Campaign Finance Caps & Who Gets the Dog?

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2:09This is Bloomberg Law with June Grosso from Bloomberg Radio. The Supreme Court is considering a Republican-led effort to erase yet another campaign finance regulation. This time, the federal caps that limit how much political parties can spend in coordination with candidates for Congress. It's the latest in a line of cases where the conservative majority has upended congressionally enacted limits on raising and spending money to influence elections. And two hours of oral arguments showed the entrenched divisions between the liberal and conservative justices over campaign finance restrictions. Liberal Justice Sonia Sotomayor said that every time the court interferes, it makes matters worse.

3:01You're telling us that Citizens United and McCutcheon ended up, yes, in amplifying the voice of corporations, but diminishing another voice, that of the party. Now you want to now tinker some more and try to raise the voice of one party. our tinkering causes more harm than it does good. Because once we take off this coordinated expenditure limits, then what's left? What's left is nothing. No control whatsoever. While conservative Justice Brett Kavanaugh said that the spending limits have hurt political parties, in an era of unlimited spending by other organizations. That's the real source of the disadvantage, right?

3:56You can give huge money to the outside group, but you can't give huge money to the party, and so the parties are very much weakened compared to the outside groups. And Chief Justice John Roberts, a potentially pivotal vote, said that he didn't see much distinction between contribution limits, which the court has long upheld, and caps on coordinated expenditures. It seems to me that that's kind of a fiction, that they're just coordinating expenditures, they're not making direct contributions. I don't know in substance what the difference is. Doing away with the caps would overturn a quarter-century-old precedent.

4:35In a week when it appears that the court will also be overturning a 90-year-old precedent in a case involving President Trump's ability to fire the heads of independent agencies. Joining me is elections law expert Richard Brafald, a professor at Columbia Law School. Rich, will you start by explaining the federal caps on spending by political parties in coordination with candidates? So the Federal Election Campaign Act, going back to the 1970s, when it was enacted in the aftermath of Watergate places limits on donations to candidates. And it also places limits on donations to parties. It does something else.

5:16It places limits on how much parties can give to candidates on the theory that donors, once they max out on how much the donor can give directly to a candidate, would then just give to a party to channel the money to a candidate. So there's a limit on how much the parties can give to their candidates. And that comes up in two ways. One is a literal limit on contributions, actually writing a check. But the parties are also allowed to engage in their own spending in support of candidates. And that's called coordinated expenditures. In other words, the party does the spending. They don't give the candidate a check, but they do spending to promote the candidate.

5:52Parties are allowed to do that, but the law places a limit on how much money they can spend supporting candidates. And again, for the same idea that if there was no limit on how much they could support candidates through spending, once again, donors who once they max out on the direct donation to the candidate would then just give unlimited amounts or very big amounts to the parties. And the parties could then use that money to basically support their candidates. So that's what this limit on coordinated spending does. It's higher than the contribution limit. And it varies from state to state based on the population of the state.

6:29But parties are allowed to do this in a way that other organizations are not. PACs are not allowed to coordinate at all with candidates. So parties get this extra permission to support the candidates directly, but with a cap on it. And what's going on in this case is the National Republican Senate Campaign Committee and J.D. Vance, who when this case began was a senator and a congressman from Ohio, who I think has since retired, have all brought suit challenging this limit on the ability of parties to coordinate their spending with candidates. I should say almost 25 years ago, the Supreme Court upheld this limit in a case called Colorado Republican, decided in 2001.

7:09And the court said, yes, because of the danger of conduits, of parties serving as conduits for donor support. These limits make sense and are constitutional. What the Supreme Court is being asked basically now is to overturn that decision. The liberal justices had concerns and one that lifting the limits on party spending would lead to quid pro quo bribery. So wealthy donors could bypass the individual contribution limits by donating through parties instead. I mean, that is the major concern of the liberal justices and of the campaign finance reform community as a whole, is that this will put another hole in the campaign finance laws and make it easier for wealthy donors to channel money to candidates.

