Citation
Politics and the Online Marketplace :

Material Information

Title:
Politics and the Online Marketplace : A First Amendment Analysis of the Application of Campaign Finance Laws to Internet Communications
Creator:
Barclay, Courtney
Place of Publication:
[Gainesville, Fla.]
Publisher:
University of Florida
Publication Date:
Language:
english
Physical Description:
1 online resource; 174 pages

Thesis/Dissertation Information

Degree:
Doctorate ( Ph.D.)
Degree Grantor:
University of Florida
Degree Disciplines:
Mass Communication
Journalism and Communications
Committee Chair:
Chamberlin, William F.
Committee Members:
Wright, John W.
Roberts, Marilyn
Lidsky, Lyrissa
Graduation Date:
8/9/2008

Subjects

Subjects / Keywords:
Campaign contributions ( jstor )
Campaign finance ( jstor )
Campaign finance law ( jstor )
Campaign finance reform ( jstor )
First Amendment ( jstor )
Internet ( jstor )
Political campaigns ( jstor )
Political candidates ( jstor )
Political corruption ( jstor )
Political speeches ( jstor )
Journalism and Communications -- Dissertations, Academic -- UF
campaign, first, internet, media
Genre:
Electronic Thesis or Dissertation
Mass Communication Thesis, Ph.D.

Notes

Abstract:
Given the increasing importance of the Internet in political communication, it is imperative to determine whether the current legal structure intended to protect the integrity of the electoral system also adequately protects free speech. The Federal Election Commission adopted rules to regulate paid online, mediated political activities under the campaign finance laws. Although these have not been litigated, previous case law analyzing other campaign finance laws and regulations under First Amendment challenges will provide a guide for evaluating the current regulations. Because campaign finance laws act as a restriction on speech, these laws must be analyzed under a First Amendment framework. To begin this analysis, it is necessary to engage in a historical overview of the evolution of campaign finance laws, which has largely followed a self-governance theory of the First Amendment. Analyzing the existing U.S. Supreme Court jurisprudence that has resolved First Amendment free speech challenges to the campaign finance laws provides insight into how the Internet may be factored into the current paradigm for campaign finance reform?or whether the Internet may contribute to a shift in controlling paradigms. Additionally, the Federal Election Commission?s approach to regulating online campaign communications must be explicated through its advisory opinions and rulemakings. This analysis is the foundation for determining whether the current Federal Election Commission regulations adequately protect First Amendment values. My study focused on the First Amendment impacts of campaign finance laws and whether the current constitutional framework should be used for campaign speech on the Internet in the same that it is used for the traditional mass media. My dissertation did not focus on the effectiveness of the laws in preventing corruption except as it relates to the discussion of the balance between that interest and the First Amendment.
Statement of Responsibility:
by Courtney Anne Barclay

Record Information

Source Institution:
University of Florida
Holding Location:
University of Florida
Rights Management:
Copyright Courtney Anne Barclay. 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.
Embargo Date:
8/31/2010
Resource Identifier:
689996868 ( OCLC )

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Full Text

























To my husband and my mother for their love and support.










the language in Buckley that both expenditures and contributions were due core First

Amendment protection. However, the force of the holdings seemed to create a stronger

constitutional difference between the two types of expression. In .\/n 11ik, the Court explicitly

articulated this difference limits on contributions are subj ected to a lower level of scrutiny.

In these three cases, the justices questioned, in concurring and dissenting opinions, the

application of the contribution/expenditure dichotomy developed in Buckley and its progeny. In

Colorado I, Justice Stevens and Justice Ginsburg said that "all money spent by a political party

to secure the election of its candidate" should be treated the same as a contribution. Stevens

and Ginsburg argued that, in the case of political parties, limits on both contributions and

expenditures should be subj ect to a lower standard of review. Justice Thomas argued more

broadly that the distinction between contributions and expenditures established in Buckley was

invalid. He said both types of expression should be treated as the "core First Amendment

expression" that they are and be held to equally strong scrutiny.452 Thomas continued this line of

argument in his dissent in Colorado H when he declared that Buckley v. Valeo "should be

overruled." Thomas obj ected to the lower level of protection that the application of an

intermediate standard of scrutiny provided political speech via the Buckley framework.

Political speech is the primary obj ect of First Amendment protection, and it is the lifeblood
of a self-governing people. I remain baffled that this Court has extended the most generous
First Amendment safeguards to filing lawsuits, wearing profane jackets, and exhibiting
drive-in movies with nudity, but has offered only tepid protection to the core speech and
associational rights that our Founders sought to defend.453



even suggest a problem of corruption. Further, even if the court could recognize a compelling interest to ward off
corruption, the Eighth Circuit found that the particular limits in this case "are so small that they run afoul of the
Constitution by unnecessarily restricting protected First Amendment freedoms." Shrink Mo. Gov't. PAC v. Nixon,
161 F.3d 519, 522. The Supreme Court overturned the Eighth Circuit's ruling. See 528 U.S. 377.
452 Id. at 636-640.

453 533 U.S. at 465-66 (Thomas, J., dissenting).










interest in preventing actual or potential corr-uption, and if the limitation is no broader than

necessary to achieve that interest."406

Justice Blackmun's concurring opinion created a situation in which there was no opinion

of the Court for the portion of the case that analyzed the First Amendment interests asserted by

CMA.407 The plurality opinion interpreted Buckley as creating not only a definitional distinction

between contributions and expenditures, but a distinction based on constitutional standards of

review. Blackmun contended in his concurrence that Buckley held both these expressions of

political preference to an "exacting scrutiny." The difference in outcome as to the

constitutionality of the different measures was a result of the application of the government

interest promoted. The Buckley Court found that the contribution limits directly advanced the

interest of preventing corr-uption, but expenditure limits did not. Blackmun argued that the intent

of the Buckley decision was not to create a framework where contributions were held to a lower

scrutiny than expenditures.

Also in 1981, the Court applied a more "rigorous" standard, similar to what Justice

Blackmun called for in California M~edical. In Citizens Against Rent Control v. City ofBerkeley

the Court found that the contribution limits to political committees upheld in California M~edical

were unconstitutional when applied to organizations formed for the purpose of political

expenditures to support or oppose a ballot measure.408 JUStices Blackmun, joined by newly


406 Id. at 203.

407 Justice Marshall delivered an opinion, in which justices Brennan, White and Stevens joined. Justice Blackmun
joined the opinion except with respect to Part III, which discussed the First Amendment claims. Justices Stewart
issued a dissenting opinion, in which Chief Justice Burger and justices Powell and Rehnquist joined. The dissent
addressed only the jurisdictional issues raised in the case, and never arrived at the First Amendment issues.

408 Citizens Against Rent Control v. City of Berkeley, 454 U.S. 290 (1981). Chief Justice Burger delivered the
opinion of the Court, which was joined by Justices Powell, Brennan, Stevens, and Rehnquist. Rehnquist, although
joining the entire opinion of the Court, issued a short concurrence. Justices Marshall, Sandra Day O'Connor, and
Blackmun issued concurring opinions. Id.










favor of the disclosure requirements as they appearede] to be the least restrictive means of

curbing the evils of campaign ignorance and corruption that Congress found to exist."356

Reconstructing FECA

After the Court deconstructed the 1974 law, Congress made the changes to the law

necessary to conform with the Court' s rling.357 In addition to revising the provisions that the

Court struck down, Congress made other significant amendments to the law.358 The new

amendments expanded the FEC's enforcement powers by allowing it to prosecute violations of

FECA.359 The contribution limit provisions were revised to include limits on the amount

individuals could donate to political action committees or national party committees.360 Although

the Court struck down independent expenditures, Congress enacted additional disclosure

requirements to ensure reporting of these activities.361

Congress continued to mold the law with changes in 1979 after candidates and party

leaders complained that the law was too restrictive.362 COngress increased reporting thresholds

for individual contributions and expenditures to reduce the amount of information candidates and



356 Id. at 68. The Court also addressed whether this balance changed when disclosure requirements were applied to
minor parties or independents. The Court found that there may be the possibility that disclosure would be too
burdensome, but that a general exemption was too broad and refused to create one. This area of disclosure law is
extremely interesting, but outside the scope of this paper.

3 Corrado, supra note 12 at 27.

3 Id.

359 However, Congress limited this power by requiring a majority of the commissioners to vote on any actions.
Additionally, any advisory opinions that the Commission issued were restricted to the factual situations presented
and cannot respond to hypothetical situations.
361) P.L. 94-283 112. Although these types of contributions were not originally included in the aggregate total limit,
Congress did not increase the total limit to accommodate these new restrictions.

361 P.L. 94-283. This included mandatory reporting of expenditures and a sworn statement as to whether the
expenditure was "made in cooperation, consultation, or concert with, or at the request or suggestion of, any
candidate or any authorized committee or agent of such candidate."

362 COrrado, supra note at 28.










such a link on a web site would be an operating expenditure and must be reported and filed with

the FEC.522

Even when a link or other mention on a third-party web site does not constitute a

contribution, it may require a disclaimer. The FEC found that web sites that "expressly advocate

the election or defeat of a Federal candidate" must carry disclaimer statements, unless an

exemption applies.523 Specifically addressing whether the inclusion of a link to a campaign web

site would require a disclaimer, the FEC opined that it would depend on the surrounding text.524

The FEC established that individuals, whether volunteers for the campaign or not, were

entitled to create and maintain web sites supporting a candidate without triggering reporting

regulations under the FECA.525 Volunteers using personal time and equipment to send e-mails

urging support of a candidate did not equate to a contribution.526 The FEC reasoned that any

costs associated with this activity would be nominal.527 Volunteers also may use, without

restraint, materials downloaded from campaign web sites that were originally produced by the

campaign.52 This mirrors the traditional volunteer exception in the FECA that is applied to

traditional media, such as print publications.529






5 Id. at 8-9.

5 Id. at 9.

5 Id.

52 Id.

526 Id. at 10.

5 Id.

528 Id. at 12.

529 For a full discussion of this exception, see infra Ch. 3.










marketplace of ideas because part the political debate is to seek out the truth. The important

element to Meiklej ohn was that the debate would result in an informed electorate. This theory

focused on the individual level of a functioning democracy the sovereign individual.

Other scholars and jurists have advocated for an approach that focuses more on the

necessity of deliberation for the structure of democracy than on the individual's decision making

process.614 Cass Sunstein and Owen Fiss have argued for the protection of "deliberative

democracy."615 This deliberative democracy approach centers not on the speaker' s right of free

expression, but on the necessity of deliberation, of public debate. Similarly, Justice Steven

Breyer has advocated a theory of active liberty, arguing that the individual speech rights gained

from the First Amendment are merely byproducts of the Amendment' s ultimate goal of

sustaining a democracy. However, a self-governing democracy can be sustained only with

"citizen participation in government." That was the centerpiece of active liberty.

In principle, these theories are congruent. They all promote societal purposes -

ascertainment of truth, an informed electorate, wide participation in government. However, the

application of these theories in the Supreme Court would yield very different results. The Court

has traditionally advanced the marketplace and self-government theories in conjunction with

individual rights.616 This approach has considered free speech as a presumptive necessity to the

open, debate required to achieve the purposes of the theories. The Court thereby engaged in a

strict scrutiny analysis of any government action that might diminish those individual rights.



614 See e.g., Stephen Breyer, Our Democratic Constitution, 77 N.Y.U. L. REV. 245, 252-53 (May, 2002); CASS R.
SUNSTEIN, DEMOCRACY AND THE PROBLEM OF FREE SPEECH (1995); Owen M. Fiss, State Activism and State
Censorship, 100 YALE L.J. 2087 (1991).

615 See, e.g., CASS R. SUNSTEIN, DEMOCRACY AND THE PROBLEM OF FREE SPEECH (1995); Owen M. Fiss, State
Activism and State Censorship, 100 YALE L.J. 2087 (1991).

616 See, e.g., N.Y. Times v. Sullivan,










While recognizing the flaws in the Buckley decision--such as the corruption justification

effects-Eugene Volokh argued that the Supreme Court got it "basically right."ss Volokh argued

that in striking down expenditure limits, the Court protected the freedom of effective speech.

These limits would have prohibited an individual from using any number of media to speak out

on political issues; Volokh mentions advertisements in maj or newspapers and message T-shirts

as two examples of speech that would be curtailed under the FECA expenditure limits.89 Volokh

supported the Court's finding that contribution limits are constitutional.90 Volokh argued that 1)

contributions are analogous to content-neutral speech limitations because the limits are not

relative to the content of communication purchased with contribution funds; 2) the limits serve

an important government interest in preventing corruption; 3) the restrictions are not overbroad

because any money given to a candidate could be a bribe; and 4) the restrictions on contributions

leaves other avenues of communication.91 Further, Volokh reasons that whereas many scholars

criticize the Buckley Court for focusing on corruption rather than political equality as the

prevailing governmental interest, the Court's decision to ignore the equality rationale was

consistent with First Amendment jurisprudence. Volokh cites the ever-present classroom

analogy. Advocates of basing campaign finance reform on equalizing the debate, compare it to a

classroom, in which government constantly controls speech.92 Volokh notes that this is

acceptable in the forum of a classroom or a courtroom, but not when the government is acting as

the sovereign.93 Each individual is supposed to be autonomous and free to decide how to express


""Eugene Volokh, Why Buckley v. Valeo is Basically Right, 34 ARIZ. ST. L.J. 1095 (2002).
89 Id. at 1095-96.

90 Id. at 1102.

91 Id.

92 Id. at 1097.










Breyer' s theory, which once debuted in a concurring opinion, is gathering strength on the Court

and in academic debate.230 Active liberty, although seemingly evolving from self-government

focuses more on the societal interests of the political debate than on the individual.231

Justifying Campaign Finance

Regulating private donations and expenditures during political campaigns has become

accepted as a given in American politics. However, the Supreme Court has warned that

campaign finance regulations "operate in an area of the most fundamental First Amendment

activities" affecting "discussion of public issues and debate on the qualifications of candidates"

which is "integral to the operation of the system of government established by [the]

Constitution."232 From this perspective, declared in the first modern campaign finance case, the

Court has attempted to reconcile the First Amendment and campaign finance reform laws.

In campaign finance reform, regulations of contributions and expenditures have been

touted as "inconsistent with the marketplace of ideas" by effectively "taking from rich speakers

for the benefit of poor ones."233 The U. S. Supreme Court agreed in Buckley v. Valeo, writing that

"the concept that government may restrict the speech of some elements of our society in order to

enhance the relative voice of others is wholly foreign to the First Amendment."234

Supporters of reform often attempt to counterbalance the First Amendment interests with

one or more general themes. Scholar Kathleen M. Sullivan identified several themes prevalent in



"3 Scholars have identified the application of Breyer' s theory in a plurality opinion authored by Breyer, in Randall
v. Sorrell, 126 S. Ct. 35 (2005). See Rachel Gage, Randall v. Sorrell: Cainpaign-Finance 8..>;;li,. ,/, and the First
4mendinent as a Facilitator ofDeinocracy, 5 FIRST AhlEND. L. REV. 341 (Spring, 2007).
231 Id

2 Buckley v. Valeo, 424 U.S. 1, 14. For a full discussion of the Buckley decision, see Chapter 3, in~fra.

2 Cass R. Sunstein, Exchanges in the Welfare State: Free Speech Kow, 59 U. CHI. L. REV. 255, 291 (1992).

2 Id. at 291 (quoting 424 U.S. 1 at 48-49).










constantly require more amendments to close the loopholes, thus ever endangering the First

Amendment rights.122

It has been suggested that the approach the Supreme Court used to examine the First

Amendment obstacles to campaign finance laws began to change with the 2006 decision in

Randallyv. Sorrell. 123 Robert Bauer explored Justice Stephen Breyer' s theory of active liberty,

which focuses on participatory self-government.124 Bauer noted that this theory, focusing on the

effectiveness of government, calls for significant deference to the legislature--even where the

First Amendment is triggered. He paraphrased Justice Breyer as having said that "the First

Amendment should not bar legislation that regulates speech for sound reasons based on the

evaluation of facts."125 Bauer analyzed Breyer' s theory as the Justice had applied it to campaign

Einance cases, finding that Breyer would defer to the legislature in determining the balance

between electoral integrity and free speech. Breyer believed that in election law, the "legislators

possess an experience and understanding not available to judges" and so are the expert and

should not "be denied the tools for Einding a solution."126

In 2007, Rachel Gage identified Breyer' s theory of active liberty as an emerging trend in

jurisprudence when she analyzed all of the Supreme Court' s campaign finance decisions to

discern the Court' s approaches in balancing the need for campaign finance reform and the First



122 See Smith, supra note 111 at 34-42.

123 See Robert F. Bauer, Democracy as Problem Solving: Campaign Finance and Justice Breyer 's Theory of "Active
Liberty, 60 U. MIAMI L. REV. 237 (2006); Lillian R. BeVier, Full ofSurprises--And More to Come: Randall v.
Sorrell, the First Amendment, and Campaign Finance R,~,d ior,. 2006 SUP. CT. REV. 173; Rachel Gage, Randall v.
Sorrell: C ??~-l;\,ag-Entent... pdl,lre.. and the First Amendment as a Facilitator ofDemocracy, 5 FIRST AMEND. L.
REV. 341 (2007).

124 See Bauer, supra note 122.

125 Id. at 246.

126 Id. at 244.










raised more than $80 million dollars online. The Bush campaign, although not targeting Intemet

donors as heavily as the Democrat candidates, managed to raise $14 million. More importantly

than the totals amassed is that most of the donations were less than $200 each. This indicates that

the Internet is the medium that can vitiate the influence of 'big money" donors in political

campaigns.4

The public does not have a monopoly on increased Intemet usage. In a 2006 survey of U. S.

Senatorial candidates, the Bivings Group found that the use of the Internet had "grown

dramatically."44 However, the study found that candidates were not utilizing all the multimedia

tools that the Intemet supports.45 For example, only 23 percent of the candidates used blogging

during the campaign. More candidates included audio and video on their websites.46 These were

mostly repurposed television and radio ads rather than materials created for the Internet.47

In the 2008 presidential race, the campaigns are using the Internet to create local events, to

push for grassroots campaigns, to deliver key messages, and to fundraise. Senator Barack Obama

raised "tens of millions of dollars from 1.7 million donors."48 Obama also reported that he has

"more than 5 million campaign e-mail contacts and nearly 2 million online friends on social

networks like Facebook and Twitter." Senator John McCain, the Republican nominee for

president, has not adopted technology as quickly or completely as his opponent. "McCain is




43Id.

44The Bivings Group, The Internet's Role in Political Campaigns: Utilization by 2006 United States Senatorial
Candidates (May 23, 2006).
45Id.

4 6Id.

47Id.

48Chuck Raasch, In 2008 election, the Internet goes local, local, local, USAToday.com (June 27, 2008).










Justice Thomas considered the dichotomy in his dissent in the .1/ti ilik~ case as well.

Thomas, joined by Justice Antonin Scalia, argued again that contributions deserve the same level

of First Amendment protection as expenditures because the contribution enables the

dissemination of messages. "The decision of individuals to speak through contributions rather

than through independent expenditures is entirely reasonable .. Citizens recognize that the best

advocate for the candidate tends to be the candidate himself."454

The justices also continued to question the general framework of First Amendment

protection for money spent in elections. Justices Stevens and Ginsburg, in Colorado I, argued

that the First Amendment is not necessarily at odds with campaign finance limits. They argued

that individual free speech rights should not be the only First Amendment interests considered

and that the integrity of the electoral process may actually benefit from limiting the flow of

money into campaigns.

It is quite wrong to assume that the net effect of limits on contributions and expenditures -
which tend to protect equal access to the political arena, to free candidates and their staffs
from the interminable burden of fund-raising, and to diminish the importance of repetitive
30-second commercials will be adverse to the interest in informed debate protected by
the First Amendment.455

Justice Stevens went one step further in his concurring opinion in .\1/ti in "Money is

property; it is not speech."456 While Justice Stevens recognized that money could be used to

enhance speech, or accomplish the same goals of speech inspiring listeners he did not support

First Amendment protections for the use of that money. Rather, Justice Stevens urged the Court







454 528 U.S. 377 at 415-416.

455 518 U.S. at 649-650 (Stevens, J., dissenting).

456 528 U.S. at 398 (Stevens, J., concurring).









CHAPTER 1
CAMPAIGN FINANCE REFORM AND THE FIRST AMENDMENT

Introduction

It' s logically impossible both to honor the First Amendment and to regulate campaign
finance effectively. We can do one or the other--but not both.l

The First Amendment to the United States Constitution protects against government

infringement of freedom of speech and of the press.2 This protection is not absolute. The

government and the Supreme Court have carved out the ability to regulate speech when there is

either a compelling reason to curtail it or a need for reasonable restriction for public safety and

order. In this process of defining the right of freedom of speech, the Court has identified a

hierarchy of protected speech, at the top of which lies political speech. This is the "core" of the

First Amendment because free exchange of political information and opinions is necessary for

effective self-government.

However, Congress and the U. S. Supreme Court have identified the protection of the

integrity of the American political system as a countervailing interest to a free exchange of

information under the First Amendment. Gallup polls have shown that the American people

support campaign finance reform. In 2007, "fixing the government" was one of the top ten

priorities of the American public. More than half of respondents supported campaign finance

reform as a tool to effect that "fix."3 In 2002, 72 percent of respondents favored new campaign

finance laws.4In 2000 61 percent of respondents thought it was more important to "protect



i Robert J. Samuelson, The Washington Post.

2 U.S. Const., amend. 1. "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."

3 Gallup Poll, The People's Priorities: Gallup's Top 10 (Nov. 2, 2007).

4 Jeffrey M. JOnes, Seven in 10 Support New Campaign Finance Legislation, Gallup News Service, Feb. 13, 2002.










redirecting candidates and office holders from the demands of fundraising back to the affairs of

governing was not adequately analyzed in Buckley. Souter' s dissenting opinion argued that this

interest, paired with potentially significant evidence of the problem, could meet the First

Amendment scrutiny laid out in Buckley.495

In 2007, the Roberts Court continued to reshape the structure of campaign finance law

when it reevaluated portions of the M\~cConnell decision in FEC v. Wisconsin Right to Life.496

This case resulted in a dramatic shift from the McConnell decision, due in some part to the

change in membership on the Court.497 The dissenters in McConnell won the day in the WRTL II

case, with the additional votes of the new Chief Justice, John Roberts, and new Associate Justice

Samuel Alito. The maj ority decision found that the new BCRA electioneering communication

provisions were unconstitutionally applied to Wisconsin Right to Life, an incorporated right-to-

life organization.

The maj ority opinion ostensibly adhered to the McConnell decision, but in effect turns that

precedent on its head. Chief Justice Roberts' opinion invalidates the corporate bans on

electioneering communications and weakens the application of the definition of electioneering

communications.498 The Court, in a direct turn on precedent invalidates the ban on corporate

electioneering communications as applied to WRTL.499 This is not only a deviation from the

McConnell decision, but also from previous cases that determined as-applied challenges to



495 Id.

496 127 S. Ct. 2652 (2007).

497 Chief Justice Rehnquist died in 2005 and Justice Sandra Day O'Connor retired in 2006. President Bush
nominated John Roberts as Chief Justice and Samuel Alito as Association Justice; both were confirmed and took
part in the WRTL II decision.
498 WRTL II, 127 S. Ct. at 2667-74.
499 Id.









District of Columbia found this to be unlawful and out of sync with congressional intent, the

FEC began the process of determining which Internet communications should be regulated.

The rules adopted in 2006 attempted to balance the interests of the integrity of the elections

process and of the individual's right to participate in that process. The rules narrowly expanded

the definition of"public communication" to comply with the Shays court, but protected

individual speech rights by incorporating only online communications that appear on a third-

party's website for a fee. Additionally, the FEC specifically exempted most individual,

uncompensated Internet activities from the definitions of contribution and expenditure. Further,

the disclaimer requirement was extended to online speech only in a manner that mirrored the

disclaimer requirements placed on traditional mass media. In its Explanation and Justification of

these rules, the FEC has consistently noted the unique character of the Internet and its ability to

foster widespread participation in political discussion. These new rules are an effort to respect

that goal as well as the goals of protecting the election process from undue influence.









Final FEC Rulemaking

In response to the Shays ruling, the FEC undertook to draft regulations that would only

encompass those "aspects of the Intemet constitute 'general public political advertising.'""56 In

adopting the Final Draft Rules,569 the FEC Commissioners attempted to balance the interests in

political speech on the Intemet, recognizing the vast opportunities the medium provides citizens,

with the interests promoted by campaign finance regulation.svo The regulations that the

Commission approved limit the application of campaign finance regulation to paid

communications appearing on a third-party's website.

These regulations include Intemet advertisements as part of the definition of "public

communication" in the BCRA. Under the BCRA, all public communications retain certain

restrictions to support campaign finance regulation and reform.5n However, this change in the

rules does not affect individuals' independent Internet activity.572 The media exemption that

applies to other campaign finance laws also applies to the regulations governing Internet activity;

media organizations may engage in news stories, commentaries and editorials online without

triggering the campaign finance regulations.573 Email is also offered specific protections from

incurring the restrictions of campaign finance laws. These regulations adopted by the

Commission appear to successfully balance these interests, however, it is still unclear how these

will be applied to the Intemet.


568 FEC Commission Mtg., Mar. 27, 2006 (Statement by Vice Chairman Robert D. Lenhard and Commisioner Ellen
L. Weintraub, FEC).

569 fIller/781 COmuiltiCoNns, 71 Fed. Reg. 18612 (to be codified at 11 CFR Parts 100, 110, 114).

"7 FEC Commission Mtg., Mar. 27, 2006 (Statement by Commissioner Hans A. von Spakovsky, FEC).

5 See supra Part II History of Campaign Finance.

5 Activities of unpaid individuals or groups are exempted from the regulations. Rules, ##100.94, 100.155.

5 Rules, ##100.73, 100.132.










impermissible infringements on free speech. A shift in this paradigm could significantly impact

how these laws are applied to campaign communications in the mass media.

It is unlikely that either of these trends a disruption of the contribution/expenditure

dichotomy or a shift away from individual free speech rights will gain significant traction in

the Supreme Court. The justices are too divided to substantially support either of these. (Discuss

Gage's tally here).636

Research Question 3: How Are the Different Communication Media Treated by Current
Campaign Finance Laws, Including FEC Regulations?

This research question is actually two parts. First, this question requires an explication

what the current campaign finance laws are. Second, this question requires an analysis of how

these laws apply to the different mass media. In Chapter 3, this study discussed the evolution of

campaign finance reform laws. This involved a review of congressional efforts, which

culminated in the Bipartisan Campaign Reform Act of 2002; case law; and the Code of Federal

Regulations. The discussion emphasized provisions that impacted communications.

In general, the provisions of the BCRA apply equally to the different media. There are

limited exceptions to this general rule. The first exception is that the FEC promulgated specific

requirements for the application of disclaimer statements for the broadcast and print media.

These differences were intended to match the requirements to the specific medium. Second, in

legislation outside the FECA, Congress placed additional requirements on broadcasters in regard

to campaign communications. This section will review the current state of the FECA, as well as

briefly summarize the additional requirements on broadcasters.

Current campaign finance law limits contributions but places no limits on expenditures that

are not coordinated with a candidate or a campaign (independent expenditures). Expenditures,

636 The effect of these trends on Internet communications will be discussed later in the chapter. See supra p.










"any news story, commentary, or editorial distributed through the facilities of any broadcasting

station, newspaper, magazine, or other periodical publication" is not considered an expenditure

for the purposes of FECA.330 Additionally, the FEC extended this exemption so that the cost of

covering or carrying those stories or commentaries is not considered a contribution.331

A maj or change in the financing of presidential campaigns was accomplished through the

public financing system put in place by the 1974 amendments. This system allowed for full

financing of presidential general election campaigns. Presidential nomination candidates were

eligible for matching funds. This system was funded by optional tax check-off that allowed

individuals to designate $1 of their tax payment for the presidential election campaign fund.

In a general election for the office of the President, maj or party candidates could receive

$20 million, the national spending limit, if they refrained from raising private money. Minor

party or independent candidates were eligible for a portion of the subsidy based on their

performance the previous election.332 In the presidential primaries, candidates had to raise at

least $5,000 in contributions of $250 or less in at least 20 states. If they qualified, the federal

government would match dollar-for-dollar the amount raised with a maximum of $5 million, or

half the national spending limit. Nominating committees could also use public financing for their

nominating convention expenses. Maj or parties could receive the entire limit of $2 million, while

minor parties were eligible only for portions based on public support in the previous election.





330 2 U.S.C. 431(9)(B)(i).
331 See 11 C.F.R. 100.73.

3 For example, if an independent candidate had received 10 percent of the vote in the previous election, he or she
would be eligible for $200,000. Candidates could also apply for post-election funding based on their performance in
the instant election. Post-election funding was the only public financing option for new candidates. Corrado, supra
note 12.










Congress defined "public communication" as "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."374 And "generic campaign activity" was defined as "a campaign activity that

promotes a political party and does not promote a candidate or non-Federal candidate."375 Public

communications made by political committees must carry disclaimers on the payment of the

communications and whether the candidate supported the communication.376

Additionally, Congress significantly changed the campaign finance landscape when it

created a category of communications called "electioneering communications." This is defined

as "any broadcast, cable or satellite communication" that refers to a clearly identified candidate

for federal office; is publicly distributed shortly before an election for the office that candidate is

seeking; and is targeted to the relevant electorate.377 BCRA prohibited corporations and labor

unions from making or funding electioneering communications that are not targeted to their

respective audiences (e.g., the labor union's membership or the corporation's employees or

stockholders). Incorporated organizations also known as 527s also are prohibited from

making electioneering communications.378 Individuals may make electioneering

communications, provided they can prove that no corporate or labor organization funds were

used.


37 2 U.S.C. # 431(22).

3 2 U.S.C. # 431(21).

3 6 2 U.S.C. # 441d.

3 Trevor Potter, The Current State of Campaign Finance Law, in THE NEW CAluPAIGN FINANCE SOURCEBOOK 48,
56 (Anthony Corrado et al., eds. 2005).

37 An incorporated state party or candidate committee may make these communications if it is not a political
committee, is incorporated for liability purposes only, does fund electioneering communications with corporate or
labor union donations, and meets all reporting requirements.










FECA. That advertisement ostensibly would be required to carry a disclaimer statement. All

online communications that do not occur through a paid intermediary, such as the DailyKos.com,

would not be considered a contribution or expenditure.

Although the new rules adopted by the FEC narrowly expand the definition of public

communication to include minimal Internet communications, there are several provisions of the

2006 rules require further explication. The disclaimer requirements for online communications

are unclear and lack specific guidance on formatting requirements. Also, the concept of "paid"

communications can be difficult to delineate online. The FEC also chose to extend its explicit

exemption of individual Internet activity to incorporated bloggers. This broadly exempted an

entire category of corporations from the FECA. The FEC also broadly applied the media

exemption to online communications a decision that has drawn criticisms from the academic

commumity.646

Public communications are required to carry disclaimers of sponsorship and connection to

the candidate. The FEC has clarified the formatting requirements for the print and broadcast

media. However, the Internet presents an amalgam of these media and it is unclear what specific

disclaimer requirements will be most appropriate for this medium. Former FEC Commissioner

Hans von Spakovsky expressed his concern that this was left unclear.647 Spakovsky suggested

that the media specific requirements would be applied to the Internet. For example, he believed

that the "stand by your ad" requirement for television and radio would not apply for Internet






646 See, e.g., David Stevenson, A Presumption Against Regulation: Why Political Blogs Should Be (Mostly) Left
Alone, 13 B.U. J. Sci. & Tech. L. 74 (Winter, 2007); Niki Vlachos, The Federal Election Commission & Political
Blogging: A Perfect Balance or Just Not Enough?, 24 J. Marshall J. Computer & Info. L. 611 (Summer, 2006).
647 Id.









FEC Adv. Op. 2000-16 (Aug. 28, 2000).

FEC Commission Meeting, Mar. 27, 2006 (Statement by Vice Chairman Robert D. Lenhard and
Commissioner Ellen L. Weintraub, FEC).

FEC Commission Meeting, Mar. 27, 2006 (Statement by Commissioner Hans A. von Spakovsky,
FEC).

Internet Communications, 70 Fed. Reg. 16967 (Apr. 4, 2005) (to amend 11 CFR Parts 100, 110,
114).

Internet Communications, 71 Fed. Reg. 18589 (Apr. 12, 2006) (codified at 11 CFR Parts 100,
110, 114).

Prohibited and Excessive Contributions: Non-Federal Funds or Soft Money, 67 FR 49064 (July
29, 2002) (codified at 11 C.F.R. Parts 100, 102, 104, 106, 108, 110, 114, 300, and 9034).

The Internet and Federal Elections; Candidate-Related Materials on Web Sites of Individuals,
Corporations and Labor Organizations, 66 FR 503 58 (Oct. 3, 2001).

Use of the Internet for Campaign Activity, 64 FR 60360 (Nov. 5, 1999) (to amend 11 CFR Parts
100, 102, 103, 104, 106, 107, 109, 110, 114, and 116).










a model for "more corrupt" and "less corrupt" to identify where the behavior falls in the

spectrum.243

Additionally, there has been doubt cast on the actual presence of or potential for corruption

in the electoral system. Many large donors hedge their bets giving to both maj or political

parties. Kathleen Sullivan argued that this bet hedging demonstrates a "weak level of confidence

in [the donors'] ability to obtain results from any particular beneficiary of their contributions."244

In fact, congressional behavior suggests that there is a low correlation between contributions and

voting behavior. Rather, congressman vote along party lines. Although, as Sullivan points out,

donors may be repaid in less formal methods, the claimed corr-uption of the electoral system

seems less certain than originally proposed.24

The anti-corruption rationale assumes that politicians, without large contributions, would

consider all constituents equally.246 However, groups of constituents that are more organized or

reputable in the community often carry more weight with politicians because they are able to

mobilize voters. Sullivan questioned whether it is just to more easily suspect corr-uption of

groups that accomplish this success through the accumulation of campaign funds.247


2 Id. at 976-78. The authors then tested the design with ten different scenarios: 1) A presidential candidate who
promises an ambassadorship in exchange for campaign contributions: 2) a member of Congress using seniority to
obtain a weapons contract for a firm in his or her district: 3) a public official using public funds for personal travel:
4) a secretary of defense who owns $50,000 in stock in a company with which the Defense Department has a
million-dollar contract: 5) a public official using influence to get a friend or relative admitted to law school: 6) the
driveway of the mayor's home being paved by the city crew: 7) a state assembly member while chairperson of the
public roads committee authorizing the purchase of land s/he had recently acquired: 8) a judge with $50,000 worth
of stock in a corporation hearing a case concerning that firm; 9) a legislator accepting a large campaign contribution
in return for voting "the right way" on a legislative bill: 10) a member of Congress who holds a large amount of
stock (about $50,000 worth) in Standard Oil of New Jersey working to maintain the oil depletion allowance. Id. at
978.

2 Sullivan, supra note 58 at 679.

245 Id.at 680.

246 Id. at 680.

2 Id. at 680.










court invalidated the FEC's definition of"public communication." Congress defined "public

communication" in BCRA as "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.'"55 The FEC

specifically excluded communications over the Internet from this definition. 560 Therefore,

Internet communications, no matter how closely coordinated with political parties or a

candidate's campaign, could not be considered contributions or expenditures.

A central argument put forth by Shays and Meehan against this definition was that the FEC

rules were contrary to the statutory instructions provided by Congress.561 In Order to decide this

issue, the court looked at "whether the agency's construction of the statute is faithful to its plain

meaning, or, if the statute has no plain meaning, whether the agency's interpretation 'is based on

a permissible construction of the statute.'"562 In applying this test to the exclusion of Internet

communications, the court first looked at whether "Congress ha[d] directly spoken on the precise

question at issue." The FEC, in its Explanation and Justification of the promulgated rules, noted

that Congress did not include the Internet in the statutory definition; therefore the exclusion of

the Internet in the rules was consistent with Congress' intent.563 Shays and Meehan argued that

[T]he phrase "any other form of general political advertising" plainly includes at least
certain communications over the Internet. There can be no question that 'political
advertising' takes place on the Internet (in exponentially increasing amounts), and that





559 2 U.S.C. # 431(22).
560)11 C.F.R. #100.26.

561 Shavs, 337 F. Supp. 2d at 51.

562 Id. (citing Chevron, U.S. 4., Inc. v. ANtDC, 467 U.S. 837, 81 L. Ed. 2d 694, 104 S. Ct. 2778 (1984).)

563 Id. at 66.










exemption, the Commission considers: (1) Whether the press entity is owned or controlled by a

political party, political entity is acting as a press entity in conducting the activity at issue (i.e.,

whether the entity is acting in its "legitimate press function").58

The FEC Exempts Individual Internet Activity

The new rules also make clear that uncompensated individual Internet activity, even if in

coordination with a candidate, party or committee, is not considered a contribution or

exemption.'"' The use of equipment or other services in the purpose of these activities is also not

a contribution or expenditure.586 This is likened to the extant exemptions for individuals

engaging in political activity; the FEC exempts the "value of services" for individuals

volunteering.'" The Commission also made clear that this exemption applies to groups of

individuals as well.58 This means that an individual can download and republish campaign

materials on their own sites without incurring any reporting requirements.58 However, this does

not permit an individual to download campaign materials and pay to have them republished

somewhere else that would constitute a "public communication."590

The FEC provided a nonexclusive list of activities in an effort to define "Internet activity":

sending or forwarding electronic messages; providing a hyperlink or other direct access to

another person's Web site; blogging; creating, maintaining or hosting a Web site; paying a

nominal fee for the use of another person's Web site; and any other form of communication

584 Id.

5 Id. at 18613 (# 100.94, 100.155).
586 Id.

5 Internet Communications, 71 Fed. Reg. 18603.
588 Id.

589 Id. at 18604.

590 Id.










limits were placed on the candidates and their campaigns. Third, national party activities were

restricted. Fourth, disclosure requirements were strengthened. Fifth, a public financing system

was set in place for presidential races. Finally, the amendments created the Federal Election

Commission.

The 1974 law limited contributions to candidates and committees in a given year.

