 SO UUCKE RATERS ESET LS 23, 27
Pacific Gas & Elec. Co. v. Public Utilities Comm’n of
Calernta; 473 U.S. t CPG) oi ese S ev iicsess 24
Republican Nat'l Comm. v. FEC, 487 F. Supp. 280
(S.D.N.Y.), aff'd, 445 U.S. 955 (1980) .......... 17
Russell v. Burris, 978 F. Supp. 1211 (E.D. Ark. 1997)
opeeded a eR oes es ORS ECESEOERU MESO ES Rakexs 1,9, 10
Russell v. Burris, 146 F.3d 563 (8th Cir. 1998) ......
oioe 6ObRCRRSRERD ORS 1, 6, 9, 10, 11, 13, 18, 20, 21, 26, 28
Service Employees Int'l Union v. Fair Political Practices
Comm'n, 955 F.2d 1312 (9th Cir.), cert. denied, 505
UB. SEO URSONS vi sv Gas vdeces}iasuceiaken 13, 26, 27
‘“ ~ —_eon ties Gabe:
vii
Table of Authorities
Page
Shrink Missouri Gov't PAC v. Adams, No. 98-2351, 1998
WL 413477 (8th Cir. July 23, 1998) ........... 13, 20, 21
Timmons v. Twin Cities Area New Party, 117 S. Ct. 1364
ED cn és Canna set haaweknsnesdiavdd nied baal 11, 26
United States v. National Treasury Employees Union, 513
IS 3.) o.6'a yogi 3a NO 446.00 656 000s 22
Vannatta v. Kiesling, 899 F. Supp. 488 (D. Ore. 1995),
aff'd, No. 95-35998, 1998 WL 461920 (9th Cir. Aug.
SES Ticats Cw hee 4kk ean oC ANSAS cha Ra ee 27
Vote Choice, Inc. v. DiStefano, 4 F.3d 26, 33 (1st Cir.
ES GMa CGE Sed eis yh sens Wea ONck sak 27
Constitutions and Statutes:
ee ches c des eeeeriwkvakxen’ passim
es as I 85 ras io Wb catbiNS lab Wi OK bu ws 1, 28
SE IIR RE SAA se an ee Cr en |
po YE SS Se ee ee ee ee 2
TS) ee a eee a ee 3
Ammmmens COGS STB BOG) .n ccc ccc cccccccenes 4,8
Arkansas Code § 7-6-201(12) ..............-0005- 3
vili
Table of Authorities
ATM CORD GS FG cite ccciccccccctsiccsiee
PR PEED osc cccccccceccscseessees
po errr rr rere rr re
Other Authorities Cited:
Thomas F. Burke, The Concept of Corruption in
Campaign Finance Law, 14 Const. Comm. 127 (Spring
ROWE ess c VEEULS CE) FPeRd oka veUSSCA sD EC EKER.
Eliza Newlin Carney, Opting Out of Politics, Nat’|
PE AGE: TF; Pen ee i iad he ck ee eed is
Daniel Hays Lowenstein, On Campaign Finance Reform:
The Root of Evil is Deeply Rooted, 18 Hofstra L. Rev.
PURSUED 05 CEN 005 Cate Wades UL bieeatensss
Michael J. Malbin & Thomas L. Gais, The Day After
Reform: Sobering Campaign Finance Lessons from the
American States 13-20 (1998) .............0005-
Sen. John McCain, The Scandal in Our Midst, Newsweek,
Ram, Fey Fee te SS vccacivcs ceedbeese Hie:
Steven H. Shiffrin, The First Amendment, Democracy and
Roun FECT O) FSO. kc a's's o5 080 ae Ha Oe
Barbara Vobejda, Just Under Half of the Possible Voters
Went to the Polls, Wash. Post, Nov. 7, 1996, at A30
23
15
23
16
15
13
15
APPENDIX
Appendix A — Opinion Of The United States Court Of
Appeals For The Eighth Circuit Decided June 4, 1998
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Appendix B — Order Of The United States District Court
For The Eastern District Of Arkansas Dated October
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1
OPINIONS BELOW
The opinion of the Court of Appeals for the Eighth Circuit,
filed June 4, 1998, is reported at 146 F.3d 563. (Appendix A, 1a-
22a). This opinion affirmed in part and reversed in part an order
of the United States District Court for the Eastern District of
Arkansas, dated October 3, 1997, granting in part and denying in
part the request of plaintiffs Ron Russell, Kent Ingram, William
R. Austin, and Associated Industries of Arkansas Political Action
Committees (hereinafter collectively described as “Associated
Industries”) for a declaratory judgment and permanent injunction.
The district court’s opinion is reported at 978 F. Supp. 1211.
(Appendix B, 23a-63a).
STATEMENT OF JURISDICTION
The Eighth Circuit’s opinion was entered on June 4, 1998.
This Court has jurisdiction pursuant to 28 U.S.C. § 1254(1).
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
First Amendment to the United States Constitution
Congress shall make no law respecting an establishment of
religion, or prohibiting the free exercise thereof; or abridging the
freedom of speech, or of the press; or of the right of the people
peaceably to assemble, and to petition the government for a redress
of grievances.
Fourteenth Amendment to the
United States Constitution, Section One
All persons born or naturalized in the United States, and
subject to the jurisdiction thereof, are citizens of the United States
and of the state wherein they reside. No state shall make or enforce
any law which shall abridge the privileges or immunities of citizens
2
of the United States; nor shall any state deprive any person of life,
liberty, or property, without due process of law; nor deny to any
person within its jurisdiction the equal protection the laws.
Arkansas Code § 7-6-203
(a)(1) It shall be unlawful fer any candidate for any public
office, except the office of Governor, Lieutenant Governor,
Secretary of State, Treasurer of State, Auditor of State, Attorney
General, and Commission of State Lands, or for any person actiag
on the candidate’s behalf, to accept campaign contributions in
excess of one hundred dollars ($100) per election from any person.
(a)(2) It shall be unlawful for any candidate for the office of
Governor, Lieutenant Governor, Secretary of State, Treasurer of
State, Auditor of State, Attorney General, and Commission of State
Lands, or for any person acting on the candidate’s behalf, to accept
campaign contributions in excess of three hundred dollars ($300)
per election from any person.
(b)(1) It shall be unlawful for any person to make a
contribution to a candidate for any public office, except the office
of Governor, Lieutenant Governor, Secretary of State, Treasurer
of State, Auditor of State, Attorney General, and Commission of
State Lands, or to any person acting on the candidate’s behalf,
which in the aggregate, exceeds one hundred dollars ($100) per
election.
(b)(2) It shall be unlawful for any person to make a
contribution to a candidate for the office of Governor, Lieutenant
Governor, Secretary of State, Treasurer of State, Auditor of State,
Attorney General, and Commission of State Lands, or to any person
acting on the candidate’s behalf, which in the aggregate, exceeds
three hundred dollars ($300) per election.
(d) However, an organized political party, defined in Arkansas
Code 7-1-101(1) and a small donor political action committee may
3
contribute up to two thousand five hundred dollars ($2500) to each
candidate per election.
Arkansas Code § 7-6-201(12)
A “small donor political action committee” means any person
who:
(A) Receives contributions from one or more individuals in
order to make contributions to candidates;
(B) Does not accept any contribution or cumulative
contributions in excess of twenty-five dollars ($25) from any
individual in any calendar year; and
(C) Is registered pursuant to Arkansas Code 7-6-215 prior to
making contributions to candidates. “Small donor political action
committee” shall not include an organized political party, the
candidate’s own committee, or an exploratory committee.
Arkansas Code § 7-6-222
(a) Pursuant to regulations to be adopted by the Arkansas
Department of Finance and Administration, a single credit against
individual Arkansas income taxes shall be allowed for money
contributions made by the taxpayer in a taxable year to one or
more of the following:
(1) A candidate seeking nomination or election to a public
office in an election, or to a candidate’s campaign committee; or
(2) A small donor political action committee as defined
in Arkansas Code 7-6-201; or
(3) An approved political action committee as defined in
Arkansas Code 7-1-201; or
(4) An organized political party as defined in Arkansas
Code 7-1-101(1).
4
(b) The credit allowed by subsection (a) of this section shall
be the aggregate contributions, not to exceed fifty dollars ($50)
on an individual tax return, or the aggregate contributions, not to
exceed one hundred dollars ($100) on a joint return.
Arkansas Code § 7-6-201(9)
“Approved political action committee” means any person
who:
(A) Receives contributions from one (1) or more persons in
order to make contributions to candidates;
(B) Does not accept any contribution or cumulative
contributions in excess of two hundred dollars ($200) from any
person in any calendar year... .
STATEMENT OF THE CASE
In the two decades since this Court’s landmark decision in
Buckley v. Valeo, 424 U.S. 1 (1976), efforts to reform our system
of campaign financing have taken one of two traditional paths:
(a) the imposition of increasingly stringent
limits on the size and source of campaign
contributions in an attempt to minimize the potential
for electoral corruption, real and apparent; or
(b) the provision of public subsidies to candidates
in an attempt to enhance political equality without
imposing stringent restrictions on campaign
contributions.
Experience has taught that each post-Buckley path, if taken
in isolation, has substantial drawbacks. Stringent limits on political
contributions, standing alone, make it more difficult for candidates
to raise the funds needed to wage a robust campaign. Moreover,
given the First Amendment ban on efforts to limit campaign
5
expenditures recognized in Buckley, an exclusive reliance on
limiting campaign contributions necessarily enhances the relative
power of extremely wealthy candidates and places enormous
pressures on all candidates to cut regulatory corners in an effort to
satisfy a virtually unlimited demand for campaign funds. On the
other hand, public funding of the campaign process, without
meaningful contribution limits, does little to address legitimate
concerns about the ability of wealthy contributors to purchase
access to candidates and officials.
Arkansas, recognizing the pitfalls inherent in the traditional
post-Buckley options, has attempted to meld campaign subsidies
and contribution limits into an innovative, integrated system of
campaign finance regulation that both prevents corruption and
enhances political equality, while emphasizing the importance of
individual participation. Arkansas provides a generous public
campaign subsidy by offering an annual $50 state income tax credit
($100 for joint filers) for political contributions. As a structural
quid pro quo for the huge subsidy, Arkansas imposes contribution
limits of $300 for most statewide races and $100 for other races. '
By linking a generous campaign subsidy in the form of income
tax credits for campaign contributions with restrictions on the size
of campaign contributions, Arkansas has avoided the adverse
impact on the availability of campaign funds often associated with
limits on campaign contributions. In short, the people of Arkansas
have found a way to minimize electoral corruption, encourage
individual participation, and enhance political equality — without
violating the First Amendment ground-rules set forth in Buckley.
Unfortunately, in assessing the constitutionality of the
Arkansas plan, the Eighth Circuit completely ignored the generous
campaign subsidy that is the structural guid pro quo for the
contribution limits. The Eighth Circuit believed that this Court’s
decision in Buckley left it no choice but to consider the contribution
1. Arkansas imposes no limit on the amounts individuals may spend
independently in support of a favored candidate.
6
ceilings in artificial isolation from the integrally related campaign
subsidy and to.invalidate the ceilings unless Arkansas produced
evidence that campaign contributions marginally larger than the
cap had actually caused public officials to alter the performance
of their official duties. Russell v. Burris, 146 F.3d 563, 569 (8th
Cir. 1998) (App. 12a).
The panel of the Eighth Circuit below was profoundly
mistaken on two levels. First, the court below erroneously believed
that Buckley requires a myopic, artificially isolated review of an
innovative effort to link campaign subsidies with contribution
ceilings. Unless corrected, the Eighth Circuit’s holding will scuttle
important efforts at imaginative campaign finance reform, like
the Arkansas plan, that minimize electoral corruption, enhance
political equality, respect individual participation, and encourage
a generous flow of campaign funds to candidates.
Second, the Eighth Circuit imposed an impossibly stringent
burden of justification on Arkansas’ decision to adopt a $300
contribution ceiling in most statewide races and a $100 cap in
other races. Russell, 146 F.3d at 569 (App. 12a). In effect, the
court below required Arkansas to prove that contributions
marginally in excess of $300 in statewide races had functioned as
bribes, causing public officials to alter their official behavior. But
it is precisely because quid pro quo bribery is so difficult to prove
that this Court upheld the $1,000 federal contribution limits at
issue in Buckley without requiring a showing that individual
officials were guilty of criminal acts.
A. Initiated Act I of 19967
In 1996, more than two-thirds of the voters in Arkansas
adopted Initiated Act I, an innovative and comprehensive campaign
financing statute designed to combat the appearance and reality
of corruption in Arkansas politics, while also broadening citizen
2. Arkansas Initiated Act I of 1996 is reprinted in its entirety at
Appendix C, 64a-72a.
7
participation in the political process and encouraging more
candidates to run for office regardless of their financial resources.
Act I furthered these goals through the following means:
Public Funding: Act 1 established a tax credit of
up to $50 per person ($100 for joint filers) for
political contributions to candidates, PACs, and
political parties. Ark. Code Ann. § 7-6-222. This
simple device put directly into the hands of Arkansas
voters a huge public subsidy to fund political speech.
Suddenly, more than one million taxpayers were
empowered to direct a total of at least $50 million
into political speech at no cost to themselves.
Lower Limits on Contributions to Candidates: Act I
lowered the contribution limit from $1,000 per election
to $300 per election for candidates running for most
statewide offices such as governor and lieutenant
governor, and to $100 for most other candidates. Ark.
Code Ann. § 7-6-203(a)-(b). These variable limits
meant, for example, that a candidate for lieutenant
governor who faced a primary, a runoff, and a general
election, might collect as much as $900 from any
person during an election cycle, and that a candidate
for the state house of representatives (where the
average race costs less than $15,000) might raise as
much as $300 from any one person.
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Higher Contribution Limit for Small Donor PACs: In
order to encourage maximum democratic participation
by large groups of citizens with common interests, Act
I also created a new entity, a broad-based collective
called “small donor political action committees.”
These small donor PACs are prohibited from accepting
donations of more than $25 per person per year. In
exchange for this limit, these small donor PACS are
permitted to give candidates up to $2,500 per election.
The candidate contributions of other PACs are subject
to the same limits as persons. Ark. Code Ann. § 7-6-
203(d).
Act I focused its regulatory scheme on creating mechanisms
that would increase political speech, while reducing the potential
for actual and apparent corruption. It did not limit candidate
campaign expenditures, independent expenditures, or party
expenditures.’ Nor did it limit contributions to a political party.
Nor is its public subsidy offered in exchange for an agreement to
abide by expenditure limits. In short, Act I rejected the option of
restricting the financial resources available to campaigns and opted,
instead, for an integrated approach that promised to expand the
resources available to candidates and other political players, while
minimizing corruption and enhancing political equality.
While Act I limited the amounts that the wealthiest
contributors could contribute directly to. a candidate — and thereby
limited the potential for corruption, undue influence, and
discriminatory access — it delivered a potentially enormous pool
of resources to average citizens, each of whom was granted a
costless mechanism for directing public money to the candidates,
political parties, and PACs of their choice.
B. Proceedings Below
1. District Court
The district court held a seven-day trial, during which it heard
evidence relating to the campaign for Act I and the contribution
patterns that had prompted it. For example, the district court heard
testimony about lucrative fund-raising events held for a state
representative by lobbyists who did not live in the representative’s
district, but who had substantial business before his committee,
3. Act I left intact the $200 limit on contributions to “approved
political action committees” enacted in 1990. Ark. Code Ann.
§ 7-6-201(9).
9
and about evidence of contributions from tobacco interests to the
sponsor of a bill that favored those interests. The court also heard
evidence predicting that candidates would be able to raise sufficient
campaign funds under the new law with its tax credits and lower
contribution limits.
In assessing the $300 and $100 limits on contributions to
candidates, the district court was bound by an earlier ruling of the
Eighth Circuit applying strict scrutiny to invalidate Missouri’s
$300- to $100-per-election-cycle limits. See Carver v. Nixon, 72
F.3d 633 (8th Cir. 1995), cert. denied, 518 U.S. 1033 (1996).
After reviewing the evidence, including the low cost of
Arkansas races, the sources of contributions to candidates, and
the examples of the appearance of corruption, the district court
concluded that, with respect to most races subject to the $100
limit,‘ the limit of $1,000 that preceded Act I was “sufficiently
large to support a reasonable perception of undue influence.”
Russell v. Burris, 978 F. Supp. 1211, 1221 (E.D. Ark. 1997) (App.
44a).