7:56There's still limits on their ability to give directly, but this would enable them to give through the parties. And so that money would still get to candidates. So, yeah, that is the core concern. A second concern is, depending on how the court writes this decision, it could be the green light for further challenges to other aspects of the campaign finance laws, depending on exactly how they write this. So it's both up front, making it easier to channel money from donors to candidates, and also yet one more case eroding Congress's ability to place limits on campaign money. What was your take on Justice Sotomayor telling Noel Francisco, the attorney for the Republicans here, that Elon Musk got his position at Doge through a quid pro quo?

8:42More speech is always better than less speech. You mean to suggest that the fact that one major donor to the current president, the most major donor to the current president, got a very lucrative job immediately upon election from the new administration does not give the appearance of a quick pro quo? Your Honor, I'm not 100 % sure about the example that you're looking at, but if I am familiar, if I think I know what you're talking about, I have a hard time thinking that his salary that he drew from the federal government was an effective quid pro quo bribery, which may be why nobody has even remotely suggested that.

9:28Maybe not the salary, but certainly the lucrative government contracts might be. I mean, I think it's fair to say that Elon Musk was by any stretch Trump's biggest supporter, the biggest financial supporter in the last election, somewhere in the neighborhood of$300 million. And I think that allowed him to ask Trump for special favors, including running Doge, which itself, you know, obviously he didn't get paid for running Doge, but it put him in a position to influence the personnel and the policies of a lot of agencies that have regulatory functions over a lot of his activities, whether it's the SEC or NASA or other organizations that can affect the industries and businesses that he has.

10:13The administration and the Republicans' argument centers on free speech rights, as these campaign finance cases since Citizens United have done. Tell us more about that argument. The essential argument is that this is a limit on the ability of parties to speak and that you don't need it. That the combination of disclosure laws, anti-bribery laws, and limits on literally earmarking, and that's the term that's used, a donation that a donor gives to a party to be used for a candidate, that that's enough. That those three things, banning bribes, requiring disclosure, and saying when a donor gives a party a donation, saying they can't literally say this is going to candidate so-and-so, that that's enough.

10:59And that to go beyond that is to constrain the ability of parties as free speech actors, as First Amendment actors, to participate in political process. What do you think? So it's hard to say that this is a big constraint. Parties are free to participate in the process. in a fairly controversial decision 30 years ago, the Supreme Court said that parties are capable of engaging in independent spending, that parties can promote their candidates just as long as they don't coordinate with them, just as long as they don't actually sit down with them and say, what do you want us to say? How do you want us to say it?

11:30What media do you want to use? So the court, you know, 30 years ago created this vehicle for unlimited party participation in elections. So It was hard to say that this is a big constraint. The defenders of the law argue that in practice, in coordinated spending, the parties actually don't do a lot of literal speechifying. They don't do a lot of actual advertising or promoting. But often what is being used is just to help the candidates pay their bills. So the candidate, you know, basically booked a block of hotels during a campaign swing or, you know, was paying for literature. or to the candidate's campaign director makes the commitment, buys the sub and then gives the party the bill and says, pay this.

12:12That's at least the argument that the defenders of the law were making, that in practice, coordinated expenditures are not parties getting out there and saying this is the party message, but they're de facto contributions to help the candidates defray the bills. That gets constitutional protection. It still enables candidates to campaign and there's a First Amendment interest. but it's hard to see that this is really squeezing the party's ability to have its own voice. Justice Brett Kavanaugh said, you can give huge money to the outside group, but you can't give huge money to the party. And so the parties are very much weakened compared to the outside group.

12:48Is he talking about PACs here, is that? Yes, he's talking about super PACs. And indeed, that is an argument that many people have raised who don't like this law, including people who like liberals or reformers who say, This law might have made some sense when it was first adopted, but given the proliferation of super PACs and other outside groups, we'd be better off if parties actually had a bigger voice, that parties can play a coordination function, that parties maybe can be a little less extreme than some outside groups, that parties have more of an interest in governance rather than being single issue.

