THE FEDERAL ELECTION CAMPAIGN-FINANCE PROBLEM

A Partial Remedy

William G. Grigsby

March2015

Professor Emeritus, City and Regional Planning, University of Pennsylvania emgrigsby@earthlink.net

Executive Summary

1. The foundation of America's representative democracy is the right of its citizens to

choose at the ballot box the persons whom they wish to govern them. It is prescribed in

Articles I and Il of the Constitution and expanded on in five different constitutional

amendments.

2. The residency requirement with respect to this right is strictly defined by each of the 50

individual states. In every state, in order to vote in a federal election, a person must be a

legal resident of the state or congressional district in which the election is being held.

3. In sharp contras4 the right to make campaign contributions in federal elections has no

residency requirement. People are free to make donations to any candidate for federal

office anywhere in the country regardless of where they themselves live.

4. This huge difference between the two sets of rules is striking because the right to make

campaign contributions is the child of [[the]] our right to vote; that is, without the right

to vote, campaign contributions would not even exist. Making residency requirements

for contributions the same as they are for voting would give recognition to this familial

relationship and in the process would bring some consistency to this area of election law.

5. Even more important than bringing consistency to one piece of election law,

prohibition of contributions by non-residents would enable states to have some assurance

that outside interest groups are unable, through campaign donations to members of the

states' Congressional delegations, to gain influence in the promotion of policies and

programs that are at odds with the states' own interests. By taking this step, states could

have some expectation that the persons whom their citizens elect to federal office would

more adequately represent them in Washington. The possibility of quid pro quo

corruption is not the issue here. It is simply one of proper representation of constituents.

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6. Prohibition on outside contributions would include contributions to the independent

expenditure campaigns of so-called Super PA Cs and 501 ( c )( 4) organiz.ations and also the

donations to political parties that are passed through to candidates.

7. Reflecting the difference between contributions and ordinary speech, prohibition

against outside contributions would not prevent outsiders from speaking out for or against

a candidate, either singly or in groups. They would, however, be required to appear

prominently in their electioneering ads, so that voters could adequately evaluate the

presentation.

8. The restriction would apply to Presidential as well as Congressional elections. Each

state primary would be treated as a separate election. In the general election in the Fall,

the selection in each state of representatives to the Electoral College would also be treated

as a separate election.

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Throughout the entire 225 year history of the United States, no one has questioned the

right of American citizens to financially support candidates for federal office anywhere in

the country. A resident of one state may contribute to the campaigns of candidates in the

other 49 states without limit This right is so much a part of the political fabric of the

United States that not only is it not questioned but to do so would likely be seen as simply

foolish. Over the years, there have been numerous attempts to regulate the dollar amount

of these donations, but not their geographic origins. The right of individuals and

organiz.ations to contribute wherever they please regardless of where they are domiciled

has been unchallenged.

In sharp contrast to the absence of geographic restrictions on campaign contributions

geographic restrictions on voting -- which has precisely the same purpose as campaign

contributions; i.e. to elect a favored individual to federal office -- [[is a right that is

strictly]] are shmply circumscribed [[with respect to residency]] by state laws. To be

eligible to vote in a particular federal election, an individual must be a legal resident of

the state or congressional district in which that election is being held. Voters cannot in

each election cycle choose the district in which they wish to cast their ballot, based on

their assessment of which electoral outcome they would most like to influence. Thus,

while the right to engage in "contribution-speech" is almost unlimited, the residency

restriction attached to its close companion, "voting-speech" is severely restricted.

As a consequence of the Supreme Court's sweeping 5-4 decisions in Citizens United v

Federal Election Commission, 130 S. Ct. 876 (2010), and McCutcheon v. Federal

Election Commission, 134 S. Ct. 1434 (2014), the chasm between contribution-speech

rights and voting-speech rights has become even wider. Throughout its Citizens United

opinion. the Court majority treats contributions as being virtually synonymous with

speech itself, reasoning that since contributions are usually absolutely essential if political

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speech is to be heard, they are the equivalent of speech and therefore that any constraint

on the size of a campaign contribution is an abridgement of speech itself in violation of

the First Amendment. So now, individuals may donate virtually as much as they wish.

