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Campaign finance

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Title:
Campaign finance contributions, expenditures and finding political equality
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Schwarz, Heather Renee
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[Gainesville, Fla.]
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University of Florida
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Campaign contributions ( jstor )
Congressional elections ( jstor )
First Amendment ( jstor )
Political campaigns ( jstor )
Political candidates ( jstor )
Political elections ( jstor )
Political parties ( jstor )
Political reform ( jstor )
Political speeches ( jstor )
State elections ( jstor )
CAMPAIGN, FINANCE
Dissertations, Academic -- Mass Communication -- UF ( lcsh )
Mass Communication thesis, M.A.M.C ( lcsh )
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government publication (state, provincial, terriorial, dependent) ( marcgt )
bibliography ( marcgt )
theses ( marcgt )
non-fiction ( marcgt )

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Abstract:
ABSTRACT: This thesis is an exhaustive analysis of contributions and expenditures in political campaigns since the Federal Election Campaign Act (FECA) was implemented in 1971. The purpose is to analyze campaign funds by looking at the FECA of 1971 and to discuss it in terms of ten U.S. Supreme Court opinions starting with the landmark case Buckley v. Valeo in 1976. The Court has consistently upheld the FECA's regulations and state campaign finance laws on contributions and coordinated expenditures for individuals, Political Action Committees (PACs), multicandidate PACs, and political parties. The justification for the government regulating contributions is political corruption or the appearance of corruption. Further, regulations on independent expenditures have been consistently struck down by the Court as unconstitutional incursions on the First Amendment, except when these expenditures are made by profit-promoting corporations. In analyzing campaign finances, the Court has applied First Amendment principles such as the right to free speech, the right to association, and the marketplace of ideas. By looking at the individual justices' opinions, a trend can be discerned that might help predict the future of campaign finance reform. In fact, three justices on the current Court clearly indicated they would like to strike down the last 25 years of decisions on campaign finance and overturn Buckley. However, five other justices exist in the majority that will stop Buckley from being overruled and will continue to work to improve the established campaign finance framework.
Abstract:
ABSTRACT (cont.): Additionally, the U.S. Congress worked to improve the established framework by passing more stringent campaign finance regulations in the Bipartisan Campaign Reform Act of 2002 (Reform Act) that amends the FECA of 1971. The Reform Act attempts to close loopholes in the FECA's provisions concerning soft money and issue advertisements, but could create a bigger loophole that would allow state and local parties to help federal elections through soft money spending. The Reform Act also amends the definitions of independent and coordinated expenditures to include political parties. In conclusion, the U.S. Congress needs to make the FECA's definitions less ambiguous and more comprehensive to eliminate existing loopholes and to avoid creating new loopholes. Although the Reform Act is a step in the right direction in reforming campaign finance, campaign finance reform still has a long way to go to achieve a fairer and less corrupt federal election system.
Thesis:
Thesis (M.A.M.C.)--University of Florida, 2002.
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Includes bibliographical references.
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Mode of access: World Wide Web.
General Note:
Title from title page of source document.
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Includes vita.
Statement of Responsibility:
by Heather Renee Schwarz.

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University of Florida
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Copyright Schwarz, Heather Renee. Permission granted to the University of Florida to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
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12/1/2003
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CAMPAIGN FINANCE: CONTRIBUTIONS, EXPENDITURES AND FINDING POLITICAL EQUALITY By HEATHER RENEE SCHWARZ A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN MASS COMMUNICATION UNIVERSITY OF FLORIDA 2002

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Copyright 2002 By Heather Renee Schwarz

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To my professors, family, and friends who gave me their guidance and support.

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TABLE OF CONTENTS page ABSTRACT.........................................................................................................................v CHAPTER 1 INTRODUCTION..........................................................................................................1 Research Questions.........................................................................................................6 Methodology...................................................................................................................6 Chapter Outline...............................................................................................................8 2 REVIEW OF LITERATURE: CAMPAIGN FINANCE.............................................10 Significance of Campaign Finance...............................................................................10 The United States Supreme Court................................................................................13 Regulation by the Government.....................................................................................15 Summary of Campaign Finance Issues........................................................................18 3 THE FEDERAL ELECTION CAMPAIGN ACT........................................................20 4 U.S. SUPREME COURT CASES................................................................................28 Ten U.S. Supreme Court Cases....................................................................................29 First Amendment Rights...............................................................................................42 Limitations on Contributions.................................................................................45 Limitations on Expenditures..................................................................................50 Justices’ Opinions.........................................................................................................55 5 BIPARTISAN CAMPAIGN REFORM ACT OF 2002...............................................66 6 SUMMARY AND CONCLUSIONS...........................................................................77 APPENDIX BIPARTISAN CAMPAIGN REFORM ACT OF 2002..............................85 REFERENCES................................................................................................................133 BIOGRAPHICAL SKETCH...........................................................................................139 iv

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Abstract of Thesis Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Master of Arts in Mass Communication CAMPAIGN FINANCE: CONTRIBUTIONS, EXPENDITURES AND FINDING POLITICAL EQUALITY By Heather Renee Schwarz December 2002 Chair: Dr. Linda Perry Major Department: Mass Communication This thesis is an exhaustive analysis of contributions and expenditures in political campaigns since the Federal Election Campaign Act (FECA) was implemented in 1971. The purpose is to analyze campaign funds by looking at the FECA of 1971 and to discuss it in terms of ten U.S. Supreme Court opinions starting with the landmark case Buckley v. Valeo in 1976. The Court has consistently upheld the FECA’s regulations and state campaign finance laws on contributions and coordinated expenditures for individuals, Political Action Committees (PACs), multicandidate PACs, and political parties. The justification for the government regulating contributions is political corruption or the appearance of corruption. Further, regulations on independent expenditures have been consistently struck down by the Court as unconstitutional incursions on the First Amendment, except when these expenditures are made by profit-promoting corporations. v

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In analyzing campaign finances, the Court has applied First Amendment principles such as the right to free speech, the right to association, and the marketplace of ideas. By looking at the individual justices’ opinions, a trend can be discerned that might help predict the future of campaign finance reform. In fact, three justices on the current Court clearly indicated they would like to strike down the last 25 years of decisions on campaign finance and overturn Buckley. However, five other justices exist in the majority that will stop Buckley from being overruled and will continue to work to improve the established campaign finance framework. Additionally, the U.S. Congress worked to improve the established framework by passing more stringent campaign finance regulations in the Bipartisan Campaign Reform Act of 2002 (Reform Act) that amends the FECA of 1971. The Reform Act attempts to close loopholes in the FECA’s provisions concerning soft money and issue advertisements, but could create a bigger loophole that would allow state and local parties to help federal elections through soft money spending. The Reform Act also amends the definitions of independent and coordinated expenditures to include political parties. In conclusion, the U.S. Congress needs to make the FECA’s definitions less ambiguous and more comprehensive to eliminate existing loopholes and to avoid creating new loopholes. Although the Reform Act is a step in the right direction in reforming campaign finance, campaign finance reform still has a long way to go to achieve a fairer and less corrupt federal election system. vi

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CHAPTER 1 INTRODUCTION The 2001 Enron bankruptcy brought to the public's attention the involvement that wealthy corporations have in political campaigns. 1 Public outrage followed after news that the bankrupt company gave $426,500 to Republicans and $362,000 to Democrats in soft money donations through state political parties in 1999 and 2000. 2 And, a week before Enron declared bankruptcy, the energy company contributed $200,000 to the Republican and Democratic National Committees. 3 With Enron in the forefront of the public’s mind, the U.S. Congress felt renewed pressure to introduce campaign finance reform measures to restore the public’s faith in the political system. One fallout from the bankruptcy was the U.S. Congress’ passing “the broadest campaign finance legislation since the Watergate era,” 4 the Bipartisan Campaign Reform Act of 2002 (Reform Act). 5 An amendment to the Federal Election 1 John Lancaster & Juliet Eilperin, Grass-Roots Effort Given Key Boost by Enron Scandal, Wash. Post, Feb. 14, 2002, at A6. U.S. Representative Martin Meehan said, “The public knows that any past action with regard to Enron—or any future government action with regard to Enron—is tainted, and that government actions have less credibility because of that money.” Id. 2 Richard L. Berke, Enron Pursued Plan to Forge Close Ties to Gore Campaign, N.Y. Times, Feb. 18, 2002. 3 John Dunbar, Shays-Meehan Shifts Money Focus to the States, The Center for Public Integrity, posted Feb. 28, 2002, at http://www.public-i.org/story_0122802.htm. 4 Adam Clymer and Alison Mitchell, House Speaker Schedules Vote Next Week on Campaign Finance Overhaul, N.Y. Times, Feb. 6, 2002. 5 Pub. L. No. 107-155, 101, 116 Stat. 81 (2002). 1

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2 Campaign Act (FECA) of 1971, the Reform Act is the product of its sponsors in the U.S. House of Representatives, Christopher Shays and Martin Meehan, and in the U.S. Senate, John McCain and Russell Feingold. The sponsors said the legislation, which becomes effective after the November 2002 elections, was written to close the loophole of unregulated soft money donations in federal elections. This soft money loophole has allowed donors to bypass the FECA’s contribution and expenditure limits. In addition, the Reform Act will allow individuals, unions, and corporations to give $10,000 in softmoney donations to state and local political parties for pre-election activities. 6 John Dunbar, a Senior Associate at the Center for Public Integrity, praised the Reform Act, saying, “It will eliminate a colossal loophole through which corporate, labor union and individual political donors poured nearly a half-billion dollars in ‘soft money’ into national party coffers in the 2000 election cycle.” 7 However, several opponents of the new law, such as the National Rifle Association and Senator Mitch McConnell of Kentucky, plan to challenge its constitutionality. 8 6 Alison Mitchell, Campaign Bill’s Chief Foe Hints of a Short Debate , N.Y. Times, Mar. 19, 2002. 7 John Dunbar, Shays-Meehan Shifts Money Focus to the States, The Center for Public Integrity, posted Feb. 28, 2002, at http://www.public-i.org/ story_01_ 022802. htm . 8 The Associated Press, Bush Signs Campaign Bill and N.R.A. Challenges New Law , N.Y. Times, Mar. 27, 2002 (stating the constitutional challenges include the limitations on soft-money contributions, restrictions on issue advertisements that are run close to federal elections, and regulations of an individual’s donations to political parties in federal elections). See also The Associated Press, Bush Campaign Finance Text , N.Y. Times, Mar. 27, 2002 (stating that before the new law, only corporations and PACs were limited in the money they could donate to state and local political parties).

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3 The Bipartisan Campaign Reform Act of 2002 constitutes a small step in a series of government regulations of campaign finance laid out since the FECA in 1971. 9 Congress passed the FECA to regulate contributions and expenditures in federal campaigns and to require detailed disclosure of campaign finance by political parties, Political Action Committees (PACs), and federal candidates. 10 The FECA was amended in 1974 11 to set contribution and expenditure limits for candidates, political parties, PACs, multicandidate PACs, and individuals. The 1974 amendment also established the 9 The FECA was the most comprehensive of Congress’ passed massive campaign finance regulations. Other acts were passed before the FECA. In the 1830’s the Pendleton Act prohibited federal employees from soliciting funds from other federal employees. See also Robert Mutch, Campaigns, Congresses and Courts: The Making of Federal Campaign Finance Law . New York: Praeger, xvi (1998). In 1907, the Tillman Act prohibited federally chartered corporations and banks from making contributions to federal candidates. The Publicity Act was passed in 1910, which required post-election disclosure of campaign funds. The Federal Corrupt Practices Act was passed in 1925 to extend the Tillman Act prohibition to anything of value, such as expenditures. There were not any successful prosecutions during its 46 years as law. The FECA was passed to replace the Federal Corrupt Practices Act. See also Herbert E. Alexander, Financing Politics: Money, Elections, and Political Reform . 4 th ed. Washington D.C.: CQ Press, 1992. The Hatch Act was passed in 1939 to extend the political contribution ban to government employees. In 1947, the Taft-Hartley Act was passed, which barred unions as well as corporations from making contributions or expenditures to federal candidates 18 U.S.C. (1970 ed.). 10 Robert F. Bauer and Doris M. Kafka, United States Federal Election Law , 6-7 (1982). The FECA of 1971 also regulated media communications, put a monetary ceiling on the amount of money that a candidate and immediate family of the candidate could spend in elections and amended the Internal Revenue Code relative to campaign finances. 11 Federal Election Campaign Act (FECA) Amendments of 1974, 2 U.S.C. 441a-441h. Pub. L. No. 93-443, 88 Stat. 1263 (codified in sections of 2, 15, 18, 26, & 47 U.S.C.) (amending FECA of 1971, Pub. L. No. 92-225, 86 Stat. 3 (1972)). See also Nicholson, Buckley v. Valeo: The Constitutionality of the Federal Election Campaign Act Amendments of 1974, 1977 Wis. L. Rev. 323 (1977), and Herbert E. Alexander, Financing Politics: Money, Elections, and Political Reform . 4 th ed. Washington D.C.: CQ Press, 1992 (stating the 1974 amendment repealed the Hatch Act provision barring federal contractors from creating PACs).

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4 Federal Election Commission (FEC), whose job was to enforce campaign finance laws, disclosure laws, and public funding programs. 12 The 1976 FECA amendment made adjustments to the legislation as the Court had set out in Buckley v. Valeo, 13 and the 1979 FECA amendment added provisions for political spending and disclosure, and eliminated some reporting requirements. In Buckley , the Court distinguished between expenditures on behalf of and contributions to federal candidates made by individuals and PACs, striking down limits on expenditures and upholding limits on contributions. 14 The FECA defined contributions as gifts or anything of value gi ven directly to a candidate or a candidate’s committee, 15 and expenditures were defined as any purchase made to advocate a candidate’s election that are not coordinated with that candidate or the candidate’s committee. 16 Expenditures that were coordinated with a particular candidate were 12 The National Association of Attorneys General: Committee on the Office of Attorney General, Campaign Finance Laws: Legislative Approaches and Constitutional Limitations (July 1977). The 1974 FECA amendments also increased public money for presidential candidates. 13 424 U.S. 1 (1976). 14 Id . at 13. 15 A contribution is defined as “any gift, subs cription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for federal office; or the payment by any person of compensation for the personal services of another person which are rendered to a political committee without charge for any purpose.” 2 U.S.C. . 16 2 U.S.C. (9)(a)(i).

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5 classified as contributions. 17 The Buckley Court left intact prohibitions on corporations’ expenditures and contributions 18 and overturned limitations on a political candidate’s expenditures for the candidate’s own campaign. 19 The issue of contributions and expenditures in political campaigns is important because of its implications for democracy and the First Amendment. 20 The Buckley Court affirmed “that a major purpose of that Amendment was to protect the free discussion of governmental affairs.” 21 The Court found in Buckley that this free expression includes the donation of money to campaigns and associating with political groups as a symbolic expression of views. 22 The U.S. Supreme Court’s justification for limiting the speech that is represented by contributions is the “single narrow exception to the rule that limits on political activity [are] contrary to the First Amendment.” 23 Thus, the Court must find the intricate balance between the First Amendment rights of free 17 A contribution includes “expenditures made by any person in cooperation, consultation, or concert, with, or at the request or suggestion of, a candidate, his authorized political committees, or their agents.” 2 U.S.C. (a)(7)(B)(i). 18 424 U.S. at 13. 19 Id . at 52. 20 The First Amendment of the U.S. Constitution guarantees freedom of speech and association. The First Amendment states that: Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. U.S. CONST. amend. I (1791). 21 424 U.S. at 14. 22 Id . at 13. 23 Citizens Against Rent Control v. City of Berkeley, 454 U.S. 290, 296-97 (1981).

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6 speech and free association and the legitimate governmental interest of preventing corruption of the electoral process. Striking this balance is necessary in order to create a more equal playing field that all citizens can participate in. Research Questions How the U.S. Supreme Court analyzes restrictions on contributions and expenditures in relation to the First Amendment is a key question in understanding campaign finance regulations and their reform. Thus, this thesis poses the following research questions: What has the Court decided on campaign contributions and expenditures in the ten cases from Buckley in 1976 to Federal Election Commission v. Colorado Republican Federal Campaign Committee ( Colorado II) in 2001? What First Amendment principles did the Court utilize when analyzing contributions and expenditures in the political process? How does the Bipartisan Campaign Finance Reform Act of 2002 change campaign finan ce law? Finally, judging from the trend discerned in the individual justices’ opinions, what is the likely future of campaign finance reform? Specifically, will the Bipartisan Campaign Reform Act of 2002 survive judicial review? Methodology This thesis relies on primary legal sources, most notably the Federal Election Campaign Act and the major amendments in 1974, 1976, and 1979, the U.S. Supreme Court decisions arising from that and related laws, and the Bipartisan Campaign Reform Act of 2002. Computerized legal databases such as Lexis-Nexis and Westlaw were used to search for all U.S. Supreme Court cases concerning contributions and expenditures in

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7 political campaigns since the FECA in 1971. The key search words included, but were not limited to, “contributions,” “expenditures,” “campaign finance,” and “First Amendment.” These key-word searches led to ten U.S. Supreme Court cases that have been decided since the FECA that were directly on point. Then, the landmark case Buckley v. Valeo was shephardized in Lexis-Nexis to assure that all relevant cases were included. The legal theories articulated by the individual U.S. Supreme Court justices were noted. The ten Supreme Court decisions were analyzed, focusing on the First Amendment implications of contributions and expenditures in political campaigns. The ten U.S. Supreme Court decisions analyzed are as follows: 1. Buckley v. Valeo 24 2. California Medical Association v. Federal Election Commission 25 3. Federal Election Commission v. Democratic Senatorial Campaign Committee 26 4. Citizens Against Rent Control v. City of Berkeley 27 5. Federal Election Commission v. National Conservative Political Action Committee 28 6. Federal Election Commission v. Massachusetts Citizens For Life, Inc . 29 7. Austin v. Michigan State Chamber of Commerce. 30 24 424 U.S. 1 (1976). 25 453 U.S. 182 (1981). 26 454 U.S. 27 (1981). 27 454 U.S. 290 (1981). 28 470 U.S. 480 (1985). 29 479 U.S. 238 (1986).

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8 8. Colorado Republican Federal Campaign Committee v. Federal Election Commission ( Colorado I ) 31 9. Nixon v. Shrink Missouri Government PAC 32 10. Federal Election Commission v. Colorado Republican Federal Campaign Committee ( Colorado II) 33 Chapter Outline This chapter introduced the topic of campaign finance, provided the research questions this study will answer, and explained the research methods and other materials used in this study. Chapter 2 is a review the literature on the issue of campaign finance and on the Court’s decisions regarding contributions and expenditures in federal election campaigns. Chapter 3 is a look at the history of campaign finance, focusing on the Federal Election Campaign Act of 1971 and its amendments of 1974, 1976, and 1979. Chapter 4 is an analysis of the ten U.S. Supreme Court decisions on campaign finance, and identify the First Amendment theories relied upon by the Court and the individual justices to arrive at their decisions, focusing on the First Amendment implications of limiting contributions and expenditures in political campaigns. 30 494 U.S. 652 (1990). 31 518 U.S. 604 (1996). 32 528 U.S. 377 (2000). 33 121 S.Ct. 2351 (2001).

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9 Chapter 5 analyzes the Bipartisan Campaign Reform Act of 2002 and discusses any First Amendment problems it raises. The conclusion and summary of the findings are discussed in Chapter 6, including whether the Court in 2003 is likely to uphold the Reform Act. It also examines what impact, if any, the changing make-up of the Court has had on the evolution of campaign finance law.

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CHAPTER 2 REVIEW OF LITERATURE ON CAMPAIGN FINANCE Financing political campaigns is part of the people’s First Amendment rights to free speech and association. 1 Over time, the federal government has limited these rights through legislation of the U.S. Congress and through court decisions, including ten U.S. Supreme Court decisions since the Federal Election Campaign Act (FECA) was enacted in 1971. Significance of Campaign Finance The First Amendment is implicated in campaign finance cases, because the people’s right to engage in political speech and association includes the donation of money to campaigns as a symbolic expression of political views. 2 The symbolic expression of donating money allows political campaigns to purchase communications 1 See generally Buckley v. Valeo, 424 U.S. 1 (1976), and Lillian R. BeVier, Money and Politics: A Perspective on the First Amendment and Campaign Finance Reform, 73 CALIF. L. REV. 1045, 1051 (1985), and David M. Mason, Repealing the First Amendment: The Campaign Finance Reform Constitutional Amendment, The Heritage Foundation, Issue Bulletin #230, Mar. 13, 1997, at http://www.heritage.org/library/ categories/govern/ib230 .html. 2 See generally Buckley v. Valeo, 424 U.S. 1 (1976), and Lillian R. BeVier, Money and Politics: A Perspective on the First Amendment and Campaign Finance Reform, 73 CALIF. L. REV. at 1053, and Bradley A. Smith, Unfree Speech: The Folly of Campaign Finance Reform, Princeton University Press, 2001: 112-14. (stating that the Court has protected activities such as burning the flag (Texas v. Johnson, 491 U.S. 397 (1989)) and not saluting the American flag (West Virginia Board of Education v. Barnette, 319 U.S. 624 (1943)). 10

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11 that let voters make informed decisions concerning their representation in government. 3 Legal scholar, David Schwartz, argued that constitutional problems occur when the U.S. Congress passes new laws limiting the amount of money that people can donate to political campaigns. 4 Restricting these political donations has the negative effect of limiting the people’s First Amendment rights to participate in political speech that is unguarded, vigorous, and free. 5 University of Virginia Professor of Law Lillian BeVier recognizes the fact that any regulation of political contributions infringes on the people’s First Amendment rights of free speech and free association. 6 The only governmental interest that allows the regulation of campaign finances is the prevention of political corruption. 7 Thus, BeVier believes governmental regulations on political contributions and expenditures are justified to prevent corruption. 8 3 Lillian R. BeVier, Money and Politics: A Perspective on the First Amendment and Campaign Finance Reform , 73 CALIF. L. REV. at 1053. 4 David J. Schwartz, Campaign Finance Reform: Limits on Out-of-State Contributions and the Question of Unconstitutional Conditions , 23 U. DAYTON L. REV. 87, 89 (Fall 1997). 5 Id . 6 Lillian R. BeVier, Money and Politics: A Perspective on the First Amendment and Campaign Finance Reform , 73 CALIF. L. REV. at 1046. “Limitations on political giving and spending, because they represent governmentally imposed constraints on political activity, infringe upon freedoms of speech and association.” Id . 7 Id . 8 Id . at 1090.

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12 Burt Neuborne, law professor and Legal Director of the Brennan Center for Justice at New York University, stated that when analyzing political power, the government and the public reject personal wealth as a prerequisite for gaining political power. 9 No citizen openly asserts that the rich should have more political power simply because they have more money, Neuborne wrote, yet Americans tolerate a considerable amount of wealth-driven inequality in our political system. 10 The most glaring example of this is the fact that Americans tolerate private money dominating our electoral process. 11 Thus, Neuborne believes the system needs to change in order to “operate a democracy that is as equal in practice as we claim it is in theory.” 12 Another scholar, Robert Post, writing in favor or regulating contributions, argued there is a false distinction between speech regulated by the government and speech infringed upon by other sources. 13 If one wealthy segment in society can purchase the nation’s political agenda by giving large campaign donations to candidates in elections, then the First Amendment interests of the majority of the population will be infringed upon. 14 In order to function effectively, the government 9 Burt Neuborne, Is Money Different? , 77 TEX. L. REV. 1609, 1610 (1999). 10 Id . 11 Id . See also Donald L. Barlett and James B. Steele, Big Money & Politics, Who Gets Hurt?, TIME, Feb. 7, 2000, 38-56. 12 Burt Neuborne, Is Money Different? , 77 TEX. L. REV. at 1625. 13 Robert C. Post, The Constitutional Concept of Public Discourse: Outrageous Opinion, Democratic Deliberation, and Hustler Magazine v. Falwell , 103 HARV. L. REV. 603, 640 n.214 (Jan. 1990). 14 Id .

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13 must regulate campaign spending to advance the First Amendment’s purpose of safeguarding a representative democracy. 15 The United States Supreme Court Professor Lillian BeVier argues that the U.S. Supreme Court has carefully balanced the individual’s First Amendment rights of free speech and association with the governmental interest of preventing corruption or the appearance of corruption in its rulings on campaign finance. 16 Chief Judge of the U.S. Court of Appeals for the Second Circuit, Ralph Winter, believes that the governmental regulation of private funding threatens candidates who use grassroots efforts for political change. 17 Winter wrote that governmental regulation of campaign finances forces campaigns to rely on independent expenditures of others to communicate through the media. 18 People must be able to express their viewpoints in order to create change within the U.S. democratic system. 19 Winter said, “Political communication that is free of government regulation is a precondition to the pursuit of change, and free financing of 15 David Rabban, The Emergence of Modern First Amendment Doctrine, 50 U. CHI. L. REV. 1207, 1311-1317 (1983). 16 Lillian R. BeVier, Money and Politics: A Perspective on the First Amendment and Campaign Finance Reform , 73 CALIF. L. REV. at 1045. 17 Ralph Winter, Campaign Finance Reform: The Constitutional Questions: The History and Theory of Buckley v. Valeo, 6 J.L. & POL'Y 93, 105-06 (1997). Winter was the plaintiffs’ attorney in Buckley . 18 Id . at 105. 19 Id . at 107.