After finding that the government had proven its interest in
preventing the appearance of corruption, the court held that the
$100 limit was not “different in kind” from the $1,000 limit
approved in Buckley because the $100 limit did not “burden the
potential for effective political dialogue.” Jd. at 1223 (App. 49a).
In support of this holding, the court found it “significant that no
officeholder testified that she would be unable to run an effective
campaign with the $100 limit.” Jd. at 1224 (App. 50a). The court
relied on testimony from experts and officeholders about the low
cost of Arkansas elections, showing, for instance, that races for
4. Because of the size of their districts, the court considered the
races for Supreme Court and the Court of Appeals different in kind from
the other elections subject to the $100 limit and struck the $100 limit as
applied to those judicial elections. 978 F. Supp. at 1224. In this petition,
except where otherwise indicated, “$100 limit” will be used to refer to
all races subject to that limit except for the elections for Supreme Court
justice and Court of Appeals judge.
10
the state house averaged only $7,000 to $16,000 an election cycle
and for the state senate averaged $23,000 to $39,000. Jd. at 1223
(App. 49a). The court also took note of evidence that during two
special elections held under Act I the candidates raised, on average,
more money than in the elections prior to Act I. Jd. at 1224 (App.
50a). The court upheld the $100 limit, except as it applied to the
races for Supreme Court justice and Court of Appeals judge. Jd.
(App. 51a).
The district court held, however, that the pre-Act I limit of
$1,000 was not large enough to appear corrupting in statewide
races. Id. at 1222 (App. 44a). The district court based this finding
primarily on the cost of gubernatorial campaigns — approximately
$900,000 per candidate — but did not address the relatively low
cost of other statewide races. Jd. at 1221 (App. 44a). Having found
that the state’s interest in combating the appearance of corruption
was not established, the district court did not consider whether the
$300 statewide limits might be constitutionally tolerable because
the infusion of public funds into the political process from the
newly enacted tax credit would provide an effective alternative to
the need to raise campaign funds from large donors.°
2. Court of Appeals
A panel of the Court of Appeals for the Eighth Circuit
concluded that every portion of the integrated plan it reviewed
5. Applying the test of California Medical Ass'n v. FEC, 453 U.S.
182 (1981) [“CalMed’”], the district court upheld the differential treatment
between generic PACs and small donor PACs, holding that Act I does not
place a greater burden on the First Amendment rights of generic PACs
because small donor PACs are subject to more burdensome restrictions on
the amount and source of contributions they may accept. Russell, 978 F.
Supp. at 1226-27. Also relying on CalMed, the district court upheld the
longstanding $200 limit on contributions to PACs as serving to prevent the
evasion of the basic contribution limits. Jd. at 1225. The court noted that
under the limit PAC contributions to Arkansas candidates had been “robust”
and that PACs had not been prevented from “ ‘amassing the resources
necessary for effective advocacy.’ ” Jd. (quoting Buckley, 424 U.S. at 21).
11
was unconstitutional, including, most pertinently, Act I’s $300 and
$100 limitations on contributions to candidates. Russell v. Burris,
143 F.3d 563 (8th Cir. 1998). The court below reasoned that Buckley
required that contribution limits be subjected to strict scrutiny, rejecting
the argument that Timmons v. Twin Cities Area New Party, 1178. Ct.
1364, 1370 (1997), requires less exacting scrutiny when, as here, the
restrictions on First Amendment expression are not “severe.” Russell,
143 F.3d at 568 (App. 9a).
The court of appeals held that in the absence of credible evidence
of actual corruption, the government is required to prove its compelling
interest in alleviating the “appearance of corruption” with evidence
showing that a “reasonable person could perceive ... that such
contributions make for undue influence or spawn corruption.” Jd. at
569 (App. 11a). Nevertheless, the court of appeals rejected evidence
presented in the district court demonstrating “specific instances in
which large contributions had given rise to the appearance of undue
influence or corruption” because the state had not proven that any
particular recipient of a $1,000 contribution had actually switched a
vote or otherwise changed position after receiving the contribution,
attempted to hide the contribution from public disclosure, or accepted
contributions in excess of the then-legal limit. Jd. at 570 (App. 13a).
Indeed, the court held that even evidence of a “uniform public
perception” that certain contribution patterns were corrupt was
insufficient to establish the state’s interest when, in the court’s view,
that “uniform perception” was not objectively reasonable. See id. at
569 (App. 12a). In short, the court below required nothing short of
proof of illegal activity as a precondition to upholding the contribution
limits.
Accordingly, the court below held that the state had failed to
prove that there “is real or perceived corruption attributable to large
political contributions.” Jd. (App. 10a). In effect, the Eighth Circuit
found that two-thirds of Arkansas’ voters were “unreasonable” to
conclude that contributions in excess of the limits they enacted seemed
corrupting.
The court of appeals also held that the contribution limits were
“too low to allow meaningful participation in protected speech and
12
association,” and found that Act I’s limits were “different in kind”
from the $1,000 limits upheld in Buckley. Id. at 570-71. But the
court below simply refused to consider whether the huge public
subsidy provided by Arkansas would ameliorate the alleged
financial effect of lower contribution limits on both candidates
and contributors.°
REASONS FOR GRANTING THE WRIT
Introduction: Three Unresolved Issues Posed in Buckley
Twenty-two years have elapsed since the landmark decision
in Buckley v. Valeo, 424 U.S. 1 (1976). While this Court has
addressed the constitutional questions posed by campaign finance
regulations in candidate elections on six occasions in the interim,’
it has yet to explain three key unresolved issues arising out of
Buckley that pose particularly difficult problems for the lower
courts and for state and local governments seeking to enact
campaign finance legislation in compliance with Buckley.
6. The court of appeals also struck the provision for small donor
PACs and the $200 annual limit on contributions to any one PAC.
7. See California Medical Ass'n v. FEC, 453 U.S. 182 (1981)
(upholding $5,000 ceiling on contributions to PACs); FEC v. National
Conservative Political Action Comm., 470 U.S. 480 (1985) (invalidating
ceiling on independent expenditures by PACs); FEC v. Massachusetts
Citizens for Life, 479 U.S. 238 (1986) (invalidating ban on independent
expenditures on behalf of federal candidates by grassroots, non-profit
corporations); Austin v. Michigan Chamber of Commerce, 494 U.S. 652
(1990) (upholding ban on independent expenditures by corporations in
state and local campaigns); Colorado Republican Federal Campaign
Comm. v. FEC, 518 U.S. 604 (1996) (invalidating ceiling on independent
expenditures by political parties during period prior to selection of
candidate). The Court has also addressed campaign finance regulation
in referendum campaigns on two occasions. See First Nat'l Bank of
Boston v. Bellotti, 435 U.S. 765 (1978) (invalidating ban on independent
expenditures by corporations in connection with referendum); Citizens
Against Rent Control v. Berkeley, 454 U.S. 290 (1981) (invalidating
$250 contribution limit in connection with referendum).
a w/c ella
13
First, Buckley ruled that the size and source of campaign
contributions may be limited in an effort to prevent electoral
corruption, real and apparent. Jd. at 19. But the precise standard
of review that governs Challenges to contribution limits remains a
matter of dispute. Some courts, including the Eighth Circuit below,
apply classic First Amendment “strict scrutiny.” See, e.g., Russell,
146 F.3d at 568; Carver, 72 F.3d at 638. Others recognize Buckley’s
holding that limits on campaign contributions only marginally
burden First Amendment rights and apply a less exacting standard
of review. See, e.g., Service Employees Int'l Union v. Fair Political
Practices Comm'n, 955 F.2d 1312, 1322 (9th Cir.), cert. denied,
505 U.S. 1230 (1992). Indeed, the standard of review suggested
in Buckley is so unpredictable that it has prompted one academic
observer to note that it “varies paragraph to paragraph.” Steven
H. Shiffrin, The First Amendment, Democracy and Romance 32
(1990).
The disagreement over the appropriate standard of review
turns, in part, on a second unresolved issue generated by the
Buckley decision — continuing confusion over what the Court
meant in Buckley when it recognized that the prevention of electoral
“corruption,” real and apparent, is a compelling governmental
interest justifying reasonable limits on the size and source of
campaign contributions. Buckley, 424 U.S. at 27. Some courts,
including the Eighth Circuit below, read the term “corruption”
very narrowly to mean quid pro quo arrangements that closely
resemble bribery or extortion. See Russell, 146 F.3d at 570; Shrink
Missouri Gov’t PAC v. Adams, No. 98-2351, 1998 WL 413477, at
*1 (8th Cir. July 23, 1998). Other courts, however, implicitly
recognize that “corruption” should be read more broadly to include
a kind of preferential treatment such as increased access or
heightened concern over issues of interest to large contributors.
Cf. Kentucky Right to Life v. Terry, 108 F.3d 637, 648 (6th Cir.)
(approving $1,000 limits without reviewing any evidence of
corruption), cert. denied, 118 S. Ct. 162 (1997); California ProLife
Council PAC v. Scully, 989 F. Supp. 1282, 1294-95 (E.D. Cal.
1998) (noting that the electorate’s concern for corruption need
not be accompanied by evidence of bribery).
14
Finally, as the opinions below demonstrate, lower courts need
guidance in assessing the constitutionality of state and local efforts
to enhance political equality by using subsidies to limit the effect
of concentrations of wealth on the democratic process. In Buckley,
this Court recognized that the enhancement of political equality
was a “legitimate” government interest that justified spending
public funds to subsidize the campaign process. 424 U.S. at 93.
The Buckley Court considered the relationship between campaign
subsidies and expenditure limits, holding that otherwise
unconstitutional limits on campaign spending could be required
as a quid pro quo for the voluntary acceptance of a campaign
subsidy. /d. at 99-100. But, because the issue did not arise in
Buckley, the Court has never considered the relationship between
campaign subsidies and contribution limits.
Lacking explicit guidance from the Buckley opinion, the
Eighth Circuit below believed itself obliged to ignore the subsidy
provided by Arkansas as the structural quid pro quo for the
contribution limits and reviewed the contribution limits as if they
existed in a legal and factual vacuum. But such a myopic approach
is inconsistent with Buckley itself, which explicitly recognized
the constitutional significance of the interplay between subsidy
and limitation, and is unnecessarily destructive of the ability of
state and local governments to combine subsidies and limitations
in an integrated program that limits the corrosive effects of wealth
inequality on the democratic process, while assuring that
candidates receive the generous flow of funds needed to wage
robust campaigns.
15
I. Unless Reviewed, the Eighth Circuit’s Misreading of
Buckley v. Valeo Will Dramatically Inhibit the Capacity of
State and Local Governments to Seek Imaginative Solutions
to the Most Important Contemporary Challenge Facing
American Democracy — Dealing with the Impact of Significant
Wealth Disparities on the Democratic Process.
This case presents the Court with a singular opportunity to
resolve the constitutional relationship between the setting of
campaign contribution limits and a linked speech-enhancing public
subsidy. This Court’s guidance in this area is crucial to ongoing
efforts by state and local governments to reform their campaign
finance systems.
Overwhelming majorities at the state and local levels
throughout the United States are struggling to combat the pervasive
cynicism engendered by the disproportionate political influence
apparently exercised by monied interests in funding our electoral
campaigns — a cynicism that some observers believe is at least
partially responsible for the alarming decline in electoral
participation that resulted, in 1996, in less than half the eligible
electorate voting in a presidential election for the first time since
1824.* See, e.g., Eliza Newlin Carney, Opting Out of Politics, Nat’!
Journal, Jan. 17, 1998, at 106; Sen. John McCain, The Scandal in
Our Midst, Newsweek, Aug. 17, 1998, at 13. Turnouts in state
and local races are even lower. Almost invariably, given the options
open after Buckley, state and local majorities seeking to build
confidence in the electoral process have turned to contribution
8. See Barbara Vobejda, Just Under Half of the Possible Voters
Went to the Polls, Wash. Post, Nov. 7, 1996, at A30. Electoral
participation fell below 50% of the eligible electorate in the 1924
presidential election, but only because the massive influx of newly
eligible women voters had not yet been fully integrated into the
democratic process.
16
limits as the primary weapon in the arsenal of reform. By 1997, at
least 39 states had imposed limits on individual contributions to
candidates. Michael J. Malbin & Thomas L. Gais, The Day After
Reform: Sobering Campaign Finance Lessons from the American
States 13-20 (1998).
While contribution ceilings curb the potential for corruption
and enhance the public’s confidence in democracy, these benefits
come at a cost. Limiting the ability of candidates to raise funds
efficiently through large contributions can diminish candidates’
ability to communicate with voters. Moreover, contribution limits
inadvertently enhance the political power of extremely wealthy
candidates who are free, under Buckley, to expend unlimited
amounts of their personal fortunes on their campaigns. Buckley,
424 US. at 54.
In contrast, Arkansas has fashioned an ingenious approach to
campaign finance reform) that increases the amount of money
available to candidates even as it caps the amount that any one
individual can give a candidate. Arkansas’ approach, if
constitutionally permissible, may well be the wave of the future.
Increasingly, states and localities are melding campaign subsidies
with contribution limits in an integrated plan that both minimizes
corruption and increases the availability of campaign funds. See
Malbin & Gais, The Day After Reform, supra, at 21-23. If the
Eighth Circuit’s opinion in this case stands, however, states and
localities throughout the United States will abandon the promising
approach of linking effective contribution limits with subsidies
designed to enhance the availability of funds to candidates. Without
further guidance from this Court, innovative reformers, who thus
far have been cooking without a constitutional recipe, will be forced
to leave the kitchen.
While Buckley did not provide clear guidance on how to
evaluate an integrated system of campaign finance regulation that
couples limits on contributions with extensive subsidies, the
Buckley decision strongly suggests that the panel of the Eighth
Circuit below was simply wrong in ignoring the subsidy half of
17
the equation when it assessed the constitutionality of the
contribution limits. Buckley held that limits on campaign
contributions do implicate the First Amendment rights of
contributors and candidates. 424 U.S. at 21. Because contributions
“fuel” candidate speech and allow supporters to signal their
support, Buckley held that it would be impermissible to impose
contribution limits that are unreasonably low — at least where the
candidate has no other source of funding. Tellingly, however, the
Court made clear that campaign contributions were not “direct”
speech, since they merely empowered a third person to speak. Jd.
Moreover, held the Buckley Court, reasonable contribution limits
amount to “marginal restrictions” on a contributor’s First
Amendment rights, and are fully justified by the “compelling”
government interest in ridding the electoral process of the reality
and appearance of corruption. /d. at 21-29.
Indeed, despite the First Amendment interests underlying
campaign contributions, the Buckley Court held that the
government could prohibit a// contributions to a candidate where
it couples that ban with public funding. That was exactly the nature
of the presidential campaign finance system upheld in Buckley, it
prohibited any candidate who accepted public funds from accepting
a penny from contributors — notwithstanding a would-be
contributor’s ardent desire to express support with a contribution.
See Republican Nat’l Comm. v. FEC, 487 F. Supp. 280, 286-87
(S.D.N.Y.) (three-judge panel) (describing and evaluating First
Amendment rights of contributors), aff'd, 445 U.S. 955 (1980).°
If federal law can bar a supporter entirely from contributing
to a candidate, so long as the public funding mechanism provides
9. It is true, of course, that presidential candidates are able to choose
whether to accept public funds and the attendant restrictions, but that
difference cannot possibly be relevant to the constitutional rights of the
contributors. A person who wishes to contribute to a presidential
candidate has no say as to whether the candidate will accept public funds,
so he cannot in any sense be said to have voluntarily accepted the bar on
contributing.
18
sufficient “fuel” for the candidate’s communication, then surely
Arkansas may take the less restrictive step of merely limiting
contributions under similar circumstances. Where, as here,
adequate public funds are provided to “fuel” a candidate’s
campaign, and where persons may “signal” support by making
substantial contributions directly to the candidate, or unlimited
personal expenditures in support of the candidate, a contributor’s
legitimate First Amendment interests, as described in Buckley,
are fully respected. Yet the Buckley decision provides confusing
instruction on whether there are residual First Amendment interests
that should be given constitutional weight when these other
interests are satisfied.
At best, the Buckley decision leaves unaddressed the important
questions of whether a public subsidy scheme that neither caps
election spending nor hinders fund-raising, but in fact encourages
moderate contributions and participation from voters, would
counterbalance any restraints on speech caused by contribution
limits. The Buckley Court praises public campaign subsidies, when
linked with spending and contribution limits, as part of a desirable
effort to “use public money to facilitate and enlarge public
discussion and participation in the electoral process, goals vital to
a self-governing people.” Buckley, 424 U.S. at 92-93. The Court
goes on to note that the public subsidy system “furthers, not
abridges, First Amendment values.” Jd. The Buckley Court also
recognizes that facilitating communication between the candidate
and the public is a valid and important government goal of
campaign regulation. Jd.
