Federation of Connecticut Taxpayer Organizations

The Supreme Court today upheld the most important provisions of the McCain-Feingold campaign reform act of 2002, an attempt to control the unregulated, uncontained and often underground system of fund-raising and spending that now dominates federal election campaigns.

The decision, allowing a ban on "soft money" and restrictions on "issue ads" that benefit individual candidates, means the current election campaign can proceed without interruption under the new law, according to attorneys on both sides of the case.

The law sought to control the influence of money in politics. It was aimed primarily at two widespread practices designed to get around existing campaign disclosure laws and contribution limitations

It prohibited national parties and federal candidates from raising and spending so-called "soft money," donations that are not subject to federal limits because they technically go to state political parties.

And it clamped new regulations on "issue ads," commercials financed by interest groups, purportedly to advance their causes, but which critics have said are thinly disguised partisan promotions of particular candidates for office. While it did not ban any kind of ad, the law required that the funding of "electioneering communications" be publicly disclosed just as other campaign spending is disclosed. It defined "electioneering" ads as those that run in close proximity to scheduled elections and refer to a particular candidate or are aimed at a particular candidates constituency.

Challengers to the law said it violated First Amendment rights of free speech in political campaigns.

But the justices upheld all of the major new restrictions by 5-to-4 votes.

Justices John Paul Stevens and Sandra Day O'Connor, writing for the majority on the main issues, said that Congress had carefully and successfully tailored the new law to avoid constitutional problems after determining that the current system of campaign finance led to corruption, or the appearance of corruption.

"The idea that large contributions to a national party can corrupt or create the appearance of corruption of federal candidates and officeholders is neither novel nor implausible," the majority said. "There is substantial evidence in these cases to support Congress' determination that contributions of soft money give rise to corruption and the appearance of corruption."

The court said Congress also has power to act against all or any "circumventions," of campaign laws, whether in the form of "soft money" or sham "issue ads."

The justices rejected as "unpersuasive" arguments that the new provisions intrude on constitutionally protected rights of free speech and free political association. They similarly rejected claims that the soft money restrictions cut too deeply into the prerogatives of the states to regulate elections.

On the main provisions of the law, Stevens and O'Connor were joined by Justices David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer.

Chief Justice William H. Rehnquist dissented from the primary holdings, as did Justices Antonin Scalia, Anthony M. Kennedy and Clarence Thomas.

The broad philosophical dividing line on campaign finance regulation revolves around the extent to which money is regarded as "speech."

Challengers of the law -- and dissenters today -- believe that campaign activity, including the deployment of campaign money, deserves the same high level of protection accorded to, say, campaign speeches and debates. Their position was reinforced by the 1976 ruling in Buckley v. Valeo, which struck down parts of an earlier campaign reform act because it impinged on the right of individuals to express themselves by giving money.

On the other side are those in the majority today, who simply do not take the speech-money equation that far. They believe Congress has great leeway to regulate activities once it has established that they may corrupt the political process.

"The evidence in the record," wrote Stevens and O'Connor, "shows that candidates and donors alike have in fact exploited the soft-money loophole, the former to increase their prospects of election and the latter to create debt on the part of officeholders. . . . For their part, lobbyists, CEOs, and wealthy individuals alike all have candidly admitted donating substantial sums of soft money to national committees not on ideological grounds, but for the express purpose of securing influence over federal officials."

Scalia, on the other hand, condemned today's outcome as a First Amendment disaster. "This is a sad day for the freedom of speech," he wrote. "Who could have imagined that the same Court which, within the past four years, has sternly disapproved of restrictions upon such inconsequential forms of expression as virtual child pornography . . . would smile with favor upon a law that cuts to the heart of what the First Amendment is meant to protect: the right to criticize the government."

There were eleven different challenges to the law, all of which were consolidated in today's ruling, called McConnell, United States Senator, et al., v. Federal Election Commission et al. The court worked with uncommon speed to get the decision published before the actual beginning of the formal election year, 2004. On only one minor matter did the challengers prevail. The court said congress went too far in banning contributions by minors. This provision was designed to prevent adults from funneling money through children.

"I think the result is disappointing but not altogether unexpected," said Jan Baran, one of the attorneys representing the main challenger of the law, Sen. Mitch McConnell (R-Ky.). "And the 5-4 decision reflects how evenly divided opinion is on these issues."

"I'm thrilled by the court's decision," said Randolph Moss, who represented the chief senate sponsors, Sens. John McCain (R-Ariz) and Russell Feingold (D-Wis.) "It's a great victory for the parties defending the law but really for the country. The court has reaffirmed Congress's ability to regulate campaign finance in a way that protects the democratic process."

The new rules have been in force during the early stages of preparation for the 2004 elections for president and Congress. A lower court panel of federal judges had issued its own, fractured ruling on the new law earlier this year, but the Supreme Court got the last word.

The two parties hauled in nearly $500 million in soft money in the two-year election cycle that ended in 2000, most of it from large corporations, labor unions and a relative handful of wealthy individuals.

The idea of "soft money" picked up steam in the 1980s in response to federal election laws enacted after Watergate limiting the size of individual campaign contributions and requiring extensive disclosure.

Lawyers for both parties found that channeling money to state political parties for their own activities could provide an alternative way of financing campaigns that was not subject to the federal law. The parties could and did use the money for such things as "get out the vote" drives and ads that directly benefited party presidential candidates.

Since then, literally billions of dollars have been spent in this fashion, including contributions from individuals far in excess of the amounts permitted under federal law.