Arizona Campaign Finance - Background

Litigation Backgrounder

 

The Dirty Truth about Arizona’s “Clean Elections” Act:

U.S. Supreme Court Asked to Strike Down Program that Discourages Free Speech, Puts Thumb on Scales for Government-Funded Political Candidates

 

The Issue in a Nutshell:

For a brief, funny video explaining how Arizona's "Clean Elections" scheme works,
visit: http://www.ij.org/AZCleanElectionsVideo

 

The Institute for Justice and the Goldwater Institute are asking the U.S. Supreme Court to strike a blow for free speech in two consolidated challenges to Arizona’s campaign finance restrictions.  IJ and Goldwater are challenging Arizona’s so-called “Clean Elections” Act, which puts a thumb on the scale in favor of publicly funded candidates in elections and creates enormous disincentives to speak for traditionally funded candidates (those who refuse government funds) and those who support them.  Arizona’s “Clean Elections Act” lavishes taxpayer-funded subsidies on government-funded candidates whenever independent groups or privately funded candidates spend more money than the government prefers to defeat them.  Nine states (including Arizona) and three large municipalities currently have similar systems in place and powerful special interest groups want to bring these laws to more states and the federal government.  The national fight over the constitutionality of these systems is now coming to a head and IJ’s and Goldwater's challenges to Arizona’s law are at the center of this fight.

These so-called “clean elections” systems replace traditional political campaigns—those funded by voluntary citizen donations—with a government-directed funding system funded by taxpayer dollars.  Worse yet, in Arizona, every time a privately funded candidate receives or spends more on political speech than an arbitrary government-set limit, the state sends a check to each government-funded opponent.  If a privately funded candidate faces more than one government-funded candidate, each of those candidates receives a check when the traditionally funded candidate raises or spends money to speak.  Likewise, independent expenditure groups—those that support a candidate but by law do not coordinate any activities with that candidate—also trigger government subsidies to their political and ideological opponents, but only when they speak out in opposition to government-funded candidates or in favor of privately funded candidates.  These laws have the obvious and intended effect of discouraging individuals and groups opposing government-funded candidates from speaking in the first place.  Arizona’s system is one of the nation’s most far-reaching government-funded elections systems and is the model for similar laws nationwide.

IJ and Goldwater asked the U.S. Supreme Court to review the cases of Arizona Freedom Club PAC v. Bennett and McComish v. Bennett because the Ninth U.S. Circuit Court of Appeals ignored U.S. Supreme Court precedent when it concluded that this law does not burden speech.  The Supreme Court accepted review of the case on November 29, 2010, and will hear argument on March 28, 2011.  The Court has already issued an order preventing the Ninth Circuit’s decision from going into effect while it decides whether to take the cases.

Although these cases raise questions that are vitally important to the right of Arizonans to speak freely about politics, they directly raise a larger national issue as well:  Does the First Amendment permit the government to drive private spending from our political campaigns by burdening the speech of independent groups and candidates who refuse to take government money?  Ultimately, the government funding of campaigns means government control over speech occurring in campaigns.  Under our Constitution, though, it is the public—not the government—that decides whose political message is worth supporting.

 

The Debate Over So-Called “Clean Elections”

Raising and spending money on political speech is a sign of a healthy democratic system. But for campaign finance “reformers,” spending money to speak about politics is a sign of a “problem with the system.” For at least 30 years, these activists have been working to limit the amount of speech in political campaigns, including pushing for laws that restrict who may donate to candidates, how much they can give, how much candidates may spend, and more. But because these anti-speech regulations have not completely stopped citizens from engaging in the political process by making donations to the candidate of their choice, these same activists are now calling for the government to take over how political campaigns are funded.[1] These public-funding schemes attempt to force out Americans’ traditional means of funding political campaigns—through voluntary, private support of candidates—and replace it with a system where campaigns are conducted with government subsidies and complex government restrictions

So-called “clean elections” systems are a particularly burdensome and punishing form of public funding. Currently, eight states and three municipalities have clean elections systems in place. Under these laws, the government gives additional funds to government-funded candidates when their privately funded opponents speak above an arbitrary government-set limit. Since the 1990s, there have been numerous constitutional challenges to these laws, but prior to 2008, most courts concluded that the First Amendment did not prevent the government from “leveling the playing field” among government and privately funded candidates.

That trend changed in 2008, however, when the U.S. Supreme Court decided Davis v. FEC. In that case, the Court struck down a federal law that attempted to “level the playing field” among candidates with differing levels of wealth. Then, in 2010 in another victory for free political speech, the Court held in Citizens United v. FEC that the government could not burden or limit the independent speech of a group supporting or opposing a candidate.

IJ's and Goldwater's challenges to Arizona clean elections law—Arizona Freedom Club PAC v. Bennett and McComish v. Bennett—ask two important questions that build off of both Davis and Citizens United. The first is whether Arizona may level the electoral playing field by doling out money to publicly financed candidates when their political opponents speak. The second is whether Arizona can indirectly limit independent groups’ speech by cutting a check to politicians they oppose when they speak out.

 

How Arizona’s Public-Funding Scheme Works

Arizona’s Citizens Clean Elections Act (the “Act”) was the result of efforts by national and local campaign finance reformer activists seeking to reduce the political speech and relative voices of business groups and others.[2] To that end, they devised a ballot initiative that became the Act. Their goal was to limit spending in campaigns and reduce the voices of those they believed spoke too much in Arizona elections. As a confidential internal memorandum circulated among the sponsors of the Act admitted: “Clean Elections is NOT about public funding. Its [sic] about spending limits, getting rid of special interests, and leveling the playing field.”[3]

The initiative passed by a single percentage point and the Act took effect in 2000.[4] It applies to statewide and state legislative offices. Under the Act, candidates who accept government funds must comply with a host of conditions. They must use only government funds,[5] are forbidden from accepting any monetary or in-kind donations from outside sources,[6] and may not spend their own money on their campaigns.

