High Court Backs U.S. `Soft Money' Ban, Rejecting Republicans

The U.S. Supreme Court rejected a Republican challenge to the centerpiece of the 2002 campaign finance overhaul, upholding the law’s ban on unregulated “soft money” contributions to political parties.

Five months after striking down federal limits on corporate campaign spending, the justices rebuffed free-speech arguments against separate contribution restrictions that apply to businesses, unions and individuals. The court issued no opinion, instead summarily upholding a lower court ruling.

The decision marks a rare Supreme Court victory for supporters of campaign spending regulations. Although Justices Antonin Scalia, Clarence Thomas and Anthony Kennedy said they would have scheduled arguments, they were unable to persuade the two swing justices on campaign finance questions -- Chief Justice John Roberts and Justice Samuel Alito -- to join them.

“The soft money ban lives for another election,” said Rick Hasen, an election-law professor at Loyola Law School in Los Angeles.

The Republican National Committee argued in its appeal that the law “imposes onerous restrictions on the First Amendment rights of political parties and their members and places political parties at a profound disadvantage to other participants in the political process.”

In rejecting the RNC appeal and upholding the law, the court avoided another collision with President Barack Obama, who has used the corporate spending decision in January to portray the court as too beholden to business interests. The administration defended the soft-money rules, saying they are justified to prevent corruption.

Changing Court

The Supreme Court agreed with that reasoning in 2003, upholding the ban on a 5-4 vote. The majority said then that national parties had been “peddling access to federal candidates and officeholders in exchange for large soft-money donations.”

Since that time, the high court’s membership has changed. Most notably, Justice Sandra Day O’Connor, who voted to uphold the 2002 law, was replaced in 2006 by Alito.

The January ruling, known as Citizens United v. Federal Election Commission, said the government could restrict political speech only to guard against either the possibility or appearance that officials were exchanging political favors for money, known as “quid pro quo” corruption.

Republican Position

The RNC said that interest doesn’t apply to soft money, at least as the party was intending to use it. The Republicans said they wanted to use donations for party-building activities, rather than for support of particular federal candidates, eliminating any risk of quid pro quo corruption.

Soft money isn’t subject to the contribution limits or disclosure requirements that apply to regulated “hard money” donations.

The Obama administration said the Citizens United reasoning should be limited to the independent spending that was at issue in that case and shouldn’t be applied to contributions. The government pointed to earlier Supreme Court decisions giving the government more power to police contributions.

“This court has consistently held that Congress has greater latitude to limit contributions to candidates or political committees than to limit independent expenditures,” the administration argued.

Appellate Ruling

A three-judge panel ruled against the RNC in March, saying it wouldn’t “get ahead of the Supreme Court” by striking down the soft-money ban.

Today’s decision “goes against the consistent tide of rulings by this court, which has systematically rolled back federal campaign finance prohibitions and limitations that have been on the books for decades,” said Kenneth A. Gross, a campaign and election lawyer at Skadden Arps Slate Meagher & Flom LLP in Washington.

Theodore Olson, the Washington lawyer who represented the RNC, said the case “was an opportunity to reaffirm our nation’s commitment to the First Amendment and to the right of citizens to join together and speak out for causes and candidates they support.”

The victory for campaign-finance supporters on soft money may be only a temporary one. Hasen said the court right now might be “gun shy” about taking up another campaign case after the Citizens United criticism.

He also said the RNC appeal was “a very weak case” for attacking the soft-money rules because the party challenged the ban only indirectly.

“The order today indicates that you already have three justices willing to at least consider seriously undermining the soft-money ban,” Hasen said in an e-mail. “If the RNC or someone else files a new case straightforwardly seeking to overturn the soft-money ban, Justice Alito, and probably the chief, will be quite receptive to considering the question.”

The case is Republican National Committee v. Federal Election Commission, 09-1287.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net.

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