Public Financing Curtailed by High Court in Arizona Case

The U.S. Supreme Court, in a decision that deepens the divide over campaign finance regulations, ruled that a 13-year-old Arizona public financing law violated the speech rights of opposing candidates.

The 5-4 decision came from the same majority that issued last year’s ruling freeing corporations to spend money on political ads. The court’s five Republican-appointed justices formed the majority and the four Democratic appointees dissented.

The Arizona law awarded public funds to candidates for state offices based on how much money was raised or spent on behalf of their opponents. The court today said the law impermissibly penalized candidates for raising and spending private money.

“Laws like Arizona’s matching funds provision that inhibit robust and wide-open political debate without sufficient justification cannot stand,” Chief Justice John Roberts wrote for the majority.

The ruling could have implications across the country. Maine and New Mexico have similar provisions, as do North Carolina and Wisconsin for their judicial elections, said Tara Malloy, associate counsel with the Campaign Legal Center, a Washington-based advocacy group that supports stronger campaign finance laws. Courts have already struck down similar provisions in Connecticut and Florida, she said.

Albuquerque, New York

Municipal elections in Albuquerque, New York and San Francisco also use similar provisions that might be invalidated, Malloy said in an interview conducted before the court ruled.

Today’s decision invalidated one of the incentives used to encourage candidates to take public financing and limit fundraising and spending.

In dissent, Justice Elena Kagan said the Arizona law “fostered both the vigorous competition of ideas and its ultimate object -- a government responsive to the will of the people.”

Craig Holman, a lobbyist for Public Citizen in Washington, which supports stronger campaign-finance laws, said the Supreme Court is rewriting election law.

“‘These types of laws, including this trigger threshold, have been around for decades,” Holman said. “This is an activist court like we have never seen since the Civil War.”

‘Greater Deference’

Sean Parnell, president of the Alexandria, Virginia-based Center for Competitive Politics, which opposes restrictions on campaign spending, said the Supreme Court continues to show “greater deference to the plain meaning of the First Amendment and less interest in schemes to suppress some speech in the interests of favoring the speech of others.”

The Supreme Court, which threw out mandatory spending limits in 1976, hasn’t invalidated all public financing today, supporters of the Arizona law said.

“This ruling affects only one mechanism of public financing, and there are numerous ways to fix it,” former Democratic Representative Bob Edgar of Pennsylvania, president of Common Cause in Washington, said in a statement.

The presidential public financing system, for example, relies on matching funds to encourage candidates to limit their spending. Still, since 2004 none of the major party nominees have agreed to take the money and the accompanying restrictions on how much they can spend during the primaries. In 2008, Barack Obama became the first major-party nominee to shun federal financing for the general election.

Initial Outlay

Even in Arizona, the rest of the public financing system remains in place, Todd Lang, executive director of the Citizens Clean Elections Commission, said in a statement. The ruling doesn’t affect an initial outlay that Arizona candidates receive when they decide to take part in the public financing system.

“This is not the end of clean elections,” Lang said. “Today’s ruling impacts only the matching funds provision of the act.”

A referendum to repeal public financing will be put before Arizona voters in 2012.

Arizona officials, including Secretary of State Ken Bennett, defended their measure as a way to reduce the corrupting influence of campaign contributors. The Obama administration also urged the high court to uphold the system.

The challengers to the law were led by John McComish, a Republican state representative.

The San Francisco-based 9th U.S. Circuit Court of Appeals upheld the Arizona system last year. The panel said the effect on free-speech rights was minimal.

The majority today pointed to a 2008 Supreme Court decision voiding a federal law that freed opponents of self-financed candidates from the usual campaign contribution limits.

The cases are Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, 10-238 and McComish v. Bennett, 10-239.

To contact the reporters on this story: Greg Stohr in Washington at gstohr@bloomberg.net; Jonathan D. Salant in Washington at jsalant@bloomberg.net.

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.

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