Contributions by individuals or groups of individuals to each candidate could not exceed $1,000

each year. Additionally, the annual aggregate amount each individual contributed to all

candidates and political committees could not exceed $25,000. Although political committees

were not restricted to an aggregate amount, they were prohibited from contributing more than

$5,000 to a candidate per election. Candidates and their immediate families were also limited in

the amount they could personally contribute to their campaigns. The total contributions for a

presidential campaign by the candidate and his or her family were limited to a total of $50,000.

The total contributions for Senate and House candidates were limited to $35,000 and $25,000

respectively. The 1974 law continued the ban on contributions from corporations and labor

umions.

The new provisions also placed limits on expenditures. Independent expenditures by

individuals or groups were limited to $1,000 per year. National party committees could not spend

more than $10,000 and $20,000 per candidate in House and Senate general elections. The

expenditure limits for presidential candidates used a system of multipliers based on the voting-

age population.326 Parties were also restricted on the amount they could spend on nominating

conventions. Maj or parties were limited to $2 million for convention expenses, while minor

parties were limited to less money.


326 National parties were permitted to spend $0.02 multiplied by the voting-age population across the nation for
presidential elections. Mutch, supra note 6.










Campaign Finance and the First Amendment

Scholars studying campaign finance laws have expended great effort devoted to the

relationship between these laws and the First Amendment. Some argue that the current paradigm

of First Amendment analysis in campaign finance cases needs to be adjusted or abandoned for a

more flexible one; others argue that the paradigm shift is already occurring.

One theme commonly found in First Amendment analysis of campaign finance laws is that

the Court needs to deviate from its current approach because First Amendment rights are being

denied.112 Scholars have suggested various new methods for analysis, but most suggest a focus

on the process of campaigns and elections--as suggested by the rhetoric in the Ranzdall

opinion--rather than on individuals. Others suggest that the current approach of focusing First

Amendment challenges on the interests of individuals implicitly supports disparate treatment of

minority voters and candidates, allowing wealth to overshadow the viewpoint of the poor. 113

Owen Fiss advocated a change in jurisprudence from the traditional approach that placed

autonomy as the ultimate value in First Amendment scrutiny, to a structural model that would

place as the ultimate principle enhancing the public debate.114 Fiss argued that whenhn the state

acts to enhance the quality of public debate, we should recognize its actions as consistent with

the first amendment."" Fiss noted that although expanding the debate might be the intent of


112 See Richard A. Davey, Jr., i:l as.../. I ,, the System: Is Meaningful Campaign Finance Reform Possible Under
Reigning First Amendment Jurisprudence?, 34 GoNz. L. REV. 509 (1999); Owen Fiss, Free Speech and Social
Structure, 71 IOWA L. REV. 1405 (1986); Bradley A. Smith, The Sirens' Song: Campaign Finance R,8, r,/. ,;,. and
the First Amendment, 6 J.L. & POL'Y 1 (1997); Stephanie A. Sprague, The Restriction ofPoliticalAssociational
Rights Under Current Campaign Finance Reform First Amendment Jurisprudence, 40 NEW ENG. L. REV. 947
(2006).

113 See, e.g., Sprague, supra note 111; Spencer Overton, The Donor Class: Campaign Finance, Democracy, and
Participation, 153 U. PA. L. REV. 73 (01 r 14 (contending that the disparities in wealth cause disparity in citizen
participation).

114 Fiss, supra note 111 at 1415.

"5 Id. at 1416.









STEPHEN BREYER, ACTIVE LIBERTY: INTERPRETING OUR DEMOCRATIC CONSTITUTION (2005).

Stephen Breyer, Our Democratic Constitution, 77 N.Y.U. L. REV. 245 (May, 2002).

Richard Briffault, The Future of Reform: Camnpaign Finance After the Bipartisan Camnpaign
Reform Act of2002, 34 ARIZ. ST. L.J. 1179 (2002).

Richard Briffault, WRTL and Randall:RRR~~~RRR~~~RR The Roberts Court and the Unsettling of Campaign
Finance Law/, 68 Ohio St. L.J. 807, 829 (2007)

Thomas F. Burke, The Concept of Corruption in Campaign Finance Law, 14 Const. Comment.
127, 128-130 (1997).

BurstMedia, Likely Presidential Voters Already Using the Internet, Online Insights (March
2007).

THE CAMPAIGN LEGAL CENTER, CAMPAIGN FINANCE GUIDE 5 (2004).

Center for Democracy and Technology, Political Speech, http://www.cdt. org/speech/political
(March 29, 2006).

COMMIssION ON CAMPAIGN FINANCE REFORM, THE ASSOCIATION OF THE BAR OF THE CITY OF
NEW YORK, DOLLARS AND DEMOCRACY: A BLUEPRINT FOR CAMPAIGN FINACE REFORM
(2000).

Anthony, Corrado, M~oney and Politics: A History ofFederal Campaign Finance Law/, in
Campaign Finance Reform: A Sourcebook. Washington, DC: Brookings Institution Press
(1997).

Anthony Corrado, M~oney and Politics: A History ofFederal Campaign Finance Law/, in THE
NEW CAMPAIGN FINANCE SOURCEBOOK 7, 14 (Anthony Corrado et al. eds., 2005).

Richard A. Davey, Jr., "Buckleying" the System: Is M~eaningfid Camnpaign Finance Reform
Possible Under Reigning First Amendment Jurisprudence?, 34 Gonz. L. Rev. 509 (1999).

Phillip H. Dougherty, Advertising; the Other Superbowl: I.B.M~ v. Apple, N.Y. TIMES, Jan. 23,
1984, at D11.

Election 2006 Online, The Pew Research Center, January 17, 2007; Ira Teinowitz, Note to
Politicians: It 's Not the Spending, Stupid, ADVERTISING AGE, vol. 79, p. 17 (Mar. 17,
2008).

ThOMAS I. EMERSON, THE SYSTEM OF FREEDOM OF EXPRESSION (1971).

Deborah Fallows, Election Newshounds Speak Up: Newspaper, TV and Internet FansFFFFF~~~~~~~FFFFFF Tell How
and Why They Differ, PEW INTERNET & AMERICAN LIFE PROJECT (Feb. 6, 2007).

Daniel A. Farber, First Amendment 1 (2003).









convenient. Seven percent believed that the Intemet provided more targeted news sources--those

that reflected their specific interests and values. But nearly 45 percent used the Internet to gather

election information because the Internet offered better or different information. Thirty-three

percent believed that traditional news sources, such as daily newspapers and network news, did

not provide the information they wanted. Eleven percent believed that the information on the

Intemet was information not available from other sources.38 A maj or source of information on

the Internet was political blogs. Eleven million people relied on blogs as their primary source of

information during the 2004 presidential race.39 Six million people joined in online political

discussions and chat groups.

The activities that Internet users engage in include researching the candidates, using emails

to send and receive political jokes, discuss the election, find voting location and time

information, and donating money. In 2004, 34 million people used the intemet to research

political candidates' positions on certain issues, and 20 million Internet users researched voting

records online.40 Nearly 20 million Intemet users took online polls to indicate their voting

preferences.41 Sixteen million Intemet users used online sources to find out about the

endorsements and ratings of candidates by particular organizations.42

Fundraising was also heavily affected by the Intemet; four million users used the Internet

to donate money to a candidate. The Howard Dean campaign raised more than $20 million

through the Intemet, which totaled 40 percent of the campaign' s total funds. The Kerry campaign


38Id.

39 Id.

o Id.

41Id.

I2d.









interest is promoting campaign finance reform. The emerging focus on institutional goals

approach is in accord with Justice Breyer' s theory of active liberty discussed in Chapter 2.

Active liberty was the foundation for the plurality opinion in Randall~RRR~~~~RRR~~~RRR v. Sorrell in 2006.634

Justice Breyer' s opinion for the Court, joined by Chief Justice John Roberts and Justice Alito,

emphasized that the First Amendment served the institutional interest of maintaining an effective

democracy. As such, campaign finance laws, although infringing on some individual free speech

rights, were not necessarily at odds with the First Amendment. Scholars argued that Breyer' s

opinion in Randall~RRR~~~~RRR~~~RRR signaled a dramatic change in the direction of campaign finance

jurisprudence.635 However, the remaining eight justices, in concurring and dissenting opinions,

continued to focus on the individual right of freedom of speech particularly in the realm of

political speech.

Individual rights also was the focus of the 2007 maj ority opinion in FEC v. Wisconsin

Right to Life. Chief Justice John Roberts authored his first campaign finance reform opinion, an

opinion that narrowly blocked the developing focus on the institutional First Amendment in a 5-4

vote. Instead, Chief Justice Roberts framed the challenge to the Federal Election Campaign Act,

as amended by the Bipartisan Campaign Reform Act, in terms of individual First Amendment

right of free speech. This explication of the competing interests reinforced the focus of a

marketplace model for political discussion.

Even with the divisive opinions on the Court, the basic foundation of campaign finance

law has remained the same. Contribution limits are generally permissible under the First

Amendment. Expenditure limits for individuals and ideological organizations are constitutionally



634 Randall v. Sorrell, 548 U.S. 230 (2006).

635 Rachel Gage










However, the Court did not find that all non-profit corporations were deserving of the

M~CFL exception to the FECA corporation requirements. In Austin v. M~ichigan2 State Chamnber of

Commerce, the Court found that provisions similar to those challenged in M~CFL, were

constitutional when applied to a state chamber of commerce, because it resembled a traditional

corporation.440 This case involved a provision of the Michigan Campaign Finance Act that

prohibited corporations from using general treasury funds for expenditures that supported or

opposed a state office candidate. The Michigan Chamber of Commerce attempted to use its

general treasury to fund a newspaper advertisement in support of a particular candidate. The

chamber sought a declaratory judgment that would enj oin the state from enforcing the regulation

against the chamber.441 Although the U.S. Supreme Court looked back to its 1986 decision in

MCFL, the Court said that the chamber of commerce did not exhibit the same characteristics as

the MCFL did.442 Rather, the Court said the chamber of commerce resembled a traditional

corporation and presented the same threat of corruption as a corporation.443 As such, the Court

held that the application of the Michigan law was permissible under the First Amendment.

Justices Scalia and Kennedy wrote dissenting opinions in this case. Justice Scalia argued,

in a lengthy dissent that the limits on corporate spending are counter to the free political

exchange guaranteed by the First Amendment. The newly appointed Justice Anthony Kennedy

also offered a dissent, which Scalia j oined along with Justice O'Connor. Kennedy argues that

independent expenditures whether funded by a corporation or an individual are at the core of




440 494 U.S. 652 (1990).
441 Id. at 656.

442 Id. at 661-65.

443 Id. at 664.









Research Question 1: What Are the First Amendment Concerns Associated with Applying
Campaign Finance Laws to Internet Communications?

Political speech is widely recognized as the core of the First Amendment. Campaign

communication is the paragon of political speech. As a result, the First Amendment is often

placed in opposition to campaign finance reform laws, which limit campaign communications.

Some limitations are explicit infringements on political speech corporations and unions are

prohibited from spending money to influence federal elections. Some limitations are indirect

infringements contributions are capped and expenditures amounting to more than $200 must be

reported to the FEC. Contribution limits controls the amount of association individuals and

organizations can have with the candidates and political committees. The latter indirect

infringement the reporting requirement may prevent some individuals from engaging in

campaign communications to avoid reporting to the FEC. Whether direct or indirect, campaign

finance laws have an impact on the discussion of political candidates.

The interaction of political free speech and campaign finance laws must be balanced as

campaign finance laws continue to evolve. Chapter 2 discussed the prevailing First Amendment

theories as well as the theories that support campaign finance reform. The free speech theories

most prominent in the debate over campaign finance, particularly in the Supreme Court, are

marketplace of ideas and self-government. However, Justice Steven Breyer' s theory of active

liberty has gained support on the Court.610 The prevailing justification of campaign finance

reform in jurisprudence is the prevention of corr-uption, although political equality has gained a

strong foothold in the academic debate. When communication is made via the Internet, the First

Amendment interests do not change. The theories of marketplace of ideas, self-government, and

active liberty are as relevant as they are when the communication is delivered in print or on

610 Randall v. Sorrell, 548 U.S. 230 (2006). Justice Stevens was joined in a plurality opinion by










although unlimited in amount, are subj ect to disclosure requirements. The definition of

contributions and expenditures includes any money spent on "public communications."

Public communications are any communications that promote or oppose a clearly

identified candidate for federal office. Congress specifically included communications via

broadcast, cable, satellite, newspaper magazine, outdoor advertising, mass mailing, and

telephone banks, as well as "any other form of general public political advertising." Public

communications are required to carry disclaimer statements that specify the sponsorship of the

communication, as well as a statement as to the authorization of the communication by the

candidate. All disclaimer statements must be "clear and conspicuous."

Congress has exempted from the definition of contribution and expenditure certain

activities including non-partisan activities, volunteer services, and news organizations.637Non-

partisan activities include get-out-the-vote drives and voter registration campaigns. Any money

spent on these communications is not considered a contribution or expenditure.638

Uncompensated activities are also exempt from the definitions of contribution and expenditure.

This includes services on behalf of a candidate or committee, use of personal property for

campaign activities, and transportation costs incurred during volunteer activities.639 Likewise,

money spent in "covering or carrying a news story" by a broadcast station, newspaper, magazine

or other periodical is not a contribution or expenditure.640 For example, any expenses attached to

assigning a reporter to cover the Republican presidential candidate's campaign would not be

considered an "expenditure." Nor would the resulting broadcasts or publications be considered


637 For a full discussion of these exemptions, see Ch. 3.

638 2 U.S.C. # 431(C)-(D).

639 Id.
641) Id.










none of these decisions were unanimous, and dissenting justices offered different interpretations

of the application of the corruption rationale.

In 1982, the Court held that applying disclosure requirements to minority parties with a

history of discrimination is unconstitutional.420 The Court reasoned that because minority parties

have a lower chance of winning the election, they do not present as much of a risk of

corruption.421 The Court also found a greater threat to the First Amendment interests of minor

parties and candidates because the Einancial base is likely to be less "sound" and "more

vulnerable to falloffs in contributions" due to fear of hostility when the association is known.422

Therefore, the government interests promoted by the restrictions are not significant enough when

applied to contributors to minor parties and candidates.423

A point of contention among the justices was the application of FECA disclosure

requirements to recipients of minor party expenditures. The majority found that these

requirements also should not apply to minority parties. However, Justice O'Connor, joined by

Justices Rehnquist and Stevens, argued that although contributors to minor parites might

experience hostility, recipients of expenditures cannot claim the same fears of retribution.42

The justices also disagreed on the extent of congressional deference necessary in analyzing

the government interest ostensibly advanced by campaign finance law provisions. In FEC v.

M~assachusetts Citizens for Life (MCFL),425 the Court analyzed the constitutionality of provisions



420 Brownyv. Socialist Workers '74 Campaign Conunittee, 459 U.S. 87 (1982).
421 Id. at 92.

422 Id. at 93.

423 Id.

424 Id.

425 479 U.S. 238 (1986).










from the "original position"--when decisions are made no one knows "his class position or

social status, nor ... his fortune in the distribution of natural assets and abilities, his intelligence,

strength, and the like."148 Rawls' contended that through this device, society would arrive at laws

that were fair and just.149 Freedman, through this analysis, concluded that the current

contribution limits are too high and that a voucher system for public financing would be more

effective at furthering the interest in political equality of speech.iso

Scholars also have argued that the collective interests and the individual interests must

both be considered--a careful balancing test is the key to the coexistence of First Amendment

principles and effective campaign finance laws." Gary Stein, in arguing that campaign finance

reforms can be effective without fatally infringing on First Amendment values asked, "of what

enduring constitutional value is unlimited political speech if its practical effect in contemporary

society is to corrupt the elective process it was intended to enhance?"152 Stein concluded that

absolute First Amendment principles cannot be used to determine campaign finance reforms.

There must be a balance between the individual interest in unlimited speech and the collective

interest in maintaining integrity of the electoral system.153









1 See JOHN RAWLS, THEORY OF JUSTICE (Belknap Press 2005) (1971).
149 Id.

150 Freedman, supra note 145 at 1087-94.

' See Gary S. Stein, The First amendment and Campaign Finance Reform: 4 Timelv Reconciliation, 44 RUTGERS
L. REV. 743 (1992).
I52d. at 795.

1 Id. at 795.










"public communications." This exemption is applied to all the different media equally. The

criterion is not the media format, but the function of the organization. These exemptions are

applied to the varying media equally. The process for determining the application of these

exemptions focuses on the content of the communication and the speaker, not the media that is

used.

However, Congress has placed additional requirements on the broadcasting medium.

Requirements for providing access and opportunity for candidate communications are not

textually included in the FECA. The Equal Opportunity and Reasonable Access rules in the

Communications Act of 1934 guarantee candidates the ability to purchase time on the public

airwaves.641 This burden is not placed on print, cable, satellite, or online media.

The only difference in the treatment of media are the specific disclaimer formatting

requirements and the broadcast opportunity rules. The general provisions of the FECA--limits

on contributions, reporting requirements for expenditures, and disclaimer requirements for public

communications--are applied across the media. The focus of analysis is not the medium of

delivery, but the content and source of the communication.

Research Question 4: What Are the Current Campaign Finance Laws and Regulations that
Govern Internet Campaign Communications?

Although the general provisions of the FECA apply across the different media, there was

significant disagreement over whether these provisions should be applied, at all, to the

Internet.642 The FEC's approach to regulating the Internet under the Federal Election Campaign

Act and the Bipartisan Campaign Reform Act has been evolving since the mid-1990s. The first



641 47 U.S.C. ## 312, 315 (2008).

642 See Conunents in Response to FEC Notice of Proposed Rulemaking on Internet Conununications,
\li \\ ll fec.gov/pdf/nprm/internet~conn/nprm connentsstl









Citizens Against Rent Control v. City of Berkeley, 454 U.S. 290 (1981).

Colorado Republican Federal Campaign Committee v. FEC, 518 U. S. 604 (1996) (Colorado I).

Complaint for Declaratory and Injunctive Relief, Shays v. Federal Election Commission, 337 F.
Supp. 2d 28 (D.D.C. 2004) (No. 1:02-cy-01984-CKK).

FEC v. Beaumont, 539 U.S. 146 (2003).

FEC v. Colorado Republican Federal Campaign Committee, 533 U.S. 431, 121 S. Ct. 2351
(2001) (Colorado II).

FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986).

FEC v. Nat'1 Conservative Political Action Comm., 470 U.S. 480, (1985).

Garrison v. Louisiana, 379 U.S. 64 (1964).

Healy v. James, 408 U.S. 169 (1972).

Jacobus v. Alaska, 338 F.3d 1095, 1107 (9th Cir. 2003)

Keyishian v. Board of Regents of the University of the State of New York, 385 U.S. 589 (1967).

Kleindeinst v. Mandel, 408 U.S. 753 (1972).

Lamont v. Postmaster General of the United States, 381 U.S. 301 (1965).

Landell v. Sorrell, 406 F.3d 159, 162 (2d Cir.)

McConnell v. FEC, 540 U.S. 93 (2003).

Miami Herald Publish'g Co. v. Tornillo, 418 U.S. 241 (1974),

New York Times Co. v. Sullivan, 376 U.S. 254 (1964).

Nixon v. Shrink Missouri Government PAC, 528 U.S. 377 (2000).

Randall v. Sorrell, 548 U.S. 230 (2006).

Red Lion Broadcasting Co., Inc. v. FCC, 395 U.S. 367 (1969).

Reno v. ACLU, 521 U.S. 844 (1997).

Saxbe v. Washington Post. Co., 417 U.S. 843 (1974).

Shays v. Federal Election Commission, 337 F.Supp.2d 28 (D.D.C. 2004).

Shrink Missouri Government PAC, 528 U.S. 377 (2000).










Internet."l In federal elections, the 2004 election cycle was the first evidence of effective use of

the Intemet.19 Candidates continued to evolve campaign styles in the 2006 mid-term election and

the 2008 election cycles to further incorporate the Internet.20 A study by the Pew Internet &

American Life Proj ect examined the use of the Intemet in the 2008 presidential election found

that Internet has both increased and diversified since the 2004 election cycle.21 Citizens also have

used the Intemet for everything from newsgathering to participating in the political debate. This

participation has increased dramatically since the 2002 federal mid-term elections.22 This section

will further explicate the expanding application of the Internet to political campaigns.

In 2008, 40 percent of all adults surveyed by the Pew Foundation look to the Intemet for

political news. This is a 9 percent increase from 2004, and an 18 percent increase from 2000.23

The public also has looked to the Internet for more in-depth information about a candidate or an

issue. This has included watching political videos online (e.g., campaign commercials, online

candidate speeches, online interviews), reading position papers, and reading transcripts of

candidate speeches.24

The public is not using the Internet merely as a source of information, but also as a tool to

engage in the political conversation. More than 60 percent of Internet users use email or text


's Alexis Wright, The Power of the Intemnet, Center for the Study of American Govemnment, John Hopkins
University (Nov. 2004), available at htll \p w\ il itcampaignsonline.org/reports/1 104.html.

19 Id. Although John McCain initiated an online following during the 2000 primary elections, the general election
candidates largely ignored the medium. Id.
20 Id.

21 The internet and the 2008 election, Pew Intemnet & American Life Project, June 15, 2008.

22 Deborah Fallows, Election Newshounds Speak Up: Newspaper, TV and Internet Fans Tell How and Why They
Differ, PEW INTERNET & AMlERICAN LIFE PROJECT (Feb. 6, 2007); see also BurstMedia, Likely Presidential Voters
Already Using the Internet, Online Insights (Mlarch 2007).

23 The Internet and the 2008 Election, supra note 20.
24 Id.










By restricting the application to communications placed on a third-party's web site for a

fee, the FEC has narrowly drawn the regulations to affect advertisements as opposed to

independent communications. Further, the FEC specifically exempted independent Internet

activity, such as blogging and e-mailing, in order to clarify the limits of the regulations. This is

parallel to the application of campaign finance laws to the print media. For example, an

advertisement placed in the local newspaper by Jane Voter would require a disclaimer statement.

However, a brochure that Jane Voter created on her computer at home and printed to distribute

on the street would not require such a disclaimer. The same is true online. If Jane Voter

purchases an pop-up ad on Slate.com, the ad must carry a disclaimer statement. However, if Jane

Voter blogs about her favorite candidate on her own web site, or on a public blog, no disclaimer

is required.

In the Jane Voter examples, Jane would have to keep a record of all money spent

purchasing the advertisements. If the amount spent totaled more than $250 in a calendar year,

Jane Voter would have to make a report to the FEC disclosing her expenditures. However, the

independent activity of personally distributing brochures or blogging would not require such

reporting.

The purpose of the FECA is to prevent corruption of the electoral process through the use

of money. The costs of independent Internet activity are so nominal that regulation of activities

such as blogging could not be supported under the First Amendment. However, advertisements

purchased on popular web sites are akin to those purchased in maj or newspapers and broadcast

stations. Wealthy individuals and organizations can heavily influence the political debate through

this medium. Applying the same disclosure and disclaimer requirements to the Internet that are

in place for print and broadcast, is not an unreasonable extension of the law.










In 2006, Justice Breyer's focus on participatory self-government was evident when he

authored a plurality opinion in Randall~RRR~~~~RRR~~~RRR v. Sorrell.285 Breyer, although specifically refusing to

overturn Buckley focused the plurality opinion striking down Vermont campaign finance reforms

on protecting the "integrity of the electoral system."286 Breyer does not strike down these

contribution limits merely because the state failed to meet a standard of corruption, but rather

because the limits were so low that they "burden[ed] First Amendment interests in a manner that

is disproportionate to the public purposes they were enacted to advance."28 Throughout the

opinion, Breyer demonstrates how the limits will hinder political deliberation, particularly in the

face of a competitive campaign scenario. This focuses on the participation in the electoral

process rather than the prevention of corr-uption, signaling perhaps a new approach to campaign

finance reform litigation.

Campaign Finance and the First Amendment

In examining campaign finance reform laws, the Court has been challenged to balance the

freedom of expression and these justifications for reforming the political process. In its attention

to campaign finance litigation, the Court has continually developed a key area of contention--

whether money is speech. In its initial assessment of the issue in Buckley, the Court determined

that the Court has never suggested that the dependence of a communication on the expenditure

of money operates itself to introduce a nonspeech element or to reduce the exacting scrutiny

required by the First Amendment."288 However, the Court did create a dichotomy between

contributions and expenditures.


285 Randall v. Sorrell, 126 S. Ct. 2479 (2006).
286 Id. at 2492.

287 Id. at 2500.

288 Buckley v. Valeo, 424 U.S. 1 at 16.










campaign finance reform laws to illustrate the need for change.106 Nawaz analyzed various

reform proposals that were being considered at the time of the article in 1999.107

In addition to using the history of campaign finance laws to evaluate the current system

and proposals for change, scholars have examined the possible future configurations of campaign

finance laws.10s For example, Richard Briffault identified concerns that he believed needed to be

addressed in future amendments to the campaign finance lawS.109 Briffault contended that the

FEC should be restructured or replaced to ensure effective enactment and enforcement of

campaign finance provisions.110 Briffault further called for the increase in available public

funding for campaigns. "[T]he next goal for campaign finance reform must be not simply the

prevention of corruption but the promotion of competition. That will require a new commitment

of public resources to the funding of federal election campaigns."ll







106 See Nawaz, supra note 102.

'07 Nawaz at 175. For other examples of using a historical approach to analyze proposed reforms, see Kenneth J.
Levit, Campaign Finance Reform and the Return ofBuckley v. Valeo, 103 YALE L.J. 469 (1993); and Kevin P.
Sullivan, But These Times Were Supposed to be al its 1,,,, ,, .. How Congress Should Regulate 527 Groups in
Light of the Bipartisan Campaign Reform Act, the Vote for I i, ag.-, Tour, and the 2004 Presidential Election, 16
SETON HALL J. SPORTS & ENT. L. 130 (2006).

10s See, e.g., Richard Brif fault, The Future of Reform: Campaign Finance After the Bipartisan Campaign Reform Act
of2002, 34 ARIZ. ST. L.J. 1179 (2002); Rep. Harold E. Ford, Jr. & Jason M. Levien, A New Horizon for Campaign
Finance Reform, 37 HARV. J. oN LEGIS. 307 (2000); Cecil C. Kuhne, III, R, thni,,, i.- Campaign-Finance Reform:
The Pressing Need for D.. ..gislan.. and Disclosure, 38 J. Marshall L. Rev. 633 (Gi r'4); William P. Marshall, The
Last Best Chance for Campaign Finance Reform, 94 Nw. U. L. REV. 335 (2000); Audra L. Wassom, Campaign
Finance L.~ go i or,. ; McCain-Feingold/Shay-Meehan-The Political Equality Rationale and Beyond, 55 SMU L.
REV. 1781 (2002).

109 Richard Briffault, The Future ofReform: Campaign Finance After the Bipartisan Campaign Reform Act of2002,
34 ARIZ. ST. L.J. 1179 (2002). This article was written prior to the Supreme Court decision in McConnell v. FEC,
which upheld the Bipartisan Campaign Reform Act of 2002. See 540 U.S. 93 (2003).

110 Briffault, supra note 108, at 1211.

"'Id. at 1216. See also, Wassom, supra note 107 at 1782 (heralding public financing as the "ultimate goal" of
campaign finance legislation).










Kennedy offered suggestions for a comprehensive reform agenda.322 However, this was not

achieved until 1971, nearly ten years after Kennedy submitted the report to Congress and urged it

to adopt the proposed reforms.

Federal Election Campaign Act

In 1971, Congress passed the Federal Election Campaign Act of 1971 (FECA) in order "to

promote fair practices in the conduct of election campaigns for Federal political offices."323

FECA placed limits on contributions and expenditures by corporations and candidates in

connection with federal election.324 The Act was intended "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."325

However, during the 1972 election cycle, there were more than 7,000 reports of campaign

finance abuse to the Department of Justice. This led Congress to significantly amend FECA in

1974. Almost immediately following the passage of the 1974 amendments, the law was

challenged in court by Senators James L. Buckley and Eugene McCarthy. In response to these

challenges, the United States Supreme Court issued a decision that has shaped campaign finance

law for more than thirty years.

Major FECA Provisions

After the 1974 amendments, the law largely consisted of six maj or areas. First, the law

limited the amount of contributions and expenditures made by individuals and groups. Second,

3 Corrado, supra note 12 at 19 (citing President's Commission on Campaign Costs, Financing Presidential
Campaigns (1962)).
3 See FECA.

324 Id.

3 S. Rep. No. 92-96, at 1774 (1971).










not promote a candidate or non-Federal candidate."72 These definitions are important because

they are used to determine the scope of all regulations mandated by the BCRA.73

Literature Review

Scholars have since the inception of the Federal Election Campaign Act more than thirty

years ago have been intrigued by the complexities of campaign finance laws. Many scholars

have focused on the explicating the definitions and specific applications. Others have

concentrated on the relationship between campaign finance laws and the First Amendment. Most

recently, scholars have addressed how campaign finance laws can, and should, be applied to the

Internet.

Campaign Finance Laws and History

Scholars have attempted to explain the complex paradigm of current campaign finance

laws. This includes explicating the concepts central to campaign finance, examining the history

of campaign finance laws, and exploring the future of campaign finance reforms.74 Scholars have

used a range of perspectives in considering these issues, including historical, normative, and

critical. The focus of these articles range from a broad, comprehensive description of the current

state of campaign finance law to a directed analysis of a particular court opinion or a particular

statutory provision. The result is a fairly well-established area of study that offers a general

understanding of the relative laws and issues.

Some scholars have focused on illustrating the key elements of campaign finance law,

clarifying a sometimes convoluted legal concept. For example, Burt Neuborne offered a "Guide


7Id

73BCRA was challenged and upheld in McConnell v. Federal Elections Conunittee, 540 U.S. 93 (2003).

74See, e.g., CouxIlssioN ON CAMPAIGN FINANCE REFORM, THE ASSOCIATION OF THE BAR OF THE CITY OF NEW
YORK, DOLLARS AND DEMOCRACY: A BLUEPRINT FOR CAMPAIGN FINANCE REFORM (2000); Burt Neuborne, One
Dollar-One Vote: 4 Preface to DI, As ;,l, Campaign Finance Reform, 37 WASH BURN L.J. 1 (1997).










corporations that derive their entire revenues from their Internet activities. Not all of these are the

types of incorporated bloggers that the FEC envisioned protecting.

Research Question 5: Do the Campaign Finance Regulations Defining Paid Internet
Communications Transmitted via Third Party as Regulated Under Campaign Finance
Laws Adequately Protect First Amendment Interests?

The Supreme Court has said that limits on campaign finance "operate in an area of the

most fundamental First Amendment activities."653 Cultivating an open debate on the

qualifications of candidates for federal office is paramount for the successful self-government

model. The Internet offers an outlet for communications that simulates the exchange of ideas

envisioned in the marketplace of ideas theory. The Supreme Court has in fact heralded the

Internet as the "new marketplace of ideas."654

Regulations restricting the online political marketplace must be subj ected to a First

Amendment analysis. The Court reviews most speech restrictions under a strict scrutiny analysis.

This requires that to infringe on speech, the government prove there is a compelling interests that

is directly advanced by the regulation, and that the regulation is narrowly drawn to address the

compelling interest in the least restrictive manner possible. The Court has found that a lower

standard of review is warranted for some types of speech. For example, for commercial speech to

be limited, the government need only prove that the restrictions on speech substantially advance

an important or substantial interest.

The Supreme Court has also drawn a distinction between the level of scrutiny for

contribution limits and that for expenditure limits. In Buckley, the Court said that expenditure

limits restrict political expression more severely than contribution limits. As a result, the Court


653 Buckle v Valeo, 424 U.S. 1, 14.

654 Reno v. ACLU, 521 U.S. 844, 885 (1997); see also Stephen C. Jaques, Comment: Reno v. ACLU: Insulating the
Internet, the First Amendment, and the Marketplace of Ideas, 46 Am. U.L. Rev 1945, 1947 (Aug. 1997).










him or herself. Allowing the government to restrict speech in favor of equality of speech would

"dramatically restrict First Amendment protection across the board."94

The Harvard Law Review published an unauthored analysis of the current Supreme

Court' s review of the Buckley opinion in its 2006 Randall v. Sorrell decision.95 The analysis

noted the negative response that Buckley received since it was issued.96 Although the Court' s

decisions between Buckley and Randall had indicated a potential for overturning the long-

standing decision, the majority in Randall~RRR~~~~RRR~~~RRR affirmed Buckley. Yet the Harvard Law Review noted

that in discussing the First Amendment challenges to campaign finance laws, the Randall

decision focused more on protecting the integrity of the electoral process than protecting the

individual's right of free speech, which was more prevalent in Buckley. This signaled a shift in

the Court's rhetoric that the law review found "more sensible."97

The law review article argued that this shift to "an institutional or structural approach"--

focusing on the integrity of the political system--would protect the courts from "undermin[ing]

the very interests they believe themselves to be securing."98 This structural approach would favor

judicial deference to the legislature when there is no risk of "such constitutional evils as, say,

permitting incumbents to insulate themselves from effective electoral challenge."99 However, the

Court--despite its eloquent phrasing--was unwilling to exercise broad legislative deference in

93 Id. at 1097.

94 Id. at 1098.

95 Leading Cases, Constitutional Law, Freedom of Speech and Expression, Campaign Finance 8..>; ,/ ,;,. ,, 120
HARV. L. REV. 283 (2006).

96 Id. at 283.

97 Id. at 284.

98 Id. at 289 (quoting Richard H. Pildes, The Supreme Court, 2003 Terin --Foreword: The Constitutionalization of
Democratic Politics, 118 HARV. L. REV. 28, 54 (GI lI14;.

99 Id. at 290 (quoting Nixon v. Shrink Mo. Gov't PAC, 528 U.S. 377, 402 (2000) (Breyer, J., concurring)).










television. Similarly, the government and reform advocates will purport to advance the same

interest by regulating campaign communications online as they do in the more traditional media

- corr-uption and political equality. It is the balance of these interests free speech and

prevention of corruption that may evolve when the campaign communications are delivered

online. The balance is more favorable to the free speech interests when applied to the Internet.

The marketplace of ideas theory imagines a public market in which all ideas are available

for consumption. The consumers or listeners or viewers determines which ideas they value

and accept and which ideas they rej ect. The supposition of this theory is that through market

forces the "true" ideas will rise to the top. Critics of the marketplace argued that television, radio

and the institutional print media distorted the marketplace by limiting access to these channels

that dominated the marketplace. Although the marketplace theory never required all voices to be

heard equally, these media outlets disproportionately affected access to the marketplace. To

protect the political debate in the marketplace, the Supreme Court upheld restrictions on

campaign financing.61

In addition to the marketplace theory, the Supreme Court has framed its campaign finance

jurisprudence in the frame of the self-government theory of the First Amendment.612 This theory,

most closely associated with Alexander Meiklej ohn, focuses on the necessity of open debate to

support a functioning democracy.613 This theory has been included as a sub-theory of the


611 See, e.g., Buckley v. Valeo, 424 U.S. 1 (1976); FEC v. Massachusetts Citizens for Life, 479 U.S. 238, 263 (1986)
(Brennan, J., writing for the plurality) (acknowledging the legitimacy of protecting the political marketplace with
restrictions on entering or using the marketplace); Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990).
Cf Citizens Against Rent Control v. City of Berkely, 454 U.S. 290 (1981) (striking down restrictions that too
heavily burdened the marketplace).

612 MCCOnnell v. FEC, 540 U.S. 93 (2003); see also Richard L. Hasen, Buckley is Dead, Long Live Buckley: The
New Campaign Finance Incoherence ofi~cConnell v. Federal Election Commission, 153 U. PA. L. REV. 31 (Nov.,
2004); in~fra Ch. 2.

613 Alexander Meiklejohn, POLITICAL FREEDOM: THE CONSTITUTIONAL POWERS OF THE PEOPLE (HARPER & BROS.
1960); see also infra Ch. 2.










a web site advocating the election of a candidate for federal office. Political committees are

required to report any independent expenditure of more than $200 or a series of expenditures to

a single payee that aggregates to more than $200 in a calendar year. The FEC suggested that for

a political committee operating an advocacy web site these expenditures could include

registration and maintenance of the web site and domain name as well as the costs of any

necessary hardware or software for producing the communications.513

X-Pac also requested the FEC to address was whether the expenditures would need to be

reported on a one-time production basis, or whether the number of times the online

communications were downloaded would act as a sort of multiplier for expenditures.514 The FEC

found that the expenditure reporting requirements only attached to X-PAC's production and

initial distribution costs.5 Users downloading and further use of the communications did not

add any attributable costs to X-PAC. Nor was X-PAC required to collect personally identifying

information from individuals downloading the materials for republication.516

In its response to X-PAC, the FEC also delineated the manner in which disclaimers must

be attached to e-mail communications."' The FEC likened e-mails to traditional mailers and

reasoned that, like mass mailings, e-mails would require a disclaimer if substantially similar

messages were sent to more than 100 separate e-mail addresses.







513 FEC Adv. Op. 1999-37, 5.

514 FEC Adv. Op. 1999-37, 5.

sis FEC Adv. Op. 1999-37, 5.

516 FEC Adv. Op. 1999-37, 6.

517 FEC Adv. Op. 1999-37, 5.










brief discussion of FEC regulations specific to the FECA provisions that directly impact

campaign communications.

Early Campaign Finance Reform Efforts

Campaign finance reform dates back to the late 19th century. The notion of campaign

finance reform was not part of the national debate during the first decades of American federal

politics.296 However, as the party system evolved, campaign expenditures increased steadily. By

the late 19th century, corporations and wealthy individuals were playing key roles in financing

political campaigns.297 Although financing by corporations was well-known, it was not until a

campaign was tainted with the air of corruption that reform was initiated.298 Reform began to

address disclosure requirements, contribution and spending limits, and public financing of

campaigns.

In 1907, Congress passed what is now considered the first effort to reform campaign

finance in response to the Equitable Life Insurance scandal.299 Hearings investigating the

corporate spending of the company revealed vast donations to the reelection campaign of

Theodore Roosevelt as well as annual retainer fees paid to republican senators.300 As the

investigation continued, it was discovered that insurance companies had donated nearly



296 Bradley A. Smith, The Sirens' Song: Campaign Finance 8..>;,Ii,lr,.. and the First amendment, 6 J.L. & POL Y 1,
3 (1997).