Notwithstanding this Court’s history of viewing techniques
of enhancing speech through a different lens, the Eighth Circuit
declined to consider the public subsidy as it evaluated the
contribution limits. Russell, 146 F.3d at 567 (App. 10a). Instead,
the court of appeals applied strict scrutiny to find that the $100
and $300 limits were “too low to allow meaningful participation
in speech and association,” id. at 570, and were not narrowly
tailored to address the reality or perception of corruption in
Arkansas. The court of appeals’ refusal to address the speech and
19
debate enhancing elements of the tax credit/subsidy cries out for
this Court’s attention.
II. While Lower Courts are Hopelessly Divided on the Issue
of the Proof Required Under Buckley to Justify Limits on
Campaign Contributions, the Eighth Circuit’s Draconian
Requirement That the State Prove Actual Corruption is in
Direct Conflict with Buckley and Would Have the Effect of
Invalidating All Existing Limits on Campaign Contributions.
In Buckley, this Court described the threshold for proving the
sufficiency of a government’s interest in “the prevention of
corruption and the appearance of corruption spawned by the real
or imagined coercive influence of large financial contributions.”
424 U.S. at 25. Buckley makes clear that the appearance of
corruption can exist, and can erode confidence in representative
government, even when the “coercive influence of large financial
contributions on candidates’ positions and on their actions if elected
to office” has no basis in reality, but is instead “imagined.” Jd.
One of the core assumptions underlying Buckley is that the
appearance of impropriety is “inherent in a regime of large
individual contributions.” Jd. at 27 (emphasis added); see also
Colorado Republican Federal Campaign Comm. v. FEC, 518 U.S.
604, 616 (1996) (plurality); Austin v. Michigan Chamber of
Commerce, 494 U.S. 652, 660 (1990) (state had sufficiently
demonstrated a danger of real or apparent corruption caused by
corporate political expenditures because “corporate wealth can
unfairly influence elections”) (emphasis added). Indeed, in
rejecting an overbreadth challenge to the $1,000 contribution limits
for all federal elections, the Court assumed that “most large
contributors do not seek improper influence over a candidate’s
position or an officeholder’s action.” Buckley, 424 U.S. at 29. Also,
the Court did not find it significant that much more than $1,000
would be needed to “enable an unscrupu!ous contributor to exercise
improper influence over a candidate or officeholder.” Jd. at 30.
20
The Eighth Circuit’s decision implicitly rejects these basic
tenets of the Court’s campaign finance jurisprudence by creating
a new and impossibly stringent standard of proof for establishing
the requisite appearance of corruption. The court of appeals
described this new requirement as “objective reasonableness,” 146
F.3d at 569, but, in application, the court required proof of actual
bribery or extortion in order to support any claim of apparent
corruption. /d. at 570.
In applying this new and unsupported standard, the court of
appeals repeatedly complained of the government’s failure to show
that any legislator had changed his vote in exchange for campaign
contributions, violated the pre-existing contribution limits, or
illegally concealed the source of his contributions. See id. at 569-
70. In other words, the court required evidence of unlawful
behavior before it would consider the public’s perception of
corruption reasonable. Indeed, the court of appeals acknowledged
the evidence that “there was a ‘uniform’ public perception of
corruption associated” with one bill and that one lawmaker
received substantial contributions from lobbyists who had business
before his committee, id. at 569, yet found this evidence insufficient
to support a public perception of corruption because, in that court’s
view, it was unreasonable. The court of appeals created a standard
of proof that a perception of corruption is “reasonable” only when
it is based on actual quid pro quo exchanges of money or other
clearly unlawful conduct.
The difference is far from semantic, as the Eighth Circuit
confirmed just weeks ago, when it enjoined contribution limits
of $1,075 — limits that exceed the limits currently in place
under federal law. Shrink Missouri Gov't PAC v. Adams, No.
98-2351, 1998 WL 413477, at *1 (8th Cir. July 23, 1998).
Relying heavily on its opinion in this case, the Eighth Circuit
concluded that
it is likely that the state has failed to show “that a
reasonable person could perceive, on the basis of
21
the evidence presented at trial, that such
contributions make for undue influence or spawn
corruption.”
Id. (quoting Russell, 146 F.3d at 568) (emphasis added). As
Shrink Missouri demonstrates, under the Eighth Circuit’s logic
in this case, it will be virtually impossible to prove an
appearance of corruption, which would mean the automatic
invalidation not only of virtually every contribution limit
adopted in the states, but also of the federal limits approved in
Buckley.
The Eighth Circuit’s newly minted “objective reasonableness”
test not only obliterates the distinction between the reality and the
appearance of corruption, it flies in the face of Buckley’s repeated
recognition that any showing of perceived corruption that is not
merely “illusory” is sufficient. The Buckley Court recognized that
“the scope of such pernicious practices [could] never reliably be
ascertained,” and concluded that anecdotal evidence was sufficient
to show that “the problem [of corruption] is not an illusory one.”
Buckley, 424 U.S. at 27 & n.28 (describing the “deeply disturbing”
examples of large contributions that surfaced after the 1972
presidential election). The Court, in fact, relied on the public
awareness of the “opportunities” for abuse without tying it to a
requirement of proving that abuse had actually occurred, or was
even likely to occur. Jd. Because such appearances can severely
undermine public confidence in representative government,
“Congress could legitimately conclude that the avoidance of the
appearance of improper influence ‘is also critical.’ ” Jd. (quoting
CSC v. Letter Carriers, 413 U.S. 548, 565 n.29 (1973)); see also
id. at 30 (“Congress was justified in concluding that the interest in
safeguarding against the appearance of impropriety requires that
the opportunity for abuse inherent in the process of raising large
monetary contributions be eliminated.”’).
The Buckley Court recognized that the very possibility of
making large contributions triggered an appearance of corruption,
22
stating that in a “system permitting unlimited financial
contributions,” the threat to the public’s confidence in the system
is self-evident. Jd. at 28.
This Court’s recent decision in United States v. National
Treasury Employees Union, 513 U.S. 454 (1995) (“NTEU”),
illustrates the flaw in the Eighth Circuit’s analysis. In NTEU, this
Court addressed whether a ban on honoraria given to lower-level
federal employees unconstitutionally restricted the First
Amendment rights of those employees. There, the Court required
the government to show that the harms allegedly caused by the
honoraria were “real, not merely conjectural.” Jd. at 475 (internal
quotation omitted). The NTEU Court agreed that “Congress could
reasonably assume that payment of honoraria to judges or high-
ranking officials in the Executive Branch might generate [an]
appearance of improper influence.” Jd. at 473 (emphasis added).
But the Court refused to extend that assumption to lower-level
employees “with negligible power to confer favors on those who
might pay to hear them speak or read their articles” in the absence
of some greater showing of need. Jd.
Thus, the N7EU Court was prepared to assume that honoraria
paid to high-level officials would generate an appearance of
improper influence, much like the Buckley Court’s assumption of
harm from “large contributions.” Indeed, the dissent in N7TEU
would have accorded the government even more deference to find
that the ban should continue to apply to all employees. Jd. at 494
(Rehnquist, C.J., dissenting). Surely, the assumption that financial
rewards to high-ranking executive officials would generate the
appearance of improper influence is applicable, as well, to
substantial campaign contributions to legislators, attorneys general,
and governors.
While no other lower court has approached the Draconian
standard applied by the Eighth Circuit, in recent years, lower courts
have struggled, without success, to apply uniform standards in
cases challenging contribution limits. The Sixth Circuit, in stark
contrast with the Eighth, for instance, seems to embrace the Buckley
23
presumption that large contributions are corrupting, and upheld
limits on individual and corporate contributions to candidates
without an analysis of the evidence of actual or perceived
corruption. See Kentucky Right to Life, Inc. v. Terry, 108 F.3d
637, 646-48 (6th Cir. 1997). On the other hand, a federal district
court in California recently grumbled that although in 1989 “ ‘the
boundaries of the notion of the appearance of corruption ha[d] not
been fully developed’ . . . [L]ittle has happened since then to help
clarify the notion.” California ProLife Council PAC v. Scully, 989
F. Supp. 1282, 1294-95 (E.D. Cal. 1998) (internal citation omitted).
The court also reviewed the evidence to note that several bribery
convictions and a government investigation of the state legislature
indicate, at the least, that the “problem [of corruption] is not
illusory,” and that, thus, the government had proved its “legitimate
interest” in limiting contributions. Jd. Another court, reviewing
contribution limits for a variety of local offices in the District of
Columbia, held that “vague or inapposite evidence” of the
government’s interest in preventing corruption or appearance of
corruption might not be sufficient to support limits as low as $50
per election cycle. National Police Ass'n v. District of Columbia
Bd. of Elections and Ethics, 924 F. Supp. 270, 281 (D.D.C. 1996),
vacated as moot, 108 F.3d 346 (D.C. Cir. 1997) (contribution limits
increased in interim).
The confusion in the lower courts is exacerbated by
widespread disagreement over the meaning of “corruption” as the
term is used in Buckley. Is it limited to acts that constitute bribery
or extortion? Or, does it encompass serious distortions in the
democratic process that afford wealthy contributors unfair
influence by granting them preferred access and heightened
concern? See generally Daniel Hays Lowenstein, On Campaign
Finance Reform: The Root of Evil is Deeply Rooted, 18 Hofstra L.
Rev. 301 (1989) (reviewing the access and influence of
contributors); Thomas F. Burke, The Concept of Corruption in
Campaign Finance Law, 14 Const. Comm. 127 (Spring 1997).
The deeply unsatisfactory nature of the lower courts’ radically
varying approaches to efforts to limit campaign contributions cries
out for guidance from this Court.
24
Ill. The Circuits are Split on the Appropriate Standard of
Review for Contribution Limits.
The Buckley Court’s review of contribution limits begins with
the observation that such limits impose “only a marginal restriction
upon the contributor’s ability engage in free communication,”
Buckley, 424 U.S. at 21, and continues with the holding that the
$1,000 limits at issue there “do not undermine to any material
degree the potential for robust and effective discussion of
candidates and campaign issues,” id. at 29. After discussing the
government’s interest in fighting corruption and the limits’ “precise
focus” on that interest, however, the Court holds that under the
“rigorous standard of review established by our prior decisions,
the weighty interests served by restricting the size of financial
contributions to political candidates are sufficient to justify the
limited effect upon First Amendment freedoms” caused by the
contribution limits. Jd. |
Then-Justice Rehnquist has since stated that
[the] Court in Buckley v. Valeo, never suggested that
the interest served by the campaign limitation provision
was a “compelling one,” nor examined the provision
to determine whether it was sufficiently tailored to the
interest to survive “heightened scrutiny.” The Court
was Satisfied that the provision had only an indirect
and minimal effect on the First Amendment interests,
as well as a rational basis.
Pacific Gas & Elec. Co. v. Public Utilities Comm'n of California,
475 U.S. 1, 29 n.2 (1985) (Rehnquist, J. dissenting) (emphasis
added). In California Medical Ass'n v. FEC, 453 U.S. 182 (1981)
25
[“CalMed”], the Court was conflicted about whether Buckley
applied a different — lower — standard of scrutiny to
contribution limits than to spending limits. Compare CalMed,
453 U.S. at 196 (plurality) (stating that “speech by proxy,” such
as contributions, is not “entitled to full First Amendment
protection”) with id., at 202 (Blackmun, J., concurring)
(disagreeing with the plurality’s suggestion that contribution
limits receive a level of scrutiny less than “rigorous”).
Recently, a pluraiity of this Court went so far as to suggest
that a weighing test applies even to the evaluation of the more
highly protected spending limits, stating that when considering
campaign finance regulations,
the Court essentially weigh{s] the First Amendment
interest in permitting candidates (and their
supporters) to spend money to advance their political
views against a “compelling” governmental interest
in assuring the electoral system’s legitimacy,
protecting it from the appearance of corruption.
Colorado Republican Federal Campaign Comm. v. FEC, 518
U.S. 604, 609 (1996) (emphasis added) (citing FEC v.
Massachusetts Citizens for Life, 479 U.S. 238, 256-63 (1986);
FEC v. National Conservative Political Action Comm., 470 U.S.
480, 493-501 (1985); CalMed, 453 U.S. at 193-199; Buckley,
424 U.S. at 14-23). Whether this “weighing test” is only a
reformulation of strict scrutiny or is a form of “less exacting
scrutiny” that takes into account speech accorded “less than
full First Amendment protection” continues to divide this Court
and confuse lower courts. Compare Colorado Republican, 518
U.S. at 640 & n.7 (Thomas, J. dissenting), with CalMed, 453
U.S. at 196, and Buckley, 424 U.S. at 27 (expressly rejecting
requirement that government must use least restrictive means
when regulating contribution limits).
26
The plurality’s view in Colorado Republican is consistent
with the standard of review applied by the Court in other areas of
First Amendment jurisprudence. In Timmons v. Twin Cities Area
New Party, 117S. Ct. 1364, 1370 (1997), the Eighth Circuit applied
strict scrutiny to invalidate Minnesota’s ban against a single
candidate running for office as the nominee of two different parties.
This Court reversed, noting that the ban did not impose a “severe
burden” on either voters or political parties because adequate
alternative methods of pursuing their respective First Amendment
interests existed. /d. at 1372. In the absence of a “severe burden,”
the Court subjected the ban to “less exacting review.” Jd.; see
also Burdick v. Takushi, 504 U.S. 428, 434 (1992) (applying less
exacting review to Hawaii’s ban on write-in votes because the
ban did not severely burden First Amendment rights). Despite
Timmons, the court below declined even to consider whether the
provision of a generous public subsidy provided an adequate
alternative means of “fueling” a candidate’s speech, rendering the
use of strict scrutiny inappropriate.
The court of appeals here insisted that any standard of review
more lenient than strict scrutiny was inappropriate in its
consideration of the constitutionality of Act I’s contribution limits,
and declared that the “weighing” analysis in Colorado Republican
was a mere “restatement or reformulation ... of the Court’s
familiar strict scrutiny analysis.” Russell, 146 F.3d at 568; see
also Carver v. Nixon, 72 F.3d 633, 638 (8th Cir. 1995) (insisting
that “strict scrutiny” was the proper standard), cert. denied, 518
U.S. 1033 (1996).
Other circuits, even before Colorado Republican, recognized
that Buckley hardly restates “the Court’s familiar strict scrutiny
analysis.” For instance, the Ninth Circuit held that “a somewhat
less stringent test than strict scrutiny [applies] to decide the
constitutionality of contribution limitations.” Service Employees
Int'l Union v. Fair Political Practices Comm'n, 955 F.2d 1312,
1322 (9th Cir.) (citing Buckley, 424 U.S. at 29; Massachusetts
Citizens for Life, 479 U.S. at 259-60), cert. denied, 505 U.S. 1230
27
(1992). Other courts have taken the kind of practical “balancing
approach” suggested by the Buckley Court. See National Black
Police Ass'n v. District of Columbia Bd. of Elections and Ethics,
924 F. Supp. 270, 274 (D.D.C. 1996) (describing the disagreement
over the standard but applying a balancing test even after finding
that the contribution limits had a “severe impact” on First
Amendment rights), vacated as moot, 108 F.3d 346 (D.C. Cir.
1997).
When the lower courts have reviewed other types of
restrictions on contributions, they have also reflected this confusion
over the standard. One court called on to review contribution limits
that were based on whether the candidate agreed to spending limits
and accepted a partial subsidy described a kind of weighing test
— the more disproportionate the burden, the more likely the statute
will be held unconstitutional. Vote Choice, Inc. v. DiStefano, 4
F.3d 26, 33 (1st Cir. 1993); see also Driver v. DiStefano, 914 F.
Supp. 797 (D.R.I. 1996) (applying type of weighing test to
contribution limits based on the calendar year). Yet, the Wisconsin
Supreme Court, purporting to apply Buckley to its analysis of a
limit on the aggregate amount a candidate could receive from
committees, applied strict scrutiny to find the limits constitutional.
Gard v. State Elections Bd., 456 N.W. 2d 809 (Wisc. 1990); see
also Vannatta v. Kiesling, 899 F. Supp. 488 (D. Ore. 1995)
(applying strict scrutiny to strike law limiting contributions from
out of district), aff'd, No. 95-35998, 1998 WL 461920 (9th Cir.