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14 that communication is a catalyst of that change.” 20 Thus, Winter believes that the First Amendment should protect donations that are used to express people’s views on political issues. 21 Legal scholar Richard Briffault argued that campaign finance practices in the last ten years have created holes in the federal campaign finance system that was established in the FECA and modified in Buckley . Parties, through their use of soft money, have allowed contributors to circumvent the FECA's limitations. 22 These loopholes created by the parties need to be closed through the U.S. Supreme Court’s more closely defining campaign finance laws. 23 Scholars such as Ira Hoffman argued that the U.S. Supreme Court’s decision in Citizens Against Rent Control v. City of Berkeley favors unlimited political spending more than fair elections. 24 He defined fair elections as those in which money is not the influencing factor as to which candidate gets greater access to paid media spots. This wealth-bought media coverage is critical in candidates’ getting the exposure needed to be elected. 25 The Burger Court had used the Constitution to justify wealthy 20 Id . 21 Id . 22 Richard Briffault, Symposium: Law and Political Parties: The Political Parties and Campaign Finance Reform, 100 COLUM. L. REV. 620 (2000). 23 Id . 24 Ira E. Hoffman, Case Comment: Legislative Regulation of Campaign Financing after Citizens Against Rent Control v. City of Berkeley : A Requiem , 1982, 36 U. MIAMI L. REV. 563, 566 (May 1982). 25 Id .

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15 groups’ running the political system, Hoffman said. 26 With wealthy groups funding candidates, quid pro quo relationships would continue between them unless the U.S. Congress and U.S. Supreme Court take active steps to curb these relationships. 27 Legal Scholar Todd Overman argued the Bipartisan Campaign Reform Act of 2002, which amends the FECA, will ban soft money donations and at the same time created an additional loophole that allows state and local political parties to receive soft money for get-out-the-vote activities. 28 “Critics believe that the soft money ban will severely limit the role of political parties in the democratic process.” 29 Thus, Overman concluded, government-regulated reform of campaign finances does not necessarily serve the public interest. 30 Regulation by the Government The government’s justification for regulating campaign finances are to promote equality and to prevent corruption or the appearance of corruption within the political system. Political corruption within campaign finance has been defined by the Court as a quid pro quo relationship between the contributor and the politician such that the politician does not use his own beliefs when voting on an issue. 31 26 Id . at 567. 27 Id . See also Leading Case, 115 HARV. L. REV. 416, 425 (Nov. 2001). 28 Todd R. Overman, Shame On You: Campaign Finance Reform Through Social Norms , 55 VAND. L. REV. 1243, 1270-71 (May 2002). 29 Id . at 1271. 30 Id . 31 Bradley A. Smith, Unfree Speech: The Folly of Campaign Finance Reform , Princeton University Press, 2001: 123. See Buckley v. Valeo, 424 U.S. 1, 26-27 (1976).

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16 In campaign finance, "regulation of speech actually might promote free speech, and should not be treated as an abridgment at all," said Cass Sunstein. 32 The U.S. Congress regulates campaign finance through laws that make sure wealthier candidates do not have unfair advantages over less-wealthy candidates. 33 Money determines who can afford to purchase access to the media, who gets exposure with the media, and ultimately who gets elected. 34 “What seems to be free speech in markets, might, in some selected circumstances, amount to an abridgement of speech,” Sunstein said. 35 When the government does not regulate the impact of wealth in relation to political speech, the government ends up promoting one group's political speech over the speech of another. 36 Even if this were not the case, the fact remains that the government has an affirmative duty to ensure that democracy functions properly. According to Sunstein, if the government fails through inaction to ensure this, then it is not performing its job. 37 32 Cass R. Sunstein, Free Speech Now , 59 U. CHI. L. REV. 255, 267 (1992). 33 Id . at 268. 34 Id . at 291. See also David M. Mason, Repealing the First Amendment: The Campaign Finance Reform Constitutional Amendment , The Heritage Foundation, Issue Bulletin #230, March 13, 1997, at http://www.heritage.org/library/categories/govern/ib230.html (stating that wealthy candidates can donate more money to their campaigns, and thus have an advantage over other candidates). 35 Cass R. Sunstein, Free Speech Now , 59 U. CHI. L. REV. at 267. 36 Id . 37 Id .

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17 Judge Skelley Wright wrote that the government, under the FECA, is regulating how money can be used, 38 rather than trying to regulate or control political speech. This rather is an incidental effect of the government regulating campaign finances. 39 Since the government’s regulation of political money has an incidental effect on political speech, Wright suggests that it should be regulated under the O’Brien test. 40 David Mason, Senior Fellow at the Heritage Foundation, argued that in political campaigns, the First Amendment rights of free speech and a free democratic system are in conflict with each other. 41 Mason believes that when the government attempts to regulate campaign finances and political speech, the government ends up weakening the American democratic process. 42 He posed the solution to change public opinion regarding free speech by educating the public on their political speech rights. 43 The people need to realize they have a say in government and should use their votes to elect the representatives that will stand up for their rights. 44 38 J. Skelley Wright, Politics and the Constitution: Is Money Speech? , 85.8 YALE L.J. 1,007-08 (1976). 39 Id . 40 Id . (citing U.S. v. O’Brien, 391 U.S. 367 (1968)). 41 David M. Mason, Repealing the First Amendment: The Campaign Finance Reform Constitutional Amendment , The Heritage Foundation, Issue Bulletin #230, Mar. 13, 1997, at http://www.heritage.org/library/categories/govern/ib230.html . 42 Id . See also Bradley A. Smith, Unfree Speech: The Folly of Campaign Finance Reform , Princeton University Press, 2001. 43 David M. Mason, Repealing the First Amendment: The Campaign Finance Reform Constitutional Amendment , The Heritage Foundation, Issue Bulletin #230, March 13, 1997, at http://www.heritage.org/library.org/library/categories/govern/ib230.html . 44 Id .

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18 Robert Knop argued after Colorado Republican Federal Campaign Committee v. FEC (Colorado I) was decided that the U.S. Congress needs to further clarify the differences between independent expenditures, coordinated expenditures, and contributions in order to give guiding principles to judges, regulators, and political parties. 45 Summary of Campaign Finance Issues Most of the literature found on campaign finance were analyses of one or more of the ten U.S. Supreme Court opinions. Although many articles have been written concerning this topic, no material was found that analyzes all ten cases from Buckley 46 in 1976 to Federal Election Commission v. Colorado Republican Federal Campaign Committee ( Colorado II) 47 in 2001. Also, no published material found has focused on the First Amendment principles that the U.S. Supreme Court relies on when analyzing contributions and expenditures in the political process. Finally, no literature has looked for a trend in the justices’ opinions that might help us predict the future of campaign finance laws. In summation, it is of great importance to explore and add new knowledge to this area because it is arguable whether regulating campaign finance is necessary to protect the integrity of the democratic process. In addition, research conducted to trace the 45 Robert Knop, The Party Expenditure Provision's Near Death Experience: Colorado Republican Federal Campaign Committee v. Federal Election Commission, 47 AM. U.L. REV. 963 (1998). 46 424 U.S. 1 (1976). 47 121 S.Ct. 2351 (2001).

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19 evolution of the U.S. Supreme Court’s and the individual justices’ decisions regarding campaign contributions and expenditures could provide evidence of the future of campaign finance laws.

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CHAPTER 3 THE FEDERAL ELECTION CAMPAIGN ACT The U.S. Constitution grants the U.S. Congress the power to regulate federal elections. 1 Campaign finance has been a prevalent issue in Congress since the 1880’s. In fact, several acts regulating campaign finance have been passed since the 1880’s. In 1971, Congress passed the current law, the Federal Election Campaign Act (FECA), “to promote fair practices in the conduct of election campaigns for Federal political offices, and for other purposes.” 2 The FECA was the first comprehensive campaign finance law. The first campaign finance law was enacted in 1883. The Pendleton Act prohibited federal employees from soliciting funds from other federal employees for election campaigns. 3 With the advent of the Industrial Revolution, corporate influence 1 U.S. CONST. art. I, : “The times, places and manner of holding elections for Senators and Representatives, shall be prescribed in each state by the legislature thereof; but the Congress may at any time by law make or alter such regulations, except as to the places of choosing Senators.” U.S. CONST. amend. XVII, , returned this power to Congress: “When vacancies happen in the representation of any State in the Senate, the executive authority of such State shall issue writs of election to fill such vacancies: Provided, That the legislature of any State may empower the executive thereof to make temporary appointments until the people fill the vacancies by election as the legislature may direct.” U.S. CONST. art. I, , cl. 18: “To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.” 2 Pub. L. No. 92-225, 86 Stat. 3 (1971)(codified at 2 U.S.C. 31-56). 3 See Robert Mutch, Campaigns, Congresses and Courts: The Making of Federal Campaign Finance Law. New York: Praeger, xvi (1998). 20

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21 had become more dominant in politics and political campaigns. 4 In 1907, the Tillman Act was passed, prohibiting corporations and banks from contributing to federal candidates. 5 The Publicity Act of 1910 amended the Tillman Act to require post-election disclosure of campaign donations exceeding $100. 6 In 1911, Congress amended the Publicity Act to limit spending to $5,000 for candidates for the House and $12,000 for candidates for the Senate. 7 In 1925, the Publicity Act was revised again to increase disclosure requirements and spending limits for Congressional campaigns and became the Federal Corrupt Practices Act. 8 There was no successful prosecution during the Federal Corrupt Practices Act’s 46 years as law. Then, the Hatch Act in 1939, also called the Clean Politics Act, banned government employees from giving federal candidates political contributions. 9 In 1947, the Taft-Hartley Act was passed, barring unions as well as corporations from making contributions to or expenditures on behalf of federal candidates. 10 4 See generally First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978) for a history of national concern over corporate influence in politics. 5 Tillman Act of 1907, ch. 420, 34 Stat. at 864. 6 Publicity Act of June 25, 1910, ch. 392, 36 Stat. 822, 823 (1910). 7 Amendment to Publicity Act of Aug. 19, 1911, ch. 33, sec. 2, , 37 Stat. 25 (1911). 8 Ch. 368, , 43 Stat. 1053, 1070 (1925)(codified at 18 U.S.C. -17, repealed 1971). 9 Hatch Act of Aug. 2, 1939, ch. 410, 53 Stat. 1147 (1939)(codified at 5 U.S.C. 08 (1974)). 10 Labor Management Relations Act, ch. 120, , 61 Stat. 136, 159 (1947), as amended, 18 U.S.C. (1970 ed.)(codified at 2 U.S.C. b (1988)).

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22 In 1971, Congress passed the Federal Election Campaign Act 11 to replace the Federal Corrupt Practices Act. The FECA regulated contributions to and spending in federal campaigns and implemented disclosure requirements for federal candidates, political parties and PACs. 12 One asserted purpose of the FECA was “to give candidates for public office greater access to the media so that they may better explain their stand on the issues, and thereby more fully and completely inform the voters” and “to halt the spiraling cost of campaigning for public office.” 13 The FECA also attempted to limit “the flow of excessive sums of money into political campaigns” by limiting contributions. 14 The FECA defines contributions 15 as gifts or anything of value given directly to a candidate or a candidate’s campaign committee, including a coordinated expenditure, that is an expenditure that is coordinated with a specific candidate. 16 The contribution limits apply to all individual contributions given to a specific candidate directly by physical exchange or indirectly given through a 11 Pub. L. No. 92-225, 86 Stat. 3 (1971)(codified at 2 U.S.C. 31-56). 12 2 U.S.C. (2) (1971). A “candidate mean s an individual who seeks nomination for election, or election, to Federal office.” 13 S. REP. NO. 92-96, at 1774 (1971). 14 S. REP. NO. 94-677, at 3 (1976). 15 2 U.S.C. (8)(A) (1971). A “contribution” is defined as “any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for federal office.” 16 Id .

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23 third party for the benefit of a particular candidate. 17 Independent expenditures 18 are defined as any purchase made to advocate or influence a clearly identified candidate’s election for federal office that is not given dir ectly to or coordinated with a candidate or the candidate’s committee. 19 Contributions, under the FECA, do not include the value of unprofessional volunteer services or the first $500 spent on specific volunteer activities. 20 In 1974, the Watergate scandal prompted Congress to amend the FECA 21 “for the purpose of providing complete control over and disclosure of campaign contributions and 17 2 U.S.C. (a)(8) (1971) states that “all contributions made by a person, either directly or indirectly, on behalf of a par ticular candidate, including contributions which are in any way earmarked or otherwise directed through an intermediary or conduit to such candidate, shall be treated as contributions from such person to such candidate.” 18 2 U.S.C. (17) (1971) defines “independent expenditure” as “an expenditure by a person expressly advocating the election or defeat relative to a clearly identified candidate which is made without cooperation or consultation with any candidate, or any authorized committee or agent of such candidate, and which is not made in concert with, or at the request or suggestion of, any candidate, or any authorized committee or agent of such candidate.” 2 U.S.C. (18) defines “clearly identified” as “(A) the name of the candidate involved appears; (B) a photograph or drawing of the candidate appears; or (C) the identity of the candidate is apparent by unambiguous reference.” 19 2 U.S.C. (9)(a)(i) (1971). An “expenditure” is defined as “any purchase, payment, distribution, loan, advance, deposit, or gift of money or anything of value, made by any person for the purpose of influencing any election for federal office.” 20 2 U.S.C. (e)(5)(A)-(D) (1971). Volunteer expenses that are exempt from the contribution limitations are “the use of real or personal property and the cost of invitations, food and beverages, voluntarily provided, the sale of any food or beverage by a vendor for use in a candidate’s campaign at a charge any unreimbursed payment for travel expenses made by an individual who on his own behalf volunteers his personal services to a candidate.” 21 FECA amend. of 1974, Pub. L. No. 93-433, 88 Stat. 1263 (1974)(codified in 2 U.S.C., 18 U.S.C. and 26 U.S.C.).

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24 expenditures” in federal elections. 22 The 1974 amendment established the Federal Election Commission (FEC) 23 and delegated the FEC with the power to enforce disclosure laws, 24 enforce public funding programs for presidential elections, 25 and enforce campaign finance laws. 26 The amendment also set limits on contributions by individuals, political parties, and PACs, and continued the prohibition against contributions and expenditures by corporations and unions. 27 Contribution limits to candidates were established that restricted individual contributions to $1,000; 28 PAC contributions to $5,000; 29 and individual annual contribution limits to $25,000. 30 This 22 S. REP. NO. 93-689, at 5587-88 (1974). 23 2 U.S.C. c(a) and (b) (1974). 24 See Presidential Election Campaign Fund Act, 2 U.S.C. 431437 (1994). 25 See Disclosure of Federal Campaign Funds, 26 U.S.C. 42 (1994). 26 Expenditure limits were set out in Pub. L. No. 93-443, 88 Stat. at 1264-65 (codified at 18 U.S.C. (c)(Supp. 1974), repealed 1976) and independent expenditures were addressed in Pub. L. No. 93-443, 88 Stat. at 1265 (codified at 18 U.S.C. (e)(1)(2)(Supp. 1974)(repealed 1976)). 27 2 U.S.C. (b) (1974), stating “it is unlawful for any national bank, or any corporation organized by authority of any law of Congress, to make a contribution or expenditure in connection with any election to any political office, or in connection with any primary election or political convention or caucus held to select candidates for any political office, or for any corporation whatever, or any labor organization, to make a contribution or expenditure in connection with any election at which presidential and vice presidential electors or a Senator or Representative in, or in a Delegate or Resident Commissioner to, Congress are to be voted for.” 28 2 U.S.C. a(a)(1)(A) (1974). 29 2 U.S.C. a(a)(1)(C) (1974). 30 2 U.S.C. a(a)(3) (1974).

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25 amendment also placed limits on personal and family finances used in a candidate’s campaign but was declared unconstitutional in Buckley v. Valeo and repealed. 31 The amendment also defines multicandidate PACs as committees that get contributions from 50 or more individuals and make contributions to more than five political candidates for more than a six-month time period. 32 In addition to the $5,000 limit on contributions per candidate, multicandidate PACs 33 cannot contribute more than $5,000 each per year to other PACs, and $15,000 per year to national parties. 34 The FECA also prohibits PACs and candidates from knowingly giving or taking money above the contribution ceilings. 35 The FECA limits the amount individuals and multicandidate PACs can donate to PACs to “restrict the opportunity to circumvent the $1,000 and $5,000 limits on contributions to a candidate, to assure that candidates’ reports reveal the root source of 31 Buckley v. Valeo, 424 U.S. 1, 51-55 (1976); Pub. L. No. 93-443, 88 Stat. at 1266 (codified at 18 U.S.C. (a)(Supp. 1974)(repealed 1976)). 32 2 U.S.C. a(a)(4) (1976). A “multicandidate PAC” is defined as “a political committee which has been registered under section 303 (2 U.S.C. ) for a period of not less than 6 months, which has received contributions from more than 50 persons, and, except for any State political party organization, has made contributions to 5 or more candidates for Federal office.” 33 Id . 34 2 U.S.C. a(2) (1976). 35 2 U.S.C. a(f) (1976) stating that “no candidate or political committee shall knowingly accept any contribution or make any expenditure in violation of the provisions of this section. No officer or employee of a political committee shall knowingly accept a contribution made for the benefit or use of a candidate, or knowingly make any expenditure on behalf of a candidate, in violation of any limitation imposed on contributions and expenditures under this section.”

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26 the contributions, and to minimize the adverse impact on the statutory scheme caused by political committees that appear to be separate entities pursuing their own ends, but are actually a means for advancing a candidate’s campaign.” 36 A 1976 FECA amendment repealed expenditure limits and created the Party Expenditure Provision 37 that regulates political parties’ 38 expenditures. According to the provision, a political party’s expenditures can be made in cooperation or consultation with a candidate, which would make them contributions if they were made by any other donor. Political parties can make direct contributions of $5,000 per candidate per election, and this provision allows them to make expenditures over and above that contribution limit. 39 Thus, this provision allows political parties to make larger coordinated expenditures than PACs and individuals can make. 40 Moreover, when individuals and PACs make coordinated expenditures, those expenditures are treated under the FECA as contributions. 36 H.R. CONF. REP. NO. 94-1057, at 58 (1976). 37 2 U.S.C. a(d)(3) (1976), also known as th e Party Expenditure Provision, states that national, state, and subordinate state political party committees donating to U.S. Senate campaigns or U.S. House of Representatives candidates with only one seat for their state are restricted to spending $20,000 adjusted for inflation under a(c) or the voting age population of the election state multiplied by $.02 under provision a(d)(3)(A). National, state, and subordinate state political party committees may only expend $10,000 for candidates running for Delegate, Resident Commissioner, and the office of Representative under a(d)(3)(B). 38 2 U.S.C. (16) (1976) defines “political party” as “an association, committee, or organization which nominates a candidate for election to any Federal office whose name appears on the election ballot as the candidate of such association, committee or organization.” 39 2 U.S.C. a(d) (1976). 40 See supra text accompanying notes 100-02.

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27 Congress again amended the FECA in 1979, this time to increase “the role of state and local parties” in federal elections. 41 The 1979 amendment permitted contributions to be given directly from corporate treasuries and individuals to local and state parties for minor campaign activities such as get-out-the-vote drives. This created a so-called “soft money” loophole that permitted more corporate money to find its way into federal election campaigns, because soft money freed the parties to use election activities funds for candidates. This loophole 42 allowed corporations to bypass contribution prohibitions if the money went to a political party instead of directly to a candidate. 43 Recently, the FECA was amended in the Bipartisan Campaign Reform Act of 2002. 44 The Reform Act limits donations to political parties and raises limits for individual contributions. 45 The Reform Act is addressed in chapter five. In 1976, the FECA was challenged on First Amendment grounds in Buckley v. Valeo . 46 The U.S. Supreme Court analyzed whether the FECA limitations imposed on contributions and expenditures violated the First Amendment rights of free speech and association. 47 This case is addressed in the next chapter. 41 H.R. NO. 96-422 (1979). 42 See Anthony Corrado, Giving, Spending and “Soft Money,” 6 J.L. & POL’Y 45, 46-47 (1997). 43 11 C.F.R. (b) (1999). 44 Pub. L. No. 107-155, 101, 116 Stat. 81 (2002)(codified at 2 U.S.C. ). 45 Id . The Reform Act also lists new donation disclosure requirements. 46 424 U.S. 1 (1976). 47 Id . at 13.

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CHAPTER 4 U.S. SUPREME COURT CASES Since the Federal Election Campaign Act (FECA) was passed in 1971, the U.S. Supreme Court has decided ten cases interpreting the FECA’s and some state statutes’ definitions of contributions and expenditures within the context of elections. The ten cases were analyzed for this thesis by examining those definitions and the First Amendment implications of their application, since contributions and expenditures in elections are forms of political expression. 1 The U.S. Constitution gives the U.S. Congress the authority to control elections 2 and guarantees the people the right to participate in their governance through the First Amendment rights of free expression and association. When limits are placed on contributions and expenditures, the limitations conflict with these First Amendment rights. From Buckley v. Valeo, 3 decided in 1976, through FEC v. Colorado Republican Federal Campaign Committee (Colorado II), 4 decided in 2001, the Court has attempted to reconcile the First Amendment rights of free speech and association with Congress’ attempts to eliminate the corruption and appearance of corruption caused by large donations in election campaigns. 1 See generally Buckley v. Valeo, 424 U.S. 1 (1976). 2 U.S. CONST. art. I, . See supra text accompanying note 82. 3 424 U.S. 1 (1976). 4 121 S.Ct. 2351 (2001). 28

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29 Ten U.S. Supreme Court Opinions The U.S. Supreme Court handed down the seminal decision on campaign finance in 1976 with Buckley v. Valeo. 5 The issue for the Court was whether the FECA limitations imposed on contributions to and expenditures on behalf of federal candidates violated the First Amendment. 6 The Buckley Court upheld the limitations on contributions and struck down the limitations on independent expenditures made by individuals and Political Action Committees (PACs). 7 In Buckley, political candidates, PACs, and donors to political parties had challenged the constitutionality of the 1971 FECA provisions and the 1974 amendments that limited individuals’ contributions to $1,000 per candidate, 8 $5,000 per PAC, 9 and $25,000 total for all PACs and candidates per election. 10 The $1,000 limit on expenditures on behalf of a “clearly identified candidate” was also challenged. 11 5 424 U.S. 1 (1976). 6 Id. at 13. The Court also examined whether the FECA provisions violated the Fifth Amendment equal protection clause by discriminating against new and minor political parties. It found the provisions did not “invidiously discriminate” against these groups in violation of the equal protection clause. 7 Id. at 12-59. The Buckley Court left in place the prohibitions on both contributions and expenditures by corporations and unions. 8 2 U.S.C. (a)(1)(A) (1974). 9 2 U.S.C. (a)(1)(C) (1974). 10 2 U.S.C. (a)(3) (1974). 11 2 U.S.C. (17) (1971) defines “independent expenditure” as “an expenditure by a person expressly advocating the election or defeat of a clearly identified candidate which is made without cooperation or consultation with any candidate, or any authorized committee or agent of such candidate, and which is not made in concert with, or at the request or suggestion of, any candidate, or any authorized committee or agent of such

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30 The Buckley Court upheld the regulation of campaign contributions on the theory they may cause undue influence and corruption in the electoral process. The Court was concerned with the quid pro quo, when large contributions purchase influence with elected officials, that could result when wealthy individuals and organizations donate unlimited sums of money to political candidates’ campaigns. 12 The Court said, “To the extent that large contributions are given to secure political quid pro quo’s from current and potential office holders, the integrity of our system of representative democracy is undermined.” 13 The Court found that the governmental interests in limiting contributions were to prevent corruption, to allow all voices to be heard, and to stop the increasing costs of political campaigns. 14 These governmental interests were found to be sufficient to justify the resulting limitations on free expression. The Buckley Court distinguished between contributions and expenditures made by both individuals and PACs. 15 Limits were allowed on contributions. which were defined as “a gift, subscription, loan, advance, or deposit of money or anything of value made for the purpose of influencing the nomination for election or influencing the result of an election.” 16 The Court also let stand limitations on multicandidate PACs contributions of candidate.” 2 U.S.C. (18) (1971) defines “clearly identified” as “(A) the name of the candidate involved appears; (B) a photograph or drawing of the candidate appears; or (C) the identity of the candidate is apparent by unambiguous reference.” 12 424 U.S. at 26-27. See also Buckley v. Valeo, 519 F.2d 821, 839-840 (1975). 13 424 U.S. at 26-27. 14 Id. at 25-26. 15 Id. 16 2 U.S.C. (8)(A) (1971).

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31 up to $5,000 per candidate to an unlimited number of candidates, $5,000 per year to other committees, and $15,000 per year to national parties. 17 Although the Court found that First Amendment protections apply to both contributions and expenditures, it viewed limitations on independent expenditures by individuals and PACs as more restrictive of First Amendment rights than limitations on contributions. 18 Limits on contributions were upheld, the Court said, because contributions are symbolic speech, or “expression mixed with particular conduct,” 19 and thus not protected by the First Amendment to the same degree as pure speech. The Court struck down the limitations on independent expenditures, which it characterized as direct, or pure, speech on behalf of candidates, deserving of more First Amendment protection. 20 Buckley also addressed FECA’s express advocacy test, which defined advertisements promoting a specific federal candidate as contributions and therefore subject to the limitations of FECA. 21 The Court found that for an independent communication to be subject to the FECA limitations under the express advocacy test, it 17 2 U.S.C. a(2) (1974). 18 424 U.S. at 23. 19 Id. at 17. 20 Id. at 13-23. 21 Id. at 43-44.

