Steve Simpson on McCutcheon vs. FEC

Jun 2, 2014 by

An Interview with Steve Simpson on McCutcheon vs. FEC

Michael F. Shaughnessy

1) Steve- first of all, tell us about yourself- who you are, what you do, and how you got involved in this?

I’m the Director of Legal Studies at the Ayn Rand Institute in Irvine, California, where I write and speak about legal issues from the perspective of Ayn Rand’s philosophy of Objectivism. I’m a lawyer by training and worked as a litigator for about 20 years before coming to ARI last October. Before coming here, I worked at the Institute for Justice in Arlington, VA for 12 years as a constitutional lawyer specializing in freedom of speech and campaign finance, among other things. You can read more about ARI and me at ari.aynrand.org/experts/Steve-Simpson.

2) Now McCutcheon vs. FEC— Who is this McCutcheon and what is the FEC?

Shaun McCutcheon is an Alabama businessman who is active in Republican politics. “FEC” stands for “Federal Election Commission,” which is the federal agency that oversees and enforces the campaign finance laws that apply to people running for federal office (as opposed to state offices, which are covered by state campaign finance laws).

Like many other activists, McCutcheon donates to the campaigns of politicians he supports. A couple years ago, he decided he wanted to donate to a lot of politicians, which federal campaign finance laws prohibit through what are known as “aggregate” contribution limits. Most people know that the campaign finance laws limit the amount anyone can give to a single politician. The current limit is $2600. But before the McCutcheon case came along, few people knew that the law also limits the total amount you can give to all candidates and political committees. The laws are complicated, but the bottom line is that you can’t give more than about $123,000 in any two year period to all candidates and political committees. The effect of the law is to limit the total number of candidates and committees to which you can contribute. McCutcheon wanted to give $1776 to 12 more candidates than the law allowed. (The amount is not a coincidence; he was trying to make a point.) His question for the Supreme Court was simple: If I can give within the limits to, say, the first 20 candidates, why can’t I give the same amount to the 21st one?

The Supreme Court’s response was fairly straightforward as well: The First Amendment protects the right to support candidates, so the limit is unconstitutional. Chief Justice Roberts, who wrote the decision for the Court, put the point this way: “The government may no more restrict how many candidates or causes a donor may support than it may tell a newspaper how many candidates it may endorse.”

3) I suspect most readers know the First Amendment-but give us a backdrop and overview vis-à-vis this case.

It’s always useful to remind people of the actual language of the First Amendment, so let’s start there: “Congress shall make no law . . . abridging the freedom of speech, or of the press.”

Campaign finance laws limit the amount of money anyone can donate to a candidate’s campaign. Why would that abridge anyone’s right to free speech? Consider that the purpose of a campaign is to convince people to vote for one candidate and against others. Campaigns do that ultimately by producing a lot of speech-typically in the form of advertisements, speeches, signs, TV appearances and the like-and to do that requires a lot of money. If you limit the money, you necessarily limit the speech.

You often hear the claim that “money isn’t speech,” which is literally true, but beside the point. It’s also true that computers, printing presses, paper and pens are not speech, but preventing people from using them would be just as much a restriction on the right to speech as telling someone they can only devote 1000 words to expressing their views.

So, the money-speech connection is simple logic. It’s an application of the broader principle, which the Supreme Court has recognized for decades, that limiting someone’s ability to get their message out-by taxing newsprint, say, or telling them they cannot form groups and associations-restricts their right to free speech. So, campaign finance laws limit free speech in two ways: by limiting what you can spend on speech and by limiting your ability to associate with and support candidates. In McCutcheon, as Justice Roberts pointed out, the law limited the number of candidates someone can support.

That’s not the end of the analysis, though, because the Supreme Court has long held that the government can restrict the right to free speech for a “compelling enough” reason. This is a very troubling standard, because it requires the courts to try to balance the individual’s right to free speech against the government’s “interest” in limiting it, which is ultimately arbitrary. We can see how a standard like this works in practice by looking at the last 40 years of campaign finance decisions, which have been a battle among the justices on the Court over whether the government has come up with a “compelling” enough reason for limiting speech in this area.