Aug. 11,1998) (affirming judgment but applying “rigorous
scrutiny”).
The circuit courts, state supreme courts, and other lower courts
are, therefore, in disagreement and confusion over whether to apply
strict scrutiny, some form of intermediate scrutiny, or a weighing
test when they review efforts to impose contribution limits. That
disagreement and confusion is only intensified when, as here, the
contribution limits are bracketed with a public subsidy, which
lessens any burden on First Amendment rights by enhancing
candidates’ ability to amass resources. Accordingly, this Court
28
should grant certiorari to clarify and enunciate the proper standard
of review in connection with efforts to link contribution ceilings
and public subsidies in an effort to prevent electoral corruption,
enhance political equality, and encourage individual participation
in the democratic process.
IV. This Court Should Consider the Small Donor PAC
Provision as Another Way that Act I Enhances Political
Participation Without Violating the Fourteenth
Amendment.
Along with the tax credit provision, Arkansas’ Act I had
another creative means of enhancing the political speech and
participation of its citizens — the small donor PAC provision.
That new law allowed PACs that only receive contributions no
larger than $25 to contribute up to $2,500 per election while regular
donor PACs were subject to the standard contribution limit for
persons. While this Court’s decision in CalMed, 453 U.S. at 204,
makes clear that the state can impose different campaign finance
regulations on different types of organizations, it leaves open the
question of whether the state is permitted to allow PACs that are
subject to much greater regulation to contribute substantially more
to individual candidates than the standard, less regulated PACs.
Although this is an open question, the court of appeals’
analysis of this issue in striking down the small donor PAC
provision is at odds with the analysis in Ca/Med. In evaluating an
equal protection challenge to different campaign finance
regulations imposed on different types of organizations, CalMed
instructed courts to consider whether the regulation in question
burdened the First Amendment rights of one group more than it
burdened the same rights of the other group and, if so, whether the
distinction was justified. The court of appeals here applied strict
scrutiny, requiring the differential treatment to be narrowly tailored
to serving a compelling state interest. Russell, 146 F.3d at 572
29
(App. 17a). Moreover, the court of appeals declined to consider
key justifications for the differential treatment of the two types of
PACs — that is, that the small donor PACs are less likely to be
used as a means of circumventing individual contribution limits
and that they enhance democratic participation by involving more
citizens in the electoral process.'® Instead, the court of appeals
held that small donor PACs would not combat corruption because
they had larger contribution limits than individuals or regular
PACs.
Arkansas used the small donor PAC as another device — like
the tax credit — to insure that candidates could continue to raise
sufficient funds for their campaigns under Act I’s lower
contribution limits. Additionally, like the tax credit, Arkansas saw
the small donor PAC as way to encourage grass roots political
involvement. This Court should grant review in order to instruct
lower courts on how to evaluate the constitutionality of this
innovative campaign financing device.
10. Similarly, the court of appeals’ decision striking down the $200
limit on contributions to the ordinary PACs is intertwined with its
decision striking the $100 and $300 limits because the problem that
donors might circumvent those limits with PAC contributions recedes
when the limit returns to $1,000. Nonetheless, the court of appeals’
construction of CalMed is flawed. As with Act I’s individual contribution
limits, the $200 limit on contributions to PACs triggers only minimal
First Amendment protection because the donor is free to spend unlimited
amounts independently and can continue to give to candidates.
30
CONCLUSION
For the foregoing reasons, the petition for writ of certiorari
should be granted.
Respectfully submitted,
BURT NEUBORNE
Counsel of Record
E. JOSHUA ROSENKRANZ
NANCY NORTHUP
ELIZABETH DANIEL
Brennan Center for Justice at
New York University School of Law
161 Avenue of the Americas
Fifth Floor
New York, NY 10013
(212) 998-6730
SCOTT C. TROTTER
TROTTER & SKELTON
103 West Capitol Avenue
Suite 1205, Boyle Building
Little Rock, AR 72201
(501) 376-6355
Attorneys for Petitionerss
APPENDIX
la
APPENDIX A — OPINION OF THE UNITED STATES
COURT OF APPEALS FOR THE EIGHTH CIRCUIT
DECIDED JUNE 4, 1998
Ron Russell, Kent Ingram, William R. Austin, and
Associated Industries of Arkansas Political Action
Committee, Appellants,
v.
Troy Burris, In His Official Capacity as Chairperson of
the Arkansas Ethics Commission; Rita Looney, In Her
Official Capacity as a Member of the Arkansas Ethics
Commission; Tom Alexander, In His Official Capacity as
a Member of the Arkansas Ethics Commission; Ben Allen,
In His Official Capacity as a Member of the Arkansas
Ethics Commission; Jack Kearney, In His Official
Capacity as a Member of the Arkansas Ethics
Commission: 2nd Citizens for Clean Government,
Appellees.
American Civil Liberties Union of Arkansas, James
Madison Center for Free Speech, Shrink Missouri
Government PAC, and Zev David Fredman,
Amici Curiae on Behalf of Appellants.
Connecticut, Iowa, Kansas, Kentucky, Massachusetts,
Minnesota, Missouri, Montana, New Mexico, North
Dakota, Utah, and Vermont, Amici Curiae on
Behalf of Appellees.
Ron Russell, Kent Ingram, William R. Austin, and
Associated Industries of Arkansas Political Action
Committee, Appellees,
PATA EE ER AT ER
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Pee
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oe > ay fs
ee OY
se ch ha a es SN DO iN
2a
Appendix A
Vv.
Troy Burris, In His Official Capacity as Chairperson of
the Arkansas Ethics Commission; Rita Looney, In Her
Official Capacity as a Member of the Arkansas Ethics
Commission; Tom Alexander, In His Official Capacity as
a Member of the Arkansas Ethics Commission; Ben Allen,
In His Official Capacity as a Member of the Arkansas
Ethics Commission; and Jack Kearney,
In His Official Capacity as a Member of the
Arkansas Ethics Commission, Appellants, and
Citizens for Clean Government, Intervenor as Defendant.
James Madison Center for Free Speech, Shrink Missouri
Government PAC, and Zev David Fredman,
Amici Curiae on Behalf of Appellees.
Connecticut, Iowa, Kansas, Kentucky, Massachusetts,
Minnesota, Missouri, Montana, New Mexico, North
Dakota, Utah, and Vermont, Amici Curiae on
Behalf of Appellants.
Ron Russell, Kent Ingram, William R. Austin, and
Associated Industries of Arkansas Political Action
Committee, Appellees,
v.
Troy Burris, In His Official Capacity as Chairperson of
the Arkansas Ethics Commission; Candi Sue Russell, In
Her Official Capacity as a Member of the Arkansas
Ethics Commission; Marvin Delph, In His Official
3a
Appendix A
Capacity as a Member of the Arkansas Ethics
Commission; Rita Looney, In Her Official Capacity as a
Member of the Arkansas Ethics Commission; and Norton
Wilson, In His Official Capacity as a Member of the
Arkansas Ethics Commission, Defendants, and Citizens
for Clean Government, Appellant.
James Madison Center for Free Speech, Shrink Missouri
Government PAC, and Zev David Fredman,
Amici Curiae on Behalf of Appellees.
Nos. 97-3922, 97-4033 and 97-4038
United States Court of Appeals,
Eighth Circuit.
Submitted: April 13, 1998
Decided June 4, 1998
Before WOLLMAN, BEAM, and MORRIS SHEPPARD
ARNOLD, Circuit Judges.
MORRIS SHEPPARD ARNOLD, Circuit Judge.
In 1996, the people of Arkansas, by voter initiative,
approved a campaign finance reform measure entitled Initiated
Act I. Prior to Act I, Arkansas law limited individuals and
political action committees to contributions of $1,000 per
candidate during each election cycle. Act I reduced the
contribution limit to $300 for the offices of governor, lieutenant
4a
Appendix A
governor, secretary of state, treasurer, auditor, attorney general,
and commissioner of state lands, see Ark. Code Ann. § 7-6-
203(a), § 7-6-203(b), and to $100 for all other state public
offices, see Ark. Code Ann. § 7-6-203(a)(1), § 7-6-203(b)(1).
Act I also created a special category of political action
committee (PAC), see Ark. Code Ann. § 7-6-201(9), § 7-6-
201(10), known as a small-donor PAC. See Ark. Code Ann. §
7-6-201(12). Under Act I, a small-donor PAC may accept no
contribution larger than $25, see Ark. Code Ann. § 7-6-
201(12)(B), and it may contribute no more than $2,500 per
election to any candidate, see Ark. Code Ann. § 7-6-203(d).
Act I authorized as well the creation of a campaign fund-raising
entity known as an independent expenditure committee. See
Ark. Code Ann. § 7-6-201(14). An independent expenditure
committee may, like any person, make unlimited independent
expenditures (that is, ones not coordinated with a candidate) to
advocate the election or defeat of a clearly identified candidate
for office. See Ark. Code Ann. § 7-6-201(13), § 7-6-201(14).
Such a committee, however, may accept no more than $500
from any person annually. See Ark. Code Ann. § 7-6-203(k).
Finally, Act I authorized local governments to set reasonable
limitations on fund-raising for campaigns for local offices. See
Ark. Code Ann. § 7-6-224. Ron Russell, Kent Ingram, William
Austin, and the Associated Industries of Arkansas Political
Action Committee challenged each of these Act I provisions in
the district court, as well as a pre-Act I provision limiting
contributions to any one PAC to $200 annually, see Ark. Code
Ann. § 7-6-201(9)(B).
Following a bench trial, the district court held that the
contribution limits of $300 for certain statewide offices and of
$100 for state judicial offices were unconstitutional because
Sa
Appendix A
they violated the First Amendment’s prohibition against
limitations on the freedom of speech. See Russell v. Burris,
978 F.Supp. 1211, 1222, 1224, 1229 (E.D. Ark. 1997). The
trial court, however, upheld the $100 contribution limit as to
all other offices and the $200 contribution limit to PACs. Id. at
1223, 1225, 1229. The trial court also held that the differential
treatment for ordinary PACs and small-donor PACs did not
violate the Fourteenth Amendment’s equal protection clause.
Id. at 1227, 1229. The trial court declined to reach the merits
on the other two issues, finding that the plaintiffs did not have
standing to contest the limit on contributions to independent
expenditure committees, id. at 1217, 1229, and that the
provision authorizing relevant actions by local governments
was not ripe for a constitutional challenge. Id. at 1217-18, 1229.
All parties appeal the rulings unfavorable to their litigating
positions. We affirm in part and reverse in part.
I.
Standing is, of course, a threshold issue in every case before
a federal court: If a plaintiff lacks standing, he or she cannot
invoke the court’s jurisdiction. See Boyle v. Anderson, 68 F.3d
1093, 1100 (8th Cir. 1995), cert. denied, 516 U.S. 1173, 116
S.Ct. 1266, 134 L.Ed.2d 214 (1996). In order to invoke the
jurisdiction of a federal court, one must meet three
requirements. First, a plaintiff must have suffered an “injury in
fact,” and such an injury must be concrete, particularized, and
either actual or imminent. Id. at 1100-01. Second, a would-be
litigant must make out a causal connection between the alleged
injury and the conduct challenged. Id. at 1100. Third, he or she
must show that the injury is likely to be redressed by a favorable
decision. Id.
6a
Appendix A
The trial court determined that each of the plaintiffs had
Article III standing as to all but one of their challenges, see
Russell, 978 F. Supp. at 1217, and the defendants do not contest
that determination here. The plaintiffs maintain, however, that
the trial court erred in finding that they did not have Article III
standing to challenge the provisions of Act I relating to
independent expenditure committees.
The trial court found that the plaintiffs did not face a
credible threat of present or future prosecution with respect to
this part of their claim, and thus could show no actual or
imminent “injury in fact,” because none of them “could think
of an independent expenditure committee to which they had
contributed in the past or to which they planned to contribute.”
Id. Indeed, one plaintiff testified, “Well, in all honesty, I’d have
to tell you it would take a stretch of my imagination to figure
out why I’d want to contribute anything to an independent
committee.” Another simply testified that he did not know if
he would ever contribute to such a committee.
We are mindful that where “plaintiffs allege an intention
to engage in a course of conduct arguably affected with a
constitutional interest which is clearly proscribed by statute,
courts have found standing to challenge the statute, even absent
a specific threat of enforcement.” United Food & Commercial
Workers International Union v. IBP, Inc., 857 F.2d 422, 428
(8th Cir. 1988). But the plaintiffs have not demonstrated any
such intention: They have indicated neither that they would
contribute to a specific independent expenditure committee nor
that, but for the limitations of Act I, they would form an
independent expenditure committee. Standing may not be
predicated merely upon a conjectural or hypothetical injury or,
as one of the plaintiffs here would have it, upon a stretch of the
7a
Appendix A
imagination. See Lujan v. Defenders of Wildlife, 504 U.S. 555,
564, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). We therefore
affirm the trial court’s determination that the plaintiffs lacked
standing to challenge the provisions relevant to independent
expenditure committees.
Il.
“Where at all possible, government must curtail speech
only to the degree necessary to meet the particular problem at
hand, and must avoid infringing on speech that does not pose
the danger that has prompted regulation.” Federal Election
Commission v. Massachusetts Citizens for Life, 479 U.S. 238,
265, 107 S.Ct. 616, 93 L.Ed.2d 539 (1986). Government
attempts to limit campaign contributions, therefore, are
“* “subject to the closest scrutiny.” ’” Carver v. Nixon, 72
F.3d 633, 636 (8th Cir. 1995), cert. denied, 518 U.S. 1033, 116
S. Ct. 2579, 135 L.Ed.2d 1094 (1996), quoting Buckley v.
Valeo, 424 U.S. 1, 25, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976)
(per curiam), itself quoting NAACP v. Alabama, 357 U.S. 449,
461, 78 S.Ct. 1163, 2 L.Ed.2d 1488 (1958). Under this standard,
a significant interference with protected rights of political
association may be sustained only when the state demonstrates
a compelling interest and means closely drawn to avoid
unnecessary abridgement of associational freedoms. Carver, 72
F.3d at 636.
Intervenor (as a defendant) Citizens for Clean Government
(CCG) argues that we should apply a more lenient standard of
review to the legislation in this case because Act I included not
only contribution limits but also a public subsidy scheme. For
this proposition, CCG relies upon the Supreme Court’s ruling
in Buckley that upheld a ban on general election campaign
Appendix A
contributions to, and a limitation on general election campaign
expenditures by, a presidential candidate who elected to receive
a public subsidy. See Buckley, 424 U.S. at 85-109, 96 S.Ct.
612.
But the Buckley Court was clear that it was the optional
nature of the contribution and expenditure limit scheme, not
the subsidy, that rendered the scheme constitutionally
permissible: “Just as a candidate may voluntarily limit the size
of the contributions he chooses to accept, he may decide to
forgo private fundraising and accept public funding.” Id. at 57
n.65, 96 S. Ct. 612. Similarly, we recently upheld a voluntary
campaign subsidy and limitation scheme in Minnesota because
the scheme “presents candidates with an additional, optional
campaign funding choice, the participation in which is
voluntary.” Rosenstiel v. Rodriguez, 101 F.3d 1544, 1552 (8th
Cir. 1996), cert. denied, U.S. __, 117 S. Ct. 1820, 137
L.Ed.2d 1028 (1997). It is true that Act I provided a subsidy
2ud limitation scheme, but unlike the schemes upheld in
Buckley and Rosenstiel, Act I was imposed upon all candidates:
Candidates do not have the power to opt out. We therefore
decline this invitation to apply a standard of scrutiny to this
case that is different from the one that we adopted in Carver.
CCG argues for a more lenient standard of review on the
basis of two recent Supreme Court decisions as well, but neither
of these authorities modifies the standard of review appropriate
to this case. In Colorado Republican Federal Campaign
Committee v. Federal Election Commission, 518 U.S. 604, 609,
116 S.Ct. 2309, 135 L.Ed.2d 795 (1996) (opinion of Breyer,
J.), a case involving the application of federal campaign
expenditure limits, three justices resorted to what CCG calls a
weighing test, rather than strict scrutiny, to decide the case.
