Buttering Bread: The Sordid Tale of Campaign Finance and Shaun McCutcheon
Background of the Case
‘We've got to pay attention to who is buttering our bread’.[i]” That statement made by a fellow Senator to Senator Paul Simon was cited in the 2003 McConnell v. FEC case. In McConnell, the Court, concluded that “soft money” or contributions to national or local political parties can be regulated by the federal government because of their effects on federal elections, including both contributions and expenditures made by corporations and unions. McConnell was not the first big campaign financing case. In 1976, Buckley v. Valeo determined that at least in some ways, limitations on expenditures and contributions to political campaigns were limitations on speech.[ii] While Buckley was once considered to have balanced the interests of the First Amendment and campaign finance conclusively, it has been expanded upon over the years. This includes the aforementioned McConnell case.[iii] Buckley had limited government action to contribution limits and forbid expenditure limits, though McConnell had expanded government action over corporate and union soft-money expenditures.[iv] However, over time, various forms of contribution limits have been tested[v]. After having been reaffirmed in a number of cases, part of Buckley’s central holding was being challenged. The distinction between expenditures and a type of contribution limits, aggregate contribution limits, was under attack. Before McCutcheon v. FEC came to the fore, Austin v. Michigan Chamber of Commerce found that limiting “the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form” was an anti-corruption interest.[vi] That 6-3 ruling was an anathema to the conservative justices on the Court who overruled it by a 5-4 margin in Citizens United v. FEC, when they gained control of the court. Those Justices held that “[p]olitical speech is indispensable to decision making in a democracy, and this is no less true because the speech comes from a corporation.”[vii] As such, the Court overruled both Austin v. Michigan Chamber of Commerce and the expenditure, but not the contribution part of McConnell v. FEC. With Austin overruled, the fundamental issue at the heart of Buckley was now in question: Are contributions and expenditures merely different sides of the same coin? For now, it appears that the answer to that question is no. Only Justice Thomas argued for completely overruling the contribution expenditure dichotomy found in Buckley[viii].
Expenditure limits were off the table. That question was not up for relitigation- neither party challenged Buckley’s holding that the government is barred from setting up expenditure limits.[ix] Meanwhile, Appellants conceded that so-called “base” contribution limits were “necessary and appropriate measures against corruption.”[x] The core issue to be decided then in McCutcheon v FEC was narrower: Are limits on an individual’s aggregation of contributions to all candidates and or committees in a single biennial election cycle an unconstitutional burden on speech?[xi] The Court, by a five four margin, answered this question in the affirmative.[xii] By doing so, the Court has paved the way for a complete overruling of Buckley v.Valeo as Justice Thomas has called for.
The case begins with Shaun McCutcheon. Shaun McCutcheon is a wealthy Alabama businessman[xiii] and a conservative who opposes “numerous ill-conceived and overreaching laws.”[xiv] To combat this trend, Mr. McCutcheon has exercised his First Amendment right of association and donated: $1,776 to 15 challengers to unseat incumbents. He would like to contribute that same amount to another 12 candidates. He has contributed $27,328 to non-candidate committees in $1,776 dollar allotments and would like to contribute another $25,000 to various other organizations, but would be in violation of criminal federal law if he did so[xv]. Mr. McCutcheon filed suit in Federal District court challenging those limits and lost.[xvi] He appealed the United States District Court for the District of Columbia decision and was granted probable jurisdiction by the Supreme Court. The primary issue of those briefs dealt with the jurisprudence of Buckley v. Valeo, which originally held that expenditures on political speech could not be limited, though they were still subject to disclosure requirements, because they were part of core First Amendment expression. However, contributions to political committees or candidates could be regulated because those were only part of the First Amendment right of association.[xvii]
Statute in Question
The pertinent part of the statute in question is as follows:
2 USC § 441a:
“(a) Dollar limits on contributions
(1) Except as provided in subsection (i) of this section and section 441a–1 of this title, no person shall make contributions—
(A) to any candidate and his authorized political committees with respect to any election for Federal office which, in the aggregate, exceed $2,000;
(B) to the political committees established and maintained by a national political party, which are not the authorized political committees of any candidate, in any calendar year which, in the aggregate, exceed $25,000;
(C) to any other political committee (other than a committee described in subparagraph (D)) in any calendar year which, in the aggregate, exceed $5,000; or
(D) to a political committee established and maintained by a State committee of a political party in any calendar year which, in the aggregate, exceed $10,000.”[xviii]
Analysis of the Court
The Court had absolutely no issue determining that Citizen’s United massively restricted the anti-corruption interest.[xix] While the Court did not hold the contribution/expenditure invalid, it overruled an important but often overlooked section of Buckley. The Court did not care whether or not freedom of speech is marginally abridged, merely that it was abridged. The Buckley Court had found that aggregate limits were only a “modest” restriction on speech.[xx] They rejected the lower courts arguments but mistakenly applied “sufficiently important” interest scrutiny, and held that aggregate limits failed that scrutiny. They evaded Buckley arguing that Buckley is not controlling in this case, and then overturned the offensive parts of it. Given Roberts’ reticence in the health care decision,[xxi] it was unlikely that they would directly overturn Buckley.