297 Id. at 4. "[In the presidential election of 1896, Republican National Chair Mark Hanna systematized fundraising
to an unprecedented level and raised as much as $7 million (approximately $140 million today) to support the
campaign of William McKinley .. Hanna raised much of this money from corporations and banks but large
individual donors also became increasingly important in the late nineteenth and early twentieth centuries." Id.

298 Robert E. Mutch, CAMPAIGNS, CONGRESS, AND COURTS: THE MAKING OF FEDERAL CAMPAIGN FINANCE LAW 3-7
(Praeger 1988).

299 Id. The public and legislators were concerned when an investigation initiated by the state of New York revealed
large corporate donations to the Republican Party by Equitable Life Insurance. Id.

""0 Adam Winkler, "Other People 's Money": Corporations, agency Costs, and Campaign Finance Law, 92 GEO.
L.J. 871, 892 Gi lrl i









Lindey Powell, Getting Around Circumvention: A Propoosal for Taking FECA Online, 58 Stan.
L. Rev. 1499 (2006).

Press Release, The Campaign Legal Center, Watchdog Groups Urge FEC to Exclude Bloggers
from Internet Regulation; Say Soft Money Ban Should Apply to Online Activity by State
Parties (June 3, 2005), available at http://www. campaignlegalcenter. org/press-1689. html.

Lee Rainie, Micheal Cornfield, and John Horrigan, THE INTERNET AND CAMPAIGN 2004, The
Pew Research Center (March 6, 2005), available at http:.//www.pewinternet. org.

Jamin Raskin & John Bonifaz, The Constitutional Imperative and Practical Superiority of
Democratically Financed Elections, 94 COLUM. L. REV. 1160, 1161-62 (1994).

John Rawls, POLITICAL LIBERALISM (Cambridge, Mass., 1993).

JOHN RAWLS, THEORY OF JUSTICE (Belknap Press 2005) (1971).

Alissa J. Rubin, History of Changes in Campaign Law, Congressional Quarterly Weekly Report
794 (Apr. 5, 1995).

Marc Santora, Video by Firefighters' Union Urgres Opposition to Giuliani~~iiiiiiiiiiiiii NY. TIMES, JULY 12,
2007, at Al8

Scott Shepard, 'Wassup?' Debate a bit Unconventional, Atlanta Journal and Constitution (Ga.),
July 24, 2007.

Katharine Q. Seelye, Allies Urge Republicans to Join YouTube Debate, New York Times, Aug.
2, 2007, at Al2.

Bradley A. Smith, Camnpaign Finance Reform: Searching for Corruption in all the Wrong
Places, 2003 CATO SUP. CT. REV. 187.

Bradley A. Smith, The Sirens' Song: Camnpaign Finance Regulation and the First Amendment, 6
J.L. & POL'Y 1 (1997).

BRADLEY A. SMITH, UNFREE SPEECH: THE FOLLY OF CAMPAIGN FINANCE REFORM (2003).

Stephanie A. Sprague, The Restriction of Political Associational Rights Under Current
Campaign Finance Reform First Amendment Jurisprudence, 40 NEW ENG. L. REV. 947
(2006).

Gary S. Stein, The First Amendment and Campaign Finance Reform: A Timely Reconciliation,
44 Rutgers L. Rev. 743 (1992).

David Stevenson, A Presumption Against Regulation: Why Political Blogs Morln/Jlbe (Mostly)
Left Alone, 13 B.U. J. SCl. & TECH. L. 74 (2007).

David Strauss, Corruption, Equality, and Campaign Finance Reform, 94 Colum. L. Rev. 1369,
1370 (1994).










The law also placed limits on total campaign expenditures. Senate campaigns were limited

to $100,000 in a primary and $150,000 in a general election. House candidates could not spend

more than $70,000 in either the primary or the general election. Presidential campaigns were

limited to $10 million in a national primary and $20 million in the general election.32 The law

did permit all candidates to spend an additional 20 percent of their limits for fundraising

activities.328

The 1974 amendments also strengthened disclosure requirements. Specifically, all

candidates were required to create one central committee through which all contributions and

expenditures would flow and be reported. Campaigns also were required to disclose the bank

depositories authorized to receive campaign funds. In election years, campaign committees and

active political committees were required to file a financial report each quarter. If a committee

received or spent $1,000 or more in the quarter, then additional reports had to be filed ten days

before and thirty days after each election. Contributions of more than $1,000 that were received

within fifteen days of an election had to be reported within 48 hours. In non-election years,

committees were required to file year-end reports.

The FECA also included exemptions for the media and volunteers to these provisions. Any

services provided individuals volunteering for a candidate were not considered contributions.329

The media exemption was adopted to "assure the unfettered right of newspapers, TV networks,

and other media to cover and comment on political campaigns." This exemption provides that



3 Presidential spending in each state was limited to twice what a senate candidate could spend in the state.

328 All limits were forecasted to adjust based on the consumer price index. In the original 1971 legislation, there
were no total campaign spending limits. Rather, the campaign spending limits were placed on specific types of
media burs. For example, under the 1971 provisions, no more than 60% of a candidate's overall media spending
could be devoted to radio and television advertisements.

329 2 U.S.C. # 431 (8)(B).










distributed over the Internet.591 Likewise, the FEC offered a list of "equipment and services" to

support the exemption for independent activity: computers, software, Internet domain names,

Internet Service Providers (ISP), and any other technology that is used to provide access to or

use of the Internet.592 These "illustrative" definitions were intended to be broad enough to

encompass any future technologies.593

This exemption extends to a corporation that is "wholly owned by one or more individuals,

that engages primarily in Internet activities and that does not derive a substantial portion of its

revenues from sources other than income from its Internet activities."594 In explaining this

extension, the FEC noted that the U. S. Supreme Court "acknowledged .. that 'some

corporations have features more akin to voluntary political associations than business firms, and

therefore should have to bear burdens .. solely because of their incorporated status."595 This

exemption takes into account the benefits of incorporation, while noting that not everyone that

takes advantage of those benefits exert the same influence as a traditional corporation.596 Only

incorporated individuals that do not derive any substantial revenue from offline activities are

eligible for this exemption.597

The "individual activity" exemption also leaves open the possibility for individuals to

pay for communications to be placed on another person's website without incurring requirements



591 fIller/781 COmuiltiCoNns, 71 Fed. Reg. 18613 (codified at 11 C.F.R. ##100.94, 100.155).
592 Id.

593 Id. at 18605.

594 71 Fed. Reg. 18613 (codified at 11C.F.R. # 100.94(d), 100.155(d)).

595 Id. at 18606 (.. as s; FEC v. Massachusetts Citizens for Life, 479 U.S. 238, 263 (1986)).
596 Id.

59 11 C.F.R. ##100.94(d), 100.155(d).










As Congress has attempted to equalize the public debate during elections, it seems to apply

the First Amendment as articulated by Alexander Meiklej ohn.l5 Meiklej ohn stressed that the free

speech imagined by the First Amendment was necessary for an informed electorate. But as an

informed electorate was the goal, Meiklej ohn suggested that it was the different viewpoints that

must all be heard, not necessarily all of the speakers supporting each viewpoint. By placing

limits on individuals' ability to give money and gifts to candidates and other restrictions on

election speech, Congress has attempted to lower the magnitude of a few voices so that others

may be heard. These efforts are aimed at keeping corr-uption and undue influence out of the

electoral process. This has served as a constant value as Congress has repeatedly expanded the

reach of campaign finance laws to address new circumventions of the limits and restrictions.16

Most recently, the Internet has prompted a reevaluation of the current campaign finance

laws and how they are interpreted and applied by the Federal Elections Commission (FEC). The

Internet provides a unique medium for campaign communications, allowing instantaneous,

global communications. This new tool magnifies the reach and impact of campaign

communications.

Campaign Communications Online

Since the Internet emerged, its use by candidates and voters has increased and

diversified." The Internet was first used as a campaign tool during the 1996 elections, but it was

Jesse Ventura' s 1998 bid for Michigan governor that first demonstrated the "power of the



'5 See ALEXANDER MEIKLEJOHN, POLITICAL FREEDOM: THE CONSTITUTIONAL POWERS OF THE PEOPLE (Harper &
Brothers 1960) (1948).

16 See infra Chapter 3 discussing the development of television and radio as new methods of communication in
campaigns and the resulting increase in campaign expenditures.
17 See, e.g., Election 2006 Online, The Pew Research Center, January 17, 2007; Ira Teinowitz, Note to Politicians:
It 's Not the Spending, Stupid, ADVERTISING AGE, vol. 79, p. 17 (Mar. 17, 2008).










to justify the regulation need not be so high."418 In determining that the contribution limits

should be upheld, Justice White adhered to a Meiklej ohnian theory of expression. He argued that

the contribution limits were justified because if there were any "ultimate impact on speech, it

will be presented to assure that a diversity of views will be presented to the voters."

The Berkeley decision further muddies the distinction drawn in Buckley between

contributions and expenditures. Justice Blackmun, joined by Justice O'Connor, continued to

argue for no constitutional distinction at all. He contended that the difference found in Buckley

resulted from the application of the state interest rather than any difference in value or First

Amendment protection. Justice Marshall argued that Buckley indeed created a First Amendment

dichotomy between contributions and expenditures, with contributions receiving a lower level of

protection because they did not directly infringe on speech. Justice White argued for no

distinction between the two types of regulations, but rather that they are both content-neutral

regulations."

Justices Disagreed Over Interpretations of Buckley 's Corruption Standard

After Buckley, the justices disagreed not only about the extent of the distinction between

expenditures and contributions, but also about the requirements of the proof of corruption as a

compelling government interest. The Court held that for certain organizations, the corr-uption

rationale was not strong enough to support the application of FECA provisions. For example, the

Court found that disclosure requirements could not constitutionally be applied to minority parties

because minority parties did not present a significant risk of corruption. The Court also held that

some corporations did not warrant the application FECA corporate spending limits. However,


41s Id. at 310.

419 Restricting the analysis to content-neutral regulations lowers the standard of review to intermediate scrutiny,
which requires a lesser interest to be proved by the government.










placed on "public communications" if the payment is "nominal."598 The Commission took into

account public comments, which pointed out that "the Internet has effectively put the power of

advertising communication into the hands of every citizen."599 Recognizing that many

individuals wishing to use the Internet do not maintain their own sites, the Commission excepted

nominal fees.600 However, the Commission failed to adequately define "nominal"; it simply

cautioned that it would be the aggregate expense of the advertisement that would be analyzed in

determining whether the cost was nominal.601

Although the Commission created these exemptions to protect individuals' participation in

the political process, it clearly included the purchase of email lists as contributions and

expenditures.602 Individuals' payments for such lists are not exempt if the purchase is at the

direction of a political committee or if the list is transferred to a political committee. 603

However, if the email list is purchased for individual use, the purchase does not produce in an

expenditure or contribution.604

The FEC Applies Disclaimer Requirement Based on Speaker

The new regulations extend BCRA disclaimer requirements to certain Internet

communications depending on the speaker and the content.605 The regulations distinguish

between political committees and all other persons. Political committees must include


598 11 C.F.R. ##10094(e)(1), 100.155(e)(1).

599 Iller/78 COmuiltiCoNns, 71 Fed. Reg. 18607.
6001 Id.

601 Id.

602 11 C.F.R. ##100.94(e)(2)-(3), 100.155(e)(2)-(3).

603 Id.

604 71 Fed. Reg. 18607.

605 11 C.F.R. #110.11.










permit regulations of political speech as "restrictions on the liberty to speak, but not of the

freedom of speech."263

This argument was proposed to the Supreme Court in 1976 as a compelling government

interest for enacting the Federal Election Campaign Act.264 The Federal Election Commission

argued that Congress had attempted to "increase opportunities for meaningful participation by

ordinary citizens, as voters, supporters and candidates.'"26 However, the Court held that limiting

campaign expenditures in an effort to equalize the political discourse during elections was

unacceptable.266 "[T]he concept that government may restrict the speech of some elements of our

society in order to enhance the relative voice of others is wholly foreign to the First

Amendment."267 The Court further dismissed the political equality argument when it relegated it

to the sphere of ancillary, opting to focus instead on the prevention of corruption argument.268

Not all of the justices found the political equality rationale so easy to repudiate. Justice Byron

White dissented from the Court's ban on expenditure caps, emphasizing the need to "dispel the

impression that federal elections are purely and simply a function of money."269

In addition to the internal strife, scholars criticized the Court' s opinion for failing to

recognize the value of political equality. For example, John Rawls wrote:




263 J.M. Balkin, Populism and Progressivism as Constitutional Categories, 104 YALE L.J. 1935, 1965 (May, 1995)
(reviewing Cass Sunstein's Democracy and the Problem of Free Speech).

264 Brief for the Attorney General and the FEC at 23, Buckley v. Valeo, 424 U. S. 1 (1976) (per curiam) (Nos. 75-
436, 75-437), 1975 WL 171459 (hereinafter Buckley brief).
265 Id.

266 424 U.S. at 26.

267 Id. at 49.

268 Id.

269 424 U.S. at 265 (White, J., concurring in part and dissenting in part).










is the only ground upon which their wishes safely can be carried out. That at any rate is the
theory of our Constitution.190

This marketplace analogy languished in the background of U. S. jurisprudence until Justice

William J. Brennan revived it inl965. 191 In Lamnont v. Postmaster General, the Court determined

that a statute mandating the detention of unsealed mail determined to be "communist political

propaganda" to be inconsistent with the First Amendment. Brennan, in a concurring opinion,

emphasized that the implementation of this law would be to restrict people's ability to receive

information, a fundamental right.192 Brennan argued that without protecting the recipient's rights

to receive and consider ideas, the First Amendment protections for dissemination would be

meaningless. "It would be a barren marketplace of ideas that had only sellers and no buyers."193

Only two years after Brennan' s initial revival of the marketplace metaphor, it found

general acceptance in the Court.194 Since then, the theory has been a fixture in free speech cases

for more than forty years.195

However, critics of the marketplace theory have contended that it does not adequately

protect free speech or promote the desired search for truth. In 1967, the same year that the

marketplace metaphor gained maj ority approval in the Court, Jerome A. Barron criticized the

theory in a HarvardLaw/ Review article.196 Barron criticized the Court for its blanket protection

of "free speech" through a prevention of government intervention. Barron averred that by

190 Id. at 630.

191 Lamont v. Postmaster General of the United States, 381 U.S. 301 (1965)(Brennan, J., concurring).
192 Id. at 308.

193 Id.

194 Keyishian y. Board of Regents of the University of the State of New York, 3 85 U.S. 589 (1967).

195 See, e.g., Tinker v. Des Moine Ind. Comm. Sch. Dist., 393 U.S. 503, 512 (1969); Healy v. James, 408 U.S. 169
(1972).

196 JeTOme A. Barron, Access to the Press A New First Amendment Right, 80 Hary. L. Rev. 1641 (1967).










PAC's mission is to provide a formm for publicly available information on selected public

officials, most notably Speaker of the House Newt Gingrich. Newt Watch existed primarily as a

"virtual PAC on the World Wide Web." The online forum offered information on Gingrich's

voting record, Ethics Committee and FEC complaints, campaign contribution data, personal

finances, honors, and bill sponsorship. Additionally, the PAC used the web site to solicit

contributions.

The FEC concluded that a web site operated by a political committee should be deemed

general public political advertising. The significance of this was to determine whether disclaimer

requirements and reporting regulations would apply to communications transmitted via the

Internet. The FEC further found that Newt Watch PAC met the disclaimer requirements by

placing at the end of the home page and immediately following requests for contributor

information a disclaimer statement of the source of the site. This statement was consistent in size

and type with the rest of the text on the web site. The FEC found these to be "clear and

conspicuous."sos5

The FEC further discussed the application of the disclaimer requirements to the Intenret in

a 1998 advisory opinion issued in response to an independent voter in Connecticut. Leo Smith

requested that the FEC advise him as to the reporting and disclaimer responsibilities attached to a

web site he created for the purpose of defeating a Republican candidate for the U.S. House of

RepresentativeS.506 Additionally, the web site called for the election of the Republican

candidate's opponent. The FEC found that because the web site expressly advocated the defeat

of one candidate and the election of another, it was "something of value." The cost of


sos FEC Advisory Op. 1995-09, 2 (Apr. 21, 1995). This advisory opinion also determined that online solicitation of
contributions by a PAC is permissible under the FECA.

506 FEC Adv. Op. 1998-22, 1 (Nov. 20, 1998).









of FECA. This type of fundraising and spending had allowed contributors to bypass FECA' s

contribution and coordinated expenditure limits for years."'

In addition to addressing concerns over soft money, provisions in BCRA included

increased contribution limits and limits on communications leading up to an election. To mitigate

soft money donations and expenditures, Congress set limits on the activities of office holders,

candidates, and national parties in relation to fundraising. Congress also amended the definition

of "public communications," which determines, in large part, the scope of the campaign finance

legal requirements mandated by FECA and BCRA for campaign communications.371

Congress restricted the funding for "federal election activity", requiring that these activities

be paid for with federal money only money that is subj ect to the restrictions of FECA.372

"Federal election activity" was defined as

(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.37


37 BCRA, supra note 2. See also Corrado, supra note at 36.
ri1 BCRA was challenged and upheld in McConnell v. Federal Elections Conunittee, 540 U.S. 93 (2003).

3 2 U.S.C. # 441i.

n7 2 U.S.C. # 431(20).










campaign spending by candidates, parties and individuals." The most recent overhaul was the

Bipartisan Campaign Reform Act of 2002, which was aimed at closing loopholes that left

elections vulnerable to unintended influence." This section will provide a brief overview of each

of these maj or developments in the law.

Federal Election Campaign Act

In 1971, Congress passed the Federal Election Campaign Act of 1971 (FECA) in order "to

promote fair practices in the conduct of election campaigns for Federal political offices."59

FECA placed limits on contributions and expenditures-indirect gifts of value--by corporations

and candidates in connection with federal election.60 However, FECA did not establish an

independent overseeing agency, and the 1972 elections led to more than 7,000 reports to the

Department of Justice of campaign finance abuse, contributing to significant amendments in the

FECA in 1974.

The 1974 amendments established the Federal Election Commission (FEC) as the sole

agency responsible for overseeing the administrative functions of the campaign finance system.61

Congress also enacted limits on both contributions and expenditures that applied to federal

candidates and political committees. The constitutionality of the 1974 amendments was

challenged by Senators James L. Buckley and Eugene McCarthy.





57 424 U.S. 1 (1976).

58Pub. L. No. 107-155 (2002) (codified at 2 U.S.C. # 431, et seq.).
59 See FECA.

61) Id. The definitions of contributions and expenditures will be further explicated in Chapter 3.

61 Federal Election Campaign Act Amendments of 1974, 2 U.S.C. ## 431 et seq. Individuals' contributions were
limited to $1,000 per candidate and $25,000 in total contributions; expenditures were limited to $1,000 per candidate
per year. Id.









the blogger exemption to those online corporations that meet the test announced in

M~assachusetts Citizens for Life.

Also, the FEC should reconsider the use of "paid" for the purposes of defining a public

communication. Content on the Internet can be sponsored in a number of ways that are not as

likely in the traditional media because there are so many more people involved in the process of

information distribution. Bloggers can be influenced by the purchase of unrelated advertisements

or direct sponsorship. The content that is posted in response to these types of payments might be

the equivalent of a paid advertisement, but does not carry the same disclaimer requirements. This

would be difficult to monitor and enforce, but is a potential for abuse and corruption that the

FEC should continue to examine.

However, more research is required to determine if the campaign finance laws are effective

at preventing corruption, particularly on the Internet. The Internet mitigates much of the concern

of corruption in the political process by the inexpensive nature and the capacity for user-

generated content. The question of effectiveness cannot be answered with legal research and is

outside the scope of this study. If the regulations adopted by the FEC do not in fact prevent

corruption, or the appearance of corruption, then they do not directly advance that goal. More or

less regulation, particularly with respect to disclaimer statements, may be needed to effectively

combat corruption in the electoral process.

More research is also needed to determine how these regulations are impacting online

speech. At this point, no advisory opinion has been issued by the FEC in response to a direct

challenge to these regulations. Advisory opinions have been requested and filed with the FEC on

other Internet activities such as fundraising, matching funds, and solicitation of funds by online

political committees. However, no affirmative action had been taken on any of these requests at










Amendment.127 Gage argued that the decision in Randall~RRR~~~~RRR~~~RRR v. Sorrell"2 indicated a paradigm shift

in campaign finance jurisprudence.129 Gage concluded that the paradigm shift, illustrated in

Justice Breyer's concurrence, could create problems because Breyer suggested that individual

speech could be curtailed to further the institutional goals of the electoral system; that is, the

individual free speech rights of campaign contributions are "subordinate to the larger First

Amendment interest of protecting the integrity of the political process in order to achieve more

perfect self-government." 130 Gage argued that this two-sided First Amendment results in courts

deciding--with little or no guidance--"the point at which the restriction on the individual fails to

serve society's interests, and also to determine when an individual deserves protection despite the

fact that such protection may be at odds with democratic self-governance.".131

Some scholars, rather than suggest a new paradigm for campaign finance reform, have

focused on revitalizing the use of strict scrutiny in determining the constitutionality of campaign

Einance laws.132 In 2000, Michael Marcucci justified the use of strict scrutinyl33 through

analogies to the Supreme Court' s election law jurisprudence.134 Because any campaign finance

law structure will impact the candidates that run and thereby voter choices, these laws may be


1 See Gage, supra note 111.

'28 126 S. Ct. 2479 (2006).

129 Gage, supra note 111, at 358-61.

130 Id. at 361-364.

'31 Id. at 364.

' See Lillian R. BeVier, Money and Politics: 4 Perspective on the First 4mendinent and Campaign Finance
Reform, 73 CAL. L. REV. 1045 (1985); Michael Marcucci, Speech or Not: applying Election Law Strict Scrutiny to
Campaign Finance 8..>;,I i,re.- 42 B.C.L. REV. 173 (2000).
133 "The standard applied to suspect classifications (such as race) in equal-protection analysis and to fundamental
rights (such as voting rights) in due-process analysis. Under strict scrutiny, the state must establish that it has a
compelling interest that justifies and necessitates the law in question." BLACK S LAW DICTIONARY.

134 Marcucci, supra note 131 at 176.










purchase a "single one-quarter page advertisement 'relative to a clearly identified candidate' in a

maj or metropolitan newspaper."347

The Court found that limits on expenditures did not advance the government's interest in

preventing corr-uption in the electoral system. Nor did the Court find persuasive the

government' s argument that these limits promoted political equality of citizens. The Court

rej ected this as a compelling interest stating that pursuing such equality at the expense of

silencing "some elements of our society" was "wholly foreign to the First Amendment."348 The

Court held that while limiting independent expenditures served no substantial governmental

interest, it did "heavily burden[ ] core First Amendment expression.349 The Court held that while

limiting independent expenditures served no substantial governmental interest, it did "heavily

burden[ ] core First Amendment expression.350

The Court did find that expenditures that are controlled by, or coordinated with, a

candidate were "disguised contributions."351 The Court found that these types of expenditures

posed the same threats of corruption as direct contributions.352 Thus, while truly independent

expenditures are fully protected by the First Amendment, any coordination with a candidate or a

candidate's staff converts that expenditure into a contribution that can constitutionally be limited.







3 Id. at 40.

3 Id.

349 424 U.S. at 48.

350 Id.

351 Id. at 46.

3 Id.










inquiry for a compelling government interest to corruption.140 Vincent Blasi contended that

campaign finance laws that limit spending should not be presumed unconstitutional when they

are justified with the obj ective of protecting candidates' time.141 Time protection is aimed at

encouraging candidates who are already elected officialS142 to spend more of their time

governing, and less time fundraising.143 Blalsi contended that in so far as the limits on

contributions and expenditures promote time-protection, they are content-neutral.144 He

advanced this rationale as a protection of the electoral system by redirecting how candidates

spend their time. He posited that such changes may increase voter confidence and encourage

citizen engagement in the public debate--thereby enhancing public discourse through a

limitation on certain speech.145

Eric Freedman contended that a political system that relies on the use of money risks

exaggerating the voice of wealthy citizens and candidates while excluding those without

sufficient funds.146 Freedman argues that it should be the equality of political influence that is the

foundation of campaign finance law. He stated that because political systems are most generally

justified by a social contract theory, private financing should be examined from the perspective

of John Rawls' A 7Jheory ofJustice.147 Rawls' theory proposed that all laws should be created


140 Vincent Blasi, Free Speech and the Widening Gyre ofFund-Raising: Why Campaign Spending Limits May Not
Violate the FirstAmendmentAfter All, 94 COLUM. L. REV. 1281 (1994).
141 Id. at 1324.

142 These could be incumbents or officials seeking a different office.

143 Blasi, supra note 139 at 1282-83.
144 Id. at 1292.

145 Id. at 1324.

146 Eric Freedman, Campaign Finance and the First Amendment: A Rawlsian Analysis, 85 IOWA L. REV. 1065
(2000).
147 Id. at 1070.









deserving of strict scrutiny under a First Amendment analysis. However, since issuing that

opinion, individual justices have questioned the validity of the contribution/expenditure

dichotomy and the deserving analysis for each category of limitation. Many members of the

current Supreme Court have written concurrences and dissents that call into question the lasting

validity of this framework.

Justice Thomas has been a consistent advocate of overturning the Buckley decision,

specifically in reference to the distinction between contributions and expenditures. More

generally, the level of review for these types of limitations has also been an issue for the justices

-some have advocated for an intermediate scrutiny for all reform methods, while others, namely

Justice Thomas, have articulated the need to hold all reform efforts to the highest level of

scrutiny.

More recently, the debate has centered on the depth of analysis that the Court should

enter into when addressing campaign finance laws. During the early Buckley progeny, the Court

focused on balancing individual First Amendment rights with the compelling interests advanced

by the government. However, current case law indicates a shift in this jurisprudential outlook.

Rather, the Court, as evidenced in Randall, begins the analysis of campaign finance laws from

the perspective that these laws may not necessarily be at odds with the First Amendment.

Instead, the Court suggested that these reforms may be in furtherance of First Amendment ideals.

Wisconsin Right to Life seems to call into question more than any other case the

campaign finance structure created under BCRA. Although the Court upheld this law in 2003 in

McConnell, the decision in WRTL has deconstructed most of the framework created by that

legislation.










connection between the lease and the contributions, Congress amended the Federal Corrupt

Practices Act of 1925 (FCPA), previously known as the Publicity Act.309 This law required

political committees to file quarterly finance reports every year, even in non-election years.

These reports had to include every contribution of $100 or more. The FCPA also raised the

Senate campaign spending limits to $25,000.310

Although the FCPA was an attempt to curb political corruption, the act had no real

enforcement powers.311 The Clerk of the House and the Secretary of the Senate were responsible

for collecting these reports, but did not have any powers to force submission. Nor were there any

requirements for the reports to be open to the public. Because there were no uniform standards

for format, content, or accounting method, the reports that were submitted were so disparate they

were of little use.312 Additionally, the FCPA provided no oversight power to ensure accuracy or

compliance.313 The only prosecution under the act was in 1928 against a religious organization

that failed to report accurate amounts of contributions during a presidential campaign.314

During Franklin D. Roosevelt's third term as president, there were accusations that

Roosevelt used federal workers to interfere with primary elections in an effort to unseat some

anti-New Deal Democrats.315 The Hatch Act of 1939, which banned partisan political activity on

the part of federal employees, was passed to prevent the coercion of federal employees to



309 Ch. 368, #301, 43 Stat. 1053, 1070 (1925) (repealed in 1971).

310 Corrado, styra note XX at 15.

311 Mutch, styra note XX at 25; see also Corrado supra note XX at 15.
312Id.

3 Id. at 25.

314 Id. at 28.

3 Mutch, styra note 6 at 33.


































O 2008 Courtney Anne Barclay










infringed on individuals' right of association based on the disclosure and reporting

requirements.335

The Court issued a per curiam opinion which shaped the future landscape of campaign

Einance laws. In its analysis of the maj or provisions of FECA, the Court recognized the

significance of the activities that the law was regulating:

The Act's 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 our Constitution. The First Amendment affords the broadest protection to
such political expression in order to assure the unfettered interchange of ideas for the
bringing about of political and social changes desired by the people.336

The Court acknowledged that there was indeed a link between money and speech. Limiting how

much an individual could spend, limited how much an individual could speak. However, the

Court found that some aspects of FECA, while triggering a balancing test of First Amendment

interests and government purposes, survived the constitutional challenges.

In its holding, the Court laid out several basic tenets. First, the Court drew a distinction

between contributions and expenditures. The Court, purporting to apply a strict scrutiny review

of the FECA provisions, held that the contribution limits survived the First Amendment

challenges.337 The Buckley Court held that limits on candidates' expenditures and "independent"

expenditures by individuals and groups were unconstitutional and infringed on First Amendment

rights.338



3 424 U.S. at 11. Appellants also opposed the FEC's composition and powers and argued that the presidential
public funding system violated the First and Fourth Amendments. However, those issues are not relevant to the
discussion in this study.

336 Id. at 14.

3 Id. at 58-59, 68.

3 Id. 43.









CHAPTER 4
HISTORY OF CAMPAIGN FINANCE JURISPRUDENCE

Modern campaign finance reform began with the Federal Election Campaign Act of

1974.384 The Supreme Court, in Buckley v. Valeo, reviewed the constitutionality of that law in

1976.385 The Court struck limits on independent expenditures, but upheld limits on

contributions and disclosure requirements. However, the Buckley decision was issued as a per

curiam opinion, with five separate opinions concurring and dissenting in part. The disagreements

among the justices continued in the more than 30 years that Buckley has been the controlling

precedent in campaign finance jurisprudence.

This chapter will discuss the evolution of campaign finance jurisprudence. Members of the

Court specifically have questioned the distinction the Buckley decision created. As the Court

continued to review campaign finance laws, it explicitly created not only a practical distinction

between contributions and expenditures, but a constitutional distinction. This constitutional

distinction meant that limits on contributions only had to pass an intermediate scrutiny review,

while limits on expenditures were subj ect to a strict scrutiny review. During this review process,

members also disagreed over the acceptance of prevention of corruption as a justification for the

application of campaign finance laws. An increasing number of justices have also questioned the

validity of the Buckley decision, calling for the overturn of that precedent.

The Court struggles to consistently apply Buckley

In 1981, five years after the Buckley per curiam decision, Justice Blackmun explicated his

brief dissent from the Buckley opinion.386 The plurality in California medical Association v. FEC



384 See supra Ch. 3. The first reform act was passed in 1971, but there were significant amendments in 1974. Id.

385 424 U.S. 1 (1976). For a full discussion of this case, see Ch. 3.

386 CalifOrnia Medical Association v. FEC, 453 U.S. 182 (1981).










Applying Buckley to BCRA

The Court' s opinions following the passage of BCRA herald changes in the paradigm of

campaign finance reform jurisprudence. The first change observable in the Court' s opinions is an

increased deference to congressional judgment. The Court' s opinions since BCRA demonstrate a

willingness to accept limitations with little to no evidence of the necessity of the resulting

restriction on speech. A second maj or trend in campaign finance jurisprudence is the change in

the focus of the First Amendment analysis in which the Court engages. The Court has begun to

shift this focus from the individual to the system of democracy both of which the Court argues

are protected by the First Amendment. These changes may be a signal of a new era of campaign

finance reform.

The Court Shows Deference

The first case decided by the Supreme Court after the passage of BCRA was Beaumont. In

this case the Court demonstrated once again its faltering adherence to the principles laid out in

Buckley v. Valeo. Christine Beaumont served as officer of the non-profit corporation North

Carolina Right to Life, Inc. (NCRL).463 NCRL brought suit against the FEC to challenge the

prohibition against spending treasury funds to make contributions to candidates. NCRL based the

challenges on the MCFL case discussed above, which some nonprofit organizations do not

present the same concerns of corruption as traditional corporations.

In upholding the contribution limits, the Court further distinguished the constitutional

standard of review between contributions and expenditures. Unlike limits on expenditures or

other types of political speech, limits on political contributions are "subj ect to relatively





463 FEC v. Beaumont, 539 U.S. 146 (2003).










all political parties."480 And, in reference to the restriction of corporate speech, Scalia invoked

the marketplace of ideas to combat the sweeping restrictions.

The premise of the First Amendment is that the American people are neither sheep nor
fools, and hence fully capable of considering both the substance of the speech presented to
them and its proximate and ultimate source. If that premise is wrong, our democracy has a
much greater problem to overcome than merely the influence of amassed wealth. Given the
premises of democracy, there is no such thing as too much speech.481

Despite the strong dissents, the Beaumont and McConnell cases demonstrate the Court' s

increasing willingness to accept a broadening concept of "corruption" based on Congressional

claims. The deference shown in both these cases indicate an opportunity for more expansive

campaign finance reforms to survive constitutional challenges. Particularly the language in the

McConnell maj ority opinion that permits Congress to "anticipate and respond to concerns about

circumvention" seems to be a harbinger of future acquiescence to Congressional decision

making.

The Court Signals a New Direction for Campaign Finance Law

Another key directional shift evident in the McConnell decision was the recognition of a

broader sense of corruption. Instead of relying on the traditional notion of big money buying a

candidate, the Court examined the threat of systemic electoral corruption.482 This systemic value

of the First Amendment seemed to burst into prominence in the first campaign finance case

decided by the new Roberts Court, but was quickly extinguished when the Chief Justice wrote

his first campaign finance maj ority opinion. The fate of this competing value remains uncertain.

In Randall v. Sorrell, the Court was presented with a new challenge. Vermont had imposed

not only contribution limits but maximum expenditure limits for candidates. With this case, the

480 Id. at 725.

481 MCCOnnell, 124 S. Ct. at 726 (Scalia, J., dissenting).

482 MCCOnnell, 524 U.S. at 116.










for the Busy Reader" that listed the principles and corollaries inherent in the campaign finance

debates." This guide reviewed the values at issue in campaign finance debates: political

autonomy, preventing corruption, and enhancing political equality.76 Neuborne continued his

guide with a critical analysis of the 1976 Supreme Court decision that determined the

constitutionality of the first comprehensive campaign finance reform law and its progeny."

Other scholars exploring the area of campaign finance also have focused on the pivotal

1976 Supreme Court decision in Buckley v. Valeo, which determined the constitutionality of the

Federal Election Campaign Act of 1971.7 Robert Bauer offered an overview of the status of

campaign finance reform, focusing on the weaknesses of the Buckley v. Valeo opinion.79 Bauer

argued that Buckley 's rationale that focused on corr-uption as the overriding government interest

has become the "principle obstruction" for FEC actions because courts have strengthened the

requirement of showing corruption so that the FEC seemingly must prove actual corruption--an

almost impossible task--before being able to enforce the laws.so Bauer further noted that the

courts have become unwilling to accept the FEC's judgment as to the existence or appearance of

corruption,sl thereby preventing effective enforcement.



75 Neuborne, supra note 73.

76 Id, at 1-8. Neuborne also identified ancillary values: efficiency, flexibility, spontaneity, increasing voter
knowledge, enhancing quality of representation, restoring confidence in democracy, and improving the quality of
democratic disclosure. Id. at 8-11.

n7 Id. at 12-26 (discussing Buckley v. Valeo, 424 U.S. 1 (1976) and subsequent cases).

78Robert F. Bauer, The Demise ofReform: Buckley v. Valeo, the Courts, and the "Corruption Rationale, 10 STAN.
L. & POL'Y REV. 11 (1998); Bradley A. Smith, Campaign Finacne Reform: Searching for Corruption in all the
Wrong Places, 2003 CATO SUP. CT. REV. 187 (2003).

79 Robert F. Bauer, The Demise ofReform: Buckley v. Valeo, the Courts, and the "Corruption Rationale, 10 STAN.
L. & POL'Y REV. 11 (1998).

so Id. at 13.

s' Id. at 14.










often aligned with the self-government theory, and recently with active liberty, because it

purports to equalize and enhance public debate.622

New technology, specifically the Internet, has served to significantly enhance participation

in the public debate. The Internet offers an alternative outlet for communications that more

closely creates the exchange of ideas envisioned in the marketplace of ideas theory. The

Supreme Court has in fact heralded the Internet as the "new marketplace of ideas."623 Many of

the criticisms of the marketplace model are mitigated online. Particularly, the theory's

assumption of access to the marketplace is realized. The marketplace of ideas theory, assumed

that everyone had access to the marketplace. Critics of the marketplace theory cited the expense

and gatekeepers of mass media outlets as a limitation of the marketplace theory only a select

few could access the channels of communication. However, there are no gatekeepers on the

Internet, and costs are nominal.

The justifications for campaign finance reform corruption, and to some extent political

inequality also are mitigated when the political debate occurs online. In general, online

communications are inexpensive.624 The threat of corruption via online communications is

considerably less than in the traditional mass media or the physical world. Similarly, political

inequality is lessened by the wide access to the Internet. Individuals can create blogs, videos, and

web sites that attract users from all over the world. The Center for Democracy and Technology

(CDT) pointed to one Internet user who coordinated more than 100 protests against the Republic



622 CASS R. SUNSTEIN, DEMOCRACY AND THE PROBLEM OF FREE SPEECH (1995); Owen M. Fiss, State Activism and
State Censorship, 100 YALE L.J. 2087 (1991); Breyer, supra note 6.

623 Reno v. ACLU, 521 U.S. 844, 885 (1997); see also Stephen C. Jaques, Comment: Reno v. ACLU: Insulating the
Internet, the First Amendment, and the Marketplace of Ideas, 46 Am. U.L. Rev 1945, 1947 (Aug. 1997).

