The lonely death of public campaign financing.

• Author: Esenberg, Richard M.

INTRODUCTION I. SPEND IT YOURSELF: THE DISTINCTION BETWEEN EXPENDITURES AND CONTRIBUTIONS A. Origin of the Distinction B. Persistence of the Distinction C. The Nature of Corruption: Setting Expenditures and Contributions Apart II. WHACKING THE MOLE: EXPENDITURES SURVIVE A. An Attempt to Limit Independent Expenditures B. The Protection of Issue Advocacy 1. The Continued Viability of Issue Ads 2. WRTL II Suggests a Narrow View of the Corruption Interest III. THE PLAYING FIELD IS NOT FLAT: WILL PUBLIC FINANCING FADE AWAY? A. Davis v. FEC: Helping One Side Burdens the Other B. The Implications of Davis and WRTL II IV. LETTING THE MOLES GO: WRTL II AND DAVIS AS CAUSE FOR RELIEF CONCLUSION INTRODUCTION

It may be a cliche to observe that campaign finance reform has proved conclusively that the road to perdition is paved with good intentions and that unforeseen consequences plague the human condition. (1) Perhaps all areas of the law are, to a greater or lesser degree, evidence of these sad truths. (2) Nevertheless, our continuing quest for "clean" elections and cosmic justice in the realm of campaign finance brings to mind Albert Einstein's reflections on insanity: "doing the same thing over and over again and expecting different results." Remarking on the inability of years--actually decades--of reform to wring "excess" money out of the process, Chief Justice John Roberts declared that "[e]nough is enough." (3) Perhaps he is right.

Much of the problem with reform arises from constitutional stumbling blocks. Although the Supreme Court's guidance has been rather fluid, (4) the core of the problem has been the idea that there is a constitutional distinction between the regulation of expenditures and contributions. (5) Restrictions on the latter are often claimed to serve more directly the interest in avoiding the apparent or actual quid pro quo corruption that the Court has sometimes, (6) but not always, (7) claimed is the only justification for regulation. The Court has said restriction of the former more substantially impairs First Amendment values because it directly limits the message chosen by the speaker and his ability to disseminate it. (8)

By permitting virtually no restrictions on expenditures by a candidate (9) and relatively robust regulation of contributions to a candidate, (10) the Court's interpretation of the First Amendment has created the modern phenomenon of the self-funded millionaire politician for whom public office is a prerogative of family wealth or a nice coda to a successful business career. (11) In 1972, General Motors heir Stewart Mott financed an experienced public servant, George McGovern. (12) In 1992, H. Ross Perot and Steve Forbes ran for public office themselves.

There has been more room for regulation of expenditures on behalf of a candidate, (13) but statutory interpretation, (14) regulatory omissions, (15) and constitutional limitations (16) have left room for a brisk business in independent expenditures that, rather than promote a favored candidate, criticize the positions of his opponent. This structure has given us the current phenomenon of sepia-toned advertisements urging us to call Senator Foghorn and tell him to stop starving children (17) and destroying the Republic. Although negative campaigning is not a current phenomenon or the product of regulation, (18) the modern independent ad--attacking in the guise of attempting to persuade--is certainly encouraged by regulation and the desire to avoid its limitations. (19)

Regulatory responses have ensued, but money has proven to be difficult to tame. What cannot be done through contribution can be done with expenditure. Dollars that can no longer be given to a candidate are given to a political party. Money that cannot be contributed to a party is given to an independent organization. What cannot be done by a political committee is done by a 527 or 501(c)(4) organization. Dollars that can no longer be spent in one way simply flow to a new use. (20) At least one commentator (21) has likened campaign finance reform to a game of "Whac-A-Mole." (22)

For this reason, the white whale for many Captain Ahabs of the campaign finance reform movement has often been "effective public financing." (23) The current system of public financing for presidential elections has become largely irrelevant, (24) as the fundraising prowess of George W. Bush and Barack Obama far outstripped the amount of public funds available. Given the effectiveness of bundling (25) and of "microdonations" (26) raised over the Internet, accepting public funding (and its attendant limitations on campaign expenditures) would leave any publicly funded presidential campaign at a marked financial disadvantage. (27)

But the dream persists. Prominent organizations call for reform of the presidential system (28) and extension of public financing to legislative races. (29) A number of states still employ-or are currently seeking to adopt or reform--public financing of elections. (30) Often promoted under the rubric of "clean" or "fair" elections, these systems generally involve the provision of public funds to candidates who have raised some minimum amount or aggregate number of private contributions. (31) In return for public funds, a candidate agrees to restrictions on further private contributions and expenditures. The idea is to reduce the role of "Big Money"--or, for that matter, money in general--in elections.