The Act, however, does not regulate only those candidates who accept public funds; it also imposes significant burdens on candidates who run traditional campaigns and do not accept public funds, as well as independent groups that want to speak out for and against candidates. The Act reduced Arizona’s already low limits on individual contributions to candidates, thereby making it extremely difficult for privately funded candidates to raise enough money to run competitive campaigns.[7] For instance, legislative candidates cannot accept contributions of more than $410 from any one source.[8]

Worse, the scheme chills the speech of privately funded candidates and independent groups by giving additional subsidies to government-funded candidates—up to two times the base amount—whenever independent groups spend, or privately funded candidates raise or spend, more than the amount the government initially provides to taxpayer-funded candidates.[9] These subsidies are nearly dollar for dollar, so if an independent expenditure group or privately funded candidate spends $10,000 above the spending limit, the government gives almost $10,000 to each government-funded candidate.

These additional subsidies, sometimes referred to as “matching” or “rescue” funds, seek to force independent groups and privately funded candidates to abide by the spending limits imposed on their government-funded opponents—or trigger even more money for their opponents. The government provides matching funds to all government funded candidates in a race. So, if there is one privately funded candidate and three government-funded candidates, one dollar used by an independent group to support the privately funded candidate results in the Arizona government giving nearly one dollar to each one of the privately funded candidate’s opponents. In other words, one dollar worth of speech results in nearly $3 in government funds to “match” it.

Under Arizona’s law, then, the harder an independent group or privately funded candidate works, the more their government-funded adversary benefits. Privately funded candidates who face government-funded opponents must also spend time and resources filing extensive reports so the government knows when to pay out matching funds—reports that government-financed candidates need not fill out.[10] And independent expenditure groups must report not just their activities, but also which candidates they are supporting or opposing.[11]

In short, Arizona’s law limits the speech of both government-funded candidates and privately funded candidates while significantly tilting the playing field toward candidates who run on public money. The Act makes it extremely difficult to run a traditional campaign against a government-funded opponent: Low contribution limits make it hard to raise funds, matching funds punish candidates who dare to speak more than Arizona election bureaucrats deem fit, and extensive reporting requirements force private candidates to use up precious time and resources that could be better spend on campaigning. Moreover, independent expenditure groups are also punished for speaking, but only when they speak out against government-funded candidates or in favor of privately funded candidates.

 

Burdening Speech of Independent Groups and Privately Funded Candidates

In Citizens United, the U.S. Supreme Court made clear that the government may not burden or suppress the speech of groups making independent expenditures because “independent expenditures … do not give rise to corruption or the appearance of corruption.”[12] But in Arizona, any time an independent group spends money on speech—such as a radio ad—to support a candidate running with private funds, that candidate’s government-funded opponent gets still more public money. Speaking out therefore triggers an outpouring of taxpayer dollars to the candidate that the independent group opposes. For independent expenditure groups, that means that they must take matching funds into account when deciding whether to speak about specific races.

The Arizona Free Enterprise Club’s Freedom Club PAC and the Arizona Taxpayer Action Committee, both political committees that support candidates who believe in private enterprise and low taxes, have delayed making independent expenditures in order to avoid triggering matching funds until later in the election cycle, when it may be too late for matching funds to reach the government-subsidized candidate the group opposes. Pressured by the Act, Arizona Taxpayers Action Committee specifically engaged in self-censorship in 2006 when it chose not to speak in opposition to a publicly financed candidate in a primary race to avoid matching funds.[13] Not surprisingly, groups like the Freedom Club PAC and Arizona Taxpayer Action Committee now think twice before supporting some candidates—and sometimes choose not to speak at all.[14]

But independent groups are not alone in feeling the effects of Arizona’s punitive system of publicly financed campaigns. The matching-funds provision also impacts the speech of privately funded candidates. Rick Murphy and Dean Martin have intentionally delayed and limited their fundraising activities in order to minimize the amount of equalization funds paid to their publicly funded opponents. In particular, Dean Martin has actively discouraged independent political groups from making independent expenditures that would trigger equalization funds to his government-funded opponents. When he ran for governor in 2010, he had to run as a government-funded candidate because the system is skewed so heavily against privately funded candidates. Also, Rick Murphy did not fundraise in the 2008 general election because he faced three government-funded opponents and would have triggered almost $3 in matching funds for every $1 he raised beyond the general election trigger amount.

 

The High Cost of Publicly Funded Elections

Recent research confirms the experience of IJ’s and Goldwater's clients that matching funds burden the political activity of both independent groups and candidates. University of Rochester political scientist David Primo analyzed campaign finance data from four Arizona election cycles and found that privately funded candidates at risk of triggering matching funds for their opponents raise and spend significantly more at the end of campaigns. This is because at the end of a campaign the government cannot “level” speech by directly financing a candidate’s political and ideological opponent. There is simply not enough time for Arizona to send funds to the publicly funded candidate before the election occurs.[15] In other words, to avoid triggering government handouts to their opponents, private candidates often delay raising and spending money on speech until as late as possible. Thus, matching funds mean that private candidates speak less earlier in the campaign than they might otherwise.