624 Center for Democracy and Technology, et al., Joint Statement Responding to Notice of FEC Inquiry (Jan. 6,
2000).










The new rules also comply with the letter of BCRA; Congress did not include the Internet

in its list of specific media incorporated in the definition of "public communication." But,

Congress did leave open the possibility of other types of communication by including "any other

general public political advertising" as part of the definition.579 By consulting several

dictionaries, the FEC concluded that Internet communications could only be included under this

catch-all if the communications appeared on a "forum controlled by another person" for a fee.5so

The FEC Applies Media Exemption to the Internet

The new rules also extend the media exemption in BCRA to Internet communications,

specifying that any cost incurred for the purpose of news stories, commentaries, or editorials by

media companies are not considered contributions or expenditures "unless the [media] facility is

owned or controlled by any political party, political committee, or candidate."' The FEC

further specified that this exemption extends just as much to media entities with only online

presence as it does to traditional media entities that incorporate online components.'" This

decision also brought to the forefront a question that is currently affecting many areas of legal

policies: what about bloggers? The FEC considered this and determined that the press exemption

would extend to bloggers only in the same way that it extends to traditional media. Traditionally,

this means that the FEC will undertake a two-part analysis.58

First, the Commission asks whether the entity engaging in the activity is a press entity as

described by the Act and Commission regulations. Second, in determining the scope of the


579 Id.

580 Id.

5si Id. at 18613 (# 100.73, 100.132).
582 Id. at 18609.

583 Id. at 18607.









Another FEC advisory opinion in 1999 addressed several issues relevant to Internet

campaign activity.' The George W. Bush for President Exploratory Committee, Inc. was

seeking the opinion of the FEC on how the campaign should or must, under the FECA, evaluate

potential uses of the Internet, such as "a web site supportive of Mr. Bush .. established by

either Committee volunteers or by individuals unconnected with the campaign", links from third-

party web sites to the campaign web site, and mentions on web sites owned by media outlets, e-

mail solicitations, republication of campaign materials, and Internet polling. The Bush

Committee, in requesting this opinion, stated that "because the Committee is uncertain as to the

Commission's position on these issues, it has been forced to discourage Internet activity." In

responding to this request the FEC advised that only certain types of online activities would

constitute contributions, trigger disclosure requirements, or necessitate disclaimer statements.51

Specifically, the FEC found that third-parties providing links to a campaign's web site was

"a service and something of value to the campaign and could, under certain circumstances, meet

the definition of a 'contribution' under the [FECA] and Commission regulations."520 If third-

party web sites provided links to the campaign web sites, it must be provided at ordinary market

cost in order to avoid being considered a contribution to the campaign. Therefore, if the web site

owner ordinarily offered links to other web sites (including non-political sites) for free, then a

campaign web site link would not be a contribution. However, if the web site owner would

ordinarily charge for a link, then any free or reduced rate would be considered a contribution in-

kind to the campaign.52 Likewise, any payment the campaign committee was to make to secure


51s Advisory Op. No. 1999-17 (Nov. 10, 1999), available at http://www.fec.gov.

519 FEC AO 1999-17, 7-8.

520 FEC AO 1999-17, 7.

521 FEC AO 1999-17, 8.









Additionally, the Federal Election Commission's approach to regulating online campaign

communications must be explicated through its advisory opinions and rulemakings. This analysis

is the foundation for determining whether the current Federal Election Commission regulations

adequately protect First Amendment values. My study focused on the First Amendment impacts

of campaign finance laws and whether the current constitutional framework should be used for

campaign speech on the Internet in the same that it is used for the traditional mass media. My

dissertation did not focus on the effectiveness of the laws in preventing corruption except as it

relates to the discussion of the balance between that interest and the First Amendment.










ideas, a term coined in U.S. jurisprudence by Justice William Brennan. Although most closely

tied to John Stuart Mill's famous essay On Liberty, Iso the concept dates to the 17th century.

John Milton in Areopatgitica set out the attainment of truth as justification for a free press

as he argued against a renewal of a licensing system for the press.ls Milton emphasized that

truth would be discovered through a free exchange of ideas. Milton argued that restricting the

free flow and debate of ideas would limit the ability for truth to emerge; values and knowledge

would stagnate.182

And though all the winds of doctrine were let loose to play upon the earth, so Truth be in
the field, we do injuriously, by licensing and prohibiting, to misdoubt her strength. Let her
and Falsehood grapple; Who ever knew Truth put to the worse in a free and open
encounter?183

More than 200 years after Milton delivered his speech to Parliament, John Stuart Mill, an

English philosopher, expanded Milton' s theory of truth attainment. In On Liberty, Mill

advocated the open exchange of ideas as a necessity for a democratic society.184 He believed

freedom to participate in this exchange was part of a citizen' s right. "' A truly free society would

allow for all ideas to be expressed, even those at the height of dissent.

When there are persons to be found, who form an exception to the apparent unanimity of
the world on any subj ect, even if the world is in the right, it is always probable that
dissentients have something worth hearing to say for themselves, and that truth would lose
something by their silence.



180 JOHN STUART MILL, ON LIBERTY (D. Spitz ed., 1975) (1859).

1 John Milton, Areopagitica, A Speech for the Liberty of Unlicensed F t, is,, to the Parliament of England (Nov.
23, 1644).
182 JOhn Milton, Areopagitica, A Speech for the Liberty of Unlicensed F t, is,, to the Parliament of England (Nov.
23, 1644).
183 Id

184 Mill, supra note 4.
185 Id.






























































38 11 C.F.R. #110.11 (2008).


The definition of contributions and expenditures includes any money spent on "public

communications." Public communications are any communications that promote or oppose a

clearly identified candidate for federal office. Congress specifically included communications

via broadcast, cable, satellite, newspaper magazine, outdoor advertising, mass mailing, and

telephone banks, as well as "any other form of general public political advertising." Public

communications are required to carry disclaimer statements that specify the sponsorship of the

communication, as well as a statement as to the authorization of the communication by the

candidate. All disclaimer statements must be "clear and conspicuous."

The FEC has mandated specific requirements for print, radio, and television disclaimer

statements. These specific requirements complement the physical characteristics of the medium.

Print communications must carry disclaimer statements that are of "sufficient type size to be

clearly readable by the recipient," contained in a printed box set apart from the main content of

the communication, and printed in contrasting colors from the background of the

commumication.380

A radio broadcast communication paid for by a candidate or authorized committee must

include an audio clip of the candidate' s verbal endorsement of the advertisement. Likewise, a

similar advertisement broadcast on television must carry a visual message from the candidate

indicating his or her endorsement of the ad. An advertisement paid for by the candidate, or

authorized committee, via broadcast, cable or satellite, must carry a written statement at the end

that includes the endorsement and source of the advertisement. This statement must be "clearly

readable." The FEC defined clearly readable as: appearing in letters equal to or greater than 4

percent of the vertical picture height; being visible for a period of at least four seconds; and










drowning out the many."279 Specifieally, Breyer considered the restrictions placed on

congressmen for the efficacy and democratization of floor debates as one example.280

The M~cConnell decision has been heralded as the tr-ue turning point for the Court in

relation to the political equality rationale. Professor Hasen wrote that the maj ority opinion "takes

pains to show its fidelity to Buckley, tripping over itself to apply the corruption (as

anticircumvention) rationale to as many BCRA [Bipartisan Campaign Reform Act] provisions as

possible. However, a more natural reading of the more controversial aspects of the j oint maj ority

opinion is as a sub silentio acceptance of the participatory self-government rationale."281 In a

well-cited note, the Court reaffirms commitment to "preserving the integrity of the electoral

process, preventing corr-uption, and 'sustaining the active, alert responsibility of the individual

citizen in a democracy for the wise conduct of the government' [as] interests of the highest

importance."282 Hasen also observed that the McConnell Court was highly selective in its review

of the Buckley precedent. Specifically, the McConnell opinion did not include any mention to

Buckley 's "explicit rej section of the equality rationale as a justification for expenditure limits."283

Hasen commented, "It seems as probable as not that the Court's elisional history was intentional

and not inadvertent."284








279 Id. at 402 (Breyer, J., concurring).
280 Id.

281 Hasen, supra note 101 at 57-58.

282 MCCOnnell v. FEC, 540 U.S. 93, 206 n. 88 (2003).

283 Hasen, supra note 101 at 60.
284 Id. at 60.










to appear on a third party's website under the purview of the FEC, but explicitly left the maj ority

of Internet speech unregulated.52

Purpose

Given the increasing importance of the Internet in political communication, it is imperative

to determine whether the current legal structure intended to protect the integrity of the electoral

system also adequately protects free speech. The FEC adopted rules to regulate paid online,

mediated political activities under the campaign finance laws. Although these have not yet been

litigated, previous case law analyzing other campaign finance laws and regulations under First

Amendment challenges will provide a guide for evaluating the current regulations.

This dissertation will analyze the FEC rulemaking that defined the Internet as a medium

regulated under campaign finance laws and regulations under a First Amendment analysis. This

study will include a history of campaign finance laws, which has largely followed a self-

governance theory of the First Amendment. Analyzing the existing U. S. Supreme Court

jurisprudence that has resolved First Amendment free speech challenges to these laws will

provide insight into how the Internet may be factored into the current paradigm for campaign

finance--or whether the Internet may contribute to a shift in controlling paradigms. Using this

case analysis, this dissertation seeks to determine whether the current FEC regulations

adequately protect First Amendment values. Additionally, this dissertation will consider

proposals for change to these rules and to the underlying principles of campaign finance laws.

This study focuses on the First Amendment impacts of campaign finance laws and whether the

current constitutional framework should be used for campaign speech on the Internet. This





52Internet Conununications, 71 Fed. Reg. 18589 (Apr. 12, 2006) (codified at 11 CFR Parts 100, 110, 114).










$250,000 to presidential campaigns between 1896 and 1904.301 To respond to the public

disapproval of these practices and to prevent corporate executives from misusing the corporation

owners' money, Congress banned campaign donations and spending by corporations and

federally chartered banks.302 In 1910, Congress required a post-election report on all

contributions and expenditures that exceeded $100 and were related to campaigns for the House

of Representatives.303 One year later, the 1910 Publicity Act was amended to include in the

disclosure requirements contributions and expenditures for Senate campaigns. The 1911

amendments also required pre-election reporting for both primary and general elections.304

Additionally, the 1911 amendments instituted the first spending limits. House campaigns could

not exceed a total of $5,000, and Senate campaigns could not exceed $10,000.305

In the early 1920s, President Warren G. Harding' s administration became the target of an

investigation of bribery.306 The Teapot Dome investigation revealed links between an oil reserve

lease through the Department of the Interior and large contributions to the Republican party.307

These donations allowed the party to pay off nearly $1.5 million of debt it had incurred during

the 1920 elections.308 The contributions were not initially reported because the disclosure acts

did not require reporting in off-election years. Although there was no concrete evidence of a



301 Id.

302 Tillman Act, 34 Stat. 864 (1907). See also Mutch, supra note 6.

303 Publicity Act of June 25, 1910, ch. 392, 36 Stat. 822, 823 (1910).

304 Anthony Corrado, Money and Politics: A History of Federal Campaign Finance Law, in THE NEW CAMPAIGN
FINANCE SOURCEBOOK 7, 14 (Anthony Corrado et al. eds., 2005).

305 Id.

306 Mutch, supra note 6 at 24.
307 Id.

308 Id.









overturned by a U. S. District Court. The FEC, on direction from the district court, adopted a

subsequent rulemaking that included regulation of online communicationS.504

This chapter will trace the history of Internet regulation under the FECA. The first rulings

on the online application of campaign finance laws were FEC advisory opinions. Political

committees began requesting rulings from the FEC in the mid-1990s. The FEC first issued a

proposed rulemaking in 2001 in an effort to codify the application of the FECA to the Internet.

However, the FEC failed to adopt this rulemaking before Congress significantly amended the

FECA in 2002. The FEC then initiated the controversial rulemaking that was the focus of Shays

v. FEC in 2004. In 2006, the FEC adopted a rulemaking that included in the definitions for

"expenditures" and "contributions" online communications placed on a third-party's web site for

a fee. This chapter will discuss each stage of this evolution of regulating the Intemet.

Advisory Opinions Offer First Look at Internet Regulations

Through advisory opinions, the FEC began shaping the regulation of campaign speech

online in 1995. In these opinions, the FEC addressed several key issues of concern in regard to

the regulation of this medium. The Commission protected individuals and organizations rights to

make independent expenditures on the Internet, but maintained the regulations that would

normally be applied to the traditional mass media. Specifically, the FEC examined corporate

expenditures, independent expenditures by individuals and organizations, disclaimer

requirements, non-partisan activity, and the media exemption.

The FEC first addressed the use of the Internet in campaigns in 1995. This advisory

opinion offered a range of issues that would be further explicated in later opinions. Newt Watch


504 Intemet Communications, 71 Fed. Reg. 18589 (Apr. 12, 2006) (codified at 11 CFR Parts 100,
110, 114).










the FEC. Research Question 6 was answered by extracting the potential problems in the FEC

regulations as addressed by Questions 4 and 5.

Dissertation Outline

This dissertation asked whether the current laws regulating campaign speech on the

Internet comports to First Amendment protections for free speech. Chapter 2 of this dissertation

will discuss the interests served by the freedom of speech and the values of regulating campaign

financing. The values that will be the focus of this study are self-governance as proposed by

Alexander Meiklej ohn and the marketplace of ideas as conceived of by John Stuart Mill because

these are the theories most utilized by the Supreme Court in campaign finance cases. Finally, this

chapter will offer a brief discussion of how the Court has approached the balance between the

First Amendment interests in free speech and the government interest in moderating the political

process.

Chapter 3 will discuss the history of campaign finance laws that have culminated in new

FEC regulations for online activities. This will include an overview of FECA and the maj or

amendments, and administrative rules and process.

Chapter 4 will provide an analysis of the relevant U. S Supreme Court case law in the area

of campaign finance. This analysis will identify trends that may impact online campaign

communications in the future.

Chapter 5 will discuss the legal developments in regulating campaign communications on

the Internet. This will include a discussion of the 2004 district court opinion in Shays v. FEC and

the rules adopted by the FEC in 2006 to regulate certain online activities.

Chapter 6, the conclusion will summarize the findings in the preceding chapters. This

chapter will discuss the role of the Internet in elections. The chapter will suggest the proper

balance between regulation and free speech on the Internet in terms of campaign finance laws.










This dichotomy has persisted throughout campaign finance jurisprudence, although courts

and scholars are beginning to question the practicality of such distinction. The impact on First

Amendment law has been to create different standards of review. Limitations on contributions

were not as invasive to the freedom of expression as those on expenditures. Congress' desire to

prevent corr-uption, even the appearance of corruption, was "weighty" enough to justify what

minimal infringement the limits imposed on the First Amendment. Limitations on expenditures,

however, "impose direct and substantial restraints on the quantity of political speech."289

Because of this direct, substantial impact, preventing corr-uption was not sufficient to support

limits on expenditures under the "exacting" First Amendment scrutiny.290

Thus far, expenditure limits have continued to fall under the protection of the First

Amendment. However, if there is a paradigm shift, as suggested by scholars, it is unclear if the

equality rationale emphatically rejected in Buckley could find support and overcome the First

Amendment challenges that have defeated the anti-corruption rationale. In fact, Justice Breyer,

applying his active liberty theory, concluded that courts should approach campaign finance

challenges from the perspective that the First Amendment "lie[s] on both sides of the

constitutional equation."29 Rather than evaluating campaign finance laws under a strict scrutiny

approach, Breyer suggested that the courts should balance, with no presumption, the "speech-

restricting" and "speech-enhancing" characteristics of reform measures.29






289 Id.at 39.
291) Id.at 39.

291 Breyer, supra note 53 at 253.

292 Id.










broadcasting was not as effective as it once was. Kang observed that campaigns began to tumn to

narrowcasting-"movement toward individualized, face-to-face campaigning."159 Campaigns

began using web-based databanks to target specific messages to specific audiences, and they

increased face-to-face time with voters--often working in cooperation with organizations not

legally affiliated with the campaign.160 Kang contended that many of these activities escaped the

construction of current campaign finance legislation.161 Although he did not dwell on Internet

activities, the concerns Kang raised in relation to these narrowcasting activities translate to

online campaign activities. Kang concluded that narrowcasting is a "strategic modernization of

old-fashioned politics that not only is difficult to regulate legally, but also makes the case for

reform less compelling."162

In 2006, shortly before the FEC adopted regulations governing Internet campaign

communications, Lindsey Powell proposed strategies for applying the federal campaign finance

laws online.163 Powell outlined which provisions of the laws and existing regulations should be

applied to the Intemet and which exemptions also should apply.164 She created a cost-analysis

str-ucture to determine the value of Intemet communications, disputing the idea that most online

activities would fall outside of the scope of FECA due to the low-cost nature.165





159 Id. at 1075. Kang explained this shift as a result of cable fragmenting the television audience. Id. at 1074.
1601)d. at 1075-84, 1087.

161 Id. at 1084.

162 Id. at 1095.

163 Lindey Powell, G.. rr,; around Circumvention: 4 Propoosal for Taking FEC4 Online, 58 STAN. L. REV. 1499
(2006).
164 Id. at 1513-1524.

165 Id. at 1513-1515.










In addressing the ban on soft money, the Court treated this provision of BCRA as a

contribution limit.469 The Court found that the soft money provisions met the "lesser demand"

for contribution limits because they were closely drawn to meet the sufficient interest of

preventing corr-uption. The maj ority relied on "common sense and the ample record" to support

Congress' claim that soft money contributed to corruption or the appearance of corruption.470

The Court noted that this lesser standard "shows proper deference to Congress' ability to weigh

competing constitutional interests in an area in which it enj oys particular expertise" and

"provides Congress with sufficient room to anticipate and respond to concerns about

circumvention of regulations designed to protect the integrity of the political process."

Four of the justices dissented from this portion of the opinion, including Chief Justice

Rehnquist.471 The Chief Justice found that the majority was too willing to accept anti-

circumvention as a legitimate government interest. Rehnquist argued that the ban on soft money,

was not closely drawn to prevent corruption and that showing such broad deference equated to a

blow to the First Amendment. "Today's decision, by not requiring tailored restrictions, has

significantly reduced the protection for political speech having little or nothing to do with

corruption or the appearance of corruption."472

The Court next turned to the challenges raised against Title II of BCRA, under which

"electioneering communications" were subj ect to specific disclosure requirements.473


469 The majority opinion quickly dismissed the challenge that some of the soft money provisions prevent spending
and are therefore deserving of a strict scrutiny analysis. "For purposes of determining the level of scmutiny, it is
irrelevant that Congress chose ... to regulate contributions on the demand rather than the supply side." Id. at 658.

4 McConnell v. FEC, 124 S. Ct. at 661.

4 Id. at 777. The Chief Justise was joined by Justices Scalia and Kennedy in his dissent of the Court' s ruling with
respect to Title I. Justices Kennedy, Thomas, and Scalia also filed separate dissenting opinions for this part.
4 Id. at 781.

4 2 U.S.C. # 434. For a complete discussion of these provisions, see infra.










posed no danger to the existence of, or the appearance of corruption, because they were going to

a political committee not a candidate.39

Justice Thurgood Marshall, delivering the opinion of the Court, was not persuaded by

CMA' s arguments.396 Marshall determined that the "'speech by proxy' that CMA [sought] to

achieve through its contributions to CALPAC is not the sort of political advocacy that this Court

in Buckley found entitled to full First Amendment protection."397 The contributor' s First

Amendment rights were no more impeded by limits on contributions to committees than they are

by contributions to candidates. The Court reiterated that Buckley offered broad constitutional

protection to "direct political advocacy," not the "general approval" of a committee's role in the

political process evidenced by contributions.39

Further, the Court found that CMA's argument that the limitation on contributions to

political committees did not further a government interest was without merit.399 The Court

reasoned that if individuals and unincorporated organizations were allowed unregulated

contributions, they could use committees to funnel unlimited funds to candidates. The Court

found that this would circumvent the contribution limits upheld in Buckley.400 The Court also

rej ected CMA' s argument that this particular limitation was unnecessary to protect the integrity



395 Id.

396 Id. at 184. Justice Marshall's opinion with respect to the First Amendment challenges was joined by Justices
William Brennan, Byron White, and John Paul Stevens. Justice Potter Stewart joined by Justices Burger, Powell,
and Rehnquist dissented from the opinion of the Court on the basis that the Supreme Court did not have
jurisdiction to hear the case. The dissenting opinion is not discussed in detail in this chapter because the First
Amendment challenges were not addressed. Id. at 204.

397 453 U.S. 182 at 196.

398 Id.

399 Id. at 197-98.

400 Id. at 198.










The FEC considered both legislative history and policy arguments in its exclusion of the

Intemet from these definitions. The FEC found no evidence that Congress intended to include

the Internet as part of the public communication definition.'" The FEC noted that the public

communication section did not mention the Intemet, while other section in the BCRA and other

contemporary legislation specifically mentioned and differentiated the online communication.552

Nor did the legislative history present evidence of Congress even "contemplat[ing] including the

Internet" in this definition.553

The FEC also determined that the underlying justification for campaign finance laws -

prevention of corr-uption is not present on the Internet.554 The FEC said that the Internet is a

"medium that allows almost limitless, inexpensive communication across the broadest possible

cross-section of the American population.""' The FEC, in agreeing with comments from a

public interest group, determined that there is significant public interest in leaving the Internet

unregulated by campaign finance laws.556

Challenging the Internet Exemption: Shays v. FEC

Shortly after the FEC adopted these rules that excluded the Intemet from the scope of the

FECA, Congressmen Shays and Meehan557 challenged the FEC's interpretation.558 The Shays


551 67 FR 49072.

552 Id.

553 Id.

554 Id.

5 Id.

556 Id.

5 Christopher Shays and Martin Meehan are a members of the U.S. House of Representatives. Shays is the
representative from the Fourth Congressional District of the State of Connecticut: Meehan is the representative from
the Fifth Congressional District of the Commonwealth of Massachusetts.

5 Shays v. Federal Election Commission, 337 F.Supp.2d 28 (D.D.C. 2004).










Finally, one of the most substantial changes the 1974 amendments made to campaign

finance law was the creation of the Federal Election Commission (FEC). The amendments

empowered the FEC to receive campaign reports from all candidates and committees; to

promulgate rules for the enactment of these laws; to make reports to Congress and the president;

to conduct audits and investigations; to subpoena witnesses and information; and to seek civil

injunctions to ensure compliance with campaign finance laws.

FECA was set to be implemented for the 1976 elections. However, the law was challenged

in the courts shortly after being signed into law. Before the 1976 election cycle, the Supreme

Court overruled some aspects of the law in Buckley v. Valeo, forcing Congress to reconfigure

portions of the law in order to implement the provisions.

Buckley v. Valeo

Almost immediately following the passage of FECA, challenges to the law were being

tested in court. Senator James L. Buckley and presidential candidate Eugene McCarthy--along

with contributors, political committees and parties, and non-profit organizations-opposed the

new law on constitutional grounds.333 Specifically, Buckley and his fellow appellants argued that

the use of money for political purposes equates to speech. Therefore, limiting the ability to spend

money on political communications violates the principles of the First Amendment.334 In

addition to opposing the contribution and expenditure limits, appellants argued that the law




m3 Buckley v. Valeo, 424 U. S. 1, 8 (1976). Plaintiffs included a candidate for the Presidency of the United States, a
United States Senator who is a candidate for re-election, a potential contributor, the Committee for a Constitutional
Presidency McCartthy '76, the Conservative Party of the Staet of New York, the Mississippi Republican Party, the
Libertarian Party, New York Civil Liberties Union, Inc., the American Conservative Union, the Conservative
Victory Fund, and Human Events, Inc." Id. The suit was originally brought in the United States District Court for
the District of Columbia. Through several procedural steps, the case was considered by the Court of Appeals. 171
U.S. App. D.C. 192. The appellate court upheld nearly all provisions of FECA. Plaintiffs appealed to the Supreme
Court.

33 424 U.S. at 11.










prohibitions against contributions and expenditures by corporations, labor organizations, federal

government contractors, and foreign nationals. The law defines contribution 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; 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."lo Independent expenditures are "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."l Despite these regulations, campaign spending has continued to rise at considerable

rates.

The Federal Election Commission reported that campaign spending by candidates for the

U. S. House of Representatives before the 2006 general election totaled more than $540 million,

an increase of 30 percent from spending in 2004.12 The spending in 2004 was 11 percent higher

than in 2002.13 The Center for Public Integrity reported that the average campaign spending for a

House race in 2004 was eleven times more than the average spending in 1976--the first election

cycle operated under the Federal Election Campaign Act amendments.14





'0 2 U.S. CODE 431(8) 2006.

11 2 U.S. CODE #431(17) 2006.

'2 FEC, Congressional Campaigns Spend $966 Million Through Mid October, Press Release (Nov. 2, 2006).

13 FEC, Congressional Campaigns Spend $711 Million Through Pre-Election Period, Press Release (Oct. 28, 2004).

14 Sandy Bergo, Center for Public Integrity, A Wealth of Advice: Nearly $2 billion flowed through consultants in
2003-2004 federal elections, b1lip \\ \\ \\ publicintegrity .org/consultants/report. aspx?aid=5 33 (last visited Sept. 27,
2007).










Additionally, corporations and unions were prohibited from directly funding these

communications.474 This new definition diminished the bright line previously applied to

distinguish express advocacy ads with issue ads.475 However, plaintiffs challenged this

definition, arguing that speakers had an inviolable First Amendment right to engage in

expression through issue advertisements.476 The Court disagreed, concluding that plaintiffs had

misconstrued the previous decisions that had created the express advocacy and issue ad

distinction.477 Further, the maj ority held that such a distinction is counterproductive in preventing

actual or apparent corruption. The new definition, however, avoids the vagueness of the express

advocacy rule, provides a clear and predictable application of FECA provisions, and targets

potential corr-upting advertisements.478

In a general and sweeping dissent, Justice Scalia criticized the underlying principles of the

Court' s decision in McConnell. Scalia contended that the maj ority espoused the view that

because money is not speech, regulating the use of money to create speech is not constricted by

the high standards of First Amendment analysis. Scalia said that the Court' s "cavalier attitude

toward regulating the Einancing of speech .. frustrates the purpose of the First Amendment."479

Further, Scalia argued that pooling money was also essential to the First Amendment and that

subj ecting such activity to less than full First Amendment protection "threatens the existence of





4 FECA 316(b).

4 See in~fra.

4 6 MCCOnnell, 124 S. Ct. at 687.
4 Id. at 687.

4 Id. at 689.

4 9 Id. at 722.












TABLE OF CONTENTS


page

ACKNOWLEDGMENT S .............. ...............4.....


AB S TRAC T ......_ ................. ............_........7


CHAPTER


1 CAMPAIGN FINANCE REFORM AND THE FIRST AMENDMENT ............... ... ............9
Introducti on .........._.... .... ...._ ......._. .............

Campaign Communications Online............... ...............12.
Purpose .............. ...............19....
Back ground ........._ ........ ._. ...... __ .............2
Federal Election Campaign Act............... ....... ..............2
Determining Constitutionality: Buckley v. Valeo....... ............~~~~~~~~~~~~~~~~~~~~~~~~...22
Bipartisan Campaign Finance Reform Act............... ...............22..
Literature Review .............. .... ......... ............2

Campaign Finance Laws and History............... ...............24
Campaign Finance and the First Amendment ........._._........__. .........__........3
Campaign Finance and the Internet ........._... ...... ...............38.
Research Questions............... ...............4
M ethodology ........._.. _..... ._ ...............42....
Dissertation Outline ................. ...............44.................


2 CAMPAIGN FINANCE AND FIRST AMENDMENT THEORY ................. ................. .45
Interpreting the First Amendment .............. ...............45....
Search for Truth................ ...............45
Democratic Self-Governance .............. ...............51....
Justifying Campaign Finance ................... ......... ...........5
Prevention of Corruption in the Electoral System ................. .............................56
Political Equality in the Electoral System ................ ...............60...............
Campaign Finance and the First Amendment .............. ...............66....

3 HISTORY OF CAMPAIGN FINANCE LAW ................ ...............68...............

Early Campaign Finance Reform Efforts .............. ...............69....
Federal Election Campaign Act ................. ...............73................
Maj or FECA Provisions ................ ...............73........... ...
Buckley v. V aleo .............. ....... ........ .. ... .. .. .. ... .. ........7
Contributions and expenditures receive different treatment in the Court' s
balancing test .............. ............. .............7
Disclosure requirements are constitutional .............. ...............82....
Reconstructing FECA........................ .............8
Bipartisan Campaign Reform Act of 2002 ................ ............... .......................84
Summary of the Current Status of the Law ................. ...............87..............









CHAPTER 6
ANALYSIS AND CONCLUSION

The purpose of this study was to evaluate the current model of regulating online campaign

communications using a First Amendment analysis. Specifically, this study examined the policy

adopted by the Federal Election Commission in 2006 to regulate online communications under

the Federal Election Campaign Act. As discussed in Chapter 4, the FEC determined that online

communications should be regulated only when they are placed on third-party web sites for a

fee.609

As this dissertation demonstrated, campaign finance law is continually evolving. This

study examined the current status of campaign finance laws with specific attention paid to the

regulation of campaign communications online. This included a review of statutes, Supreme

Court cases, and administrative law. The statutes and cases discussed in Chapter 3 laid the

foundation for the analysis of the current approach to regulating the Internet under campaign

Einance law.

This chapter begins with a review of the key findings of this dissertation framed by the

research questions. First, this chapter will discuss the interests that have been balanced in

campaign finance jurisprudence. This traditionally has been an individual First Amendment free

speech interest, explicated by the marketplace of ideas and self-government theories of free

speech, weighed against the government interest in preventing corruption, or the appearance of

corruption, of the political process. Next, this chapter will summarize the trends in campaign

finance jurisprudence. Then, this chapter will summarize the current statutory and administrative

laws that govern campaign finance, including online communications.




609 See supra Ch. 4: 11 CFR 100, et seq. (2006).









efforts were made through advisory opinions.643 In these opinions, the FEC attempted to mirror

the application of these laws to other, familiar media formats, particularly the print media.644 The

FEC began in 1999 to engage in a rulemaking process to codify the application of the FECA to

online communications. However, before this rulemaking was adopted by the FEC, Congress

passed the BCRA, significantly amending the FECA.

After BCRA passed in 2002, the FEC reevaluated its approach to regulating the Internet.

Interpreting the BCRA provisions that defined public communication, the FEC determined that

Congress had not intended for online communications to be regulated at all. In accordance with

this interpretation, the FEC adopted rules that explicitly exempted the Internet from the

definition of public communication in 2002.645 Sponsors of BCRA challenged this interpretation

in the courts, arguing that the Internet was too influential a medium to leave wholly unregulated.

The U.S. District Court for the District of Columbia agreed and ordered the FEC to reconsider

the regulations to include appropriate online communications as part of the definition of public

communication.

The regulations that the FEC adopted in 2006 resulted from nearly a year-long public

comment period. In the final rules, the FEC explicitly protected individual speakers in the form

of blogs, volunteers, and all other independent endeavors online. The FEC limited the application

of campaign finance laws to expression that is placed on a third-party web site for a fee. For

example, if an individual purchased a banner ad on the DailyKos.com that expressly advocates

the election of a candidate, that would be considered a public communication for the purposes of



643 These advisory opinions are still reliable guidelines for the application the FECA to online communications
because BCRA did not adversely address any issues decided in these opinions.

644 For full discussion of these advisory opinions, see Ch. 4.

645 See 67 FR 49064 (July 29, 2002) (codified at 11 CFR 100 et al.) (2002).










dissertation will not focus on the effectiveness of the laws in preventing corruption except as it

relates to the discussion of the balance between that interest and the First Amendment.

Background

At this point, this study requires a brief history and explanation of campaign finance laws.

In the formative years of the U. S. political system, party supporters were placed in government

jobs with the expectation that they would contribute to party activities, including campaigns.53

Congress first began legislating campaign funding banning naval yard employees from

contributing to campaigns.54 As Congress continued to regulate federal employment, corporate

contributions became a larger part of the political process." In the beginning of the 20th century,

Congress continued to expand regulations of campaign finance. With the Tillman Act of 1907,

Congress banned all corporate donations and gifts to federal candidates.

Although these first efforts regulated pieces of campaign financing, the first

comprehensive campaign finance reform was not passed until 1971.56 Until the Federal Election

Campaign Act of 1971, the campaign finance laws consisted of piecemeal legislation regulating

disclosure and contributions-direct payments or gifts of money. Since 1971, Congress has

continued to amend the statute to address new concerns and close loopholes in the law as they

appeared.

One of the most significant campaign finance cases followed amendments to the law in

1974. The U.S. Supreme Court, in Buckley v. Valeo, determined the constitutionality of limiting



53 THE CAMPAIGN LEGAL CENTER, CAMPAIGN FINANCE GUIDE 5 ( I i1-0. This guide was written by Trevor Potter,
Daniel R. Ortiz, and Anthony Corrado.

54Id. See also 1868 Naval Appropriations Act.
55 Id.

56 Federal Election Campaign Act of 1971, 2 U.S.C. ## 431-455) (hereinafter FECA).









Political Action Committee, "Corruption is a subversion of the political process. Elected onfcials

are influenced to act contrary to their obligations of onfce by the prospect of Einancial gain to

themselves or infusions of money into their campaigns. The hallmark of corruption is the

Financial quid pro quo: dollars for political favors."254 Although Justice Rehnquist broadened the

environment to include rather than be defined by quid pro quo, his opinion continued to strike

down expenditure limits, relying on language from Buckley that "the absence of prearrangement

and coordination of an expenditure with the candidate or his agent not only undermines the value

of the expenditure to the candidate, but also alleviates the danger that expenditures will be given

as a quid pro quo for improper commitments from the candidate."255

Another conception of corruption in the Court has been distortion. Justice Marshall

identified this as a different type of corruption from the traditionally acknowledged quid pro quo.

Rather distortion is "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."256 JUStice Scalia criticized Marshall's

opinion for trying to revive a justification rej ected by the Court in 1974 political equality -

under the guise of a "new corruption".257

Political Equality in the Electoral System

Although prevention of corruption is more commonly accepted, it has been argued that

corruption is a derivative problem. David Strauss contended that corruption actually stems from




2 470 U.S. 480, 497 (1985).
25 Id

256 Austin v. Michigan Chamber of Conunerce, 494 U.S. 652, 659-60 (1990).

25 Id. at 684-85 (Scalia, J., dissenting).









Abstract of Dissertation Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy

POLITICS AND THE ONLINTE MARKETPLACE: A FIRST AMENDMENT ANALYSIS OF
THE APPLICATION OF CAMPAIGN FINTANCE LAWS TO INTERNET
COMMUNICATIONS

By

Courtney Anne Barclay

August 2008

Chair: William F. Chamberlin
Major: Mass Communication

Given the increasing importance of the Internet in political communication, it is imperative

to determine whether the current legal structure intended to protect the integrity of the electoral

system also adequately protects free speech. The Federal Election Commission adopted rules to

regulate paid online, mediated political activities under the campaign finance laws. Although

these have not been litigated, previous case law analyzing other campaign finance laws and

regulations under First Amendment challenges will provide a guide for evaluating the current

regulations.

Because campaign finance laws act as a restriction on speech, these laws must be analyzed

under a First Amendment framework. To begin this analysis, it is necessary to engage in a

historical overview of the evolution of campaign finance laws, which has largely followed a self-

governance theory of the First Amendment. Analyzing the existing U. S. Supreme Court

jurisprudence that has resolved First Amendment free speech challenges to the campaign finance

laws provides insight into how the Internet may be factored into the current paradigm for

campaign finance reform--or whether the Internet may contribute to a shift in controlling

paradigms.










there are various mechanisms by which such advertising over the Internet is targeted at the
"general public."564

The court found that "any other form of general political advertising" did not cover all

Internet communications, but did "clearly" include some Internet communications.565 Therefore,

the court found that there could be no reasonable "wholesale" exclusion of any definition of

"public communication.'"56

The court further found that even if Congress had not spoken specifically to this issue, the

FEC's interpretation would have been counter to the purpose of the FECA. The court noted that

excluding all Internet communications from the definition of"public communications" would

thereby exclude a whole class of "coordinated communications" from regulation. The court

found that allowing

[A]n entire class of political communications to be completely unregulated irrespective of
the level of coordination between the communication's publisher and a political party or
federal candidate, would permit an evasion of campaign finance laws, thus "unduly
compromis[ing] the Act' s purposes," and "creat[ing] the potential for gross abuse."567

The Court therefore concluded that the "wholesale" exclusion of Internet communications

was an "impermissible" interpretation of the BCRA. The court remanded the issue to the FEC for

further consideration, specifically delineating which Internet communications constitute "general

public political advertising."









564 Id.

565 Id. at 68.

566 Id.

567 Id. at 65.










Disclosure requirements are constitutional

The 1974 FECA required candidates and committees to disclose sources of funding and

campaign expenditures. The Court found that disclosure requirements did not impermissibly

infringe on First Amendment free speech rights. However, the Court did require that disclosure

laws survive "exacting scrutiny" because it found that disclosure of this information revealed

political associations. Therefore, compelling individuals to disclose this information to the

government could infringe on the First Amendment freedom of association.353 The Court

required that the government prove that its interest be "more than a mere showing of some

legitimate governmental interest" and that the interest is "substantially" related to the

information that would be disclosed under the FECA.354

The Court identified three categories of governmental interests that were ostensibly

served by the disclosure requirements: 1) providing the electorate with information; 2) deterring

corruption, or avoiding the appearance of corruption; and 3) detecting violations of FECA limits

on contributions.355 Although the Court found that these were substantial interests and that the

disclosure requirements "directly" served them, the Court continued to analyze the burdens that

the requirements placed on individuals to complete the balancing test.

The Court noted that the requirements may deter some individuals from contributing to

candidates or political parties. The Court also recognized the potential for contributors to be

subj ected to harassment for their donation. However, the Court found that the balance fell in



353 Id. at 64.

354 The government argued that this law was different than those at issue in the Court's precedent on this matter
because FECA only required a list of contributors; FECA did not require organizations to provide membership lists.
Id. at 65. However, the Court supported the idea that joining monetary resources often was just as essential as
joining groups in effectively disseminating a message or effecting change. Id. at 65-66.
355 Id. at 66-68.










