Rutgers Journal of Law & Public Policy


DEMOCRACY IS NOT FOR SALE: Why courts should adopt the Ninth Circuit interpretation of Buckley v. Valeo that permits the regulation of organizations with “a” major purpose towards political advocacy as political action committees

By: Ryan Grosso*

September 23, 2015

                    I. Introduction

            Due to the influx of money in politics following the Supreme Court’s holding in Citizens United, it is imperative that states maintain their ability to properly inform their electorate of who is contributing money to political campaigns.  Barring the passing of a new amendment, restricting monetary expenditures is close to impossible because of recent Supreme Court precedent and the First Amendment implications that curbing speech entails.[1]  However, disclosure requirements remain a constitutionally permissible device for states to inform their electorate of organization expenditures.  Nonetheless, the Fourth and Tenth Circuit have restricted disclosure requirements considerably by permitting only organizations whose main or sole purpose is political advocacy to be regulated as political action committees under state campaign finance regulations.[2]  This is problematic because organizations that are significantly involved in the political and electoral cycle can circumvent campaign finance regulations provided the major purpose of their organization is not political advocacy.  Accordingly, this paper will serve to argue that circuits – including the Third Circuit – follow the Ninth Circuit approach and permit states to regulate organizations with “a” major purpose in political advocacy – as opposed to only “the” major purpose – as political action committees.

                    II. History

            Jurisprudence in modern campaign finance law is governed by the Supreme Court’s holding Buckely v. Valeo.[3]  It also the origin of the major purpose test, and thus of tantamount importance to this article. In 1976, the Supreme Court reviewed the Federal Election Campaign Act of 1971[4] (“FECA”) and held the regulations promulgated in the statute applied only to “political committees” or organizations “under the control of a candidate or the major purpose of which is the nomination or election of a candidate.  

            If it is determined that an organization is a political committee, FECA requires disclosure reports by political committees of contributions[5] and expenditures[6] if an organization raises more than $1,000 in contributions or makes more than $1,000 in expenditures[7], and by any “person” making independent expenditures that contribute more than $250 to a candidate in a single year.[8]

            Nonetheless, “regardless of a non-candidate organization's campaign finance activities, the organization is a political committee under federal law only if its ‘major purpose’ is to nominate or elect a candidate.”[9]  However, how exactly to determine the major purpose of an organization is often ambiguous, and courts have thus far failed to articulate a clear method for ascertaining whether an organization is a political committee under FECA.[10]

                   III. The Circuit Split

            Additionally, there is also circuit split amongst lower courts pertaining to the application of the major purpose test espoused in Buckley.[11]  They key issue is whether Buckley permits states to regulate organizations with “a” major purpose or “the” major purpose as political action committees.[12]  Accordingly, if states are only permitted to regulate organizations with “the” major purpose of influencing and contributing to electoral campaigns, then their reach is very limited and narrow in scope.  However, if “a” major purpose were the correct application of Buckley, then states would have considerably broader authority to regulate organizations under modern state campaign finance laws.

            A. “A” Major Purpose Test

            In Human Life of Washington Inc. v. Brumsickle, the Ninth Circuit adopted the position that Buckley’s test should be read as “a” major purpose – which in turn allows this circuit to regulate more freely regulate multipurpose organizations under state campaign finance regulations.[13]  Human Life[14] challenged Washington’s Public Disclosure campaign finance regulations[15] as it applied to them.[16]  The disclosure law provisions at issue did “not place a limit on expenditures for [political committees]; rather, they require only that covered entities make certain public disclosures.”[17]  Unlike under FECA, political committee under Washington’s disclosure law is defined as “any person (except a candidate or individual dealing with his or her own funds or property) having the expectation of receiving contributions or making expenditures in support of, or opposition to, any candidate or any ballot proposition.”[18]

            Human Life argued that it could not be constitutionally construed as a political committee under Buckley’s major purpose test unless its “sole, primary purpose is political advocacy.”[19]  However, the court here disagreed with plaintiffs, holding “nothing in Buckley suggests . . . that an entity must have that [defined] major purpose to be deemed constitutionally a political committee.”[20]  Moreover, the court found that Supreme Court’s reasoning in Buckley does not restrict the application of disclosure requirements to only apply to those organizations whose sole, primary purpose is political advocacy.  Thus, the court argued that regulating organizations with “a” major purpose as political action committees is constitutionally permissible.[21]