In a May 2010 study, the U.S. Government Accountability Office (“GAO”) interviewed candidates and independent groups who reaffirmed that independent groups and privately funded candidates delay raising and spending money on speech until late in the campaign to avoid triggering matching funds.[16] In addition, research by Cornell University political scientist Michael Miller demonstrated that these delays are now common practice in Arizona.[17] Every single candidate he surveyed said that privately supported candidates put off spending until the last minute to avoid helping the opposition with matching funds. As one privately funded candidate put it, “Every dollar I spend over the threshold starts feeding the alligator trying to eat me . . . . I sent out a lot less mail and held a lot less events than I would have but for my hands feeling like they were tied under this system.”

In upholding matching funds, the Ninth Circuit characterized these decisions as mere strategic choices that are insignificant to the First Amendment.[18] But the First Amendment guarantees that it is the individual, not the government, who decides whether—and when—to speak. Research and experience make clear the impossible choice independent groups and privately supported candidates face as a result of matching funds: Speak too much at the wrong time and trigger additional campaign money to opponents, or be quiet and avoid funding the opposition. Arizona has no right to punish independent groups and candidates for speaking “too much” or at the “wrong” time.

 

No Benefit from Publicly Funded Elections

These violations of Arizonans’ basic constitutional rights are even more apparent when weighed against the Act’s utter lack of success. The proponents of taxpayer-funded campaigns made grandiose promises about Arizona’s public-funding system, saying it would limit the “corrupting” nature of accepting voluntary donations, increase the competitiveness of elections, increase citizen participation, and improve representation for ordinary people.[19] However, a study examining Arizona’s law—and those like it in other states—suggests that government-funding systems actually have a negative impact on citizen perceptions of, and citizen participation in, government.[20] This is not surprising—half of Arizona voters have never heard of the Act and those that have had a difficult time understanding what it does.[21]

As attorney, former Assistant Professor of Law at George Mason University School of Law, and current Vice President of Policy for the Center for Competitive Politics Allison Hayward has noted, “There is little evidence that [Arizona’s] Clean Elections law has fulfilled its goals. Instead, it imposes real burdens on political speech and the ability to run for office. . . . Arizona’s Clean Elections system may actually harm the political process while imposing significant costs on the public.”[22] Moreover, in a comprehensive six-year review of Arizona’s system, Hayward’s analysis on behalf of the Goldwater Institute study found that since Arizona’s law went into effect, incumbency re-election rates remained near 100 percent.[23] The system has also had no measurable impact on voter turnout and the public-financing scheme “has not resulted in any increase in minor or third-party participation in politics.”[24]

The GAO recently confirmed these findings. In its report, the GAO found no statistically significant differences in contestedness (number of candidates per race), incumbent re-election rates, or increased voter choice. Moreover, the GAO found no evidence that the system reduced the influence of interest groups or enhanced confidence in government.[25]

 

Why Clean Elections Systems Are Unconstitutional

The U.S. Supreme Court has consistently said that governments may not limit how much money candidates and independent groups spend in political campaigns.[26] Therefore, to pass constitutional muster, a system like Arizona’s has to be truly voluntary[27] and Arizona’s expenditure and contribution limits cannot indirectly force candidates who refuse taxpayer dollars to limit their speech.

Concluding that a similar Minnesota law infringed “the most fundamental of rights,” the Eighth U.S. Circuit Court of Appeals struck down Minnesota’s system of paying “equalization” funds to candidates eligible for public subsidies whenever an independent group spent money to advocate the defeat of such candidates.[28] As the court said, “[B]y advocating a candidate’s defeat . . . via an independent expenditure, the individual, committee, or fund working for the candidate’s defeat instead has . . . given her the wherewithal to increase[] spending—merely by exercising a First Amendment right to make expenditures[.]”[29] The court found that the independent-expenditure match had a chilling effect on political speech.[30] The court explained its rationale:

The knowledge that a candidate who one does not want to be elected will have her spending limits increased and will receive a public subsidy equal to half the amount of the independent expenditure, as a direct result of that independent expenditure, chills the free exercise of that protected speech. This “self-censorship” that has occurred even before the state implements the statute’s mandates is no less a burden on speech that is susceptible to constitutional challenge than is direct government censorship.[31]

In contrast, the First,[32] Fourth[33] and Sixth[34] Circuits have all upheld public-financing laws in Maine, North Carolina and Kentucky, respectively, and specifically rejected the Eighth Circuit’s holding. In upholding Maine’s equalization scheme, the First Circuit wrongly claimed that “[t]he public funding system in no way limits the quantity of speech one can engage in or the amount of money one can spend in engaging in political speech, nor does it threaten censure or penalty for such expenditures.”[35] More bizarrely, the First Circuit upheld equalization payments in part based on the reasoning that people do not have a constitutional right to speak free from response.[36] But the court missed the point. People do not have a constitutional right to speak free from response—but they do have a right to speak freely without their speech trigging government funds to the very candidate whom they wish to see defeated.

After this string of decisions, it seemed like the courts would continue to let the government try to “level” political speech using punitive campaign finance systems. In 2008, however, the outlook for free speech became significantly brighter. In Davis v. FEC,[37] the U.S. Supreme Court struck down a portion of the McCain-Feingold law commonly called the “Millionaire’s Amendment.” As part of that law, the government limited how much individuals could give to federal candidates and how much political parties could spend on campaign activities coordinated with federal candidates. The Millionaire’s Amendment provided that these restrictions changed when a federal candidate’s opponent spent more than $350,000 of his own money on the race. Candidates facing a personally financed candidate then could accept individual contributions that were three times larger than before.[38]

The U.S. Supreme Court concluded that the Millionaire’s Amendment imposed “an unprecedented penalty” on any candidate who “robustly exercised” his First Amendment right to expend personal funds.[39] In other words, the Millionaire’s Amendment “require[d] a candidate to choose between the First Amendment right to engage in unfettered speech and subjection to discriminatory fundraising limitations.”[40] Even though candidates could choose to make large personal expenditures to support their campaigns, “they must shoulder a special and potentially significant burden if they make that choice.”[41] Notably, the Court cited to the Eighth Circuit’s decision for this proposition.