The Appellants’ arguments for strict scrutiny were simply not viable. Appellants both argued that strict scrutiny should apply, but that base limits should survive strict scrutiny as a legitimate anti-corruption interest, but failed to effectively distinguish aggregate limits from base limits. This was probably why the Court in McCutcheon did not seriously deal with the question of scrutiny. However, the FEC missed an important point. The aggregate limits were not decided by intermediate “sufficiently important interest” scrutiny, but were rather decided by rational basis scrutiny.[xxii] For example, rather than showing that the aggregate limits were directly related to limiting corruption, the court pointed out that those limits were “marginal restrictions on speech,” and acted as a “corollary” to the overall contribution limits. In other words, the aggregate limits were rationally related to the government’s contribution limits, which affected the “sufficiently important” interest of preventing corruption and the appearance thereof.[xxiii] Even clearer, aggregate limits were rationally related to the governmental interest of stopping corruption or the appearance thereof. The McCutcheon Court rejected the Buckley Court view that aggregate limits were “modest” restrictions on speech. By doing so the McCutcheon Court subtly overruled the actual scrutiny for aggregate limits established in Buckley, and also narrowly construed the anti-corruption interest to the point of suffocating it.
The Supreme Court is wrong to assume that only quid pro quo corruption is a valid anti-corruption interest under the First Amendment. If only quid pro quo arrangements are prohibited under the First Amendment, then campaign finance is entirely redundant. Bribery laws already prohibit quid pro quo arrangements. To limit the anti-corruption interest to only the most blatant acts of bribery is akin to saying that all campaign finance legislation should be found overbroad in a later decision.
The Buckley Court did not limit corruption to only the most blatant quid pro quo arrangements. Despite the Roberts Court’s current interpretation of Buckley, Buckley Court was aware of the subtle influences that monied interests have on politics. True the Court focused quid pro quo arrangements, but as can be seen in the following quote, the Buckley Court did not limit quid pro quo to only the most blatant acts of bribery.
“Appellants contend that the contribution limitations must be invalidated because bribery laws and narrowly drawn disclosure requirements constitute a less restrictive means of dealing with “proven and suspected quid pro quo arrangements.” But laws making criminal *28 the giving and taking of bribes deal with only the most blatant and specific attempts of those with money to influence governmental action. And while disclosure requirements serve the many salutary purposes discussed elsewhere in this opinion,30 Congress was surely entitled to conclude that disclosure was only a partial measure, and that contribution ceilings were a necessary legislative concomitant to deal with the reality or appearance of corruption inherent in a system permitting unlimited financial contributions, even when the identities of the contributors and the amounts of their contributions are fully disclosed.”[xxiv]
At first glance, one could easily be forgiven for thinking that only quid pro quo arrangements are forbidden. However, the Court found that the Constitution allowed the government to limit the subtle influence money has on politics since “…laws making criminal *28 the giving and taking of bribes deal with only the most blatant and specific attempts of those with money to influence governmental action.”[xxv]
The appearance of corruption has already taken hold in the United States, and it can be linked to money in politics. In 2013, Gallup conducted a poll in which 73% of the American respondents answered that they believed their government to be corrupt.[xxvi] Additionally, trust in the Judicial, Executive and Legislative branches of government respectively fell from 76%, 61%, and 45% in 2009 to 62% 51% 34% in 2013.[xxvii] This could be attributed to a number of concerns, from partisanship to money in politics. However, according to a paper by Martin Gillens at Princeton University, and Benjamin Page at Northwestern University, government is more respondent to the needs of those higher on the income scales than to ordinary Americans.[xxviii] Research has also shown that income inequality is correlated with polarization.[xxix] This leads to a death loop where income inequality allows a small section of the country to pass legislation that benefits them, which makes income inequality worse which makes it easier for those with money to pass more laws cementing their power. While the parties are too ideologically sorted at this point for campaign finance to solve political polarization, it could cut down on the worst excesses of partisanship by allowing politicians more time to interface with clients instead of fundraising, and weakening the grasp that monied interests have on American politics.
