Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett (2011)
In 1998, Arizona passed the Citizens Clean Elections Act which allowed candidates for state office to voluntarily select public financing for their campaign.1 In order to be eligible, publicly funded candidates had to limit their expenditure of personal funds to $500;2 participate in at least one debate;3 adhere to an expenditure cap;4 and return all unspent public moneys to the state.5 Furthermore, publicly financed candidates received approximately one dollar for every dollar spent by a privately financed candidate or independent expenditure group that exceeded the set spending limit (minus a 6 percent fee). Put simply, the state matched any amounts the privately financed candidate spent in excess of the expenditure cap. Matching funds topped out at “two times the initial authorized grant of public funding to the publicly financed candidate,” whereas the privately financed candidate could spend unlimited funds.6
Justice Roberts’ majority opinion provided an example from Arizona’s Fourth District during the 2010 election. The Fourth District had three candidates running for two House seats. While two of the candidates opted for public funding, the third candidate chose to privately fund his campaign. If the privately financed candidate received contributions in any amount above the $21,479 cap, both of the publicly financed candidates would receive matching funds. For instance, if the privately financed candidate spent $1,000 for a direct mailing, the publicly financed candidates would each receive $940 ($1,000 minus 6 percent). If an independent expenditure group spent $1,000 for a brochure supporting the privately financed candidate, each of the publicly financed candidates would receive $940 in matching funds. The publicly financed candidates would continue to receive state funds until they reached the $64,437 limit.
The matching funds part of the statute led to the First Amendment challenge in this appeal. Four candidates for state office and two independent expenditure groups filed a lawsuit claiming the matching funds provision violated the First Amendment. The main appellant in the case, the Arizona Free Enterprise Club, was a Conservative, pro-business, independent expenditure group. It supported lowering taxes, cutting regulations, reducing the influence of unions, and ending government regulation of campaign finance. The appellants argued that the motive behind Arizona’s statute was equalizing resources between candidates.
The State of Arizona claimed its statute was an anti-corruption measure intended to lessen the influence of private funds in state elections. The statute did not prevent privately financed candidates or independent expenditure groups from spending unlimited amounts. The issue in the case was whether the matching funds provision had the effect of inhibiting these expenditures because the publicly financed opponent(s) would receive a matching amount.
Justice Roberts cited the court’s line of precedent expanding the rights of independent groups to spend unlimited amounts in American elections. Prior to this case, the court invalidated: government restrictions on campaign expenditures (Buckley v. Valeo [1976]);7 restraints on expenditures from express advocacy groups (Federal Election Commission v. Massachusetts Citizens for Life, Inc. [1986]);8 restrictions on uncoordinated party expenditures (Colorado Republican Federal Campaign Commission v. Federal Election Commission [1996]);9 and bans on independent expenditures from corporations and unions (Citizens United v. Federal Election Commission [2010]).10
These cases were of limited precedential value, though, because Arizona’s statute didn’t place any spending limits on candidates or independent groups. The majority turned to Davis v. Federal Election Commission (2008) as its primary precedent.11 As table 9.1 shows, a large proportion of the majority opinion was spent discussing Davis.
Table 9.1 Justice Roberts’ Majority Opinion, Arizona Freedom Club PAC v. Bennett (2011)
|
Content |
Number of lines |
Percentage of opinion |
|
Arizona Citizens Clean Election Act |
28 |
11.48 |
|
Majority distinguishes Davis v. FEC (2008)(w/o citation) |
23 |
9.43 |
|
Davis v. FEC (2008) |
19 |
7.79 |
|
Arizona’s statute burdens First Amendment rights(w/o citation) |
18 |
7.38 |
|
Example involving Arizona’s Fourth District during the 2010 election |
14 |
5.74 |
|
State of Arizona’s arguments |
13 |
5.33 |
|
General statements refuting Arizona’s arguments(w/o citation) |
13 |
5.33 |
|
Statute does not further Arizona’s anti-corruption interest (with citation) |
8 |
3.28 |
|
Statute does not further Arizona’s anti-corruption interest (w/o citation) |
7 |
2.87 |
|
Arguments challenging the dissenting opinion |
7 |
2.87 |
|
Statute burdens independent expenditure groups even more than individual candidates |
7 |
2.87 |
|
Arizona claims its goal is to eliminate corruption |
6 |
2.46 |
|
Majority argues Arizona’s goal is to equalize resources (with citation) |
6 |
2.46 |
|
Government may not increase free speech rights of some at the expense of others (with citation) |
6 |
2.46 |
Notes: N = 244. This table presents data for content that appeared at least six times in the opinion.
Source: Table created by author based on data from Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, 564 U.S. 721 (2011).