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32 must “expressly advocate the election or defeat of a clearly identified candidate,” 22 where the candidate’s name, photograph, or identity is referenced in the communication. 23 Five years later, in 1981, the Court in California Medical Association v. FEC 24 examined whether the FECA restrictions on contributions to multicandidate PACs 25 made by an unincorporated organization violates the First Amendment or the Fifth Amendment right of equal protection. The Court held that limiting individuals’ and unincorporated associations’ contributions to multicandidate PACs was constitutional. 26 The California Medical Association had tested the constitutionality of the law by knowingly giving above the FECA contribution limits of $5,000 27 to the California Medical Political Action Committee, which the California Medical Association had created as a multicandidate PAC. 28 And, the California Medical Political Action Committee knowingly had taken the California Medical Association’s money. 29 In his opinion for the Court, Justice Thurgood Marshall said the Court had reasoned that 22 2 U.S.C. (17) (1971). 23 424 U.S. at 44 n.51. 24 453 U.S. 182 (1981). 25 Id. at 184-85, quoting from 2 U.S.C. a(a)(4) (1974), “A multicandidate political committee is defined as a ‘political committee which has been registered under section 433 of this title for a period of not less than 6 months, which has received contributions from more than 50 persons, and has made contributions to 5 or more candidates for Federal Office.’” 26 Id. at 201. 27 2 U.S.C. a(a)(1)(C) (1974). 28 453 U.S. at 185-86. 29 Id.

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33 “contribution restrictions did not directly infringe on the ability of contributors to express their own political views, and that such limitations served the important government interests in preventing the corruption or appearance of corruption of the political process that might result if such contributions were not restrained.” 30 Also in 1981, the Court in FEC v. Democratic Senatorial Campaign Committee 31 considered whether a state political party committee could designate the national party as its agent under the FECA expenditure provision. 32 The Democratic Senatorial Campaign Committee had challenged agency agreements between Republican state and national parties, contending they conflicted with the FECA Party Expenditure Provision 33 that regulates political parties’ expenditures. 34 Justice Byron White delivered a unanimous Court decision, which held that under the FECA expenditure provision the FEC could permit agency agreements between a state political party committee and a national party, because agency agreements do not compromise the FECA’s basic purpose, which “is the prevention of corruption and the appearance of corruption spawned by the real or 30 Id. at 194-95. 31 454 U.S. 27 (1981). 32 Id. at 29. 33 2 U.S.C. a(d)(3) (1976), also known as the Party Expenditure Provision, states that political party committees donating to U.S. Senate campaigns are restricted to spending $20,000 adjusted for inflation under a(c) or the voting age population of the election state multiplied by $.02 under provision a(d)(3)(A). 34 454 U.S. at 28-29.

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34 imagined coercive influence of large financial contributions on candidates’ positions and on their actions if elected to office.” 35 That same year, the Court in Citizens Against Rent Control v. City of Berkeley 36 examined whether state contribution limits infringed on the First Amendment rights of people organized to promote views on ballot initiatives. 37 The Court found contribution limits unconstitutional as applied to special interest groups such as ballot initiative campaign committees, because the limits impermissibly infringed on the rights of association and expression guaranteed by the First Amendment. 38 Citizens Against Rent Control was an unincorporated group that had organized to contest a rent-control ballot initiative. 39 The group had collected nine contributions that were above the limits set in the California Election Reform Act, 40 and the city had instructed the association to pay it the money collected in excess of those limits. 41 The Court noted that the value of special-interest groups such as the association “is that by collective effort individuals can make their views known, when, individually, their voices would be faint or lost.” 42 The Court reasoned that no risk of corruption exists 35 Id. at 36. (quoting Buckley v. Valeo, 424 U.S. at 25). 36 454 U.S. 290 (1981). 37 Id. at 291. 38 Id. at 303. 39 Id. at 292-93. 40 Election Reform Act, Ord. No. 4700-N.S., (1974). 41 454 U.S. at 293. 42 Id. at 295.

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35 since the people voting on the ballot initiative know the identity of the person who contributed money, as opposed to concealed identities of the source of donations when individuals or corporations speak through PACs. 43 In his opinion for the Court, Chief Justice Warren Burger said, “The risk of corruption perceived in cases involving candidate elections simply is not present in a popular vote on a public issue.” 44 Burger further stated, “To place a Spartan limit—or indeed any limit—on individuals wishing to band together to advance their views on a ballot measure, while placing none on individuals acting alone, is clearly a restraint on the right of association.” 45 In 1985, the Court in FEC v. National Conservative Political Action Committee 46 considered the constitutionality of a provision in the Presidential Election Campaign Act that prohibited PACs from making independent expenditures above $1,000 if the candidate received public funding. 47 The Court held that independent expenditures could not be regulated and that the provision of the Act could constitutionally apply only to coordinated expenditures. 48 The National Conservative Political Action Committee had purchased time independently of the candidate on radio and television in support of the 43 Id. at 298. 44 Id. 45 Id. at 296. 46 470 U.S. 480, 501 (1985). 47 Id. The Presidential Election Campaign Fund Act “makes it a criminal offense for independent political committees to expend more than $1,000 to further that candidate’s election.” 26 U.S.C.S. (f). Under the Presidential Election Campaign Act, political candidates running for president of the United States are given the option during general election campaigns of obtaining public funding. Id. 48 470 U.S. at 501.

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36 reelection of President Ronald Reagan. 49 In his decision for the Court, Justice William Rehnquist said, “[T]he absence of prearrangement and coordination undermines the value of the expenditure to the candidate, and thereby alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate.” 50 In 1986, the U.S. Supreme Court in FEC v. Massachusetts Citizens For Life, analyzed whether Massachusetts Citizens For Life, a nonprofit ideological corporation, violated the FECA’s provision prohibiting corporations from making independent expenditures and whether the FECA applies to such nonprofit corporations. 51 The Court held that while Massachusetts Citizens For Life had violated the FECA provision by using its treasury to fund a political newsletter, the provision was unconstitutional as applied to the newsletter’s First Amendment political activity. 52 The nonprofit ideological corporation had published a special newsletter pointing out federal candidates with anti-abortion stances, showing the candidates’ pictures and asking readers to vote for them. 53 The Fed0eral Election Commission (FEC) argued that the anti-abortion newsletter’s expressly advocating the election of specific political candidates violated the FECA provision 54 prohibiting independent expenditures out of a corporation’s general 49 Id. at 493. 50 Id. at 498. 51 479 U.S. 238, 241 (1986). 52 Id. at 241-42, 245. 53 Id. at 243-44. 54 2 U.S.C. (b) (1974).

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37 treasury. 55 The Court recognized three characteristics of Massachusetts Citizens For Life that made the FECA provision on independent expenditures non-applicable to it: the organization was created to advocate and disseminate political communication, was separate from the influences of corporations or unions, and had no shareholders who hold a stake in the organization’s earnings. 56 Thus, non-profit ideological organizations may make unlimited independent expenditures out of their general treasuries. 57 In his opinion for the Court, Justice William Brennan wrote that the FECA expenditure restriction 58 applied only to regular editions of a nonprofit company’s newsletter. The Massachusetts Citizens For Life’s special election newsletter was not sent to the company’s normal mailing list, was not prepared by people affiliated with the regular newsletter, was not on the non-profit letterhead, and was not a continuation of the regular newsletter series. 59 Justice Brennan said the special election newsletter was direct political speech by a nonprofit ideological organization with members that came together to expressly advocate a viewpoint rather than to make a profit. 60 Since Massachusetts 55 479 U.S. at 244. 56 Id. at 262-65. See 2 U.S.C. (b) (1974). 57 479 U.S. at 264-65. 58 The FECA “prohibits corporations from using treasury funds to make an expenditure ‘in connection with’ any federal election, and requires that any expenditure for such purpose be financed by voluntary contributions to a separate segregated fund.” 479 U.S. at 241, quoting 2 U.S.C. b (1974). See 117 Cong. Rec. 43379 (1971), where the legislative purpose of (b) was “to prohibit the use of union or corporate funds for active electioneering directed at the general public on behalf of a candidate in a Federal election.” 59 479 U.S. at 250-51. 60 Id. at 256-64.

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38 Citizens For Life was using the newsletter only to advocate its political views, the government had no compelling interest to justify limiting its expenditures. 61 Therefore, the special election newsletter received full First Amendment protection, the Court said, since the political speech embodied in the newsletter was speech at the heart of the First Amendment. 62 In a 1990 case, Austin v. Michigan State Chamber of Commerce, 63 a state chamber of commerce challenged the constitutionality of the Michigan Campaign Finance Act’s prohibition on expenditures by nonprofit corporations out of their general treasury funds, which paralleled the FECA. 64 The Court held that nonprofit corporations that function as profit-promoting corporations are not exempt from regulations on contributions or expenditures. 65 In this case, the Michigan State Chamber of Commerce wanted to put an advertisement in a newspaper supporting a political candidate and sought injunctive relief from the provision prohibiting corporations from using general treasury funds in elections. 66 The Court said the nonprofit chamber of commerce functioned as a profit-promoting corporation because it was influenced by for-profit corporations, was controlled by members who acted like shareholders, and performed 61 Id. at 263-64. 62 Id. at 265. 63 494 U.S. 652 (1990). 64 Id. at 654. The (1) of the Michigan Campaign Finance Act at issue here is identical to the FECA provision (b), which requires corporations and unions to establish separate segregated accounts, or PACs, for any political campaign spending. 65 494 U.S. at 655. 66 Id. at 654-56.

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39 many nonideological purposes such as promoting its members’ business goals and training employees. 67 The Court found nonprofit corporations that function as profit-promoting corporations could use money only out of segregated funds, or PACs, to make independent expenditures on behalf of political candidates. The Court reasoned that people who donate money to the segregated account would know their contribution would be used to support their political beliefs. 68 In his opinion for the Court, Justice Marshall said profit-promoting corporations must use money out of segregated accounts because of “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.” 69 In 1996, the Court in Colorado Republican Federal Campaign Committee v. FEC (Colorado I) 70 decided whether expenditures made by a political party independently of a candidate were subject to the expenditure ceilings set out in the FECA’s Party Expenditure Provision. 71 The Court held that when a political party’s expenditures are 67 Id. 68 Id. at 660. 69 Id. 70 518 U.S. 604 (1996). 71 Id. 2 U.S.C. a(d)(3) (1976), also known as the Party Expenditure Provision, states that national, state, and subordinate state political party committees donating to U.S. Senate campaigns or U.S. House of Representatives candidates with only one seat for their state are restricted to spending $20,000 adjusted for inflation under a(c) or the voting age population of the election state multiplied by $0.02 under provision a(d)(3)(A). National, state, and subordinate state political party committees may

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40 independent of specific candidates, they are entitled to the full protection of the First Amendment. 72 In his opinion for the Court, Justice Stephen Breyer wrote, “Restrictions on independent expenditures significantly impair the ability of individuals and groups to engage in direct political advocacy and represent substantial restraints on the quantity and diversity of political speech.” 73 The Colorado I decision essentially allowed political parties to make unlimited expenditures on behalf of candidates in a federal election. 74 In 2000, the Court in Nixon v. Shrink Missouri Government PAC reviewed a Missouri statute that placed a limit on contributions to state political candidates. 75 Using the Buckley rationale, the Court upheld the Missouri state law limiting contributions. 76 In his opinion for the Court, Justice David Souter found that voters perceive large campaign donations as corrupt exchanges between the donor and the candidate. 77 This perception could make voters reluctant to vote in a democratic system where they believe their votes will not count. 78 Further, “an overwhelming 74 percent of the voters of Missouri expend only $10,000 each for candidates running for Delegate, Resident Commissioner, and the office of Representative under a(d)(3)(B). 72 518 U.S. at 608. 73 Id. at 615. 74 Id. 75 528 U.S. 377 (2000). 76 Id. at 382. 77 Id. at 390-391. 78 Id.

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41 determined that contribution limits are necessary to combat corruption and the appearance thereof.” 79 This statistic reaffirmed the reasoning that limits on contributions serve the purpose of stopping corruption or the appearance of corruption in the political process. 80 While the Colorado I Court in 1996 decided the constitutionality of limiting parties’ independent expenditures, the Court in FEC v. Colorado Republican Federal Campaign Committee (Colorado II) 81 decided the constitutionality of limiting parties’ coordinated expenditures. 82 The Court looked at whether a distinct burden is placed on a state political party if its coordinated expenditures are regulated and whether the potential for corruption increases when expenditures are coordinated with a candidate. 83 A closely divided Court upheld regulations on coordinated expenditures by political parties, reasoning that no unique burden was put on political parties and that the potential for corruption increased with coordinated expenditures. 84 The Court examined the FECA Party Expenditure Provision, 85 where a political party’s contributions and expenditures are treated as exceptions to the FECA limitations 79 Id. at 393-94. See also, Carver v. Nixon, 882 F.Supp. 901, 905; See also Nixon v. Shrink Missouri Government PAC, 5 F.Supp. 2d 734, 738 (E.D. Mo. 1998), where “the district court cited newspaper accounts of large contributions supporting inferences of impropriety.” Id. 80 528 U.S. at 390-95. 81 121 S.Ct. 2351 (2001). 82 Id. at 2356. 83 Id. at 2360. 84 Id. at 2371. 85 2 U.S.C. a(d) (1976).

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42 on organizations’ contributions and expenditures. The Party Expenditure Provision allows parties to make coordinated expenditures larger than the $5,000 limit placed on multicandidate PACs. However, the Court found, a political party’s coordinating expenditures with a specific candidate constitutes a contribution and should be subject to the limitations on contributions. 86 In his opinion for the Court, Justice Souter reasoned that when a political party coordinates expenditures with its candidates, the expenditures work the same as contributions, and therefore are entitled to less First Amendment protection than independent expenditures. 87 First Amendment Rights The Buckley Court relied on the principle that political expression is a fundamental activity of democracy protected by the First Amendment, particularly the rights of free speech and association. 88 Buckley established that political contributions and expenditures are political expression. 89 However, the extent to which the First Amendment protects these rights is not well settled. The core First Amendment rights of free speech and free association are key to the ten U.S. Supreme Court opinions related to campaign finance. These two interrelated rights grant people the freedom to participate in the “unfettered interchange of ideas for 86 121 S.Ct. at 2362-63. 87 Id. at 2361-69. 88 424 U.S. at 14-15, citing Kusper v. Pontikes, 414 U.S. 51 (1973), and NAACP v. Ala., 357 U.S. 449 (1958). 89 See generally 424 U.S. 1 (1976).

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43 the bringing about of political and social changes desired by the people.” 90 As Justice William Brennan stated in New York Times v. Sullivan, 91 the First Amendment reflects a “national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open.” 92 This concept is just as alive in the Buckley decision, which affirms that political debate is necessary for government officials to be elected democratically. 93 The First Amendment is said to ensure that a marketplace of ideas, especially political ideas, will continue to exist. 94 “The best test of truth is the power of the thought to get itself accepted in the competition of the market,” Justice Oliver Wendell Holmes said of his marketplace of ideas analogy. 95 This marketplace allows for free thought, for sharing of ideas, and for a democratic government. 96 Chief Justice Warren Burger invoked the concept in Citizens Against Rent Control v. City of Berkeley when he said, 90 Buckley v. Valeo, 424 U.S. at 49 (quoting New York Times Co. v. Sullivan, 376 U.S. 254, 266-69 (1964)). 91 376 U.S. 254 (1964). 92 Id. at 270. See also Terminiello v. Chicago; 337 U.S. 1 , 4 (1949), and De Jonge v. Oregon, 299 U.S. 353 , 365 (1937). 93 424 U.S. at 14-15. 94 Citizens Against Rent Control v. City of Berkeley, 454 U.S. at 295. Justice Oliver Wendell Homes coined the phrase “marketplace of ideas” in Abrams v. U.S., 250 U.S. 616, 630 (1919)(Holmes, J., dissenting). See also NAACP v. Alabama, 357 U.S. 449, 460 (1958). 95 479 U.S at 257. See also Abrams v. United States, 250 U.S. 616, 630 (1919) (Holmes, J., joined by Brandeis, J., dissenting), arguing that “the ultimate good desired is better reached by free trade in ideas.” Id. 96 Citizens Against Rent Control v. City of Berkeley, 454 U.S. at 295.

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44 “The Court has long viewed the First Amendment as protecting a marketplace for the clash of different views and conflicting ideas.” 97 However, the economic marketplace can damage the marketplace of ideas. As Justice Brennan explained in FEC v. Massachusetts Citizens For Life, “Political activity raises the prospect that resources amassed in the economic marketplace may be used to provide an unfair advantage in the political marketplace,” 98 especially with the vast resources of corporations. The government has an interest in stopping these unfair monetary advantages by limiting campaign finances, thereby opening up the marketplace of ideas to all citizens regardless of their wealth. 99 “This concern over the corrosive influence of concentrated corporate wealth reflects the conviction that it is important to protect the integrity of the marketplace of political ideas,” Brennan said. 100 Justice Brennan in Buckley said the First Amendment right of free association “is a basic constitutional freedom closely allied to freedom of speech and a right which, like free speech, lies at the foundation of a free society.” 101 The right of free association assures that people can exercise their right to be heard on societal matters. 102 However, the freedom to politically associate is not absolute and can be restricted if the government 97 Id. 98 479 U.S at 257. 99 Id. 100 Id. 101 424 U.S. at 25. 102 Citizens Against Rent Control v. City of Berkeley, 454 U.S. at 295.

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45 has a “sufficiently important interest and employs means closely drawn to avoid unnecessary abridgement of associational freedoms.” 103 The individual’s act of donating money associates the contributor with a political entity, and political contributions allow “like-minded persons to pool their resources in furtherance of common political goals.” 104 The right of association allows people with the same viewpoint to group together to get their ideas out, because as individuals their views may not be amplified enough to be heard. 105 The government’s enactment of limitations that silence a group’s collective opinion, while not necessarily silencing individual opinions, infringes on the First Amendment right of association. 106 Thus, the FECA “contribution and expenditure limitations operate in an area of the most fundamental First Amendment activities. Discussion of public issues and debate on the qualifications of candidates are integral to the operation of the system of government established by the Constitution.” 107 Limitations on Contributions Individuals who communicate by donating money to campaigns are expressing their political ideas by the act of giving money. 108 This political expression is protected 103 Buckley v. Valeo, 424 U.S. at 25. 104 Id. at 22. 105 Citizens Against Rent Control v. City of Berkeley, 454 U.S. at 294. 106 Id. at 296. 107 Buckley v. Valeo, 424 U.S. at 14. 108 Id. at 21.

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46 by the First Amendment rights of free expression and free association. 109 As Chief Justice Burger stated in Citizens Against Rent Control v. City of Berkeley, “a limit on contributions need not be analyzed exclusively in terms of the right of association or the right of expression. The two rights overlap and blend; to limit the right of association places an impermissible restraint on the right of expression.” 110 A governmental concern linked to the exchange of money in the political process is the public’s perception that corruption is attached to big contributions. 111 As the Buckley Court pointed out, political corruption is the one exception that would justify the government’s restricting the First Amendment right of expending money on behalf of candidates or their parties. The Buckley Court found that when excessive amounts of money are donated to political campaigns, “the integrity of our system of representative democracy is undermined.” 112 The Court views limitations on contributions in the FECA provisions as restraining conduct while only minimally infringing on First Amendment speech rights, because the limitations allow more people to have a political voice. 113 Since campaign finance is conduct with an incidental speech element, the appellees in Buckley, argued, the Court should examine any limitations on that conduct using the test for restrictions on 109 Id. at 14-24. 110 454 U.S. 290, 300 (1981). 111 424 U.S. at 27. 112 Id. at 26-27. 113 Id. at 16.

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47 constitutional rights set out in U.S. v. O’Brien. 114 In O’Brien, a young man arrested for burning his draft card in protest of the military draft and the Vietnam War claimed the act was symbolic speech protected by the First Amendment. 115 The Court upheld the conviction after applying a two-part test requiring that the restriction must advance a substantial government interest and must be no more than necessary to regulate or further that interest. 116 The governmental interest involved in O’Brien was to protect the military’s ability to recruit an army. 117 The Court found that the “incidental restriction on alleged First Amendment rights was no greater than essential to the furtherance of that interest.” 118 The O’Brien Court held that the government could prohibit symbolic speech where the regulation would further a substantial government interest, as long as the interest was not to limit free speech. 119 The Buckley Court did not agree that the O’Brien test should apply to campaign finance since the FECA restrictions at issue in Buckley targeted speech specifically. 120 The Court reasoned that [u]nlike O’Brien, where the Selective Service System’s administrative interest in the preservation of draft cards was wholly unrelated to their use 114 Id. See 391 U.S. 367, 376-77 (1968). 115 Id. at 369. 116 Id. at 376-77. 117 Id. 118 Id. 119 Id. 120 424 U.S. at 17-18 (stating that the FECA acts to limit the voice of wealthy people and groups by restricting the amount they can give to federal campaigns).

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48 as a means of communication, it is beyond dispute that the interest in regulating the alleged conduct of giving or spending money arises in some measure because the communication allegedly integral to the conduct is itself thought to be harmful. 121 This idea of regulating conduct that also communicates is one of the FECA’s objectives: to “equaliz[e] the relative ability of all voters to affect electoral outcomes by placing a ceiling on expenditures for political expression by citizens and groups.” 122 The Buckley Court noted that regulating contributions does not diminish an individual’s right to political expression, since the donor is not restrained from freely discussing political issues in other forums. 123 The appellees in Buckley, had argued that the FECA regulations should be sustained because the government may implement content-neutral time, place, and manner restrictions on speech. 124 However, the Court said the FECA limitations go beyond time, place and manner restrictions and “impose direct quantity restrictions on political communication and association by persons, groups, candidates, and political parties.” 125 But the restrictions are only marginal when donated money is used to communicate issues to the public, the Court said, since “the transformation of contributions into political debate involves speech by someone other than the 121 Id. at 17. 122 Id. 123 Id. at 21. 124 Id. at 18. See Clark v. Community for Creative Non-Violence, 468 U.S. 288, 293 (1984). 125 424 U.S. at 18.

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49 contributor.” 126 Thus, the regulation of campaign finances serves “the basic governmental interest in safeguarding the integrity of the electoral process without directly impinging upon the rights of individual citizens and candidates to engage in political debate and discussion.” 127 The FECA limitations on contributions still allow people “to engage in independent political expression, to associate actively through volunteering their services, and to assist to a limited but nonetheless substantial extent in supporting candidates and committees with financial resources.” 128 Nonetheless, these contribution restrictions must be narrowly tailored to achieve the governmental purpose of preventing political corruption, and the Court found that they were. 129 The argument has been raised that the FECA contribution limitations benefit incumbents over their opponents. Both are allowed to raise the same amount of money, but the incumbent has the advantage of name and face recognition. 130 However, the Buckley Court found insufficient evidence that the limitations benefit the class of people already holding a federal office and “the record provides no basis for predicting that such adventitious factors will invariably and invidiously benefit incumbents as a class.” 131 The Court reasoned that the appearance of corruption can occur with both incumbents 126 Id. 127 Id. at 58. 128 Id. 129 Id. at 28. 130 See Burt Neuborne, Campaign Finance Reform and the Constitution: A Critical Look at Buckley v. Valeo, Brennan Center for Justice at New York University School of Law, 1998, at http://www.brennancenter.org/ resources/downloads/cfr1.pdf. 131 424 U.S. at 32-33.

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50 and their challengers, and therefore both should be subject to the same FECA limitations. 132 The First Amendment protections for political expression extend to contributions by PACs as well. Contributions by PACs are not classified as individual symbolic speech, but as symbolic “speech by proxy.” 133 Five years after Buckley, the Court in California Medical Association v. FEC said, ‘“[S]peech by proxy’ that is achieved through contributions to a political campaign committee is not the sort of political advocacy that this Court in Buckley found entitled to full First Amendment protection.” 134 The people who donate money to PACs have no control over where their money goes or the content of the PAC’s communications. 135 Therefore, regulations on PACs’ contributions are constitutional since the act of contributing money has very little direct effect on protected speech. 136 Limitations on Expenditures The FECA regulates “any expenditure relative to a clearly identified candidate.” 137 The FECA defines an independent expenditure as any purchase relative to a clearly identified candidate’s election for federal office that is not given directly to a 132 Id. at 33. 133 California Medical Association v. FEC, 453 U.S. at 196. 134 Id. 135 Id. at 195-96. 136 Id. at 196-197, quoting Buckley v. Valeo, 424 U.S. at 21. 137 2 U.S.C. (17) (1971). See supra text accompanying note 99.

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51 candidate or the candidate’s committee. 138 However, the Buckley Court pointed out that the FECA fails to define what the term “relative to” means regarding candidates. 139 The Court said giving the phrase “relative to” a broad interpretation could have a chilling effect on speech concerning issues that are intertwined with political candidates’ campaign positions. 140 The Buckley Court interpreted the phrase “relative to,” through its context in the FECA, to mean “advocating the election or defeat of” political figures. 141 The Court found that for an independent communication to be subject to the FECA limitations, it must “expressly advocate the election or defeat of a clearly identified candidate,” 142 where the candidate’s name, photograph, or identity is referenced in the communication. 143 This limits expenditures regulated under the FECA “to communications containing express words of advocacy of election or defeat, such as ‘vote for,’ ‘elect,’ ‘support,’ ‘cast your ballot for,’ ‘Smith for Congress,’ ‘vote against,’ ‘defeat,’ and ‘reject.’” 144 138 2 U.S.C. (9)(a)(i) (1971). An independent expenditure is defined as “any purchase, payment, distribution, loan, advance, deposit, or gift of money or anything of value, made by any person for the purpose of influencing any election for federal office.” 139 424 U.S. at 41. 140 Id. at 42-44 n.52. 141 Id. at 42. 142 2 U.S.C. (17) (1971). 143 424 U.S. at 44 n.51. 144 Id. at 44 n.52.