            B. “The” Major Purpose Test

            The Fourth Circuit has traditionally been cited as a hostile circuit for campaign finance regulations.[22]  Accordingly, their approach to Buckley’s major purpose deviates significantly from that adopted by the Ninth Circuit as outlined in the above.  For example, several non-profit organizations challenged the constitutionality of North Carolina’s Campaign Finance Laws in 2008.[23]  The lead plaintiff in the case was North Carolina Rights to Life, Inc. (“NCRL”)[24]–a nonprofit incorporated in North Carolina. 

             The Fourth Circuit held North Carolina’s campaign finance regulations as it pertains to its definition of what can constitute a “political committee”[25] to be unconstitutional under Buckley.[26]  NCRL argues that North Carolina’s regulations unnecessarily burdens their organization since the statute requires that it “must they appoint a treasurer who the state shall train before every election cycle . . . [and] they must also file a statement of organization that reveals all financial depository information.”[27]

            Ultimately, “the Fourth Circuit held that under Buckley, to regulate an organization as a political committee, ‘the major purpose’ of the organization must be supporting or opposing a candidate.”[28]  Moreover, the Fourth Circuit found that “including every organization with a major purpose of influencing elections would be both unconstitutionally overbroad, because it would sweep in too much constitutionally protected political speech, and unconstitutionally vague[29], because the statute provided absolutely no direction as to what constituted a major purpose.”[30]

                   IV. Analysis

            Campaign finance reform remains a hot button topic that garners substantial media attention.  However, very little is being achieved legislatively to combat the problems currently facing the nation in this realm of politics.  For example, over six billion dollars were spent in the 2012 elections–the largest number in history.[31]  Much of this can be attributed to the Supreme Court’s holdings during the past several decades on the issue, particularly Citizens United.[32]  The court has made it increasingly arduous for federal and state governments to curb political spending.  This has resulted in money playing a larger role in elections than ever before, and has led directly to the creation what have been become known as “Super PACs”.[33]

            The concern here is that because “Super PACs” can spend an unlimited amount of funds, they are overly influencing elections and damaging the integrity of the democratic process.  Furthermore, “Super PACs” also pose the danger of political corruption: “ [Super PACs] may skew the legislative process . . . in favor of the interests of large [Super PAC] contributors.”[34]  This skew can occur because “a candidate who receives a large contribution will feel grateful to the contributor, and legislative policy could well skew in the contributor's direction.”[35]  While we undoubtedly want interest groups involved in the electoral process to a certain extent, Citizens United has created a colossal, unregulated mess where organizations have carte blanche reign to spend unlimited funds without any form of oversight or – in many cases – having to disclose their identity to their electorate.  This ultimately poses serious dangers and risks to the integrity of the electoral process as a whole.

            Many legislators have proposed solutions to the problems presented by the Supreme Court’s holding in Citizens United.  Such proposals have included strengthening disclosure requirements.[36]  Disclosure requirements can be very effective tools for both curbing political corruption and informing the electorate of contributions by organizations to specific political campaigns.  While the Supreme Court has staunchly rebuked legislation that seeks to curb political “speech”, the court also made it abundantly clear that, “disclosure requirements may burden the ability to speak, but they ‘impose no ceiling on campaign-related activities' and do not prevent anyone from speaking.”[37]

            Moreover, “providing information to the electorate is vital to the efficient functioning of the marketplace of ideas, and thus to advancing the democratic objectives underlying the First Amendment.”[38]  Additionally, courts have recognized a legitimate government interest in individual citizens seeking to make informed choices in the political marketplace[39], and “by revealing information about the contributors to and participants in public discourse and debate, disclosure laws help ensure that voters have the facts they need to evaluate the various messages competing for their attention.”[40] [41]