Recognizing the constitutional limitations on reform, state public funding laws frequently provide "relief'--referred to by names such as "reserve funds" and "fair fight funds'--to publicly financed candidates running against a self-financed or privately financed candidate (32) whose spending has exceeded a trigger amount and to candidates who face independent expenditures directed against them. (33) This relief may include permitting the "disadvantaged" candidate to raise more money, providing matching state funds, or some combination of the two.

This Article argues that the game of reform, having been the victim of two major campaign finance decisions of the Roberts Court, is over. The Supreme Court's decision in Davis v. FEC (34) will prove to be fatal to most, if not all, asymmetrical public financing schemes, and the Court's treatment of expenditures for issue advocacy announced in FEC v. Wisconsin Right to Life (WRTL II) (35) will leave most forms of independent expenditures beyond effective limitation. The combination may render public financing systems--at least as a device to reduce substantially the influence of private money on elections--effectively futile.

Part I of this Article briefly reviews the evolution of the distinction between expenditures and contributions and the various rationales the Court has considered as potential justification for regulation. Part II considers the degree of constitutional protection now apparently enjoyed by independent expenditures for issue advocacy after the Court's decision in WRTL II. Part III addresses the impact of Davis on the attempts to restrict or blunt the impact of independent expenditures through asymmetrical public financing systems. Most such systems cannot be reconciled with Davis's suggestion that measures designed to "counter" the constitutionally protected speech of one side of a campaign are unconstitutional burdens upon that speech.

Part IV argues that this outcome is correct and suggests, in Chief Justice Roberts's words, that "enough is enough." Although regulation to avoid actual or potential corruption remains essential, the Court's recent decisions quite properly reject the restriction of speech in pursuit of "barometric" equality, that is, the notion that contending candidates and interests ought not to be able to deploy financial resources that are not proportionate to their public support ex ante. Rather than trust elected officials to superintend the electoral process in pursuit of some "pure" manifestation of democracy, it is better to allow broad public participation. We should understand that contending factions enjoy different electoral advantages and that allowing them to engage in relatively unfettered competition is preferable to management of the political process in a futile--and unavoidably self-interested--effort to eliminate unfair advantages. Happily, technological advances may have weakened the need for reform and validated the Madisonian approach to the influence of "special" interests advocated here.

1. SPEND IT YOURSELF: THE DISTINCTION BETWEEN EXPENDITURES AND CONTRIBUTIONS

   1. Origin of the Distinction

      Our problem begins with the seminal case of Buckley v. Valeo, (36) which considered a constitutional challenge to certain aspects of comprehensive federal campaign finance reform passed in the wake of Watergate. Buckley considered the 1974 amendments to the Federal Election Campaign Act of 1971 (FECA). (37) FECA contained a number of provisions, including limitations on contributions to a candidate and expenditures by or on behalf of a campaign.

      Buckley is a lengthy and complex decision addressing multiple statutory provisions. The judgment of the Court was expressed in a per curiam opinion, parts of which were joined by different groups of Justices. Full explication of the case is beyond the scope--and need--of this Article. (38) It is most important to note that the Court upheld certain limitations on contributions. (39) A limitation upon the amount that can be contributed to a candidate "entails only a marginal restriction" upon the contributor's expressive rights because a contribution communicates only general support for a candidate and his views and not "the underlying basis of that support." (40) Nor, the Court concluded in Buckley, does the quantity of communication "increase perceptibly with the size of the contribution." (41) Contribution limits, moreover, more readily serve the state interest in limiting "the actuality and appearance of corruption...