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Questions and Answers About Colorado Republican II: Supreme Court Upholds Restrictions on Political Parties

Published: June 26, 2005

Ques­tions and Answers About
Color­ado Repub­lican II:
Supreme Court Upholds Restric­tions on Polit­ical Partie

On Monday, June 25, in FEC v. Color­ado Repub­lican Federal Campaign Commit­tee, 2001 U.S. Lexis 4668 (June 25, 2001), the U.S. Supreme Court upheld the federal limit on expendit­ures that polit­ical parties coordin­ate with their candid­ates. The case, commonly known as Color­ado Repub­lican II, is the second major Supreme Court victory for campaign finance reform in two years and bodes well for future chal­lenges to the soft money ban in McCain-Fein­gold. In this news alert, the Bren­nan Center for Justice at NYU School of Law explains what was at stake in the case, what the Court decided, and what the decision means for the future.

What Was at Stake in Color­ado Repub­lican II?

In the federal system, there are three differ­ent ways that polit­ical parties may use money to help elect candid­ates. First, the parties may donate funds directly to candid­ates’ campaigns, under specified contri­bu­tion limits. Second, the Supreme Court ruled in Color­ado Repub­lican I that polit­ical parties, like indi­vidu­als and PACs, can spend unlim­ited sums inde­pend­ently of the candid­ates (i.e., make inde­pend­ent expendit­ures). Finally unlike other polit­ical play­ers parties are permit­ted to make limited expendit­ures in coordin­a­tion with their candid­ates, without count­ing those coordin­ated expendit­ures toward their contri­bu­tion limits. Color­ado Repub­lican II involved a First Amend­ment chal­lenge to the caps on the amount of expendit­ures that could be coordin­ated with candid­ates.

The prin­cipal reason for limit­ing coordin­ated spend­ing is to prevent circum­ven­tion of contri­bu­tion limits applic­able to indi­vidu­als and PACs. The caps protect against evasion by redu­cing incent­ives for wealthy donors to funnel money through polit­ical parties. The same anti-evasion rationale supports other campaign finance restric­tions, such as limits on contri­bu­tions to parties and PACs. If the Court had rejec­ted that rationale in Color­ado Repub­lican II, we would have seen not only skyrock­et­ing coordin­ated spend­ing, but also attacks on a wide array of other campaign finance regu­la­tions.

What Did the Supreme Court Decide in Color­ado Repub­lican II?

In a 5–4 decision, authored by Justice Souter (and joined by Justices Stevens, O’Con­nor, Gins­burg, and Breyer), the Supreme Court decided that Congress was justi­fied in limit­ing coordin­ated expendit­ures because, without the limit, wealthy donors would have an added incent­ive to circum­vent exist­ing contri­bu­tion limits by chan­nel­ing funds through the polit­ical parties. The Court noted that the “tally” system whereby candid­ates get credit for funds they raise for the party, which in turn supports the candid­ates’ campaigns was already “a sign that contri­bu­tion limits are being diluted and could be diluted further if the floodgates were open.” To deny the poten­tial for abuse, said Justice Souter, was to suffer from a kind of “myopia, a refusal to see how the power of money actu­ally works in the polit­ical struc­ture.”

The Court refused to “ignore real­ity” in eval­u­at­ing the party’s role in rais­ing and spend­ing money. The party’s fund­ing “comes from contrib­ut­ors with their own personal interests” contrib­ut­ors who some­times give to both parties and even to compet­ing candid­ates in a single race. “Parties are thus neces­sar­ily the instru­ments of some contrib­ut­ors whose object is not to support the party’s message or to elect party candid­ates across the board, but rather to support a specific candid­ate for the sake of a posi­tion on one, narrow issue, or even to support any candid­ate who will be obliged to the contrib­ut­ors.” The coordin­ated spend­ing limits control the extent to which parties will be exploited in this way and thus contain the threat of corrup­tion and appar­ent corrup­tion.

What Is the Signi­fic­ance of Color­ado Repub­lican II?

On the federal level, the reas­on­ing of the Court supports argu­ments favor­ing a soft money ban. The purpose of such a ban is to prevent the circum­ven­tion of contri­bu­tion limits (and the ban on contri­bu­tions from corpor­a­tions and unions). Color­ado Repub­lican II strongly reaf­firmed this anti-evasion rationale for campaign finance regu­la­tion, stat­ing in no uncer­tain that “all members of the Court agree that circum­ven­tion is a valid theory of corrup­tion.”

Moreover, the Court put to bed the idea that polit­ical parties are entitled to more consti­tu­tional protec­tion from campaign finance regu­la­tions than are indi­vidu­als and PACs. Indeed, the Court recog­nized that the very close­ness of parties to their candid­ates increases the effic­acy of parties as “conduits for contri­bu­tions meant to place candid­ates under oblig­a­tion.” Oppon­ents of a soft money ban can no longer claim, as they have in the past, that polit­ical parties cannot be regu­lated because they play no role in the corrup­tion of candid­ates. Nor can oppon­ents seek a higher stand­ard of First Amend­ment review just because polit­ical parties are subject to restric­tions. States that have regu­lated, or are consid­er­ing regu­lat­ing, soft money in state elec­tions should also take comfort from this decision.

On the state level, the case also calls into ques­tion the decision in Missouri Repub­lican Party v. Lamb, 227 F.3d 1070 (8th Cir. 2000), a case inval­id­at­ing limits on contri­bu­tions from polit­ical parties to candid­ates for state offices in Missouri. The U.S. Court of Appeals for the Eighth Circuit rested its decision in Lamb on its rejec­tion of the anti-evasion rationale. Now that the Supreme Court has firmly endorsed the rationale, specific­ally in the context of limits on the func­tional equi­val­ent of contri­bu­tions, Missouri and other states in the Eighth Circuit should be free to cap the amounts contrib­uted to state candid­ates by polit­ical parties. (States in the Eighth Circuit, in addi­tion to Missouri, include Arkan­sas, Iowa, Minnesota, Nebraska, North Dakota, and South Dakota.)

Finally, the case augurs well for campaign finance juris­pru­dence gener­ally. All too often, courts have been will­ing to decide First Amend­ment chal­lenges to campaign finance reforms on the basis of mere spec­u­la­tion of what might happen, without consid­er­a­tion of polit­ical real­ity. The Supreme Court’s refusal in Color­ado Repub­lican II to ignore “how the power of money actu­ally works in the polit­ical struc­ture” will be enorm­ously import­ant when the Court is asked to consider the consti­tu­tion­al­ity of laws regu­lat­ing soft money and sham issue ads. We stand an excel­lent chance of clos­ing those gaping loop­holes if the Court contin­ues to ask, as it did in Color­ado Repub­lican II, “whether exper­i­ence under the present law confirms a seri­ous threat of abuse.”