Senator Leland Yee’s arrest and the subsequently unsealed FBI affidavit illustrate the folly of depending only on quid pro quo corruption as the only legitimate anti-corruption interest. However, it is important to note that these are only allegations and have not been prove in the court of law. Furthermore, the conversations that this note will highlight are not ones that Senator Yee can be indicted for. These conversations are only here to highlight the weakness in viewing campaign finance only through the prism of blatant quid pro quo corruption. Focusing on conversations that seem corrupt but are not chargeable offenses fulfills that goal.
“On September 23, 20022 UCE (undercover agent) 4773 received two calls from Senator Yee. During the first call, Senator Yee said he would like to discuss affordable housing with UCE 4773- one of UCE 4773’s purported business interests- “particularly” once Senator Yee was elected mayor. During the second call, Senator Yee said that he could not talk policy at the same time he asked for money. At this point, Senator Yee asked UCE 4773 to raise $5,000 to $100,00 for SENATOR YEE’s campaign. Senator YEE acknowledged the $50 individual donation limit during the conversation.”[xxx]
The problem here is that under the Supreme Court’s current jurisprudence, it is perfectly reasonable to view Senator Yee’s clumsy attempts at avoiding quid pro quo corruption by making a second phone call as valid. He is only asking for donations, and only after that conversation does he speak with his “constituent” about an issue that they both “agree on.” Moreover, the actual policy discussion was void of specifics and is therefore not one of the charges that Senator Yee is being indicted for.
“Over the course of their relationships and dealings for the remainder of the mayoral election, UCE 4773, made it clear to both Keith Jackson and Senator Yee that he was prepared to assist them but expected consideration in exchange in terms of further his own business interests… $11,000 to the campaign and told Senator Yee ‘it’s too much money... not to get something.’ UCE 4773 was not necessarily seeking specifics… Senator Yee responded ‘Right Right Right… there is tremendous opportunity in local levels… because whoever’s gonna be the mayor controls everything.’”[xxxi]
Once again these comments avoid an actual quid pro quo, but are clearly indicative of corruption. This conversation contains the promise of getting something, without indicating what that something actually is, along with the promise that the mayor can control everything. This statement would be safe under a blatantquid pro quo test, but would be damning for a more general quid pro quo test. Buckley ould allow the government to prevent this type of corruption, McCutcheon would not.
At an April 6, 2013 Fundraiser, “UCE 4774 asked if there was some way that he could contribute money, ‘outside the campaign’ and not have to be worried, Senator Yee said that UCE 4773 could contribute unlimited sums to a committee supporting a ballot measure for school funding that Senator Yee also supported. Senator Yee explained that the ads for the measure would feature Senator Yee in a positive piece supporting schools and education. ‘I’m at 11,000 dollars” and said that there was no problem getting the money, he just did not want to get caught doing something stupid. Senator Yee responded “[r]ight, and, like I said, you know, you get ten thousand into the campaign… and then the other ten, you know, you can write it and dump it into the ballot measure, I don’t care.’”[xxxii]
As we can see here, Senator Yee is using a Super Pac that he is not affiliated with as a way to gain support. This is allowed since he is not coordinating with the PAC itself, only directing a “constituent” to make a donation to it for Senator Yee’s sake. Once again, a narrowly tailored view of corruption would prohibit government action; a less narrowly tailored view would allow government action in this arena.
“At one Point UCE 41480 asked Senator Yee, ‘how do we get you elected?’ Senator Yee responded, “I’m going to leave that to what you think you can handle. But whatever fundraising you can do, I would appreciate it.” After Senator Yee Left the conversation, UCE 41480 asked what he gets for his money, and [Keith] JACKSON [the political consultant connected to Senator Lee] responded ‘access to him,’ referring to Senator Yee.… Jackson told UCE 4180 that he had been asked for $50,000 for Senator Yee’s campaign. Jackson told UCE 4180 that he needed somebody on the state level who can push legislation, someone who is not afraid to push it.”[xxxiii]
This statement is directly contrary to the notion that access and gratitude is not corruption. However, under the Roberts Court, these conversations would be perfectly acceptable. In light of these unindictable conversations, the idea that large sums of money and the gratitude and access that they buy is not corruption is simply laughable. (Senator Yee is, however, being indicted on instances of quid pro quo corruption for actions that are outside the scope of this note).