The Court also rejected the FEC’s justification for the law, namely that it “level[led] electoral opportunities for candidates of different personal wealth.”[42] This argument, the Court concluded, has “ominous implications because it would permit Congress to arrogate the voters’ authority to evaluate the strengths of candidates competing for office . . . . Leveling electoral opportunities means making and implementing judgments about which strengths should be permitted to contribute to the outcome of an election.” The Court concluded, “it is a dangerous business for Congress to use the election laws to influence voters’ choices.”[43]

Then, in 2010, the U.S. Supreme Court issued its decision in Citizens United, which held that the government could not burden the speech of groups making independent expenditures. The Court’s strong pronouncement that the federal government and the states should keep their hands off the political speech of independent groups called into serious question the constitutionality of clean elections systems. After all, in clean elections systems, the government attempts to “level” the speech of such groups by providing matching funds to their political and ideological opponents based solely on their exercise of free speech. If the speech of such groups cannot be burdened directly, there should be no reason the courts would allow the government to burden their speech indirectly.

Many commentators,[44] courts[45] and public officials[46] believed that Davis spelled the end of clean elections systems, with Citizens United putting the nail in the coffin for such systems’ regulation of independent expenditure groups. Matching-funds systems like Arizona’s are actually worse than the Millionaire’s Amendment. Under the Millionaire’s Amendment, a non-self-financing candidate still had to raise money for her campaign once the limit was raised. In clean elections systems, however, the government simply gives money to the publicly financed candidate based on the exercise of First Amendment rights by independent expenditure groups and privately financed candidates. Indeed, the constitutionality of such systems was so seriously doubted that pro-regulation members of Congress removed a matching-funds provision from a proposed federal public-funding system after the Court decided Davis.

All signs pointed to the end of clean elections after Davis. The Ninth U.S. Circuit Court of Appeals, however, had other thoughts.

 

The U.S. Supreme Court Should Strike Down Arizona's Clean Elections Act

Although it was clear that any court that applied Davis should conclude that matching funds were constitutionally impermissible, on May 21, 2010, the Ninth Circuit ruled the opposite way.[47] In a lengthy opinion, the court, while admitting that matching funds burdened political speech, upheld matching funds and rejected, as inapplicable, Davis, the case that so many had recognized as the end of matching funds and clean elections systems.[48] The Ninth Circuit also dismissed the burdens placed on independent expenditure groups and privately financed candidates as “metaphysical” because independent expenditure groups and privately financed candidates had not stopped speaking altogether, but only changed the timing and amount of their speech. In other words, because people had stood up to the attempted chilling of their speech, the Ninth Circuit ruled, the chilling could continue.[49]

The Ninth Circuit’s misapplication of the law was almost immediately rejected by other federal appeals courts. Two months after the Ninth Circuit issued its decision, the Second U.S. Circuit Court of Appeals held that matching funds are unconstitutional. In Green Party of Connecticut v. Garfield, the Second Circuit was faced with Connecticut’s matching funds law; a law modeled on and largely identical to Arizona’s. The Second Circuit held that, under Davis, matching-funds impose unjustified and substantial burdens on the exercise of First Amendment rights and are “clearly unconstitutional.”[50] The Institute for Justice, on behalf of its clients in the Arizona case, wrote a friend-of-the-court brief in support of the victorious Green Party. The Second Circuit completely rejected the Ninth Circuit’s contrary reasoning, saying succinctly, “[w]e are not persuaded by the Ninth Circuit’s opinion.”[51]

The Eleventh U.S. Circuit Court of Appeals also rejected the Ninth Circuit’s conclusion and held that matching funds are unconstitutional, not long after the Second Circuit. In Scott v. Roberts, the Eleventh Circuit held that, under Davis, Florida’s matching-funds law—which provides funds to candidates who participate in a public-funding program for their campaign to match the “excess” expenditures of non-participating candidates—unconstitutionally burdened the free speech rights of the non-participating candidates.[52]

Thus, there exists a split in the circuits regarding the constitutionality of matching funds and the existence of a circuit split is a significant reason for the Supreme Court to grant review in a case. The split between the Second and Eleventh Circuits on the one hand and Ninth Circuit on the other does not, however, affect elections only in the states in those circuits. At the time of the Ninth Circuit’s decision, three states—Maine,[53] Arizona[54] and Connecticut[55]— used public-funding systems with matching funds to fund all of their statewide and legislative political campaigns. At least six other states have public-funding systems with matching-fund mechanisms for certain offices: Florida (governor),[56] Hawaii (pilot program for county of Hawaii Council elections),[57] New Mexico (Public Regulation Commission and statewide judicial elections),[58] North Carolina (judicial elections),[59] West Virginia (judicial elections)[60] and Wisconsin (judicial elections).[61] Nebraska provides government subsidies to candidates for statewide and legislative offices who agree to abide by a spending limit to match the expenditures by those candidates’ opponents that the government deems excessive.[62] Still more states have considered enacting such systems, including New York, Illinois, Maryland, Washington and Wyoming.[63] In addition, in the cities of Tucson, Ariz.,[64] Portland, Ore.[65] and Albuquerque, N.M.,[66] municipal taxpayers are forced to fund citywide races. The idea has even caught on with some members of Congress; U.S. Senators Richard Durbin (D-IL) and Arlen Specter (D-PA) have introduced a taxpayer-funding scheme for federal elections, the “Fair Elections Now Act,” although the senators removed the matching-funds provision from later versions of this bill after the Supreme Court’s decision in Davis.[67] Moreover, anti-speech advocates continue to push clean elections proposals across the country, even in light of the decision in Davis.