Court surprised commentators by striking down both the expenditure limits and the contribution

limits, focusing on a lack of evidence as to the necessity of these limits. The Court noted that the

limits were so low that they could not be "closely drawn." Justice Breyer wrote the plurality

opinion in which he weighed five factors that led the Court to strike down the limits: 1) the limits

"significantly" restrict available funding for challengers; 2) the equating of political parties to

individuals for the purpose of contribution caps threatens the ability of individuals to politically

associate; 3) the limits restrict the amount volunteers can incur as part of their individual

contribution limit; 4) the limits are not subj ect to inflation; and 5) the record did not present any

justification for these problems.483

The plurality opinion clearly displayed Justice Breyer' s theory of the First Amendment -

what he has termed "active liberty" in other writings.484 He has argued that individual rights are a

byproduct of the true meaning of the First Amendment the integrity of self-government.485 In

his opinion, Justice Breyer articulated that this larger goal rather than an individual's right of

free expression should be the interest protected by the Court in campaign finance cases.486 The

opinion was a stark departure from the Court's previous cases in which individual rights of

freedom of expression were pitted against campaign finance laws. Breyer, in the Randall case,

shifted the argument to suggest that campaign finance laws can be congruent with First

Amendment interests, thus signaling a change in the Court's direction on campaign finance.487


4 548 U.S. 230, 126 S. Ct. 2479, 2495-98.

4 See generally STEPHEN BREYER, ACTIVE LIBERTY: INTERPRETING OUR DEMOCRATIC CONSTITUTION (2005).

4 Stephen Breyer, Madison Lecture: Our Democratic Constitution, 77 N.Y.U. L. REV. 245, 253 (2002).
4 Randall, 126 S. Ct. at 2492.

4 See, e.g., Lillian R. BeVier, First 4mendinent Basics Redux: Buckley v. Valeo to FEC v. Wisconsin Right to Life,
2006-07 CATO SUP. CT. REV 77, 84-87: Richard Briffault, FFRTL and Randall: The Roberts Court and the
Unsettling of Campaign Finance Law, 68 OHIO ST. L.J. 807, 829 (2007); Rachel Gage, Randall v. Sorrell:
Campaign Finance 8..>; ,/ ,;,.. and the First 4mendinent as a Facilitator ofDemocracy, 5 FIRST. AMlEND. L. REV.










"an even more preeminent place than they already have in the shaping of public attitudes toward

federal candidates."274 Jamin Raskin and John Bonifaz contended that political equality is the

"key First Amendment issue at stake" because it ensures that all citizens are able to participate in

the electoral process.275 However, Bradley A. Smith, former chairman of the Federal Election

Commission, averred that political equality is not a right guaranteed by the Constitution, and,

further, that promoting such equality effectively abridges the right to free speech.276

In the midst of this scholarly debate, the Supreme Court reopened the legal conversation on

the equality rationale Since Buckley, the Court staunchly refused to uphold any campaign

finance reform efforts unless they were purposed to prevent corrutption.77 However, the Court' s

decision in M~cConnell v. FEC has been heralded as a shift in campaign finance jurisprudence.

Even in the aftermath of this proposed shift, the Court has not expressly adopted the political

equality argument that was summarily rej ected in Buckley.

Leading up to the McConnell decision, the Court provided some foreshadowing beginning

to its jurisprudential shift. In 2000, Justice Breyer issued a concurring opinion in Austin v. .1/;i mk1

M~issouri PAC, in which he announced that Buckley' s rej section of political equality as a

compelling interest "cannot be taken literally."278 Breyer noted that there are many times that the

First Amendment "permits restrictions on the speech of some in order to prevent a few from



274 Richard L. Hasen, Campaign Finance Laws and the Rupert Murdoch Problem, 77 TEX. L. REV. 1627, 1629
(1999) (discussing the media exception built into the campaign finance reform structure).

275 Jamin Raskin & John Bonifaz, The Constitutional Imperative and Practical Superiority of Democratically
Financed Elections, 94 COLUM. L. REV. 1160, 1161-62 (1994).

276 See generally BRADLEY A. SMITH, UNFREE SPEECH: THE FOLLY OF CAMPAIGN FINANCE REFORM (Princeton
University Press 2003).

277 Richard L. Hasen, Buckely is Dead, Long Live Buckley: The New Campaign Finance Incoherence ofi~cConnell
v. Federal Election Commission, 153 U. PA. L. REV. 31, 31-32 (Nov., 2004).

278 NiXOn v. Shrink Missouri Government PAC, 528 U.S. 377, 402 (Breyer, J., concurring).









Cecil C. Kuhne, III, Rethinking Campaign-Finance Reform: The Pressing Need for Deregulation
andDisclosure, 38 J. Marshall L. Rev. 633 (2004).

Leading Cases, Constitutional Law, Freedom of Speech and Expression, Campaign Finance
Regulation, 120 HARV. L. REV. 283 (2006).

Kenneth J. Levit, Campaign Finance Reform and the Return ofBuckley v. Valeo, 103 YALE L.J.
469 (1993).

Michael Marcucci, Speech or Not: Applying Election Law Strict Scrutiny to Campaign Finance
Regulations, 42 B.C.L. Rev. 173 (2000).

William P. Marshall, The Last Best Chance for Clampaign Finance Reform, 94 Nw. U. L. REV.
335 (2000).

John McCain, Reclaiming Our Democracy: The Way Forward, 3 ELECTION L.J. 115, 115 (2004).

ALEXANDER MZEIKLEJOHN, POLITICAL FREEDOM: THE CONSTITUTIONAL POWERS OF THE PEOPLE
(Harper & Brothers 1960) (1948).

JOHN STUART MILL, ON LIBERTY (D. Spitz ed. 1975)(1859).

John Milton, Areopagitica, A Speech for the Liberty of Unlicensed Printing to the Parliamiii~~~~~iiiient of
England (Nov. 23, 1644).

Robert E. Mutch, Campaigns, Congress, and Courts: The Making of Federal Campaign Finance
Law 3-7 (Praeger 1988).

Farah Nawaz, Camnpaign Finance Reform "Dollarllllll11~~~~~~~~ fo otes The American Democracy, 14
ST. JOHN'S J. LEGAL COMMENT. 155 (1999).

Justin A. Nelson, The Supply and Demand of Campaign Finance Reform, 100 COLUM. L. REV.
524 (2000)

Burt Neuborne, One Dollar-One~~ll1~~~~111~~~ Vote: A Preface to Debating Campaign Finance Reform, 37
WASHBURN L.J. 1 (1997).

GEORGE ORWELL, NINETEEN EIGHTY-FOUR (Secker & Warburg 1949).

Spencer Overton, The Donor Class: Campaign Finance, Democracy, and Participation, 153 U.
Pa. L. Rev. 73 (2004).

John G. Peters & Susan Welch, Political Corruption in America: A Search for Definitions and a
Theory, or If Political Corruption Is in the Mainstreamn ofAmerican Politics Why Is It Not
in the Mainstreamn ofAmerican Politics Research?, 72 AM. POL. SCl. REV. 974 (1978).

Trevor Potter, The Current State of Camnpaign Finance Law, in The New Campaign Finance
Sourcebook 48, 56 (Anthony Corrado et al., eds. 2005).




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POLITICS AND THE ONLINE MARKETPLACE: A FIRST AMENDMENT ANALYSIS OF CAMPAIGN FINANCE LAWS TO INTERNET COMMUNICATIONS By COURTNEY ANNE BARCLAY A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY UNIVERSITY OF FLORIDA 2008 1

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2008 Courtney Anne Barclay 2

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To my husband and my mother for their love and support. 3

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ACKNOWLEDGMENTS This dissertation would not have been possible without the assistance of my family, friends and advisers. I truly appreciate the extraordinary support system they provided. First, I would like to thank my committee members: my chair, Dr. Bill F. Chamberlin; Professor Lyrissa Lidsky; Dr. Marilyn Roberts, and Dean John Wright, II. I would also like to thank Dr. Justin Brown for his help in the beginning stages of this project. Special thanks are due to Dr. Chamberlin for constant support, encouragement and inspiration. When I felt stymied by the pressures of academe and life, Dr. Chamberlin and the not-so-occasional latte served as a mental buoy. Dr. Chamberlin not only led me through this dissertation. He also taught me what it means to be a mentor. I will feel successful if I can give one graduate student all of the guidance that Dr. Chamberlin gave me and to so many. Next, I would like to thank my husband David who has been an unflagging source of love, patience, and motivation. He seemed to have a sixth sense for when to leave me alone, when to push me, and when to make me take a break. He took on more than his fair share during this process. He has added more to my life than I know how to say. I also would like to thank my mother. She instilled in me early on the value of education though I am not sure she envisioned quite so many degrees. I cannot thank her enough for starting me on the path to the profession that I love. She is my best friend. I am proud to be so like her. Finally, I would like to thank everyone else who endured this long process: my mother-in-law Betty, for always believing in me; Tara Engleman, for always having a consoling word; Amy Sanders, for being a font of information; Heather French, for helping me survive law school; Sunny Hughes, for sharing this time with me; Katie Blevins, for always making me laugh; and Debbie Muga, for being there. Thank you all for letting me lean on you. 4

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TABLE OF CONTENTS page ACKNOWLEDGMENTS...............................................................................................................4 ABSTRACT.....................................................................................................................................7 CHAPTER 1 CAMPAIGN FINANCE REFORM AND THE FIRST AMENDMENT................................9 Introduction...............................................................................................................................9 Campaign Communications Online........................................................................................12 Purpose...................................................................................................................................19 Background.............................................................................................................................20 Federal Election Campaign Act.......................................................................................21 Determining Constitutionality: Buckley v. Valeo............................................................22 Bipartisan Campaign Finance Reform Act......................................................................22 Literature Review...................................................................................................................24 Campaign Finance Laws and History..............................................................................24 Campaign Finance and the First Amendment.................................................................31 Campaign Finance and the Internet.................................................................................38 Research Questions.................................................................................................................42 Methodology...........................................................................................................................42 Dissertation Outline................................................................................................................44 2 CAMPAIGN FINANCE AND FIRST AMENDMENT THEORY.......................................45 Interpreting the First Amendment..........................................................................................45 Search for Truth...............................................................................................................45 Democratic Self-Governance..........................................................................................51 Justifying Campaign Finance.................................................................................................55 Prevention of Corruption in the Electoral System...........................................................56 Political Equality in the Electoral System.......................................................................60 Campaign Finance and the First Amendment........................................................................66 3 HISTORY OF CAMPAIGN FINANCE LAW......................................................................68 Early Campaign Finance Reform Efforts...............................................................................69 Federal Election Campaign Act..............................................................................................73 Major FECA Provisions..................................................................................................73 Buckley v. Valeo.............................................................................................................77 Contributions and expenditures receive different treatment in the Courts balancing test........................................................................................................79 Disclosure requirements are constitutional..............................................................82 Reconstructing FECA......................................................................................................83 Bipartisan Campaign Reform Act of 2002.............................................................................84 Summary of the Current Status of the Law............................................................................87 5

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4 HISTORY OF CAMPAIGN FINANCE JURISPRUDENCE...............................................90 The Court struggles to consistently apply Buckley.................................................................90 Justices disagreed over interpretations of Buckley corruption standard................................97 Buckley Loses Support.........................................................................................................103 Applying Buckley to BCRA..................................................................................................108 The Court Shows Deference..........................................................................................108 The Court Signals a New Direction for Campaign Finance Law..................................112 Conclusion............................................................................................................................116 5 REGULATING CAMPAIGN SPEECH ONLINE..............................................................119 Advisory Opinions Offer First Look at Internet Regulations...............................................120 Corporations Must Adhere to Contribution and Expenditure Prohibitions...................126 Non-Partisan Activities Are Permissible and Exempt from the FECA.........................127 Media Exemption Applies to Online Web Sites that Provide a News Function...........127 Initial FEC Rulemakings......................................................................................................128 Challenging the Internet Exemption: Shays v. FEC.............................................................130 Final FEC Rulemaking.........................................................................................................133 The FEC Redefines Public Communication..............................................................134 The FEC Applies Media Exemption to the Internet......................................................135 The FEC Exempts Individual Internet Activity.............................................................136 The FEC Applies Disclaimer Requirement Based on Speaker.....................................138 Conclusion............................................................................................................................139 6 ANALYSIS AND CONCLUSION......................................................................................141 Summary of Findings...........................................................................................................142 Research Question 1: What Are the First Amendment Concerns Associated with Applying Campaign Finance Laws to Internet Communications?............................143 Research Question 2: What Is the Current Framework for Campaign Finance Reform?......................................................................................................................148 Research Question 3: How Are the Different Communication Media Treated by Current Campaign Finance Laws, Including FEC Regulations?...............................151 Research Question 4: What Are the Current Campaign Finance Laws and Regulations that Govern Internet Campaign Communications?...............................153 Research Question 5: Do the Campaign Finance Regulations Defining Paid Internet Communications Transmitted via Third Party as Regulated Under Campaign Finance Laws Adequately Protect First Amendment Interests?................................158 Conclusions...........................................................................................................................162 LIST OF REFERENCES.............................................................................................................165 Articles, Books, and Reports................................................................................................165 Case Law and Related Documents.......................................................................................170 Congressional Materials.......................................................................................................172 Administrative Materials......................................................................................................172 BIOGRAPHICAL SKETCH.......................................................................................................174 6

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Abstract of Dissertation Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy POLITICS AND THE ONLINE MARKETPLACE: A FIRST AMENDMENT ANALYSIS OF THE APPLICATION OF CAMPAIGN FINANCE LAWS TO INTERNET COMMUNICATIONS By Courtney Anne Barclay August 2008 Chair: William F. Chamberlin Major: Mass Communication Given the increasing importance of the Internet in political communication, it is imperative to determine whether the current legal structure intended to protect the integrity of the electoral system also adequately protects free speech. The Federal Election Commission adopted rules to regulate paid online, mediated political activities under the campaign finance laws. Although these have not been litigated, previous case law analyzing other campaign finance laws and regulations under First Amendment challenges will provide a guide for evaluating the current regulations. Because campaign finance laws act as a restriction on speech, these laws must be analyzed under a First Amendment framework. To begin this analysis, it is necessary to engage in a historical overview of the evolution of campaign finance laws, which has largely followed a self-governance theory of the First Amendment. Analyzing the existing U.S. Supreme Court jurisprudence that has resolved First Amendment free speech challenges to the campaign finance laws provides insight into how the Internet may be factored into the current paradigm for campaign finance reformor whether the Internet may contribute to a shift in controlling paradigms. 7

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Additionally, the Federal Election Commissions approach to regulating online campaign communications must be explicated through its advisory opinions and rulemakings. This analysis is the foundation for determining whether the current Federal Election Commission regulations adequately protect First Amendment values. My study focused on the First Amendment impacts of campaign finance laws and whether the current constitutional framework should be used for campaign speech on the Internet in the same that it is used for the traditional mass media. My dissertation did not focus on the effectiveness of the laws in preventing corruption except as it relates to the discussion of the balance between that interest and the First Amendment. 8

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CHAPTER 1 CAMPAIGN FINANCE REFORM AND THE FIRST AMENDMENT Introduction Its logically impossible both to honor the First Amendment and to regulate campaign finance effectively. We can do one or the otherbut not both. 1 The First Amendment to the United States Constitution protects against government infringement of freedom of speech and of the press. 2 This protection is not absolute. The government and the Supreme Court have carved out the ability to regulate speech when there is either a compelling reason to curtail it or a need for reasonable restriction for public safety and order. In this process of defining the right of freedom of speech, the Court has identified a hierarchy of protected speech, at the top of which lies political speech. This is the core of the First Amendment because free exchange of political information and opinions is necessary for effective self-government. However, Congress and the U.S. Supreme Court have identified the protection of the integrity of the American political system as a countervailing interest to a free exchange of information under the First Amendment. Gallup polls have shown that the American people support campaign finance reform. In 2007, fixing the government was one of the top ten priorities of the American public. More than half of respondents supported campaign finance reform as a tool to effect that fix. 3 In 2002, 72 percent of respondents favored new campaign finance laws. 4 In 2000 61 percent of respondents thought it was more important to protect 1 Robert J. Samuelson, The Washington Post. 2 U.S. Const., amend. 1. 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. 3 Gallup Poll, The Peoples Priorities: Gallups Top 10 (Nov. 2, 2007). 4 Jeffrey M. Jones, Seven in 10 Support New Campaign Finance Legislation, Gallup News Service, Feb. 13, 2002. 9

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government from excessive influence by campaign contributors than to protect the freedom of individuals to support political candidates and parties financially. 5 Campaign finance laws regulate the flow of money in federal campaigns with the aim to protect against corruption by excessive contributions. The formula of campaign finance laws has changed over the years when new challenges arose. Federal campaign finance laws originated in the early twentieth century when corporate donations to presidential campaigns were a transparent method of curry[ing] influence with the administration. 6 In response, Congress prohibited corporations from donating to federal political campaigns. 7 In the following half century, Congress created disclosure requirements, spending limits, and contribution limits to ward off further threats of corruption. 8 With the advent of television and the Watergate era, Congress embarked on its first attempt at a comprehensive reform, resulting in the Federal Election Campaign Act of 1971. 9 Since then, the major amendments have been aimed at closing loopholes left open by this law. The most substantial of these was the Bipartisan Campaign Reform Act of 2002 (BCRA). Current campaign finance law consists of four basic provisions: 1) limitations on contributions to candidates by individuals and political committees; 2) requirements that candidate committees, party committees and political action committees disclose money raised and spent; 3) requirements that individuals disclose any independent expenditures; and 4) 5 Gallup Poll, Campaign Financing (Oct. 18, 2000). 6 See, e.g., Justin A. Nelson, The Supply and Demand of Campaign Finance Reform, 100 Colum. L. Rev. 524, 533 (2000). For a brief summary of major campaign finance reform efforts, see infra p. 21. For a more in depth history of campaign finance law in the United States, see infra Chapter 3. 7 Tillman Act, ch. 420, 34 Stat. 864 (1907). 8 Nelson, supra note X at 535-537. 9 Federal Election Campaign Act of 1971, 2 U.S.C. 431455). 10

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prohibitions against contributions and expenditures by corporations, labor organizations, federal government contractors, and foreign nationals. The law defines contribution 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; 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. 10 Independent expenditures are 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 candidates authorized political committee, or their agents, or a political party committee or its agents. 11 Despite these regulations, campaign spending has continued to rise at considerable rates. The Federal Election Commission reported that campaign spending by candidates for the U.S. House of Representatives before the 2006 general election totaled more than $540 million, an increase of 30 percent from spending in 2004. 12 The spending in 2004 was 11 percent higher than in 2002. 13 The Center for Public Integrity reported that the average campaign spending for a House race in 2004 was eleven times more than the average spending in 1976the first election cycle operated under the Federal Election Campaign Act amendments. 14 10 2 U.S. CODE 431(8) 2006. 11 2 U.S. CODE 431(17) 2006. 12 FEC, Congressional Campaigns Spend $966 Million Through Mid October, Press Release (Nov. 2, 2006). 13 FEC, Congressional Campaigns Spend $711 Million Through Pre-Election Period, Press Release (Oct. 28, 2004). 14 Sandy Bergo, Center for Public Integrity, A Wealth of Advice: Nearly $2 billion flowed through consultants in 2003-2004 federal elections, http://www.publicintegrity.org/consultants/report.aspx?aid=533 (last visited Sept. 27, 2007). 11

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As Congress has attempted to equalize the public debate during elections, it seems to apply the First Amendment as articulated by Alexander Meiklejohn. 15 Meiklejohn stressed that the free speech imagined by the First Amendment was necessary for an informed electorate. But as an informed electorate was the goal, Meiklejohn suggested that it was the different viewpoints that must all be heard, not necessarily all of the speakers supporting each viewpoint. By placing limits on individuals ability to give money and gifts to candidates and other restrictions on election speech, Congress has attempted to lower the magnitude of a few voices so that others may be heard. These efforts are aimed at keeping corruption and undue influence out of the electoral process. This has served as a constant value as Congress has repeatedly expanded the reach of campaign finance laws to address new circumventions of the limits and restrictions. 16 Most recently, the Internet has prompted a reevaluation of the current campaign finance laws and how they are interpreted and applied by the Federal Elections Commission (FEC). The Internet provides a unique medium for campaign communications, allowing instantaneous, global communications. This new tool magnifies the reach and impact of campaign communications. Campaign Communications Online Since the Internet emerged, its use by candidates and voters has increased and diversified. 17 The Internet was first used as a campaign tool during the 1996 elections, but it was Jesse Venturas 1998 bid for Michigan governor that first demonstrated the power of the 15 See ALEXANDER MEIKLEJOHN, POLITICAL FREEDOM: THE CONSTITUTIONAL POWERS OF THE PEOPLE (Harper & Brothers 1960) (1948). 16 See infra Chapter 3 discussing the development of television and radio as new methods of communication in campaigns and the resulting increase in campaign expenditures. 17 See, e.g., Election 2006 Online, The Pew Research Center, January 17, 2007; Ira Teinowitz, Note to Politicians: Its Not the Spending, Stupid, ADVERTISING AGE, vol. 79, p. 17 (Mar. 17, 2008). 12

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Internet. 18 In federal elections, the 2004 election cycle was the first evidence of effective use of the Internet. 19 Candidates continued to evolve campaign styles in the 2006 mid-term election and the 2008 election cycles to further incorporate the Internet. 20 A study by the Pew Internet & American Life Project examined the use of the Internet in the 2008 presidential election found that Internet has both increased and diversified since the 2004 election cycle. 21 Citizens also have used the Internet for everything from newsgathering to participating in the political debate. This participation has increased dramatically since the 2002 federal mid-term elections. 22 This section will further explicate the expanding application of the Internet to political campaigns. In 2008, 40 percent of all adults surveyed by the Pew Foundation look to the Internet for political news. This is a 9 percent increase from 2004, and an 18 percent increase from 2000. 23 The public also has looked to the Internet for more in-depth information about a candidate or an issue. This has included watching political videos online (e.g., campaign commercials, online candidate speeches, online interviews), reading position papers, and reading transcripts of candidate speeches. 24 The public is not using the Internet merely as a source of information, but also as a tool to engage in the political conversation. More than 60 percent of Internet users use email or text 18 Alexis Wright, The Power of the Internet, Center for the Study of American Government, John Hopkins University (Nov. 2004), available at http://www.campaignsonline.org/reports/1104.html. 19 Id. Although John McCain initiated an online following during the 2000 primary elections, the general election candidates largely ignored the medium. Id. 20 Id. 21 The internet and the 2008 election, Pew Internet & American Life Project, June 15, 2008. 22 Deborah Fallows, Election Newshounds Speak Up: Newspaper, TV and Internet Fans Tell How and Why They Differ, PEW INTERNET & AMERICAN LIFE PROJECT (Feb. 6, 2007); see also BurstMedia, Likely Presidential Voters Already Using the Internet, Online Insights (March 2007). 23 The Internet and the 2008 Election, supra note 20. 24 Id. 13

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messaging to take part in the political process. Users subscribe to email listservs to receive political information related to a campaign. Users also use email to urge family and friends to support a candidate or to provide information on the campaigns. Text messaging is a growing factor in political communication. 25 Social networking sites also are increasing in popularity for engaging in the political conversation. Sites such as Facebook and MySpace have allowed users to find out information about their friends political interests, get campaign information, join political groups, and track the activities of a candidate. Social networking sites have so far appealed more to adults 18 to 29 years old. More than 30 percent of those adults had used a social networking site for political reasons. 26 Despite the growing online usage for political activities, the public is wary of the impact of the Internet. A majority believed that the Internet is full of misinformation and propaganda that too many voters believe is accurate. 27 Less than 30 percent believed that the Internet helped them feel more personally connected to [their] candidate or campaign of choice. 28 A minority of Internet users believed that the Internet had any impact on their level of involvement in the 2008 campaign. 29 However, the positive perception of the Internets impact on political involvement increased when younger users were segmented out of the total survey respondents. 30 25 Id. 26 Id. 27 Id. 60 percent of respondents agreed with this statement. 28 Id. 67 percent of respondents disagreed with this statement. 29 Id. 74 percent of respondents disagreed with the statement: I would not be as involved in this campaign as much if it werent for the internet. 30 Id. 14

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Comments to the FEC in 2005 reported that Internet users took active roles in supporting policies and candidates. 31 According to the FEC report, the Internet activities included posting commentary about federal candidates, creating and distributing advertisements on the Internet, fundraising, and providing hyperlinks to campaign Web sites. 32 In addition to being a forum for discussion, the Internet has evolved into a primary source of information. In 2004, 63 million people used the Internet as a source of campaign news, and 18 percent of Americans reported that the Internet was their leading source of information during the campaign. 33 Nearly 25 percent of all online political news consumers said their use of the Internet for political news and activities encouraged them to vote. 34 Nearly 30 percent of online political news consumers said the online information helped them decide to vote for or against a particular candidate. 35 A majority of online political news consumers said the Internet was important in providing information that helped them decide how to vote. 36 Moreover, the Internet was perceived as improving not only the quantity of information available, but also the quality of the information. 37 People used the Internet to gather campaign information for a variety of reasons. Nearly 60 percent used online sources because it was 31 Proposed Rulemaking: Internet Communications, 70 Fed. Reg. 16967 (Apr. 4, 2005) (to amend 11 CFR Parts 100, 110, 114). 32 Id. 33 Id. This number was more than twice than what it was in the 2000 election when 30 million people reported using the Internet as a primary source of campaign news. Id. 34 Lee Rainie, Micheal Cornfield, and John Horrigan, THE INTERNET AND CAMPAIGN 2004, The Pew Research Center (March 6, 2005), available at http://www.pewinternet.org 35 Id. 36 Id. 37 Id. Forty-nine percent of all Internet users and 56 percent of all online political news consumers said that the Internet had raised the overall quality of public debate during an election. However, 5 percent said the Internet lowered the quality of debate during elections; 36 percent said the Internet made no difference to the quality of debate. Id. 15

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convenient. Seven percent believed that the Internet provided more targeted news sourcesthose that reflected their specific interests and values. But nearly 45 percent used the Internet to gather election information because the Internet offered better or different information. Thirty-three percent believed that traditional news sources, such as daily newspapers and network news, did not provide the information they wanted. Eleven percent believed that the information on the Internet was information not available from other sources. 38 A major source of information on the Internet was political blogs. Eleven million people relied on blogs as their primary source of information during the 2004 presidential race. 39 Six million people joined in online political discussions and chat groups. The activities that Internet users engage in include researching the candidates, using emails to send and receive political jokes, discuss the election, find voting location and time information, and donating money. In 2004, 34 million people used the internet to research political candidates positions on certain issues, and 20 million Internet users researched voting records online. 40 Nearly 20 million Internet users took online polls to indicate their voting preferences. 41 Sixteen million Internet users used online sources to find out about the endorsements and ratings of candidates by particular organizations. 42 Fundraising was also heavily affected by the Internet; four million users used the Internet to donate money to a candidate. The Howard Dean campaign raised more than $20 million through the Internet, which totaled 40 percent of the campaigns total funds. The Kerry campaign 38 Id. 39 Id. 40 Id. 41 Id. 42 Id. 16

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raised more than $80 million dollars online. The Bush campaign, although not targeting Internet donors as heavily as the Democrat candidates, managed to raise $14 million. More importantly than the totals amassed is that most of the donations were less than $200 each. This indicates that the Internet is the medium that can vitiate the influence of big money donors in political campaigns. 43 The public does not have a monopoly on increased Internet usage. In a 2006 survey of U.S. Senatorial candidates, the Bivings Group found that the use of the Internet had grown dramatically. 44 However, the study found that candidates were not utilizing all the multimedia tools that the Internet supports. 45 For example, only 23 percent of the candidates used blogging during the campaign. More candidates included audio and video on their websites. 46 These were mostly repurposed television and radio ads rather than materials created for the Internet. 47 In the 2008 presidential race, the campaigns are using the Internet to create local events, to push for grassroots campaigns, to deliver key messages, and to fundraise. Senator Barack Obama raised tens of millions of dollars from 1.7 million donors. 48 Obama also reported that he has more than 5 million campaign e-mail contacts and nearly 2 million online friends on social networks like Facebook and Twitter. Senator John McCain, the Republican nominee for president, has not adopted technology as quickly or completely as his opponent. McCain is 43 Id. 44 The Bivings Group, The Internets Role in Political Campaigns: Utilization by 2006 United States Senatorial Candidates (May 23, 2006). 45 Id. 46 Id. 47 Id. 48 Chuck Raasch, In 2008 election, the Internet goes local, local, local, USAToday.com (June 27, 2008). 17

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aware of the Internet, but just because he doesnt have as many Facebook supporters doesnt mean he doesnt have as many active supporters. 49 The Internet has played an increasingly important role in federal elections. As candidates, political organizations, and citizens began using the Internet to advocate for the election of a candidate, the FEC began considering the regulation of this medium under the Federal Election Campaign Act. The approach that the FEC adopted to applying the FECA to the Internet went through several permutations, but made gained national attention after Congress passed the Bipartisan Campaign Reform Act of 2002, which failed to mention the Internet anywhere in the legislation. The Federal Election Commission (FEC) specifically exempted Internet communications from campaign finance regulation when it first adopted rules for the Bipartisan Campaign Reform Act (BCRA). In the face of such an influential medium, two congressmen who had sponsored the BCRA filed for a declaratory judgment that the FECs exclusion of the Internet was unlawful. 50 The U.S. District Court for the District of Columbia agreed with the congressmen, finding that the FEC could not exempt all Internet communications. 51 In response to the district courts ruling the FEC undertook a new rulemaking in 2005 that would create a regulatory scheme for Internet communications consistent with the functionality of current campaign finance laws. In 2006, the FEC adopted regulations that brought Internet speech paid 49 Id. 50 Complaint for Declaratory and Injunctive Relief, Shays v. Federal Election Commission, 337 F. Supp. 2d 28 (D.D.C. 2004) (No. 1:02-cv-01984-CKK). 51 Shays, 337 F. Supp. 2d 28. 18

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to appear on a third partys website under the purview of the FEC, but explicitly left the majority of Internet speech unregulated. 52 Purpose Given the increasing importance of the Internet in political communication, it is imperative to determine whether the current legal structure intended to protect the integrity of the electoral system also adequately protects free speech. The FEC adopted rules to regulate paid online, mediated political activities under the campaign finance laws. Although these have not yet been litigated, previous case law analyzing other campaign finance laws and regulations under First Amendment challenges will provide a guide for evaluating the current regulations. This dissertation will analyze the FEC rulemaking that defined the Internet as a medium regulated under campaign finance laws and regulations under a First Amendment analysis. This study will include a history of campaign finance laws, which has largely followed a self-governance theory of the First Amendment. Analyzing the existing U.S. Supreme Court jurisprudence that has resolved First Amendment free speech challenges to these laws will provide insight into how the Internet may be factored into the current paradigm for campaign financeor whether the Internet may contribute to a shift in controlling paradigms. Using this case analysis, this dissertation seeks to determine whether the current FEC regulations adequately protect First Amendment values. Additionally, this dissertation will consider proposals for change to these rules and to the underlying principles of campaign finance laws. This study focuses on the First Amendment impacts of campaign finance laws and whether the current constitutional framework should be used for campaign speech on the Internet. This 52 Internet Communications, 71 Fed. Reg. 18589 (Apr. 12, 2006) (codified at 11 CFR Parts 100, 110, 114). 19

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dissertation will not focus on the effectiveness of the laws in preventing corruption except as it relates to the discussion of the balance between that interest and the First Amendment. Background At this point, this study requires a brief history and explanation of campaign finance laws. In the formative years of the U.S. political system, party supporters were placed in government jobs with the expectation that they would contribute to party activities, including campaigns. 53 Congress first began legislating campaign funding banning naval yard employees from contributing to campaigns. 54 As Congress continued to regulate federal employment, corporate contributions became a larger part of the political process. 55 In the beginning of the 20th century, Congress continued to expand regulations of campaign finance. With the Tillman Act of 1907, Congress banned all corporate donations and gifts to federal candidates. Although these first efforts regulated pieces of campaign financing, the first comprehensive campaign finance reform was not passed until 1971. 56 Until the Federal Election Campaign Act of 1971, the campaign finance laws consisted of piecemeal legislation regulating disclosure and contributionsdirect payments or gifts of money. Since 1971, Congress has continued to amend the statute to address new concerns and close loopholes in the law as they appeared. One of the most significant campaign finance cases followed amendments to the law in 1974. The U.S. Supreme Court, in Buckley v. Valeo, determined the constitutionality of limiting 53 THE CAMPAIGN LEGAL CENTER, CAMPAIGN FINANCE GUIDE 5 (2004). This guide was written by Trevor Potter, Daniel R. Ortiz, and Anthony Corrado. 54 Id. See also 1868 Naval Appropriations Act. 55 Id. 56 Federal Election Campaign Act of 1971, 2 U.S.C. 431455) (hereinafter FECA). 20

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campaign spending by candidates, parties and individuals. 57 The most recent overhaul was the Bipartisan Campaign Reform Act of 2002, which was aimed at closing loopholes that left elections vulnerable to unintended influence. 58 This section will provide a brief overview of each of these major developments in the law. Federal Election Campaign Act In 1971, Congress passed the Federal Election Campaign Act of 1971 (FECA) in order to promote fair practices in the conduct of election campaigns for Federal political offices. 59 FECA placed limits on contributions and expendituresindirect gifts of valueby corporations and candidates in connection with federal election. 60 However, FECA did not establish an independent overseeing agency, and the 1972 elections led to more than 7,000 reports to the Department of Justice of campaign finance abuse, contributing to significant amendments in the FECA in 1974. The 1974 amendments established the Federal Election Commission (FEC) as the sole agency responsible for overseeing the administrative functions of the campaign finance system. 61 Congress also enacted limits on both contributions and expenditures that applied to federal candidates and political committees. The constitutionality of the 1974 amendments was challenged by Senators James L. Buckley and Eugene McCarthy. 57 424 U.S. 1 (1976). 58 Pub. L. No. 107-155 (2002) (codified at 2 U.S.C. 431, et seq.). 59 See FECA. 60 Id. The definitions of contributions and expenditures will be further explicated in Chapter 3. 61 Federal Election Campaign Act Amendments of 1974, 2 U.S.C. 431 et seq. Individuals contributions were limited to $1,000 per candidate and $25,000 in total contributions; expenditures were limited to $1,000 per candidate per year. Id. 21

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Determining Constitutionality: Buckley v. Valeo In response to challenges to the constitutionality of the 1974 amendments of FECA, the Supreme Court of the United States issued a per curiam opinion in Buckley v. Valeo 62 that has shaped all subsequent campaign finance reform. The constitutionality of FECA was challenged by individuals and groups that included federal officeholders, candidates and political organizations. 63 Among other issues, the petitioners challenged the limits on campaign spending, contributions, and expenditures, as well as disclosure requirements. In its opinion, the Court attempted to fence in campaign finance reform, in efforts to protect First Amendment rights. The Buckley Court held that limits on candidates expenditures and independent expenditures by individuals and groups were unconstitutional and infringed on First Amendment rights. 64 However, limiting contributions and coordinated expenditures, the Court found, satisfied the compelling government interest in reducing corruption of the election system. 65 Bipartisan Campaign Finance Reform Act Nearly thirty years passed before Congress again significantly amended the Federal Election Campaign Act (FECA). In 2002, Congress passed the Bipartisan Campaign Reform Act (BCRA), which was aimed to close some of the loopholes that the FECA left open. 66 62 424 U.S. 1 (1976). 63 424 U.S. 7-8. Plaintiffs included a candidate for the Presidency of the United States, a United States Senator who is a candidate for re-election, a potential contributor, the Committee for a Constitutional Presidency McCartthy the Conservative Party of the State of New York, the Mississippi Republican Party, the Libertarian Party, New York Civil Liberties Union, Inc., the American Conservative Union, the Conservative Victory Fund, and Human Events, Inc. Id. 64 Id. 43. 65 Id. at 58-59. 66 BCRA, supra note 37. On February 13, 2002, the House of Representatives passed H.R. 2356. The bill was then adopted by the Senate on March 18 and 20, 2002. President George W. Bush signed H.R. 2356 into law on March 22

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Specifically, the sponsors of the bill, Senators John McCain and Russell Feingold, expressed concern with the unregulated soft money donationsmoney raised outside the scope of FECA. 67 These type of donations had allowed contributors to bypass the FECAs contribution and expenditure limits for years. 68 In an effort to close these loopholes, BCRA prohibited national parties, federal candidates, and federal officeholders from raising or spending soft money. 69 BCRA also prohibited corporations and labor unions from using soft money to fund broadcasts that mention a federal candidate or officeholder within 30 days of a primary and 60 days of a general election. Further, BCRA required state and local parties to pay for federal election activities with hard money. Disclosure of electioneering communications that exceed $10,000 a year must be disclosed to the FEC under the new BCRA requirements. BCRA also increased the dollar limit on contributions from individuals to candidate and political parties. 70 In the BCRA, Congress defined two terms key to this discussion. Public communication was defined as any communication by means of 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. 71 And general campaign activity was defined as a campaign activity that promotes a political party and does 27, 2002. BCRA is also known as the McCain-Feingold Act, after its Senate co-sponsors, Senators John McCain and Russell Feingold. 67 These funds were generally raised for grass-roots campaigns and party-specific activities (i.e., bumper stickers, get-out-the-vote drives, and committee publications with three or more candidates listed). For a further discussion of soft money, see infra Ch. 3. 68 BCRA, supra note 8. See also ANTHONY CORRADO, MONEY AND POLITICS: A HISTORY OF FEDERAL CAMPAIGN FINANCE LAW CAMPAIGN FINANCE REFORM: A SOURCEBOOK (Washington, DC: Brookings Institution Press 1997). 69 See Corrado, supra note 67. 70 BCRA, supra note 71 Id. 23

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not promote a candidate or non-Federal candidate. 72 These definitions are important because they are used to determine the scope of all regulations mandated by the BCRA. 73 Literature Review Scholars have since the inception of the Federal Election Campaign Act more than thirty years ago have been intrigued by the complexities of campaign finance laws. Many scholars have focused on the explicating the definitions and specific applications. Others have concentrated on the relationship between campaign finance laws and the First Amendment. Most recently, scholars have addressed how campaign finance laws can, and should, be applied to the Internet. Campaign Finance Laws and History Scholars have attempted to explain the complex paradigm of current campaign finance laws. This includes explicating the concepts central to campaign finance, examining the history of campaign finance laws, and exploring the future of campaign finance reforms. 74 Scholars have used a range of perspectives in considering these issues, including historical, normative, and critical. The focus of these articles range from a broad, comprehensive description of the current state of campaign finance law to a directed analysis of a particular court opinion or a particular statutory provision. The result is a fairly well-established area of study that offers a general understanding of the relative laws and issues. Some scholars have focused on illustrating the key elements of campaign finance law, clarifying a sometimes convoluted legal concept. For example, Burt Neuborne offered a Guide 72 Id. 73 BCRA was challenged and upheld in McConnell v. Federal Elections Committee, 540 U.S. 93 (2003). 74 See, e.g., COMMISSION ON CAMPAIGN FINANCE REFORM, THE ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK, DOLLARS AND DEMOCRACY: A BLUEPRINT FOR CAMPAIGN FINACE REFORM (2000); Burt Neuborne, One Dollar-One Vote: A Preface to Debating Campaign Finance Reform, 37 WASHBURN L.J. 1 (1997). 24