The primary argument for the laws is that large campaign contributions “corrupt” the government. Thankfully, in recent years the five conservative justices have viewed that argument with great skepticism. Their view, in essence, is that trying to influence politicians cannot be considered “corruption” in a nation with a representative form of government. Supporting a campaign is one way to try to ensure that your representatives actually “represent” your views.

In this case, Justice Roberts made an even simpler point: if making a contribution within the limits to one candidate isn’t “corrupting”-which, by definition, it isn’t-then giving the same amount to many different candidates can’t be “corrupting” either.

4) We often hear people claim that too much campaign spending is “bad for democracy.” What do they mean and is there anything to that idea?

To answer this question, we need to be clear about what we mean by “democracy.” It’s important, because one reason a lot of people think campaign spending should be regulated is that they are confused about the nature of government in this country.

Some people use “democracy” to mean the same thing as freedom-that is, a nation in which the power of government is limited and individual rights are protected. Under that meaning, there can’t be anything “bad” about spending money to express your opinions and support candidates. Freedom means you have the right to act according to your judgment in pursuing your goals, so long as you don’t violate the rights of others. So you don’t have the right to commit fraud or libel, for example, or to bribe officials, but if you don’t do those things when you speak, you can say what you want and support candidates to your heart’s content.

But that’s not the real meaning of “democracy.” It doesn’t mean freedom, it means majority rule. And that’s how many people use it today, including those who support campaign finance laws. Under this view, the majority’s power is effectively unlimited and they get to have whatever laws they vote for.

Most people who think America is, or should be, a true democracy rather than a constitutionally-limited republic support campaign finance laws on the grounds that no one should have a greater say in what government does than anyone else. If “the people” are supposed to rule, they say, then it is unfair for any one person to have more influence over what government does than anyone else. The principle of democracy is “one man, one vote,” they point out. But allowing some to exert more influence than others effectively gives them more than one vote. That “corrupts” the system, they claim. If you accept this argument, then campaign finance laws make sense, because their purpose is to prevent anyone from having “too much” influence.

The point is this: Don’t confuse freedom with democracy. Democracy means the majority gets to impose its views on everyone through the force of law. Freedom means the government is limited to protecting individual rights. Free speech flourishes under freedom, because respecting people’s rights means respecting their right to live according to their own judgment. In a democracy, though, free speech lasts only as long as the majority tolerates it. If we leave campaign finance laws on the books, that won’t be long.

5) Let’s talk about people contributing money to a candidate (let’s pick on Bill Gates) and then corporations contributing money and then unions contributing money-what are the good and bad perspectives on these three contributions?

Currently, only individuals can contribute to candidates. So Bill Gates and anyone else can give $2600 to any one candidate and varying amounts to different committees depending on their type. Because of McCutcheon, there are no more aggregate limits. But corporations and unions are not allowed to contribute money directly to candidates or committees that contribute to candidates, although they can spend their own money on political ads and give money to groups that only spend money on ads. The Supreme Court’s Citizens United decision freed them to do that.

In my view, corporations and unions should be able to contribute to candidates the way individuals do. Corporations and unions are associations-that is, they are groups of individuals organized for a particular purpose. Whether they decide to spend the money they’ve earned or pooled for political speech is up to the individuals in the group. So long as no one is forced to join and they follow whatever internal procedures they’ve agreed upon for making decisions, then they should be free to spend their money for whatever legal purpose they want.

