Supreme Court ruling gives small number of wealthy donors new ways to drive campaigns

Clarification: Craig Engle is a Republican election law attorney. An earlier version of this story did not indicate his profession.

In a sweeping campaign finance decision, the U.S. Supreme Court struck down aggregate limits -- or rules for how much an individual can give in one campaign cycle. So what's the backstory of this case? (Julie Percha/The Washington Post)

An elite class of wealthy donors who have gained mounting influence in campaigns now has the ability to exert even greater sway.

A Supreme Court decision Wednesday to do away with an overall limit on how much individuals can give candidates and political parties opens a new spigot for money to flow into ­campaigns already buffeted by huge spending from independent groups.

In this year’s midterm races, outside organizations financed by very rich donors, such as the conservative advocacy group Americans for Prosperity, have significantly shaped the campaign landscape with TV ads and other expenditures totaling in the tens of millions of dollars.

The ruling by a sharply split court opens the door even wider for a narrow universe of donors to expand their giving by writing single checks for as much as $3.6 million that could flow directly to candidate and party committees.

Just 591 donors reached the limit on giving to federal candidates in the 2012 election, according to an analysis by the nonpartisan Center for Responsive Politics.

Ruling on limits means campaign contributions could soar

Even that small number of contributors has the potential to inject big sums into the system, now that they can give to as many candidates, party committees and PACs as they wish.

That could mean a financial infusion for the national parties, whose traditional dominance has been eclipsed in many areas by super PACs and politically active nonprofit groups that can collect unlimited sums.

The change could help candidates raise more money to fend off attacks by outside groups, focusing their fundraising on big-dollar givers whose full largess was off-limits until now — and making officeholders more indebted to those wealthy contributors.

And it could bring at least some additional transparency to the role of suchbig donors, whose contributions to many outside political groups are kept secret but whose checks to candidates and party committees must be reported to the Federal Election Commission and publicly disclosed.

Supporters of stricter campaign finance rules cast the decision in McCutcheon v. FEC as a sequel to Citizens United, a 2010 case that allowed corporations and labor unions to spend unlimited amounts on independent political activity. That ruling paved the way for the creation of super PACs and led to the proliferation of nonprofit advocacy groups that engage in campaigns.

That development gave new influence to billionaires such as conservative industrialists Charles and David Koch and liberal former hedge-fund manager Tom Steyer, who are expected to spend tens of millions of dollars this year.

“The Supreme Court is turning our representative system of government into a sandbox for millionaires and billionaires,” said Fred Wertheimer, president of Democracy 21, a group that advocates for reducing the role of big money in politics.

After Wednesday’s ruling, Sen. John McCain (R-Ariz.), long a champion of curbing huge donations, pointed to the influx of money and predicted, “There will be scandal.”

Many conservatives, meanwhile, cast the case as a free-speech victory.

“This is a good day for candidates, both Republican and Democratic, liberal and conservative,” said Craig Engle, a Republican election law attorney, who served as a legal adviser to the team that filed the case on behalf of Alabama businessman Shaun McCutcheon and the Republican National Committee.

“This isn’t a threat to democracy — it is democracy,” Engle added. “One of the things that is anti-democratic is when people aren’t allowed to express themselves.”

Many Republicans rejected the notion that the new ruling would unleash a flood of new political giving by the rich.

“The immediate effect will be that some major donors that would like to max out to multiple committees will have the ability to do so,” said Charlie Spies, a GOP campaign finance lawyer and fundraiser. But, he added, “there is a limited universe of donors that want to give multiple-hundreds-of-thousands-of-dollar contributions.”

Fundraisers for both parties were skeptical about how many donors would take advantage of the new freedom to give beyond the previously allowed maximum, which was set at $123,200 for the 2014 cycle.

“It doesn’t actually mean that much more money in the system,” said Wade Randlett, a major Democratic fundraiser in California. “The number of people who actually wanted to give more than that and were not using super PACs already is not a gigantic number of people.”

Those who do take advantage of their new freedom to give more, he added, are mostly likely to be donors “who have a particular legal or administrative result in mind.”

In its ruling Wednesday, the court declared unconstitutional a total limit on how much an individual can give federal candidates and parties in a two-year cycle. That limit had been set at $123,200 for this cycle. (The base limits on contributions — $5,200 to a candidate for the cycle — remain untouched.)

If the overall limits had been lifted for the 2012 campaign, about 1,200 wealthy donors who hit or came close to the limit on giving to candidates and party committees could have poured an additional $304 million into federal political committees, according to an analysis by the liberal groups Demos and U.S. PIRG.

That nearly equals the $313 million that 4 million small donors gave to the campaigns of President Obama and GOP challenger Mitt Romney that cycle.

Election lawyers anticipate that both parties will quickly seek ways to take advantage of court’s decision by creating national joint fundraising committees that can singlehandedly raise major sums. A committee made up of the presidential candidate, all the organizations and congressional candidates of one party could solicit a single check for as much as $3.6 million, for example.

Some legal experts said the McCutcheon decision could actually redirect some of the money going to secretive outside groups to political committees that must disclose their donors.

“The decision should be celebrated by all of us who worry about the polarizing effect of money on politics,” Nathaniel Persily, a professor of constitutional law at Stanford University, wrote in an analysis of the case. “A world in which individuals can give limited amounts of disclosed money to a lot of politicians is certainly preferable to one in which large chunks are only given to Super PACs and other unaccountable outside groups.”

But others were skeptical that the decision would fundamentally alter the dynamics and momentum of independent groups.

“It’s a good day for political parties in one sense, but do I believe, given the current pressures in the campaign finance system, that this significantly reverses the flow of money back to the parties? No, I don’t think so,” said Robert Bauer, a top Democratic campaign finance lawyer.

Although the ruling may amplify the influence of deep-pocketed donors, it was not welcome news for many of those who are asked to write the checks.

“It’s much more of a curse than a liberation,” said Randlett, who noted that this is the point in the election cycle when many major contributors have reached their limit. “The sound you heard was the collective groan of all cycle-maxed donors.”

No longer will donors be able to put off political solicitations by saying, “I can’t give, I am watching my aggregate limits,’ ” noted Engle, the GOP lawyer. “Now you don’t have a legal excuse.”

Ed O’Keefe contributed to this report.

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