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for the Busy Reader that listed the principles and corollaries inherent in the campaign finance debates. 75 This guide reviewed the values at issue in campaign finance debates: political autonomy, preventing corruption, and enhancing political equality. 76 Neuborne continued his guide with a critical analysis of the 1976 Supreme Court decision that determined the constitutionality of the first comprehensive campaign finance reform law and its progeny. 77 Other scholars exploring the area of campaign finance also have focused on the pivotal 1976 Supreme Court decision in Buckley v. Valeo, which determined the constitutionality of the Federal Election Campaign Act of 1971. 78 Robert Bauer offered an overview of the status of campaign finance reform, focusing on the weaknesses of the Buckley v. Valeo opinion. 79 Bauer argued that Buckleys rationale that focused on corruption as the overriding government interest has become the principle obstruction for FEC actions because courts have strengthened the requirement of showing corruption so that the FEC seemingly must prove actual corruptionan almost impossible taskbefore being able to enforce the laws. 80 Bauer further noted that the courts have become unwilling to accept the FECs judgment as to the existence or appearance of corruption, 81 thereby preventing effective enforcement. 75 Neuborne, supra note 73. 76 Id, at 1-8. Neuborne also identified ancillary values: efficiency, flexibility, spontaneity, increasing voter knowledge, enhancing quality of representation, restoring confidence in democracy, and improving the quality of democratic disclosure. Id. at 8-11. 77 Id. at 12-26 (discussing Buckley v. Valeo, 424 U.S. 1 (1976) and subsequent cases). 78 Robert F. Bauer, The Demise of Reform: Buckley v. Valeo, the Courts, and the Corruption Rationale, 10 STAN. L. & POLY REV. 11 (1998); Bradley A. Smith, Campaign Finacne Reform: Searching for Corruption in all the Wrong Places, 2003 CATO SUP. CT. REV. 187 (2003). 79 Robert F. Bauer, The Demise of Reform: Buckley v. Valeo, the Courts, and the Corruption Rationale, 10 STAN. L. & POLY REV. 11 (1998). 80 Id. at 13. 81 Id. at 14. 25

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Bradley Smith also offered commentary on the required corruption standard that issued from Buckley. 82 Smith offered a brief history of campaign finance laws leading to the Buckley decision. Smith argued that the Court, in its treatment of the corruption requirement, created three important impacts on the enforcement of campaign finance laws. First, Buckley, by rejecting the argument that political equality was a sufficiently compelling interest to limit the First Amendment via contribution and expenditure limits, requires all reform advocates to shoehorn their arguments into the guise of anti-corruption arguments. 83 Second, by creating a legal standard that contributions may be banned, the Court opened the door for regulations that ban or limit activity that does not have the potential for corruption, merely because it comes in the form of a contribution ban. 84 Finally, by failing to more precisely define the evil to be prevented, it opened up the system to manipulation. 85 Smith further argued that these flaws resulting from the reasoning in Buckley have promoted the trend toward regulating political speech more than the Court intended, no longer limiting regulation to monetary contributions. 86 For example, Smith pointed out that BCRA placed more extensive limits on the amount that groups like the Sierra Club could spend on broadcast advertisements than on print and billboard advertisements. 87 82 Smith, supra note 77. 83 Id. at 201. 84 Id. at 209. 85 Id. at 201. 86 Id. at 222. 87 Id. at 221. 26

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While recognizing the flaws in the Buckley decisionsuch as the corruption justification effectsEugene Volokh argued that the Supreme Court got it basically right. 88 Volokh argued that in striking down expenditure limits, the Court protected the freedom of effective speech. These limits would have prohibited an individual from using any number of media to speak out on political issues; Volokh mentions advertisements in major newspapers and message T-shirts as two examples of speech that would be curtailed under the FECA expenditure limits. 89 Volokh supported the Courts finding that contribution limits are constitutional. 90 Volokh argued that 1) contributions are analogous to content-neutral speech limitations because the limits are not relative to the content of communication purchased with contribution funds; 2) the limits serve an important government interest in preventing corruption; 3) the restrictions are not overbroad because any money given to a candidate could be a bribe; and 4) the restrictions on contributions leaves other avenues of communication. 91 Further, Volokh reasons that whereas many scholars criticize the Buckley Court for focusing on corruption rather than political equality as the prevailing governmental interest, the Courts decision to ignore the equality rationale was consistent with First Amendment jurisprudence. Volokh cites the ever-present classroom analogy. Advocates of basing campaign finance reform on equalizing the debate, compare it to a classroom, in which government constantly controls speech. 92 Volokh notes that this is acceptable in the forum of a classroom or a courtroom, but not when the government is acting as the sovereign. 93 Each individual is supposed to be autonomous and free to decide how to express 88 Eugene Volokh, Why Buckley v. Valeo is Basically Right, 34 ARIZ. ST. L.J. 1095 (2002). 89 Id. at 1095-96. 90 Id. at 1102. 91 Id. 92 Id. at 1097. 27

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him or herself. Allowing the government to restrict speech in favor of equality of speech would dramatically restrict First Amendment protection across the board. 94 The Harvard Law Review published an unauthored analysis of the current Supreme Courts review of the Buckley opinion in its 2006 Randall v. Sorrell decision. 95 The analysis noted the negative response that Buckley received since it was issued. 96 Although the Courts decisions between Buckley and Randall had indicated a potential for overturning the long-standing decision, the majority in Randall affirmed Buckley. Yet the Harvard Law Review noted that in discussing the First Amendment challenges to campaign finance laws, the Randall decision focused more on protecting the integrity of the electoral process than protecting the individuals right of free speech, which was more prevalent in Buckley. This signaled a shift in the Courts rhetoric that the law review found more sensible. 97 The law review article argued that this shift to an institutional or structural approachfocusing on the integrity of the political systemwould protect the courts from undermin[ing] the very interests they believe themselves to be securing. 98 This structural approach would favor judicial deference to the legislature when there is no risk of such constitutional evils as, say, permitting incumbents to insulate themselves from effective electoral challenge. 99 However, the Courtdespite its eloquent phrasingwas unwilling to exercise broad legislative deference in 93 Id. at 1097. 94 Id. at 1098. 95 Leading Cases, Constitutional Law, Freedom of Speech and Expression, Campaign Finance Regulation, 120 HARV. L. REV. 283 (2006). 96 Id. at 283. 97 Id. at 284. 98 Id. at 289 (quoting Richard H. Pildes, The Supreme Court, 2003 Term --Foreword: The Constitutionalization of Democratic Politics, 118 HARV. L. REV. 28, 54 (2004)). 99 Id. at 290 (quoting Nixon v. Shrink Mo. Gov't PAC, 528 U.S. 377, 402 (2000) (Breyer, J., concurring)). 28

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Randall. 100 And thus, while the Court purported to support a structural standard, it continued to utilize the individual rights standard applied in Buckley. The Court held that the limits in the challeged law constrained the ability of challengers to run competitive campaigns, threatened individual voters' right to association, and imprecisely determined the impact of volunteer activity. 101 The law review concluded that although the Courts rhetoric indicated a positive change to a structural approach, the Court did not follow through in its decision; the approach in Buckley was affirmed. 102 Some scholars, instead of focusing on particular aspects of the Buckley decision, used the pivotal decision and a historical approach toward campaign finance reform to explore the evolution of campaign finance laws. 103 For example, Justin Nelson explored the trends that have emerged through the years since the inception of campaign finance reform. 104 Nelson argued that previous reform attempts have failed because they have focused too heavily on limiting the amount of money being infused into the political system, and that efforts should instead focus on decreasing politicians need for private money. 105 Farrah Nawaz also used the history of 100 Id. at 292. 101 Id. at 285-86. 102 Id. at 287. 103 See, e.g., Justin A. Nelson, The Supply and Demand of Campaign Finance Reform, 100 COLUM. L. REV. 524 (2000); Farah Nawaz, Campaign Finance Reform Dollar for Votes The American Democracy, 14 ST. JOHNS J. LEGAL COMMENT. 155 (1999). 104 Nelson, supra note 102. 105 Id. at 524. 29

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campaign finance reform laws to illustrate the need for change. 106 Nawaz analyzed various reform proposals that were being considered at the time of the article in 1999. 107 In addition to using the history of campaign finance laws to evaluate the current system and proposals for change, scholars have examined the possible future configurations of campaign finance laws. 108 For example, Richard Briffault identified concerns that he believed needed to be addressed in future amendments to the campaign finance laws. 109 Briffault contended that the FEC should be restructured or replaced to ensure effective enactment and enforcement of campaign finance provisions. 110 Briffault further called for the increase in available public funding for campaigns. [T]he next goal for campaign finance reform must be not simply the prevention of corruption but the promotion of competition. That will require a new commitment of public resources to the funding of federal election campaigns. 111 106 See Nawaz, supra note 102. 107 Nawaz at 175. For other examples of using a historical approach to analyze proposed reforms, see Kenneth J. Levit, Campaign Finance Reform and the Return of Buckley v. Valeo, 103 YALE L.J. 469 (1993); and Kevin P. Sullivan, But These Times Were Supposed to be a Changing How Congress Should Regulate 527 Groups in Light of the Bipartisan Campaign Reform Act, the Vote for Change Tour, and the 2004 Presidential Election, 16 SETON HALL J. SPORTS & ENT. L. 130 (2006). 108 See, e.g., Richard Briffault, The Future of Reform: Campaign Finance After the Bipartisan Campaign Reform Act of 2002, 34 ARIZ. ST. L.J. 1179 (2002); Rep. Harold E. Ford, Jr. & Jason M. Levien, A New Horizon for Campaign Finance Reform, 37 HARV. J. ON LEGIS. 307 (2000); Cecil C. Kuhne, III, Rethinking Campaign-Finance Reform: The Pressing Need for Deregulation and Disclosure, 38 J. Marshall L. Rev. 633 (2004); William P. Marshall, The Last Best Chance for Campaign Finance Reform, 94 NW. U. L. REV. 335 (2000); Audra L. Wassom, Campaign Finance Legislation: McCain-Feingold/Shay-MeehanThe Political Equality Rationale and Beyond, 55 SMU L. REV. 1781 (2002). 109 Richard Briffault, The Future of Reform: Campaign Finance After the Bipartisan Campaign Reform Act of 2002, 34 ARIZ. ST. L.J. 1179 (2002). This article was written prior to the Supreme Court decision in McConnell v. FEC, which upheld the Bipartisan Campaign Reform Act of 2002. See 540 U.S. 93 (2003). 110 Briffault, supra note 108, at 1211. 111 Id. at 1216. See also, Wassom, supra note 107 at 1782 (heralding public financing as the ultimate goal of campaign finance legislation). 30

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Campaign Finance and the First Amendment Scholars studying campaign finance laws have expended great effort devoted to the relationship between these laws and the First Amendment. Some argue that the current paradigm of First Amendment analysis in campaign finance cases needs to be adjusted or abandoned for a more flexible one; others argue that the paradigm shift is already occurring. One theme commonly found in First Amendment analysis of campaign finance laws is that the Court needs to deviate from its current approach because First Amendment rights are being denied. 112 Scholars have suggested various new methods for analysis, but most suggest a focus on the process of campaigns and electionsas suggested by the rhetoric in the Randall opinionrather than on individuals. Others suggest that the current approach of focusing First Amendment challenges on the interests of individuals implicitly supports disparate treatment of minority voters and candidates, allowing wealth to overshadow the viewpoint of the poor. 113 Owen Fiss advocated a change in jurisprudence from the traditional approach that placed autonomy as the ultimate value in First Amendment scrutiny, to a structural model that would place as the ultimate principle enhancing the public debate. 114 Fiss argued that [w]hen the state acts to enhance the quality of public debate, we should recognize its actions as consistent with the first amendment. 115 Fiss noted that although expanding the debate might be the intent of 112 See Richard A. Davey, Jr., Buckleying the System: Is Meaningful Campaign Finance Reform Possible Under Reigning First Amendment Jurisprudence?, 34 GONZ. L. REV. 509 (1999); Owen Fiss, Free Speech and Social Structure, 71 IOWA L. REV. 1405 (1986); Bradley A. Smith, The Sirens Song: Campaign Finance Regulation and the First Amendment, 6 J.L. & POLY 1 (1997); Stephanie A. Sprague, The Restriction of Political Associational Rights Under Current Campaign Finance Reform First Amendment Jurisprudence, 40 NEW ENG. L. REV. 947 (2006). 113 See, e.g., Sprague, supra note 111; Spencer Overton, The Donor Class: Campaign Finance, Democracy, and Participation, 153 U. PA. L. REV. 73 (2004) (contending that the disparities in wealth cause disparity in citizen participation). 114 Fiss, supra note 111 at 1415. 115 Id. at 1416. 31

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campaign finance laws, sometimes laws may have contrary results, restricting the debate by narrow[ing] the choices and information available to the public. 116 However, he maintained that by adhering to the traditional approach of the the First Amendment, the Court ignores the manifold ways that the state participates in the construction of all things social and how contemporary social structure will, if left to itself, skew public debate. The structural approach would, on the whole, allow for the necessity of restricting some speech in order to enhance the relative voice of others. 117 Another scholar, Stephanie Sprague, argued that the current campaign finance laws disparately deny First Amendment association rights to the poor. 118 Sprague contended that unlimited spending promotes wealthy candidates, and deemphasizes the efforts of poor citizens to support a candidate that would represent their interests. 119 Further, Sprague argued that unlimited spending has worked against the goals of the First Amendment because candidates without the ability to raise the large sums of money now necessary for a successful campaign are left outthose voices and views are not included in the public debate. 120 Sprague recognized that the right of free speech supported by unlimited spending is important. However, she noted that this right must be balanced against the rights of political association and that the courts must not simply ignore one in favor of another. 121 Other aspects of First Amendment protections also may be threatened because further amendments to the campaign finance regime will 116 Id. at 1418. 117 Id. at 1425. 118 Sprague, supra note 111 at 973. See also Spencer Overton, The Donor Class: Campaign Finance, Democracy, and Participation, 153 U. PA. L. REV. 73 (2004) (contending that the disparities in wealth cause disparity in citizen participation). 119 Sprague, supra note 111 at 973 120 Id. at 976. 121 Id. at 981. 32

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constantly require more amendments to close the loopholes, thus ever endangering the First Amendment rights. 122 It has been suggested that the approach the Supreme Court used to examine the First Amendment obstacles to campaign finance laws began to change with the 2006 decision in Randall v. Sorrell. 123 Robert Bauer explored Justice Stephen Breyers theory of active liberty, which focuses on participatory self-government. 124 Bauer noted that this theory, focusing on the effectiveness of government, calls for significant deference to the legislatureeven where the First Amendment is triggered. He paraphrased Justice Breyer as having said that the First Amendment should not bar legislation that regulates speech for sound reasons based on the evaluation of facts. 125 Bauer analyzed Breyers theory as the Justice had applied it to campaign finance cases, finding that Breyer would defer to the legislature in determining the balance between electoral integrity and free speech. Breyer believed that in election law, the legislators possess an experience and understanding not available to judges and so are the expert and should not be denied the tools for finding a solution. 126 In 2007, Rachel Gage identified Breyers theory of active liberty as an emerging trend in jurisprudence when she analyzed all of the Supreme Courts campaign finance decisions to discern the Courts approaches in balancing the need for campaign finance reform and the First 122 See Smith, supra note 111 at 34-42. 123 See Robert F. Bauer, Democracy as Problem Solving: Campaign Finance and Justice Breyers Theory of Active Liberty, 60 U. MIAMI L. REV. 237 (2006); Lillian R. BeVier, Full of SurprisesAnd More to Come: Randall v. Sorrell, the First Amendment, and Campaign Finance Regulation, 2006 SUP. CT. REV. 173; Rachel Gage, Randall v. Sorrell: Campaign-Finance Regulation and the First Amendment as a Facilitator of Democracy, 5 FIRST AMEND. L. REV. 341 (2007). 124 See Bauer, supra note 122. 125 Id. at 246. 126 Id. at 244. 33

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Amendment. 127 Gage argued that the decision in Randall v. Sorrell 128 indicated a paradigm shift in campaign finance jurisprudence. 129 Gage concluded that the paradigm shift, illustrated in Justice Breyers concurrence, could create problems because Breyer suggested that individual speech could be curtailed to further the institutional goals of the electoral system; that is, the individual free speech rights of campaign contributions are subordinate to the larger First Amendment interest of protecting the integrity of the political process in order to achieve more perfect self-government. 130 Gage argued that this two-sided First Amendment results in courts decidingwith little or no guidancethe point at which the restriction on the individual fails to serve society's interests, and also to determine when an individual deserves protection despite the fact that such protection may be at odds with democratic self-governance.. 131 Some scholars, rather than suggest a new paradigm for campaign finance reform, have focused on revitalizing the use of strict scrutiny in determining the constitutionality of campaign finance laws. 132 In 2000, Michael Marcucci justified the use of strict scrutiny 133 through analogies to the Supreme Courts election law jurisprudence. 134 Because any campaign finance law structure will impact the candidates that run and thereby voter choices, these laws may be 127 See Gage, supra note 111. 128 126 S. Ct. 2479 (2006). 129 Gage, supra note 111, at 358-61. 130 Id. at 361-364. 131 Id. at 364. 132 See Lillian R. BeVier, Money and Politics: A Perspective on the First Amendment and Campaign Finance Reform, 73 CAL. L. REV. 1045 (1985); Michael Marcucci, Speech or Not: Applying Election Law Strict Scrutiny to Campaign Finance Regulations, 42 B.C.L. REV. 173 (2000). 133 The standard applied to suspect classifications (such as race) in equal-protection analysis and to fundamental rights (such as voting rights) in due-process analysis. Under strict scrutiny, the state must establish that it has a compelling interest that justifies and necessitates the law in question. BLACKS LAW DICTIONARY. 134 Marcucci, supra note 131 at 176. 34

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analyzed similarly to ballot access lawsto which the Supreme Court has always applied strict scrutiny. 135 The Court applies a balancing test when examining ballot access laws, inquiring into the alleged injury to constitutional rights and the competing governmental interests. 136 Marcucci concludes that applying this same type of balancing test to campaign finance laws would not render all such laws unconstitutional, but would require the courts to find a compelling governmental interest to justify the laws. 137 In 1985, Lillian BeVier defended strict scrutiny when she refuted common arguments put forth by reformers who demanded a relaxed standard of review for First Amendment challenges to campaign finance laws. Bevier argued that: 1) that the First Amendment requires the restriction of political speech inherent in campaign finance laws and 2) that the courts should defer to the Congress in the decisions that may subordinate free speech rights to the interest in equality in the electoral process. BeVier argued that the First Amendment does not guarantee outputsequality of viewsbut rather it prohibits government intrusion of inputsexpression entering the marketplace. 138 BeVier further argued that even if the output view was accepted, that does not preclude a strict scrutiny standard in the courts. This is particularly true in cases involving campaign finance legislation because the legislators have incentives to craft legislation to favor incumbents. 139 Other scholars have argued that when courts engage in a balancing teststrict scrutiny or notto determine the constitutionality of campaign finance laws, they should not limit their 135 Id. at 190. 136 Id. at 191. 137 Id. at 197. 138 BeVier, supra note 131 at 1071. 139 Id. at 1075-1081. 35

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inquiry for a compelling government interest to corruption. 140 Vincent Blasi contended that campaign finance laws that limit spending should not be presumed unconstitutional when they are justified with the objective of protecting candidates time. 141 Time protection is aimed at encouraging candidates who are already elected officials 142 to spend more of their time governing, and less time fundraising. 143 Blasi contended that in so far as the limits on contributions and expenditures promote time-protection, they are content-neutral. 144 He advanced this rationale as a protection of the electoral system by redirecting how candidates spend their time. He posited that such changes may increase voter confidence and encourage citizen engagement in the public debatethereby enhancing public discourse through a limitation on certain speech. 145 Eric Freedman contended that a political system that relies on the use of money risks exaggerating the voice of wealthy citizens and candidates while excluding those without sufficient funds. 146 Freedman argues that it should be the equality of political influence that is the foundation of campaign finance law. He stated that because political systems are most generally justified by a social contract theory, private financing should be examined from the perspective of John Rawls A Theory of Justice. 147 Rawls theory proposed that all laws should be created 140 Vincent Blasi, Free Speech and the Widening Gyre of Fund-Raising: Why Campaign Spending Limits May Not Violate the First Amendment After All, 94 COLUM. L. REV. 1281 (1994). 141 Id. at 1324. 142 These could be incumbents or officials seeking a different office. 143 Blasi, supra note 139 at 1282-83. 144 Id. at 1292. 145 Id. at 1324. 146 Eric Freedman, Campaign Finance and the First Amendment: A Rawlsian Analysis, 85 IOWA L. REV. 1065 (2000). 147 Id. at 1070. 36

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from the original positionwhen decisions are made no one knows his class position or social status, nor his fortune in the distribution of natural assets and abilities, his intelligence, strength, and the like. 148 Rawls contended that through this device, society would arrive at laws that were fair and just. 149 Freedman, through this analysis, concluded that the current contribution limits are too high and that a voucher system for public financing would be more effective at furthering the interest in political equality of speech. 150 Scholars also have argued that the collective interests and the individual interests must both be considereda careful balancing test is the key to the coexistence of First Amendment principles and effective campaign finance laws. 151 Gary Stein, in arguing that campaign finance reforms can be effective without fatally infringing on First Amendment values asked, of what enduring constitutional value is unlimited political speech if its practical effect in contemporary society is to corrupt the elective process it was intended to enhance? 152 Stein concluded that absolute First Amendment principles cannot be used to determine campaign finance reforms. There must be a balance between the individual interest in unlimited speech and the collective interest in maintaining integrity of the electoral system. 153 148 See JOHN RAWLS, THEORY OF JUSTICE (Belknap Press 2005) (1971). 149 Id. 150 Freedman, supra note 145 at 1087-94. 151 See Gary S. Stein, The First Amendment and Campaign Finance Reform: A Timely Reconciliation, 44 RUTGERS L. REV. 743 (1992). 152 Id. at 795. 153 Id. at 795. 37

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Campaign Finance and the Internet As the debates surrounding campaign finance laws continued, the Internet emerged as a new medium for political campaigns in the 2000 election cycle. 154 As the Internet has increased in perceived importance to campaigns, scholars have increasingly explored how campaign finance laws could, and should, be applied to the Internet. Scholars have recognized that the Internet creates unique problems for the enforcement of current campaign finance laws. For example, one scholar questioned how the Internet would affect the campaign finance media exemptionif an individual creates a website, does that individual become a media entity? 155 Additionally, the Internet can intensify the disparity of participation among the poor and minority citizens, as Internet users generally control more financial resources than other Americans and nearly 25 percent of all Americans are offline. 156 Scholars have examined the challenges that the Internet poses to application and enforcement of campaign finance laws, and proposed some solutions and amendments. Michael Kang studied the evolution in political communications from broadcasting to narrowcasting, taking note of the unique challenges this shift poses to campaign finance laws. 157 Kang noted that television was, in recent years, the prominent feature in any campaign or political communication strategy; in parallel, broadcast was the prominent feature in campaign finance laws. 158 Beginning in the 2004 election cycle though, candidates recognized that 154 Spencer Overton, The Donor Class: Campaign Finance, Democracy, and Participation, 153 U. PA. L. REV. 73, 110 (2004). 155 Volokh, supra note 87 at 1097. 156 Overton, supra note 153 at 110. 157 Michael S. Kang, From Broadcasting to Narrowcasting: The Emerging Challenge for Campaign Finance Law, 73 GEO. WASH. L. REV. 1070 (2005). 158 Id. at 1073. 38

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broadcasting was not as effective as it once was. Kang observed that campaigns began to turn to narrowcastingmovement toward individualized, face-to-face campaigning. 159 Campaigns began using web-based databanks to target specific messages to specific audiences, and they increased face-to-face time with votersoften working in cooperation with organizations not legally affiliated with the campaign. 160 Kang contended that many of these activities escaped the construction of current campaign finance legislation. 161 Although he did not dwell on Internet activities, the concerns Kang raised in relation to these narrowcasting activities translate to online campaign activities. Kang concluded that narrowcasting is a strategic modernization of old-fashioned politics that not only is difficult to regulate legally, but also makes the case for reform less compelling. 162 In 2006, shortly before the FEC adopted regulations governing Internet campaign communications, Lindsey Powell proposed strategies for applying the federal campaign finance laws online. 163 Powell outlined which provisions of the laws and existing regulations should be applied to the Internet and which exemptions also should apply. 164 She created a cost-analysis structure to determine the value of Internet communications, disputing the idea that most online activities would fall outside of the scope of FECA due to the low-cost nature. 165 159 Id. at 1075. Kang explained this shift as a result of cable fragmenting the television audience. Id. at 1074. 160 Id. at 1075-84, 1087. 161 Id. at 1084. 162 Id. at 1095. 163 Lindey Powell, Getting Around Circumvention: A Propoosal for Taking FECA Online, 58 STAN. L. REV. 1499 (2006). 164 Id. at 1513-1524. 165 Id. at 1513-1515. 39

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Specifically, Powell determined that paid online advertisements should be regulated in the same manner as paid advertisements in other media. 166 Further, Powell identified two exemptions to campaign finance laws that also should be carried to the online forum: individual volunteers and the media. 167 Powell ultimately focused on the issue of disclaimers online; she raised a concern that is unique to the Internetor at least exacerbated by the Internethidden associations between online actors and candidates or political parties. Powell contended that traditional media forestalls much of this concern by the existence of codes of ethics and professional standards. 168 In order to dispel concern over this issue, Powell proposed a mandatory disclosure provision that would require an online actor receiving money from a political source to state conspicuously on her website that she has a paid relationship with that source. Reference to the fact of payment would have to be explict. 169 Powell did contemplate the impact this requirement would have on online speech. She recognized a risk of decreased speech due to the fact that many online actors, bloggers specifically, are unpaid. 170 This mandatory disclosure could be a deterrent for online actors to accept paymentleaving the online speech up to mostly hobby bloggers. 171 However, Powell doubted that the disclosure requirement would in fact deter bloggers from accepting payment as most bloggers do not pretend to be nonpartisan. In fact, Powell ponders whether a disclosure requirement would actually lend more credibility to blogs and thus increase the demand for 166 Id.at 1515-1518. 167 Id.at 1518. 168 Id.at 1524-1526. 169 Id.at 1534. 170 Id.at 1536. 171 Id.at 1536. 40

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online speech. 172 Powell concluded that this disclosure requirement would be a mere first step at regulating the Internet, but that until more is learned about the potential of the medium it is best to permit some amount of undesirable activity than unjustifiably to stifle core political speech and in turn damage the democratic process in its own name. 173 In 2007, David Stevenson called for a disclaimer requirement similar to Powells and argued for blogger exemption from FECA. 174 Stevenson called for an expansion of the media exemption to FECA to online communications beyond that which the FEC adopted in its 2006 rules. Specifically, Stevenson proposed that online entities should not need to meet the definition of a press entity to qualify for the exemption; also, he advocated a shift in presumption when the FEC decides press exemption claimshe stated that the commission should presume the exemption applies unless (1) the entity's ownership or control by a political party, committee, or candidate compromised its ability to be a bona fide member of the media, or (2) the entity was created for the primary purpose of advocating the election or defeat of clearly identified federal candidates. 175 Stevenson concluded that a disclaimer requirement would alleviate any additional circumvention that this shift in presumption would create. 176 Applying campaign finance laws to the Internet is a relatively new and complicated issue. Scholars have begun to tackle the unique problems presented, but further discussion and analysis is warranted. 172 Id.at 1535-1538. 173 Id.at 1538. 174 David Stevenson, A Presumption Against Regulation: Why Political Blogs Should be (Mostly) Left Alone, 13 B.U. J. SCI. & TECH. L. 74 (2007). 175 Id. at 105. 176 Id. at 105. 41

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Research Questions The current literature provides a fairly complete discussion of the current laws and history of campaign finance reform. Additionally, the discussion of the interaction between the First Amendment and campaign finance reform is diverse and abundant. However, the current literature addressing the Internet and campaign finance reform lacks a comprehensive review of the FECs 2006 rulemaking. Rather, the extant literature focuses on particular aspects of Internet political activitymost notably bloggers. While bloggers are a significant audience to consider, it is important to discuss the full ambit of effects of regulating online political activity. This study will provide that discussion and further analyze the First Amendment compliance of these regulations. The research questions that are answered by this dissertation are: 1. What are the First Amendment concerns associated with applying campaign finance laws to Internet communications? 2. What is the current framework for campaign finance reform? 3. How are the different communication media treated by current campaign finance laws, including FEC regulations? 4. What are the current campaign finance laws and regulations that govern Internet campaign communications? 5. Do the campaign finance regulations defining paid Internet communications transmitted via third party as regulated under campaign finance laws adequately protect First Amendment interests? 6. What is the optimum model for regulating campaign finance on the Internet to protect First Amendment interests? Methodology The questions posed by this study are best answered using legal research methods. As the focus of this dissertation is at the federal level, the primary sources include the U.S. Constitution, federal campaign finance reform acts, Federal Elections Commission regulations and 42

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rulemakings, and federal court decisions. Additionally, the author analyzed legislative history and regulatory rulemaking documents to understand the intent of Congress and the FEC. To gather the primary legal resources, the author used both Lexis-Nexis Legal and Westlaw legal databases. The author used both known citations as well as string searches to the required materials. The researcher was aware of the federal statutes from reviewing secondary literature, including journals and treatises. These were retrieved from the Westlaw database using a citation search. The relevant administrative law materials were located by searching the Westlaw database as well as the FEC government website. Additionally, the researcher completed a legislative history search for both identified legislation; this was completed using the Lexis-Nexis legal database. U.S. Supreme Court cases were identified by Shepardizing major decisions in campaign finance law including Buckley v. Valeo and McConnell v. FEC. To perform the literature review, the author reviewed the Lexis-Nexis and Westlaw databases. Research Question 1 was answered by reviewing relevant First Amendment theories and Supreme Court cases addressing First Amendment challenges to campaign finance laws. The researcher then applied the same challenges to the Internet environment. Research Questions 2 and 3 were answered by analyzing the Federal Election Campaign Act, including codified amendments, along with relevant U.S. Supreme Court cases. Additionally, FEC advisory opinions to determine the application of the statute to the different media. Research Question 4 was answered by analyzing the FECA and the corresponding sections of the Code of Federal Regulations. Additonally, the researcher discussed the FEC advisory opinions that addressed application of the FECA to the Internet. Research Question 5 was answered by using First Amendment analyses generated by review of First Amendment legal scholars and Supreme Court campaign finance opinions to evaluate the constitutionality of the regulations adopted by 43

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the FEC. Research Question 6 was answered by extracting the potential problems in the FEC regulations as addressed by Questions 4 and 5. Dissertation Outline This dissertation asked whether the current laws regulating campaign speech on the Internet comports to First Amendment protections for free speech. Chapter 2 of this dissertation will discuss the interests served by the freedom of speech and the values of regulating campaign financing. The values that will be the focus of this study are self-governance as proposed by Alexander Meiklejohn and the marketplace of ideas as conceived of by John Stuart Mill because these are the theories most utilized by the Supreme Court in campaign finance cases. Finally, this chapter will offer a brief discussion of how the Court has approached the balance between the First Amendment interests in free speech and the government interest in moderating the political process. Chapter 3 will discuss the history of campaign finance laws that have culminated in new FEC regulations for online activities. This will include an overview of FECA and the major amendments, and administrative rules and process. Chapter 4 will provide an analysis of the relevant U.S Supreme Court case law in the area of campaign finance. This analysis will identify trends that may impact online campaign communications in the future. Chapter 5 will discuss the legal developments in regulating campaign communications on the Internet. This will include a discussion of the 2004 district court opinion in Shays v. FEC and the rules adopted by the FEC in 2006 to regulate certain online activities. Chapter 6, the conclusion will summarize the findings in the preceding chapters. This chapter will discuss the role of the Internet in elections. The chapter will suggest the proper balance between regulation and free speech on the Internet in terms of campaign finance laws. 44

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CHAPTER 2 CAMPAIGN FINANCE AND FIRST AMENDMENT THEORY Interpreting the First Amendment Congress shall make no law abridging the freedom of speech, or of the press. 177 The seemingly clear words of the First Amendment are deceptively simple. 178 The meaning and scope of protection for expression has been continually tested and debated. The U.S. Supreme Court and scholars have developed theories to fill the gaps left by the Framers. 179 These theories embody justifications for the First Amendment protections, namely freedom of speech and freedom of the press. The Supreme Court has leaned on many of these theories in analyzing alleged infringements of free speech, including campaign finance laws. The Court, in its evaluation of the interaction of the First Amendment and campaign finance laws has focused on free speech as fundamental to self-government and the search for truth. In fact, these theories of the First Amendment often have been pitted against one another in the academic debates over campaign finance reform. Search for Truth The search for truth has been touted as a rationale for First Amendment protection of free and uninhibited speech. This theory of free speech also has been claimed by both sides of the campaign finance reform debate. This rationale most often takes the form of the marketplace of 177 U.S. Const., amend. 1. 178 DANIEL A. FARBER, FIRST AMENDMENT 1 (2003). 179 The major theories most consistently cited by courts and legal scholars are the search for truth, espoused most notably by John Milton, John Stuart Mill, and Justice Holmes; self-governance, espoused most notably by Alexander Meiklejohn; the checking value, espoused most notably by Vincent Blasi; self-fulfillment, espoused by Thomas Emerson who envisioned a cooperaton between several justifications. This study focuses on the search for truth and self-governance as the two theories most heavily relied on in the debate over campaign finance reform. For a full discussion of the checking value, see Vincent Blasi, The Checking Value in First Amendment Theory, 1977 AM. BAR FOUND. RES. J. 521; for a full discussion of Emersons theory, see ThOMAS I. EMERSON, THE SYSTEM OF FREEDOM OF EXPRESSION (1971). 45

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ideas, a term coined in U.S. jurisprudence by Justice William Brennan. Although most closely tied to John Stuart Mills famous essay On Liberty, 180 the concept dates to the 17th century. John Milton in Areopatgitica set out the attainment of truth as justification for a free press as he argued against a renewal of a licensing system for the press. 181 Milton emphasized that truth would be discovered through a free exchange of ideas. Milton argued that restricting the free flow and debate of ideas would limit the ability for truth to emerge; values and knowledge would stagnate. 182 And though all the winds of doctrine were let loose to play upon the earth, so Truth be in the field, we do injuriously, by licensing and prohibiting, to misdoubt her strength. Let her and Falsehood grapple; Who ever knew Truth put to the worse in a free and open encounter? 183 More than 200 years after Milton delivered his speech to Parliament, John Stuart Mill, an English philosopher, expanded Miltons theory of truth attainment. In On Liberty, Mill advocated the open exchange of ideas as a necessity for a democratic society. 184 He believed freedom to participate in this exchange was part of a citizens right. 185 A truly free society would allow for all ideas to be expressed, even those at the height of dissent. When there are persons to be found, who form an exception to the apparent unanimity of the world on any subject, even if the world is in the right, it is always probable that dissentients have something worth hearing to say for themselves, and that truth would lose something by their silence. 180 JOHN STUART MILL, ON LIBERTY (D. Spitz ed., 1975) (1859). 181 John Milton, Areopagitica, A Speech for the Liberty of Unlicensed Printing to the Parliament of England (Nov. 23, 1644). 182 John Milton, Areopagitica, A Speech for the Liberty of Unlicensed Printing to the Parliament of England (Nov. 23, 1644). 183 Id. 184 Mill, supra note 4. 185 Id. 46

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Indeed, Mill thought that by nature of the comparison and necessity of evaluation of different ideas, the truth would be that much stronger for having survived the process. [T]he peculiar evil of silencing the expression of an opinion is, that it is robbing the human race; posterity as well as the existing generation; those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error. 186 Mill did express concern that minority views might be silenced by the sheer power of a majority. He feared that a government by majority may lead to laws directed at limiting the expression of the minority; but also that the majority would also oppress minority expression through social controls. Mill argued that individuals must fight to protect the limits of collective opinion over individual opinion. 187 This concept that a free exchange of ideas is necessary to arrive at the truth and a prerequisite for self-government was introduced into U.S. jurisprudence in a dissent by Justice Oliver Wendell Holmes in Abrams v. United States. 188 The Abrams Court found that the publication of dissident publications during time of war was not protected expression under the First Amendment. 189 Holmes dissented from the majority, arguing that such restriction would hamper the debate on public policy, thereby undercutting the search for truths. [W]hen men have realized that time has upset many fighting faiths, they may come to believe even more than they believe the very foundations of their own conduct that the ultimate good desired is better reached by free trade in ideas-that the best test of truth is the power of the thought to get itself accepted in the competition of the market, and that truth 186 Id. 187 Id. There is a limit to the legitimate interference of collective opinion with individual independence; and to find that limit, and maintain it against encroachment, is as indispensable to a good condition of human affairs, as protection against political despotism. 188 See Abrams v. U.S., 250 U.S. 616 (1919) (Holmes, J., dissenting). 189 Id. at 619. 47