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52 The Buckley Court struck down FECA’s limitations on independent expenditures by individuals, PACs and political parties, 145 saying that expenditures have less possibility for abuse than contributions 146 and that limits on independent expenditures “impose direct and substantial restraints on the quantity of political speech.” 147 The Court found that “a restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached.” 148 Thus, independent expenditure limitations “place substantial and direct restrictions on the ability of candidates, citizens, and associations to engage in protected political expression, restrictions that the First Amendment cannot tolerate.” 149 The Court’s decision in Colorado Republican Federal Campaign Committee v. FEC (Colorado I) reaffirmed that limits on independent expenditures restrains and infringes on the protected First Amendment rights of groups. The Court stated, “The independent expression of a political party’s views is ‘core’ First Amendment activity no less than is the independent expression of individuals, candidates, or other political committees.” 150 145 Id. at 13. Corporations and unions were still prohibited from making independent expenditures from their general treasuries. 146 Id. at 47. 147 Id. at 39. 148 Id. at 19. 149 Id. at 58-59. 150 518 U.S. at 616.

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53 The Buckley Court found that the only foundation for the FECA’s limitation on expenditures is “in equalizing the relative financial resources of candidates competing for elective office,” which is not enough to allow the government to burden protected liberties. 151 Valeo had argued that the governmental interest of reducing excessive campaign spending is the reason why Congress wanted expenditure limitations, but the Court found “the First Amendment denies government the power to determine that spending to promote one’s political views is wasteful, excessive, or unwise.” 152 Additionally, the Buckley Court determined that individual candidates can make personal expenditures on behalf of their own campaigns, because to restrict this would impermissibly burden the candidates’ First Amendment right to free speech. 153 The governmental interests of preventing corruption and undue influence do not apply to political candidates who are spending their own money. 154 The Court noted that “unlike a person’s contribution to a candidate, a candidate’s expenditure of his personal funds directly facilitates his own political speech” and does not have the appearance of corruption. 155 In Citizens Against Rent Control v. City of Berkeley, the city of Berkeley, California, attempted to limit contributions and expenditures for groups that wanted to 151 424 U.S. at 54. 152 Id. at 57. 153 Id. at 52. 154 Id. at 53. 155 Id. at 53 n.58.

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54 contest or support ballot measures. 156 The Court struck down the ordinance, because the limits infringed on the group’s First Amendment rights of association and expression. 157 The Court found that no governmental interest existed that would override the constitutional presumption against restricting debate. 158 The Court in FEC v. National Conservative Political Action Committee held that independent expenditures by PACs should receive the full protection of the First Amendment. 159 PACs communicate through expenditures, and their communications require extensive funding, such as expenditures for advertisements. 160 Writing for the Court, Justice William Rehnquist said, “[A]llowing the presentation of views while forbidding the expenditure of more than $1,000 to present them is much like allowing a speaker in a public hall to express his views while denying him the use of an amplifying system.” 161 The Court found that while the risk of corruption is greater with PACs than with individuals since PACs have more money to spend on political communication 162 and this 156 454 U.S. at 292. 157 Id. at 303. 158 Id. at 293. 159 470 U.S. at 496. 160 Id. at 493. 161 Id. 162 Id. at 497-98.

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55 potential for corruption allows the government to regulate PACs’ contributions, 163 it was unable to link the risk of corruption to PACs’ independent expenditures. Thus, the Court struck down independent expenditure limits for PACs. 164 Justices’ Opinions The Buckley Court was the first to decide a campaign finance case concerning contributions and expenditures after the FECA was implemented. The Buckley Court consisted of Chief Justice Warren E. Burger 165 and Justices William J. Brennan, Jr., Potter Stewart, Lewis F. Powell, Jr., Thurgood Marshall, Harry A. Blackmun, William H. Rehnquist, and Byron R. White. 166 The Court has changed drastically since then. When the last case on the topic, FEC v. Colorado Republican Federal Campaign Committee (Colorado II) was decided in 2001, Chief Justice Rehnquist was the only member of the Buckley Court still on the bench. In addition to Chief Justice Rehnquist, today’s Court consists of Justices John Paul Stevens, David H. Souter, Sandra Day O’Connor, Ruth Bader Ginsberg, Stephen G. Breyer, Clarence Thomas, Antonin Scalia, and Anthony M. Kennedy. 163 Id. at 500. See also 2 U.S.C. (1974)(limiting labor unions and corporations from solicitation). 164 470 U.S. at 501. 165 Burger was Chief Justice of the United States from 1969-1986. Between FEC v. National Conservative Political Action Committee in 1985 and FEC v. Massachusetts Citizens For Life, Inc. in 1986, Burger retired and Justice Rehnquist became Chief Justice. Justice Scalia joined the Court at this time. 166 424 U.S. 1 (1976). Justice Stevens did not participate in the decision, although he was on the Court.

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56 The justices have the difficult job of looking at the FECA laws and determining their constitutionality. In a per curiam opinion, the Buckley Court held that under the First Amendment, contributions can be regulated and independent expenditures by individuals and PACs cannot be regulated. 167 The Buckley Court was badly fractured, with only three justices, Brennan, Stewart, and Powell joining all parts of the opinion. Chief Justice Burger and Justices White, Marshall, Blackmun, and Rehnquist either concurred in part or dissented in part. Two of the justices, Burger and Blackmun, would have struck down FECA’s limitations on both contributions and independent expenditures on First Amendment grounds and did not want the Court to make a distinction between them. Blackmun said he was “not persuaded that the Court makes, or indeed is able to make, a principled constitutional distinction between the contribution limitations, on the one hand, and the expenditure limitations, on the other, that are involved here.” 168 Justice White would have upheld FECA’s limitations on both expenditures and contributions. White dissented from Part I-C of the Court’s decision quashing limits on independent expenditures, saying he believed “the contribution and expenditure limitations are neutral as to the content of speech and are not motivated by fear of the consequences of the political speech of particular candidates or of political speech in general.” 169 White said expenditure ceilings do not violate the First Amendment and 167 424 U.S. at 12-59. The Court upheld limitations on both contributions and expenditures made by corporations and unions. 168 Id. at 290 (Blackmun, J., dissenting). 169 Id. at 259-60 (White, J., concurring in part and dissenting in part). Justice White was President Kennedy’s campaign coordinator.

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57 “limiting independent expenditures is essential to prevent transparent and widespread evasion of the contribution limits.” 170 Dissenting in Buckley v. Valeo, Citizens Against Rent Control v. City of Berkeley, and FEC v. National Conservative Political Action Committee, White would have upheld restrictions on expenditures because, he said, the restrictions are only a minor and indirect intrusion on a person’s First Amendment rights and the quantity of speech is not affected by regulation of expenditures. 171 White’s dissenting opinion in Citizens Against Rent Control v. City of Berkeley argued that the Court’s result “illustrates that the Buckley framework is most problematical and strengthens my belief that there is a proper role for carefully drafted limitations on expenditures.” 172 Justice White also argued that a PAC’s independent expenditures act as contributions, and the contribution limits in the FECA should apply to independent PAC expenditures. 173 “The candidate cannot help but know of the extensive efforts ‘independently’ undertaken on his behalf.” 174 Justice White argued “it is pointless to limit the amount that can be contributed to a candidate or spent with his approval without also limiting the amounts that can be spent on his behalf.” 175 Further, individuals who 170 Id. at 261-62 (White, J., dissenting). 171 Citizens Against Rent Control v. City of Berkeley, 454 U.S. at 303-05. 172 Id. at 304. 173 FEC v. National Conservative Political Action Committee, 470 U.S. at 509-10. 174 Id. at 510. 175 Id. at 511.

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58 contribute to independent organizations such as PACs are not exercising their right to free speech any more than individuals who donate money directly to candidates. 176 Chief Justice Burger, in a separate dissenting opinion in Buckley, argued there was no distinction between contributions and expenditures and both should not be limited. Burger agreed with the Court’s reasoning that limits on independent expenditures “place substantial and direct restrictions on the ability of candidates, citizens, and associations to engage in protected political expression, restrictions that the First Amendment cannot tolerate.” 177 However, Burger disagreed with the Court’s allowing restrictions on contributions. “[C]ontribution limits will, in specific instances, limit exactly the same political activity that the expenditure ceilings limit, and at least one of the ‘expenditure’ limitations the Court finds objectionable operates precisely like the ‘contribution’ limitations.” 178 Burger believed the prevention of corruption rationale for regulating contributions and coordinated expenditures was unfounded. 179 Burger suggested the limitations on contributions should have failed for the same reasons articulated by the majority that expenditure limitations failed. 180 “Contributions and 176 Id. at 513. 177 424 U.S. at 58-59. 178 Id. at 243-44. (Burger, C.J., concurring in part and dissenting in part). Burger criticized the Court’s treating a political candidate spending his own money on a campaign as an expenditure when it could also be looked at as a contribution. Id. at 244 n.8. Burger reasoned that “people—candidates and contributors—spend money on political activity because they wish to communicate ideas, and their constitutional interest in doing so is precisely the same whether they or someone else utters the words.” Id. at 244. 179 Id. at 235. 180 Id.

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59 expenditures are two sides of the same First Amendment coin,” Burger said. 181 “There are many prices we pay for the freedoms secured by the First Amendment; the risk of undue influence is one of them, confirming what we have long known: freedom is hazardous, but some restraints are worse.” 182 In Citizens Against Rent Control v. City of Berkeley, writing for the Court and joined by Justices Brennan, Powell, Rehnquist, and Stevens, Burger noted that the appearance of corruption does not exist on a ballot initiative vote as it may in the election of political candidates, so the governmental interest in regulating spending on ballot initiatives is not sufficient to overcome the First Amendment protection for political expression. 183 In his Buckley dissent, Justice Marshall argued that political candidates should not be able to use unlimited funds out of their personal accounts. 184 “A wealthy candidate’s immediate access to a substantial personal fortune may give him an initial advantage that his less wealthy opponent can never overcome.” 185 Justice Marshall had joined the per curiam opinion in Buckley, which distinguished contributions from expenditures. However, nine years later in FEC v. National Conservative Political Action Committee, Marshall said he no longer saw the constitutional importance of the distinction 186 and he 181 Id. at 241. 182 Id. at 256-57 (Burger, C.J., dissenting). 183 454 U.S. at 299-300. 184 424 U.S. at 288 (Marshall, J., dissenting). 185 Id. 186 470 U.S. at 519.

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60 had come to believe “that the distinction has no constitutional significance.” 187 Marshall believed independent expenditures should be limited like contributions were, because limitations on both “are justified by the congressional interests in promoting ‘the reality and appearance of equal access to the political arena’ and in eliminating political corruption and the appearance of such corruption.” 188 In delivering the 1990 Court opinion in Austin v. Michigan State Chamber of Commerce, Justice Marshall, joined by Chief Justice Rehnquist and Justices Brennan, White, Blackmun and Stevens, wrote that a nonprofit corporation must use a segregated account, or a PAC, for making independent expenditures to political candidates. 189 The opinion placed nonprofit corporations who engage in profit-promoting activities in the same category as for-profit corporations. Justice Marshall reasoned that “the compelling governmental interest in preventing corruption support[s] the restriction of the influence of political war chests funneled through the corporate form.” 190 Joined by Brennan, White and Stevens, Marshall wrote in California Medical Association v. FEC that the “speech by proxy” that is achieved through contributions to multicandidate PACs “is not the sort of political advocacy that this Court in Buckley found entitled to full First Amendment protection.” 191 Marshall reasoned that if individual limits on contributions 187 Id. at 484 (Marshall, J., dissenting). 188 Id. at 485 (Marshall, J., dissenting, quoting Buckley v. Valeo, 424 U.S. at 287). 189 494 U.S. at 655. 190 Id. at 659. (quoting FEC v. National Conservative Political Action Committee, 470 U.S. at 500-01). 191 453 U.S. at 196 (Marshall, J., plurality opinion).

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61 in support of political views do not infringe on First Amendment rights, then “the rights of a contributor are similarly not impaired by limits on the amount he may give to a multicandidate political committee which advocates the views and candidacies of a number of candidates.” 192 In 1981, just before Citizens Against Rent Control v. City of Berkeley was decided, Justice O’Connor replaced Justice Stewart on the Court. O’Connor and Blackmun, in a concurring opinion, wrote that contribution limits in ballot initiative campaigns “encroach directly on political expression and association,” did not advance a government interest, and were not narrowly drafted to prevent excessive restrictions on First Amendment activity. 193 Writing for the Court and joined by Justices Burger, Blackmun, Powell and O’Connor in FEC v. National Conservative Political Action Committee, Chief Justice Rehnquist wrote that a PAC’s independent expenditures could not be regulated. 194 Rehnquist said the First Amendment protects independent expenditures by PACs, because these committees “are mechanisms by which large numbers of individuals of modest means can join together in organizations which serve to ‘amplify the voice of their adherents.’” 195 Writing for the dissent in FEC v. Massachusetts Citizens For Life, Rehnquist, joined by White, Blackmun, and Stevens, argued that distinguishing profit-promoting 192 Id. at 197. 193 454 U.S. at 302. 194 470 U.S. at 501. 195 Id. at 494.

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62 corporations from organizations who just promote political campaigns is making “‘distinctions in degree’ that do not amount to ‘differences in kind.’” 196 The dissent argued that non-profit ideological organizations should be required to use segregated funds, or PACs, to collect money for political purposes just like profit-promoting corporations, since the restrictions for both further the governmental interests of preventing corruption and protecting individual donors who contribute money for non-political purposes. 197 The dissent said Congress should make these decisions. 198 Writing for the dissent in Austin v. Michigan State Chamber of Commerce, Justice Kennedy, joined by Justices O’Connor and Scalia, argued that the Court’s result of treating some nonprofit organizations like for-profit corporations was “the most severe restriction on political speech ever sanctioned by this Court.” 199 The Court majority had prevented some nonprofit organizations from engaging in political speech, Kennedy wrote. 200 The dissent found the Court’s result “repugnant to the First Amendment contradict[ing] its central guarantee, the freedom to speak in the electoral process.” 201 In Colorado Republican Federal Campaign Committee v. FEC (Colorado I), Justice Thomas’s dissent, joined by Chief Justice Rehnquist and Justice Scalia “reject[ed] 196 479 U.S. at 268, quoting Buckley v. Valeo, 424 U.S. at 30 (per curiam). 197 479 U.S. at 267. 198 Id. at 270. 199 494 U.S. at 699. By the time Austin v. Michigan State Chamber of Commerce was decided in 1990, Justice Kennedy had replaced Justice Powell on the Court. 200 Id. at 688. 201 Id.

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63 the framework established by Buckley v. Valeo for analyzing the constitutionality of campaign finance laws where political parties are the subject of such regulation.” 202 Justice Thomas argued the prevention of corruption analysis that the Court uses to uphold campaign finance laws does not apply to political parties because of the special relationship between political parties and its candidates. 203 In another Colorado I dissent, written by Justice Stevens and joined by Justice Ginsburg, the justices argued, “all money spent by a political party to secure the election of its candidate should be considered a ‘contribution’ to his or her campaign.” 204 The justices stated all money spent by a political party should be limited to avoid corruption and the appearance of corruption in the political system. 205 The Court in Nixon v. Shrink Missouri Government PAC, in an opinion by Justice Souter, and joined by Chief Justice Rehnquist and Justices Stevens, O’Connor, Ginsburg, and Breyer, upheld using Buckley’s reasoning a Missouri state law limiting contributions. 206 The Court noted that contribution limits for individuals and PACs entail “only a marginal restriction upon the contributor’s ability to engage in free communication.” 207 202 518 U.S. at 631. 203 Id. 204 Id. at 648. 205 Id. 206 528 U.S. at 382. 207 Id. at 386, quoting Buckley v. Valeo, 424 U.S. at 20-21.

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64 Like the justices who decided Buckley, the justices on the U.S. Supreme Court of 2002 are coming to close decisions on matters of campaign finance. The 2001 decision of FEC v. Colorado Republican Federal Campaign Committee (Colorado II), written by Justice Souter and joined by Justices Stevens, O’Connor, Ginsburg, and Breyer, upheld limits on a political party’s coordinated expenditures. 208 The four justices in the dissent, Thomas, Scalia, Kennedy, and Rehnquist have said they would like to abandon these limits. 209 Although the Court majority reasoned that political parties “have an especially strong working relationship with their candidates,” 210 it found “little evidence to suggest that coordinated party spending limits adopted by Congress have frustrated the ability of political parties to exercise their First Amendment rights to support their candidates.” 211 The dissents in Nixon v. Shrink Missouri Government PAC and FEC v. Colorado Republican Federal Campaign Committee (Colorado II) written by Justice Thomas and joined by Justices Scalia and Kennedy, clearly indicated they would like to strike down the last 20 years of decisions on campaign finance and overturn Buckley. 212 These justices argue, “Political speech is the primary object of First Amendment protection and 208 Justices Breyer, Ginsburg, Thomas and Souter joined the Court between Austin v. Michigan State Chamber of Commerce in 1990 and Colorado Republican Federal Campaign Committee v. FEC (Colorado I) in 1996, replacing Justices Blackmun, Brennan, Marshall, and White. 209 121 S. Ct. at 2372. 210 Id. at 2362. 211 Id. at 2363. 212 Id. at 2371. See Nixon v. Shrink Missouri Government PAC, 528 U.S. at 409-10 (stating “the existing distortion of speech caused by the half-way house we created in Buckley ought to be eliminated.”).

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65 it is a lifeblood of a self-governing people.” 213 Chief Justice Rehnquist said he does not believe Buckley should be overturned, but did join the FEC v. Colorado Republican Federal Campaign Committee (Colorado II) dissent that wanted to strike down the Party Expenditure Provision, because the provision “undermines parties’ ‘freedom to discuss candidates and issues.’” 214 The Court’s next major decision on campaign finance will most likely come in the 2003 term when it considers the constitutional challenges of the Bipartisan Campaign Reform Act. 215 The Bipartisan Campaign Reform Act of 2002 is addressed in the next chapter. 213 121 S. Ct. at 2371. (quoting Nixon v. Shrink Missouri Government PAC, 528 U.S. at 410-411)(Thomas, J., dissenting). 214 121 S.Ct. at 2373. (quoting Buckley v. Valeo, 424 U.S. at 21). 215 Pub. L. No. 107-155, 101, 116 Stat. 81 (2002).

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CHAPTER 5 BIPARTISAN CAMPAIGN REFORM ACT OF 2002 After a seven-year battle for more stringent campaign finance legislation, the U.S. Congress passed the Bipartisan Campaign Reform Act of 2002 on March 27, 2002, but delayed its effective date, in part, until November 6, 2002, after the general election. 1 The Reform Act, an amendment to the Federal Election Campaign Act of 1971, among other things, limits expenditures by and to local, state, and national political parties; raises limits on individual contributions; and narrows the FECA definition of issue advocacy. 2 The Reform Act redefines independent expenditures and coordinated expenditures in federal elections, most notably to include expenditures by political parties. The Reform Act redefines an independent expenditure “as an expenditure by a person (A) expressly advocating the election or defeat of a clearly identified candidate; (B) that is not made in concert or cooperation with or at the request or suggestion of such candidate, the candidate’s authorized political committee, or their agents, or a political party or its agents.” 3 The definition of coordinated expenditures, which are treated as contributions, 1 Pub. L. No. 107-155, 101, 116 Stat. 81 (2002)(codified at 2 U.S.C. ). The provision in the Reform Act that increases individual contribution limits takes effect on January 1, 2003. 2 Id. The Reform Act also lists new donation disclosure requirements. 3 Id. at (codified as amended at 2 U.S.C. (17)), emphasis added to indicate a new application of the provision. The Reform Act expands the 1971 FECA’s definition 66

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67 are expanded in the Reform Act to include “expenditures made by any person (other than a candidate or candidate’s authorized committee) in cooperation, consultation, or concert with, or at the request or suggestion of, a national, State, or local committee of a political party .” 4 Once a political party makes a coordinated expenditure on behalf of a candidate, the Reform Act prohibits the political party from making unlimited independent expenditures on behalf of that specific candidate. 5 Likewise, once a party makes an independent expenditure on behalf of a candidate, it cannot make a coordinated expenditure for that candidate. 6 This forces a political party to choose between using the Party Expenditure Provision 7 or making unlimited independent expenditures. The Reform Act attempts to control soft money, which are the unlimited contributions that individuals, corporations , unions, and political organizations donate to state and local political parties for party-building purposes other than the expressed advocacy of a federal candidate's election. 8 A 1979 FECA amendment permitted individuals, corporations, and unions to make unlimited contributions to state and local of independent expenditures to include political parties and to close the soft money loophole. 4 Id . at (a)(2)(ii)(codified as amended at 2 U.S.C. a(a)(7)(B)), emphasis added to indicate a new application of the provision. This definition adds political parties to the 1971 FECA definition of coordinated expenditures in an attempt to close the soft money loophole. 5 Id . at (codified as amended at 2 U.S.C. a(d)(4)(A)(ii)). 6 Id . at (codified as amended at 2 U.S.C. a(d)(4)(A)(i)). 7 Pub. L. No. 92-225, 86 Stat. 3, a(d)(1971)(codified at 2 U.S.C. -56). 8 Pub. L. No. 107-155, 101, 116 Stat. 81 (2002).

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68 parties for minor political activities, such as get-out-the-vote drives in the states that allowed such contributions. 9 This created the soft money loophole that permitted more money, including donations from corporate and union treasuries, to find its way into federal election campaigns. This loophole allowed corporations to bypass contribution limits by funneling money from the corporate treasuries to state political parties. That freed up the national parties funds that would have been used for such minor activities to go directly to federal candidates’ campaigns. Now, the money donated to state and local parties will be considered contributions subject to the limitations of the FECA as amended by the Reform Act. The Reform Act allows donors to give a maximum of $10,000 annually to state, district, and local parties for certain minor political activities. 10 These allowable contributions cannot refer to a “clearly identified candidate for Federal office,” cannot be used for broadcast communications, cannot be shared between state and national parties, and must be raised only by the district, local or state party. 11 State and local political parties also will have to segregate and report contributions and expenditures. The Reform Act bans PACs, political parties, or officers of a campaign from spending soft money for fundraising costs and from soliciting funds from or making donations to specific tax-exempt political or ideological organizations in a federal 9 This happened in the states that allowed such contributions to local and state parties. The loophole also allowed state parties to broadcast issue ads into states that did not allow unlimited contributions to state parties. 10 Pub. L. No. 107-155, 101, 116 Stat. 81 (2002). Examples include get-out-the-vote drives and promotion of political parties. 11 Id .

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69 election. 12 Thus, PACs, political parties, and officers of a campaign will no longer be able to filter soft money through certain tax-exempt corporations into other political organizations to pay for election activities. However, these groups can make “electioneering communications.” 13 Electioneering communications, which include issue ads, are broadcast, cable, or satellite communications that refer directly to specific candidates and attack or defend them. 14 If the Court finds this definition unconstitutional, then the Reform Act provides a second definition of electioneering communications, which is a communication that “promotes or supports a candidate for that office (regardless of whether the communication expressly advocates a vote for or against a candidate) and which also is suggestive of no plausible meaning other than an exhortation to vote for or against a 12 Id . at (d)(codified as amended at 2 U. S.C. i) Tax-exempt organizations include 501(c)(3) corporations consisting of charitable, educational, scientific, literary or religious groups and 527(e) political organizations that are defined as “a party, committee, association, fund, or other orga nization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both” under the Internal Revenue Code. 13 Id . at (codified as amended at 2 U.S.C. b(b)(2)). These communications must be paid for by U.S. citizens/residents donations. If not, the money must come from a separate business account or PAC. 14 Id . at (a)(f)(3)(A)(codified as amended at 2 U.S.C. ). “Electioneering communication” is defined as “any broadcast, cable, or satellite communication which refers to a clearly identified candidate for Federal office (which) is made within 60 days before a general, special, or runoff electi on for the office sought by the candidate or 30 days before a primary or preference election, or a convention or caucus of a political party that has authority to nominate a candidate, for the office sought by the candidate and in the case of a communication which refers to a candidate for an office other than President or Vice President, is targeted to the relevant electorate.”

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70 specific candidate.” 15 The Reform Act’s limitations on electioneering communications do not apply to news editorials, stories, and commentaries disseminated through broadcasting facilities, unless a candidate, political party, or a PAC owns the facility. 16 The Reform Act broadens the express advocacy test from Buckley by treating as contributions “any broadcast, cable, or satellite communication” that is coordinated with or refers to any federal candidate “within 60 days before a general, special, or runoff election for the office sought by the candidate or 30 days before a primary or preference election.” 17 The Reform Act makes this type of political communication a contribution, which means contribution limits will now apply to issue ads that refer to a candidate. 18 This follows the Buckley express advocacy test that states only ads containing words for or against a candidate can be regulated. 19 The Reform Act specifically bans profitpromoting corporations and unions from e ngaging in electioneering communications as defined in the Reform Act. Since such coordinated communications with a specific candidate are considered a contribution under the Reform Act, this prohibition is in line with Buckley . 15 Id . at (a)(f)(3)(A)(ii). This narrow definition of electioneering communications comes from FEC v. Furgatch, 807 F.2d. 857 (9th Cir. 1987), cert denied, 484 U.S. 850 (1987). 16 Id . at (a)(f)(3)(B)(i). 17 Id . 18 Id . at and (codified as amended at 2 U.S.C. a(a)(7)) Issue Ads will now have to follow the limitations set out in 2 U.S.C. a and 2 U.S.C. b. 19 424 U.S. at 43-44 (emphasis added). See generally James Bopp Jr. and Richard E. Coleson, Fatal Flaws in the Bipartisan Campaign Reform Act of 2002 , Money & Politics Report, Apr. 22, 2002.