9a
Appendix A
See id. at 616, 618, 116 S.Ct. 2309. These justices described
their approach as consistent with cases in which the Court
“essentially weighed the First Amendment interest in permitting
candidates (and their supporters) to spend money to advance
their political views against a ‘compelling’ governmental
interest in assuring the electoral system’s legitimacy, protecting
it from the appearance and reality of corruption.” Id. at 609,
116 S.Ct. 2309. This adjudicatory approach appears to us to be
a restatement or reformulation, not a modification, of the
Court’s familiar strict scrutiny analysis.
We are aware that during the last term, in Timmons v.
Twin Cities Area New Party, 520 U.S. 351, 117 S. Ct. 1364,
1370, 137 L.Ed.2d 589 (1997), the Supreme Court upheld an
election regulation that barred a political party from choosing
as its nominee a candidate already appearing on another party’s
ballot. The Court held that while regulations “imposing severe
burdens on plaintiffs’ rights must be narrowly tailored and
[must] advance a compelling state interest,” lesser burdens
“trigger [a] less exacting review.” Id. We believe, however,
that restrictions on individual contributions to candidates and
on candidates’ amassing sufficient resources to run for office
are more severe than the restrictions at issue in Timmons. Where
the regulations impose severe burdens on First Amendment
rights, as here, Timmons reiterates the Court’s position that
strict scrutiny applies.
We must therefore first determine what interest can be
sufficiently compelling to permit the state to restrict First
Amendment freedoms. The compelling state interest identified
in Buckley was “the prevention of corruption and the
appearance of corruption spawned by the real or imagined
coercive influence of large financial contributions on
10a
Appendix A
candidates’ positions and on their actions if elected to office.” -
Buckley, 424 U.S. at 25, 96 S.Ct. 612. The Court reiterated
this position five years later, holding that “Buckley identified
a single narrow exception to the rule that limits on political
activity were contrary to the First Amendment. The exception
relates to the perception of undue influence of large contributors
to a candidate.” Citizens Against Rent Control v. Berkeley,
454 U.S. 290, 296-97, 102 S.Ct. 434, 70 L.Ed.2d 492 (1981)
(emphasis omitted). Subsequently, the Court stated flatly that
“[p]reventing corruption or the appearance of corruption are
the only legitimate and compelling government interests thus
far identified for restricting campaign finances.” Federal
Election Commission v. National Conservative Political Action
Committee, 470 U.S. 480, 496-97, 105 S.Ct. 1459, 84 L.Ed.2d
455 (1985).
Only three years ago, we emphasized in Carver, 72 F.3d at
638-39, that the state may abridge political speech in the form
of campaign contributions only to address the reality or
perception ot undue influence or corruption attributable to large
contributions. We turn, then, to a consideration of whether the
challenged provisions can pass muster under this standard.
Il.
We consider first the provisions of Act I that limited direct
contributions to candidates to $300 per election for certain
statewide offices, see Ark. Code Ann. § 7-6-203(a), § 7-6-
203(b), and to $100 per election for all other state offices, see
Ark. Code Ann. § 7-6-203(a)(1), § 7-6-203(b)(1). The
defendants must prove first that there is real or perceived undue
influence or corruption attributable to large political
contributions in Arkansas, and then that these challenged
Ie ciacenceeemaceaeamiaiaiaaiiitiaiial
lla
Appendix A
provisions of Act I are narrowly tailored to address that reality
or perception. We find that the defendants failed to carry their
burden before the trial court.
We note that our review of the trial court’s judgment may
involve the review of some of the factual determinations that it
made. The Supreme Court has instructed that, in cases involving
the First Amendment, appellate courts are to make an
independent examination of the whole record to ensure that
their judgments do not constitute a forbidden intrusion on the
right of free expression. See New York Times Co. v. Sullivan,
376 U.S. 254, 285, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964). But
we are also mindful of Fed. R. Civ. P. 52(a), which provides
that a trial court’s factual findings are typically reviewed for
clear error.
To reconcile these two legal propositions, we held last
year that, in cases involving the First Amendment, we would
review findings of noncritical facts for clear error, but would
conduct an independent review of critical facts. See Families
Achieving Independence and Respect v. Nebraska Department
of Social Services, 111 F.3d 1408, 1411 (8th Cir. 1997) (en
banc). Accordingly, in the discussion that follows, we give due
deference to the trial court’s determination of noncritical facts,
while we review independently those facts that we believe to
be critical.
We begin with the observation that no defendant provided
any credible evidence to the trial court of actual undue influence
or corruption stemming from large contributions. We are left,
then, to determine whether the defendants proved that a
reasonable person could perceive, on the basis of the evidence
presented at trial, that such contributions make for undue
influence or spawn corruption.
12a
Appendix A
CCG presented proof at trial that was intended to
demonstrate specific instances in which large contributions had
given rise to the appearance of undue influence or corruption.
Much of this proof focused on the introduction in the Arkansas
legislature of a bill that would have prohibited local
governments from regulating tobacco. The bill’s sponsor, State
Representative James Dietz, had received as much as $2,700
in contributions the previous year from various sources related
to the tobacco industry, such as the Tobacco Institute. Many
other supporters of the bill had apparently also received
contributions from pro-tobacco sources. An opponent of the
bill, State Representative Ted Thomas, testified that there was
a “uniform” public perception of corruption associated with
the bill’s having been introduced and supported by legislators
who had received contributions from tobacco interests.
Even assuming that Mr. Thomas was correct that there
was a public perception of corruption, we must determine
whether that public perception was reasonable, and whether
that perception of corruption derived from the magnitude of
the contributions to Mr. Dietz and other supporters of the bill.
We believe, after an independent review of the facts presented
to the trial court, that the defendants did not prove that the
perception of corruption to which Mr. Thomas alluded was
objectively reasonable. A newspaper article admitted into
evidence quoted Mr. Dietz as saying that he supported the
preemption measure because he believed that one “ought to
have the right to say what goes on inside his building as long
as it’s legal.” That Mr. Dietz received political contributions
from those whose interests he tended to support hardly indicates,
on its own, any corruption.
The defendants provided no evidence at trial, for instance,
that Mr. Dietz changed his position on the tobacco bill due to
i
;
13a
Appendix A
an intervening contribution. Nor did the defendants provide
evidence that Mr. Dietz sought to conceal his contributions from
tobacco-related sources. If it were reasonable to presume
corruption from the fact that a public official voted in a way
that pleased his contributors, legislatures could constitutionally
ban all contributions except those from the public official’s
opponents, a patent absurdity. That would spell the end to the
political right, protected by the First Amendment, to support a
candidate of one’s choice.
The defendants’ objections to Mr. Dietz’s activities are
also, we believe, essentially unrelated to the size of the
individual contributions that he received. The defendants did
not provide evidence, such as that produced by the government
in Buckley, of multi-million-dollar contributions to Mr. Dietz.
Indeed, our review of the evidence presented to the trial court
indicates that Mr. Dietz reported no individual contribution
larger than $1,000 from any source, tobacco-related or
otherwise. We believe that $1,000 is simply not a large enough
sum of money to yield, of its own accord and without further
evidence, a reasonable perception of undue influence or
corruption.
The defendants essentially criticize Mr. Dietz for offering
a bill favorable to interests from whom he had already accepted
campaign contributions. The difficulty pointed to, then, seems
to be the identity of the contributors and their subsequent
interest in legislation rather than the size of their contributions.
We note that even if Mr. Dietz had received twenty-seven
individual contributions of $100 from various tobacco-related
sources instead of a few somewhat larger contributions, the
defendants could make the same criticism of his activities as
they made here. We therefore conclude that the evidence that
l4a
Appendix A
the defendants presented regarding the tobacco legislation does
not permit a finding of a reasonable perception of corruption
or undue influence due to large contributions.
The defendants also produced proof at trial that was related
to contributions by lobbyists to State Representative Ode
Maddox. In April, 1996, a group of lobbyists held a fund-raiser
for Mr. Maddox at the Arkansas Poultry Federation in Little
Rock. According to the trial court, at that event Mr. Maddox
raised a total of more than $22,000 from various lobbyists,
PACs, and corporations. Our independent review of the record
shows that Mr. Maddox received no contribution in excess of
$1,000 from any single source.
The record does not indicate any change in Mr. Maddox’s
political behavior following these donations, nor does it indicate
that Mr. Maddox sought to conceal his contributions or their
sources. Indeed, the defendants did not even demonstrate that
Mr. Maddox voted in any particular fashion with respect to
any relevant issues following the receipt of these donations. At
bottom, the defendants’ complaint about Mr. Maddox’s
contributions is that they came from lobbyists who live outside
his district and have business before his committee from time
to time. But this complaint is not related to the size of the
contributions made to Mr. Maddox, and thus does not satisfy
the compelling state interest standard established in Buckley
and Carver. We conclude, then, that the evidence that the
defendants offered regarding Mr. Maddox’s fund-raising
practices does not permit a finding of a reasonable perception
of corruption or undue influence stemming from large
contributions.
The defendants also adduced proof at trial of contributions
by “real estate interests” to members of the Little Rock
aaah aii
15a
Appendix A
municipal government. But, again, the defendants’ declared
interest in regulating these has to do with the identity of the
contributor and that contributor’s interests rather than with the
size of individual contributions. According to records provided
to the trial court, no member of the Little Rock municipal
government received more than $1,000 from any so-called “real
estate interest.” The record does not indicate any change in
any Official’s behavior following such contributions, nor did
the defendants demonstrate that any official attempted to
conceal the source of the contributions. The evidence instead
shows that the “real estate interests” contributed to candidates
who supported initiatives with which the contributors agreed
— that is, the “real estate interests” appear to have chosen well
which candidates to support.
We cannot say that this evidence is sufficient to establish
that there could be a reasonable perception of corruption or
undue influence due to large contributions. The defendants
identify, instead, a concern that “real estate interests” gave
money to officials of a municipal government, and that those
officials then voted on issues relevant to real estate. This
concern, as we have said above, is ne related specifically to
the size of the contributions, and thus is outside the scope of
the compelling state interest as defined by Buckley and Carver.
We also believe that the candidate contribution limits set
forth in Act I are too low to allow meaningful participation in
protected speech and association. See Carver, 72 F.3d at 641-
42. In Buckley, 424 U.S. at 20-35, 96 S.Ct. 612, the Supreme
Court approved a $1,000 contribution limit as a narrowly
tailored means to address the problem of large campaign
contributions. As we noted in Day v. Holahan, 34 F.3d 1356,
1366 (8th Cir. 1994), cert. denied, 513 U.S. 1127, 115 S.Ct.
16a
Appendix A
936, 130 L.Ed.2d 881 (1995), inflation has eroded
approximately 60 percent of the value of a dollar since 1976.
A $1,000 contribution in 1976 would thus be worth about the
same as a $2,500 contribution today. We recognize that the
contribution limit upheld in Buckley does not constitute a
constitutional minimum and that we may not fine-tune the
contribution limits established by Act J. See Carver, 72 F.3d at
641. We must, however, invalidate the contribution limitations
if they are different in kind from those that Buckley upheld.
See id.
The provisions of Aci I challenged here limited
contributions to a candidate to only $100 or $300, depending
upon the office. See Ark. Code Ann. § 7-6-203(a), § 7-6-203(b).
The limits prescribed by Act I, then, are (adjusted for inflation)
approximately 4 percent or 12 percent, respectively, of the limit
upheld in Buckley. In Day, 34 F.3d at 1366, we concluded that
a limitation of $100, or 4 percent of the inflation-adjusted limit
upheld in Buckley, constituted a difference in kind from the
limit upheld in Buckley. In Carver, 72 F.3d at 641-42, we held
that contribution limitations of $100 or $300 per election cycle
(2 percent or 6 percent, respectively, of the limit approved in
Buckley) were “dramatically lower,” and thus different in kind,
from the limit upheld in Buckley. We believe that the limitations
in question here are similarly dramatically lower than, and
different in kind from, the limits approved in Buckley, and thus
are unconstitutionally low.
We note, finally, that even if there were a compelling state
interest to prevent the perception of corruption or undue
influence due to any of the various concerns identified here by
the defendants — that is, supporting tobacco legislation,
accepting contributions from those appearing before or having
17a
Appendix A
interests before one’s legislative committee, accepting
contributions from supporters outside one’s district, or the like
— Act I was not narrowly tailored to address them. As we have
already noted, “[w]here at all possible, government must curtail
speech only to the degree necessary to meet the particular
problem at hand, and must avoid infringing on speech that does
not pose the danger that has prompted regulation.”
Massachusetts Citizens for Life, 479 U.S. at 265, 107 S.Ct.
616. Act I, however, is at once both overinclusive and
underinclusive, by limiting the free speech of al! who would
contribute without addressing the specific concerns identified.
IV.
The plaintiffs challenged two provisions relating to the
activities of political action committees. The first of these was
a provision, enacted in 1990, that prohibited persons from giving
more than $200 each year to any one political action committee.
See Ark. Code Ann. § 7-6-201(9)(B).
State-enforced limits on contributions to political action
committees stifle “not only free political speech, but also free
political association,” and are reviewed according to a strict
scrutiny standard. Day, 34 F.3d at 1365. We must therefore
determine whether the defendants demonstrated that the
provision was narrowly tailored to address the compelling state
interest in avoiding corruption or the appearance of corruption
that stems from large contributions.
We hold that this provision, like the provision that we
invalidated in Day, is not narrowly tailored to serve a
compelling state interest, because the annual limit is so low as
to be different in kind from the limit approved in Buckley. See
18a
Appendix A
id. at 1366. In Day, we noted that a $100 limit (in 1994 dollars)
for contributions to political action committees was, adjusted
for inflation, equal to approximately 4 percent of the
contribution limit upheld in Buckley. Id. Thus, a $200 limit (in
1998 dollars) is equal to no more than 8 percent of the
contribution limit approved in Buckley. That limit is also less
than 5 percent, even before any adjustment for inflation, of the
$5,000 limitation on contributions to PACs approved by the
Supreme Court in California Medical Association v. Federal
Election Commission, 453 U.S. 182, 195-99, 101 S.Ct. 2712,
69 L.Ed.2d 567 (1981) (plurality opinion).
There is also less of a danger of quid pro quo corruption,
such as the sort that one might presume from large contributions
given directly to candidates, when a contribution is given to a
PAC that does not itself wield legislative power. Cf. Day, 34
F.3d at 1365. We believe that a $200 limit (in 1998 dollars)
will significantly impair the ability of individuals to exercise
their political rights. The limit is simply too low to allow for
appropriately robust participation in protected political speech
_ and association, and thus violates the protections for free
political speech and free association that the First Amendment
affords.
The plaintiffs also challenged the provision in Act I that
permitted small-donor political action committees to give as
much as $2,500 to a candidate (in contrast to the lower limits
applicable to contributions by ordinary political action
committees). See Ark. Code Ann. § 7-6-203{d); see also Ark.
Code Ann. § 7-6-201(a), § 7-6-201(b). We believe that such
differential treatment must be evaluated according tv a strict
scrutiny standard. “Because the right to engage in political
expression is fundamental to our constitutional system, statutory
© EEN CALS ET Ra
19a
Appendix A
classifications impinging upon that right must be narrowly
tailored to serve a compelling governmental interest.” Austin
v. Michigan Chamber of Commerce, 494 U.S. 652, 666, 110
S.Ct. 1391, 108 L.Ed.2d 652 (1990).
The defendants argue that the differential treatment of
ordinary and small-donor PACs is justified because of the
difference in regulations as to their method of raising money.
The only compelling government interest that might permit this
infringement of First Amendment rights, as we have said, is
preventing the reality or perception of undue influence or
corruption that might arise from large contributions. As the
Supreme Court has held, “To the extent that large contributions
are given to secure a political quid pro quo from current and
potential office holders, the integrity of our system of
representative democracy is undermined.” Buckley, 424 U.S.
at 26, 96 S.Ct. 612. Ostensibly to alleviate this potential for
corruption, Act I limited individuals and ordinary PACs to
giving $300 to certain candidates and $100 to others (although
we note that our holding above returns these limits to their pre-
Act I limits of $1,000). See Ark. Code Ann. § 7-6-201(a), § 7-
6-201(b). Act I allowed small-donor PACs, however, to give
$2,500 to any candidate. See Ark. Code Ann. § 7-6-203(d).
This differential treatment is said to be acceptable because
small-donor PACs themselves receive that money in
contributions of $25 or less, see Ark. Code Ann. § 7-6-
201(12)(B).
This explanation, however, is manifestly flawed, because
it focuses on the source of the funds given to a PAC rather than
on the entity from which the candidate receives the funds.