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is the only ground upon which their wishes safely can be carried out. That at any rate is the theory of our Constitution. 190 This marketplace analogy languished in the background of U.S. jurisprudence until Justice William J. Brennan revived it in1965. 191 In Lamont v. Postmaster General, the Court determined that a statute mandating the detention of unsealed mail determined to be communist political propaganda to be inconsistent with the First Amendment. Brennan, in a concurring opinion, emphasized that the implementation of this law would be to restrict peoples ability to receive information, a fundamental right. 192 Brennan argued that without protecting the recipients rights to receive and consider ideas, the First Amendment protections for dissemination would be meaningless. It would be a barren marketplace of ideas that had only sellers and no buyers. 193 Only two years after Brennans initial revival of the marketplace metaphor, it found general acceptance in the Court. 194 Since then, the theory has been a fixture in free speech cases for more than forty years. 195 However, critics of the marketplace theory have contended that it does not adequately protect free speech or promote the desired search for truth. In 1967, the same year that the marketplace metaphor gained majority approval in the Court, Jerome A. Barron criticized the theory in a Harvard Law Review article. 196 Barron criticized the Court for its blanket protection of free speech through a prevention of government intervention. Barron averred that by 190 Id. at 630. 191 Lamont v. Postmaster General of the United States, 381 U.S. 301 (1965)(Brennan, J., concurring). 192 Id. at 308. 193 Id. 194 Keyishian v. Board of Regents of the University of the State of New York, 385 U.S. 589 (1967). 195 See, e.g., Tinker v. Des Moine Ind. Comm. Sch. Dist., 393 U.S. 503, 512 (1969); Healy v. James, 408 U.S. 169 (1972). 196 Jerome A. Barron, Access to the Press A New First Amendment Right, 80 Harv. L. Rev. 1641 (1967). 48

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focusing on the free flow of information, the Court has been indifferent to the fact that communication channels had changed and that access to those channels was limited to certain interest groups; this imbalance of access allowed powerful speakers to overshadow those with fewer resources. 197 The marketplace of ideas view has rested on the assumption that protecting the right of expression is equivalent to providing for it. 198 It is not the government who may most effectively abridge free expression but the media. 199 The marketplace of ideas model, according to Barron, no longer protected robust debate in the age of media control because it restricts the government from ensuring equal access to the debate. Barron argued that restraining the government would not ensure free speech. Rather, he required a restraint on private groups that controlled the mass media. He advocated a balance of the interests of the owners of media outlets and members of the public seeking a forum in which to express their point of view. 200 To ensure equal access to the mass media, Barron suggested that there existed a constitutional right of access to the media. 201 This right of access calls for burial of the classic marketplace of ideas. With the development of private restraints on free expression, the idea of a free marketplace where ideas can compete on their merits has become unrealistic. 202 C. Edwin Baker, echoing concerns of critics like Barron that the monopolization of media channels led to a failure of the marketplace, also argued that the classic marketplace of ideas 197 Id. at 1642-43. 198 Id. at 1648. 199 Id. at 1655-56. 200 Id. at 1656. 201 Id. at 1666-1668. 202 Id. at 1678. 49

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model rests on certain faulty assumptions: 1) truth is objective and 2) that people are rational and able to perceive the truth. 203 Baker said that truth is constantly shaded by experience and, therefore, is notcannot beobjective. Having proven the faulty nature of the first assumption, Baker argued, also discredits the second. If there is no objective truth, people cannot discern it. Further, Baker argued that even if there is a discernible truth, people cannot look past the packaging of the message. Emotions greatly impact peoples decisions and perceptions; they will not be able to see past form and frequency to the real information. Thus, Baker concluded that the classic marketplace of ideas fails to produce the value intended by the metaphor. 204 Baker reviewed several proposals for a revised marketplace model. 205 These models ranged from advocacy subsidies to expenditure limitations to creating free media for speech. However, in his evaluation of these proposals, Baker found them all unacceptable for First Amendment doctrine. 206 Rather he proposed the Liberty Model, which would expand First Amendment doctrine beyond the Marketplace model to include a focus on autonomy and self-fulfillment. 207 These critiques, particularly limited access, have been considered, but not adopted widely by the Court. In Red Lion Broadcasting Company v. Federal Communications Commission, the Court relied on the marketplace of ideas model to support public access to broadcast outlets. 208 203 C. Edwin Baker, Scope of the First Amendment Freedom of Speech, 25 UCLA L. Rev. 964, 974 (1978). 204 Id. at 974-81. 205 Id.at 981-90. 206 Id.at 989-90. 207 Id.at 1009. 208 See 395 U.S. 367 (1969). 50

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However, for most of the Courts marketplace jurisprudence, the focus has been on the right of the recipient to receive information. 209 Democratic Self-Governance Stemming from the concept of a marketplace of ideas, democratic self-governance theory supports the free flow of information and the search for truth as necessary to support an informed electorate. Alexander Meiklejohn, the scholar most closely associated with self-governance theory, posited that the First Amendment protects free speech to the extent that it promotes an effective self-governing process. 210 Under Meiklejohns formula, the core of the First Amendment, which he termed public speech, is valid only in and for a society which is self-governing. It has no political justification where men are governed without their consent. 211 Alexander Meiklejohn, in Political Freedom, identified the ultimate goal of the democratic process, including free discussion of issues, as the voting of wise decisions. 212 Meiklejohn offered the town hall meeting as a model by which free political procedures may be measured. In this model, individuals allow free speech to be abridged in exchange for order and to get business done 213 a chairperson calls the meeting to order, causing all speech to be waived until orderly process recognizes it. In the town hall meeting, the point is not that each individual 209 See, e.g., Kleindeinst v. Mandel, 408 U.S. 753 (1972); Miami Herald Publishg Co. v. Tornillo, 418 U.S. 241 (1974); Bigelow v. Virginia, 421 U.S. 809 (1975); Virginia State Pharmacy Board v. Virginia Citizens Consumer Council, 425 U.S. 728 (1976). 210 ALEXANDER, MEIKLEJOHN, POLITICAL FREEDOM: THE CONSTITUTIONAL POWERS OF THE PEOPLE 84 (HARPER & BROS. 1960). 211 Id.at 7. 212 Id.at 26. 213 Id. at 24. 51

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speak freely, but that everything worth saying shall be said to make the voters as wise as possible. 214 Meiklejohn applied this analogy to the First Amendment. It is not, he argues, the guardian of unregulated talkativeness. Rather, the First Amendment guarantees that speakers shall not be denied the opportunity to speak based on viewpoint or content. The First Amendment guarantees that the people shall hear and have the opportunity to evaluate every idea as a necessity of self-government. 215 To suppress ideas out of fear, Meiklejohn said, is to be unfit for self-government. 216 However, Meiklejohn limited this absolute protection of freedom for the exchange of ideas only to speech which bears, directly or indirectly, up on issues with which voters have to dealonly, therefore, to the consideration of matters of public interest. Other types of speech, which he termed private speech, received protection only from due process, not from the First Amendment. Meiklejohn distinguished the two types of speech as identified by each citizens dual roles in government: sovereign and governed. As voters, citizens are We the Peoplequite simply, the government. However, as individuals, citizens are the governed, subject to regulations that may infringe on private rights for the enhancement of the government. 217 These two different roles and sets of values, Meiklejohn argued, must be given fundamentally different status under the law. 218 Within private speech, Meiklejohn has included a merchant advertising his wares and a paid lobbyist fighting for the advantage of his client as juxtaposed 214 Id. at 26. 215 Id. at 27. 216 Id. at 28. 217 Id. at 80. 218 Id. 52

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against the citizen who is planning for the general welfare. Meiklejohn argued that private speech may be regulated, but that public speechas the true meaning of the First Amendmentmust not be abridged in any way. Meiklejohn argued that speech protected under the First Amendment was so vital to the education and decision making of voters that a balancing test would be meaninglessfreedom of speech is absolute. 219 The U.S. Supreme Court has to some extent adopted Meiklejohns theory of self-government as the central meaning of the First Amendment. Meiklejohns influence on the Court is evident in its 1964 New York Times v. Sullivan decision. 220 In Sullivan, a case addressing a defamation claim by public officials in Montgomery Alabama, the Court ruled that there must be protection for public criticism of the actions of government officials. 221 Justice William Brennan emphasized the need for open discussion on government issues, which dated back to the writings of James Madison and Thomas Jefferson. 222 Discussing the Sullivan case, Brennan said that at the core of the First Amendment is speech which must carry the highest protection because without [it] democracy cannot function the censorial power would be in the Government over the people and not in the people over the Government. 223 Since Sullivan, the Court has supported this approach in various areas of the law. In the same year as Sullivan, the Court decided another defamation case. Drawing on the self-governance theory, the Court held that speakers criticizing public officials credentials, 219 Id. at 20. 220 376 U.S. 254 (1964); see also William J. Brennan, The Supreme Court and the Meiklejohn Interpretation of the First Amendment, 79 HARV. L. REV. 1 (1965). 221 376 U.S. at 270. 222 Id. at 274. 223 Brennan, The Supreme Court and the Meiklejohn Interpretation of the First Amendment, 79 HARV. L. REV. 1, 16 (1965). 53

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without actual malice, were protected from criminal prosecution for defamatory statements. 224 In 1974, the Court held that the First Amendment does not require that representatives of the media to interview specific prisoners in person. 225 However, three dissenting justices relied on Meiklejohns self-government theory of the First Amendment to argue that allowing the media access to the prisoners would give the public information they might not otherwise receive. 226 This theory regained majority support when the Court found that public access to criminal trials would promote informed discussion among citizens about the criminal process. 227 Cass Sunstein and Owen Fiss have continued in this vein, arguing for the protection of deliberative democracy. 228 This deliberative democracy approach centers not on the speakers right of free expression, but on the necessity of deliberation, of public debate. In the Meiklejohnian tradition, Justice Breyer has posited a theory he calls active liberty, which is grounded in the idea that the First Amendment's constitutional role is not simply one of protecting the individual's negative freedom from governmental restraint. The Amendment in context also forms a necessary part of a constitutional system designed to sustain that democratic self-government. The Amendment helps to sustain the democratic process both by encouraging the exchange of ideas needed to make sound electoral decisions and by encouraging an exchange of views among ordinary citizens necessary to their informed participation in the electoral process. It thereby helps to maintain a form of government open to participation by all the citizens, without exception. 229 224 Garrison v. Louisiana, 379 U.S. 64 (1964). 225 Saxbe v. Washington Post. Co., 417 U.S. 843 (1974). 226 Id. at 862. 227 Richmond Newspapers v. Virginia, 448 U.S. 555, 586-87 (1980). The self-government theory also has been expanded to application in areas that Meiklejohn likely did not intend, such as protecting commercial speech based on the consumers right to receive information. Virginia Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. at 748. 228 See, e.g., CASS R. SUNSTEIN, DEMOCRACY AND THE PROBLEM OF FREE SPEECH (1995); Owen M. Fiss, State Activism and State Censorship, 100 YALE L.J. 2087 (1991). 229 Stephen Breyer, Our Democratic Constitution, 77 N.Y.U. L. REV. 245, 252-53 (May, 2002). 54

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Breyers theory, which once debuted in a concurring opinion, is gathering strength on the Court and in academic debate. 230 Active liberty, although seemingly evolving from self-government focuses more on the societal interests of the political debate than on the individual. 231 Justifying Campaign Finance Regulating private donations and expenditures during political campaigns has become accepted as a given in American politics. However, the Supreme Court has warned that campaign finance regulations operate in an area of the most fundamental First Amendment activities affecting discussion of public issues and debate on the qualifications of candidates which is integral to the operation of the system of government established by [the] Constitution. 232 From this perspective, declared in the first modern campaign finance case, the Court has attempted to reconcile the First Amendment and campaign finance reform laws. In campaign finance reform, regulations of contributions and expenditures have been touted as inconsistent with the marketplace of ideas by effectively taking from rich speakers for the benefit of poor ones. 233 The U.S. Supreme Court agreed in Buckley v. Valeo, writing that the concept that government may restrict the speech of some elements of our society in order to enhance the relative voice of others is wholly foreign to the First Amendment. 234 Supporters of reform often attempt to counterbalance the First Amendment interests with one or more general themes. Scholar Kathleen M. Sullivan identified several themes prevalent in 230 Scholars have identified the application of Breyers theory in a plurality opinion authored by Breyer, in Randall v. Sorrell, 126 S. Ct. 35 (2005). See Rachel Gage, Randall v. Sorrell: Campaign-Finance Regualtion and the First Amendment as a Facilitator of Democracy, 5 FIRST AMEND. L. REV. 341 (Spring, 2007). 231 Id. 232 Buckley v. Valeo, 424 U.S. 1, 14. For a full discussion of the Buckley decision, see Chapter 3, infra. 233 Cass R. Sunstein, Exchanges in the Welfare State: Free Speech Now, 59 U. CHI. L. REV. 255, 291 (1992). 234 Id. at 291 (quoting 424 U.S. 1 at 48-49). 55

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the campaign finance debate: political inequality in voting, distortion, corruption or political inequality in representation, carpet bagging, diversion of legislative and executive energies, quality of debate, and lack of competitiveness. 235 The most common themes cited by reform advocates and addressed by the Supreme Court are prevention of corruption and political equality. As Sullivan explained, these themes sometimes contrast sharply with First Amendment values, even when they are put forth under the guise of free speech protections. Prevention of Corruption in the Electoral System The Supreme Court has said that preventing corruption or the appearance of corruption are the only legitimate and compelling government interests thus far identified for restricting campaign finances. 236 This corruption is generally portrayed as a quid pro quo scenario in which campaign contributions are exchanged for promises of political favors, such as support for or opposition to a piece of legislation. There is opposition to the continued use of the anti-corruption rationale both from practical standpoints and from conceptual outlooks on campaign finance reform. However, the longevity of the anti-corruption rationale does not appear to be lessening in the Courts analysis, although its prominence may be. One of the main academic criticisms of the anti-corruption rationale is the lack of clear criteria for identifying corruption. 237 Definitions proposed by scholars can be grouped by their basis in legality, public interest, or public opinion. 238 According to John Peters and Susan Welch, 235 Kathleen M. Sullivan, Political Money and Freedom of Speech, 30 U.C. DAVIS L. REV. 663, 671-86 (Spring, 1997). 236 Federal Election Comm'n v. National Conservative Political Action Comm., 470 U.S. 480, 496 97 (1985). 237 See Thomas F. Burke, The Concept of Corruption in Campaign Finance Law, 14 CONST. COMMENT. 127, 128-130 (1997). 238 John G. Peters & Susan Welch, Political Corruption in America: A Search for Definitions and a Theory, or If Political Corruption Is in the Mainstream of American Politics Why Is It Not in the Mainstream of American Politics Research?, 72 AM. POL. SCI. REV. 974 (1978) (citing JAMES SCOTT, COMPARATIVE POLITICAL CORRUPTION (Prentice-Hall, 1972)). 56

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the legal-based definition, which confines corruption to the violation of formal laws or rules, is simultaneously too narrow and too broad in scope; all illegal acts are not necessarily corrupt and all corrupt acts are not necessarily illega1. 239 The public interest definition finds corrupt any act that violates responsibility toward at least one system of public or civic order. This definition allows for the possibility that an act, while illegal, may actually benefit the political system. 240 The difficulty with this type of definition is that it requires first a definition or delineation of public interest. 241 The third category of corruption definitions is based on public opinion that is, acts are judged to be corrupt or not by the public. This approach necessitates the estimation of public sentiment, but allows for a continuum of corruptness. For example, Peters and Welch explain that scholars have identified black and white corruption. Black corruption is an act that both the public and other public officials would find to be both corrupt and deserving of severe punishment (heroin trafficking is the example provided). On the opposite end of the spectrum would be white corruption, which the public and public officials may deem to be corrupt but not deserving of punishment (fixing a parking ticket is the example provided). As Peters and Welch found each of these categories to be insufficient for identifying corruption, they proposed a method of analyzing the components of a potentially corrupt act: the public official involved, the favor provided b the official, the payoff gained by the official, and the donor of the payoff or the recipient of the favor. 242 Each of these elements are assessed using 239 Id.at 975. 240 Id. The authors provide the example of a politician fixing immigration papers for an illegal alien who has aided economic growth. 241 Id. at 975. 242 Id. at 976. 57

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a model for more corrupt and less corrupt to identify where the behavior falls in the spectrum. 243 Additionally, there has been doubt cast on the actual presence of or potential for corruption in the electoral system. Many large donors hedge their bets giving to both major political parties. Kathleen Sullivan argued that this bet hedging demonstrates a weak level of confidence in [the donors] ability to obtain results from any particular beneficiary of their contributions. 244 In fact, congressional behavior suggests that there is a low correlation between contributions and voting behavior. Rather, congressman vote along party lines. Although, as Sullivan points out, donors may be repaid in less formal methods, the claimed corruption of the electoral system seems less certain than originally proposed. 245 The anti-corruption rationale assumes that politicians, without large contributions, would consider all constituents equally. 246 However, groups of constituents that are more organized or reputable in the community often carry more weight with politicians because they are able to mobilize voters. Sullivan questioned whether it is just to more easily suspect corruption of groups that accomplish this success through the accumulation of campaign funds. 247 243 Id. at 976-78. The authors then tested the design with ten different scenarios: 1) A presidential candidate who promises an ambassadorship in exchange for campaign contributions; 2) a member of Congress using seniority to obtain a weapons contract for a firm in his or her district; 3) a public official using public funds for personal travel; 4) a secretary of defense who owns $50,000 in stock in a company with which the Defense Department has a million-dollar contract; 5) a public official using influence to get a friend or relative admitted to law school; 6) the driveway of the mayor's home being paved by the city crew; 7) a state assembly member while chairperson of the public roads committee authorizing the purchase of land s/he had recently acquired; 8) a judge with $50,000 worth of stock in a corporation hearing a case concerning that firm; 9) a legislator accepting a large campaign contribution in return for voting "the right way" on a legislative bill; 10) a member of Congress who holds a large amount of stock (about $50,000 worth) in Standard Oil of New Jersey working to maintain the oil depletion allowance. Id. at 978. 244 Sullivan, supra note 58 at 679. 245 Id.at 680. 246 Id. at 680. 247 Id. at 680. 58

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The anti-corruption rationale was not fully explicated in Buckley, and has evolved to the point of a barrier for campaign finance law enforcement. 248 Initially, the Court deferred to the FECs decision-making regarding corruption prevention measures. However, in the 1990s, the Court began to question the FECs decision-making process. In FEC v. National Conservative Political Action Committee, the Court invalidated expenditure limits associated with presidential campaign public funding. 249 The Court rejected the FECs record demonstrating corruption and the efficacy of the proposed laws in the prevention of that corruption. 250 The Courts wholesale rejection of the Commissions factual record left it unclear as to how the FEC could ever show the presence of corruption in a campaign financing scheme. 251 Since Buckley, the Court has applied the anti-corruption rationale in a variety of ways. Thomas Burke identified three standards in the Courts jurisprudence from Buckley to Austin v. Michigan Chamber of Commerce in 1990. The first standard that the Court has applied is a quid pro quo type of corruption in which money is donated on the arrangement of future votes. 252 This was the standard originally announced in the Buckley decision, although further examination of the opinions reveal that the Court may have been recognizing a broader scope of corruption. 253 One of the possible broader conceptions that Burke identified is monetary influence. This idea was expressed by Chief Justice William Rehnquist in FEC v. National Conservative 248 See Rovert F. Bauer, The Demise of Reform: Buckley v. Valeo, The Courts, and the Corruption Rationale, 10 STAN. L. &POLY REV. 11 (Fall, 1998). 249 FEC v. National Conservative Political Action Comm'n, 470 U.S. 480 (1985). 250 Id. at 498. 251 Bauer, supra note 71 at 14. 252 Burke, supra note 60 at 130. See also Buckley, 424 U.S. 1, 26. 253 Buckley, 424 U.S. at 26; but see 424 U.S. at 28 (arguing that laws focusing on the prevention of bribery alone deal with only the most blatant and specific attempts of those with money to influence governmental action). 59

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Political Action Committee, Corruption is a subversion of the political process. Elected officials are influenced to act contrary to their obligations of office by the prospect of financial gain to themselves or infusions of money into their campaigns. The hallmark of corruption is the financial quid pro quo: dollars for political favors. 254 Although Justice Rehnquist broadened the environment to include rather than be defined by quid pro quo, his opinion continued to strike down expenditure limits, relying on language from Buckley that the absence of prearrangement and coordination of an expenditure with the candidate or his agent not only undermines the value of the expenditure to the candidate, but also alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate. 255 Another conception of corruption in the Court has been distortion. Justice Marshall identified this as a different type of corruption from the traditionally acknowledged quid pro quo. Rather distortion is 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. 256 Justice Scalia criticized Marshalls opinion for trying to revive a justification rejected by the Court in 1974 political equality under the guise of a new corruption. 257 Political Equality in the Electoral System Although prevention of corruption is more commonly accepted, it has been argued that corruption is a derivative problem. David Strauss contended that corruption actually stems from 254 470 U.S. 480, 497 (1985). 255 Id. 256 Austin v. Michigan Chamber of Commerce, 494 U.S. 652, 659-60 (1990). 257 Id. at 684-85 (Scalia, J., dissenting). 60

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political inequality. 258 The political equality argument suggests that limits on campaign finance promote political equality for voters during an electionequalizing the voices of all citizens. The Government in Buckley v. Valeo raised political equality as one of its justifications for limiting contributions and expenditures during elections. 259 Kathleen Sullivan explained that this view equates the campaign process to a kind of shadow election that results in unequal value of votes. 260 However, as Sullivan noted, a serious flaw in this argument is that financing during campaigns is more akin to political speech than it is to casting a vote at the ballot box. Generally, political speech is protected from such equalizing restrictions. [I]n the informal realm of political speech -the kind that goes on continuously between elections as well as during them -conventional First Amendment principles generally preclude a norm of equality of influence. Political speakers generally have equal rights to be free of government censorship, but not to command the attention of other listeners. Under virtually any theory of the justification for free speech, legislative restrictions on political speech may not be predicated on the ground that the political speaker will have too great a communicative impact, or his competitor too little. Conventional First Amendment norms of individualism, relativism, and antipaternalism preclude any such affirmative equality of influence -not only as an end-state but even as an aspiration. 261 Meiklejohns theory has been used to bolster this argument that government restraints on political speech in the form of campaign finance laws are necessary for effective public debate. 262 It has been argued that a Meiklejohnian approach to the First Amendment would 258 David Strauss, Corruption, Equality, and Campaign Finance Reform, 94 COLUM. L. REV. 1369, 1370 (1994). 259 Buckley v. Valeo, 424 U.S. at 26. 260 Sullivan, supra note 58 at 672. 261 Id. at 673. 262 See, e.g. Buckley v. Valeo, 424 U.S. 1 (1976); Sunstein, supra note 52. 61

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permit regulations of political speech as restrictions on the liberty to speak, but not of the freedom of speech. 263 This argument was proposed to the Supreme Court in 1976 as a compelling government interest for enacting the Federal Election Campaign Act. 264 The Federal Election Commission argued that Congress had attempted to increase opportunities for meaningful participation by ordinary citizens, as voters, supporters and candidates. 265 However, the Court held that limiting campaign expenditures in an effort to equalize the political discourse during elections was unacceptable. 266 [T]he concept that government may restrict the speech of some elements of our society in order to enhance the relative voice of others is wholly foreign to the First Amendment. 267 The Court further dismissed the political equality argument when it relegated it to the sphere of ancillary, opting to focus instead on the prevention of corruption argument. 268 Not all of the justices found the political equality rationale so easy to repudiate. Justice Byron White dissented from the Courts ban on expenditure caps, emphasizing the need to dispel the impression that federal elections are purely and simply a function of money. 269 In addition to the internal strife, scholars criticized the Courts opinion for failing to recognize the value of political equality. For example, John Rawls wrote: 263 J.M. Balkin, Populism and Progressivism as Constitutional Categories, 104 YALE L.J. 1935, 1965 (May, 1995) (reviewing Cass Sunsteins Democracy and the Problem of Free Speech). 264 Brief for the Attorney General and the FEC at 23, Buckley v. Valeo, 424 U.S. 1 (1976) (per curiam) (Nos. 75-436, 75-437), 1975 WL 171459 (hereinafter Buckley brief). 265 Id. 266 424 U.S. at 26. 267 Id. at 49. 268 Id. 269 424 U.S. at 265 (White, J., concurring in part and dissenting in part). 62

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The Court fails to recognize the essential point that the fair-value of the political liberties is required for a just political procedure, and that to insure their fair-value it is necessary to prevent those with greater property and wealth, and the greater skills of organization which accompany them, from controlling the electoral process to their advantage.... On the Court's view, democracy is a kind of regulated rivalry between economic classes and interest groups in which the outcome should properly depend on the ability and willingness of each to use its financial resources and skills, admittedly very unequal, to make its desires felt. 270 The revival of political equality as a compelling interest for campaign finance reform laws has been heavily supported. Senator John McCain, a chief architect of the Bipartisan Campaign Reform Act of 2002, heralded the 2002 reform efforts for reminding the American people that the American government belongs to all citizens, not just those who can afford enormous payments to parties and candidates. 271 Sen. McCain focused on effective participatory self-government as a goal of the reform efforts he spearheaded. Judge Calabresi of the U.S. Court of Appeals for the Second Circuit wrote, The notion that intensity of desire [to support a candidate] is not well-measured by money in a society where money is not equally distributed has been, since Buckley, the huge elephant--and donkey--in the living room in all discussions of campaign finance reform. 272 Since the Buckley decision, scholars have debated advantages of political equality as a justification for campaign finance reform laws. Noted scholar Cass Sunstein argued, Insofar as Buckley rejects political equality as a legitimate constitutional goal, it should be overruled. 273 Richard L. Hasen has argued that political equality is not possible when the media is elevated to 270 JOHN RAWLS, POLITICAL LIBERALISM 362-63 (Cambridge, Mass., 1993). 271 John McCain, Reclaiming Our Democracy: The Way Forward, 3 ELECTION L.J. 115, 115 (2004). 272 Landell v. Sorrell, 406 F.3d 159, 162 (2d Cir.) (Calabresi, J., concurring), cert. granted sub nom., Randall v. Sorrell, 126 S. Ct. 35 (2005). See also Jacobus v. Alaska, 338 F.3d 1095, 1107 (9th Cir. 2003) (upholding limits on soft money contributions in Alaska). In Jacubus, the 9th Circuit panel held that unregulated campaign finance creates an environment in which individual citizens voices are drown out by wealth. Id. 273 Cass R. Sunstein, Political Equality and Unintended Consequences, 94 COLUM. L. REV. 1390, 1400 (1994). 63

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an even more preeminent place than they already have in the shaping of public attitudes toward federal candidates. 274 Jamin Raskin and John Bonifaz contended that political equality is the key First Amendment issue at stake because it ensures that all citizens are able to participate in the electoral process. 275 However, Bradley A. Smith, former chairman of the Federal Election Commission, averred that political equality is not a right guaranteed by the Constitution, and, further, that promoting such equality effectively abridges the right to free speech. 276 In the midst of this scholarly debate, the Supreme Court reopened the legal conversation on the equality rationale Since Buckley, the Court staunchly refused to uphold any campaign finance reform efforts unless they were purposed to prevent corruption. 277 However, the Courts decision in McConnell v. FEC has been heralded as a shift in campaign finance jurisprudence. Even in the aftermath of this proposed shift, the Court has not expressly adopted the political equality argument that was summarily rejected in Buckley. Leading up to the McConnell decision, the Court provided some foreshadowing beginning to its jurisprudential shift. In 2000, Justice Breyer issued a concurring opinion in Austin v. Shrink Missouri PAC, in which he announced that Buckleys rejection of political equality as a compelling interest cannot be taken literally. 278 Breyer noted that there are many times that the First Amendment permits restrictions on the speech of some in order to prevent a few from 274 Richard L. Hasen, Campaign Finance Laws and the Rupert Murdoch Problem, 77 TEX. L. REV. 1627, 1629 (1999) (discussing the media exception built into the campaign finance reform structure). 275 Jamin Raskin & John Bonifaz, The Constitutional Imperative and Practical Superiority of Democratically Financed Elections, 94 COLUM. L. REV. 1160, 1161-62 (1994). 276 See generally BRADLEY A. SMITH, UNFREE SPEECH: THE FOLLY OF CAMPAIGN FINANCE REFORM (Princeton University Press 2003). 277 Richard L. Hasen, Buckely is Dead, Long Live Buckley: The New Campaign Finance Incoherence of McConnell v. Federal Election Commission, 153 U. PA. L. REV. 31, 31-32 (Nov., 2004). 278 Nixon v. Shrink Missouri Government PAC, 528 U.S. 377, 402 (Breyer, J., concurring). 64

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drowning out the many. 279 Specifically, Breyer considered the restrictions placed on congressmen for the efficacy and democratization of floor debates as one example. 280 The McConnell decision has been heralded as the true turning point for the Court in relation to the political equality rationale. Professor Hasen wrote that the majority opinion takes pains to show its fidelity to Buckley, tripping over itself to apply the corruption (as anticircumvention) rationale to as many BCRA [Bipartisan Campaign Reform Act] provisions as possible. However, a more natural reading of the more controversial aspects of the joint majority opinion is as a sub silentio acceptance of the participatory self-government rationale. 281 In a well-cited note, the Court reaffirms commitment to preserving the integrity of the electoral process, preventing corruption, and sustaining the active, alert responsibility of the individual citizen in a democracy for the wise conduct of the government [as] interests of the highest importance. 282 Hasen also observed that the McConnell Court was highly selective in its review of the Buckley precedent. Specifically, the McConnell opinion did not include any mention to Buckleys explicit rejection of the equality rationale as a justification for expenditure limits. 283 Hasen commented, It seems as probable as not that the Court's elisional history was intentional and not inadvertent. 284 279 Id. at 402 (Breyer, J., concurring). 280 Id. 281 Hasen, supra note 101 at 57-58. 282 McConnell v. FEC, 540 U.S. 93, 206 n. 88 (2003). 283 Hasen, supra note 101 at 60. 284 Id. at 60. 65

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In 2006, Justice Breyers focus on participatory self-government was evident when he authored a plurality opinion in Randall v. Sorrell. 285 Breyer, although specifically refusing to overturn Buckley focused the plurality opinion striking down Vermont campaign finance reforms on protecting the integrity of the electoral system. 286 Breyer does not strike down these contribution limits merely because the state failed to meet a standard of corruption, but rather because the limits were so low that they burden[ed] First Amendment interests in a manner that is disproportionate to the public purposes they were enacted to advance. 287 Throughout the opinion, Breyer demonstrates how the limits will hinder political deliberation, particularly in the face of a competitive campaign scenario. This focuses on the participation in the electoral process rather than the prevention of corruption, signaling perhaps a new approach to campaign finance reform litigation. Campaign Finance and the First Amendment In examining campaign finance reform laws, the Court has been challenged to balance the freedom of expression and these justifications for reforming the political process. In its attention to campaign finance litigation, the Court has continually developed a key area of contentionwhether money is speech. In its initial assessment of the issue in Buckley, the Court determined that the Court has never suggested that the dependence of a communication on the expenditure of money operates itself to introduce a nonspeech element or to reduce the exacting scrutiny required by the First Amendment. 288 However, the Court did create a dichotomy between contributions and expenditures. 285 Randall v. Sorrell, 126 S. Ct. 2479 (2006). 286 Id. at 2492. 287 Id. at 2500. 288 Buckley v. Valeo, 424 U.S. 1 at 16. 66

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This dichotomy has persisted throughout campaign finance jurisprudence, although courts and scholars are beginning to question the practicality of such distinction. The impact on First Amendment law has been to create different standards of review. Limitations on contributions were not as invasive to the freedom of expression as those on expenditures. Congress desire to prevent corruption, even the appearance of corruption, was weighty enough to justify what minimal infringement the limits imposed on the First Amendment. Limitations on expenditures, however, impose direct and substantial restraints on the quantity of political speech. 289 Because of this direct, substantial impact, preventing corruption was not sufficient to support limits on expenditures under the exacting First Amendment scrutiny. 290 Thus far, expenditure limits have continued to fall under the protection of the First Amendment. However, if there is a paradigm shift, as suggested by scholars, it is unclear if the equality rationale emphatically rejected in Buckley could find support and overcome the First Amendment challenges that have defeated the anti-corruption rationale. In fact, Justice Breyer, applying his active liberty theory, concluded that courts should approach campaign finance challenges from the perspective that the First Amendment lie[s] on both sides of the constitutional equation. 291 Rather than evaluating campaign finance laws under a strict scrutiny approach, Breyer suggested that the courts should balance, with no presumption, the speech-restricting and speech-enhancing characteristics of reform measures. 292 289 Id.at 39. 290 Id.at 39. 291 Breyer, supra note 53 at 253. 292 Id. 67

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CHAPTER 3 HISTORY OF CAMPAIGN FINANCE LAW Although campaign finance laws trace back to the early 20th Century, the first comprehensive campaign finance reform was not passed until 1971. 293 Until Congress passed the Federal Election Campaign Act of 1971 (FECA), the campaign finance laws consisted of piecemeal legislation regulating disclosure and contributions. Since 1971, Congress has continued to amend the statute to address new concerns and close loopholes in the law. The seminal campaign finance case followed amendments to the law in 1974. The Supreme Court, in Buckley v. Valeo, determined the constitutionality of the law striking independent expenditures, but upholding limits on contributions. The most recent overhaul was the Bipartisan Campaign Reform Act of 2002, which was aimed at closing loopholes that left elections vulnerable to unintended influence. 294 Since 1976, the FEC has been charged with and has executed the adoption of regulations for the enactment of campaign finance laws. This chapter will discuss the evolution of campaign finance reform. First, this chapter will offer a brief summary of early efforts of reform beginning in the early 1900s. Next this chapter will explain the Federal Election Campaign Act of 1971 and the amendments in 1974. Then, this chapter will discuss the 1976 Buckley v. Valeo decision and the subsequent amendments to the FECA. Then, this chapter will discuss the provisions of the Bipartisan Campaign Reform Act of 2002. Specifically, this chapter will discuss how the provisions of BCRA address the different media. 295 Finally, this chapter will offer a concluding summary of the current laws, including a 293 Federal Election Campaign Act of 1971, 2 U.S.C. 431455, Pub. Law No. 92-225 (hereinafter FECA). 294 Pub. L. No. 107-155 (2002) (codified at 2 U.S.C. 431, et seq.). 295 The application of BCRA to the different media will be discussed in Chapter Four, infra. 68

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brief discussion of FEC regulations specific to the FECA provisions that directly impact campaign communications. Early Campaign Finance Reform Efforts Campaign finance reform dates back to the late 19th century. The notion of campaign finance reform was not part of the national debate during the first decades of American federal politics. 296 However, as the party system evolved, campaign expenditures increased steadily. By the late 19th century, corporations and wealthy individuals were playing key roles in financing political campaigns. 297 Although financing by corporations was well-known, it was not until a campaign was tainted with the air of corruption that reform was initiated. 298 Reform began to address disclosure requirements, contribution and spending limits, and public financing of campaigns. In 1907, Congress passed what is now considered the first effort to reform campaign finance in response to the Equitable Life Insurance scandal. 299 Hearings investigating the corporate spending of the company revealed vast donations to the reelection campaign of Theodore Roosevelt as well as annual retainer fees paid to republican senators. 300 As the investigation continued, it was discovered that insurance companies had donated nearly 296 Bradley A. Smith, The Sirens Song: Campaign Finance Regulation and the First Amendment, 6 J.L. & POLY 1, 3 (1997). 297 Id. at 4. [In the presidential election of 1896, Republican National Chair Mark Hanna systematized fundraising to an unprecedented level and raised as much as $7 million (approximately $140 million today) to support the campaign of William McKinley Hanna raised much of this money from corporations and banks but large individual donors also became increasingly important in the late nineteenth and early twentieth centuries. Id. 298 Robert E. Mutch, CAMPAIGNS, CONGRESS, AND COURTS: THE MAKING OF FEDERAL CAMPAIGN FINANCE LAW 3-7 (Praeger 1988). 299 Id. The public and legislators were concerned when an investigation initiated by the state of New York revealed large corporate donations to the Republican Party by Equitable Life Insurance. Id. 300 Adam Winkler, Other Peoples Money: Corporations, Agency Costs, and Campaign Finance Law, 92 GEO. L.J. 871, 892 (2004). 69

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$250,000 to presidential campaigns between 1896 and 1904. 301 To respond to the public disapproval of these practices and to prevent corporate executives from misusing the corporation owners money, Congress banned campaign donations and spending by corporations and federally chartered banks. 302 In 1910, Congress required a post-election report on all contributions and expenditures that exceeded $100 and were related to campaigns for the House of Representatives. 303 One year later, the 1910 Publicity Act was amended to include in the disclosure requirements contributions and expenditures for Senate campaigns. The 1911 amendments also required pre-election reporting for both primary and general elections. 304 Additionally, the 1911 amendments instituted the first spending limits. House campaigns could not exceed a total of $5,000, and Senate campaigns could not exceed $10,000. 305 In the early 1920s, President Warren G. Hardings administration became the target of an investigation of bribery. 306 The Teapot Dome investigation revealed links between an oil reserve lease through the Department of the Interior and large contributions to the Republican party. 307 These donations allowed the party to pay off nearly $1.5 million of debt it had incurred during the 1920 elections. 308 The contributions were not initially reported because the disclosure acts did not require reporting in off-election years. Although there was no concrete evidence of a 301 Id. 302 Tillman Act, 34 Stat. 864 (1907). See also Mutch, supra note 6. 303 Publicity Act of June 25, 1910, ch. 392, 36 Stat. 822, 823 (1910). 304 Anthony Corrado, Money and Politics: A History of Federal Campaign Finance Law, in THE NEW CAMPAIGN FINANCE SOURCEBOOK 7, 14 (Anthony Corrado et al. eds., 2005). 305 Id. 306 Mutch, supra note 6 at 24. 307 Id. 308 Id. 70

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connection between the lease and the contributions, Congress amended the Federal Corrupt Practices Act of 1925 (FCPA), previously known as the Publicity Act. 309 This law required political committees to file quarterly finance reports every year, even in non-election years. These reports had to include every contribution of $100 or more. The FCPA also raised the Senate campaign spending limits to $25,000. 310 Although the FCPA was an attempt to curb political corruption, the act had no real enforcement powers. 311 The Clerk of the House and the Secretary of the Senate were responsible for collecting these reports, but did not have any powers to force submission. Nor were there any requirements for the reports to be open to the public. Because there were no uniform standards for format, content, or accounting method, the reports that were submitted were so disparate they were of little use. 312 Additionally, the FCPA provided no oversight power to ensure accuracy or compliance. 313 The only prosecution under the act was in 1928 against a religious organization that failed to report accurate amounts of contributions during a presidential campaign. 314 During Franklin D. Roosevelts third term as president, there were accusations that Roosevelt used federal workers to interfere with primary elections in an effort to unseat some anti-New Deal Democrats. 315 The Hatch Act of 1939, which banned partisan political activity on the part of federal employees, was passed to prevent the coercion of federal employees to 309 Ch. 368, 01, 43 Stat. 1053, 1070 (1925) (repealed in 1971). 310 Corrado, supra note XX at 15. 311 Mutch, supra note XX at 25; see also Corrado supra note XX at 15. 312 Id. 313 Id. at 25. 314 Id. at 28. 315 Mutch, supra note 6 at 33. 71