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71 The bans on corporate electioneering communications includes issue ads that span the time when the public is most interested in a political campaign, within 60 days before an election and 30 days before a primary. President Bush expressed “reservations about the constitutionality of the broad ban on issue advertising, which restrains the speech of a wide variety of groups on issues of public import in the months closest to an election.” 20 The Reform Act also raises the ceiling on limits that individuals may contribute directly to federal candidates per election, from the $1,000 limit set in the 1971 FECA to $2,000. 21 An individual can now give a maximum of $25,000 instead of $20,000 to national political parties 22 and a total of $37,500 to candidates over two years and $57,500 to PACs, national political parties and candidates, as long as no more than $37,500 of that goes to “political committees which are not political committees of national political parties.” 23 These limits will be modified each year for inflation. 24 The Reform Act did not increase the limits for PACs or lift prohibitions on contributions by corporations or unions. Federal candidates running against wealthy opponents get some assistance from the Reform Act. If a wealthy opponent spends more than $350,000 of his or her own money, candidates may accept contributions up to triple the $2,000 limit on individual 20 President’s Statement: Bush Signs Bipartisan Campaign Reform Act of 2002, released by the White House: Office of the Press Secretary (Mar. 27, 2002). 21 Pub. L. No. 107-155, , (a)(1), 116 Stat. 81 (2002)(codified as amended at 2 U.S.C. a(a)(1)). 22 Id . at (a)(2). 23 Id . at (b)(3)(A) and (B). Under the 1971 FECA, the maximum total contributions is $25,000. 24 Id . at (d).

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72 contributions. 25 Within 15 days of declaring candidacy, a wealthy opponent must declare the expenditures expected to be spent over the $350,000 threshold. 26 This allows candidates of limited means to be on a more equal footing with wealthy opponents. Further, the Reform Act prohibits solicitation of campaign finances on federal property, including the White House, which reduces incumbents’ advantage. 27 The Reform Act also bans “minors” 28 and “foreign nationals” 29 from making campaign contributions to federal, state or local elec tions, prohibits donations from being converted for a candidate’s personal use, 30 and increases penalties for violations. 31 Opponents contend the Reform Act violates the First Amendment rights of expression and association. 32 However, as pointed out in Buckley , there are many ways 25 Id . at (a)(1)(A)(codified as amended at 2 U.S.C. a-1). 26 Id . at (b)(1)(B)(codified as amended at 2 U.S.C. a-1). 27 Id . at (codified as amended at 18 U.S.C. ). 28 Id . at (codified as amended at 2 U.S.C. )(stating that minors are individuals 17 years old or younger). 29 Id . at (2)(a)(1)(codified as amended at 2 U.S.C. e). 30 Id . at (b)(1)(codified as amended at 2 U.S.C. ). Conversion of a donation to personal use occurs when a political candidate uses an item. Examples include but are not limited to rent, clothes, membership to clubs, vacations, and food. 31 Id . at (codified as amended at 2 U.S.C. g(d)(1)(A))(stating violations for more than $25,000 in a year will receive a fine under title 18, U.S.C. and/or will be imprisoned for 5 years or less, and violations for $2,000, but less than $25,000, in a year will be fined under title 18, U.S.C. and/or will be imprisoned for 1 year or less). 32 See generally Tom Campbell, Arguments before the Court: Why the legal challenge to overturn campaign-finance reform law will not succeed , S.F. CHRON., Apr. 10, 2002, and James Bopp, Jr. & Richard E. Coleson, Fatal Flaws in the Bipartisan Campaign Reform Act of 2002 , Money & Politics Report, Apr. 22, 2002.

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73 other than contributions that a person can politically speak and associate. 33 Most sections of the law seem to comport with the Buckley rationale that limitations on campaign finances are justified because they reduce the potential for or the appearance of corruption. The new contribution limits, for example, those that allow individuals to donate $2,000 directly to federal candidates, are consistent with Buckley . The higher limits accommodate more than 30 years of inflation since the FECA was passed. Thus, the new limits are consistent with the individual contribution limits set out in that seminal case. 34 Adding political parties to the FECA definitions of independent and coordinated expenditures is an effort to prevent individuals, corporations, and unions from making unlimited soft money donations through the political parties to benefit federal candidates. Questions have been raised by the Reform Act’s opponents concerning whether federal law should control contributions to state and local parties and require their disclosure. 35 President Bush stated, “Individual freedom[s] to participate in elections should be expanded, not diminished; and when individua l freedoms are restricted, questions arise under the First Amendment.” 36 33 See generally Tom Campbell, Arguments before the Court: Why the legal challenge to overturn campaign-finance reform law will not succeed , S.F. CHRON., Apr. 10, 2002. 34 Pub. L. No. 107-155, , (a)(1), 116 Stat. 81 (2002)(codified as amended at 2 U.S.C. a(a)(1)). See generally Tom Campbell, Arguments before the Court: Why the legal challenge to overturn campaign-finance reform law will not succeed , S.F. CHRON., Apr. 10, 2002. 35 See generally James Bopp Jr. and Richard E. Coleson, Fatal Flaws in the Bipartisan Campaign Reform Act of 2002 , Money & Politics Report, Apr. 22, 2002. 36 President’s Statement: Bush Signs Bipartisan Campaign Reform Act of 2002, released by the White House: Office of the Press Secretary, (Mar. 27, 2002).

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74 The imposition by the federal government into state and local political party members’ right to free symbolic speech may hinder the capacity to which parties can promote their ideals in elections. Under the Reform Act, state and local parties must pay for get-out-the-vote activities and political party promotions with funds that are now limited. The U.S. Supreme Court stated in Colorado Republican Federal Campaign Committee v. FEC (Colorado I) that the Court is “not aware of any special dangers of corruption associated with political parties.” 37 Therefore, the government will have to establish that it has a legitimate interest in limiting soft money funds sufficient to regulate state and local political parties’ right of speech relating to minor election activities. On September 26, 2002, the FEC voted to allow tax-exempt groups 38 to run electioneering communications until election day. 39 The Reform Act bars electioneering communications that refer to candidates by pr ofit-promoting corporations 60 days before an election and 30 days before a primary. But the FEC stated that non-profit, charitable, educational and religious groups, not just the ideological organizations protected in FEC v. Massachusetts Citizens for Life, 40 would be excluded from this provision in the Reform Act. The FEC’s interpretation of the Reform Act’s electioneering communication 37 518 U.S. at 619-23. 38 Tax-exempt groups are referred to as 501(c)3 organizations under the Internal Revenue Service. 39 Richard A. Oppel, Jr., Election Panel Lifts Restrictions on Political Ads for Some Groups , N.Y. Times, Sept. 27, 2002. 40 See generally 479 U.S. 238 (1986).

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75 provision “opened up these communications to a whole class of nonprofit corporations.” 41 How effective the Reform Act will be may be determined by how the FEC will regulate the new campaign finance system under the Reform Act. U.S. Senators John McCain and Russell Feingold and U.S. Representatives Christopher Shays and Martin Meehan strongly opposed the FEC’s interpretation of how to regulate soft money, saying that the FEC’s proposed regulations are too loose and will create an even bigger loophole than before the Reform Act was passed. 42 The loophole would allow express advocacy advertisements to be purchased with soft money, which was not allowed before the Reform Act was passed. 43 It is now up to the expedited review process articulated in the Reform Act to get opponents’ First Amendment concerns heard before the U.S. Supreme Court. 44 Senator Mitch McConnell, the National Association of Broadcasters, and the National Rifle Association are just a few of the plaintiffs 45 that have filed an action for injunctive relief 41 Id . 42 Alison Mitchell, Law’s Sponsors Fault Draft of Campaign Finance Rules , N.Y. Times, May 31, 2002. 43 Id . 44 Pub. L. No. 107-155, 101, , 116 Stat. 81 (2002)(codified as amended at 2 U.S.C. h)(A severability clause in states that the whole Act would not be affected if parts of it are declared unconstitutional). 45 The following individuals’ and organizations’ lawsuits alleging the Act violates the First Amendment have been consolidated into McConnell v. FEC : The American Federation of Labor, Congress of Industrial Organizations, California Democratic Party, Chamber of Commerce of the U.S., The American Federation of Labor and Congress of Industrial Organizations, Victoria Jackson Gr ay (Adams), Emily Echols, U.S. Rep. Ron

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76 in the U.S. District Court for the District of Columbia. 46 A three-judge federal court panel is scheduled to hear the case in December 2002, and the U.S. Supreme Court could hear the case in the beginning of 2003. 47 How the Court might rule regarding the Reform Act is discussed in the next chapter. Paul (R), Texas, U.S. Rep. Bennie G. T hompson (D), Mississippi, and The Republican National Committee. 46 Id . 47 Linda Greenhouse, Crucial Issues Wait in Wings for the Justices, N.Y. Times, Oct. 7, 2002.

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CHAPTER 6 SUMMARY AND CONCLUSIONS The role that wealthy corporations have in political campaigns was made salient with the 2001 Enron bankruptcy. The public has responded to that and other corporate failures, as well as the resulting impact on the stock market, by pressuring the U.S. Congress in part to create more stringent campaign finance laws. One response was the passing of the Bipartisan Campaign Reform Act of 2002, amending the Federal Election Campaign Act of 1971. Since the FECA was enacted more than 30 years ago, the U.S. Supreme Court has distinguished for constitutional purposes between contributions and expenditures in the ten cases analyzed in this thesis. The Court has consistently upheld the FECA and state campaign finance laws regulating contributions and coordinated expenditures for individuals, Political Action Committees, multicandidate PACs, and political parties. However, the Court has found contribution limits unconstitutional as applied to ballot initiative campaign committees. Further, regulations on independent expenditures have been consistently struck down by the Court as unconstitutional incursions on the First Amendment, except when these expenditures are made by profit-promoting corporations. The Court has made a distinction between the expenditures of nonprofit ideological and profit-promoting corporations. Nonprofit, ideological corporations may make unlimited independent expenditures out of their general treasuries. However, for-profit corporations and nonprofit corporations such as in Austin v. Michigan State 77

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78 Chamber of Commerce that function as profit-promoting corporations cannot use general treasury funds for election purposes, including contributions, coordinated expenditures, and independent expenditures. The Court has recognized the First Amendment rights of free speech and association as fundamental rights protecting political expression as a necessary activity of democracy. The right to free speech and association grant people the freedom to participate in unfettered political debate and in the political process, including supporting candidates’ election campaigns. However, the extent to which the U.S. Constitution protects these First Amendment rights when elections are at stake is not well settled. As House Minority Leader Richard Gephardt was quoted as saying, “What we have is two important values in direct conflict: freedom of speech and our desire for healthy campaigns in a healthy democracy.” 1 While the Court has utilized First Amendment principles such as the marketplace of ideas when analyzing contributions and expenditures, the Court has found that First Amendment rights can be limited in campaign finance to prevent political corruption or the appearance of corruption. A Court majority has consistently found that the government has a sufficient interest in preventing unfair monetary advantages to candidates and quid pro quo arrangements between elected officials and their large contributors. A trend can be discerned in the individual justices’ opinions that might help predict the future of campaign finance reform. The Court has changed drastically since Buckley v. Valeo was first decided in 1976. As a matter of fact, Chief Justice William 1 Nancy Gibbs, The Wake-Up Call, TIME, Feb. 3, 1997, at 22.

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79 Rehnquist is the only participating member from the Buckley Court still on the bench. 2 In a 5-3 per curiam opinion, the Buckley Court ruled that under the First Amendment contributions and coordinated expenditures can be regulated and independent expenditures cannot be regulated. Limits on contributions were upheld, the Court said, because contributions are symbolic speech, or “expression mixed with particular conduct,” 3 and thus not protected by the First Amendment to the same degree as pure speech. The Court struck down the limitations on independent expenditures, which it characterized as direct, or pure, speech on behalf of candidates, deserving of more First Amendment protection. Rehnquist joined the majority opinion. The U.S. Supreme Court justices of 2002 have conflicting opinions about how the First Amendment applies to contributions and expenditures, leading the current Court to close decisions on campaign finance matters. In the 2001 decision of FEC v. Colorado Republican Federal Campaign Committee (Colorado II), Justices David H. Souter, John Paul Stevens, Sandra Day O’Connor, Ruth Bader Ginsburg, and Stephen G. Breyer formed the majority that upheld limits on a political party’s coordinated expenditures under the FECA’s Party Expenditure Provision. The other four justices, Chief Justice Rehnquist and Justices Clarence Thomas, Antonin Scalia and Anthony M. Kennedy, have said they would like to abandon these limits and treat coordinated expenditures like independent expenditures, granting them the full protection of the First Amendment. 2 Although Justice Stevens was on the bench, he did not participate in Buckley. 3 Buckley v. Valeo, 424 U.S. 1, 17 (1976).

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80 Likewise, three justices on the current Court, Justices Thomas, Scalia and Kennedy, clearly indicated they would like to strike down the last 25 years of decisions on campaign finance and overturn Buckley. However, the five justices in the Colorado II majority can stop Buckley from being overruled and most likely will continue to work to fine tune the established campaign finance framework. Of course, any of these justices could step down from the bench at any time. The U.S. Congress passed the Bipartisan Campaign Reform Act of 2002 to amend and improve current campaign finance law. On November 6, 2002, the sections of the Reform Act take effect that attempt to close the soft money loopholes and to create more stringent requirements for electioneering communications. However, the Reform Act does not cut off the ability of state and local parties to help federal candidates through soft money spending. The legislation continues to allow state and local parties to fund get-out-the-vote activities in federal campaigns, thereby freeing the national parties to spend more of their treasuries on federal candidates’ campaigns. The Reform Act’s electioneering communication provision broadens the express advocacy definition from Buckley. For an independent communication to be subject to the FECA limitations under the express advocacy test, it must “expressly advocate the election or defeat of a clearly identified candidate,” where the candidate’s name, photograph, or identity is referenced in the communication. 4 The Reform Act expanded that definition to include any broadcast, cable or satellite communication within 60 days before an election and 30 days before a primary that refers to a clearly identified candidate for federal office. Through close examination of today’s campaign 4 424 U.S. at 44 n.51, 2 U.S.C. (17) (1971).

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81 advertisements, the Court is likely to find that issue ads and electioneering communications are merely an extension of political campaigns and should subject to the FECA restrictions on contributions. The Reform Act also contains a second definition of electioneering communications, which closely resembles the Buckley express advocacy test, in case the Court finds the first definition unconstitutional. 5 The Reform Act’s second definition adds to the Buckley test in that the communication does not have to expressly advocate for a particular candidate and can be merely “suggestive of no plausible meaning other than an exhortation to vote for or against a specific candidate.” 6 If the Court finds the electioneering provision to be constitutional, electioneering communications probably will not be as effective or used as frequently under the Reform Act. In addition, the Reform Act increases contribution limits that individuals can give to PACs, political parties and candidates. The higher limits, which take effect on January 1, 2003, accommodate the more than 30 years of inflation since the FECA was enacted. Thus, the new limits are consistent with the individual contribution limits upheld in Buckley. The Reform Act also expands the FECA’s limitations on independent expenditures and coordinated expenditures to include those made by local, state, and national political parties. Adding political parties to the FECA definitions stops the unlimited soft money from individuals, corporations, and unions that was finding its way 5 The Reform Act contains a severability clause, stating the whole Reform Act would not be affected if parts of it were declared unconstitutional. 6 Pub. L.No. 107-155, (a)(f)(3)(A)(i), 116 Stat. 81 (2002)(codified at 2 U.S.C. ).

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82 into federal elections via the state and local parties. The Reform Act provision, if found constitutional, would limit the contributions and expenditures given through political parties, thereby limiting political parties’ monetary influence on federal elections. A great deal of judicial review and governmental examination of soft money contributions and expenditures likely will continue into the future. Conversely, the Reform Act does not change contribution limits for PACs, nor does it ban soft money for PACs. Partisan activists are establishing substitute party organizations to raise and spend soft money. 7 These special interest groups and PACs will use the soft money to buy advertising that supports issues and, indirectly, the candidates that endorse those issues. As a policy matter, these groups should be banned from raising and using soft money in the same way that the Reform Act bans soft money to federal political parties. Justices Thomas, Scalia, Kennedy, and Chief Justice Rehnquist will oppose the Reform Act’s soft money provisions as evidenced by their dissenting opinion in FEC v. Colorado Republican Campaign Committee (Colorado II), finding that coordinated expenditure limits diminish a political party’s First Amendment freedom to associate through the symbolic act of donating money. On the other hand, Justices Stevens and Ginsburg believe both contributions and expenditures could be regulated as shown in their dissenting opinion in Colorado Republican Federal Campaign Committee v. FEC (Colorado I). Justices Breyer, Souter, and O’Connor will be the three critical votes in determining the constitutionality of the Reform Act’s soft money provisions and 7 Don Van Natta, Jr., and Richard A. Oppel, Jr., Parties Create New Ways to Avoid Soft Money Ban, N.Y. Times, Nov. 2, 2002.

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83 ultimately determining whether the Buckley framework is still viable. 8 Unless Buckley is overturned, the Court likely will find the Reform Act constitutional. While the Reform Act gives the government more power to regulate, the outcome of that increased regulation is uncertain, given the Federal Election Commission’s (FEC) reluctance to apply the law as Congress intended. The FEC’s proposed interpretation of the Reform Act would allow express advocacy advertisements to be purchased with soft money, but that interpretation has been met with strong opposition from the Reform Act’s sponsors. U.S. Senators John McCain and Russell Feingold and U.S. Representatives Christopher Shays and Martin Meehan strongly protested the FEC’s proposal for regulating soft money as too loose, saying the FEC’s approach would create an even bigger loophole for soft money donations to reach federal candidates than before the Reform Act was passed. Senator McCain stated the solution includes pressuring the FEC to propose and enforce regulations in line with the legislative intent of the Reform Act or else restructuring the FEC. 9 The ultimate goals in reforming the FECA were to create a more equal political playing field in which all citizens can participate and to allow the free expression of political ideas, including supporting federal election campaigns and associating with political groups. However, the FECA regulations will lessen the First Amendment speech rights of wealthy individuals, in conflict with the First Amendment, despite the good intentions of the U.S. Congressmen who want to reform the campaign finance 8 Buckley Stops Here: Loosening the Judicial Stranglehold on Campaign Finance Reform, at 21 (E. Joshua Rosenkranz ed., 1998). 9 Richard A. Oppel, Jr., Sponsors Assert Soft Money Ban May Be Diluted, N.Y. Times, June 14, 2002.

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84 system. And, people will always find new loopholes to get around campaign finance regulations and large amounts of money will still enter the system through different pathways. Thus, the new campaign reform efforts need to protect the intricate balance between the First Amendment rights of free speech and association and the legitimate governmental interest of preventing corruption of the electoral process. The Bipartisan Campaign Reform Act of 2002 is a step in the right direction. The effects of the Reform Act on the political parties will need to be examined for its impact on First Amendment rights of expression and association. Specifically, scholars should analyze whether the Reform Act will change the roles of national parties and state parties, whether political parties are creating new ways to avoid the soft money ban, and whether it is illegal now for state parties to solicit party memberships to the national party. The Libertarian Party raised this issue in a solicitation e-mail before the Reform Act became effective. 10 In response to political parties creating new ways to avoid the soft money ban, Senator McCain stated, “We’ll fight them, and we’ll fight them in the courts, and we’ll fight them on the floors of Congress. And we’ll do everything we can to make sure we have meaningful campaign finance reform in this country.” 11 10 Libertarian Party, http://www.lp.org/contribute?prog=lastcorporate&fund=2002-0202 . 11 Don Van Natta, Jr., and Richard A. Oppel, Jr., Parties Create New Ways to Avoid Soft Money Ban, N.Y. Times, Nov. 2, 2002.

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APPENDIX BIPARTISAN CAMPAIGN REFORM ACT OF 2002 UNITED STATES PUBLIC LAWS 107th Congress -2nd Session PUBLIC LAW 107-155 [H.R. 2356] MAR. 27, 2002 107 P.L. 155; 116 Stat. 81; 2002 Enacted H.R. 2356; 107 Enacted H.R. 2356 An Act To amend the Federal Election Campaign Act of 1971 to provide bipartisan campaign reform. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE; TABLE OF CONTENTS. (a) Short Title.--This Act may be cited as the "Bipartisan Campaign Reform Act of 2002." (b) Table of Contents.--The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. TITLE I--REDUCTION OF SPECIAL INTEREST INFLUENCE Sec. 101. Soft money of political parties. Sec. 102. Increased contribution limit for State committees of political parties. Sec. 103. Reporting requirements. TITLE II--NONCANDIDATE CAMPAIGN EXPENDITURES Subtitle A--Electioneering Communications Sec. 201. Disclosure of electioneering communications. Sec. 202. Coordinated communications as contributions. Sec. 203. Prohibition of corporate and labor disbursements for electioneering communications. Sec. 204. Rules relating to certain targeted electioneering communications. Subtitle B--Independent and Coordinated Expenditures Sec. 211. Definition of independent expenditure. 85

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86 Sec. 212. Reporting requirements for certain independent expenditures. Sec. 213. Independent versus coordinated expenditures by party. Sec. 214. Coordination with candidates or political parties. TITLE III--MISCELLANEOUS Sec. 301. Use of contributed amounts for certain purposes. Sec. 302. Prohibition of fundraising on Federal property. Sec. 303. Strengthening foreign money ban. Sec. 304. Modification of individual contribution limits in response to expenditures from personal funds. Sec. 305. Limitation on availability of lowest unit charge for Federal candidates attacking opposition. Sec. 306. Software for filing reports and prompt disclosure of contributions. Sec. 307. Modification of contribution limits. Sec. 308. Donations to Presidential inaugural committee. Sec. 309. Prohibition on fraudulent solicitation of funds. Sec. 310. Study and report on clean money clean elections laws. Sec. 311. Clarity standards for identification of sponsors of election-related advertising. Sec. 312. Increase in penalties. Sec. 313. Statute of limitations. Sec. 314. Sentencing guidelines. Sec. 315. Increase in penalties imposed for violations of conduit contribution ban. Sec. 316. Restriction on increased contribution limits by taking into account candidate's available funds. Sec. 317. Clarification of right of nati onals of the United States to make political contributions. Sec. 318. Prohibition of contributions by minors. Sec. 319. Modification of individual contribution limits for House candidates in response to expenditures from personal funds. TITLE IV--SEVERABILITY; EFFECTIVE DATE Sec. 401. Severability. Sec. 402. Effective dates and regulations. Sec. 403. Judicial review. TITLE V--ADDITIONAL DISCLOSURE PROVISIONS Sec. 501. Internet access to records. Sec. 502. Maintenance of website of election reports. Sec. 503. Additional disclosure reports. Sec. 504. Public access to broadcasting records.

