Courts

Supreme Court Does Away With a Major Restriction on Big-Spending Campaign Donors


The Supreme Court knocked down one of the two main limits on federal campaign contributions, a move that could let more money flow into elections through complicated webs of donations and place greater pressure on enforcing the laws still on the books.

The limits on federal campaign contributions are of two types. One caps how much someone can donate to any given candidate or campaign committee; the other limits how much a donor can give overall in an election cycle. The high court, in a 5-4 ruling (pdf), struck down that second component. Overall caps don’t further the “only one legitimate governmental interest for restricting campaign finances: preventing corruption or its appearance,” wrote Chief Justice John Roberts in the majority ruling.

A donor could nearly max out his or her aggregate limit by giving the individual maximums to nine candidates or committees, Roberts noted, which would prevent the person from making donations in other races and “deny the individual all ability to exercise his expressive and associational rights by contributing to someone who will advocate for his policy preferences.” He asked: Why should giving to nine campaigns be OK while giving to a 10th is deemed illegal?

The four dissenting judges, in an opinion written by Justice Stephen Breyer, disagreed that it was that simple. The ruling creates a “massive loophole” to circumvent the caps on limits to candidates, Breyer wrote, and donors could give to other committees likely to support the same candidate.

Breyer went on to enumerate three different scenarios of how this would work. “Without an aggregate limit, the law will permit a wealthy individual to write a check, over a 2-year election cycle, for $3.6 million—all to benefit his political party and its candidates.” He said the law allows a party and its candidates to set up their committees in a way that would “shift most of Rich Donor’s contributions to a single candidate.” In the appendix, Breyer provided a table showing how this would shake out:

He also sketches out a way donors could use PACs to channel money to candidates. Groups of party supporters—individuals, corporations, or trade unions—create 200 PACs. Each PAC claims it will use the funds it raises to support several candidates in the party, though it will favor those who are most endangered. … Over a two-year election cycle, Rich Donor No. 1 gives $10,000 to each PAC ($5,000 per year), yielding $2 million total. Rich Donor No. 2 does the same. So, too, do the other eight Rich Donors. Each PAC will have collected $100,000, and each can use its money to write 10 checks of $10,000—to each of the 10 most Embattled Candidates in the party. … The recipient candidates may not know which of the 10 Rich Donors is personally responsible for the $2 million he or she receives. But the recipient candidate is highly likely to know who the 10 Rich Donors are and to feel appropriately grateful.

Chief Justice Roberts said a donation to a PAC will be “significantly diluted by all the contributions from others to the same PACs” and therefore will not be a corruption risk. He also found that examples of setting up numerous committees were either “implausible” or already illegal under other laws that prohibit coordination and earmarking among committees. He went on to say that Congress and the Federal Election Commission had ways to further curtail the ties between committees and candidates, such as restricting transfers between groups.

If existing or future laws are designed to keep that crossover in check, it’s up to enforcement to ensure the lines aren’t crossed. As I wrote recently, uncovering potentially illegal donations is no easy task. An investigation in Utah by experts with subpoena power spent $4 million and months of work to untangle a web of donations in just a single statewide race. After today’s Supreme Court ruling, the limits on influence will be even more dependent on the increasingly remote chance of getting caught.

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Weise is a reporter for Bloomberg Businessweek in New York. Follow her on Twitter @kyweise.

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