Because a small-donor PAC receives small donations, it is true
that it is unlikely that any one contributor to a small-donor
——
20a
Appendix A
PAC will be able to control that PAC. Act I, however, ignored
the possibility that the small-donor PAC itself will seek to
control a given candidate. A $2,500 contribution would be even
more likely to exacerbate this difficulty than the $1,000
contribution limit applicable to most other contributors. Indeed,
if any contribution is likely to give rise to a reasonable
perception of undue influence or corruption, it would be one
from an entity permitted to contribute two-and-a-half times the
amount that most others are allowed to contribute. The small-
donor PAC provision is not, then, narrowly tailored to serve
the compelling government interest of combating the reality or
perception of undue influence or corruption.
We reject the defendants’ argument that the plaintiffs
(namely, three individuals and a political action committee)
may not assert this equal protection argument because they are
not burdened to a greater extent by this provision than small-
donor PACs are. Ordinary PACs may, it is true, raise more
money per contribution than a small-donor PAC, but the issue
is their ability to speak freely by contributing money to
candidates for office. Insofar as that freedom is at issue, the
ordinary PACs are burdened more than the small-donor PACs,
because ordinary PACs may donate only the amount that
individuals may donate, while small-donor PACs may donate
$2,500. We believe, then, that the plaintiffs here meet the
requirements set forth in California Medical Association, 453
U.S. at 200, 101 S.Ct. 2712.
¥,
The plaintiffs also challenged the constitutionality of Ark.
Code Ann. § 7-6-224. This provision states only that local
governments “shall have the authority to establish reasonable
©
21a
Appendix A
limitations” on campaign contributions and expenditures, and
appears to be simply an allocation by the state of Arkansas of
certain of its plenary powers to local governments: It does not
set any specific limits on campaign contributions or
expenditures, and thus cannot restrict the First Amendment
freedoms of any person or entity seeking to contribute to or
spend the revenues of a political campaign. Were a local
government to exercise the power granted it by § 7-6-224, its
action might then be challenged in the same manner as the
actions of the defendants were challenged in this suit. But no
such action has yet been taken and brought to the attention ofa
court. Ark. Code Ann. § 7-6-224 thus does not present a federal
constitutional controversy that is ripe for adjudication at this
time.
VI.
Those provisions of the Arkansas statutes in conflict with
our analysis above are unconstitutional and unenforceable. We
must now determine whether the invalid provisions of Act I
may be severed from the remainder of its provisions.
Severability is a matter of state law. Leavitt v. Jane L.,
518 U.S. 137, 139, 116 S.Ct. 2068, 135 L.Ed.2d 443 (1996)
(per curiam). The Supreme Court of Arkansas looks to two
considerations to determine severability: “(1) whether a single
purpose is meant to be accomplished by the act; and (2) whether
the sections of the act are interrelated and dependent upon each
other.” U.S. Term Limits, Inc. v. Hill, 316 Ark. 251, 872 S.W.2d
349, 357 (Ark. 1994). The court provided further guidance,
moreover, in its observation that “it is important whether the
portion of the act remaining is complete in itself and capable
of being executed wholly independent of that which was
22a
Appendix A
rejected.” Id. at 358. A severability clause, such as the one
provided in Act I, is relevant but not determinative of whether
individual provisions of the act will be considered severable.
Id.
Applying the principles set forth in U.S. Term Limits, we
find no single purpose behind Act I with which our ruling could
interfere. Act I provided for a series of campaign finance
reforms, including the independent expenditure committee and
certain tax provisions, that remain unaffected by the outcome
of this case. We can find no reason not to honor the intent of
the drafters of Act I that, to the extent possible, its various
provisions should stand on their own.
VIL.
We therefore affirm in part and reverse in part the judgment
of the trial court. We remand the case to the district court for
the entry of declaratory and injunctive relief consistent with
this opinion.
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23a
APPENDIX B — ORDER OF THE UNITED STATES
DISTRICT COURT FOR THE EASTERN DISTRICT OF
ARKANSAS DATED OCTOBER 3, 1997
Ron RUSSELL, Kent Ingram, William R. Austin, and
Associated Industries of Arkansas Political Action Committee,
Plaintiffs,
Vv.
Troy BURRIS, in his official capacity as chairperson of the
Arkansas Ethics Commission, and Candi Sue Russell, Marvin
Delph, Rita Looney, and Norton Wilson, in their official
capacities as members of the Arkansas Ethics Commission,
Defendants,
and
Citizens for Clean Government, Defendant-Intervenor.
No. LR-C-97-0089.
United States District Court,
E.D. Arkansas.
Oct. 3, 1997.
* * *
MEMORANDUM & ORDER
WILSON, District Judge.
The plaintiffs seek a declaratory judgment that Arkansas
Initiated Act I of 1996 (Act I) violates their First Amendment
24a
Appendix B
rights to freedom of political speech and association,' and their
Fourteenth Amendment right of equal protection of the laws.
They seek to enjoin the enforcement of both Act I and Arkansas
Code 7-6-201(9)(B), a law that pre-dated Act I. The plaintiffs’
motion is granted in part and denied in part:
A. Enforcement of Arkansas Code section 7-6-203(a)(2)
and (b)(2), which imposes a $300 per election contribution
limit applicable to enumerated statewide offices, is
enjoined.
B. Arkansas Code section 7-6-203(a)(1) and (b)(1), which
imposes a $100 per election contribution limit applicable
to all other offices, is upheld, except as to the offices of
Supreme Court Justice and Court of Appeals Judge.
Application of this section to the offices of Supreme Court
Justice and Court of Appeals Judge, is enjoined.
C. Arkansas Code section 7-6-201(9)(B), which imposes
a $200 per year limit on contributions to approved political
action committees, is upheld.
D. Arkansas Code sections 7-6-201 and -203(d), pertaining
to small donor political action committees, are upheld
against the plaintiffs’ challenge on equal protection
grounds.
E. The plaintiffs lack standing to challenge Arkansas Code
sections 7-6-201(13) and (14), and 7-6-203(k), which
1. First Amendment protections are made applicable to the states
by the Fourteenth Amendment. See McIntyre v. Ohio Elections Comm'n,
514 U.S. 334, 336 n. 1, 115 S.Ct. 1511, 1514 n. 1, 131 L.Ed.2d 426
(1995).
4
¥
25a
Appendix B
address contributions to an independent expenditure
committee.
F. The plaintiffs’ challenge to Arkansas Code section 7-
6-224, concerning the authority of local jurisdictions to
enact more restrictive campaign contribution regulations
than state law, is dismissed because it is not ripe.
I. Background
A. ActI
Act I, which amended Arkansas’ existing campaign
contribution laws, was approved by voters on November 5,
1996, by a two-to-one margin. Before Act I, a candidate could
receive up to $1000 in contributions per election from
individuals, corporations, unions, political action committees
(PACs) and other groups. Ark.Code Ann. §§ 7-6-201(1), -203(a)
(Michie Supp.1995). In addition, a state political party could
contribute up to $2500 per election to that party’s candidate.
Id. § 7-6-203(d). Since 1990, approved PACs have been limited
to contributions of no more than $200 per year from any person.
Id. § 7-6-201(9). While not established by Act I, this limitation
is attacked by the plaintiffs in this action.
Act I made substantial changes to Arkansas’ campaign
contribution law. Under the Act I amendments, candidates for
the offices of Governor, Lieutenant Governor, Secretary of
State, State Treasurer, State Auditor, Attorney General, and
Commissioner of State Lands (“statewide candidates”) may not
accept campaign contributions exceeding $300 per election
from any person.” Candidates for all other offices, including
2. Section 2 of Act I states in part:
(Cont’d)
26a
Appendix B
Arkansas Supreme Court Justices and Court of Appeals Judges,
are limited to contributions of no more than $100 per election
from any person.’ Although state Supreme Court Justices run
(Cont'd)
Arkansas Code 7-6-203(a) [and] (b) ... are hereby amended
to read as follows:
(a)(2) It shall be unlawful for any candidate for the office
of Governor, Lieutenant Governor, Secretary of State,
Treasurer of State, Auditor of State, Attorney General, and
Commissioner of State Lands, or for any person acting on
the candidate’s behalf, to accept campaign contributions in
excess of three hundred dollars ($300) per election from
any person.
(b)(2) It shall be unlawful for any person to make a
contribution to a candidate for the office of Governor,
Lieutenant Governor, Secretary of State, Treasurer of State,
Auditor of State, Attorney General, and Commissioner of
State Lands, or to any person acting on the candidate’s
behalf, which, in the aggregate, exceeds three hundred
dollars ($300) per election.
3. Sectior 2 of Act I provides in part:
Arkansas Code 7-6-203(a) [and] (b) . . . are hereby amended
to read as follows:
(a)(1) It shall be unlawful for any candidate for any public
office, except the office of Governor, Lieutenant Governor,
(Cont’d)
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27a
Appendix B
statewide, they are not included in the category of “statewide
candidates” under the Act I limitations. Arkansas Court of
Appeals Judges are elected from districts of approximately
400,000 persons. By way of comparison, Arkansas Senate
districts include approximately 68,000 persons; Arkansas
House of Representative districts include a population of
approximately 24,000.
Act I did not disturb the right of political parties to
contribute up to $2500 to a candidate per election,‘ and it creates
(Cont’d)
Secretary of State, Treasurer of State, Auditor of State,
Attorney General, and Commissioner of State Lands, or for
any person acting on the candidate’s behalf, to accept
campaign contributions in excess of one hundred dollars
($100) per election from any person.
(b)(1) It shall be unlawful for any person to make a
contribution to a candidate for any public office, except
the office of Governor, Lieutenant Governor, Secretary of
State, Treasurer of State, Auditor of State, Attorney General,
and Commissioner of State Lands, or to any person acting
on the candidate’s behalf, which, in the aggregate, exceeds
one hundred dollars ($100) per election.
4. Section 2 of Act I requires in part:
Arkansas Code 7-6-203 . . . {d) [is] hereby amended to read
as follows:
(Cont’d)
28a
Appendix B
a small donor PAC subject to the same $2500 limit.* Neither
did the Act alter the definition of “persons,” which remains:
“any individual, proprietorship, firm, partnership, joint venture,
syndicate, labor union, business trust, company, corporation,
association, committee, or any other organization or group of
persons acting in concert. It shall also include organized
political parties. . . .” Id. § 7-6-201(1). Because approved PACs
are persons by definition, Act I limits their contributions to
statewide candidates to $300 per election and contributions to
other candidates to $100 per election. Act I also limits aggregate
contributions by any person to independent expenditure
(Cont'd)
(d) However, an organized political party as defined in
Arkansas Code 7- 1-101(1) and a small donor political
action committee may contribute up to two thousand five
hundred dollars ($2500) to each candidate per election.
5. Section | of Act I requires in part:
Arkansas Code 7-6-201 is hereby amended to add the
following new subdivision[ ]:
12) A “small donor political action committee” means any
person who: (A) Receives contributions from one or more
individuals in order to make contributions to candidates;
(B) Does not accept any contribution or cumulative
contributions in excess of twenty-five dollars ($25) from
any individual in any calender year; and (C) Is registered
pursuant to Arkansas Code 7-6-215 prior to making
contributions to candidates. “Small donor political action
committee” shall not include an organized political party,
the candidate’s own committee, or an exploratory
committee.
29a
Appendix B
committees® to $500 per calendar year.’ Introducing a public
subsidy element, Act I provides for state tax credits for
6. Section I of Act I provides in part:
Arkansas Code 7-6-201 is hereby amended to add the
following new subdivisions:
(13) An independent expenditure is any expenditure which
is not a contribution and: (A) expressly advocates the
election or defeat of a clearly identified candidate for office;
and (B) is made without arrangement, cooperation, or
consultation between any candidate, or any authorized
committee or agent of such candidate, and the person
making the expenditure or any authorized agent of that
person; and (C) is not made in concert with, or at the request
or suggestion of, any candidate, or any authorized
committee or agent of the candidate.
(14) “Independent expenditure committee” means any
person who receives contributions from one or more persons
in order to make an independent expenditure and is
registered pursuant to Arkansas Code 7-6-215 prior to
making expenditures.
7. Section 3 of Act I declares:
Arkansas Code 7-6-203 is hereby amended to add the
following new subsection:
(k) An Independent expenditure committee may not accept
any contribution or cumulative contributions in excess of
five hundred dollars ($500) in value from any person in
any calendar year.
30a
Appendix B
campaign contributions of $50 per year on an individual return
and $100 on a joint return.* Additionally, Act I allows
8. Section 10 of Act I provides the following:
Arkansas Code Title 7, Chapter 6, Subchapter 2 is amended
by adding the following new section:
7-6-222. Tax Credits for Certain Individual Political
Contributions.
(a) Pursuant to regulations to be adopted by the Arkansas
Department of Finance and Administration, a single credit
against individual Arkansas Income taxes shall be allowed
for money contributions made by the taxpayer in a taxable
year to one or more of the following:
(1) A candidate seeking nomination or election to a public
office at an election, or to the candidate’s campaign
committee; or
(2) A small donor political action committee as defined in
Arkansas Code 7-6-201; or
(3) An approved political action committee as defined in
Arkansas Code 7-6-201; or
(4) An organized political party as defined in Arkansas
Code 7-1-101(1).
(b) The credit allowed by subsection (a) of this section shall
be the aggregate contributions, not to exceed fifty dollars
($50) on an individual tax return, or the aggregate
contributions, not to exceed one hundred dollars ($100) on
a joint return.
RED Ms
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'
3la
Appendix B
municipalities, counties and townships to set contribution limits
lower than those set by state law.°
B. The Parties
The plaintiffs are three individuals and a registered
Arkansas PAC. Plaintiff Kent Ingram is a businessman, former
state senator, and frequent campaign contributor, who had made
numerous campaign contributions at levels that would exceed
the Act I limits, and who desires to continue to contribute at
the higher levels. Plaintiff William R. Austin is a businessman
who wishes to contribute in amounts exceeding the Act I limits.
Plaintiff Ron Russell is the Executive Vice-President of the
Arkansas Chamber of Commerce, a former mayor, and
campaign contributor in amounts that would exceed current Act
I limits. Mr. Russell also wishes to contribute at the higher
levels. Plaintiff Associated Industries of Arkansas Political
Action Committee (AIAPAC) is an approved PAC favoring
business interests, that asserts the right to contribute $2500 per
election to candidates, just as a small donor PAC may do.
9. Section 12 of Act I provides:
Arkansas Code Title 7, Chapter 6, Subchapter 2 is amended
by adding the following new section:
7-6-224. Authority of Local Jurisdictions Municipalities,
counties and townships shall have the authority to establish:
reasonable limitations on the time periods candidates for
local office shall be allowed to solicit contributions; limits
on contributions to local candidates at amounts lower than
those set by state law; and voluntary campaign expenditure
limits for candidates seeking election to their respective
governing bodies.
32a
Appendix B
Plaintiffs Ingram and Russell are officers of the State Chamber
PAC. Plaintiffs Austin and Russell are officers of AIAPAC.
- The defendants are the individual members of the Arkansas
Ethics Commission, sued in their official capacities. The
Commission administers Arkansas campaign finance and
disclosure laws and investigates alleged violations of these laws.
Defendant-Intervenor Citizens for Clean Government
(Citizens), is a coalition of organizations including the
Association of Community Organizations for Reform Now
(ACORN), Common Cause, the New Party, and a local union.
Citizens was the principal proponent of Act I.
C. The Issues
The plaintiffs claim that the following provisions of Act I
violate their rights to freedom of political expression (speech)
and association under the First Amendment: (1) the $100 and
$300 limits on campaign contributions to candidates; (2) Act
I’s authorization for local jurisdictions to set even lower
contribution limits; and (3) the $500 limit to annual
contributions a person may give to an independent expenditure
committee. The plaintiffs challenge, on the same grounds,
Arkansas’ $200 per person limit on annual contributions to an
approved PAC. As noted earlier, this latter limit was approved
by a ballot initiative in 1990, and thus pre-dated Act I. The
plaintiffs claim further that in allowing small donor PACs to
contribute $2500 per election to a candidate, Arkansas denies
equal protection of the laws to approved PACs, which are
subject to the $100 and $300 individual contribution limits.
The defendants and Citizens argue that plaintiffs lack standing
to assert these claims.
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Appendix B
II. Discussion
A. Standing
This Court’s jurisdiction is restricted by the U.S.