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87 TITLE I--REDUCTION OF SPECIAL INTEREST INFLUENCE Sec. 101. SOFT MONEY OF POLITICAL PARTIES. (a) In General.--Title III of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.) is amended by adding at the end the following: "Sec. 323. SOFT MONEY OF POLITICAL PARTIES. "(a) National Committees.-"(1) In general.-A national committee of a political party (including a national congressional campaign committee of a political party) may not solicit, receive, or direct to another person a contribution, donation, or transfer of funds or any other thing of value, or spend any funds, that are not subject to the limitations, prohibitions, and reporting requirements of this Act. "(2) Applicability.-The prohibition established by paragraph (1) applies to any such national committee, any officer or agent acting on behalf of such a national committee, and any entity that is directly or indirectly established, financed, maintained, or controlled by such a national committee. "(b) State, District, and Local Committees.-"(1) In general.-Except as provided in paragraph (2), an amount that is expended or disbursed for Federal election activity by a State, district, or local committee of a political party (including an entity that is directly or indirectly established, financed, maintained, or controlled by a State, district, or local committee of a political party and an officer or agent acting on behalf of such committee or entity), or by an association or similar group of candidates for State or local office or of individuals holding State or local office, shall be made from funds subject to the limitations, prohibitions, and reporting requirements of this Act. "(2) Applicability.---"(A) In general.--Notwithstanding clause (i) or (ii) of section 301(20)(A), and subject to subparagraph (B), paragraph (1) shall not apply to any amount expended or disbursed by a State, district, or local committee of a political party for an activity described in either such clause to the extent the amounts expended or disbursed for such activity are allocated (under regulations prescribed by the Commission) among amounts-"(i) which consist solely of contributions subject to the limitations, prohibitions, and reporting requirements of this Act (other than amounts described in subparagraph (B)(iii)); and

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88 "(ii) other amounts which are not subject to the limitations, prohibitions, and reporting requirements of this Act (other than any requirements of this subsection). "(B) Conditions.--Subparagraph (A) shall only apply if-"(i) the activity does not refer to a clearly identified candidate for Federal office; "(ii) the amounts expended or disbursed are not for the costs of any broadcasting, cable, or satellite communication, other than a communication which refers solely to a clearly identified candidate for State or local office; "(iii) the amounts expended or disbursed which are described in subparagraph (A)(ii) are paid from amounts which are donated in accordance with State law and which meet the requirements of subparagraph (C), except that no person (including any person established, financed, maintained, or controlled by such person) may donate more than $ 10,000 to a State, district, or local committee of a political party in a calendar year for such expenditures or disbursements; and "(iv) the amounts expended or disbursed are made solely from funds raised by the State, local, or district committee which makes such expenditure or disbursement, and do not include any funds provided to such committee from-"(I) any other State, local, or district committee of any State party, "(II) the national committee of a political party (including a national congressional campaign committee of a political party), "(III) any officer or agent acting on behalf of any committee described in subclause (I) or (II), or "(IV) any entity directly or indirectly established, financed, maintained, or controlled by any committee described in subclause (I) or (II). "(C) Prohibiting involvement of national parties, federal candidates and officeholders, and state parties acting jointly.--Notwithstanding subsection (e) (other than subsection (e)(3)), amounts specifically authorized to be spent under subparagraph (B)(iii) meet the requirements of this subparagraph only if the amounts-"(i) are not solicited, received, directed, transferred, or spent by or in the name of any person described in subsection (a) or (e); and "(ii) are not solicited, received, or directed through fundraising

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89 activities conducted jointly by 2 or more State, local, or district committees of any political party or their agents, or by a State, local, or district committee of a political party on behalf of the State, local, or district committee of a political party or its agent in one or more other States. "(c) Fundraising Costs.--An amount spent by a person described in subsection (a) or (b) to raise funds that are used, in whole or in part, for expenditures and disbursements for a Federal election activity shall be made from funds subject to the limitations, prohibitions, and reporting requirements of this Act. "(d) Tax-Exempt Organizations.--A national, State, district, or local committee of a political party (including a national congressional campaign committee of a political party), an entity that is directly or indirectly established, financed, maintained, or controlled by any such national, State, district, or local committee or its agent, and an officer or agent acting on behalf of any such party committee or entity, shall not solicit any funds for, or make or direct any donations to-"(1) an organization that is described in section 501(c) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code (or has submitted an application for determination of tax exempt status under such section) and that makes expenditures or disbursements in connection with an election for Federal office (including expenditures or disbursements for Federal election activity); or "(2) an organization described in section 527 of such Code (other than a political committee, a State, district, or local committee of a political party, or the authorized campaign committee of a candidate for State or local office). "(e) Federal Candidates.-"(1) In general.-A candidate, individual holding Federal office, agent of a candidate or an individual holding Federal office, or an entity directly or indirectly established, financed, maintained or controlled by or acting on behalf of 1 or more candidates or individuals holding Federal office, shall not"(A) solicit, receive, direct, transfer, or spend funds in connection with an election for Federal office, including funds for any Federal election activity, unless the funds are subject to the limitations, prohibitions, and reporting requirements of this Act; or "(B) solicit, receive, direct, transfer, or spend funds in connection with any election other than an election for Federal office or disburse funds in connection with such an election unless the funds-

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90 "(i) are not in excess of the amounts permitted with respect to contributions to candidates and political committees under paragraphs (1), (2), and (3) of section 315(a); and "(ii) are not from sources prohibited by this Act from making contributions in connection with an election for Federal office. "(2) State law.-Paragraph (1) does not apply to the solicitation, receipt, or spending of funds by an indi vidual described in such paragraph who is or was also a candidate for a State or local office solely in connection with such election for State or local office if the solicitation, receipt, or spending of funds is permitted under State law and refers only to such State or local candidate, or to any other candidate for the State or local office sought by such candidate, or both. "(3) Fundraising events.-Notwithstanding paragraph (1) or subsection (b)(2)(C), a candidate or an individual holding Federal office may attend, speak, or be a featured guest at a f undraising event for a State, district, or local committee of a political party. "(4) Permitting certain solicitations.---"(A) General solicitations.--Notwithstanding any other provision of this subsection, an individual described in paragraph (1) may make a general solicitation of funds on behalf of any organization that is described in section 501(c) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code (or has submitted an application for determination of tax exempt status under such section) (other than an entity whose principal purpose is to conduct activities described in clauses (i) and (ii) of section 301(20)(A)) where such solicitation does not specify how the funds will or should be spent. "(B) Certain specific solicitations.--In addition to the general solicitations permitted under subparagraph (A), an individual described in paragraph (1) may make a solicitation explicitly to obtain funds for carrying out the activities described in clauses (i) and (ii) of section 301(20)(A), or for an entity whose principal purpose is to conduct such activities, if-"(i) the solicitation is made only to individuals; and "(ii) the amount solicited from any individual during any calendar year does not exceed $ 20,000.

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91 "(f) State Candidates.-"(1) In general.-A candidate for State or local office, individual holding State or local office, or an agen t of such a candidate or individual may not spend any funds for a communication described in section 301(20)(A)(iii) unless the funds are subject to the limitations, prohibitions, and reporting requirements of this Act. "(2) Exception for certain communications.-Paragraph (1) shall not apply to an individual described in such paragraph if the communication involved is in connection with an election for such State or local office and refers only to such individual or to any other candidate for the State or local office held or sought by such individual, or both.". (b) Definitions.--Section 301 of the Federal Election Campaign Act of 1971 (2 U.S.C. 431) is amended by adding at the end thereof the following: "(20) Federal election activity.---"(A) In general.--The term 'Federal election activity' means-"(i) voter registration activity during the period that begins on the date that is 120 days before the date a regularly scheduled Federal election is held and ends on the date of the election; "(ii) voter identification, get-out-the-vote activity, or generic campaign activity conducted in connection with an election in which a candidate for Federal office appears on the ballot (regardless of whether a candidate for State or local office also appears on the ballot); "(iii) a public communication that refers to a clearly identified candidate for Federal office (regardless of whether a candidate for State or local office is also mentioned or identified) and that promotes or supports a candidate for that office, or attacks or opposes a candidate for that office (regardless of whether the communication expressly advocates a vote for or against a candidate); or "(iv) services provided during any month by an employee of a State, district, or local committee of a political party who spends more than 25 percent of that individual's compensated time during that month on activities in connection with a Federal election. "(B) Excluded activity.--The term 'Federal election activity' does not include an amount expended or disbursed by a State, district, or local committee of a political party for-

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92 "(i) a public communication that refers solely to a clearly identified candidate for State or local office, if the communication is not a Federal election activity described in subparagraph (A)(i) or (ii); "(ii) a contribution to a candidate for State or local office, provided the contribution is not designated to pay for a Federal election activity described in subparagraph (A); "(iii) the costs of a State, district, or local political convention; and "(iv) the costs of grassroots campaign materials, including buttons, bumper stickers, and yard signs, that name or depict only a candidate for State or local office. "(21) Generic campaign activity.-The term 'generic campaign activity' means a campaign activity that promotes a political party and does not promote a candidate or non-Federal candidate. "(22) Public communication.-The term 'public communication' means a communication by means of any broadcast, cable, or satellite communication, newspaper, magazine, outdoor advertising facility, mass mailing, or telephone bank to the general public, or any other form of general public political advertising. "(23) Mass mailing.-The term 'mass mailing' means a mailing by United States mail or facsimile of more than 500 pieces of mail matter of an identical or substantially similar nature within any 30-day period. "(24) Telephone bank.-The term 'telephone bank' means more than 500 telephone calls of an identical or substantially similar nature within any 30-day period.". Sec. 102. INCREASED CONTRIBUTION LIMIT FOR STATE COMMITTEES OF POLITICAL PARTIES. Section 315(a)(1) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a (a)(1)) is amended-(1) in subparagraph (B), by striking "or" at the end; (2) in subparagraph (C)-(A) by inserting "(other than a committee described in subparagraph (D))" after "committee"; and

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93 (B) by striking the period at the end and inserting "; or"; and (3) by adding at the end the following: "(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.". Sec. 103. REPORTING REQUIREMENTS. (a) Reporting Requirements.--Section 304 of the Federal Election Campaign Act of 1971 (2 U.S.C. 434) is amended by adding at the end the following: "(e) Political Committees.-"(1) National and congressional political committees.-The national committee of a political party, any national congressional campaign committee of a political party, and any subordinate committee of either, shall report all receipts and disbursements during the reporting period. "(2) Other political committees to which section 323 applies.---"(A) In general.--In addition to any other reporting requirements applicable under this Act, a political committee (not described in paragraph (1)) to which section 323(b)(1) applies shall report all receipts and disbursements made for activities described in section 301(20)(A), unless the aggregate amount of such receipts and disbursements during the calendar year is less than $ 5,000. "(B) Specific disclosure by state and local parties of certain non-federal amounts permitted to be spent on federal election activity.--Each report by a political committee under subparagraph (A) of receipts and disbursements made for activities described in section 301(20)(A) shall include a disclosure of all receipts and disbursements described in section 323(b)(2)(A) and (B). "(3) Itemization.-If a political committee has receipts or disbursements to which this subsection applies from or to any person aggregating in excess of $ 200 for any calendar year, the political committee shall separately itemize its reporting for such person in the same manner as required in paragraphs (3)(A), (5), and (6) of subsection (b). "(4) Reporting periods.-Reports required to be filed under this subsection shall be filed for the same time periods required for political committees under subsection (a)(4)(B).".

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94 (b) Building Fund Exception to the Definition of Contribution.-(1) In general.-Section 301(8)(B) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(8)(B)) is amended-(A) by striking clause (viii); and (B) by redesignating clauses (ix) through (xv) as clauses (viii) through (xiv), respectively. (2) Nonpreemption of state law.-Section 403 of such Act (2 U.S.C. 453) is amended-(A) by striking "The provisions of this Act" and inserting "(a) In General.--Subject to subsection (b), the provisions of this Act"; and (B) by adding at the end the following: "(b) State and Local Committees of Political Parties.--Notwithstanding any other provision of this Act, a State or local committee of a political party may, subject to State law, use exclusively funds that are not subject to the prohibitions, limitations, and reporting requirements of the Act for the purchase or construction of an office building for such State or local committee.". TITLE II--NONCANDIDATE CAMPAIGN EXPENDITURES Subtitle A--Electioneering Communications Sec. 201. DISCLOSURE OF ELECTIONEERING COMMUNICATIONS. (a) In General.--Section 304 of the Federal Election Campaign Act of 1971 (2 U.S.C. 434), as amended by section 103, is amended by adding at the end the following new subsection: "(f) Disclosure of Electioneering Communications.-"(1) Statement required.-Every person who makes a disbursement for the direct costs of producing and airing electioneering communications in an aggregate amount in excess of $ 10,000 during any calendar year shall, within 24 hours of each disclosure date, file with the Commission a statement containing the information described in paragraph (2). "(2) Contents of statement.-Each statement required to be filed under this subsection shall be made under penalty of perjury and shall contain the following information:

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95 "(A) The identification of the person making the disbursement, of any person sharing or exercising direction or control over the activities of such person, and of the custodian of the books and accounts of the person making the disbursement. "(B) The principal place of business of the person making the disbursement, if not an individual. "(C) The amount of each disbursement of more than $ 200 during the period covered by the statement and the identification of the person to whom the disbursement was made. "(D) The elections to which the electioneering communications pertain and the names (if known) of the candidates identified or to be identified. "(E) If the disbursements were paid out of a segregated bank account which consists of funds contributed solely by individuals who are United States citizens or nationals or lawfully admitted for permanent residence (as defined in section 101(a)(20) of the Immigration and Nationality Act (8 U.S.C. 1101 (a)(20))) directly to this account for electioneering communications, the names and addresses of all contributors who contributed an aggregate amount of $ 1,000 or more to that account during the period beginning on the first day of the preceding calendar year and ending on the disclosure date. Nothing in this subparagraph is to be construed as a prohibition on the use of funds in such a segregated account for a purpose other than electioneering communications. "(F) If the disbursements were paid out of funds not described in subparagraph (E), the names and addresses of all contributors who contributed an aggregate amount of $ 1,000 or more to the person making the disbursement during the period beginning on the first day of the preceding calendar year and ending on the disclosure date. "(3) Electioneering communication.-For purposes of this subsection-"(A) In general.--(i) The term 'electioneering communication' means any broadcast, cable, or satellite communication which-"(I) refers to a clearly identified candidate for Federal office; "(II) is made within-"(aa) 60 days before a general, special, or runoff election for the office sought by the candidate; or "(bb) 30 days before a primary or preference election, or a

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96 convention or caucus of a political party that has authority to nominate a candidate, for the office sought by the candidate; and "(III) in the case of a communication which refers to a candidate for an office other than President or Vice President, is targeted to the relevant electorate. "(ii) If clause (i) is held to be constitutionally insufficient by final judicial decision to support the regulation provided herein, then the term 'electioneering communication' means any broadcast, cable, or satellite communication which promotes or supports a candidate for that office, or attacks or opposes a candidate for that office (regardless of whether the communication expressly advocates a vote for or against a candidate) and which also is suggestive of no plausible meaning other than an exhortation to vote for or against a specific candidate. Nothing in this subparagraph shall be construed to affect the interpretation or application of section 100.22(b) of title 11, Code of Federal Regulations. "(B) Exceptions.--The term 'electioneering communication' does not include-"(i) a communication appearing in a news story, commentary, or editorial distributed through the facilities of any broadcasting station, unless such facilities are owned or controlled by any political party, political committee, or candidate; "(ii) a communication which constitutes an expenditure or an independent expenditure under this Act; "(iii) a communication which constitutes a candidate debate or forum conducted pursuant to regulations adopted by the Commission, or which solely promotes such a debate or forum and is made by or on behalf of the person sponsoring the debate or forum; or "(iv) any other communication exempted under such regulations as the Commission may promulgate (consistent with the requirements of this paragraph) to ensure the appropriate implementation of this paragraph, except that under any such regulation a communication may not be exempted if it meets the requirements of this paragraph and is described in section 301(20)(A)(iii). "(C) Targeting to relevant electorate.--For purposes of this paragraph, a communication which refers to a clearly identified candidate for Federal office is 'targeted to the relevant electorate' if the communication can be received by 50,000 or more persons-"(i) in the district the candidate seeks to represent, in the case of

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97 a candidate for Representative in, or Delegate or Resident Commissioner to, the Congress; or "(ii) in the State the candidate seeks to represent, in the case of a candidate for Senator. "(4) Disclosure date.-For purposes of this subsection, the term 'disclosure date' means-"(A) the first date during any calendar year by which a person has made disbursements for the direct costs of producing or airing electioneering communications aggregating in excess of $ 10,000; and "(B) any other date during such calendar year by which a person has made disbursements for the direct costs of producing or airing electioneering communications aggregating in excess of $ 10,000 since the most recent disclosure date for such calendar year. "(5) Contracts to disburse.-For purposes of this subsection, a person shall be treated as having made a disbursement if the person has executed a contract to make the disbursement. "(6) Coordination with other requirements.-Any requirement to report under this subsection shall be in addition to any other reporting requirement under this Act. "(7) Coordination with internal revenue code.-Nothing in this subsection may be construed to establish, modify, or otherwise affect the definition of political activities or electioneering activities (including the definition of participating in, intervening in, or influencing or attempting to influence a political campaign on behalf of or in opposition to any candidate for public office) for purposes of the Internal Revenue Code of 1986.". (b) Responsibilities of Federal Communications Commission.--The Federal Communications Commission shall compile and maintain any information the Federal Election Commission may require to carry out section 304(f) of the Federal Election Campaign Act of 1971 (as added by subsection (a)), and shall make such information available to the public on the Federal Communication Commission's website. Sec. 202. COORDINATED COMMUNICATIONS AS CONTRIBUTIONS. Section 315(a)(7) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a (a)(7)) is amended-(1) by redesignating subparagraph (C) as subparagraph (D); and

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98 (2) by inserting after subparagraph (B) the following: "(C) if-"(i) any person makes, or contracts to make, any disbursement for any electioneering communication (within the meaning of section 304(f)(3)); and "(ii) such disbursement is coordinated with a candidate or an authorized committee of such candidate, a Federal, State, or local political party or committee thereof, or an agent or official of any such candidate, party, or committee; such disbursement or contracting shall be treated as a contribution to the candidate supported by the electioneering communication or that candidate's party and as an expenditure by that candidate or that candidate's party; and". Sec. 203. PROHIBITION OF CORPORATE AND LABOR DISBURSEMENTS FOR ELECTIONEERING COMMUNICATIONS. (a) In General.--Section 316(b)(2) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441b(b)(2)) is amended by inserting "or for any applicable electioneering communication" before ", but shall not include". (b) Applicable Electioneering Communication.--Section 316 of such Act is amended by adding at the end the following: "(c) Rules Relating to Electioneering Communications.-"(1) Applicable electioneering communication.-For purposes of this section, the term 'applicable electioneering communication' means an electioneering communication (within the meaning of section 304(f)(3)) which is made by any entity described in subsection (a) of this section or by any other person using funds donated by an entity described in subsection (a) of this section. "(2) Exception.-Notwithstanding paragraph (1), the term 'applicable electioneering communication' does not include a communication by a section 501(c)(4) organization or a political organization (as defined in section 527(e)(1) of the Internal Revenue Code of 1986) made under section 304(f)(2)(E) or (F) of this Act if the communication is paid for exclusively by funds provided directly by individuals who are United States citizens or nationals or lawfully admitted for permanent residence (as defined in section 101(a)(20) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(20))). For purposes of the preceding sentence, the term 'provided directly by individuals' does not include funds the source of which is an entity described in subsection (a) of this section.

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99 "(3) Special operating rules.---"(A) Definition under paragraph (1).--An electioneering communication shall be treated as made by an entity described in subsection (a) if an entity described in subsection (a) directly or indirectly disburses any amount for any of the costs of the communication. "(B) Exception under paragraph (2).--A section 501(c)(4) organization that derives amounts from business activities or receives funds from any entity described in subsection (a) shall be considered to have paid for any communication out of such amounts unless such organization paid for the communication out of a segregated account to which only individuals can contribute, as described in section 304(f)(2)(E). "(4) Definitions and rules.-For purposes of this subsection-"(A) the term 'section 501(c)(4) organization' means-"(i) an organization described in section 501(c)(4) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code; or "(ii) an organization which has submitted an application to the Internal Revenue Service for determination of its status as an organization described in clause (i); and "(B) a person shall be treated as having made a disbursement if the person has executed a contract to make the disbursement. "(5) Coordination with internal revenue code.-Nothing in this subsection shall be construed to authorize an organization exempt from taxation under section 501(a) of the Internal Revenue Code of 1986 to carry out any activity which is prohibited under such Code.". Sec. 204. RULES RELATING TO CERTAIN TARGETED ELECTIONEERING COMMUNICATIONS. Section 316(c) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441b), as added by section 203, is amended by adding at the end the following: "(6) Special rules for targeted communications.---"(A) Exception does not apply.--Paragraph (2) shall not apply in the case of a targeted communication that is made by an organization described in such paragraph.

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100 "(B) Targeted communication.--For purposes of subparagraph (A), the term 'targeted communication' means an electioneering communication (as defined in section 304(f)(3)) that is distributed from a television or radio broadcast station or provider of cable or satellite television service and, in the case of a communication which refers to a candidate for an office other than President or Vice President, is targeted to the relevant electorate. "(C) Definition.--For purposes of this paragraph, a communication is 'targeted to the relevant electorate' if it meets the requirements described in section 304(f)(3)(C).". Subtitle B--Independent and Coordinated Expenditures Sec. 211. DEFINITION OF INDEPENDENT EXPENDITURE. Section 301 of the Federal Election Campaign Act (2 U.S.C. 431) is amended by striking paragraph (17) and inserting the following: "(17) Independent expenditure.-The term 'independent expenditure' means an expenditure by a person-"(A) expressly advocating the election or defeat of a clearly identified candidate; and "(B) that is not made in concert or cooperation with or at the request or suggestion of such candidate, the candidate's authorized political committee, or their agents, or a political party committee or its agents.". Sec. 212. REPORTING REQUIREMENTS FOR CERTAIN INDEPENDENT EXPENDITURES. (a) In General.--Section 304 of the Federal Election Campaign Act of 1971 (2 U.S.C. 434) (as amended by section 201) is amended-(1) in subsection (c)(2), by striking the undesignated matter after subparagraph (C); and (2) by adding at the end the following: "(g) Time for Reporting Certain Expenditures.-"(1) Expenditures aggregating $ 1,000.---"(A) Initial report.--A person (including a political committee) that makes or contracts to make independent expenditures aggregating $ 1,000 or more after the 20th day, but more than 24 hours, before the date of an election shall

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101 file a report describing the expenditures within 24 hours. "(B) Additional reports.--After a person files a report under subparagraph (A), the person shall file an additional report within 24 hours after each time the person makes or contracts to make independent expenditures aggregating an additional $ 1,000 with respect to the same election as that to which the initial report relates. "(2) Expenditures aggregating $ 10,000.---"(A) Initial report.--A person (including a political committee) that makes or contracts to make independent expenditures aggregating $ 10,000 or more at any time up to and including the 20th day before the date of an election shall file a report describing the expenditures within 48 hours. "(B) Additional reports.--After a person files a report under subparagraph (A), the person shall file an additional report within 48 hours after each time the person makes or contracts to make independent expenditures aggregating an additional $ 10,000 with respect to the same election as that to which the initial report relates. "(3) Place of filing; contents.-A report under this subsection-"(A) shall be filed with the Commission; and "(B) shall contain the information required by subsection (b)(6)(B)(iii), including the name of each candidate whom an expenditure is intended to support or oppose.". (b) Time of Filing of Certain Statements.-(1) In general.-Section 304(g) of such Act, as added by subsection (a), is amended by adding at the end the following: "(4) Time of filing for expenditures aggregating $ 1,000.-Notwithstanding subsection (a)(5), the time at which the statement under paragraph (1) is received by the Commission or any other recipient to whom the notification is required to be sent shall be considered the time of filing of the statement with the recipient.". (2) Conforming amendments.-(A) Section 304(a)(5) of such Act (2 U.S.C. 434(a)(5)) is amended by striking "the second sentence of subsection (c)(2)" and inserting "subsection (g)(1)". (B) Section 304(d)(1) of such Act (2 U.S.C. 434(d)(1)) is amended by inserting "or (g)" after "subsection (c)".