            The Fourth Circuit has specifically emphasized that in the “cacophony of political communications through which . . . being able to evaluate who is doing the talking is of great importance.”[42] Furthermore, disclosure requirements are of paramount importance to citizens because “as lawmakers, [they] have an interest in knowing who is lobbying for their vote, just as members of Congress may require lobbyists to disclose who is paying for the lobbyists' services and how much.”[43]  More importantly, “access to reliable information becomes even more important as more speakers, more speech—and thus more spending—enter the marketplace, which is precisely what has occurred in recent years.”[44]  Thus, disclosure requirements are an effective means of both informing the electorate and keeping organizations in check.[45]

Nonetheless, states and legislatures are facing a plethora of legal pushback in their attempts to administer more disclosure requirements.  As demonstrated in the above, several circuits have utilized Buckley’s major purpose test to find several state campaign finance regulations–featuring bold and forceful disclosure requirements–unconstitutional.[46]  These rulings are based on a skewed reading of Buckley.[47]  Moreover, it would appear dangerous for other circuits to follow both the Fourth and Tenth circuits and adopt “the” major purpose test, particularly given the free reign organizations currently have in utilizing “Super PACs” following the Supreme Court’s ruling in Citizens United. Accordingly,  circuits yet to rule on this split should adopt – as the Ninth circuit has – “a” major purpose test as applied to when organizations can be regulated as a political committee and forced to comply with campaign finance regulations, including disclosure requirements. 

                   V. Conclusion

            Because the political landscape and influx of money in politics following the Supreme Court’s holding in Citizens United, the Fourth and Tenth circuit approach sets a concerning and dangerous precedent and should be rejected by other circuits–including the Third Circuit.  Accordingly, it would be prudent for subsequent circuit rulings to digest and incorporate the Ninth Circuit approach and interpret Buckley to accommodate a test that permits disclosure requirements to regulate organizations with “a” major purpose towards political advocacy as political action committees.

 


*Submissions and Symposiums Editor, Rutgers Journal of Law and Public Policy; J.D. Candidate 2016, Rutgers Law School.

[1] Former Supreme Court Justice John Paul Stevens has publically suggested an amendment to “fix” the problematic outcomes of recent Supreme Court decision on campaign finance restrictions.  See Adam Liptak, Justice Stevens Suggests Solution for ‘Giant Step in the Wrong Direction’, The New York Times (April 21, 2014), http://www.nytimes.com/2014/04/22/us/politics/justice-stevenss-prescript....

[2] This is due to their narrow reading of Buckley’s major purpose which will be discussed ad nauseam in the below.

[3] It was in Buckley where the Supreme Court first formally held that spending money on political campaigns was considered constitutionally protected speech under the First Amendment.  Buckley v. Valeo, 424 U.S. 1, 19 (1976).

[4] The Federal Election Campaign Act of 1971 was passed in an effort to increase campaign disclosures pertaining to federal candidates and political action committees. It also formed the Federal Election Commission.  Federal Election Commission (FEC) and the Federal Campaign Finance Law (February 2004), available at http://www.fec.gov/pages/brochures/fecfeca.shtml# Historical_Background.

[5] FECA defines “contribution” as any gift, subscription, loan, or anything of value made for the purpose of influencing a federal election.  See 52 U.S.C.A. § 30101(8)(A).

[6] FECA defines “expenditure” as any purchase, payment, or anything of value made for the purpose of influencing a federal election.  See 52 U.S.C.A. § 30101(9)(A).

[7] See 52 U.S.C.A. § 30101(4)(A).

[8] See generally 52 U.S.C.A. § 30104.

[9] Ciara Torres-Spelliscy, The $500 Million Question: Are the Democratic and Republican Governors Associations Really State PACs Under Buckley's Major Purpose Test?, 15 N.Y.U. J. LEGIS. & PUB. POL'Y 485, 513 (2012)(quoting Trevor Potter, The Current State of Campaign Finance Law, The New Campaign Finance Sourcebook 48, 50-51 [2005]).

[10] Edward B. Foley, The “Major Purpose” Test: Distinguishing Between Election-Focused and Issue-Focused Groups, 31 N. KY. L. REV. 341, 352 (2004).

[11] Torres-Spelliscy, supra note 10, at 521.

[12] Id.

[13] Human Life of Washington v. Brumsickle, 624 F.3d 990 (9th Cir. Ct. App. 2010).

[14] This is a nonprofit, pro-life advocacy corporation.  Id. at 995. 