13:20and that actually, if we could start all over, now that the outside groups have kind of unlimited voice, that anything that strengthens the parties is actually a good thing. And you see many people who are not conservatives who are taking that position, who are not First Amendment absolutists, but think that, in fact, the campaign finance system has gotten unbalanced, and it would actually be good to strengthen the role of parties, and this could do that. Coming up next, I'll continue this conversation with Professor Richard Brafalt. So how is the court likely to rule? I'm June Grosso, and you're listening to Bloomberg.

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17:15Restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank N.A., member FDIC. The Supreme Court this week weighed Republican calls for a fresh rollback of campaign finance regulations, questioning federal caps that limit spending by political parties in coordination with candidates. I've been talking to Columbia Law School Professor Richard Brafalt. So, Rich, the Chief Justice suggested that he didn't see much difference between the contribution limits, which the court has long upheld, and the caps on coordinated expenditures. Do you think there's a chance that the chief won't vote with the super conservatives on this to do away with the caps?

18:03Or there's a chance that it goes the other way and that once they begin to dismantle limits on coordinated expenditures, contribution limits are next. And there was an interesting point where some of the justices asked Mr. Francisco, who is the lawyer for the National Republican Senate Campaign Committee, well, what about that? What about limits on contributions. And he says, I don't want to get into that right now. I kind of want to reserve the right to challenge that down the road. And indeed, some of the liberal justices and the lawyer for people who are defending this law, which I should say is not the government.

18:34This is a federal statute, but the Trump administration will not defend it. In fact, they actually joined in the attack on it. So the statute was being defended by two lawyers. One was a lawyer appointed by the court to speak for the statute. In addition, the lawyer for the Democratic Party, for democratic organizations also was given permission to argue. And they both argued that basically this is the bait and switch that's been going on in campaign finance law for a long time. Someone says, well, given changes in the law, this particular restriction doesn't make any sense, so you should strike it down.

19:05And then they come along and say, well, now you struck down this one. The next restriction doesn't make any sense either, so strike that down. And there seems to be a kind of a salami tactic aspect to this. A number of the justices are very, very skeptical, more than skeptical about the constitutionality of the contribution restrictions. They don't have to decide that in this case, but the court has traditionally treated coordinated expenditures as the constitutional equivalent of contributions. If they're going to start protecting coordinated expenditures more, saying that they're more protected from limitation, it's not a big leap to say that that kind of thinking would also apply to the contribution restrictions.

19:40The Republicans are bringing this challenge to do away with the federal caps. So one assumes that they would benefit more than the Democrats who are fighting to keep the caps. But Justice Amy Coney Barrett asked the attorney for the Democrats which party would ultimately benefit from a ruling. If there isn't an imbalance in who this benefits, why would the DNC be here? And I believe that was the only question she asked. I think what Barrett was getting at is that the reason you're here, Elias, the Democrats are here, is for pure partisan reasons. That you have less of a merits basis for opposing this and more you're doing it because you think that this will help the Republicans.

20:26And if the first man requires it, it doesn't matter who's helped or not. I think there was also some sort of some effort to figure out why is it if this is about a restriction on parties? And in fact, why does one party want to strike it down and one party want to keep it? And does that mean that it operates unevenly across the parties? Not clear that it does. But if it operates unevenly, it suggests that you're opposing it for for partisan reasons rather than on a kind of a merits based. This is good for for democracy. There was also a standing argument that the attorney appointed to defend the law made.

21:03It centered on Vice President J.D. Vance, who was a Senate candidate when he originally brought the case. And the argument is that Vance no longer has a stake in the case, and so no standing, because he's no longer a candidate. And then there was a lot of discussion about, well, is he going to run for president? I don't think this standing argument is going anywhere, but it's interesting. So tell us about it. So Ramon Martinez was the man appointed by the court to defend the law when the government declined to do so. And he opened by saying, this case is a big deal. You know, anytime you're being asked to overturn a precedent that's 25 years old, you should be very hesitant.