Freedom Club PAC and McComish provide the U.S. Supreme Court with the most immediate and best chance to clarify whether these publicly funded “clean elections” schemes are constitutional. The Ninth Circuit—covering most of the western United States—has refused to give meaning to Davis’ protections. The Second Circuit—covering much of the Northeast—and the Eleventh Circuit—covering much of the Southeast—have accepted Davis’ meaning. Thus, Americans are now enjoying very different federal constitutional rights depending solely on where they live. Moreover, other courts, faced with the diametrically opposed decisions of the Second, Eleventh and Ninth Circuits will need the Supreme Court to provide a conclusive answer. The Court should stop these laws from suppressing even more political speech and stop these systems from spreading to other jurisdictions by striking down Arizona's Clean Elections Act as unconstitutional.

 

Fighting For Free Speech Since 2004

The journey to the Supreme Court has been a long one. The Institute for Justice first filed this constitutional challenge to Arizona’s elections scheme in 2004 in the U.S. District Court in Arizona, before the Honorable Earl Carroll. IJ initially represented then-Senator Martin as well as other privately funded candidates and a political action committee. The district court dismissed that lawsuit,[68] but IJ appealed to the Ninth Circuit and won the right to proceed with the case.[69]

Back in district court, Martin was joined in IJ’s challenge by two independent expenditure groups, Arizona Taxpayers Action Committee and the Freedom Club PAC. On August 21, 2008, John McComish, Nancy McClain, Tony Bouie and other privately funded candidates, represented by the Goldwater Institute, filed a separate challenge to matching funds in the U.S. District Court, before the Honorable Roslyn Silver. These plaintiffs likewise argued that the matching-funds provision of the Arizona Clean Elections Act violated the First Amendment. Judge Carroll refused to consolidate the two cases, however, so IJ’s clients intervened in the McComish case and voluntarily dismissed the case before Judge Carroll. Joining Martin and the independent groups seeking intervention were privately financed candidates Rick Murphy and Robert Burns.

On August 29, 2008, Judge Silver ruled that the “Matching Funds provision of the Act violates the First Amendment of the U.S. Constitution.”[70] Nevertheless, Judge Silver refused to grant a motion for a temporary restraining order because of on-going elections.[71] On October 17, 2008, Judge Silver found that the challengers had “shown a high likelihood of success on the merits,” but refused to enter a preliminary injunction that the court feared would interfere with ongoing elections.[72]

On January 20, 2010, Judge Silver again found that the matching-funds provision was unconstitutional because independent expenditure groups and privately financed candidates “face a choice very similar to that faced in Davis: either ‘abide by a limit on personal expenditures’ or face potentially serious negative consequences” of having their opponents be additionally funded by the government.[73] Judge Silver granted the challengers’ motions for summary judgment and enjoined the operation of the matching-funds provision. However, Judge Silver stayed the effect of the injunction for ten days to permit the state of Arizona to appeal. The state appealed both IJ and the Goldwater Institute’s cases to the Ninth U.S Circuit Court of Appeals, which consolidated the appeals. The Ninth Circuit extended the stay of the injunction and expedited the case.[74] As noted above, it then reversed the district court and held that matching funds do not burden free speech.

The Supreme Court, however, refused to let stand the Ninth Circuit’s rejection of Davis. On June 8, 2010, at the urging of both the Institute for Justice and the Goldwater Institute, the Court vacated the Ninth Circuit’s stay of the district court’s injunction and stayed the mandate of the Ninth Circuit “pending the timely filing and disposition of a petition for a writ of certiorari.” The Court ordered, in effect, that Judge Silver’s original injunction take effect and that matching funds in Arizona be stopped.[75] That ruling was an early sign of just how badly the Ninth Circuit erred in upholding Arizona’s unconstitutional system.

 

The Litigation Team

William R. Maurer, executive director of the Institute for Justice Washington Chapter, is the lead attorney in Arizona Freedom Club PAC v. Bennett. Maurer has won significant free speech victories before both the Ninth Circuit and the Washington Supreme Court. Timothy D. Keller, executive director of the Institute for Justice Arizona Chapter, and Paul V. Avelar, staff attorney for IJ-AZ, are assisting on the case.

Nick Dranias, the director of the Goldwater Institutes Center for Constitutional Government, is the lead attorney in McComish v. Bennett.

 

Reinforcing and Expanding Free Speech

The Institute for Justice litigates in support of fundamental individual liberties, including free speech. IJ’s headquarters and state chapters have challenged or are challenging restrictions on political speech across the nation, including:

 

  • SpeechNow.org v. Federal Election Commission[76] 

SpeechNow.org is a group of citizens who want to defend free speech at the ballot box by running ads that oppose candidates who do not support First Amendment rights. But under federal law, if the group spends more than a small amount of money on ads that call for the election or defeat of political candidates, it must register with the government as a political action committee or “PAC” and be subjected to a host of burdensome regulations before speaking. SpeechNow.org—represented by the Institute for Justice (IJ) and the Center for Competitive Politics (CCP)—filed its suit arguing that the campaign finance laws that apply to PACs could not constitutionally apply to a group that simply engages in independent political speech—speech that is not coordinated with any political candidates. In March 2010, the D.C. Circuit Court of Appeals issued a unanimous, nine-judge decision holding that SpeechNow.org could accept unlimited donations to fund its political ads. Unfortunately, the court also held that if SpeechNow.org chose to speak out it would have to register with the government as a PAC. On July 23, 2010, IJ and CCP appealed this case to the U.S. Supreme Court. 