Constitution, which allows federal courts to hear only “cases”
and “controversies.” U.S. Const. art. III, § 2, cl. 1. The Court
cannot render advisory opinions. Whether a plaintiff has
standing to invoke the jurisdiction of the federal courts is a
threshold question in any case. To establish standing a plaintiff
must show: (1) that she suffered an injury in fact — “an
invasion of a legally protected interest” that is both “concrete
and particularized,” and “actual or imminent, not ‘conjectural’
or ‘hypothetical’ ”; (2) a causal connection between the injury
and the challenged action; and (3) that a favorable decision is
likely to redress her injury. Lujan v. Defenders of Wildlife,
504 U.S. 555, 560-61, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351
(1992) (citations omitted). When a party brings “a pre-
enforcement challenge to a statute that both provides for
criminal penalties and abridges First Amendment rights, ‘a
credible threat of present or future prosecution itself works an
injury that is sufficient to confer standing.’” Minnesota
Citizens Concerned for Life v. FEC, 113 F.3d 129, 131 (8th
Cir.1997) (quoting New Hampshire Right to Life Political
Action Comm. v. Gardner, 99 F.3d 8, 13 (1st Cir.1996)). The
Honorable H. Franklin Waters discusses this precise issue in a
case challenging the constitutionality of Act I. Arkansas Right
to Life State Political Action Comm. v. Butler, 972 F.Supp.
1187 (W.D.Ark.1997).
In Arkansas Right to Life, the defendants argued that the
plaintiffs lacked standing to raise a claim against Defendant
Butler, a State Attorney for Benton County, Arkansas. The
34a
Appendix B
defendants contended that there was no real and immediate
threat that Butler would prosecute the plaintiffs, because
prosecutors had not brought criminal charges for violations of
state contribution limits since the limits were enacted in 1975.
The court rejected this reasoning, concluding instead that this
time span was not sufficient to show that failure to prosecute
under the Act was a “deeply embedded way that Arkansas
carries out state policy. The fact that Arkansas has recently
chosen to address the issue through passage of the Act provides
ample grounds for belie~ing that a credible threat of prosecution
exists under the Act.” Id. at 1192. Finding that the defendants
had failed to introduce compelling evidence that the plaintiffs
did not face a credible threat of prosecution, Judge Waters
concluded. “the Act has been recently enacted, it facially
restricts the plaintiffs, and violation of the statute can subject
the plaintiffs to criminal prosecution.” Id. at 1192.
Here, the plaintiffs testified that they want to contribute
more to candidates, PACs, and independent expenditure
committees than is allowed by the limits established by
Arkansas law as amended by Act I. The defendants and Citizens
counter that these assertions are largely speculative and
unsupported by the facts. I find that the Act I amendments
present a credible threat of present or future prosecution with
respect to each of the plaintiffs’ claims. Arkansas Right to Life,
972 F.Supp. at 1192. Therefore, the Plaintiffs have standing,
except in their challenge to the $500 limit to annual
contributions a person may give to an independent expenditure
committee. This exception arises because none of the plaintiffs
could think of an independent expenditure committee to which
they had contributed in the past or to which they planned to
contribute, although they stated they may wish someday to
contribute to such a committee. The plaintiffs’ stated desire to
35a
Appendix B
contribute to independent expenditure committees is too
conjectural to support a finding of a credible threat of present
or future prosecution. Therefore, on this issue, I find that the
plaintiffs lack standing.
B. Ripeness
One other claim fails to meet a threshold requirement. The
plaintiffs allege a violation of their First Amendment rights
because Act I authorizes local jurisdictions to set even lower
contribution limits than the state imposes. This issue is not
ripe for consideration, because no local jurisdiction has yet set
a lower contribution level. I can “only hypothesize that such
an event will come to pass, and it is only on this basis that the
constitutional claim could be adjudicated at this time.” Babbitt
v. United Farm Workers Nat’! Union, 442 U.S. 289, 304, 99
S.Ct. 2301, 2312, 60 L.Ed.2d 895 (1979). See Abbott
Laboratories v. Gardner, 387 U.S. 136, 148-49, 87 S.Ct. 1507,
1515-16, 18 L.Ed.2d 681 (1967).
C. Limits on Contributions
1. Contributions to candidates
Any analysis of the constitutionality of limited
contributions to candidates under Act I must begin with Buckley
v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976). In
Buckley, the Supreme Court upheld as constitutional provisions
of the Federal Election Campaign Act of 1971 (FECA) limiting
campaign contributions in federal elections. The Court upheld
FECA’s $1000 per election contribution limit to single
candidates by an individual contributor or group, and a $5000
limit to candidates by a political committee. 424 U.S. at 23-24,
ie ee Ba a
36a
Appendix B
35-36, 96 S.Ct. at 637, 642-43. After recognizing that the
freedoms of speech and association “lie[ ] at the foundation of
a free society,” the Court warned that “[nJeither the right to
associate nor the right to participate in political activities is
absolute.” Id. at 25, 96 S.Ct. at 637-38 (citations omitted).
The Court instructed that these rights may be limited if the
limitation is “closely drawn to avoid unnecessary abridgment
of associational freedoms” and if the state “demonstrates a
sufficiently important interest.” Id., at 25, 96 S.Ct. at 637-38.
In a decision directly applicable here, the Eighth Circuit,
only two years ago, decided the constitutionality of a Missouri
initiative on campaign contribution limits. The court found
the initiative’s limits too low to pass constitutional muster, in
spite of the fact that the initiative passed by a three-fourths
majority. Carver v. Nixon, 72 F.3d 633 (8th Cir.1995), cert.
denied, U.S.__, 116 S.Ct. 2579, 135 L.Ed.2d 1094 (1996)."°
This Missouri law limited campaign contributions by a person
or committee to a candidate or candidate committee to: (1)
$100 for candidates in districts with populations of less than
100,000; (2) $200 for non-statewide candidates in districts with
a population of 100,000 or more; and (3) $300 for statewide
candidates. Id. at 635. Statewide candidates were defined by
the Missouri statute as Governor, Lieutenant Governor,
Attorney General, Auditor, Treasurer, and Secretary of State.
The Missouri limits applied to an “election cycle,” defined by
Missouri statute as “the period of time from general election
for an office until the next general election for the same office.”
Id. at 635 & n. 3 (citing Mo.Ann.Stat. § 130.100 (Vernon
Supp.1995)). An election cycle included both the primary and
10. For a thoughtful discussion of Carver, see William J. Connolly,
How Low Can You Go? State Campaign Contribution Limits and the
First Amendment, 76 B.U.L.Rev. 483 (1996).
37a
Appendix B
the general election. Id. Thus, a candidate for statewide office
in Missouri could receive a total of $300 for both the primary
and general elections. Conversely, Arkansas’ limit is $300 per
election. In Arkansas, a candidate for one of the enumerated
statewide races could receive a total of $900, assuming a
primary race, a run off, and then a general election.
In Carver, the plaintiff argued, as the plaintiffs do here,
that the contribution limits unconstitutionally infringed on his
First Amendment rights to political expression and freedom of
association. After noting that individual Justices of the U.S.
Supreme Court had voiced differing opinions on the level of
scrutiny applicable to contribution limits, the Carver court
concluded that, “[t]he Court has not ruled that anything other
than strict scrutiny applies” in cases involving such limits. Id.
at 637.'' The court thus applied strict scrutiny and required the
11. In his partial concurrence and dissent in Buckley, Justice White
argued that while campaign contributions help produce speech, they are
not themselves speech protected by the First Amendment. Justice White
reasoned that “[FECA] regulates ... giving and spending money, acts
that have First Amendment significance not because they are themselves
communicative with respect to the qualifications of the candidate, but
because money may be used to defray the expenses of speaking or
otherwise communicating about the merits or demerits of federal
candidates for election.” 424 U.S. at 259, 96 S.Ct. at 745. Justice White
would not have decided the challenge to contribution limits on First
Amendment speech grounds. Rather, he saw the issue as one depending
on whether the government’s nonspecch interests in regulating “the use
of money in political campaigns are sufficiently urgent to justify the
incidental effects” that limits have on the First Amendment rights of
candidates. Id. at 260, 96 S.Ct. at 746. Justice White reiterated this
view almost 10 years after Buckley:
The First Amendment protects the right to speak, not the right to spend,
and limitations on the amount of money that can be spent are not the
(Cont’d)
38a
Appendix B
state to prove that the statute’s limitations were “narrowly
tailored to meet a compelling state interest.” Id. at 638. The
court emphasized that when government defends a regulation
on speech it must demonstrate that the regulation will “alleviate
these harms in a direct and material way.” Id. at 644 (citing
Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 664, 114 S.Ct.
2445, 2470, 129 L.Ed.2d 497 (1994) (Kennedy, J., plurality)).
Where First Amendment freedom of association concerns are
threatened, the court found that, under Buckley, the regulation
must be “closely drawn to avoid unnecessary abridgment” of
these freedoms. Id. at 644 (quoting Buckley, 424 US. at 25, 96
S.Ct. at 637-38).
Addressing the state’s compelling interest, the Eighth
Circuit declared that the Buckley Court “identified the
compelling interest as ‘the prevention of corruption and the
appearance of corruption spawned by the real or imagined
(Cont'd)
same as restrictions on speaking. I agree with the majority that the
expenditures in this case “produce” core First Amendment speech. But
that is precisely the point: they produce such speech; they are not speech
itself. ... Such a house-that-Jack-built approach could equally be used
to find a First Amendment right to a job or to a minimum wage to
“produce” the money to “produce” the speech.
FEC v. National Conservative Political Action Comm., 470 U.S. 480,
508, 105 S.Ct. 1459, 1474, 84 L.Ed.2d 455 (1985) (internal citation
omitted).
It has been suggested, in jest, that if “spending money in politics is really
speech, then the laws against bribery should be unconstitutional.” Robert
Peck, et al., Constitutional Implications of Campaign Finance Reform,
8 Admin.L.J.Am.U. 161, 186 (1994) (comments of Professor Jamin B.
Raskin). I think the point is that limiting campaign contributions should
not be equated with limiting protected speech. If I were writing on a
clean slate, I might well be persuaded that Justice White’s view is correct;
but his opinion has remained a minority view.
39a
Appendix B
coercive influence of large financial contributions on
candidates’ positions and on their actions if elected to office. ”
Id. at 638 (quoting Buckley, 424 U.S. at 25, 96 S.Ct. at 638)
(emphasis in original).'? The Eighth Circuit concluded that the
district court, which had upheld the Missouri statute as
constitutional, had erred in extending Buckley to limit all
contributions, not just large ones. Id. at 639. In other words,
under the explicit holding in Carver, if $1000 is not large, the
analysis ends and the plaintiffs win. This leaves me the difficult
task of determining what a “large” contribution is in the context
of Arkansas elections.
The Carver court concluded that the district court had
posed, but had not answered, the question of whether the
Missouri limits were unconstitutionally low. Id. at 640. The
court noted that the district court’s conclusions extended only
to the question of whether the limits were narrowly tailored.
Id. (“The fact that [the Missouri initiative] sets forth graduated
limits has nothing to do with whether the limits are-so-low as
to be unconstitutional.”) Turning once more to Buckley, the
court observed that, “[a]lthough we certainly are not free to
fine tune the limits established by [the Missouri statutes], and
we generally accept the limits established by the legislature,
Buckley instructs that we must invalidate that judgment when
the ‘distinctions in degree’ become ‘differences in kind.’ ” Id.
at 641 (quoting Buckley, 424 U.S. at 30, 96 S.Ct. at 640). After
independently reviewing the facts, the Eighth Circuit held that
the contribution limitations did, in fact, amount to a “difference
in kind” compared to the $1000 limits upheld in Buckley. Id.
at 645. At first blush, it might appear that Carver requires an
12. This portion of Buckley quoted in Carver is actually the Supreme
Court’s characterization of the parties’ definition of the state interest,
and was not an explicit holding of the Supreme Court.
40a
Appendix B
out-of-hand ruling for the plaintiffs. However, I believe that a
close inspection reveals constitutionally important differences
between the Carver case and the claims in this case.
As noted, the Carver court held that the state’s compelling
interest in burdening political activity protected by the First
Amendment was that of limiting “the reality or perception of
undue influence and corruption from large contributions.” Id.
at 639. Prior to the passage of the law challenged in Carver,
Missouri had no contribution limits. The court noted two
extreme examples of corruption presented at trial: a $420,000
contribution from a corporation’s PAC to various local races,
and the “Keating Five” scandal. Id. at 642. In fima.ng that the
Missouri law was not narrowly- tailored to avoid corruption,
the court declared that “[a] $420,000 contribution is a far cry
from the [Missouri] limits.” Id. In contrast, Arkansas has limited
individual contributions to $1000 since 1975," and there was
no evidence at trial of campaign contributions exceeding $1000.
I believe that the contribution limits in place prior to Act I
were intended to address Arkansas’ interest in limiting real or
perceived undue influence or corruption from extremely “large”
contributions, such as the $420,000 contribution mentioned by
the Eighth Circuit in Carver, and the $2 million contribution to:
the 1972 Presidential campaign from dairy interests referred to
in Buckley. 424 U.S. at 27 n. 28, 96 S.Ct. at 638 n. 28 (citing
the D.C. Circuit’s discussion of contribution abuses in the same
case, Buckley v. Valeo, 519 F.2d 821, 840 n. 36 (D.C.Cir.1975)
(per curiam)). However, I conclude that Arkansas, having
initially established contribution limits intended to avoid
13. The Arkansas Legislature first established a $1000 per election
contribution limit in 1975, which it increased to $1500 per election in
1981. In 1990, the voters passed Initiative Measure No. 1, returning the
limit to $1000. Ark.Code Ann. § 7-6-203 (historical notes).
mwa wwewtwWwYae0”™
4la
Appendix B
corruption associated with large contributions, may
subsequently lower the level of such limits, if the limits have
not adequately addressed that harm, and the lower limits are
not so low as to render them a difference in kind rather than a
difference in degree. So, what is “large,” and what is “too
low”? “Ay, there’s the rub.”
I find that, at least regarding the non-statewide offices, the
defendants and Citizens have shown that Arkansas’ campaign
contribution laws prior to Act I have not adequately addressed
the harm of real or perceived undue influence or corruption
arising from large contributions. For example, the defendants
and Citizens introduced evidence of an April 1996 fundraiser
organized by registered business interest lobbyists for
Representative Ode Maddox, the Chairman of the Arkansas
General Assembly’s House Insurance and Commerce
Committee. The event was held at the Arkansas Poultry
Federation office in Little Rock. Representative Maddox’s
district is in the Ouachita Mountains in the western part of the
state. None of the contributors resided in Representative
Maddox’s district, and most if not all of these contributors had
lobbied before members of the Insurance and Commerce
Committee. Significantly, of the more than $30,000
Representative Maddox raised for his campaign, over $22,000
came from various lobbyists, business related PACs, and
corporations, including several contributions of $1000.
I hasten to point out that no evidence of actual undue
influence was introduced, and the defendants and Citizens did
not contend there was any such evidence. Representative
Maddox’s uncontradicted testimony was that he had never
solicited “a dime” in contributions in any race during his more
14. William Shakespeare, Hamlet, act 3, sc.1, 1. 56.
42a
Appendix B
than forty years of service in the Arkansas General Assembly.
Furthermore, Representative Maddox testified that he gave all _
interested parties an equal opportunity to be heard before his
committee, regardless of contributions. I credit this testimony.
Nonetheless, the question of appearances remains.
Defendants and Citizens introduced evidence concerning
the sponsoring of a “tobacco bill” sponsored by State
Representative James Dietz. This bill, if enacted, would have
kept local governments from passing ordinances regulating
tobacco, leaving all such regulation to the state. The evidence
reflected that Representative Dietz received contributions
totaling $2700 from tobacco interests in one election cycle.
The evidence also revealed that tobacco interests had made
several contributions to the members of the House Committee
who voted for the bill. While Representative Dietz publicly
defended this bill on the merits (according to a newspaper article
introduced into evidence), it received widespread media
attention, and was roundly condemned as “bad,” “special
interest” legislation. It would be hard to argue that the media,
and presumably, therefore, the public, did not in this instance
perceive undue influence from “large” contributions.
Citizens also introduced an August 1997 report compiled
by ACORN of the 1994 election cycle for the Arkansas House
and Senate races. The report examined contributions in excess
of $100, and found that special interest group contributions
made up seventy percent of the total. After subtracting
contributions from non-business related interest groups, the
report noted that business related interest groups still accounted
for between sixty-two and sixty-five percent of contributions
in excess of $100. Defendants’ witness Robert Stern testified
concerning a study conducted by the Center for Governmental
43a
Appendix B
Studies that listed campaign contribution patterns over the past
three election cycles in Arkansas. Mr. Stern’s testimony echoed
the findings of the ACORN report. He explained that business
interest contributions had provided the major part of campaign
contributions.