The Davis v. FEC (2008) case was decided by the same five Republican justices in the majority. Davis involved application of the “Millionaire’s Amendment” of the Bipartisan Campaign Reform Act of 2002 to a House race in New York.12 Under the Amendment, if a candidate spent over $350,000 of personal funds, their opponents were permitted to collect up to $6,900 per contributor (three times the normal contribution limit of $2,300). The majority in Davis ruled the “Millionaire’s Amendment” burdened a candidate’s free speech right to spend unlimited personal funds because doing so allowed their opponents to raise more money. Although it did not provide an outright cap on expenditures, the Amendment operated as a penalty on candidates who had the means to spend over $350,000 of their own personal funds.
The majority believed Arizona’s statute went beyond Davis in burdening First Amendment speech. Justice Roberts highlighted three important differences between Davis and the present case that strengthened Arizona Freedom Club’s First Amendment argument. First, under the “Millionaire’s Amendment” in Davis, the candidates still had to go out and raise additional contributions. The state wasn’t automatically providing matching funds. It simply raised the limit on the amount opponents could receive per contributor. Conversely, Arizona’s matching funds provision didn’t require opponents to do anything to receive the additional funds. Second, under Arizona’s statute, each additional dollar a candidate spent benefited potentially more than one adversary because every opponent was entitled to matching funds. Third, Arizona’s matching funds provision applied to spending by groups operating independent of the candidates. Thus, unlike in Davis, candidates were penalized for the actions of groups operating outside their campaigns.
The majority used these rationales as its basis for striking down the Citizens Clean Elections Act as an unjustifiable burden on free speech. Ironically, the statute actually did the opposite. Unlimited spending by wealthy candidates and groups had the effect of drowning out opposing viewpoints. Providing additional funds to publicly financed candidates meant more advertisements, more speeches, more debates, and more opportunities to meet with constituents. It also meant these campaigns had a better chance of going the distance. Many campaigns ended because they lacked the funds to continue. Arizona’s statute increased the probability of voters getting to know both candidates and both sides of the issues.
The majority agreed that “the matching funds provision did result in more speech by publicly financed candidates and more speech in general,” but it did so at the expense of privately financed candidates.13 In support of this position, Justice Roberts cited a few instances when candidates or groups supposedly curtailed their fundraising efforts to avoid triggering the matching funds provision, but otherwise, the record provided scant evidence of this effect. Justice Roberts dismissed the lack of credible evidence by simply stating, “we do not need empirical evidence to determine that the law at issue is burdensome.”14
Once the majority decided the matching funds provision imposed a substantial burden on free speech, the court had to decide if the state could pass the compelling interest test. Justice Roberts identified two potential state interests: (1) leveling the playing field between publicly financed and privately financed candidates, or (2) fighting corruption.15 The majority soundly rejected both of these as compelling interests. Justice Roberts argued that leveling the playing field was not sufficiently compelling since it handicapped candidates who had to spend more money due to a lack of name recognition or public exposure to their views.16 This view was based on the questionable premise that Arizona’s matching funds provision stifled the spending of privately financed candidates. However, there was very little evidence in the record to support this contention. Ultimately, the justices substituted their judgment for the elected representatives of Arizona. Justice Roberts stated, “the guiding principle is freedom . . . not whatever the State may view as fair.”17
Table 9.1 demonstrates that the majority devoted more attention to the anti-corruption interest, which they did not view as compelling either. The justices dismissed the connection between independent expenditures and corruption. As long as independent expenditures were not coordinated with a candidate, Justice Roberts claimed that the “candidate-funding circuit is broken. The separation between candidates and independent expenditure groups negates the possibility that independent expenditures will result in the sort of quid pro quo corruption with which our case law is concerned.”18 This remark suggests the majority didn’t understand how influence in American politics works, or they didn’t care.
Writing for the dissent, Justice Kagan noted that Arizona’s anti-corruption statute “. . . does not discriminate against any candidate or point of view, and it does not restrict any person’s ability to speak. In fact, by providing resources to many candidates, the program creates more speech and thereby broadens public debate.”19 She believed the statute promoted the values underlying the First Amendment while making government more responsive to the voters instead of wealthy interests. States had long recognized that political quid pro quos between wealthy donors and officeholders undermined the integrity of American democracy and created the perception of corruption. Justice Kagan pointed to a recent scandal in Arizona, known as “AZScam,” where almost 10 percent of Arizona’s state legislators were caught accepting campaign contributions as a bribe in exchange for votes on particular pieces of legislation.20
Public financing made incidents like these far less likely. Candidates who received public financing were beholden to no one, and therefore, less likely to act in the interests of donors, at the expense of the public good. In this respect, public financing was a successful strategy for battling political corruption. The dissent referred to the court’s declaration in Buckley v. Valeo (1976) that a public financing system would serve the governmental interest of eliminating the improper influence of large private contributors while increasing public debate and participation in the electoral process. The Buckley opinion expressly gave “state and municipal governments the green light to adopt public financing systems.”21
The dissent recognized that a public financing system would only work if enough candidates chose to participate, rather than raise private funds. At the same time, participation had to be voluntary in order to be constitutional. Therefore, states had to give candidates an incentive to join. However, due to fiscal constraints, there was a limit on how much they could provide in subsidies. Arizona addressed this challenge by adjusting the amount of the subsidy for each specific electoral contest based on the amount spent by the privately financed candidates and their supporters. The publicly financed candidate received an initial lump sum and then an additional 94 cents for every dollar the privately financed candidate spent over the initial lump sum, up to three times the initial amount. After that, the publicly financed candidate could not receive any more in subsidies or private contributions. This matching funds strategy gave publicly financed candidates a fighting chance, but even so, the privately financed candidates were still at a distinct advantage.