“During a telephone conversation between Senator Yee and Keith Jackson on November 16, 2013, Jackson asked about the letter (an actualquid pro quo promised by Senator Yee) and Senator Yee said it had to go through the “rules people.” Jackson said if they could just get the letter, then UCE 4773 would do what he needs to do. Senator Yee responded, “[y]eah, well just tell [UCE 4773] to just do it. Come on, [UCE 4773].” Senator Yee complained that he was busy and ‘there’s got to be some trust around her man, shit.’ He compared it to dating a woman, saying that you do this and I’ll do that. Senator Yee wondered whether UCE 4773 understood that if Senator Yee did not succeed, then UCE 4772 would not have access. Senator Yee then referred to the eight years he would be in charge if he bec[a]me the Secretary of State.”[xxxiv]
This conversation is the only one that this note will analyze that actually does have a quid pro quo component to it. However, the focus is not the quid pro quo letter that Senator Yee was writing on behalf of his constituent but rather the idea that access would exist if Senator Yee won the election, but would dissipate if he did not. This is the second hint that in the real world, access and corruption are deeply intertwined. The Roberts court might deny that access and gratitude are corruption, but for Senator Leland Yee, they were integral to raising the donations he needed to run an effective campaign.
The fact remains that there are two interrelated interests that the Buckley Court was blind to. Those two interests can be grouped into a single category: insuring democratic competition. There is ample evidence that incumbents have an advantage in the democratic process.[xxxv] Likewise, there is similar evidence that wealth creates an advantage in the marketplace of ideas.[xxxvi] Buckley was incorrect to overlook the incumbency advantage.[xxxvii] Likewise, it was wrong to ignore the advantage that aggregations of wealth have on the political process, and their cost on democratic competition.[xxxviii] While incumbency begets incumbency, wealth begets wealth. Policies that make it easier to retain money makes it easier to influence elections, just as policies that make it easier for incumbents to stay in power influence elections. The Articles of Confederation and the Constitution were challenges to the existing orders. As such, there is an implicit subtext underneath our governing documents that promote competition in the democratic field. It is true that our Revolution would have seemed odd if George the III was forced to finance it.[xxxix] But what if he was forced to finance the revolution? What if he had to do so without the guarantee that his members of parliament and chosen vassals would retain power? Political and wealth incumbencies are our new George III. There should be a linked interest in promoting democracy by “equalizing the voices” across the economic strata but only if that same legislation also reduces the power of incumbents.[xl] If there is a government interest in limiting the voice of wealthy individuals for the purpose of lifting the voices of the rest of the community, there must also be an interest in limiting the voice of incumbents and strengthening the voices of challengers. Since incumbent legislators create legislation there is a direct connection between legislators and an incumbency advantage. Likewise, because legislators are often wealthy and often influenced by wealth, either through contributions or access, then there is only an indirect effect that wealth has on limiting democratic competition. As such, equalizing wealth should be justified by equalizing challenges, but only if also proven to equalize challengers and incumbents. However, equalizing challengers and incumbents without equalizing wealth should be constitutionally permissible.
There is a final important point of interest to address. The Republican Party has taken part in this case as an Appellant. The Democratic Party has only made an amici brief on behalf of Appellee. If both parties benefit from a pro-Appellant ruling, why are they polarized on the outcome? The reason is simple: Republicans policies benefit wealthy potential contributors more than Democratic policies do.[xli][xlii] However, Republicans are more apt to rail against an incumbency advantage than Democrats are. Wealth and incumbency are both power structures that calcify over time and become impediments to a constantly fluctuating political map. The Court should allow aggregate limits based on rational basis scrutiny. However, it should also question Buckley’s rejection of the realities of the wealth and incumbency advantages. If the Court finally did take into consideration those realities, our political system may finally incentivize politicians to act on behalf of the country’s general welfare, and not just for the people who are buttering their bread.
[i] McConnell v FEC 124 S. Ct. 619, 301-302 (2003).
[ii] See Buckley v Valeo 96 S.Ct. 612, (on Expenditures at 19 and association at 21) (1976).