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102 Sec. 213. INDEPENDENT VERSUS COORDINATED EXPENDITURES BY PARTY. Section 315(d) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a (d)) is amended-(1) in paragraph (1), by striking "and (3)" and inserting ", (3), and (4)"; and (2) by adding at the end the following: "(4) Independent versus coordinated expenditures by party.---"(A) In general.--On or after the date on which a political party nominates a candidate, no committee of the political party may make-"(i) any coordinated expenditure under this subsection with respect to the candidate during the election cycle at any time after it makes any independent expenditure (as defined in section 301(17)) with respect to the candidate during the election cycle; or "(ii) any independent expenditure (as defined in section 301(17)) with respect to the candidate during the election cycle at any time after it makes any coordinated expenditure under this subsection with respect to the candidate during the election cycle. "(B) Application.--For purposes of this paragraph, all political committees established and maintained by a national political party (including all congressional campaign committees) and all political committees established and maintained by a State political party (including any subordinate committee of a State committee) shall be considered to be a single political committee. "(C) Transfers.--A committee of a political party that makes coordinated expenditures under this subsection with respect to a candidate shall not, during an election cycle, transfer any funds to, assign authority to make coordinated expenditures under this subsection to, or receive a transfer of funds from, a committee of the political party that has made or intends to make an independent expenditure with respect to the candidate.". Sec. 214. COORDINATION WITH CANDIDATES OR POLITICAL PARTIES. (a) In General.--Section 315(a)(7)(B) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a(a)(7)(B)) is amended-(1) by redesignating clause (ii) as clause (iii); and

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103 (2) by inserting after clause (i) the following new clause: "(ii) expenditures made by any person (other than a candidate or candidate's authorized committee) in cooperation, consultation, or concert with, or at the request or suggestion of, a national, State, or local committee of a political party, shall be considered to be contributions made to such party committee; and". (b) Repeal of Current Regulations.--The regulations on coordinated communications paid for by persons other than candidates, authorized committees of candidates, and party committees adopted by the Federal Election Commission and published in the Federal Register at page 76138 of volume 65, Federal Register, on December 6, 2000, are repealed as of the date by which the Commission is required to promulgate new regulations under subsection (c) (as described in section 402(c)(1)). (c) Regulations by the Federal Election Commission.--The Federal Election Commission shall promulgate new regulations on coordinated communications paid for by persons other than candidates, authorized committees of candidates, and party committees. The regulations shall not require agreement or formal collaboration to establish coordination. In addition to any subject determined by the Commission, the regulations shall address-(1) payments for the republication of campaign materials; (2) payments for the use of a common vendor; (3) payments for communications directed or made by persons who previously served as an employee of a candidate or a political party; and (4) payments for communications made by a person after substantial discussion about the communication with a candidate or a political party. (d) Meaning of Contribution or Expenditure for the Purposes of Section 316.--Section 316(b)(2) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441b(b)(2)) is amended by striking "shall include" and inserting "includes a contribution or expenditure, as those terms are defined in section 301, and also includes". TITLE III--MISCELLANEOUS Sec. 301. USE OF CONTRIBUTED AMOUNTS FOR CERTAIN PURPOSES. Title III of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.) is amended by striking section 313 and inserting the following:

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104 "Sec. 313. USE OF CONTRIBUTED AMOUNTS FOR CERTAIN PURPOSES. "(a) Permitted Uses.--A contribution accepted by a candidate, and any other donation received by an individual as support for activities of the individual as a holder of Federal office, may be used by the candidate or individual-"(1) for otherwise authorized expenditures in connection with the campaign for Federal office of the candidate or individual; "(2) for ordinary and necessary expenses incurred in connection with duties of the individual as a holder of Federal office; "(3) for contributions to an organization described in section 170(c) of the Internal Revenue Code of 1986; or "(4) for transfers, without limitation, to a national, State, or local committee of a political party. "(b) Prohibited Use.-"(1) In general.-A contribution or donation described in subsection (a) shall not be converted by any person to personal use. "(2) Conversion.-For the purposes of paragraph (1), a contribution or donation shall be considered to be converted to personal use if the contribution or amount is used to fulfill any commitment, obligation, or expense of a person that would exist irrespective of the candidate's election campaign or individual's duties as a holder of Federal office, including-"(A) a home mortgage, rent, or utility payment; "(B) a clothing purchase; "(C) a noncampaign-related automobile expense; "(D) a country club membership; "(E) a vacation or other noncampaign-related trip; "(F) a household food item; "(G) a tuition payment; "(H) admission to a sporting event, concert, theater, or other form of entertainment not associated with an election campaign; and

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105 "(I) dues, fees, and other payments to a health club or recreational facility.". Sec. 302. PROHIBITION OF FUNDRAISING ON FEDERAL PROPERTY. Section 607 of title 18, United States Code, is amended-(1) by striking subsection (a) and inserting the following: "(a) Prohibition.-"(1) In general.-It shall be unlawful for any person to solicit or receive a donation of money or other thing of value in connection with a Federal, State, or local election from a person who is located in a room or building occupied in the discharge of official duties by an officer or employee of the United States. It shall be unlawful for an individual who is an officer or employee of the Federal Government, including the President, Vice President, and Members of Congress, to solicit or receive a donation of money or other thing of value in connection with a Federal, State, or local election, while in any room or building occupied in the discharge of official duties by an officer or employee of the United States, from any person. "(2) Penalty.-A person who violates this section shall be fined not more than $ 5,000, imprisoned not more than 3 years, or both."; and (2) in subsection (b), by inserting "or Executive Office of the President" after "Congress". Sec. 303. STRENGTHENING FOREIGN MONEY BAN. Section 319 of the Federal Election Campaign Act of 1971 (2 U.S.C. 441e) is amended-(1) by striking the heading and inserting the following: " contributions and donations by foreign nationals "; and (2) by striking subsection (a) and inserting the following: "(a) Prohibition.--It shall be unlawful for-"(1) a foreign national, directly or indirectly, to make-"(A) a contribution or donation of money or other thing of value, or to make an express or implied promise to make a contribution or donation, in connection with a Federal, State, or local election;

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106 "(B) a contribution or donation to a committee of a political party; or "(C) an expenditure, independent expenditure, or disbursement for an electioneering communication (within the meaning of section 304(f)(3)); or "(2) a person to solicit, accept, or receive a contribution or donation described in subparagraph (A) or (B) of paragraph (1) from a foreign national.". Sec. 304. MODIFICATION OF INDI VIDUAL CONTRIBUTION LIMITS IN RESPONSE TO EXPENDITURES FROM PERSONAL FUNDS. (a) Increased Limits for Individuals.--Section 315 of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a) is amended-(1) in subsection (a)(1), by striking "No person" and inserting "Except as provided in subsection (i), no person"; and (2) by adding at the end the following: "(i) Increased Limit To Allow Response to Expenditures From Personal Funds.-"(1) Increase.---"(A) In general.--Subject to paragraph (2), if the opposition personal funds amount with respect to a candidate for election to the office of Senator exceeds the threshold amount, the limit under subsection (a)(1)(A) (in this subsection referred to as the 'applicable limit') with respect to that candidate shall be the increased limit. "(B) Threshold amount.-"(i) State-by-state competitive and fair campaign formula.--In this subsection, the threshold amount with respect to an election cycle of a candidate described in subparagraph (A) is an amount equal to the sum of-"(I) $ 150,000; and "(II) $ 0.04 multiplied by the voting age population. "(ii) Voting age population.--In this subparagraph, the term 'voting age population' means in the case of a candidate for the office of Senator, the voting age population of the State of the candidate (as certified under section 315(e)). "(C) Increased limit.--Except as provided in clause (ii), for purposes of subparagraph (A), if the opposition personal funds amount is over-

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107 "(i) 2 times the threshold amount, but not over 4 times that amount-"(I) the increased limit shall be 3 times the applicable limit; and "(II) the limit under subsection (a)(3) shall not apply with respect to any contribution made with respect to a candidate if such contribution is made under the increased limit of subparagraph (A) during a period in which the candidate may accept such a contribution; "(ii) 4 times the threshold amount, but not over 10 times that amount-"(I) the increased limit shall be 6 times the applicable limit; and "(II) the limit under subsection (a)(3) shall not apply with respect to any contribution made with respect to a candidate if such contribution is made under the increased limit of subparagraph (A) during a period in which the candidate may accept such a contribution; and "(iii) 10 times the threshold amount-"(I) the increased limit shall be 6 times the applicable limit; "(II) the limit under subsection (a)(3) shall not apply with respect to any contribution made with respect to a candidate if such contribution is made under the increased limit of subparagraph (A) during a period in which the candidate may accept such a contribution; and "(III) the limits under subsection (d) with respect to any expenditure by a State or national committee of a political party shall not apply. "(D) Opposition personal funds amount.--The opposition personal funds amount is an amount equal to the excess (if any) of-"(i) the greatest aggregate amount of expenditures from personal funds (as defined in section 304(a)(6)(B)) that an opposing candidate in the same election makes; over "(ii) the aggregate amount of expenditures from personal funds made by the candidate with respect to the election. "(2) Time to accept contributions under increased limit.---"(A) In general.--Subject to subparagraph (B), a candidate and the

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108 candidate's authorized committee shall not accept any contribution, and a party committee shall not make any expenditure, under the increased limit under paragraph (1)-"(i) until the candidate has received notification of the opposition personal funds amount under section 304(a)(6)(B); and "(ii) to the extent that such contribution, when added to the aggregate amount of contributions previously accepted and party expenditures previously made under the increased limits under this subsection for the election cycle, exceeds 110 percent of the opposition personal funds amount. "(B) Effect of withdrawal of an opposing candidate.--A candidate and a candidate's authorized committee shall not accept any contribution and a party shall not make any expenditure under the increased limit after the date on which an opposing candidate ceases to be a candidate to the extent that the amount of such increased limit is attributable to such an opposing candidate. "(3) Disposal of excess contributions.---"(A) In general.--The aggregate amount of contributions accepted by a candidate or a candidate's authorized committee under the increased limit under paragraph (1) and not otherwise expended in connection with the election with respect to which such contributions relate shall, not later than 50 days after the date of such election, be used in the manner described in subparagraph (B). "(B) Return to contributors.--A candidate or a candidate's authorized committee shall return the excess contribution to the person who made the contribution. "(j) Limitation on Repayment of Personal Loans.--Any candidate who incurs personal loans made after the effective date of the Bipartisan Campaign Reform Act of 2002 in connection with the candidate's campaign for election shall not repay (directly or indirectly), to the extent such loans exceed $ 250,000, such loans from any contributions made to such candidate or any authorized committee of such candidate after the date of such election.". (b) Notification of Expenditures From Personal Funds.--Section 304(a)(6) of the Federal Election Campaign Act of 1971 (2 U.S.C. 434(a)(6)) is amended-(1) by redesignating subparagraph (B) as subparagraph (E); and (2) by inserting after subparagraph (A) the following: "(B) Notification of expenditure from personal funds.-

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109 "(i) Definition of expenditure from personal funds.--In this subparagraph, the term 'expenditure from personal funds' means-"(I) an expenditure made by a candidate using personal funds; and "(II) a contribution or loan made by a candidate using personal funds or a loan secured using such funds to the candidate's authorized committee. "(ii) Declaration of intent.--Not later than the date that is 15 days after the date on which an individual becomes a candidate for the office of Senator, the candidate shall file a declaration stating the total amount of expenditures from personal funds that the candidate intends to make, or to obligate to make, with respect to the election that will exceed the State-by-State competitive and fair campaign formula with-"(I) the Commission; and "(II) each candidate in the same election. "(iii) Initial notification.--Not later than 24 hours after a candidate described in clause (ii) makes or obligates to make an aggregate amount of expenditures from personal funds in excess of 2 times the threshold amount in connection with any election, the candidate shall file a notification with-"(I) the Commission; and "(II) each candidate in the same election. "(iv) Additional notification.--After a candidate files an initial notification under clause (iii), the candidate shall file an additional notification each time expenditures from personal funds are made or obligated to be made in an aggregate amount that exceed $ 10,000 with-"(I) the Commission; and "(II) each candidate in the same election. Such notification shall be filed not later than 24 hours after the expenditure is made. "(v) Contents.--A notification under clause (iii) or (iv) shall include-"(I) the name of the candidate and the office sought by the candidate;

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110 "(II) the date and amount of each expenditure; and "(III) the total amount of expenditures from personal funds that the candidate has made, or obligated to make, with respect to an election as of the date of the expenditure that is the subject of the notification. "(C) Notification of disposal of excess contributions.--In the next regularly scheduled report after the date of the election for which a candidate seeks nomination for election to, or election to, Federal office, the candidate or the candidate's authorized committee shall submit to the Commission a report indicating the source and amount of any excess contributions (as determined under paragraph (1) of section 315(i)) and the manner in which the candidate or the candidate's authorized committee used such funds. "(D) Enforcement.--For provisions providing for the enforcement of the reporting requirements under this paragraph, see section 309.". (c) Definitions.--Section 301 of the Federal Election Campaign Act of 1971 (2 U.S.C. 431), as amended by section 101(b), is further amended by adding at the end the following: "(25) Election cycle.-For purposes of sections 315(i) and 315A and paragraph (26), the term 'election cycle' means the period beginning on the day after the date of the most recent election for the specific office or seat that a candidate is seeking and ending on the date of the next election for that office or seat. For purposes of the preceding sentence, a primary election and a general election shall be considered to be separate elections. "(26) Personal funds.-The term 'personal funds' means an amount that is derived from-"(A) any asset that, under applicable State law, at the time the individual became a candidate, the candidate had legal right of access to or control over, and with respect to which the candidate had-"(i) legal and rightful title; or "(ii) an equitable interest; "(B) income received during the current election cycle of the candidate, including-"(i) a salary and other earned income from bona fide employment; "(ii) dividends and proceeds from the sale of the candidate's stocks

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111 or other investments; "(iii) bequests to the candidate; "(iv) income from trusts established before the beginning of the election cycle; "(v) income from trusts established by bequest after the beginning of the election cycle of which the candidate is the beneficiary; "(vi) gifts of a personal nature that had been customarily received by the candidate prior to the beginning of the election cycle; and "(vii) proceeds from lotteries and similar legal games of chance; and "(C) a portion of assets that are jointly owned by the candidate and the candidate's spouse equal to the candidate's share of the asset under the instrument of conveyance or ownership, but if no specific share is indicated by an instrument of conveyance or ownership, the value of 1/2 of the property.". Sec. 305. LIMITATION ON AVAILABILITY OF LOWEST UNIT CHARGE FOR FEDERAL CANDIDATES ATTACKING OPPOSITION. (a) In General.--Section 315(b) of the Communications Act of 1934 (47 U.S.C. 315(b)) is amended-(1) by striking "(b) The charges" and inserting the following: "(b) Charges.-"(1) In general.-The charges"; (2) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively; and (3) by adding at the end the following: "(2) Content of broadcasts.---"(A) In general.--In the case of a candidate for Federal office, such candidate shall not be entitled to receive the rate under paragraph (1)(A) for the use of any broadcasting station unless the candidate provides written certification to the broadcast station that the candidate (and any authorized committee of the candidate) shall not make any direct reference to another candidate for the same office, in any broadcast using the rights and conditions of access under this Act, unless such reference meets the requirements of

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112 subparagraph (C) or (D). "(B) Limitation on charges.--If a candidate for Federal office (or any authorized committee of such candidate) makes a reference described in subparagraph (A) in any broadcast that does not meet the requirements of subparagraph (C) or (D), such candidate shall not be entitled to receive the rate under paragraph (1)(A) for such broadcast or any other broadcast during any portion of the 45-day and 60-day periods described in paragraph (1)(A), that occur on or after the date of such broadcast, for election to such office. "(C) Television broadcasts.--A candidate meets the requirements of this subparagraph if, in the case of a television broadcast, at the end of such broadcast there appears simultaneously, for a period no less than 4 seconds-"(i) a clearly identifiable photographic or similar image of the candidate; and "(ii) a clearly readable printed statement, identifying the candidate and stating that the candidate has approved the broadcast and that the candidate's authorized committee paid for the broadcast. "(D) Radio broadcasts.--A candidate meets the requirements of this subparagraph if, in the case of a radio broadcast, the broadcast includes a personal audio statement by the candidate that identifies the candidate, the office the candidate is seeking, and indicates that the candidate has approved the broadcast. "(E) Certification.--Certifications under this section shall be provided and certified as accurate by the candidate (or any authorized committee of the candidate) at the time of purchase. "(F) Definitions.--For purposes of this paragraph, the terms 'authorized committee' and 'Federal office' have the meanings given such terms by section 301 of the Federal Election Campaign Act of 1971 (2 U.S.C. 431).". (b) Conforming Amendment.--Section 315( b)(1)(A) of the Communications Act of 1934 (47 U.S.C. 315(b)(1)(A)), as amended by this Act, is amended by inserting "subject to paragraph (2)," before "during the forty-five days". (c) Effective Date.--The amendments made by this section shall apply to broadcasts made after the effective date of this Act. Sec. 306. SOFTWARE FOR FILING REPORTS AND PROMPT DISCLOSURE OF CONTRIBUTIONS. Section 304(a) of the Federal Election Campaign Act of 1971 (2 U.S.C. 434(a))

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113 is amended by adding at the end the following: "(12) Software for filing of reports.---"(A) In general.--The Commission shall-"(i) promulgate standards to be used by vendors to develop software that-"(I) permits candidates to easily record information concerning receipts and disbursements required to be reported under this Act at the time of the receipt or disbursement; "(II) allows the information recorded under subclause (I) to be transmitted immediately to the Commission; and "(III) allows the Commission to post the information on the Internet immediately upon receipt; and "(ii) make a copy of software that meets the standards promulgated under clause (i) available to each person required to file a designation, statement, or report in electronic form under this Act. "(B) Additional information.--To the extent feasible, the Commission shall require vendors to include in the software developed under the standards under subparagraph (A) the ability for any person to file any designation, statement, or report required under this Act in electronic form. "(C) Required use.--Notwithstanding any provision of this Act relating to times for filing reports, each candidate for Federal office (or that candidate's authorized committee) shall use software that meets the standards promulgated under this paragraph once such software is made available to such candidate. "(D) Required posting.--The Commission shall, as soon as practicable, post on the Internet any information received under this paragraph.". Sec. 307. MODIFICATION OF CONTRIBUTION LIMITS. (a) Increase in Individual Limits for Certain Contributions.--Section 315(a)(1) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a(a)(1)) is amended-(1) in subparagraph (A), by striking "$ 1,000" and inserting "$ 2,000"; and

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114 (2) in subparagraph (B), by striking "$ 20,000" and inserting "$ 25,000". (b) Increase in Annual Aggregate Limit on Individual Contributions.--Section 315(a)(3) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a(a)(3)) is amended to read as follows: "(3) During the period which begins on January 1 of an odd-numbered year and ends on December 31 of the next even-numbered year, no individual may make contributions aggregating more than-"(A) $ 37,500, in the case of contributions to candidates and the authorized committees of candidates; "(B) $ 57,500, in the case of any other contributions, of which not more than $ 37,500 may be attributable to contributions to political committees which are not political committees of national political parties.". (c) Increase in Senatorial Campaign Committee Limit.--Section 315(h) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a(h)) is amended by striking "$ 17,500" and inserting "$ 35,000". (d) Indexing of Contribution Limits.--Section 315(c) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a(c)) is amended-(1) in paragraph (1)-(A) by striking the second and third sentences; (B) by inserting "(A)" before "At the beginning"; and (C) by adding at the end the following: "(B) Except as provided in subparagraph (C), in any calendar year after 2002-"(i) a limitation established by subsections (a)(1)(A), (a)(1)(B), (a)(3), (b), (d), or (h) shall be increased by the percent difference determined under subparagraph (A); "(ii) each amount so increased shall remain in effect for the calendar year; and "(iii) if any amount after adjustment under clause (i) is not a multiple of $ 100, such amount shall be rounded to the nearest multiple of $ 100.

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115 "(C) In the case of limitations under subsections (a)(1)(A), (a)(1)(B), (a)(3), and (h), increases shall only be made in odd-numbered years and such increases shall remain in effect for the 2-year period beginning on the first day following the date of the last general election in the year preceding the year in which the amount is increased and ending on the date of the next general election."; and (2) in paragraph (2)(B), by striking "means the calendar year 1974" and inserting "means-"(i) for purposes of subsections (b) and (d), calendar year 1974; and "(ii) for purposes of subsections (a)(1)(A), (a)(1)(B), (a)(3), and (h), calendar year 2001". (e) Effective Date.--The amendments made by this section shall apply with respect to contributions made on or after January 1, 2003. Sec. 308. DONATIONS TO PRESIDENTIAL INAUGURAL COMMITTEE. (a) In General.--Chapter 5 of title 36, United States Code, is amended by-(1) redesignating section 510 as section 511; and (2) inserting after section 509 the following: "Sec. 510. Disclosure of and prohibition on certain donations "(a) In General.--A committee shall not be considered to be the Inaugural Committee for purposes of this chapter unless the committee agrees to, and meets, the requirements of subsections (b) and (c). "(b) Disclosure.-"(1) In general.-Not later than the date that is 90 days after the date of the Presidential inaugural ceremony, the committee shall file a report with the Federal Election Commission disclosing any donation of money or anything of value made to the committee in an aggregate amount equal to or greater than $ 200. "(2) Contents of report.-A report filed under paragraph (1) shall contain-"(A) the amount of the donation; "(B) the date the donation is received; and

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116 "(C) the name and address of the person making the donation. "(c) Limitation.--The committee shall not accept any donation from a foreign national (as defined in section 319(b) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441e(b))).". (b) Reports Made Available by FEC.--Section 304 of the Federal Election Campaign Act of 1971 (2 U.S.C. 434), as amended by sections 103, 201, and 212 is amended by adding at the end the following: "(h) Reports From Inaugural Committees.--The Federal Election Commission shall make any report filed by an Inaugural Committee under section 510 of title 36, United States Code, accessible to the public at the offices of the Commission and on the Internet not later than 48 hours after the report is received by the Commission.". Sec. 309. PROHIBITION ON FRAUDULENT SOLICITATION OF FUNDS. Section 322 of the Federal Election Campaign Act of 1971 (2 U.S.C. 441h) is amended-(1) by inserting "(a) In General.--" before "No person"; and (2) by adding at the end the following: "(b) Fraudulent Solicitation of Funds.--No person shall-"(1) fraudulently misrepresent the person as speaking, writing, or otherwise acting for or on behalf of any candidate or political party or employee or agent thereof for the purpose of soliciting contributions or donations; or "(2) willfully and knowingly participate in or conspire to participate in any plan, scheme, or design to violate paragraph (1).". Sec. 310. STUDY AND REPORT ON CLEAN MONEY CLEAN ELECTIONS LAWS. (a) Clean Money Clean Elections Defined.--In this section, the term "clean money clean elections" means funds received under State laws that provide in whole or in part for the public financing of election campaigns. (b) Study.-(1) In general.-The Comptroller General shall conduct a study of the clean money clean elections of Arizona and Maine.

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117 (2) Matters studied.---(A) Statistics on clean money clean elections candidates.--The Comptroller General shall determine-(i) the number of candidates who have chosen to run for public office with clean money clean elections including-(I) the office for which they were candidates; (II) whether the candidate was an incumbent or a challenger; and (III) whether the candidate was successful in the candidate's bid for public office; and (ii) the number of races in which at least one candidate ran an election with clean money clean elections. (B) Effects of clean money clean elections.--The Comptroller General of the United States shall describe the effects of public financing under the clean money clean elections laws on the 2000 elections in Arizona and Maine. (c) Report.--Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall submit a report to the Congress detailing the results of the study conducted under subsection (b). Sec. 311. CLARITY STANDARDS FOR IDENTIFICATION OF SPONSORS OF ELECTION-RELATED ADVERTISING. Section 318 of the Federal Election Campaign Act of 1971 (2 U.S.C. 441d) is amended-(1) in subsection (a)-(A) in the matter preceding paragraph (1)-(i) by striking "Whenever" and inserting "Whenever a political committee makes a disbursement for the purpose of financing any communication through any broadcasting station, newspaper, magazine, outdoor advertising facility, mailing, or any other type of general public political advertising, or whenever"; (ii) by striking "an expenditure" and inserting "a disbursement"; (iii) by striking "direct"; and

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118 (iv) by inserting "or makes a disbursement for an electioneering communication (as defined in section 304(f)(3))" after "public political advertising"; and (B) in paragraph (3), by inserting "and permanent street address, telephone number, or World Wide Web address" after "name"; and (2) by adding at the end the following: "(c) Specification.--Any printed communication described in subsection (a) shall-"(1) be of sufficient type size to be clearly readable by the recipient of the communication; "(2) be contained in a printed box set apart from the other contents of the communication; and "(3) be printed with a reasonable degree of color contrast between the background and the printed statement. "(d) Additional Requirements.-"(1) Communications by candidates or authorized persons.---"(A) By radio.--Any communication described in paragraph (1) or (2) of subsection (a) which is transmitted through radio shall include, in addition to the requirements of that paragraph, an audio statement by the candidate that identifies the candidate and states that the candidate has approved the communication. "(B) By television.--Any communication described in paragraph (1) or (2) of subsection (a) which is transmitted through television shall include, in addition to the requirements of that paragraph, a statement that identifies the candidate and states that the candidate has approved the communication. Such statement-"(i) shall be conveyed by-"(I) an unobscured, full-screen view of the candidate making the statement, or "(II) the candidate in voice-over, accompanied by a clearly identifiable photographic or similar image of the candidate; and "(ii) shall also appear in writing at the end of the communication in

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119 a clearly readable manner with a reasonable degree of color contrast between the background and the printed statement, for a period of at least 4 seconds. "(2) Communications by others.-Any communication described in paragraph (3) of subsection (a) which is transmitted through radio or television shall include, in addition to the requirements of that paragraph, in a clearly spoken manner, the following audio statement: ' G7 XXXXX is responsible for the content of this advertising.' (with the blank to be filled in with the name of the political committee or other person paying for the communication and the name of any connected organization of the payor). If transmitted through television, the statement shall be conveyed by an unobscured, full-screen view of a representative of the political committee or other person making the statement, or by a representative of such political committee or other person in voice-over, and shall also appear in a clearly readable manner with a reasonable degree of color contrast between the background and the printed statement, for a period of at least 4 seconds.". Sec. 312. INCREASE IN PENALTIES. (a) In General.--Subparagraph (A) of section 309(d)(1) of the Federal Election Campaign Act of 1971 (2 U.S.C. 437g(d)(1)(A)) is amended to read as follows: "(A) Any person who knowingly and willfully commits a violation of any provision of this Act which involves the making, receiving, or reporting of any contribution, donation, or expenditure-"(i) aggregating $ 25,000 or more during a calendar year shall be fined under title 18, United States Code, or imprisoned for not more than 5 years, or both; or "(ii) aggregating $ 2,000 or more (but less than $ 25,000) during a calendar year shall be fined under such title, or imprisoned for not more than 1 year, or both.". (b) Effective Date.--The amendment made by this section shall apply to violations occurring on or after the effective date of this Act. Sec. 313. STATUTE OF LIMITATIONS. (a) In General.--Section 406(a) of the Federal Election Campaign Act of 1971 (2 U.S.C. 455(a)) is amended by striking "3" and inserting "5". (b) Effective Date.--The amendment made by this section shall apply to violations occurring on or after the effective date of this Act.

