Colorado Ruling May Change Campaign Finance
By Susan Glasser
Federal law imposes strict limits on party spending on behalf of congressional and presidential candidates. But the ruling, in a long-running case from Colorado, threw out those limits as an unconstitutional infringement on the parties' freedom of speech. On Tuesday, the Federal Election Commission voted unanimously in closed session to appeal the decision.
Even as the case makes its way through the courts, however, both Republican and Democratic strategists are assessing the implications for the 2000 elections and beyond, crafting fund-raising plans that will put them in a position to take advantage of the ruling.
Republican election lawyer William B. Canfield said the decision could open the floodgates for a new infusion of party spending in direct support of candidates. "My guess is that the parties will treat it as tantamount to a nationwide elimination of party [spending] limits," he said.
Both Democrats and Republicans are "planning," as one party adviser put it, for the "likelihood that they will be spending" without the limits in the 2000 elections.
But Democrats are worried that the result could be a significant boon to Republicans. In particular, they fear the ruling could hurt their bid to recapture the six seats necessary to take control of the House. "That's the immediate threat," said one Democrat. "In 20 to 30 key races, it could make a difference."
As they gear up for next year's elections, the parties are poised to raise record amounts of political cash and play a far more central role in financing candidates than they have in the past.
Their greater influence stems largely from the explosion in "soft money" contributions – the unlimited donations that can come from individuals, labor unions and corporations. In recent years, the parties have been making increasingly effective use of soft money to finance "issue advertising" campaigns that do not directly advocate the election or defeat of particular candidates but nonetheless make the parties' positions clear.
The Colorado case involves a separate issue: how the parties can spend "hard money," donations from individuals who are limited to giving a maximum of $1,000 per election. Under the law challenged in the Colorado ruling, parties are limited in the amounts of hard money they can spend directly on their candidates' behalf and in consultation with them.
The limits are about $66,000 for House races and as much as $3 million for a Senate race, depending on the population of the state. For the presidential campaign, the parties will be able to kick in about $15 million.
While the GOP always out raises its Democratic counterparts, Republicans enjoy a far greater edge in the hard money contributions affected by the Colorado ruling. During the 1998 elections, for example, Republican Party committees out raised Democrats by $274 million to $153 million in hard money contributions, but led the soft money race by only $111 million to $89 million.
Jan Baran, the lawyer for the Colorado GOP who has been attacking the spending limits since the case against his client was filed in 1986, argued that the ruling is actually a step toward reform, signaling a shift back from soft money to hard money. "This is the good money," he said, adding that the decision "provides an incentive to raise what should be the most accountable money."
To advocates of overhauling campaign finance laws, however, the Colorado case could dismantle a key part of the system set up by the post-Watergate federal election law, removing the last significant brake on spending by political parties. Parties "are already massively evading the hard money contribution limits by the use of soft money," said Fred Wertheimer, president of Democracy 21, which advocates tightening campaign finance rules. "Right now, the law at least bars them from going the next step."
But the decision by U.S. District Judge Edward W. Nottingham, issued last month, said that such assumptions of corruption are unfounded since parties by definition cannot corrupt their own candidates.
"The message of the party and the message of the candidates are unified," he wrote, concluding that the limits therefore strike at "core First Amendment rights."
In an earlier round of the Colorado case, the Supreme Court ruled in 1996 that the parties could spend in excess of the limits as long as they operated entirely independently of their candidates. While the National Republican Senatorial Committee embraced that method in the final few months of the 1996 campaign, and Democrats later followed suit, both sides say it's cumbersome to set up separate entities prohibited from coordinating their activities with the candidates they are supporting.
The Colorado ruling, which election lawyers expect will end up back at the Supreme Court, removes the requirement that the parties operate independently of their own candidates if they spend beyond the set limits. Parties would "no longer have to go through the fiction" of establishing independent operations, Canfield said. "This decision is more sweeping than Colorado I."
Officially, Democrats point out, the ruling is still just a district court opinion that does not apply anywhere else and is not likely to be resolved by the Supreme Court until well after the 2000 elections.
"I don't believe it affects the 2000 cycle," said lawyer Robert F. Bauer. "It will not make it to the Supreme Court before then, and a district court decision is not applicable to any committee other than the Colorado committee."
But privately, Democrats concede that Republicans "could use the district court decision as the basis for an awful lot of mischief," as one Democrat put it.
Key GOP strategists say they do not need to decide for many months whether to spend more than the limits allow in districts other than Colorado in the expectation that the spending ceilings ultimately will be struck down nationwide. For now, they note, the challenge is to raise as much hard money as possible – whether it's ultimately spent on independent expenditures or on directly coordinated efforts.
Although hard money is far more difficult for parties to raise than soft money because of the strict $1,000 contribution limit, it is also far more valuable for parties to have on hand. It can be spent directly to urge voters to choose a particular candidate, rather than forcing parties to resort to more mildly worded advertising. And stations are required to give political parties the lowest advertising rates for commercials paid for with hard dollars.
"Certainly, [the ruling] puts a lot of pressure on political party committees to raise a lot of hard money," said Benjamin Ginsberg, a former Republican National Committee general counsel.
Asked if he would advise party committees to ignore the limits, another GOP lawyer responded: "Yes. Test it in another district court if that's what it takes."
Either way, election law experts view the Colorado case as a part of a broad trend in recent years of court decisions striking at the FEC's ability to restrict political spending.
"This is one of a series of decisions that reflect problems the FEC has encountered defending its constitutional position before the courts," Bauer said. "Parties have benefited from that trend, have been swept up in this constitutional battle, and the Republican Party has gained some ground as a result." Still, in a case that's already been going strong for 13 years and has become the campaign finance equivalent of the endless litigation chronicled in Dickens's "Bleak House," few are confident in predicting the final outcome. Said Bauer, "Whether, at the end of all this, parties will have shed all limits is unclear."
© Copyright 1999 The Washington Post Company