[15] The disclosure law provides for “political campaign and lobbying contributions and expenditures be fully disclosed to the public and that secrecy is to be avoided.”  Wash. Rev. Code § 42.17A.001(1).  It also states as Washington's public policy “full access to information concerning the conduct of government on every level must be assured as a fundamental and necessary precondition to the sound governance of a free society.”  Id.

[16] Human Life of Washington, 624 F.3d at 995.

[17] Id. at 997; the Washington Disclosure Laws were not in violation of the Supreme Courts decision in Citizens United v. FEC, 130 S.Ct. 875, 913 (2010) (holding that corporations have a First Amendment right to make independent expenditures).

[18] Wash. Rev. Code § 42.17A.0005(37).

[19] Human Life of Washington, 624 F.3d at 1008.

[20] Id. at 1009-10.

[21] Torres-Spelliscy, supra note 10, at 526.

[22] Torres-Spelliscy, supra note 10, at 521 (describing the Fourth Circuit as a “bastion of hostility” towards campaign finance regulations).

[23] N. Carolina Right to Life, Inc. v. Leake, 525 F.3d 274, 277 (4th Cir. 2008).

[24] NCRL’s self-proclaimed purpose is the protection of human life.  They primarily provide information to the public regarding abortions, euthanasia, and pregnancies.  Id.

[25] Political Committee under the act is defined as a combination of two or more individuals . . . that makes, or accepts anything of value to make, contributions or expenditures and has one or more of the following characteristics: a) is controlled by a candidate; b) is a political party or executive committee of a political party or is controlled by a political party or executive committee of a political party; c) is created by a corporation, business entity, insurance company, labor union, or professional association pursuant; or d) has as a major purpose to support or oppose the nomination or election of one or more clearly identified candidates.  See N.C. Gen Stat. § 163–278.6(14).

[26] N. Carolina Right to Life, Inc., 525 F.3d at 288-89.

[27] N.C. Gen. Stat. § 163–278.7; N. Carolina Right to Life, Inc., 525 F.3d at 286.

[28] Torres-Spelliscy, supra note 10, at 522 (quoting N. Carolina Right to Life, Inc., 525 F.3d at 288).

[29] The Fourth Circuit compared the regulations to handing out “speeding tickets without telling anyone . . . the speed limit.”  Id. at 290. 

[30] Id.

[31] Jessica A. Levinson, The Original Sin of Campaign Finance Law: Why Buckley v. Valeo Is Wrong, 47 U. Rich. L. Rev. 881 (2013).

[32] The Supreme Court held in Citizens United, the Court held that limits on independent expenditures violate the First Amendment and that these independent expenditures do not pose a corruption danger.  Citizens United, 120 S. Ct. at 91.

[33] “Super PACs are independent expenditure-only political action committees that, as a result of a court of appeals decision and advisory opinions by the Federal Election Commission, can raise and spend unlimited sums.”  See SpeechNow.org v. FEC, 599 F.3d 686, 696 (D.C. Cir. 2010).

[34] Id.

[35] Id.

[36] “The purpose of the act was to increase transparency in political campaigns and give the public information about the individuals and entities giving and spending campaign funds”.  Levinson, supra note 32, at 937 (citing Richard Briffault, Updating Disclosure for the New Era of Independent Spending, 27 J.L. & Pol. 683, 691-713 (2012)).

[37] Citizens United, 130 S.Ct. at 914 (quoting Buckley, 424 U.S. at 64; McConnell, 540 U.S. at 201).

[38] Human Life of Washington Inc., 624 F.3d at 1005.

[39] See, eg., McConnell v. FEC, 251 F.Supp.2d 176, 237 (D.D.C. 2003).

[40] Human Life of Washington Inc., 624 F.3d at 1005.

[42] Cal. Pro-Life Council, Inc. v. Getman, 328 F.3d 1088, 1105 (9th Cir. 2003).

[43] Id. at 1106.

[44] Human Life of Washington Inc., 624 F.3d at 1007.

[45] Organizations might be more prudent and careful in their decisions to donate to political campaigns if their disclosures were to be made available to the public.  

[46] N. Carolina Right to Life, Inc., 525 F.3d at 288-89.

[47] Human Life of Washington, 623 F. 3d at 1011-12.