In addition, in the Citizens United decision, the Court majority ruled that the contribution­

speech of organizations merits the same First Amendment protection as that of natural

persons. Again by contrast, voting-speech can be exercised only by natural persons and

only in the state or congressional district where they legally reside.

Not unexpectedly, in neither Citizens United nor McCutcheon did any questions

concerning the geographic origins of campaign contributions arise. Except for foreign

contributions, where donors legally reside has never been an issue. This is unfortunate

because there are at least two compelling reasons for greatly narrowing their First

Amendment protection in federal election campaigns to include only donors who are in

the state or congressional district where they wish to make a campaign contribution.

The first reason has to do with the origin of contributions-speech. It is the child of the

right to vote. Were voting-speech not a part of our political system, contributions-speech

would not even exist, much less be in need of First Amendment protection. This unique

provenance of contribution-speech as an outgrowth of voting-speech strongly argues for

contributions-speech not being more broadly protected than its progenitor.

First Amendment protection for campaign contributions, it should be emphasized, is to

enable candidates to be heard, not the donors. Potential donors do not need such

protection. They already have it in the language of the First Amendment regarding

speech generally. If prohibited from making a donation, they have the money to speak

out either individually or in groups, just as newspapers and other media outlets already

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do. They would be required only to make it abundantly clear in their ads who is doing the

speaking, so that voters would be fully aware of the out-of-state or out-of-district origins

of the ads and evaluate them accordingly. ((What about anonymous bloggers?))

The second reason, and an even more compelling one, for allowing only legal residents to

make campaign contributions can perhaps best be explained through reference to an

actual election campaign, that of Montana Senator Max Baucus in 2008. According to

reports filed with the Federal Election Commission by the Baucus campaign during the

Senator's re-election bid (well before Citizens United), the campaign received the bulk of

its more than $8 million in donations from out-of-state contributors. Among the most

prominent contributors were Big Pharma and the health care industry. It is unlikely that

these contributors were interested at all in the current and future well-being of Montana.

They were focused instead, as they should have been, on the financial well-being of their

stockholders. Indeed, many of them would have been hard pressed to pick out Montana

on a map. Their efforts were intended, nevertheless to help determine who would

represent Montana in the Senate for the next six years.

And their efforts no doubt made a difference, not only in the election outcome but also in

whose names appeared on the ballot. Even before the Baucus re-election campaign got

underway, the Senator's huge, largely out-of-state financed war chest certainly must have

deterred at least a few potential opponents from entering the primary race. So even the

candidates appearing on the ballot were no doubt determined in part by outside interests.

The most significant damage of unlimited contribution-speech to our representative

democracy occurs, however, after the votes have been counted. The outside donors who

have contributed large sums to various campaigns [[or who have threatened not to

contribute]] expect quite rightly to be well treated in return. Buying such access has not

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been viewed as quid pro quo corruption by the Court but rather has been described as the

very nature of politics: "Ingratiation and access ...... are not corruption .. " Citizens United,

558 U.S. at 360. Such arrangements are, indeed, the very essence of politics.

Although buying access may be acceptable if the donor is a constituent, when the access

is purchased by out-of-state funding sources, the political equation changes in an

important way. The interests of inside-the-state donors and those of outside donors will

come into conflict. Maybe not often, but certainly such occasions will inevitably arise.

And it is equally inevitable that on some of these occasions the contribution-speech of

non-residents who have paid for access will affect the vote of a member of Congress in a

way that is not in the interest of the member's constituents even though no quid pro quo

corruption is involved. An elected official may not consciously decide to be more

responsive to non-resident donors than to constituent non-donors, but it would be a

natural tendency to sometimes do so, and, therefore, at times unavoidable. Simply

banning contributions from outsiders would prevent this from happening.