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120 Sec. 314. SENTENCING GUIDELINES. (a) In General.--The United States Sentencing Commission shall-(1) promulgate a guideline, or amend an existing guideline under section 994 of title 28, United States Code, in accordance with paragraph (2), for penalties for violations of the Federal Election Campaign Act of 1971 and related election laws; and (2) submit to Congress an explanation of any guidelines promulgated under paragraph (1) and any legislative or administrative recommendations regarding enforcement of the Federal Election Campaign Act of 1971 and related election laws. (b) Considerations.--The Commission shall provide guidelines under subsection (a) taking into account the following considerations: (1) Ensure that the sentencing guidelines and policy statements reflect the serious nature of such violations and the need for aggressive and appropriate law enforcement action to prevent such violations. (2) Provide a sentencing enhancement for any person convicted of such violation if such violation involves-(A) a contribution, donation, or expenditure from a foreign source; (B) a large number of illegal transactions; (C) a large aggregate amount of illegal contributions, donations, or expenditures; (D) the receipt or disbursement of governmental funds; and (E) an intent to achieve a benefit from the Federal Government. (3) Assure reasonable consistency with other relevant directives and guidelines of the Commission. (4) Account for aggravating or mitigating circumstances that might justify exceptions, including circumstances for which the sentencing guidelines currently provide sentencing enhancements. (5) Assure the guidelines adequately meet the purposes of sentencing under section 3553(a)(2) of title 18, United States Code. (c) Effective Date; Emergency Authority To Promulgate Guidelines.-

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121 (1) Effective date.-Notwithstanding section 402, the United States Sentencing Commission shall promulgate guidelines under this section not later than the later of-(A) 90 days after the effective date of this Act; or (B) 90 days after the date on which at least a majority of the members of the Commission are appointed and holding office. (2) Emergency authority to promulgate guidelines.-The Commission shall promulgate guidelines under this section in accordance with the procedures set forth in section 21(a) of the Sentencing Reform Act of 1987, as though the authority under such Act has not expired. Sec. 315. INCREASE IN PENALTIES IMPOSED FOR VIOLATIONS OF CONDUIT CONTRIBUTION BAN. (a) Increase in Civil Money Penalty for Knowing and Willful Violations.--Section 309(a) of the Federal Election Campaign Act of 1971 (2 U.S.C. 437g(a)) is amended-(1) in paragraph (5)(B), by inserting before the period at the end the following: "(or, in the case of a violation of section 320, which is not less than 300 percent of the amount involved in the violation and is not more than the greater of $ 50,000 or 1,000 percent of the amount involved in the violation)"; and (2) in paragraph (6)(C), by inserting before the period at the end the following: "(or, in the case of a violation of section 320, which is not less than 300 percent of the amount involved in the violation and is not more than the greater of $ 50,000 or 1,000 percent of the amount involved in the violation)". (b) Increase in Criminal Penalty.--Section 309(d)(1) of such Act (2 U.S.C. 437g(d)(1)) is amended by adding at the end the following new subparagraph: "(D) Any person who knowingly and willfully commits a violation of section 320 involving an amount aggregating more than $ 10,000 during a calendar year shall be-"(i) imprisoned for not more than 2 years if the amount is less than $ 25,000 (and subject to imprisonment under subparagraph (A) if the amount is $ 25,000 or more); "(ii) fined not less than 300 percent of the amount involved in the

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122 violation and not more than the greater of-"(I) $ 50,000; or "(II) 1,000 percent of the amount involved in the violation; or "(iii) both imprisoned under clause (i) and fined under clause (ii).". (c) Effective Date.--The amendments made by this section shall apply with respect to violations occurring on or after the effective date of this Act. Sec. 316. RESTRICTION ON INCREASED CONTRIBUTION LIMITS BY TAKING INTO ACCOUNT CANDIDATE'S AVAILABLE FUNDS. Section 315(i)(1) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a (i)(1)), as added by this Act, is amended by adding at the end the following: "(E) Special rule for candidate's campaign funds.-"(i) In general.--For purposes of determining the aggregate amount of expenditures from personal funds under subparagraph (D)(ii), such amount shall include the gross receipts advantage of the candidate's authorized committee. "(ii) Gross receipts advantage.--For purposes of clause (i), the term 'gross receipts advantage' means the excess, if any, of-"(I) the aggregate amount of 50 percent of gross receipts of a candidate's authorized committee during any election cycle (not including contributions from personal funds of the candidate) that may be expended in connection with the election, as determined on June 30 and December 31 of the year preceding the year in which a general election is held, over "(II) the aggregate amount of 50 percent of gross receipts of the opposing candidate's authorized committee during any election cycle (not including contributions from personal funds of the candidate) that may be expended in connection with the election, as determined on June 30 and December 31 of the year preceding the year in which a general election is held.". Sec. 317. CLARIFICATION OF RIGHT OF NATIONALS OF THE UNITED STATES TO MAKE POLITICAL CONTRIBUTIONS. Section 319(b)(2) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441e (b)(2)) is amended by inserting after "United States" the following: "or a national of the United States (as defined in section 101(a)(22) of the Immigration and Nationality Act)".

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123 Sec. 318. PROHIBITION OF CONTRIBUTIONS BY MINORS. Title III of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.), as amended by section 101, is further amended by adding at the end the following new section: " prohibition of contributions by minors "Sec. 324 An individual who is 17 years old or younger shall not make a contribution to a candidate or a contribution or donation to a committee of a political party.". Sec. 319. MODIFICATION OF INDIVI DUAL CONTRIBUTION LIMITS FOR HOUSE CANDIDATES IN RESPONSE TO EXPENDITURES FROM PERSONAL FUNDS. (a) Increased Limits.--Title III of the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.) is amended by inserting after section 315 the following new section: " modification of certain limits for house candidates in response to personal fund expenditures of opponents "Sec. 315A.(a) Availability of Increased Limit-"(1) In general.-Subject to paragraph (3), if the opposition personal funds amount with respect to a candidate for election to the office of Representative in, or Delegate or Resident Commissioner to, the Congress exceeds $ 350,000-"(A) the limit under subsection (a)(1)(A) with respect to the candidate shall be tripled; "(B) the limit under subsection (a)(3) shall not apply with respect to any contribution made with respect to the candidate if the contribution is made under the increased limit allowed under subparagraph (A) during a period in which the candidate may accept such a contribution; and "(C) the limits under subsection (d) with respect to any expenditure by a State or national committee of a political party on behalf of the candidate shall not apply. "(2) Determination of opposition personal funds amount.---"(A) In general.--The opposition personal funds amount is an amount equal to the excess (if any) of-

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124 "(i) the greatest aggregate amount of expenditures from personal funds (as defined in subsection (b)(1)) that an opposing candidate in the same election makes; over "(ii) the aggregate amount of expenditures from personal funds made by the candidate with respect to the election. "(B) Special rule for candidate's campaign funds.-"(i) In general.--For purposes of determining the aggregate amount of expenditures from personal funds under subparagraph (A), such amount shall include the gross receipts advantage of the candidate's authorized committee. "(ii) Gross receipts advantage.--For purposes of clause (i), the term 'gross receipts advantage' means the excess, if any, of-"(I) the aggregate amount of 50 percent of gross receipts of a candidate's authorized committee during any election cycle (not including contributions from personal funds of the candidate) that may be expended in connection with the election, as determined on June 30 and December 31 of the year preceding the year in which a general election is held, over "(II) the aggregate amount of 50 percent of gross receipts of the opposing candidate's authorized committee during any election cycle (not including contributions from personal funds of the candidate) that may be expended in connection with the election, as determined on June 30 and December 31 of the year preceding the year in which a general election is held. "(3) Time to accept contributions under increased limit.---"(A) In general.--Subject to subparagraph (B), a candidate and the candidate's authorized committee shall not accept any contribution, and a party committee shall not make any expenditure, under the increased limit under paragraph (1)-"(i) until the candidate has received notification of the opposition personal funds amount under subsection (b)(1); and "(ii) to the extent that such contribution, when added to the aggregate amount of contributions previously accepted and party expenditures previously made under the increased limits under this subsection for the election cycle, exceeds 100 percent of the opposition personal funds amount. "(B) Effect of withdrawal of an opposing candidate.--A candidate and a candidate's authorized committee shall not accept any contribution and a party

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125 shall not make any expenditure under the increased limit after the date on which an opposing candidate ceases to be a candidate to the extent that the amount of such increased limit is attributable to such an opposing candidate. "(4) Disposal of excess contributions.---"(A) In general.--The aggregate amount of contributions accepted by a candidate or a candidate's authorized committee under the increased limit under paragraph (1) and not otherwise expended in connection with the election with respect to which such contributions relate shall, not later than 50 days after the date of such election, be used in the manner described in subparagraph (B). "(B) Return to contributors.--A candidate or a candidate's authorized committee shall return the excess contribution to the person who made the contribution. "(b) Notification of Expenditures From Personal Funds.-"(1) In general.---"(A) Definition of expenditure from personal funds.--In this paragraph, the term 'expenditure from personal funds' means-"(i) an expenditure made by a candidate using personal funds; and "(ii) a contribution or loan made by a candidate using personal funds or a loan secured using such funds to the candidate's authorized committee. "(B) Declaration of intent.--Not later than the date that is 15 days after the date on which an individual becomes a candidate for the office of Representative in, or Delegate or Resident Commissioner to, the Congress, the candidate shall file a declaration stating the total amount of expenditures from personal funds that the candidate intends to make, or to obligate to make, with respect to the election that will exceed $ 350,000. "(C) Initial notification.--Not later than 24 hours after a candidate described in subparagraph (B) makes or obligates to make an aggregate amount of expenditures from personal funds in excess of $ 350,000 in connection with any election, the candidate shall file a notification. "(D) Additional notification.--After a candidate files an initial notification under subparagraph (C), the candidate shall file an additional notification each time expenditures from personal funds are made or obligated to be made in an aggregate amount that exceeds $ 10,000. Such notification shall be filed not later than 24 hours after the expenditure is made.

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126 "(E) Contents.--A notification under subparagraph (C) or (D) shall include-"(i) the name of the candidate and the office sought by the candidate; "(ii) the date and amount of each expenditure; and "(iii) the total amount of expenditures from personal funds that the candidate has made, or obligated to make, with respect to an election as of the date of the expenditure that is the subject of the notification. "(F) Place of filing.--Each declaration or notification required to be filed by a candidate under subparagraph (C ), (D), or (E) shall be filed with-"(i) the Commission; and "(ii) each candidate in the same election and the national party of each such candidate. "(2) Notification of disposal of excess contributions.-In the next regularly scheduled report after the date of the election for which a candidate seeks nomination for election to, or election to, Federal office, the candidate or the candidate's authorized committee shall submit to the Commission a report indicating the source and amount of any excess contributions (as determined under subsection (a)) and the manner in which the candidate or the candidate's authorized committee used such funds. "(3) Enforcement.-For provisions providing for the enforcement of the reporting requirements under this subsection, see section 309.". (b) Conforming Amendment.--Section 315(a)(1) of the Federal Election Campaign Act of 1971 (2 U.S.C. 441a), as amended by section 304(a), is amended by striking "subsection (i)," and inserting "subsection (i) and section 315A,". TITLE IV--SEVERABILITY; EFFECTIVE DATE Sec. 401. SEVERABILITY. If any provision of this Act or amendment made by this Act, or the application of a provision or amendment to any person or circumstance, is held to be unconstitutional, the remainder of this Act and amendments made by this Act, and the application of the provisions and amendment to any person or circumstance, shall not be affected by the holding.

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127 Sec. 402. EFFECTIVE DATES AND REGULATIONS. (a) General Effective Date.-(1) In general.-Except as provided in the succeeding provisions of this section, the effective date of this Act, and the amendments made by this Act, is November 6, 2002. (2) Modification of contribution limits.-The amendments made by-(A) section 102 shall apply with respect to contributions made on or after January 1, 2003; and (B) section 307 shall take effect as provided in subsection (e) of such section. (3) Severability; effective dates and regulations; judicial review.-Title IV shall take effect on the date of enactment of this Act. (4) Provisions not to apply to runoff elections.-Section 323(b) of the Federal Election Campaign Act of 1971 (as added by section 101(a)), section 103(a), title II, sections 304 (including section 315(j) of Federal Election Campaign Act of 1971, as added by section 304(a)(2)), 305 (notwithstanding subsection (c) of such section), 311, 316, 318, and 319, and title V (and the amendments made by such sections and titles) shall take effect on November 6, 2002, but shall not apply with respect to runoff elections, recounts, or election contests resulting from elections held prior to such date. (b) Soft Money of National Political Parties.-(1) In general.-Except for subsection (b) of such section, section 323 of the Federal Election Campaign Act of 1971 (as added by section 101(a)) shall take effect on November 6, 2002. (2) Transitional rules for the spending of soft money of national political parties.---(A) In general.--Notwithstanding section 323(a) of the Federal Election Campaign Act of 1971 (as added by section 101(a)), if a national committee of a political party described in such section (including any person who is subject to such section under paragraph (2) of such section), has received funds described in such section prior to November 6, 2002, the rules described in subparagraph (B) shall apply with respect to the spending of the amount of such funds in the possession of such committee as of such date. (B) Use of excess soft money funds.-

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128 (i) In general.--Subject to clauses (ii) and (iii), the national committee of a political party may use the amount described in subparagraph (A) prior to January 1, 2003, solely for the purpose of-(I) retiring outstanding debts or obligations that were incurred solely in connection with an election held prior to November 6, 2002; or (II) paying expenses or retiring outstanding debts or paying for obligations that were incurred solely in connection with any runoff election, recount, or election contest resulting from an election held prior to November 6, 2002. (ii) Prohibition on using soft money for hard money expenses, debts, and obligations.--A national committee of a political party may not use the amount described in subparagraph (A) for any expenditure (as defined in section 301(9) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(9))) or for retiring outstanding debts or obligations that were incurred for such an expenditure. (iii) Prohibition of building fund uses.--A national committee of a political party may not use the amount described in subparagraph (A) for activities to defray the costs of the construction or purchase of any office building or facility. (c) Regulations.-(1) In general.-Except as provided in paragraph (2), the Federal Election Commission shall promulgate regulations to carry out this Act and the amendments made by this Act that are under the Commission's jurisdiction not later than 270 days after the date of enactment of this Act. (2) Soft money of political parties.-Not later than 90 days after the date of enactment of this Act, the Federal Election Commission shall promulgate regulations to carry out title I of this Act and the amendments made by such title. Sec. 403. JUDICIAL REVIEW. (a) Special Rules for Actions Brought on Constitutional Grounds.--If any action is brought for declaratory or injunctive relief to challenge the constitutionality of any provision of this Act or any amendment made by this Act, the following rules shall apply: (1) The action shall be filed in the United States District Court for the District of Columbia and shall be heard by a 3-judge court convened pursuant to

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129 section 2284 of title 28, United States Code. (2) A copy of the complaint shall be delivered promptly to the Clerk of the House of Representatives and the Secretary of the Senate. (3) A final decision in the action shall be reviewable only by appeal directly to the Supreme Court of the United States. Such appeal shall be taken by the filing of a notice of appeal within 10 days, and the filing of a jurisdictional statement within 30 days, of the entry of the final decision. (4) It shall be the duty of the United States District Court for the District of Columbia and the Supreme Court of the United States to advance on the docket and to expedite to the greatest possible extent the disposition of the action and appeal. (b) Intervention by Members of Congress.--In any action in which the constitutionality of any provision of this Act or any amendment made by this Act is raised (including but not limited to an action described in subsection (a)), any member of the House of Representatives (including a Delegate or Resident Commissioner to the Congress) or Senate shall have the right to intervene either in support of or opposition to the position of a party to the case regarding the constitutionality of the provision or amendment. To avoid duplication of efforts and reduce the burdens placed on the parties to the action, the court in any such action may make such orders as it considers necessary, including orders to require intervenors taking similar positions to file joint papers or to be represented by a single attorney at oral argument. (c) Challenge by Members of Congress.--Any Member of Congress may bring an action, subject to the special rules described in subsection (a), for declaratory or injunctive relief to challenge the constitutionality of any provision of this Act or any amendment made by this Act. (d) Applicability.-(1) Initial claims.-With respect to any action initially filed on or before December 31, 2006, the provisions of subsection (a) shall apply with respect to each action described in such section. (2) Subsequent actions.-With respect to any action initially filed after December 31, 2006, the provisions of subsection (a) shall not apply to any action described in such section unless the person filing such action elects such provisions to apply to the action.

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130 TITLE V--ADDITIONAL DISCLOSURE PROVISIONS Sec. 501. INTERNET ACCESS TO RECORDS. Section 304(a)(11)(B) of the Federal Election Campaign Act of 1971 (2 U.S.C. 434(a)(11)(B)) is amended to read as follows: "(B) The Commission shall make a designation, statement, report, or notification that is filed with the Commission under this Act available for inspection by the public in the offices of the Commission and accessible to the public on the Internet not later than 48 hours (or not later than 24 hours in the case of a designation, statement, report, or notification filed electronically) after receipt by the Commission.". Sec. 502. MAINTENANCE OF WEBSITE OF ELECTION REPORTS. (a) In General.--The Federal Election Commission shall maintain a central site on the Internet to make accessible to the public all publicly available election-related reports and information. (b) Election-Related Report.--In this section, the term "election-related report" means any report, designation, or statement required to be filed under the Federal Election Campaign Act of 1971. (c) Coordination With Other Agencies.--Any Federal executive agency receiving election-related information which that agency is required by law to publicly disclose shall cooperate and coordinate with the Federal Election Commission to make such report available through, or for posting on, the site of the Federal Election Commission in a timely manner. Sec. 503. ADDITIONAL DISCLOSURE REPORTS. (a) Principal Campaign Committees.--Section 304(a)(2)(B) of the Federal Election Campaign Act of 1971 is amended by striking "the following reports" and all that follows through the period and inserting "the treasurer shall file quarterly reports, which shall be filed not later than the 15th day after the last day of each calendar quarter, and which shall be complete as of the last day of each calendar quarter, except that the report for the quarter ending December 31 shall be filed not later than January 31 of the following calendar year.". (b) National Committee of a Political Party.--Section 304(a)(4) of such Act (2 U.S.C. 434(a)(4)) is amended by adding at the end the following flush sentence: "Notwithstanding the preceding sentence, a national committee of a political party shall file the reports required under subparagraph (B).".

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131 Sec. 504. PUBLIC ACCESS TO BROADCASTING RECORDS. Section 315 of the Communications Act of 1934 (47 U.S.C. 315), as amended by this Act, is amended by redesignating subsections (e) and (f) as subsections (f) and (g), respectively, and inserting after subsection (d) the following: "(e) Political Record.-"(1) In general.-A licensee shall maintain, and make available for public inspection, a complete record of a request to purchase broadcast time that-"(A) is made by or on behalf of a legally qualified candidate for public office; or "(B) communicates a message relating to any political matter of national importance, including-"(i) a legally qualified candidate; "(ii) any election to Federal office; or "(iii) a national legislative issue of public importance. "(2) Contents of record.-A record maintained under paragraph (1) shall contain information regarding-"(A) whether the request to purchase broadcast time is accepted or rejected by the licensee; "(B) the rate charged for the broadcast time; "(C) the date and time on which the communication is aired; "(D) the class of time that is purchased; "(E) the name of the candidate to which the communication refers and the office to which the candidate is seeking election, the election to which the communication refers, or the issue to which the communication refers (as applicable); "(F) in the case of a request made by, or on behalf of, a candidate, the name of the candidate, the authorized committee of the candidate, and the treasurer of such committee; and "(G) in the case of any other request, the name of the person purchasing

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132 the time, the name, address, and phone number of a contact person for such person, and a list of the chief executive officers or members of the executive committee or of the board of directors of such person. "(3) Time to maintain file.-The information required under this subsection shall be placed in a political file as soon as possible and shall be retained by the licensee for a period of not less than 2 years.". Speaker of the House of Representatives. Vice President of the United States and President of the Senate.

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REFERENCES Cases Abrams v. United States, 250 U.S. 616 (1919). Austin v. Michigan State Chamber of Commerce, 494 U.S. 652 (1990). Buckley v. Valeo, 519 F.2d 821 (1975). Buckley v. Valeo, 424 U.S. 1 (1976). Carver v. Nixon, 882 F.Supp. 901 (1995). California Medical Association v. Federal Election Commission, 453 U.S. 182 (1981). Citizens Against Rent Control v. City of Berkeley, 454 U.S. 290 (1981). Clark v. Community for Creative Non-Violence, 468 U.S. 288 (1984). Colorado Republican Federal Campaign Committee v. Federal Election Commission (Colorado I), 518 U.S. 604 (1996). De Jonge v. Oregon, 299 U.S. 353 (1937). Federal Election Commission v. Colorado Republican Federal Campaign Committee (Colorado II), 121 S.Ct. 2351 (2001). Federal Election Commission v. Democratic Senatorial Campaign Committee, 454 U.S. 27 (1981). Federal Election Commission v. Furgatch, 807 F.2d. 857 (9th Circuit 1987), cert denied, 484 U.S. 850 (1987). Federal Election Commission v. National Conservative Political Action Committee, 470 U.S. 480 (1985). Federal Election Commisssion v. Massachusetts Citizens For Life, Inc., 479 U.S. 238 (1986). First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978). 133

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134 Kusper v. Pontikes, 414 U.S. 51 (1973). NAACP v. Alabama, 357 U.S. 449 (1958). New York Times Co. v. Sullivan, 376 U.S. 254 (1964). Nixon v. Shrink Missouri Government PAC, 5 F.Supp. 2d 734 (1998). Nixon v. Shrink Missouri Government PAC, 528 U.S. 377 (2000). Terminiello v. Chicago, 337 U.S. 1 (1949). Texas v. Johnson, 491 U.S. 397 (1989). United States v. O’Brien, 391 U.S. 367 (1968). West Virginia Board of Education v. Barnette, 319 U.S. 624 (1943). Government Codes, Reports, Statutes, Constitutional Sources California Election Reform Act, Ord. No. 4700-N.S., (1974). Disclosure of Federal Campaign Funds, 26 U.S.C. 900142 (1994). Federal Corrupt Practices Act, ch. 368, , 43 stat. 1053, 1070 (1925)(codified at 18 U.S.C. -17, repealed 1971). Federal Election Campaign Act of 1971, Pub. L. No. 92-225, 86 stat. 3 (1971) (codified at 2 U.S.C. -56). FECA amend. of 1974, Pub. L. no. 93-433, 88 stat. 1263 (1974)(codified in 2 U.S.C., 18 U.S.C. and 26 U.S.C.). Federal Election Campaign Act (FECA) amend. of 1974, 2 U.S.C. 441a-441h. Pub. L. No. 93-443, 88 stat. 1263 (codified in sections of 2, 15, 18, 26, & 47 U.S.C.)(amending FECA of 1971, Pub. L. No. 92-225, 86 Stat. 3 (1972)). FECA amend. of 2002, Bipartisan Campaign Reform Act of 2002, Pub. L. No. 107-155, 101, 116 stat. 81 (2002)(codified at 2 U.S.C. ). Hatch Act of August 2, 1939, ch. 410, 53 stat. 1147 (1939)(codified at 5 U.S.C. 08 (1974). H.R. Conf. Rep. No. 94-1057, at 58 (1976).

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135 H.R. No. 96-422 (1979). Labor Management Relations Act, ch. 120, , 61 stat. 136, 159 (1947), as amended, 18 U.S.C. (1970 ed.)(codified at 2 U.S.C. b (1988). Presidential Election Campaign Fund Act, 2 U.S.C. 431437 (1994). Presidential Election Campaign Fund Act, 26 U.S.C.S. (f). Publicity Act of June 25, 1910, ch. 392, 36 stat. 822, 823 (1910). Publicity Act Amend. of August 19, 1911, ch. 33, sec. 2, , 37 stat. 25 (1911). S. Rep. No. 92-96, at 1774 (1971). S. Rep. No. 93-689, at 5587-88 (1974). S. Rep. No. 94-677, at 3 (1976). Taft-Hartley Act, 18 U.S.C. (1970 ed.). Tillman Act of 1907, ch. 420, 34 stat. at 864. U.S. Const., art. I, . U.S. Const., art. I, . U.S. Const., art. I, , cl. 18. U.S. Const., art. II, , cl. 2. U.S. Const., amend. I. U.S. Const., amend. XVII. 11 C.F.R. (b) (1999). 117 Cong. Rec. 43379 (1971). Books, Law Reviews, and Periodicals Alexander, Herbert E., Financing Politics: Money, Elections, and Political Reform , 4 th ed. Washington D.C.: CQ Press, 1992. Anonymous Note, Leading Case, 115 Harvard Law Review 416, November 2001.

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136 Associated Press, Bush Signs Campaign Bill and N.R.A. Challenges New Law, The New York Times , March 27, 2002. Associated Press, Bush Campaign Finance Text , The New York Times , March 27, 2002. Barlett, Donald L. and James B. Steele, Big Money & Politics, Who Gets Hurt?, Time , February 7, 2000, 38-56. Bauer, Robert F. and Doris M. Kafka, United States Federal Election Law . London: Oceana Publications, 1982. Berke, Richard L., Enron Pursued Plan to Forge Close Ties to Gore Campaign, The New York Times , February 18, 2002. BeVier, Lillian R., Money and Politics: A Perspective on the First Amendment and Campaign Finance Reform, 73 California Law Review 1045, 1985. Bopp, James Jr. and Richard E. Coleson, Fatal Flaws in the Bipartisan Campaign Reform Act of 2002, Money & Politics Report , April 22, 2002. Briffault, Richard, Symposium: Law and Political Parties: The Political Parties and Campaign Finance Reform , 100 Columbia Law Review 620, 2000. Campbell, Tom, Arguments Before the Court: Why the Legal Challenge to Overturn Campaign-Finance Reform Law Will Not Succeed, The San Francisco Chronicle, April 10, 2002. Clymer, Adam and Alison Mitchell, House Speaker Schedules Vote Next Week on Campaign Finance Overhaul, The New York Times , February 6, 2002. Corrado, Anthony, Giving, Spending and “Soft Money,” 6 Journal of Law and Policy 45, 1997. Dunbar, John, Shays-Meehan Shifts Money Focus to the States, The Center for Public Integrity, posted February 28, 2002, at http://www.public-i.org/story_0122802.htm. Gibbs, Nancy, The Wake-Up Call, Time , February 3, 1997, at 22. Greenhouse, Linda, Crucial Issues Wait in Wings for the Justices, The New York Times , October 7, 2002. Hoffman, Ira E., Case Comment: Legislativ e Regulation of Campaign Financing after Citizens Against Rent Control v. City of Berkeley: A Requiem, 36 University of Miami Law Review 563, May 1982.

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BIOGRAPHICAL SKETCH Heather Renee Schwarz was born in Tampa, Florida, in 1977. She graduated from King High School with honors in 1995. In the summer of that year, Heather enrolled at the University of Florida where she studied public relations. In 1999, she graduated summa cum laude with her Bachelor of Science degree and an outside concentration in business administration. After graduating, Heather worked as a legal assistant in Tampa, Florida. In the spring of 2000, she returned to Gainesville, Florida, to attend the University of Florida College of Law. In the fall of 2001, Heather was accepted in the mass communication graduate program. She graduated with her juris doctorate and Master’s degree in mass communication in the fall of 2002. 139