In a warm-up for the anticipated legal battle over the McCain-Feingold campaign finance reform law, the Supreme Court announced yesterday that it will decide whether a ban on political contributions by profit-making corporations should also encompass donations to candidates by advocacy groups that are organized as nonprofit corporations.
At issue in the case is a challenge to a federal law that prohibits corporate contributions to candidates. The challenge was filed by North Carolina Right to Life, a tax-exempt, antiabortion organization that says it is primarily engaged in community activism and political advocacy and funded by voluntary contributions from supporters.
The organization contends that the First Amendment guarantee of free speech gives it the right to donate money from its own treasury directly to candidates, a practice that would be forbidden if it were a for-profit corporation.
Earlier this year, the Richmond-based U.S. Court of Appeals for the 4th Circuit, by a vote of 2-1, sided with North Carolina Right to Life. The court ruled that the risk of corruption associated with corporate donations to candidates in federal elections "is not present when the corporation at issue is a nonprofit advocacy corporation."
The court noted that, in a 1986 case, the Supreme Court had approved independent campaign expenditures by nonprofit advocacy corporations and that the same free-speech logic could apply to direct financial support for candidates.
The 4th Circuit's ruling conflicted with a decision in a different case by the Cincinnati-based U.S. Court of Appeals for the 6th Circuit, but the Federal Elections Commission decided not to appeal.
However, the Justice Department asked the Supreme Court to review the matter, with Solicitor General Theodore B. Olson urging the court to provide "guidance" on the issue. "There is a clear need for uniform campaign financing rules governing federal elections across the country," Olson's petition told the court.
The case is FEC v. Beaumont, No. 02-403. Oral arguments are expected in March and a decision by July.
Though the case requires the court to consider a perennial issue in campaign finance law -- defining the types of contributions that could undermine public confidence in the integrity of elections -- it touches only indirectly on the issues in the Bipartisan Campaign Reform Act (BCRA), known as the McCain-Feingold law, such as a ban on "soft money" donations and regulation of "issue ads."
Litigation over that statute is still going on before a three-judge panel in the U.S. District Court in Washington, with Supreme Court review considered all but in- evitable, perhaps as early as this spring.