Such a ban would lead to another much-to-be-desired change in federal election

campaigns. Members of the House and Senate complain about the huge amount of time

they must spend raising money to fund their election efforts. Time devoted to marketing

themselves to non-constituent donors is also time not spent with constituents. This

situation raises no constitutional issues, but it is one which some states may find to be not

in their interest to facilitate. Although a law prohibiting non-residents from making

campaign donations might not reduce the time that candidates spend raising money, it

would force them to engage more often and more intimately with their constituents.

And such a ban would not affect the actual speech qua speech of anyone, only the

contribution-speech of out-of-staters.

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In another context, the Supreme Court and Congress have already implicitly recogniz.ed

the danger to the American political community that is posed by not recognizing the

possibly conflicting interests between residents and non-residents when it comes to the

question of contribution-speech rights. Under current law (2 U.S.C. 441e) it is a crime

for non-U.S. citizens (other than those who are lawful permanent residents) to exercise

contribution-speech in federal elections, but it is not a crime for them to engage in other

types of political activity, including speech When a recent challenge to this law, Blumen

v. Federal Election Commission, 132 S. Ct. 1086 (2012), reached the Supreme Court in

2012, the Court affirmed per curiam the lower court's ruling that it is reasonable to

prohibit campaign contributions if such action is necessary to prevent persons not having

"a long-term stake in the flourishing of American society" from unduly influencing the

outcome of our elections. "Temporary resident foreign citizens by definition have

primary loyalty to other national political communities, many of which have interests that

compete with those of the United States." Blumen, 800 F. Supp. at 291. (See John Paul

Stevens, Six Amendments, New York, Little Brown, 2014, Chapter ID.)

It is true, of course, that American citizens, unlike foreigners, have an obvious long-term

stake in the country's future, but a large proportion of campaign contributions that move

across state lines are for the purpose of furthering the interests of the non-resident donors,

not either the national interest or the interests of the state in which the donation is made.

Thus, much more than an inconsistency in election law between voting rights and

contribution rights is at issue here. Pursuant to a carefully crafted plan by our Founding

Fathers for the governance of our country, the 13 sovereign states relinquished some of

their powers to the Federal government and retained -- through the Constitution - other

powers for themselves, including, most importantly, the right of their citizens to choose,

either directly or indirectly, whom they wish to represent their state in Congress and in

the selection of their President by the Electoral College. In order to retain this power,

states have a compelling interest in

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. .

The restriction would not apply to so-called issue ads that seek to promote ideas but not

candidates. The Sierra Club, the National Rifle Association, and other advocacy groups

could continue to promote their views however they wished short of actual electioneering.

The restriction would also put no limit on the size of contributions that residents of a state

or Congressional District can make to a candidate or to an independent expenditure

campaign in their state. Big donors, such as George Soros and the Koch brothers, would

still be kings of the hill, but only in their own states and congressional districts.

The restriction on contributions should apply not only to Congressional campaigns but

also to Presidential campaigns. These campaigns should be treated as a series of separate

state-wide contests, not a single national election. There are justifiable reasons for doing

so. Not only are Presidential primaries held sequentially, their participatory rules vary

widely across states, as do their rules regarding apportionment of national convention

delegates among winning and losing candidates and the instructions that delegates to the

national convention must follow. And although the general election in the Fall might

seem by contrast to be a truly national affair, it is not. Since Presidents are chosen in the

Electoral College by representatives from each state and the District of Columbia, not by

direct popular vote, the general election is really just an amalgamation of 51 separate

contests.

It is not necessary to wait for Congress to initiate legislation prohibiting non-residents

from making campaign contributions. Since states already prevent non-residents from

exercising voting-speech in their elections, surely they have the constitutional authority to

stop non-residents from exercising voting-speech's derivative right -- contribution-speech.

Any one of the SO states could be the first to do so. Prohibition of contribution-speech by

non-residents would obviously be only a partial solution to the total campaign finance

problem. However, all of the other proposed interventions that are being considered also

address only pieces of the problem and none has any likelihood of being enacted.