  • Many Cultures, One Message v. Clements[77]

The Institute for Justice represents individuals who are challenging Washington’s “grassroots lobbying” law. Under that law, if you urge your fellow citizens to contact government officials and spend more than the state’s arbitrarily low ceiling (only $500 in one month or $1,000 in three months), the government forces you to register with it and report your name, address, business and occupation, as well as the names and addresses of anyone with whom you are working to spread your message. The state also demands to know the names and addresses of each person who contributes more than $25 to your efforts. Simply put: Even if you never talk to an elected official but spend as little as $500 merely to communicate with your neighbors and friends about state policies, you must register with, and provide information to, the government, which then proceeds to disseminate the information on the Internet. Failure to register can lead to an investigation, significant penalties (including treble damages, the costs of the investigation and the government’s attorney’s fees), and a revocation of the ability to engage in any political activity that might qualify as “grassroots lobbying.” 

  • Broward Coalition v. Browning[78]

In May of 2009, the Institute for Justice secured a federal court decision striking down Florida’s so-called “electioneering communications” law. That law made it illegal for any group to merely mention a candidate or ballot issue, let alone express an opinion, without registering with the state as an “electioneering communications organization.” Once registered, groups had to appoint a campaign treasurer, make regular reports, record expenditures and disclose all donors—even those whose contributions were not intended to support political speech. There were almost 100 possible violations of the law, and failure to comply could have led to fines and jail time. The time and money required to navigate this bureaucratic red tape was too much for many citizen groups and non-profits, leaving them no choice but to stay silent. That is why the Broward Coalition, University of Florida College Libertarians and National Taxpayers Union joined with IJ to challenge Florida’s law as a violation of First Amendment rights. In June 2009, the state of Florida declined to appeal the federal court’s ruling, marking a final victory for the nonprofit groups that challenged the law as a violation of First Amendment rights. 

  • San Juan County v. No New Gas Tax[79]

The Institute for Justice secured a unanimous opinion from the Washington Supreme Court halting efforts by the government to treat on-air radio commentary about an initiative campaign as “in-kind” contributions subject to regulation under state campaign finance laws.

  • Sampson v. Coffman[80]

The Institute for Justice is challenging Colorado’s campaign finance laws in federal court on behalf of six neighbors in Parker North, Colo., sued by political opponents for speaking out against the annexation of their neighborhood to a nearby town. This case demonstrates how complicated campaign finance laws are often used by political operatives to try to silence their opponents.

 

For More Information Contact:

John Kramer, Vice President for Communications
Institute for Justice
901 N. Glebe Road, Suite 900
Arlington, VA 22203

(703) 682-9320 ext. 205

jkramer@ij.org



[1] E.g., Testimony of David Arkush, Director, and Craig Holman, Ph.D., Government Affairs Lobbyist, Public Citizen’s Congress Watch Division in support of the Fair Elections Now Act (H.R. 1826), July 30, 2009, available at: http://www.citizen.org/Page.aspx?pid=2672; Testimony of Arn H. Pearson, Vice President for Programs, Common Cause, in support of the Fair Elections Now Act (H.R. 1826), July 30, 2009, available at: http://www.commoncause.org/atf/cf/%7Bfb3c17e2-cdd1-4df6-92be-bd4429893665%7D/PEARSONTESTIMONY_HR1826_7302009.PDF.

[2] Arizonans for Clean Elections, “Yeah But . . .” (The Most Asked Questions about Arizona’s Clean Money, Clean Elections Initiative).

[3] Confidential “State of the Campaign” Memorandum From Campaign Manager Josh Silver, April 6, 1998.

[4] http://www.azsos.gov/election/1998/General/Canvass1998GE.pdf at 15 (Proposition 200 barely passed with 51 percent of the vote).

[5] A.R.S. § 16-941.

[6] Id.

[7] A.R.S. § 16-941.

[8] Arizona Secretary of State Office, 2009-2010 Contribution Limits, available at: http://www.azsos.gov/election/2010/info/campaign_contribution_limits_2010.htm.

[9] The Legislature subsequently raised the initial subsidy amounts, in many instances nearly doubling the funding amounts originally adopted by voters. 2007 Ariz. Sess. Laws, Ch. 277, § 11 (amending A.R.S. § 16-961). These initial disbursements are also raised every two years for inflation. A.R.S. § 16-959.

[10] A.R.S. § 16-958.

[11] Id.

[12] Citizens United v. FEC, 130 S. Ct. 876, 909 (2010).

[13] Deposition of Chad Kirkpatrick (Jan. 30, 2009) at 73-75, 87.

[14] Id. at 73-75, 87; Deposition of Stephen James Voeller (Feb. 26, 2009) at 64.

[15] Expert Report of David M. Primo, Ph.D. in McComish v. Bennett, No. CV-08-1550-PHX-ROS (D. Ariz.), available at http://www.ij.org/images/pdf_folder/first_amendment/az_campaign_finance/expert-report-d_primo.pdf.

[16] General Accounting Office, Report to the Subcommittee on Financial Services and General Government, Committee on Appropriations, U.S. Senate, Campaign Finance Reform: Experiences of Two States That Offered Full Public Funding for Political Candidates, GAO-10-390 (“GAO-10-390”), at 80 (May, 2010), available at: http://www.gao.gov/new.items/d10390.pdf.

[17] Michael Miller, “Gaming Arizona: Public Money and Shifting Campaign Strategies.” PS: Political Science and Politics 41:527-532 (2008).

[18] McComish v. Bennett, No. 10-15165, Amended Slip Op. at 9164 (9th Cir. June 23, 2010).