Nevertheless, the majority still saw this system as a substantial burden on free speech. Conversely, the dissent believed the statute actually subsidized political speech. The law did not impose a ceiling on spending by privately financed candidates or their supporters, nor did it restrict how they spent their money, when they spent it, or what they spent it on. What the law did was make electoral races more competitive by funding speech from publicly financed candidates. This distinction between restricting and subsidizing speech was an important one.
Justice Kagan used the word chutzpah to describe the petitioners’ complaint that the state was disbursing funds to their opponents through a program that they themselves refused to participate in.22 The program was available to any candidate regardless of party affiliation or viewpoint. She wrote, “Indeed, what petitioners demand is essentially a right to quash others’ speech through the prohibition of a (universally available) subsidy program.”23 Nothing prevented the petitioners or their supporters from spending unlimited amounts, but what they really wanted was to suppress the competition.
The majority embraced the petitioners’ complaint and ruled that Arizona’s law burdened free speech because it hindered the amount privately financed candidates would spend. The theory was that privately financed candidates would withhold spending because they didn’t want their opponents to receive more funds. In other words, a viewpoint-neutral subsidy to a candidate posed a First Amendment burden on their opponent. Undeniably, this was a novel holding by the court. Justice Kagan noted the lack of a single precedent supporting the majority’s reasoning.
The dissent saw a clear distinction between this case and Davis v. FEC (2008). The Davis case dealt with the “Millionaire’s Amendment,” that imposed campaign contribution restrictions between the candidates. Under the “Millionaire’s Amendment” in Davis, if a candidate spent more than $350,000 of her own money, the contribution limit for her opponent would increase from $2,300 to $6,900 per contributor (three times more than the self-financed candidate). Thus, the self-financed candidate’s campaign expenditures triggered discriminatory contribution limits between candidates. This amounted to a speech restriction, whereas Arizona’s statute provided a speech subsidy.
Even assuming the matching funds provision substantially burdened free speech, the dissent believed the state had a compelling interest in preventing corruption or the appearance of corruption. The state’s motive was apparent from the title (Citizens Clean Elections Act), and its stated justification was to deter “. . . quid pro quo corruption and the appearance of corruption by providing Arizona candidates with an option to run for office without depending on outside contributions.”24 Without the matching funds provision, this goal would be unattainable.
Nevertheless, the majority believed it had discovered “the State’s true (and nefarious) intention.”25 According to the majority, the state’s true purpose was “leveling the playing field.”26 But, as Justice Kagan noted, this point was irrelevant. If the state had two motives—preventing corruption and leveling the playing field—as long as one of the motives was legitimate, it didn’t matter if the other motive provided an insufficient justification. She stated, “It is a ‘fundamental principle of constitutional adjudication,’ from which we have deviated in only exceptional cases, ‘that this Court will not strike down an otherwise constitutional statute on the basis of an alleged illicit legislative motive.’”27 As the dissent put it, the majority’s hunt for evidence of “leveling” was a “waste of time.”28
NOTES
1. Citizens Clean Elections Act, Ariz. Rev. Stat. §§ 16-940 to 16-961.
2. Id. at § 16-941(A)(2).
3. Id. at § 16-956(A)(2).
4. Id. at § 16-941(A).
5. Id. at § 16-953.
6. Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, 564 U.S. 721, 730 (2011).
7. Buckley v. Valeo, 424 U.S. 1 (1976).
8. FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986).
9. Colorado Republican Federal Campaign Committee v. FEC, 518 U.S. 604 (1996).
10. Citizens United v. FEC, 558 U.S. 310 (2010).
11. Davis v. FEC, 554 U.S. 724 (2008).
12. Bipartisan Campaign Reform Act of 2002 § 319(b), 116 Stat. 81.
13. Arizona Free Enterprise, 564 U.S. at 741.
14. Id. at 746.
15. There was a dispute in the case about the state’s true motive.
16. Arizona Free Enterprise, 564 U.S. at 750.
17. Id.
18. Id. at 751.
19. Id. at 756.
20. Id. at 761.
21. Id. at 759.
22. Id. at 766.
23. Id.
24. Id. at 778.
25. Id. at 780.
26. Id.
27. Id. at 783.
28. Id.