Pandora's Box of Corporate Money in Federal Elections Is Open Again

June 29, 2007

Originally published on the Huffington Post, June 29, 2007

Anyone concerned about the role of money in politics should be worried about the conclusions reached earlier this week by the Supreme Court in FEC v. Wisconsin Right to Life Inc. ("WRTL"). For all practical purposes, corporations and unions have been given a green light to spend unlimited money on political ads again.

Before 2002, corporations and unions used treasury funds to finance political ads that supported or opposed candidates for federal office. By leaving out express words of advocacy such as “vote for” or “vote against,” these political ads escaped regulation because most courts deemed them to be “issue ads,” rather than electioneering.

Unsurprisingly, it was not difficult for corporations or unions to avoid express advocacy. The Brennan Center’s groundbreaking study “Buying Time” showed that in the 2000 federal election cycle $629 million was spent on political advertising, but only 4% of interest group ads expressly urged voting. This tactic carved a huge loophole in federal campaign finance law and sham ads flourished.

In the wake of the Enron scandal, Congress enacted McCain-Feingold (Bipartisan Campaign Reform Act of 2002, or “BCRA"). One of the key goals of BCRA was to close the sham issue ad loophole. The reform law required that corporations and unions use a PAC to pay for “electioneering communications"-political ads that ran 60 days before a general election or 30 days before a primary election, mentioned a candidate for federal office, and targeted the candidate’s constituents. The Brennan Center’s study showed what the American public already knew: the vast majority of such ads were campaign ads, whether or not they used magic words. In December 2003, the Supreme Court upheld the electioneering communications provisions in BCRA.

The WRTL case started during Sen. Russ Feingold’s reelection campaign in 2004. A non-profit corporation subject to BCRA, Wisconsin Right to Life Inc., started running ads criticizing the Senator’s filibuster of judicial nominees and referring viewers to a website opposing his reelection. When BCRA kicked in, before the primary election, the group challenged the application of the law to its ads, insisting that its ads were actually issue ads, not “electioneering communications” that could be regulated. On Monday, the Supreme Court agreed.

Specifically, WRTL holds that corporations and unions are entitled to exemptions from BCRA, unless their ads are the “functional equivalent of express advocacy.” This squishy language is a litigator’s dream and may well provoke scores of suits about which future ads can be regulated or not. WRTL invited lower courts to make those determinations by ignoring the purpose of the ads, focusing on their content, and giving only minimal consideration to the factual context. As far as the Supreme Court was concerned, if the ad could be an issue ad, it was an issue ad.

Coming in advance of the 2008 presidential and congressional elections, WRTL will almost certainly open the floodgates for phony “issue” ads. Although it will still be illegal for corporations and unions to run electioneering communications, we nevertheless expect them to pour millions into what is already predicted to be one of the most costly election seasons in U.S. history. If challenged, the sponsors of the ads will claim the exemption that the Supreme Court recognized in WRTL. As Justice Stephen Breyer warned from the bench when the case was argued, if the opinion came down the way it did, “Good-bye McCain-Feingold.”

The ruling creates an opportunity for a national dialogue about how we want our federal elections to be run. For example, public funding systems like those in Arizona, Connecticut, Maine, New Mexico, and North Carolina , which allow candidates to run a campaign with a public grant instead of private funds, provide an alternative path for limiting the impact of money on campaigns. Fixing the presidential election fund and passing the Fair Elections Now Act (introduced by Senators Durbin and Specter) have both taken on more urgency in light of the Court’s holding in WRTL.

The Pandora’s box of corporate and union money, which was closed for a few years, is back open. Therefore, if we want ideas to have more impact than money, we must free candidates from the influence of big spenders and open the process to candidates who will be accountable to voters.

Deborah Goldberg is the Democracy Program Director of the Brennan Center, where Ciara Torres-Spelliscy is Counsel. The Brennan Center took the lead in defending BCRA’s electioneering communications provisions before the Supreme Court in 2003.