[19] See generally Brennan Center for Justice, et al., Breaking Free with Fair Elections: A New Declaration of Independence for Congress (March 2007), available at www.brennancenter.org/dynamic/subpages/download_file_48611.pdf.

[20] David M. Primo and Jeffrey Milyo, Campaign Finance Laws and Political Efficacy: Evidence from the States, 5 Election L.J. 23, at 34-35 (2006).

[21] GAO-10-390 at 76, 101-02.

[22] Allison Hayward, Campaign Promises: A Six-Year Review of Arizona’s Experiment with Taxpayer-Financed Campaigns, Goldwater Institute Policy Report (March 28, 2006).

[23] Id.

[24] Id.

[25] GAO-10-390 at 34-82.

[26] Buckley v. Valeo, 424 U.S. 1 (1976); McConnell v. Fed. Election Comm’n., 540 U.S. 93 (2003).

[27] Vote Choice, Inc. v. DiStefano, 4 F.3d 26 (1st Cir. 1993) (upholding Rhode Island’s taxpayer financing scheme, but noting that voluntariness is an important judicial factor when reviewing campaign finance schemes for First Amendment violations).

[28] Day v. Holahan, 34 F.3d 1356, 1360-62 (8th Cir. 1994) (striking down Minnesota’s “equal funding” provision with regard to independent expenditures).

[29] Id. at 1359-60.

[30] Id. at 1360.

[31] Id.

[32] Daggett v. Comm’n on Governmental Ethics & Election Practices, 205 F.3d 445 (1st Cir. 2000) (upholding Maine’s scheme, which is substantively very similar to Arizona’s).

[33] N.C. Right to Life Comm. Fund for Indep. Political Expenditures v. Leake, 524 F.3d 427 (4th Cir. 2008) (upholding North Carolina’s scheme).

[34] Gable v. Patton, 142 F.3d 940 (6th Cir. 1998) (upholding Kentucky’s taxpayer financing scheme).

[35] Daggett, 205 F.3d at 464.

[36] Id.

[37] Davis v. FEC, 128 S. Ct. 2759 (2008).

[38] Id. at 2766.

[39] Id. at 2771.

[40] Id.

[41] Id. at 2772.

[42] Id. at 2773.

[43] Id. at 2773-74.

[44] E.g., Richard M. Esenberg, The Lonely Death of Public Campaign Financing, 33 Harv. J.L. & Pub. Pol’y 283, 289 (Winter 2010) (“The Supreme Court's decision in Davis v. FEC will prove to be fatal to most, if not all, asymmetrical public financing schemes . . . .” (internal footnote omitted)); Samuel Gedge, Comment, “Wholly Foreign to the First Amendment”: The Demise of Campaign Finance’s Equalizing Rationale in Davis v. Federal Election Commission, 128 S. Ct. 2759 (2008), 32 Harv. J.L. & Pub. Pol’y 1197, 1209 (Summer 2009) (“In contrast to the era of ever-expanding governmental authority to police political expression, Davis is a considerable victory in the recent effort to rein in unbridled regulation of campaign finance.”); E. Stewart Crosland, Note, Failed Rescue: Why Davis v. FEC Signals the End to Effective Clean Elections, 66 Wash & Lee L. Rev. 1265, 1314 (Summer, 2009) (“In Davis’s wake, however, these special benefits no longer function as a constitutionally viable response to one-sided spending and legislatures in Clean Elections jurisdictions must anticipate litigation seeking to invalidate their rescue funds provisions. And, they should expect the courts to rule in the challengers’ favor.); Richard Briffault, Davis v. FEC: The Roberts Court’s Continuing Attack on Campaign Finance Reform, 44 Tulsa L. Rev. 475, 476 (Spring, 2009) (Davis “calls into serious question the constitutionality of a provision in many state public funding laws that relaxes public funding spending limits or offers candidates additional public funds when they run against high-spending privately-funded opponents. . . .”); Emily C. Schuman, Developments in the Law: Election Law: Daivs v. Federal Election Commission: Muddying the Clean Money Landscape, 42 Loy. L.A. L. Rev. 737, 757 (Spring, 2009) (Davis “threatens the viability of current and future Clean Money public funding programs because it suggests that triggers are unconstitutional.”); The Supreme Court, 2007 Term-Leading Cases, 122 Harv. L. Rev. 375, 380-383 (Nov. 2008) (“In the wake of Davis, however, some commentators have read the Court’s broad language to suggest that asymmetrical public funding schemes are unconstitutional. . . . There have also been warnings in the popular press that Davis calls asymmetrical financing schemes into question.”).

[45] Green Party of Connecticut v. Garfield, 648 F. Supp. 2d 298, 373 (D. Conn. 2009) (“Arguably the benefit conferred by the CEP trigger provisions is more constitutionally objectionable than increasing an opponent's individual contribution limits. In the latter scenario, the opponent must still go out and raise the additional contributions; there is no guarantee that increasing contribution limits will actually result in increased contributions. The CEP, by contrast, ensures that there will be additional money to counteract the excess expenditures by the non-participating candidate, or the independent expenditures by the non-candidate or independent political advocacy group, because the participating candidate automatically receives additional funding. By making those expenditures, the non-participating candidate or advocacy group is guaranteed to see the participating candidate's funding increase. Therefore, following the reasoning set forth in Davis, the trigger provisions unquestionably burden the exercise of First Amendment rights.”).

[46] New Jersey’s non-partisan Office of Legislative Services also determined that the matching funds provision of that state’s law—there called “rescue funds”—was unconstitutional in light of Davis. See Letter from Albert Porroni, Executive Director & Legislative Counsel, New Jersey State Legislature Office of Legislative Services, to William Castner, Executive Director, New Jersey Assembly Democratic Office (July 21, 2008) (concluding that the “rescue money provisions [of “The 2009 New Jersey Fair and Clean Elections Pilot Project Act”]… violate the First Amendment,” and relying on Davis).