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(See "A Note On Other Campaign-Finance Reform Proposals" below.) Although placing

restrictions on whose contribution-speech merits First-Amendment protection is not a

total solution, it is a significant and easy first step that can be taken now.

A Note On Other Campaign Finance Reform Proposals.

The campaign finance reform that is proposed in this paper joins five other quite different

recommended remedies to the perceived problem of excessive influence over election

outcomes by wealthy, often unnamed, donors. In order to put my own proposal in

context, a brief description of the five companion approaches may be helpful. Such a

discussion is not included in the body of the paper lest it obscure the paper's principal

argument.

(a) More complete and timely disclosure of the names of campaign contributors is

fleshed out in detail in the Disclose Act which has been languishing in Congress, even

though the Court itself recommended such legislation in its Citizens United decision.

While greater transparency would be helpful, it would likely not alter campaign financing

practices very muc~ since a large proportion of the more generous contributions currently

come from individuals who do not bother to hide their identity.

(b) Partial public funding of political campaigns is the subject of several different

legislative proposals. However, like full disclosure, it does not seem to be very popular

in Congress, despite the fact that it appears to have been successfully implemented in a

few state and local jurisdictions. One barrier to its acceptance may be the large volume of

negative -- approaching repellent -- political advertising that ordinary citizens see so

frequently on TV. Being forced to directly or indirectly subsidize such speech would not

be widely appealing. Also, partial public funding of campaigns would not by itself touch

independent expenditure campaigns, and so would leave a major part of the problem

unaddressed.

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..

( c) A constitutional amendment ending First Amendment protection for the s,peech of

other than natural persons would reverse Citizens United Its intent, obviously, is to stifle

the perceived undue influence of the contribution-speech of corporations, unions, and

other organiz.ations in federal election campaigns. Various proposals for such an

amendment surfaced almost before the ink was dry on the Citizens United decision. If the

proposed amendment were enacted, it is unclear how much difference it would make. A

large proportion of the funds now received by candidates and independent expenditure

campaigns comes from individuals. And if First Amendment protection for the

contribution-speech of organiz.ations were terminated, much of the financial support from

these sources would likely be re-channeled through individuals.

(d) A constitutional amendment "granting Congress and the states the power to regulate

and set reasonable limits on the raising and mending of money by candidates and others

to influence elections": This amendment, based on former Justice Stevens'

recommendation in Six Amendments, cited earlier and just rejected in the Senate on a

party-line vote, takes direct aim at what most worries critics of Citizens United -- the

dominance in many campaigns of huge contributions by a few wealthy interests. Even

though one might think that members of Congress would be delighted to have restored to

them a right that Citizens United took away, this is clearly not the case. Whether this

re-instated power would have achieved its intended purpose is somewhat doubtful.

Campaign finance excesses were prevalent well before Citizens United, the disturbingly

large amount of outside funding in the Baucus campaign being but one example. And

these excesses occurred after the passage of the laboriously designed McCain-Feingold

bill which was supposed to end campaign finance excesses.

( e) Complete non-disclosure of the sources of campaign contributions so that not only

the public but also the candidates would not know who was contributing to whom. This

approach to campaign finance reform, first proposed over a decade ago, would seem to be

the perfect answer to the underlying concern over the undue influence of big-money

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donors in politics. Political preferences could be freely expressed through contributions

without concomitantly creating a potential quid pro quo situation between donor and

recipient. However, when the idea was tried in a local election in Florida, contributions

dried up. (Lawrence Lessig, Republic. Lost, New York: Hatchette Book Group, 2011, p.

262) Without the possibility of a quo, there was no quid to be had.

What one can conclude from this brief review is that all of the proposed interventions

would be helpful but none by itself would solve the problem it seeks to address More

important, after over four years of effort by many different dedicated groups to overturn,

as it were, the perceived adverse consequences of Citizens United, none of the proposed

reforms has gained traction in Congress or seems likely to do so.

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