You often hear the claim that if rich people, corporations, or unions are allowed to contribute freely to candidates or spend money on their own political speech, then they will be able to “buy” elections. But that’s not at all true. The money either given to candidates for their campaigns or spent by individuals or groups goes to buy speech-meaning it seeks to persuade voters to vote one way or another-it does not buy anyone’s votes. At the root of the complaints about money in elections is the view that voters cannot make up their own minds in the face of all that political advertising, which is nonsense. Whether you like the outcome of elections or not, the fact is that voters ultimately decide to vote the way they do. In a free society, each of us must have the right to try to convince people to adopt different ideas or to vote a different way. That’s what all that money in elections seeks to do, and those who oppose it are ultimately opposing the idea that people are and should be free to make their own decisions.

None of this is to say that I agree with the decisions voters often make. The point is that they are able to make those decisions freely. If I don’t agree, I have the right to convince them to choose differently. That’s what the right to free speech protects-the right to try to persuade people to adopt different ideas. Money certainly helps to get our message out, but it does not win the debate. There are too many examples of big spending candidates-Meg Whitman and Jon Corzine come to mind-who lost elections for that to be debatable anymore. Money is necessary for any candidate to be a contender, but to win, they need to convince the voters to vote for them.

6) Now, let’s talk about payoffs and kickbacks–is there any proof that favors are given to large contributors ? (If that were so, I would like to be ambassador to England-How much would it take?)

To my knowledge, there’s no evidence that campaign contributions lead to political favors in any general or systematic sense. This has been researched and debated for decades, and supporters of campaign finance laws have never shown, as far as I know, that contributions lead to what’s known as “quid pro quo” corruption-that is, contributions for special favors.

But those who think contributions lead to special favors for contributors aren’t crazy, so it’s worth examining the issue in more detail. Let’s ask a different question: Why do people want to influence elections and politicians?

The answer is that government influences people. Government limits our freedom to produce, to earn money, to run businesses and to live our lives in myriad ways. Government controls so much of what we do today that it would be crazy not to try to influence it to try to preserve our freedom-by, for example, trying to influence elections and politicians.

Consider the businessman who faces a growing regulatory burden. The difference between two types of regulation can mean billions in revenue and sometimes the difference between staying in business and bankruptcy. Is he supposed to sit idly by and refuse to try to influence how those regulations are written or whether they are passed?

Or consider the taxpayer who sees politicians clamoring for more and more of his hard-earned income. Is he supposed to stay out of politics for fear of receiving “favors” in the form of lower taxes in exchange for his campaign contributions?

The problem, in short, is not that there is too much money in politics, it’s that politics controls too much money, property, business, and personal freedom. Eliminate government’s power to hand out benefits and burdens and you eliminate the incentive to try to influence it. I believe in a free society in which government has one essential purpose: protecting rights. That means preventing people from using force against each other-for example, by preventing crime and protecting people’s rights to life, liberty, property, and the pursuit of happiness. If that were all government did, it wouldn’t be able to redistribute income, hand out corporate welfare, or impose anti-competitive regulations on business, so there would be no point in trying to influence it the way people do today.

Obviously, this is a radical approach to government that Americans are not going to adopt anytime soon. But if we don’t understand why people try to influence government, we will end up focusing on a symptom while ignoring the cause, and we will end up restricting free speech in the process.

The cause of all the efforts to influence government-whether it comes in the form of campaign contributions, lobbying, or something else-is our lack of any principled limits on government power. The real limit on what government does today is majority will.

Each election season, candidates practically fall all over themselves inviting voters to vote for them in exchange for all sorts of benefits, whether it is welfare for the poor, welfare for corporations, subsidies for this or that preferred business, bailouts for certain businesses, bailouts for foreclosed homeowners, or protectionist laws. The list goes on and on.

How can we say that it is proper for politicians to offer all of these benefits and burdens in exchange for votes, but the moment any pressure group seeks the same benefits in exchange for campaign contributions, that is somehow corrupt?

This isn’t to defend all of this behavior. All of it is regrettable, because it is a tremendous waste of effort, time, and money, but much of it is necessary and defensible. I take the same approach to judging efforts to influence politics through lobbying and campaigning that I take to free speech: it all has to be legal, but that doesn’t make it ethical. Just as you have the legal right to advocate stupid, destructive, and crazy ideas, you also have the legal right to try to convince politicians to redistribute income or pass protectionist laws, but sensible people should criticize you for that. But there’s nothing at all wrong with trying to influence politics in order to lower taxes and spending, decrease regulations, and promote freedom.

