Campaign Finance and the Supreme Court

7/17/2015

Overview

The 10th amendment to the U.S. Constitution preserves for the states all powers not explicitly delegated to the federal government.

This amendment provides the basis for states controlling the administration of elections, including regulation of campaign finance. Congress plays a role in election administration, and the Federal Election Commission (FEC) provides regulations in relation to federal candidates, but campaign finance regulation for state or local candidates is done at the state level.

Though states must foot the bill and institute provisions for elections and any campaign finance regulations, the federal government retains judicial review over these in the form of U.S. Supreme Court rulings. Binding for all 50 states, these decisions oftentimes force states to amend or completely change their election protocols. Each state is also subject to decisions from both local and federal courts.

This page provides an overview of some of the most important Supreme Court decisions dealing with campaign finance. For more information on the methods state use to regulate campaign finance, head back to the Campaign Finance Overview page

Buckley v. Valeo, 424 U.S. 1 (1976)

Significance: Contribution limits are constitutional, expenditure limits are not.

Summary: Any discussion of campaign finance-related Supreme Court decisions has to start with Buckley, which represents the court’s reaction to the passage of the Federal Election Campaign Act (FECA) in 1971. After Congress amended the FECA in 1974 to (1) limit and require disclosure of contributions, (2) limit expenditures, and (3) mandate participation in a publically financed presidential election program, both Republicans and Democrats filed suit claiming these provisions violated both First Amendment free speech protections and Fifth Amendment Due Process guarantees. The court agreed in part, striking down limits on expenditures, making public financing optional, upholding the FECA disclosure requirements, and allowing limits on contributions. These contribution limits were upheld because they act as a deterrent to quid pro quo corruption, where contributors to campaigns are given preferential treatment because of their financial assistance. Buckley established the principle that political money is speech, because “virtually every means of communicating ideas in today’s mass society require the expenditure of money.” After this case, many states implemented contribution limits in line with the federal limits outlined in the FECA, which would come under attack 24 years later in Nixon.

First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978)

Significance: States cannot prohibit corporations from contributing money to ballot proposals.

Summary: When Massachusetts legislators prohibited corporations from donating to ballot initiatives that did not directly affect their business, First National Bank and other corporations filed suit. Justice Powell wrote the decision, which allowed corporations to make contributions to ballot initiatives, because “the inherent worth of the speech in terms of its capacity for informing the public does not depend upon the identity of its source, whether corporation, association, union, or individual.” (776)

Citizens Against Rent Control v. City of Berkeley, 454 U.S. 290 (1981)

Significance: There can be no contribution limits to ballot initiatives.

Summary: A companion case to First National Bank, this case saw the Court decide that state governments have no compelling interest in limiting speech, including money, about ballot issues. Recognizing that contribution limits help to limit quid pro quo corruption, the court ruled that “[w]hatever may be the state interest . . . in regulating and limiting contributions to or expenditures of a candidate . . . there is no significant state or public interest in curtailing debate and discussion of a ballot measure.” As a result, the California law that set contribution limits on ballot initiative campaigns was invalidated.

Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990)

Significance: Corporations must keep a separate account from which they can make political contributions, usually by establishing a PAC.

Summary: A challenge to the Michigan Campaign Finance Act, which barred corporations from using money from their own treasury to make political contributions, came before the court. The court upheld the Michigan statute, because it was “precisely targeted to eliminate the distortion caused by corporate spending while also allowing corporations to express their political views.”

Nixon v. Shrink Missouri Government PAC, 528 U.S. 377 (2000)

Significance: States can also limit the amount of money that any one individual or group can contribute to a state campaign.

Summary: While the Buckley decision allowed the FEC to cap contributions at $1,000 to federal campaigns, the court remained silent about contributions to state campaigns until 1998, when Missouri legislators passed a statute setting the contribution limit for state campaigns at $1,075. Nixon, a candidate for statewide office in Missouri, challenged this statute, claiming it violated his freedom of speech and due process protections. The court disagreed, wary of the corruption “inherent in a regime of large individual financial contributions to candidates for public office.”

McConnell v. Federal Election Commission, 540 U.S. 93 (2003)

Significance: This case was the first to recognize the link between “soft money” and corruption.  

