On-Going Court Case Exposes How Weak Campaign Finance Regulation Really Is
An on-going case in the federal district court system regarding limits on coordinated party expenditures in federal elections exposed, while perhaps not extremely consequential on its own, exposes how utterly weak the contemporary campaign finance regulatory apparatus is.
In contemporary, public debates surrounding issues with how we fund elections in the United States, the conversation largely surrounds the ability for special interests, such as affluent individuals and corporations, to spend infinite amounts of money in elections.
Congressional focus on this issue especially heightened following the Supreme Court’s decision in Citizens United v. Federal Election Commission (2010), where the Court ruled that it violates the First Amendment of the Constitution to limit how much corporations and unions can independently spend (without coordinating with candidates or political parties).
When the spender engages in such independent spending to expressly advocate the election or defeat of a federal candidate, they are making what is legally defined as an independent expenditure. If the spender mentions a clearly identifiable federal candidate without expressly advocating their election or defeat, but they make the relevant communication within 30 days of a primary election or 60 days of a general election, they are making what is legally defined as an electioneering communication.
While spenders must report independent expenditures and electioneering communications to the Federal Election Commission (FEC) for transparency, the government cannot limit such spending for individuals–thanks to the Supreme Court in Buckley v. Valeo (1976)–along with artificial entities like corporations–thanks to Citizens United.
The legal reasoning behind the Court’s decisions comes from a shift in standard judicial interpretation of campaign finance law in the 1970s, where the Court moved to view the spending of money as a form of constitutionally protected speech. However, since Buckley, the Court has upheld limitations on direct campaign contributions to candidates and parties out of the view that they serve the legitimate government interest of curbing quid pro quo corruption or the appearance of such corruption.
Consequently, while individuals, groups, and artificial entities with enormous concentrations of economic power can use their wealth to infinitely finance elections, they cannot give money directly to candidates and parties without restriction. For example, an individual and a corporate political action committee (PAC) can only give up to $3,300 and $5,000 respectively to an individual candidate per election.
The relevant, on-going case here concerns the ability for national and state political parties to make unlimited expenditures in coordination with federal candidates and campaigns.
In 1996, the Supreme Court in Colorado Republican Federal Campaign Committee v. FEC ruled that political parties could make unlimited independent expenditures to aid their political candidates.
Thus, there are three principal ways for national and state political parties to spend their funds to aid their federal candidates. First, a party can make a maximum direct contribution of $5,000 to each candidate per election in accordance with legal limitations. Second, a party can spend however much money they can on independent expenditures that they do not make in coordination with candidates. Third, a party can make a coordinated expenditure.
Coordinated party expenditures refer to when a party purchases goods or services to aid a candidate, making the purchase effectively on behalf of their campaign due to coordinating and discussing the spending. In a consequent decision to Colorado in 2001 known as Colorado II, the Supreme Court explained that coordinated expenditures are effectively the same as contributions and upheld separate spending limitations.
The federal spending limits for coordinated party expenditures differ depending on the office the supported candidate is running for, the state they are running in, and the size of the voting-age population (VAP) in the state. For example, the 2023 spending limits range from $118,700 to $3,623,400 for Senate candidates depending on the VAP of each state. Parties can make coordinate expenditures of $118,700 for House candidates in single-district states and $59,400 for all other House candidates.
In the present case, the National Republican Senatorial Committee (NRSC), National Republican Congressional Committee (NRCC), and other individual plaintiffs filed a legal complaint against the FEC in the U.S. District Court for the Southern District of Ohio Cincinnati Division, alleging that the coordinated expenditure limits violate their First Amendment speech rights.
To make their argument, the plaintiffs use Buckley’s standard regarding the compelling government interest to prevent the existence or appearance of quid pro quo corruption. They argue (1) that coordinated party expenditures “are not the functional equivalent of contributions” and (2) that evidence does not show that such spending promotes the existence or appearance of quid pro quo corruption.
In support of their argument, the plaintiffs assert that “all party committee spending has been presumed coordinated with the party’s supported candidate.” Political scientist Thomas Mann, in his 2007 argument to abolish coordinated party expenditure limits, explained this assertion clearly:
The idea of a political party spending independently of its own candidates, affirmed in Colorado I, strikes most political scientists, myself included, as preposterous, especially once the party’s nominee is selected. What public good is served by forcing parties to set up entirely independent operations, which avoid any coordination with that candidate? It is a perversion of the whole purpose of political parties.
