Arizona Free Enterprise and the Future of Public Financing

Last month, a bitterly divided Supreme Court issued the latest in a string of ideologically-driven decisions that have struck down a series of legislative attempts to reduce the influence of money and special interests in our elections.

July 11, 2011

Last month, a bitterly divided Supreme Court issued the latest in a string of ideologically-driven decisions that have struck down a series of legislative attempts to reduce the influence of money and special interests in our elections.

In Arizona Free Enterprise Club v. Bennett, the Court struck down one provision of Arizona’s public financing law, triggered matching funds, which increased the amount of political speech available to Arizona voters. A five-justice majority concluded — contrary to all the record evidence in the case — that the provision suppressed the speech of privately funded candidates and independent political spenders who challenged the law. These plaintiffs claimed a First Amendment right to attack publicly funded candidates free of any response — and Chief Justice John Roberts’ majority opinion accepted the theory hook, line, and sinker.

If there is a silver lining in the Supreme Court’s latest misstep, it’s that it was a relatively narrow decision. True, the Court struck down the triggered matching funds in Arizona’s public financing law. And true, the decision means that similar trigger provisions in a handful of other jurisdictions will need to be removed from those states’ laws. But the decision did not call into question the constitutionality of public financing as a whole.

Indeed, as it has for nearly four decades, the Court reaffirmed that public financing writ large stands on firm constitutional footing. “We do not today call into question the wisdom of public financing as a means of funding political candidacy,” the majority opinion said. It also recognized that public funding can “further significant governmental interest[s], such as the state interest in preventing corruption.”

This recognition is vitally important, and gives states — and Congress — the green light to adopt public financing programs that lack trigger matching funds, such as New York City’s successful small donor matching program. It’s crucial that they do so — no reform works better than public financing to fight corruption and restore confidence in our democracy.

To ensure that voters remain at the center of our elections — and that elections aren’t  bought and paid for by special interests — elected officials in Congress and the States should act quickly to institute public financing where it’s not currently available, and to update any laws that need changes in light of the Court’s latest pronouncement.

The Roberts Opinion

Despite the admission that public financing stands on firm constitutional ground, the rest of Roberts’ majority opinion flipped traditional First Amendment jurisprudence on its head. As Justice Elena Kagan said in her eloquent dissenting opinion, “[e]xcept in a world gone topsy-turvy, additional campaign speech and electoral competition is not a First Amendment injury.” Kagan explained that Arizona’s law didn’t in any way reduce or chill speech. “What the law does—all the law does—is fund more speech,” Kagan wrote. “And under the First Amendment, that makes all the difference.”

The First Amendment aims at fostering robust, wide open political debate, and Arizona’s public financing system promoted First Amendment values by allowing candidates who lack personal wealth — or access to wealthy backers — to engage in political discussion and run for political office. Roberts’ opinion declared that under the Constitution, it is less important to promote speech by candidates who can’t run without public funds than it is to ensure that wealthy, self-funded candidates and special interests can speak free of response — even if that means they monopolize all political discourse in a given election.

Put differently, the Roberts Court has recognized a series of new “rights” under the First Amendment — a right to speak without any response, and a right to use monetary advantage to monopolize political debate. Surely, this is not what the Framers of the First Amendment had in mind. As Justice Kagan rightly declared, the vigorous debate made possible by Arizona’s public financing law “is the whole idea of the First Amendment, and a benefit of having more responsive speech.” By turning against this basic First Amendment principle, Justice Kagan explained, the Roberts Court has betrayed Justice Holmes’ justly famous maxim: “[T]he best test of truth is the power of the thought to get itself accepted in the competition of the market.”

Public Financing in Arizona

The trigger provision struck down last Monday protected the First Amendment rights of ordinary voters who can’t make big campaign contributions, and ensured that Arizona’s elections were open to the powerful and the downtrodden alike. Against all the evidence, the Supreme Court majority said that triggers made opponents refrain from political spending because their spending would cause extra money to be disbursed to the candidate they were taking on.

In reality, empirical analyses of political spending in Arizona (and elsewhere) confirm that there was no sign triggers deterred spending. Overall political spending increased substantially since Arizona adopted public financing. Triggers were a fiscally responsible tool that saved taxpayer money from being wasted in uncompetitive contests where additional funds were not needed.

And they made Arizona’s clean elections law a tremendous success. A clear majority of likely voters in Arizona said in 2010 that they supported public financing, while just 7 percent disapproved. Candidates from across the political spectrum participated and competition in Arizona elections improved: with public financing, there were fewer uncontested elections.

Most importantly, public financing effectively constrained political corruption. Before public financing, Arizona experienced a corruption scandal that was caught on tape. Nearly 10 percent of the state legislature was indicted. Since the law has been in effect, Arizona has avoided similar scandals.

New York City: The Future of Public Financing

New York City adopted public financing more than 20 years ago after a serious corruption scandal that culminated in the 1986 suicide of former Queens Borough President Donald Manes following revelations about extortion and bribery among contractors and city officials. Its program provides a model for the nation.

Under current rules, the City gives participating candidates a $6 to $1 match in public financing for the first $175 they raise from New York City voters. This means that a $175 donation to a City Council candidate is worth as much as a $1,225 contribution from a special-interest lobbyist. This encourages candidates to target average New Yorkers — and allows candidates with grassroots support to run viable campaigns, even without the backing of big money.

New York City’s pioneering experiment has been a resounding success. The multiple match program has enjoyed robust participation by serious, credible candidates. It has promoted voter choice by increasing diversity and competition in City elections. It has dramatically expanded the number of New Yorkers who participate in electoral campaigns. And the New York City “small donor matching fund” model gives out public funding based on a candidate’s own fundraising. This avoids the constitutional problems raised in the Arizona case, by ensuring that a candidate’s public financing grant rises or falls based on her own success at campaigning.

Congress, the states and municipalities around the country should adopt small donor matching programs like New York City’s — without delay. They are the surest way to guarantee that voters, not dollars, are the heart of our democracy.