People use the term “cronyism” a lot today, but they typically don’t distinguish between ethical efforts to influence government and unethical ones. That’s unjust, so let’s try to set the record straight. Cronyism, which is obviously a negative term, should only be used to refer to those who are trying to convince government to use the power of law-which ultimately means force-to achieve something they could never do without government. They can’t take the income of others or ruin someone else’s business directly, so they try to convince their “cronies” in government to do it for them. Ethical influence essentially amounts to a form of self-defense against the increasing restrictions on freedom that government imposes. It’s a businessman trying to convince politicians not to regulate his business or a taxpayer urging them not to tax away even more of his income or an advocacy group urging government to change these destructive policies across the board.

Many of the people who are widely criticized for allegedly “corrupting” politics today-the Koch brothers come to mind-are trying to influence government in a positive direction. They are actually opposing the political system that leads to cronyism, and I applaud them for it.

7) A bit of history-what has been going on in terms of past Supreme Court decisions?

Here’s the thumbnail sketch of the last four decades of campaign finance law.

The modern federal law, the Federal Election Campaign Act, was passed in the early 1970s. It limited both the amounts you could give to candidates and the amounts you or candidates could spend to get elected. In 1976, the Supreme Court struck down spending limits as a direct limit on speech, but it upheld contribution limits as a minor restriction that was necessary to help eliminate “corruption.”

The Court did not define “corruption” carefully, however, so for the next three decades the Supreme Court and the lower courts were at the center of a struggle to define the term broadly, and thus allow more regulation of campaign financing, or narrowly and allow less. If you think “corruption” means bribery-that is, paying an official to abuse his power, then the campaign finance laws are superfluous, because we already have bribery laws on the books. If you define corruption broadly to mean anyone who influences a candidate or an election “too much”-which is how the supporters of campaign finance laws tend to define it-then the laws will expand to restrict more and more political spending and thus more and more speech.

To understand why the laws expand under a broad definition of corruption, consider how easy it is to try to influence elections or candidates despite the campaign finance laws. If the law limits the amount you can give to a candidate, you just spend that money on your own by, for example, paying for your own ads supporting the candidate. If restricting influence-either influence over the voters or the candidates-is the goal, then you have to restrict those ads as well, along with anything a person might do to try to get a candidate elected.

The high-water mark for regulation came in 2003, when the Supreme Court upheld the Bipartisan Campaign Reform Act, otherwise known as McCain-Feingold for its sponsors. The law imposes all sorts of regulations on candidates and political parties and prohibited certain groups from spending any money on ads that mentioned a candidate near an election. When John Roberts took the helm as Chief Justice, the Court became more sympathetic to free speech and began to limit the government’s power in this area. The big case, of course, was Citizens United in 2010, which struck down the McCain-Feingold limits on corporate and union advertisements that support or oppose candidates. After that, the Court struck down a law that pertained to tax-payer funded campaigns and then the aggregate limits in McCutcheon.

So, the recent trend is toward greater protections for free speech. But that could change if the composition of the Court changes.

8) Now- are corporations that contribute money people or entities and what has the Supreme Court said in this regard?

You often hear that corporations are not “people.” Like the “money is not speech” argument, this one is technically true, but irrelevant. Yes, corporations are not “people;” they are groups of people. If we take the right to association seriously, corporations and any other groups must have the same speech rights as individuals.

And that is, in essence, what the Supreme Court held in Citizens United. The Court has held for over 50 years that the First Amendment protects not only the individual’s right to speak, but his right to join with others to make his efforts to speak more effective. There is no good reason to treat corporations any differently from any other group.

9) What have I neglected to ask?

I think we’ve covered the issue pretty thoroughly. Thanks!

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