Ultimately, the idea is that when a political party nominates a candidate, its central purpose is to work with and aid their candidates. Thus, having to set up different operations for uncoordinated independent expenditures and coordinated party expenditures is just a burdening, wasteful administrative expense.
Additionally, the plaintiffs along with Mann argue that party committees only spend the money they receive from contributions which themselves are subject to federal limitations. Therefore, special and affluent interests would not be able to spend significantly more money to aid candidates through funneling money through party committees.
Although, contribution limits to party committees are higher than for individual candidates. A single donor can effectively give over $1.7 million to a party in a two-year election cycle. So, special interests actually can give more money to parties to circumvent harsher contribution limits to candidates.
However, the central takeaway from the plaintiffs’ argument is not even that they are wrong about the potential to circumvent candidate limits. Rather, it is that they acknowledge that there is little difference between independent and coordinated party expenditures. A political party can discuss its spending with a candidate and make a limited coordinated expenditure for an advertisement. Or, the party can run the exact same advertisement without coordinating with the candidate and snake unlimited independent expenditures.
Supreme Court Justice Byron White made a very similar point in his dissent to Buckley regarding the distinction between independent expenditures and campaign contributions:
Let us suppose that each of two brothers spends $1 million on TV spot announcements that he has individually prepared and in which he appears, urging the election of the same named candidate in identical words. One brother has sought and obtained the approval of the candidate; the other has not. The former may validly be prosecuted under § 608(e); under the Court's view, the latter may not, even though the candidate could scarcely help knowing about and appreciating the expensive favor.
It is not difficult at all for parties to figure out how to spend money to aid candidates without directly coordinating with them. For example, the party could simply pay attention to the pressing issues of the campaign and the messages their candidate pushes.
Additionally, as the plaintiffs point out, current law already allows parties to make unlimited coordinated expenditures in the limited application of mailed political advertisements that expressly advocate the election or defeat of a candidate as long as they are sufficiently disseminated by volunteers.
Thus, as argued by the plaintiffs, the ultimate effect of this case is whether party committees have to spend money to performatively separate their independent and coordinated operations.
While by itself not super consequential, the case exposes how utterly weak the contemporary campaign finance system is. Official distinctions between independent and coordinated spending effectively do not matter and allow for easy circumvention of contribution limitations.
Revealingly, the plaintiffs also argue against coordinated party expenditure limits by asserting that they are unnecessary burdens in the face of unlimited outside spending. Arguing that unlimited coordinated expenditures are essential for parties to function, they write:
[F]ollowing the rise of Super PACs, whose ability to fundraise without limit has diminished the parties’ dominance in the political landscape compared to 2001 … “[I]t is widely accepted [that the advent of Super PACs] has been damaging to the political parties, and some Super PACs are seen to be moving in the direction of assuming most of the functions of parties, including not only expensive on-air appeals but also the ‘ground game’ conducted to motivate voters to appear at the polls.”
In other words, Super PACs–independent political action committees that can raise and spend infinite sums of money from practically any domestic source as long as they do not coordinate with candidates and parties–are so powerful that parties cannot keep up.
This concern is not unfounded, as outside/independent spending, predominantly by Super PACs, has dramatically increased since Citizens United in 2010, far outpacing the growth of election spending by candidates and parties themselves. In fact, the Republican and Democratic party committees spent around $1.2 billion and $1.4 billion respectively in the 2022 midterm elections compared to over $1.3 billion for Super PACs and nearly $2.3 billion in total outside spending.
A central purpose behind the creation of Super PACs is to have a vehicle for affluent individuals and special interests to pool far more money into elections than they are allowed to under current contribution limits. For example, in the 2018 midterm elections, 68% of donations to Super PACs were over $1 million, 36% were between $200 and $1 million, and 6% were below $200. In comparison, the 2018 maximum individual contribution limit to a candidate was $2,700 per election.
Ultimately, the on-going case about coordinated party expenditures involves a battle between Republican party committees wanting to lower administrative expenses and pro-regulatory campaign finance experts trying to prevent injury to a system that is already effectively dead. Not only can parties already spend infinite sums of money to aid candidates, but special interests have several ways to avoid strict candidate contribution limits and dominate elections.