The evidence presented here convinces me that a “large”
contribution depends — at least in part — on its size relative to
total campaign expenses. The Supreme Court has instructed
that the compelling interest at issue “relates to the perception
of undue influence of large contributions to a candidate: ‘[t]o
the extent that large contributions are given to secure a political
quid pro quo from current and potential office holders, the
integrity of our system of representative government is
undermined. . . .’ ” Citizens Against Rent Control/Coalition for
Fair Housing v. City of Berkeley, 454 U.S. 290, 297, 102 S.Ct.
434, 437-38, 70 L.Ed.2d 492 (1981) (citations and quotations
omitted). I take this to mean that a contribution large enough
to support at least the appearance of a political quid pro quo is
“large.” This interpretation is, of necessity, fact-specific. The
record here, unlike the meager record available to the court in
Carver makes such a determination possible.
In the case of Representative Maddox, for example,
approximately seventy percent of his campaign funds came from
business interests in individual contributions ranging between
$200 and $1000. Assuming Representative Maddox spent
everything he raised, a single $1000 contribution accounted
for more than three percent of his total expenses. It is both the
large size of these contributions relative to Representative
Maddox’s total campaign expenditures and the nature of the
contributors that could give rise to a reasonable perception of
undue influence. Similarly, of his total campaign expenses,
44a
Appendix B
Representative Dietz raised roughly twenty percent from
tobacco interests, which contributed in amounts between $200
and $1000. Considered in the light of Representative Dietz’s
subsequent support for the tobacco bill, these contributions are
large enough to support a reasonable perception of undue
influence.
According to Mr. Stern’s study, in the general election races
for the Arkansas State Senate in 1992, 1994, and 1996,
candidates raised an average of $22,500 including the
candidates’ own money and loans. During the same election
years, candidates for the Arkansas House of Representatives
raised, on average, $7550, also including personal contributions
and loans. Of these averages, a single $1000 contribution
equates to over four percent in the Senate races, and over
thirteen percent in the House races. Clearly, a single $1000
contribution in these elections is significant. Therefore, I find
that, for these non- statewide races, a $1000 contribution is
sufficiently large to support a reasonable perception of undue
influence.
In contrast, in Arkansas’ 1994 gubernatorial general
election, each candidate spent over $900,000. Of this total,
$1000 is only about one-tenth of one percent. I conclude that
under these facts, a $1000 contribution in a statewide race is
not large enough to readily support a reasonable’ perception
of undue influence. This conclusion finds support in the fact
that the Buckley Court did not consider a $1000 contribution
to be large. The FECA contribution limits considered in Buckley
applied to races for both houses of Congress as well as the
15. I use the word “reasonable” because I assume that any
contribution would cause some supersensitive souls to perceive undue
influence.
45a
Appendix B
Presidential race. Of course, U.S. Senators are elected in each
state on a statewide basis, and U.S. Representatives on a district
basis. As of the 1990 census, Arkansas has four congressional
districts, each with a population of roughly 590,000. While
Buckley did not hold that $1000 is a “constitutional minimum,”
it seems clear that a $1000 contribution in 1997 dollars is not
“large” in a statewide race when it was not large in 1976 dollars
(when Buckley was decided), or in 1971 dollars (when FECA
was enacted). '® e
Having decided that a $1000 contribution is not large for
statewide races in Arkansas, I find that the State lacks the
compelling interest necessary to justify further limiting
contributions in the “statewide races,” as well as elections for
the offices of state Supreme Court Justices and Judges of the
Court of Appeals.
But what of non-statewide races? Because I have concluded
that a $1000 centribution to candidates for non-statewide races
in Arkansas is large, I must consider whether the $100 limit
imposed by Act I is too small to be constitutional. In Buckley,
the Supreme Court observed that the FECA limits were not
structured to take into account the widely ranging financial
needs of the congressional and presidential campaigns. The
Court declared, “ ‘[i]f it is satisfied that some limit on
contributions is necessary, a court has no scalpel to probe,
whether, say, a $2,000 ceiling might not serve as well as
$1,000.” Such distinctions in degree become significant only
16. The Eighth Circuit, in Day v. Holahan, 34 F.3d 1356, 1366
(8th Cir.1994) noted that a $100 contribution in 1976 dollars was worth
$40.60 in 1994. Dr. Herbert Alexander, a witness for the plaintiffs,
testified that a $1000 contribution when FECA went into effect (1971)
would be worth from $300 to $325 in 1997.
46a
Appendix B
when they can be said to amount to differences in kind.”
Buckley, 424 U.S. at 30, 96 S.Ct. at 640 (quoting Buckley v.
Valeo, 519 F.2d at 842).
As noted, the Carver court found the Missouri contribution
limits to be a difference in kind compared to the FECA limits
considered in Buckley. Carver, 72 F.3d at 644. In its degree-
versus-kind analysis, the Carver court emphasized: (1) the
Missouri limits were per election cycle as opposed to per
election in Buckley; (2) after adjusting for inflation, the
Missouri limits were an even smaller fraction of the FECA
limits upaeld in Buckley than the bare numbers would indicate;
(3) the state’s evidence concerning corrupting contributions
involved amounts in the hundreds of thousands of dollars,
whereas the contribution limits imposed by the challenged
statute ranged only from $100 to $300 dollars; (4) the state
adduced no evidence that the particular limits chosen were
narrowly tailored to address corruption or the appearance of
corruption associated with large campaign contributions; and
(5) a much higher percentage of contributors would be affected
by the Missouri limits than were affected by the FECA limits
at issue in Buckley. Carver, 72 F.3d at 641-44.
In deciding whether the $100 limit represents a difference
in kind, | begin by addressing the factors upon which the Eighth
Circuit telied in Carver. First, Act I’s contribution limits apply
on a perelection basis. This means that the Act’s limits apply
anew in each election within an election cycle — primary,
general election, and any run-off. In contrast, the Missouri law
applied ‘o the election cycle as a single unit.
Second, the Carver court discussed the erosive effects of
inflatior in comparing FECA limits at issue in Buckley to the
47a
Appendix B
Missouri limits. This discussion applies here as well. In 1976
dollars, Act I’s $100 limit shrinks to less than forty percent of
its face value, and only four percent of the federal $1000 limit
upheld in Buckley. See Carver, 72 F.3d at 641 (citing Day v.
Holahan, 34 F.3d 1356, 1366 (8th Cir.1994)).
Third, in contrast to Carver, where state contribution limits
were imposed for the first time, here the perceived undue
influence argued by the defendants and Citizens occurred in
spite of the $1000 limit already established by Arkansas. As to
statewide races, a $1000 contribution is not large, and Act I’s
$300 limit is unconstitutionally low. However, as to non-
statewide races, I do find a $1000 contribution to be “large.”
The defendants’ argument that the $100 limit has been narrowly
tailored is convincing, particularly in light of Carver. I see this
as a close call.
Fourth, in contrast to the Carver case, the defendants and
Citizens introduced substantial evidence of the need for the
reduced limits found in Act I. For example, the Stern study, as
well as reports compiled by ACORN, indicate that large
contributions, as defined by this Court, have led to the
perception of undue influence in non-statewide races.
Fifth, in Carver, the Eighth Circuit noted that a sizable
percentage of contributors would be affected by the new limits.
An even higher percentage of contributors will apparently be
affected by the Act I limits here. Mr. Stern’s study indicates
that the $100 limit will affect as much as eighty percent of
contributions in Arkansas Senate and House races.
I find persuasive the Citizens’ argument that contribution
limits amount to a difference in kind, when compared to the
48a
Appendix B
limits upheld in Buckley, because the limits do not permit the
same quality of political expression and association that the
FECA limits allowed. In upholding FEC,’.’s $1000 contribution
limit, the Buckley Court concluded that the limit:
focuses precisely on the problem of large campaign
contributions the narrow aspect of political
association where the actuality and potential for
corruption have been identified while leaving
persons free to engage in independent political
expression, to associate actively through
volunteering their services, and to assist to a limited
but nonetheless substantial extent in supporting
candidates and committees with financial resources.
Significantly, [FECA’s] contribution limitations in
themselves do not undermine to any material degree
the potential for robust and effective discussion of
candidates and campaign issues by individual
citizens, associations, the institutional press,
candidates, and political parties.
424 U.S. at 28-29, 96 S.Ct. at 639-40. See also id. at 21, 96
S.Ct. at 636 (“contribution restrictions could have a severe
impact on political dialogue if the limitations prevented
candidates and political committees from amassing the
resources necessary for effective advocacy”). Thus for Act I’s
limits to impermissibly affect First Amendment rights, the limits
must “undermine to [a] material degree the potential for robust
and effective discussion of candidates and campaign issues by
individual citizens, associations, the institutional press,
candidates, and political parties.” Id. at 29, 96 S.Ct. at 639-40.
49a
Appendix B
I conclude that Act I’s $100 contribution limits applicable
to candidates in non-statewide races (excepting races for the
offices of Arkansas Supreme Court Justice, and Arkansas Court
of Appeals Judge) do not burden the potential for effective
political dialogue to the extent that the limits can be said to
represent a difference in kind. Applied in this case, the factors
on which the Carver court relied do not alone provide a clear
answer as to the degree-versus-kind question. However, this
Court has had the benefit of evidence presented during a seven-
day trial, including evidence derived from special elections
vonducted under the Act I limits.
The defendants and Citizens introduced evidence showing
that the cost of running Arkansas House of Representatives and
Senate races in the past three election cycles averaged between
$7000 and $16,000 per election for the Arkansas House and
between $23,000 and $39,000 per election for an Arkansas
Senate seat. If a candidate for each of these positions raised
all of her funds from $50 contributions (half of the Act I limit),
a House candidate would need 320 contributors, and a Senate
candidate would need 780 contributors to mee* the highest of
these historical cost levels. This hypothetical does not include
contributions from political parties, small donor PACs, or
candidates’ personal contributions. Evidence admitted at tzial
showed that the population of an Arkansas House district is
roughly 24,000 and that of a senate district is &pproximately
68,000. Thus I find credible the testimony of state legislators,
including former Arkansas Representative Mark Pryor and
Arkansas Senator Phil Wyrick (also a former Representative),
that they will be able to raise adequate funds to run effective
campaigns."’ I consider it significant that no officeholder
17. As a candidate for State Representative in two successful races
prior to Act I, Mr. Pryor testified he raised sufficient funds to run effective
(Cont’d)
50a
Appendix B
testified that she would be unable to run an effective campaign
with the $100 limit, although two professional fundraisers did
Sc testify. In the two special elections held in January 1997
under Act I, the evidence shows that the candidates were able
to raise contributions exceeding the average amount raised by
open-seat candidates in primary elections during the past three
election cycles. Senator Wyrick, for example, testified that he
raised approximately $24,000 for his successful Arkansas
Senate race under the Act I limits, while his opponent raised
about $40,000.
There are two exceptions to the finding that the $100 limit
is constitutional. Act I omits from its definition of statewide
offices the office of state Supreme Court Justice, even though
these judges are elected in statewide races. Act I sets a $100
per election limit on the twelve judges of the Court of Appeals,
who are elected from districts of equal populations."* In
Arkansas, judicial candidates and judicial races are subject to
more stringent restrictions in solicitation than other candidates.
Under Canon 5C(2) of the Arkansas Code of Judicial Conduct,
a judge or candidate for judicial office subject to a public
election may neither personally solicit nor accept campaign
contributions. Canon 5C(2) also restricts candidate committees
acting on behalf of judges or candidates from soliciting earlier
than 180 days prior to a primary election, or later than forty-
(Cont'd)
campaigns under a self-imposed contribution limit of $250. Mr. Pryor
ran an unsuccessful race for the statewide office of Attorney General in
1996, and intends to run for that office again in 1998.
18. Ark.Code Ann. § 16-12-101. Prior to July 1, 1995, the Arkansas
Court of Appeals was composed of six members. After that date, the
membership was increased to twelve. Id.
Sla
Appendix B
five days after the last contested election in which the candidate
participates.
The defendant’s witness, Mr. Stern, testified that the $100
limit on contributions to Arkansas Supreme Court Justices was
the most troubling aspect of Act I, although he suggested that
this requirement was justifiable. I am also troubled by the limit,
and do not think it justifiable. Several witnesses explained that
a candidate is typically her own best fundraiser. Yet a judge
cannot personally solicit funds. A Supreme Court Justice must
nevertheless mount a statewide campaign, and Court of Appeals
Judges must run in districts much larger than state senate
districts. '* I conclude that this combination of obstacles prevents
candidates for these judicial positions from “amassing the
resources necessary for effective advocacy.” Therefore, I find
that Act I’s $100 limit, as applied to Arkansas Supreme Court
Justices and Arkansas Court of Appeals Judges, amounts to a
difference in degree when compared to those upheld in Buckley.
It is, thus, unconstitutionally low.
2. Contributions to PACs
The plaintiffs also complain that the $200 limitation on
contributions to approved PACs is so low that it
unconstitutionally infringes on their First and Fourteenth
Amendment rights to free speech and association. Each party
cites California Medical Ass’n v. FEC, 453 U.S. 182, 101 S.Ct.
2712, 69 L.Ed.2d 567 (1981) as controlling on this issue. In
California Medical, a federal PAC complained of FECA’s
$5000 per year limit on contributions to multicandidate federal
PACs. Upholding the challenged provision of FECA, a plurality
of the Court concluded that the limitations on contributions to
19. Arkansas currently has 35 senate districts.
52a
Appendix B
PACs was justified by the government’s interest in “preventing
the actual or apparent corruption of the political process.” Id.
at 197, 101 S.Ct. at 2722. The plurality feared that actual or
perceived corruption would arise if individuals and
unincorporated associations were able to channel unlimited
funds through PACs to candidates, thereby circumventing the
$1000 limit on contributions to individual candidates. Id. at
198, 101 S.Ct. at 2722-23. Further, the Court reasoned that
when a contributor’s First Amendment rights are not infringed
by limits on his contributions to a candidate’s campaign, those
rights “are similarly not impaired by limits on the amount he
may give to a multicandidate political committee. ...” Id. at
197, 101 S.Ct. at 2722.
The plaintiffs point out that FECA limited contributions
to candidates to $1000 per election, and contributions to PACs
to $5000 per year. They then suggest that it would be irrational
for Arkansas to limit contributions to PACs to only $200 per
year while allowing $300 contributions to individuals per
election. The defendants counter that the 1990 limit allows
substantial participation in Arkansas’ elective process while
serving to prevent circumvention of the limits imposed on
individual contributions. Citizens add that a limit on
contributions to PACs is even more warranted in Arkansas than
under the federal scheme. They note that the federal PACs in
California Medical were required to enlist at least fifty
contributors and contribute to no fewer than five candidates.
Id. at 185 n. 1, 101 S.Ct. at 2716 n. 1. Arkansas imposes.no
such requirements. Similarly, Citizens argue, Arkansas has no
corollary to FECA’s $25,000 annual limitation on total
contributions by an individual. See Buckley, 424 U.S. at 38,
96 S.Ct. at 644.
53a
Appendix B
Having determined that Act I’s $300 per election limit on
contributions to candidates for statewide race are
unconstitutionally low, this Court is sympathetic to the
argument that a $200 limit on annual contributions to PACs is
similarly infirm. This view finds support in Day v. Holahan,
34 F.3d 1356 (8th Cir.1994). In Day, the court deemed
unconstitutional a Minnesota law limiting contributions to a
political committee or political fund to no more than $100 per
year. The Day court recognized the state’s compelling interest
in avoiding “corruption or the appearance of corruption in the
political process that could result from large amounts of special
interest money circulating in the system... .” Id. at 1365.
However, it declared that “the fighting issue” presented was
whether the $100 limit had been narrowly tailored to serve that
interest, in the light of the burden it placed on political speech.
Id. The court based its finding that the limit was too low to
allow meaningful participation in protected political speech and
association on: the reduced danger of actual or perceived
corruption when contributions are to a political committee
rather than a candidate; the fact that $100 in 1994 dollars was
a scant four percent of the $1000 limit upheld in Buckley; and
the fact that one-fourth to one-third of the Appellant political
fund’s contributions in the previous election cycle had exceeded
$100. Id. at 1365-66.
I find Day distinguishable and conclude that the $200 limit
is constitutional. I am impressed by the fact that even though
the limit has been in place since 1990, the plaintiffs do not
c
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