21:43You should make sure that this is a case that's jurisdictionally sound. And he basically said it's not for two reasons. One, so this case was brought by some individuals, J.D. Vance and Congressman Chabot from Ohio, and also by the National Public and Senate Committee. With respect to the two individuals, one of them is actually retired and no longer in politics. So that gets it down to Vance. And Vance has pretty clearly said, I don't know if I'm running. Or more to the point, I don't currently have a plan to run. I mean, apparently he was recently quoted saying, I might run, I might not run.

22:16So Mr. Martinez's argument was, well, if that's the case, the case isn't right. We don't know if he's running. So there's no candidate here to bring it. And therefore, there's no plaintiff. He's not a good plaintiff because whether he's going to run is speculative. He doesn't clearly have a stake in this case. And then Martinius makes the point that the reason this case goes directly from the district court, this is done by a three-judge panel. There was an appeal within the Sixth Circuit. But the jurisdictional basis for this going to the Supreme Court is the federal campaign finance law gives sort of a special ability to go directly to the Supreme Court to cases that burden voters, certain other special groups, and the national party committees.

22:58And his argument is based on a much older Supreme Court case, the only national committees that get that right are the two top committees, the Republican National Committee and the Democratic National Committee. And he points out there was a decision in the Supreme Court back around 1980 that said that the Democratic Senate Campaign Committee couldn't take advantage of that law. And so his point is the NRSC, the National Republican Senate Campaign Committee, can't do it either. So he's basically making the argument that there's either no standing or a lack of jurisdiction. J.D. Vance could use that, but if he's not a candidate, he can't.

23:32So there were some back and forth on that, but it does seem unlikely that, well, you never know with the Supreme Court, but most of, almost all of the oral argument was really focused on the merits of the case. It doesn't seem as clear as in other cases, But can you tell where the justices are on this? Gorsuch didn't even ask a question. It's worth pointing out that in every single campaign finance case the court has taken since Chief Justice Roberts became chief justice and Justice Alito joined the court. The attack on campaign finance law has won. That's about eight cases. And turn it around, there's not been a single case that the Supreme Court has taken since 2005 on campaign finance law where the law was sustained.

24:15That's all I think I need to say about that. So the track record, the court hasn't upheld a campaign finance law, federal or state, since around 2003. OK, then. So then what would be the effect of getting rid of these federal caps? There are some predictions that it will completely reshape TV advertising for congressional races. I think that's unlikely. Honestly, I think the system that we have had for the last roughly 15 years since the emergence of super PACs in a big way around 2010, 2012, I don't know that it's going to change that much. I mean, I think right now many of these super PACs are candidate-specific super PACs, or they are super PACs that are already run by the parties.

25:02Some of the biggest super PACs are the four super PACs run by the Republican Senate and House and Democratic Senate and House leadership. If you look at the top 10 super PACs by dollars, certainly the Senate ones are always in the top 10. And I think the House ones often are, too. So I don't know that there's going to be a revolution in this. I mean, it's always hard to tell. And it may take a couple of election cycles till we fully see how it works out. But, you know, it's hard to tell. But I doubt there'll be a dramatic change. I think many wealthy individuals just as soon would run their money through PACs that they control through super PACs.

25:40And many candidates, I think, would continue to want to have a super PAC that works just for them. Many of our super PACs now are basically one candidate super PACs. On the other hand, some people do think that maybe it will change the balance and more money will run through the parties. And that could have some benefits in terms of giving the party committees a little more ability to kind of coordinate their candidates, not so much in the election, but in the government that follows. I think that the party committees will have a bit more influence, maybe holding their party delegations in Congress together a bit more.

26:15It seems to me lately, given partisan polarization in Congress, they tend to hold together pretty well right now. But it could be that at the margins, parties will be a little bit more unified in Congress. So if the court upholds the caps, would you be surprised fall off your chair surprised or that's interesting surprised? Probably fall off my chair. I mean, when the court upheld this law in 2001, it was a 5-4 vote then. And in terms of just the current majority of the Supreme Court, I guess I'm not sure Justice Barrett has written on a big campaign finance case. But all the others, the conservatives have, and they've been rather consistently skeptical of campaign finance.