[47] McComish v. Bennett, No. 10-15165, Amended Slip Op. at 9139-69 (9th Cir. June 23, 2010). Judge Kleinfeld concurred in a separate opinion. Id. at 9169-74.

[48] Id. at 9159.

[49] Id. at 9169.

[50] Green Party of Conn. v. Garfield, Nos. 09-3760-cv, 09-3941-cv, Slip Op. at 49 (2d Cir. July 13, 2010).

[51] Id. at 49, n. 19.

[52] Scott v. Roberts, No. 10-13211, Slip Op. at 34-35 (11th Cir. July 30, 2010).

[53] An Act to Reform Campaign Finance, 1996 Me. Legis. Serv. Initiated Bill Ch. 5 (West) (codified at scattered sections of Me. Rev. Stat. Ann. tit. 21-A, §§ 1121-1128 (Supp. 2006)). This law has recently been challenged anew in federal court. Cushing v. McGee, No. 10-cv-0330 (D. Me. Aug. 8, 2010).

[54] Arizona Citizens Clean Elections Act, 1998 Ariz. Legis. Serv. Prop. 200 (West) (codified at Ariz. Rev. Stat. Ann., §§ 16-901.01, -940 to -961 (2006)).

[55] An Act Concerning Comprehensive Campaign Finance Reform for State-Wide Constitutional and General Assembly Offices, 2005 Conn. Pub. Acts 5 (Spec. Sess.) (codified as amended at Conn. Gen. Stat. §§ 9-600 to -674, 9-700 to -751 (Supp. 2007)). The Second Circuit struck the law’s matching funds provision down and the Connecticut Legislature has since amended it to conform to the court’s decision.

[56] Florida Election Campaign Financing Act, Fla. Laws 86-276, (codified at Florida Statutes §§ 106.30-106.36).

[57] Pilot Comprehensive Public Funding for Elections to the Hawaii County Council, 2008 Hawaii Act 244.

[58] Voter Action Act, 2007 N.M. Laws 1st Spec. Sess. Ch. 2 (H.B. 6) (West) (Public Regulation Commission provisions are codified at N.M. Stat. § 1-19A-10 (2003)). The judicial elections provisions took effect in 2008.

[59] North Carolina Judicial Campaign Reform Act, 2002 N.C. Sess. Laws 158 (codified as amended in scattered sections of N.C. Gen. Stat. ch. 163 (2005)).

[60] West Virginia Supreme Court of Appeals Public Campaign Financing Pilot Program, 2010 W. Va. Acts 72 (Codified at W. Va. Code § 3-12-1 et seq.) (pilot program for 2012).

[61] Wisconsin Impartial Justice Act, 2009 Wisconsin Sess. Laws 89 (codified in scattered sections of Wis. Stat. Ch. 8, 11, 20, 25, 71 (2010).

[62] Nebraska Campaign Finance Limitation Act, 1992 Neb. Laws 556 §§ 1-10 (codified as amended at Neb. Rev. Stat. §§ 32-1601-32-1613.

[63] http://www.publicampaign.org/pressroom/2006/05/22/while-congress-fiddles-and-washington-burns-states-take-action-to-clean-up-politics; http://en.wikipedia.org/wiki/Clean_Elections (“a pilot program adopted by the New Jersey state legislature in 2004 and applying in select legislative districts was abandoned by the legislature after the 2007 state elections”).

[64] Tucson, Ariz., Charter ch. XVI, Subchapter (B) § 5 (2003).

[65] Portland, Or., Municipal Code ch. 2.10 (2005).

[66] Albuquerque, N.M., Charter art. XVI (2004).

[67] S. 1285, 110th Cong. (2007); S. 752, 111th Cong. (2009); see alsoH.R. 1026, 111th Cong. (2009).

[68] Assoc. of Am. Physicians & Surgeons v. Brewer, 363 F. Supp. 2d 1197 (D. Ariz. 2005).

[69] Assoc. of Am. Physicians & Surgeons v. Brewer, 494 F.3d 1145, 1146 (9th Cir. 2007), amended by 497 F.3d 1056 (9th Cir. 2007).

[70] McComish v. Bennett, No. CV-08-1550-PHX-ROS (D. Ariz.), Order of Aug. 29, 2008 at 4-7.

[71] Id. at 9.

[72] Id., Order of Oct. 17, 2008 at 15, 18.

[73] Id., Order of Jan. 20, 2008 at 14.

[74] McComish v. Bennett, No. 10-15165 (9th Cir.), Order of Feb. 1, 2010 at 2.

[75] McComish v. Bennett, 09A1163, 560 U.S. ___ (June 8, 2010).

[76] See SpeechNow.org v. FEC, 599 F.3d 686 (D.C. Cir. 2010).

[77] See Many Cultures, One Message v. Clements, No. 10-cv-5253 (W.D. Wa.).

[78] See Broward Coalition of Condos. v. Browning, No. 08-cv-0445-SPM-WCS, 2009 U.S. Dist. LEXIS 43925 (N.D. Fla. May 22, 2009). 

[79] See San Juan County v. No New Gas Tax, 160 Wash. 2d 140, 157 P.3d 831 (2007).

[80] See Sampson v. Coffman, No. 06-cv-1858-RPM, 2008 U.S. Dist. LEXIS 70583 (D. Colo. Sept. 18, 2008).


Email Address
Please enter a valid email address
Share

Institute for Justice
901 N. Glebe Road, Suite 900
Arlington, VA 22203
Tel 703.682.9320, Fax 703.682.9321
© 1997-2014