Ruling allows contributions to activist groups for campaigns

By Dan Eggen
Washington Post Staff Writer
Saturday, March 27, 2010

A federal appeals court on Friday handed another victory to conservative opponents of campaign-finance restrictions, striking down limits on individual contributions to advocacy groups that want to use the money for or against candidates in federal elections.

But in a unanimous decision, the nine-judge U.S. Court of Appeals for the District of Columbia Circuit also ruled that a conservative group called must disclose its donors and other details of its finances to the Federal Election Commission (FEC), a requirement the group had sought to loosen.

The case was one of the first to be decided after Citizens United v. FEC, a Supreme Court ruling two months ago. That ruling found that corporations are akin to individuals when it comes to political speech and are therefore free to spend as much company money as they like for or against candidates. The appeals court found that a similar rationale applies to independent political groups such as SpeechNow.

The decision did little to end the uncertainty surrounding the patchwork system of federal campaign restrictions first put in place during the Watergate era and strengthened by the 2002 McCain-Feingold Act and other statutes. In a separate decision issued Friday, for example, a three-judge panel in the U.S. District Court for the District of Columbia rejected a bid by the Republican National Committee to raise unlimited contributions from corporations and individuals, setting the stage for further litigation.

The SpeechNow decision effectively widens the field of organizations that can raise and spend money on politics more freely in light of the Citizens United decision, which swept aside decades of legislative restrictions on the role of corporations in political campaigns.

In a similar vein, SpeechNow and other independent political groups -- also known as 527 organizations, for their designation under the tax code -- are now free to solicit unlimited contributions as long as they do not donate directly to candidates or coordinate with their campaigns.

Steve Simpson, a lawyer who helped argue the case, called the decision voiding contribution limits "a tremendous victory for free speech." He said it "ensures that all Americans can band together to make their voices heard during elections."

But the group, which was founded by Club for Growth Executive Director David Keating, signaled that it might appeal the court's ruling in favor of FEC disclosure requirements, arguing that they are too onerous for a citizen advocacy group not directly involved in campaigns.

Beleaguered reform advocates, still reeling from the sweeping Citizens United ruling, said they were relieved that independent political groups must continue to disclose their finances in detail and conform to other FEC administrative requirements. The RNC ruling also means that political parties and candidates remain subject to stricter standards than individuals or corporations, at least for now.

"In the campaign finance world, today was certainly a win-some, lose-some day," said Lisa Gilbert, democracy advocate for the U.S. Public Interest Research Group.

Paul S. Ryan, a lawyer at the Campaign Legal Center, which favors limits on political spending, said the removal of limits on contributions is "a significant loss for the American public." He also said the Supreme Court, which set aside its own precedents in issuing the Citizens United ruling, might be willing to go further in stripping away disclosure rules and other restrictions.

In the RNC case, a special panel of three judges, all appointed by President George W. Bush, rejected the party committee's argument that it should be free to raise unregulated "soft money" for activities not directly related to federal elections. The panel said it was bound by a 2003 high court ruling that upheld a ban on such contributions, which forms a cornerstone of the McCain-Feingold law.

Rep. Chris Van Hollen (Md.), who is helping lead a Democratic effort to write new campaign finance restrictions for corporations, praised the RNC decision. "I am optimistic that, upon appeal, the Supreme Court will see the wisdom of maintaining this soft- money ban on the national political parties," he added in a statement.

The January decision freeing up corporate spending on elections has sparked an unusual public feud between the high court's conservative wing and President Obama, who sharply criticized the ruling during his State of the Union address. Justice Samuel A. Alito Jr. mouthed "not true" as he sat in the audience while Obama spoke, and Chief Justice John G. Roberts Jr. later called the criticism "very troubling."

The SpeechNow decision, coupled with the Citizens United ruling, dramatically alter the landscape for raising and spending money on elections. Under previous FEC rules, donors to independent political groups such as SpeechNow had to adhere to individual contribution limits of $5,000, and those contributions also counted against the total amount donors could give to all political recipients. Under Friday's ruling, such groups can take in as much money as they wish from individual donors in order to fund ad campaigns or other efforts for or against candidates.

Chip Mellor, president and general counsel of the Institute for Justice, which helped bring the SpeechNow case to court, said in a statement that the ruling "has moved us one step closer to ending this nation's failed 35-year experiment with campaign finance 'reform' and restoring the First Amendment to its proper place."

© 2010 The Washington Post Company