THE DECISION last week by U.S. District Judge Henry Kennedy to allow the Hawaii Right to Life Inc. to run issue ads in the weeks leading up to special elections for a House of Representatives seat may seem a blow against campaign finance reform. But the ruling merely highlights one of the potential vehicles for circumventing the McCain-Feingold reform law -- a vehicle that actually has been around since the Supreme Court carved a narrow exception to campaign finance laws out of the First Amendment. Since this exception is rooted in the Constitution, Congress can do little about it. And for exactly that reason, it may grow in importance should the Supreme Court ultimately uphold the new law's restrictions on soft money. The Federal Election Commission needs to make sure that this constitutionally mandated exception does not become a means of abusing the new law.
Back in 1986 the Supreme Court struck down the restrictions on corporate campaign spending as applied to a group called the Massachusetts Citizens for Life (MCFL). While the MCFL was a corporation, the Supreme Court held, it was one formed not to make money but solely to spread an ideological message. And because it took donations only from individuals, not from other corporations or labor unions, the First Amendment protected its right to make independent expenditures in campaigns -- just as it protects the right of an individual to spend however much of his own money he wishes promoting his views. Since this decision, there has been no doubt that a so-called MCFL corporation is allowed to spend money on elections, and there was no doubt either when McCain-Feingold was passed that an MCFL committee was exempt from its ban on soft-money-funded issue ads during the run-up to elections. The question Judge Kennedy ruled upon, therefore, had nothing to do with whether McCain-Feingold was valid. The only question he addressed was whether the Hawaii Right to Life committee was, or was not, an MCFL group -- which he held it to be.
MCFL corporations offer a potential means for interest groups to keep taking unlimited contributions and to use them in ways that McCain-Feingold otherwise would forbid. It is not hard to imagine certain groups organizing as MCFL corporations or setting up quasi-affiliated ones. Politicians might try to replicate the soft-money system by directing large contributions to favored groups. And while the fact that corporate and labor money is off-limits to MCFL corporations is a reassuring limitation on their activity, corporations and unions might nonetheless organize large numbers of individual donations to groups that can advocate in ways they cannot. The main defense against these possibilities lies in ensuring that MCFL corporations are genuinely independent of politicians and are not fronting for groups barred from raising or spending soft money. The FEC this week will finalize its regulations governing coordination between supposedly independent entities and those that may not raise soft money under the new law. Judge Kennedy's opinion is, therefore, a timely reminder that the commission needs to get this critical area right.