[iii] See McConnel v. FEC, Citizen’s,United, Randall v. Sorrell,126 S.Ct. 2479 (2006);Davis, Benett v. Arizona Free Enterprise PAC,131 S.Ct. 2806 (2011).
[iv]See McConnell v FEC 301-302.
[v]See Randall v. Sorrell, Davis, Benett v. Arizona Free Enterprise PAC.
[vi]Austin v. Michigan Chamber of Commerce, 110 S.Ct. 1391, 660 (1990).
[vii] Citizens United v. FEC at 313internal citations omitted
[viii]McCutcheon v. FEC, 572 U.S. (2014). (Thomas’s Concurrence)
[ix] Neither Appellee nor Appellants are trying to overturn that aspect of the Buckley v. Valeo decision.
[x]McCutcheon Page 32.
[xi] See McCutcheon, RNC and FEC briefs Question Presented.
[xii]McCutcheon v. FEC 572 U.S. (2014).
[xiii]Ben Jacobs; Meet Shaun McCutcheon, the Republican Activist Trying to Make History at the Supreme Court, (Oct, 8th 2013, 6:34 A.M.) http://www.thedailybeast.com/articles/2013/10/08/meet-shaun-mccutcheon-t...at-the-supreme-court.html.
[xiv] McCutcheon brief at 11.
[xv] Id 11-13.
[xvi] McCutcheon v. Fed. Election Comm'n, 893 F. Supp. 2d 133 (D.D.C. 2012).
“For the foregoing reasons, the Court will issue a contemporaneous Order denying Plaintiffs' Motion for a Preliminary Injunction and granting the FEC's motion to dismiss.”
[xvii]See Buckley v. Valeo at 15
[xviii]2 USC § 441a (2002)
[xix]McCutcheon v. FEC, 572 U.S. (2014).
[xx]McCutcheon v. FEC, 572 U.S. (2014).
[xxi]See National Federation of Independent Businesses v. Sebelleius, 132 S.Ct. 2566 (2012)
[xxii]Buckley v. Valeo at 16
[xxiii]Id. at 38
[xxv]Id at 30.
[xxvi]Jan Sonnenschein and Julie Ray; Government Corruption Viewed as Pervasive Worldwide, (October 18, 2003) http://www.gallup.com/poll/165476/government-corruption-viewed-pervasive...
[xxviii]Gillens, Martin Inequality and Democratic Responsiveness in the United States (Prepared for the Conference on the Comparative Politics of Inequality and Redistribution, Princeton University, May 11-12, 2007) http://www.princeton.edu/~piirs/events/PU%20Comparative%20Conf%20May%202...
[xxix]McCarty, Nolan; Poole, Keith T.; Rosenathal, Howard; Political Polarization and Income Inequality
[xxx]Affidavit of Special Agent Emmanuel v. Pascua in Support of Complaint filed March 2, 2014 pp. 104-105.
[xxxi]Id. At 106.
[xxxii]Id. at 106- 107.
[xxxiii]Id. at 124.
[xxxiv] Id. at 115.
[xxxv]Hansen Mark; Hirano, Shigeo; Snyder, James Jr.; The Incumbency Advantage in U.S. Primary Elections, (2005) http://www.columbia.edu/~sh145/papers/inc_ad_primary.pdf.
[xxxvi]Thomas J. Hayes, Senate Responsiveness in an Era of Inequality (April 17, 2010) http://www.democracy.uci.edu/files/democracy/docs/conferences/grad/Hayes_Congressional%20Responsiveness%20in%20an%20Era%20of%20Inequality.4.17.10.pdf
[xxxvii]Buckley v. Valeo 30-32
[xxxviii]See McConnel v. FEC at 205 dealing with corporate wealth: “We have repeatedly sustained legislation aimed at the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public's support for the corporation's political ideas.” (Internal Citations Omitted)
[xxxix]Directly addressing part of: Joel Gora,Don't Feed The Alligators: Government Funding Of Political Speech And The Unyielding Vigilance Of The First Amendment2011 Cato Sup. Ct. Rev. 81, 82.
[xl]See Buckley v. Valeo at 47 writing about the failed justification of expenditure limitations as only “sequalizing the relative ability of individuals and groups to influence the outcome of elections.”
[xli]Lam Thuy Vo, How Income Divides Democrats, Republicans and Independants. (October 01, 201212:00 PM) http://www.npr.org/blogs/money/2012/09/26/161841771/how-income-divides-democrats-republicans-and-independents.