The Supreme Court on Monday heard oral argument in a case challenging provisions of Arizona’s public financing law, which it is said burden the free speech rights of opponents who don’t receive the funds.  Under the Arizona law, publicly financed candidates receive an initial grant of money with which to conduct their campaign.  Then, if an opponent who is not publicly funded spends more than the initial grant, it “triggers” the state to match what the opponent raises up to three times the initial amount.  Given the Court’s recent hostility to campaign finance regulations which are said to burden the exercise of political speech, it seems likely that the Court will reverse the Ninth Circuit and strike down at least portions of the matching funds system.  This conclusion was reinforced by the questions at oral argument, which seemed to suggest that the Justices will again vote by a 5-4 margin to restrict the ability of the government to regulate campaign finance. This post will briefly review the background of the case and look at how such a decision could effect the twenty-two other states with public financing systems and particularly those with triggering provisions.

The case, McComish v. Bennett, was brought by six past and present candidates for political office and two PACs, claiming the triggered funds punish them for making and  spending campaign donations.  The appellants argue that they are unable to make campaign expenditures or contributions in the amounts they would like for fear of triggering matching funds to their opponents.  The state meanwhile, argues that matching funds help prevent corruption or the appearance of corruption, and actually facilitate more speech by helping candidates who could not secure funding through traditional means.  The Ninth Circuit agreed with the state and upheld the trigger provisions.

The statute at issue, Arizona’s Citizens Clean Elections Act, was passed by voter initiative in 1998, in response to the revelation of wide ranging corruption in the state government in the early nineties.  Under the law, candidates may choose whether to raise unlimited funds from contributors, subject to contribution and disclosure limits, or may opt into the public financing system and forfeit their right to private contributions.  In order to show that they are a viable candidate, candidates who opt into the system must raise a specified amount, which varies by office, in $5 contributions.  Since the law went into effect, over half of all candidates have opted to take the public money.

If a candidate qualifies for public funds, they first receive a lump sum which varies depending on whether the candidate is running unopposed or opposed in a primary and whether they are an independent candidate.  Then, if an opposing candidate who has declined public financing spends more than the initial grant, or their expenditures in combination with all of the independent expenditures made on their behalf is greater than the initial grant, the candidate accepting public financing is entitled to matching funds.  During both the primary and the general election, matching grants are capped at three times the cost of the initial grant, meaning that nonparticipating candidates who raise more than three times the initial grant may continue to raise and spend in excess of their opponent who is limited to the public money they have received and may not fundraise.

Trigger provisions were thrown into constitutional question by the Supreme Court’s 2008 decision in Davis v. Federal Election Commission.  In that case, the Court struck down the so-called “Millionaires Amendment” of the Bipartisan Campaign Reform Act  2002.  The Court found that the Amendment, which allowed candidates to exceed contribution limits when a self-financing opponent spent personal funds in excess of a statutory amount, created a “scheme of discriminatory contribution limits,” which “impose[d] a substantial burden on the exercise of the First Amendment right to use personal funds for campaign speech.”  The Court noted that if a self-financing candidate “engaged in unfettered political speech” they would be subject “to discriminatory fundraising limitations.”  Having found that the scheme forced a choice between spending for political speech and triggering increased contributions limits, the Supreme Court applied strict scrutiny and struck down the “asymmetrical regulatory scheme” as a violation of the First Amendment.”

Before the Ninth Circuit,  the candidates and PACs argued that matching funds forced a similar choice for non-participating candidates between fully exercising speech rights and increasing their opponent’s campaign chest.  The Ninth Circuit rejected this argument, holding that while Davis had condemned treating candidates “differently based on a candidate’s decision to self-finance his or her campaign,” the Supreme Court had approved “subject[ing] candidates running against each other for the same office to entirely different regulatory schemes when some candidates voluntarily choose to participate in a public financing system.”  The court cited Buckley v. Valeo, which stated that “the Constitution does not require Congress to treat all declared candidates the same for public financing purposes.”  Concluding that the matching funds provisions imposed only a “minimal or indirect” burden on appellants’ speech rights, the Ninth Circuit upheld the Clean Election Act matching fund provisions.

This narrow reading of Davis has not carried the day in other Circuits: in the last year both the Second and Eleventh Circuits have relied on Davis to enjoin or strike down similar triggered matching fund systems which, in the words of the Second Circuit, cause a candidate to “‘shoulder a special and potentially significant burden’ if she chooses to exercise her First Amendment right to spend personal funds on her campaign” (for more on these challenges to trigger funds in other states, see this earlier post).

Including Arizona, there are twenty-three states with some form of public financing system.  Of these states, twelve have systems that condition the amount that a participating candidate receives on the spending of a non-participating candidate.  These trigger mechanisms typically follow the model used by Arizona, in which matching funds up to a certain amount are triggered if a non-participating opponent exceeds a set expenditure limit.  A less common model simply removes expenditure limits from participating candidates if their opponent exceeds the expenditure limit.  Seven states count independent expenditures against the expenditure limit which triggers matching funds.

While the language in Davis suggests it is likely that the Court will find that mechanisms which create a disincentive for non-participating candidates to exercise their right to “speech” are unconstitutional, it seems unlikely that the Court will go so far as to strike down funding schemes generally.  The Court in Buckley held that public financing schemes were an effort to use public money to facilitate and enlarge public  discussion and participation in the electoral process, goals vital to a self-governing people.”  As such, the Court continued, public financing “furthers, not abridges, pertinent First Amendment values.”

A decision striking down matching funds will leave states with a more limited arsenal of tools to create parity in elections but would not bar pre-set lump sum disbursements, which are already part of most state plans.  It would also not affect the federal public finance system which offers lump sums which are not connected to the actions of other parties.  Lump sums are a blunt instrument because they can’t be adjusted to the actual level of spending in a given race.  One size has to fit all.  One potential benefit of a decision striking down matching funds might be to force states to try innovative approaches that don’t create “speech” disincentives for opponents.  One such approach would be to create multipliers for small donations, whereby the state would match or multiply individual donations of less than a certain amount.  Michigan for example provides 2:1 matching funds for qualifying contributions of less than $100 made before the primary.

While encouraging innovation might be a positive development, it seems more likely that a decision striking down matching funds will chill attempts by states to pass further public financing schemes particularly in this difficult economy when state funds are scarce.

Sam Robinson is a third-year student at William & Mary Law School.


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