Summary: This case is the court’s reaction to the passage of the federal Bipartisan Campaign Reform Act (BCRA) of 2002. BCRA imposed bans on soft money (money contributed to political parties for purposes other than supporting or opposing a candidate, such as to run voter registration drives), and placed limits on advertising by corporations and PACs immediately preceding an election. Because “there is substantial evidence to support Congress’ determination that large soft-money contributions to national political parties give rise to corruption and the appearance of corruption,” this provision of the BCRA was upheld. Later, in Citizens United, the court overruled the portion of McConnell that allowed prohibitions on corporate indpendent expenditures. 

Randall v. Sorrell, 548 U.S. 230 (2006)

Significance: States cannot limit independent expenditures, and must ensure their contribution limits are high enough to enable the candidate to run an effective campaign.

Summary: Randall involved a Vermont law that limited independent expenditures and set the strictest contribution limits in the country (allowing a maximum contribution of $400 for a gubernatorial campaign). The court affirmed its position on independent expenditures, ruling they do not directly affect campaigns or candidates and must be allowed as free speech. The court also struck down the Vermont contribution limit as unconstitutionally low, as they “prevent candidates from amassing the resources necessary for effective campaign advocacy.” As a result, states now must not set their contribution limits so low as to make it difficult to run a campaign and all its related expenses.

Davis v. Federal Election Commission, 554 U.S. 724 (2008)

Significance: “Triggering” provisions found in many public financing statutes are unconstitutional.

Summary: Portions of the federal BCRA were challenged by a candidate for New York state senate, who believed disclosure requirements of the BCRA infringed upon the First Amendment. Electing to finance his own campaign, Davis was required by the BCRA to disclose just how much money he intended to spend on campaigning. When this number crossed certain thresholds, Davis’ opponent was allowed to receive contributions in excess of the state’s limits. The court held that this provision “impermissibly burdens his First Amendment right to spend his own money for campaign speech.” Davis’ campaign was essentially a series of independent expenditures, and thus could not be limited and cannot trigger an increase in contribution limits for his opponent.

The elimination of this provision led many states, including Arizona, to strip similar language from their public financing regulations, decreasing the attractiveness of these programs.

Citizens United v. Federal Election Commission, 558 U.S. 310 (2010)

Significance: States cannot place limits on the amount of money corporations, unions, or PACs use for electioneering communications, as long as the group does not directly align itself with a candidate.

Summary: The limits on advertising by corporations and PACs that helped frame the McConnell decision came into play again during the 2008 presidential campaign. When Citizens United tried to run ads critical of Senator Hillary Clinton close to the 2008 Democratic primary, it was barred from doing so by the BCRA. When brought to the Supreme Court, Justice Anthony Kennedy, on behalf of the majority, struck down provisions of the BCRA that prohibited corporations, unions, and PACs from making independent expenditures and election communications, as “the government may not suppress political speech on the basis of the speaker’s corporate identity.” After this (5-4) decision, corporations and unions can spend unlimited sums of money on ads and other communications designed to support or oppose a candidate. Corporations are still prohibited from contributing directly to federal candidates, but can contribute unlimited sums to organizations, such as Super PACs and 501(c)4s, that support or oppose a candidate (Speechnow.org v. FEC).

McCutcheon v. Federal Election Commission, 134 S.Ct. 1434 (2014)

Significance: States can place a limit on how much any individual or group contributes to any one campaign, but cannot impose aggregate limits on how much and individual or group contributes to all campaigns during an election cycle.

Summary: Another challenge to the Federal Election Campaign Act came in regard to aggregate contribution limits. While the FECA imposed a limit on how much individuals could contribute to any one candidate, individuals were able to donate to as many candidates as they pleased, provided they did not cross the aggregate threshold, set at $46,200 for the 2012 election cycle. Shaun McCutcheon challenged this limit as a violation of his freedom of speech. Chief Justice John Roberts and the majority agreed with McCutcheon, striking down the aggregate contribution limits. “Campaign finance restrictions that pursue other objectives [besides suppressing quid pro quo corruption] . . . impermissibly inject the government into the debate over who should govern.” The court ruled that there is not enough evidence that the ability to contribute to as many candidates as one pleases influences quid pro quo corruption in politics. In order to impose these kinds of limits, states must be able to prove the link between contributions and corruption, which remains an extremely difficult task. 

These cases represent some of the most important campaign finance cases heard by U.S. Supreme Court. It is important to remember that your state or jurisdiction must also adapt to decisions rendered by state and local courts. The FEC posts in-depth information about these and other important campaign finance cases at this link.

Additional Resources

About This NCSL Project

The content for this webpage was created by Brian Cruikshank from William and Mary Law School, in coordination with NCSL's staff. 

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