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contribute to campaigns. 316 However, some argued that these restrictions, meant to protect employees and the public from corruption, actually prevented voluntary political activity and restricted employees individual rights to participate in the political process. 317 In 1940, the Hatch Act was amended to extend this protection to state and local government workers who received federal funding. Additional provisions of the amendments included a limit on individual contributions of $5,000 per year to a candidate or committee; the application of these laws to primary elections as well as the general elections; and expenditure limits on multi-state political committees. 318 The Taft-Hartley Act of 1947 further restricted contributions and expenditures by prohibiting labor unions and corporations from using treasury funds for either of these activities. 319 Between 1947 and the adoption of the Federal Election Campaign Act of 1971, there were no major campaign finance legislative developments. 320 However, between 1947 and 1971, campaign finance continued to be a concern as campaigns changed dramatically. The heavy reliance on party money began to decrease as candidates shifted to raising money for their own committees. Additionally, the use of television as a campaign tool led to marked increases in campaign costs. 321 A 1962 Commission on Campaign Costs formed by President John F. 316 Scott J. Bloch, The Judgment of History: Faction, Political Machines, and The Hatch Act, 7 U. PA. J. LAB. & EMP. L. 225, 231 (Winter, 2005). 317 Id. at 232. 318 Act of July 19, 1940, ch. 640, Pub. L. No. 76-753, 54 Stat. 767 (amended 1940). 319 Corrado, supra note at 17-18. Previously, corporations were prohibited from making contributions from treasury funds, but the Tillman Act of 1907 did not prohibit expenditures. The result of this new prohibition was the birth of Political Action Committees (PACs). These groups are formed as ancillary committees of corporations and unions to support candidates. The groups collect money from their members to finance political activities. 320 Corrado, supra note 12 at 19. 321 Dwight D. Eisenhowers campaign cost $6.6 million in 1952; this cost increased to nearly $10 million in both John F. Kennedy and Richard Nixons campaigns in 1960. See Alissa J. Rubin, History of Changes in Campaign Law, CONGRESSIONAL QUARTERLY WEEKLY REPORT 794 (Apr. 5, 1995). 72

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Kennedy offered suggestions for a comprehensive reform agenda. 322 However, this was not achieved until 1971, nearly ten years after Kennedy submitted the report to Congress and urged it to adopt the proposed reforms. Federal Election Campaign Act In 1971, Congress passed the Federal Election Campaign Act of 1971 (FECA) in order to promote fair practices in the conduct of election campaigns for Federal political offices. 323 FECA placed limits on contributions and expenditures by corporations and candidates in connection with federal election. 324 The Act was intended 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. 325 However, during the 1972 election cycle, there were more than 7,000 reports of campaign finance abuse to the Department of Justice. This led Congress to significantly amend FECA in 1974. Almost immediately following the passage of the 1974 amendments, the law was challenged in court by Senators James L. Buckley and Eugene McCarthy. In response to these challenges, the United States Supreme Court issued a decision that has shaped campaign finance law for more than thirty years. Major FECA Provisions After the 1974 amendments, the law largely consisted of six major areas. First, the law limited the amount of contributions and expenditures made by individuals and groups. Second, 322 Corrado, supra note 12 at 19 (citing Presidents Commission on Campaign Costs, Financing Presidential Campaigns (1962)). 323 See FECA. 324 Id. 325 S. Rep. No. 92-96, at 1774 (1971). 73

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limits were placed on the candidates and their campaigns. Third, national party activities were restricted. Fourth, disclosure requirements were strengthened. Fifth, a public financing system was set in place for presidential races. Finally, the amendments created the Federal Election Commission. The 1974 law limited contributions to candidates and committees in a given year. Contributions by individuals or groups of individuals to each candidate could not exceed $1,000 each year. Additionally, the annual aggregate amount each individual contributed to all candidates and political committees could not exceed $25,000. Although political committees were not restricted to an aggregate amount, they were prohibited from contributing more than $5,000 to a candidate per election. Candidates and their immediate families were also limited in the amount they could personally contribute to their campaigns. The total contributions for a presidential campaign by the candidate and his or her family were limited to a total of $50,000. The total contributions for Senate and House candidates were limited to $35,000 and $25,000 respectively. The 1974 law continued the ban on contributions from corporations and labor unions. The new provisions also placed limits on expenditures. Independent expenditures by individuals or groups were limited to $1,000 per year. National party committees could not spend more than $10,000 and $20,000 per candidate in House and Senate general elections. The expenditure limits for presidential candidates used a system of multipliers based on the voting-age population. 326 Parties were also restricted on the amount they could spend on nominating conventions. Major parties were limited to $2 million for convention expenses, while minor parties were limited to less money. 326 National parties were permitted to spend $0.02 multiplied by the voting-age population across the nation for presidential elections. Mutch, supra note 6. 74

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The law also placed limits on total campaign expenditures. Senate campaigns were limited to $100,000 in a primary and $150,000 in a general election. House candidates could not spend more than $70,000 in either the primary or the general election. Presidential campaigns were limited to $10 million in a national primary and $20 million in the general election. 327 The law did permit all candidates to spend an additional 20 percent of their limits for fundraising activities. 328 The 1974 amendments also strengthened disclosure requirements. Specifically, all candidates were required to create one central committee through which all contributions and expenditures would flow and be reported. Campaigns also were required to disclose the bank depositories authorized to receive campaign funds. In election years, campaign committees and active political committees were required to file a financial report each quarter. If a committee received or spent $1,000 or more in the quarter, then additional reports had to be filed ten days before and thirty days after each election. Contributions of more than $1,000 that were received within fifteen days of an election had to be reported within 48 hours. In non-election years, committees were required to file year-end reports. The FECA also included exemptions for the media and volunteers to these provisions. Any services provided individuals volunteering for a candidate were not considered contributions. 329 The media exemption was adopted to "assure the unfettered right of newspapers, TV networks, and other media to cover and comment on political campaigns." This exemption provides that 327 Presidential spending in each state was limited to twice what a senate candidate could spend in the state. 328 All limits were forecasted to adjust based on the consumer price index. In the original 1971 legislation, there were no total campaign spending limits. Rather, the campaign spending limits were placed on specific types of media buys. For example, under the 1971 provisions, no more than 60% of a candidates overall media spending could be devoted to radio and television advertisements. 329 2 U.S.C. 431 (8)(B). 75

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"any news story, commentary, or editorial distributed through the facilities of any broadcasting station, newspaper, magazine, or other periodical publication" is not considered an expenditure for the purposes of FECA. 330 Additionally, the FEC extended this exemption so that the cost of covering or carrying those stories or commentaries is not considered a contribution. 331 A major change in the financing of presidential campaigns was accomplished through the public financing system put in place by the 1974 amendments. This system allowed for full financing of presidential general election campaigns. Presidential nomination candidates were eligible for matching funds. This system was funded by optional tax check-off that allowed individuals to designate $1 of their tax payment for the presidential election campaign fund. In a general election for the office of the President, major party candidates could receive $20 million, the national spending limit, if they refrained from raising private money. Minor party or independent candidates were eligible for a portion of the subsidy based on their performance the previous election. 332 In the presidential primaries, candidates had to raise at least $5,000 in contributions of $250 or less in at least 20 states. If they qualified, the federal government would match dollar-for-dollar the amount raised with a maximum of $5 million, or half the national spending limit. Nominating committees could also use public financing for their nominating convention expenses. Major parties could receive the entire limit of $2 million, while minor parties were eligible only for portions based on public support in the previous election. 330 2 U.S.C. 431(9)(B)(i). 331 See 11 C.F.R. 100.73. 332 For example, if an independent candidate had received 10 percent of the vote in the previous election, he or she would be eligible for $200,000. Candidates could also apply for post-election funding based on their performance in the instant election. Post-election funding was the only public financing option for new candidates. Corrado, supra note 12. 76

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Finally, one of the most substantial changes the 1974 amendments made to campaign finance law was the creation of the Federal Election Commission (FEC). The amendments empowered the FEC to receive campaign reports from all candidates and committees; to promulgate rules for the enactment of these laws; to make reports to Congress and the president; to conduct audits and investigations; to subpoena witnesses and information; and to seek civil injunctions to ensure compliance with campaign finance laws. FECA was set to be implemented for the 1976 elections. However, the law was challenged in the courts shortly after being signed into law. Before the 1976 election cycle, the Supreme Court overruled some aspects of the law in Buckley v. Valeo, forcing Congress to reconfigure portions of the law in order to implement the provisions. Buckley v. Valeo Almost immediately following the passage of FECA, challenges to the law were being tested in court. Senator James L. Buckley and presidential candidate Eugene McCarthyalong with contributors, political committees and parties, and non-profit organizationsopposed the new law on constitutional grounds. 333 Specifically, Buckley and his fellow appellants argued that the use of money for political purposes equates to speech. Therefore, limiting the ability to spend money on political communications violates the principles of the First Amendment. 334 In addition to opposing the contribution and expenditure limits, appellants argued that the law 333 Buckley v. Valeo, 424 U.S. 1, 8 (1976). Plaintiffs included a candidate for the Presidency of the United States, a United States Senator who is a candidate for re-election, a potential contributor, the Committee for a Constitutional Presidency McCartthy 6, the Conservative Party of the Staet of New York, the Mississippi Republican Party, the Libertarian Party, New York Civil Liberties Union, Inc., the American Conservative Union, the Conservative Victory Fund, and Human Events, Inc. Id. The suit was originally brought in the United States District Court for the District of Columbia. Through several procedural steps, the case was considered by the Court of Appeals. 171 U.S. App. D.C. 192. The appellate court upheld nearly all provisions of FECA. Plaintiffs appealed to the Supreme Court. 334 424 U.S. at 11. 77

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infringed on individuals right of association based on the disclosure and reporting requirements. 335 The Court issued a per curiam opinion which shaped the future landscape of campaign finance laws. In its analysis of the major provisions of FECA, the Court recognized the significance of the activities that the law was regulating: The Act's 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 our Constitution. The First Amendment affords the broadest protection to such political expression in order to assure the unfettered interchange of ideas for the bringing about of political and social changes desired by the people. 336 The Court acknowledged that there was indeed a link between money and speech. Limiting how much an individual could spend, limited how much an individual could speak. However, the Court found that some aspects of FECA, while triggering a balancing test of First Amendment interests and government purposes, survived the constitutional challenges. In its holding, the Court laid out several basic tenets. First, the Court drew a distinction between contributions and expenditures. The Court, purporting to apply a strict scrutiny review of the FECA provisions, held that the contribution limits survived the First Amendment challenges. 337 The Buckley Court held that limits on candidates expenditures and independent expenditures by individuals and groups were unconstitutional and infringed on First Amendment rights. 338 335 424 U.S. at 11. Appellants also opposed the FECs composition and powers and argued that the presidential public funding system violated the First and Fourth Amendments. However, those issues are not relevant to the discussion in this study. 336 Id. at 14. 337 Id. at 58-59, 68. 338 Id. 43. 78

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Second, the Court further distinguished types of financial support of candidates by holding that expenditures coordinated with candidates as the functional equivalent of contributions. 339 Finally, the Court ruled that and disclosure requirements were also constitutional means of preventing corruption of the political process. Contributions and expenditures receive different treatment in the Courts balancing test One of the most significant results of the Buckley decision was the constitutional splitting of contributions and expenditures. Although the Court found that limitations on both of these operate[d] in an area of the most fundamental First Amendment activities, they were treated differently under First Amendment analysis. Limits on contributions were found to be constitutional, but the Court found expenditure limits to be an unconstitutional violation of individuals free speech rights. The government provided three justifications for contribution limitations. First, the government offered the need to prevent corruption, or the appearance of corruption, from the influence of large financial contributions. Second, the government contended that the contribution limits provided equalization to the relative ability of all citizens to affect the outcome of elections. 340 Finally, the government proposed that these limits would act check the rising costs of campaigns, thus allowing easier access to candidates without much money or large contributors. 341 The Court found the first rational sufficient to the extent that large contributions are given to secure political quid pro quos from current and potential office holders, the integrity of our system of representative democracy is undermined. 342 339 Id. at 46-47. 340 424 U.S. at 26. 341 Id. 342 424 U.S. at 26-27. 79

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The Court found that limitation on contributions entails only a marginal restriction upon the contributors ability to engage in free communication. A contribution serves as a general expression of support for the candidate and his views, but does not communicate the underlying basis for the support. 343 The Court concluded that limiting contributions would have no direct impact on the contributors freedom of expression, nor did it find any evidence that the limits would have a dramatic adverse effect on campaign financing or political association funding. 344 In fact, the Court found that the limits would increase the total amount of political communication because candidates and committees would gather smaller donations from more people and convince those who would give more to spend that money on independent communications. 345 The Court did recognize that the limits on contributions infringed on an individuals freedom of association. However, the Court noted that this right has never been absolute. As the limits advanced a sufficient government interests and posed only minimal threats to the First Amendment, the Court upheld the limits on contributions. Although the Court found the limits on contribution constitutionally valid, the Court was not so willing to accept the limits placed on independent expenditures. The Court found that limits on expenditures raised more significant First Amendment concerns because they are intended to restrict the quantity of campaign speech and therefore limit political expression at the core of our electoral process and of the First Amendment freedoms. 346 For example, the Court determined that the expenditure limits would make it unlawful for an individual to 343 Id. 344 Id. at 21. 345 Id. at 22. 346 Id. at 39. 80

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purchase a single one-quarter page advertisement relative to a clearly identified candidate in a major metropolitan newspaper. 347 The Court found that limits on expenditures did not advance the governments interest in preventing corruption in the electoral system. Nor did the Court find persuasive the governments argument that these limits promoted political equality of citizens. The Court rejected this as a compelling interest stating that pursuing such equality at the expense of silencing some elements of our society was wholly foreign to the First Amendment. 348 The Court held that while limiting independent expenditures served no substantial governmental interest, it did heavily burden[ ] core First Amendment expression. 349 The Court held that while limiting independent expenditures served no substantial governmental interest, it did heavily burden[ ] core First Amendment expression. 350 The Court did find that expenditures that are controlled by, or coordinated with, a candidate were disguised contributions. 351 The Court found that these types of expenditures posed the same threats of corruption as direct contributions. 352 Thus, while truly independent expenditures are fully protected by the First Amendment, any coordination with a candidate or a candidates staff converts that expenditure into a contribution that can constitutionally be limited. 347 Id. at 40. 348 Id. 349 424 U.S. at 48. 350 Id. 351 Id. at 46. 352 Id. 81

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Disclosure requirements are constitutional The 1974 FECA required candidates and committees to disclose sources of funding and campaign expenditures. The Court found that disclosure requirements did not impermissibly infringe on First Amendment free speech rights. However, the Court did require that disclosure laws survive exacting scrutiny because it found that disclosure of this information revealed political associations. Therefore, compelling individuals to disclose this information to the government could infringe on the First Amendment freedom of association. 353 The Court required that the government prove that its interest be more than a mere showing of some legitimate governmental interest and that the interest is substantially related to the information that would be disclosed under the FECA. 354 The Court identified three categories of governmental interests that were ostensibly served by the disclosure requirements: 1) providing the electorate with information; 2) deterring corruption, or avoiding the appearance of corruption; and 3) detecting violations of FECA limits on contributions. 355 Although the Court found that these were substantial interests and that the disclosure requirements directly served them, the Court continued to analyze the burdens that the requirements placed on individuals to complete the balancing test. The Court noted that the requirements may deter some individuals from contributing to candidates or political parties. The Court also recognized the potential for contributors to be subjected to harassment for their donation. However, the Court found that the balance fell in 353 Id. at 64. 354 The government argued that this law was different than those at issue in the Courts precedent on this matter because FECA only required a list of contributors; FECA did not require organizations to provide membership lists. Id. at 65. However, the Court supported the idea that joining monetary resources often was just as essential as joining groups in effectively disseminating a message or effecting change. Id. at 65-66. 355 Id. at 66-68. 82

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favor of the disclosure requirements as they appear[ed] to be the least restrictive means of curbing the evils of campaign ignorance and corruption that Congress found to exist. 356 Reconstructing FECA After the Court deconstructed the 1974 law, Congress made the changes to the law necessary to conform with the Courts ruling. 357 In addition to revising the provisions that the Court struck down, Congress made other significant amendments to the law. 358 The new amendments expanded the FECs enforcement powers by allowing it to prosecute violations of FECA. 359 The contribution limit provisions were revised to include limits on the amount individuals could donate to political action committees or national party committees. 360 Although the Court struck down independent expenditures, Congress enacted additional disclosure requirements to ensure reporting of these activities. 361 Congress continued to mold the law with changes in 1979 after candidates and party leaders complained that the law was too restrictive. 362 Congress increased reporting thresholds for individual contributions and expenditures to reduce the amount of information candidates and 356 Id. at 68. The Court also addressed whether this balance changed when disclosure requirements were applied to minor parties or independents. The Court found that there may be the possibility that disclosure would be too burdensome, but that a general exemption was too broad and refused to create one. This area of disclosure law is extremely interesting, but outside the scope of this paper. 357 Corrado, supra note 12 at 27. 358 Id. 359 However, Congress limited this power by requiring a majority of the commissioners to vote on any actions. Additionally, any advisory opinions that the Commission issued were restricted to the factual situations presented and cannot respond to hypothetical situations. 360 P.L. 94-283 112. Although these types of contributions were not originally included in the aggregate total limit, Congress did not increase the total limit to accommodate these new restrictions. 361 P.L. 94-283. This included mandatory reporting of expenditures and a sworn statement as to whether the expenditure was made in cooperation, consultation, or concert with, or at the request or suggestion of, any candidate or any authorized committee or agent of such candidate. 362 Corrado, supra note at 28. 83

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committees had to report to the FEC. 363 Additionally, the 1979 amendments exempted from the disclosure requirements candidates and committees that raised less than $5,000. 364 To ease the budget restraints on party expenditures, Congress exempted activities primarily aimed at party building. For example, parties could spend unlimited amounts on voter registration drives and promotional items, such as buttons and bumper stickers. 365 There were minor changes in the law and continued debate over the topic. 366 The amendments in 1979 constituted the last major Congressional effort to reform campaign finance law until the 2002 Bipartisan Campaign Finance Reform Act. 367 Bipartisan Campaign Reform Act of 2002 The efforts to significantly overhaul FECA began in 1996, when the first versions of what became the Bipartisan Campaign Reform Act of 2002 (BCRA) were introduced. 368 However, a bill was not passed until January 2002. The reform bill was aimed to close some of the loopholes that had developed under FECA. 369 Specifically, the sponsors of the bill, Senators John McCain and Russel Feingold, expressed concern with the unregulated soft money donations in federal elections. Soft money is contributions that parties solicited and spent outside the purview 363 Id. at 29. 364 Id. 365 Id. The 1979 amendments also withdrew the FECs authority to conduct random audits, decreased the amount of public subsidy for nominating conventions, and prohibited the use of excess campaign funds for personal spending. 366 Id. at 31-35. 367 Id. at 30. 368 Corrado, supra note 12 at 36. Efforts were met with Republican-led filibusters and opposition that held the bill in committees. 369 BCRA, supra note 8. On February 13, 2002, the House of Representatives passed H.R. 2356. The bill was then adopted by the Senate on March 18 and 20, 2002. President George W. Bush signed H.R. 2356 into law on March 27, 2002. BCRA is also known as the McCain-Feingold Act, after its Senate co-sponsors, Senators John McCain and Russell Feingold. 84

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of FECA. This type of fundraising and spending had allowed contributors to bypass FECAs contribution and coordinated expenditure limits for years. 370 In addition to addressing concerns over soft money, provisions in BCRA included increased contribution limits and limits on communications leading up to an election. To mitigate soft money donations and expenditures, Congress set limits on the activities of office holders, candidates, and national parties in relation to fundraising. Congress also amended the definition of public communications, which determines, in large part, the scope of the campaign finance legal requirements mandated by FECA and BCRA for campaign communications. 371 Congress restricted the funding for federal election activity, requiring that these activities be paid for with federal money only money that is subject to the restrictions of FECA. 372 Federal election activity was defined as (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. 373 370 BCRA, supra note 2. See also Corrado, supra note at 36. 371 BCRA was challenged and upheld in McConnell v. Federal Elections Committee, 540 U.S. 93 (2003). 372 2 U.S.C. 441i. 373 2 U.S.C. 431(20). 85

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Congress defined public communication as 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. 374 And generic campaign activity was defined as a campaign activity that promotes a political party and does not promote a candidate or non-Federal candidate. 375 Public communications made by political committees must carry disclaimers on the payment of the communications and whether the candidate supported the communication. 376 Additionally, Congress significantly changed the campaign finance landscape when it created a category of communications called electioneering communications. This is defined as any broadcast, cable or satellite communication that refers to a clearly identified candidate for federal office; is publicly distributed shortly before an election for the office that candidate is seeking; and is targeted to the relevant electorate. 377 BCRA prohibited corporations and labor unions from making or funding electioneering communications that are not targeted to their respective audiences (e.g., the labor unions membership or the corporations employees or stockholders). Incorporated organizations also known as 527s also are prohibited from making electioneering communications. 378 Individuals may make electioneering communications, provided they can prove that no corporate or labor organization funds were used. 374 2 U.S.C. 431(22). 375 2 U.S.C. 431(21). 376 2 U.S.C. 441d. 377 Trevor Potter, The Current State of Campaign Finance Law, in THE NEW CAMPAIGN FINANCE SOURCEBOOK 48, 56 (Anthony Corrado et al., eds. 2005). 378 An incorporated state party or candidate committee may make these communications if it is not a political committee, is incorporated for liability purposes only, does fund electioneering communications with corporate or labor union donations, and meets all reporting requirements. 86

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The electioneering communications restrictions were created to curb circumvention of spending prohibitions on corporations and unions. Prior to the BCRA electioneering communication restrictions, corporations and unions could use treasury funds to distribute advertisements that, while ostensibly issue ads, were in fact intended to influence an election for federal office. The sham issue ads escaped FECA regulation because they did not fit into the Buckley Courts framework of expressly advocating or opposing a given candidate. 379 Summary of the Current Status of the Law Current campaign finance law limits contributions but places no limits on expenditures that are not coordinated with a candidate or a campaign (independent expenditures). The law caps the amount an individual, a political action committee, or a political committee could give to a candidate, national party, and political committees in a given year. Additionally, the Act limited the total amount individuals could give per year. Corporations, labor unions, and national banks are prohibited from making any direct contributions. However, these organizations can form separately funded political action committees for the purpose of contributing to campaigns and political parties, or otherwise attempting to influence the outcome of federal elections. Expenditures, although unlimited in amount, are subject to disclosure requirements. Independent expenditures aggregating to more than $250 in a calendar year must be reported to the FEC. These reports must include the name of the person or group making the expenditure; mailing address; the occupation and name of employer; identity of the expenditure recipient; the amount, date, and purpose of the expenditure; a statement as to whether the expenditure was in support or opposition of a candidate; and the name of any other person who contributed to the expenditure. 379 Potter, supra note 148 at 56. 87

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The definition of contributions and expenditures includes any money spent on public communications. Public communications are any communications that promote or oppose a clearly identified candidate for federal office. Congress specifically included communications via broadcast, cable, satellite, newspaper magazine, outdoor advertising, mass mailing, and telephone banks, as well as any other form of general public political advertising. Public communications are required to carry disclaimer statements that specify the sponsorship of the communication, as well as a statement as to the authorization of the communication by the candidate. All disclaimer statements must be clear and conspicuous. The FEC has mandated specific requirements for print, radio, and television disclaimer statements. These specific requirements complement the physical characteristics of the medium. Print communications must carry disclaimer statements that are of sufficient type size to be clearly readable by the recipient, contained in a printed box set apart from the main content of the communication, and printed in contrasting colors from the background of the communication. 380 A radio broadcast communication paid for by a candidate or authorized committee must include an audio clip of the candidates verbal endorsement of the advertisement. Likewise, a similar advertisement broadcast on television must carry a visual message from the candidate indicating his or her endorsement of the ad. An advertisement paid for by the candidate, or authorized committee, via broadcast, cable or satellite, must carry a written statement at the end that includes the endorsement and source of the advertisement. This statement must be clearly readable. The FEC defined clearly readable as: appearing in letters equal to or greater than 4 percent of the vertical picture height; being visible for a period of at least four seconds; and 380 11 C.F.R. 110.11 (2008). 88

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appearing with a reasonable degree of color contrast between the background and the text of the statement. 381 A radio or television advertisement paid for by individuals not authorized by the candidate must include a state that includes the source of the advertisement. The statement must be spoken clearly. Television advertisements must also include a visual representation of the individual, group, or committee funding the advertisement and the written copy of the verbal statement of disclaimer. 382 This visual representation also must be clearly readable. 383 These requirements for disclaimer statements are the only distinction made between media entities in the application of the FECA and BCRA. The general provisions of campaign finance laws, such as disclosure requirements and contribution limits, are applied more generally across the various media. However, some justices on the U.S. Supreme Court have questioned the constitutionality of those general provisions since the Buckley decision in 1976. Chapter 4 will discuss the Courts decisions on campaign finance. 381 Id. 382 Id. 383 Id. 89

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CHAPTER 4 HISTORY OF CAMPAIGN FINANCE JURISPRUDENCE Modern campaign finance reform began with the Federal Election Campaign Act of 1974. 384 The Supreme Court, in Buckley v. Valeo, reviewed the constitutionality of that law in 1976. 385 The Court struck limits on independent expenditures, but upheld limits on contributions and disclosure requirements. However, the Buckley decision was issued as a per curiam opinion, with five separate opinions concurring and dissenting in part. The disagreements among the justices continued in the more than 30 years that Buckley has been the controlling precedent in campaign finance jurisprudence. This chapter will discuss the evolution of campaign finance jurisprudence. Members of the Court specifically have questioned the distinction the Buckley decision created. As the Court continued to review campaign finance laws, it explicitly created not only a practical distinction between contributions and expenditures, but a constitutional distinction. This constitutional distinction meant that limits on contributions only had to pass an intermediate scrutiny review, while limits on expenditures were subject to a strict scrutiny review. During this review process, members also disagreed over the acceptance of prevention of corruption as a justification for the application of campaign finance laws. An increasing number of justices have also questioned the validity of the Buckley decision, calling for the overturn of that precedent. The Court struggles to consistently apply Buckley In 1981, five years after the Buckley per curiam decision, Justice Blackmun explicated his brief dissent from the Buckley opinion. 386 The plurality in California Medical Association v. FEC 384 See supra Ch. 3. The first reform act was passed in 1971, but there were significant amendments in 1974. Id. 385 424 U.S. 1 (1976). For a full discussion of this case, see Ch. 3. 386 California Medical Association v. FEC, 453 U.S. 182 (1981). 90

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interpreted a lower constitutional standard for contributions than expenditures. 387 Justice Blackmun concurred in the decision, but argued that contributions and expenditures should be held to the same constitutional standard and that the standard should be exacting scrutiny. 388 In California Medical Association v. FEC, the Court in a plurality opinion relied on the analysis in Buckley to uphold a contribution limit that restricted the amount of money that unincorporated associations could donate to a political action committee. 389 The California Medical Association (CMA), which consisted of California physicians, formed a political action committee (CALPAC) in order to engage in political speech and support candidates for federal office via contributions to candidates. 390 Under the FECA, CMA was limited to a donation of $5,000 a year to CALPAC. 391 CMA challenged this limit on First Amendment grounds, arguing that CALPAC was the tool that CMAs members used to engage in political speech. 392 Therefore, the limits constituted an unconstitutional restriction of CMAs freedom of expression as more similar to a limit on expenditures than on contributions. 393 Alternatively, CMA argued that even if the Court found this limitation to resemble the limitations on contributions, these limitations were different than those at issue in Buckley. 394 CMA argued that these contributions 387 Id. 388 Id. at 202 (Blackmun, J., concurring). 389 Id. 390 Id. at 185. 391 Id. (citing 2 U.S.C. 441a (a)(1)(c) (1976)). 392 Id. at 195. 393 Id. 394 Id. 91

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posed no danger to the existence of, or the appearance of corruption, because they were going to a political committee not a candidate. 395 Justice Thurgood Marshall, delivering the opinion of the Court, was not persuaded by CMAs arguments. 396 Marshall determined that the speech by proxy that CMA [sought] to achieve through its contributions to CALPAC is not the sort of political advocacy that this Court in Buckley found entitled to full First Amendment protection. 397 The contributors First Amendment rights were no more impeded by limits on contributions to committees than they are by contributions to candidates. The Court reiterated that Buckley offered broad constitutional protection to direct political advocacy, not the general approval of a committees role in the political process evidenced by contributions. 398 Further, the Court found that CMAs argument that the limitation on contributions to political committees did not further a government interest was without merit. 399 The Court reasoned that if individuals and unincorporated organizations were allowed unregulated contributions, they could use committees to funnel unlimited funds to candidates. The Court found that this would circumvent the contribution limits upheld in Buckley. 400 The Court also rejected CMAs argument that this particular limitation was unnecessary to protect the integrity 395 Id. 396 Id. at 184. Justice Marshalls opinion with respect to the First Amendment challenges was joined by Justices William Brennan, Byron White, and John Paul Stevens. Justice Potter Stewart joined by Justices Burger, Powell, and Rehnquist dissented from the opinion of the Court on the basis that the Supreme Court did not have jurisdiction to hear the case. The dissenting opinion is not discussed in detail in this chapter because the First Amendment challenges were not addressed. Id. at 204. 397 453 U.S. 182 at 196. 398 Id. 399 Id. at 197-98. 400 Id. at 198. 92

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of the other contribution limits because there were other antifraud provisions in the FECA. 401 The Court reasoned that the activity restricted by the contribution limits was not entitled to full First Amendment protection, therefore, Congress was not required to select the least restrictive means of protecting the integrity of its legislative scheme. 402 Justice Blackmun, although voting with the majority to uphold the contribution limits, disagreed with the Courts interpretation of the Buckley opinion. 403 Blackmun argued that the Buckley Court held both contributions and expenditures to be fully protected expressive activities. Specifically, Blackmun said that the plurality in California Medical erred in applying a less than rigorous standard of review in its First Amendment analysis of the contribution limits. Blackmun argued that under a rigorous analysis the Court should reach a different result if the contribution limits were applied to a political committee that was established for the purpose of making independent expenditures, rather than contributions to candidates. 404 CALPAC, and other multicandidate committees, according to Blackmun serve as conduits of funds for candidates and, therefore, pose a perceived threat of corruption. 405 However, committees that only engage in independent expenditures pose no more of a threat than individuals making the same expenditures. Accordingly, Blackmun concluded that contributions to political committees can be limited only if those contributions implicate the governmental 401 Id. at 199. 402 Id. 403 453 U.S. 182 at 201 (Blackmun, J., concurring). Justice Blackmun dissented in Buckley v. Valeo, contending that the contribution limits were unconstitutional. However, for the purposes of his analysis in California Medical, he accepted the tenets of the Buckley decision upholding those limits. Id. 404 Id. at 204. 405 Id. 93

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interest in preventing actual or potential corruption, and if the limitation is no broader than necessary to achieve that interest. 406 Justice Blackmuns concurring opinion created a situation in which there was no opinion of the Court for the portion of the case that analyzed the First Amendment interests asserted by CMA. 407 The plurality opinion interpreted Buckley as creating not only a definitional distinction between contributions and expenditures, but a distinction based on constitutional standards of review. Blackmun contended in his concurrence that Buckley held both these expressions of political preference to an exacting scrutiny. The difference in outcome as to the constitutionality of the different measures was a result of the application of the government interest promoted. The Buckley Court found that the contribution limits directly advanced the interest of preventing corruption, but expenditure limits did not. Blackmun argued that the intent of the Buckley decision was not to create a framework where contributions were held to a lower scrutiny than expenditures. Also in 1981, the Court applied a more rigorous standard, similar to what Justice Blackmun called for in California Medical. In Citizens Against Rent Control v. City of Berkeley the Court found that the contribution limits to political committees upheld in California Medical were unconstitutional when applied to organizations formed for the purpose of political expenditures to support or oppose a ballot measure. 408 Justices Blackmun, joined by newly 406 Id. at 203. 407 Justice Marshall delivered an opinion, in which justices Brennan, White and Stevens joined. Justice Blackmun joined the opinion except with respect to Part III, which discussed the First Amendment claims. Justices Stewart issued a dissenting opinion, in which Chief Justice Burger and justices Powell and Rehnquist joined. The dissent addressed only the jurisdictional issues raised in the case, and never arrived at the First Amendment issues. 408 Citizens Against Rent Control v. City of Berkeley, 454 U.S. 290 (1981). Chief Justice Burger delivered the opinion of the Court, which was joined by Justices Powell, Brennan, Stevens, and Rehnquist. Rehnquist, although joining the entire opinion of the Court, issued a short concurrence. Justices Marshall, Sandra Day OConnor, and Blackmun issued concurring opinions. Id. 94

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appointed Justice Sandra Day OConnor, and Justice Marshall issued separate concurring opinions. Their concurrences focused on the level of scrutiny required for reviewing limits on contributions. In Berkeley, the Citizens Against Rent Control, a committee formed to oppose a ballot measure in 1977, challenged a city ordinance that limited the amount an individual could contribute to candidate and ballot measure committees during an election. 409 The Court analogized that the restrictions on contributions to ballot measure committees are restrictions on the marketplace for the clash of different views and conflicting ideas that the Court had long viewed as protected by the First Amendment. The Court found reporting requirements sufficient to prevent undue influence by associations in the public discussion of the measure. The Court held that the limit imposed by the Berkeley ordinance automatically affects expenditures and limits on expenditures operate as a direct restraint on freedom of expression of a group or committee desiring to engage in political dialogue concerning a ballot measure. 410 The Court briefly contrasted the limits on contributions in Buckley by recognizing that there are state interests in regulating contributions to a candidate, but concluded that there was no significant state or public interest served by limiting discussion of a ballot measure. 411 The Court reached this conclusion without any guidance as to the level of scrutiny it was applying. Justice Marshall, who wrote the opinion of the Court in California Medical, concurred in the judgment, but wrote separately to affirm that the Court, since Buckley has applied a lower scrutiny to contribution limits than to expenditure limits. 412 Justice Marshall expressed concern 409 Id. (citing the Election Reform Act of 1974, Ord. No. 4700-N. S., 602). 410 Id. at 299. 411 Id. 412 Id. at 300 (Marshall, J., concurring). 95

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that the opinion of the Court did not explicitly uphold that constitutional distinction. 413 Marshall continued on the assumption that the Court was adhering to a lower standard of review for First Amendment challenges to contribution limits. He concurred in the Courts judgment because he found no evidence that voter confidence, the interest ostensibly served by the ordinance, was undermined by large contributions to ballot measure committees. 414 Although Justice Blackmun concurred in the judgment as well, he flatly denied the application of the lower standard assumed by Marshall. In his concurring opinion, joined by Justice OConnor, Blackmun reiterated his position in California Medical that any contribution limit must survive exacting scrutiny. 415 Blackmun recognized that protecting voter confidence was a legitimate interest. However, Blackmun required both proof that voter confidence was threatened and that the ordinance was narrowly drawn to protect voter confidence. Blackmun found that the City failed on both counts. 416 Justice White issued a scathing dissent in which he admonished the Court for overstat[ing] the extent to which First Amendment interests are implicated and for, worse, assert[ing] that the ordinance furthers no legitimate public interest. 417 White argued that limitations are content neutral and, therefore, must be analyzed as to how much they restrict expressive activity. That First Amendment interests are implicated should begin, not end the inquiry. When the infringement is as slight and ephemeral as it is here, the requisite state interest 413 454 U.S. at 301 (Marshall, J. concurring). 414 Id. 415 Id. at 302 (Blackmun, J. and OConnor, J., concurring). 416 Id. at 302-303. 417 Id. at 306 (White, J., dissenting). 96

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to justify the regulation need not be so high. 418 In determining that the contribution limits should be upheld, Justice White adhered to a Meiklejohnian theory of expression. He argued that the contribution limits were justified because if there were any ultimate impact on speech, it will be presented to assure that a diversity of views will be presented to the voters. The Berkeley decision further muddies the distinction drawn in Buckley between contributions and expenditures. Justice Blackmun, joined by Justice OConnor, continued to argue for no constitutional distinction at all. He contended that the difference found in Buckley resulted from the application of the state interest rather than any difference in value or First Amendment protection. Justice Marshall argued that Buckley indeed created a First Amendment dichotomy between contributions and expenditures, with contributions receiving a lower level of protection because they did not directly infringe on speech. Justice White argued for no distinction between the two types of regulations, but rather that they are both content-neutral regulations. 419 Justices Disagreed Over Interpretations of Buckleys Corruption Standard After Buckley, the justices disagreed not only about the extent of the distinction between expenditures and contributions, but also about the requirements of the proof of corruption as a compelling government interest. The Court held that for certain organizations, the corruption rationale was not strong enough to support the application of FECA provisions. For example, the Court found that disclosure requirements could not constitutionally be applied to minority parties because minority parties did not present a significant risk of corruption. The Court also held that some corporations did not warrant the application FECA corporate spending limits. However, 418 Id. at 310. 419 Restricting the analysis to content-neutral regulations lowers the standard of review to intermediate scrutiny, which requires a lesser interest to be proved by the government. 97

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none of these decisions were unanimous, and dissenting justices offered different interpretations of the application of the corruption rationale. In 1982, the Court held that applying disclosure requirements to minority parties with a history of discrimination is unconstitutional. 420 The Court reasoned that because minority parties have a lower chance of winning the election, they do not present as much of a risk of corruption. 421 The Court also found a greater threat to the First Amendment interests of minor parties and candidates because the financial base is likely to be less sound and more vulnerable to falloffs in contributions due to fear of hostility when the association is known. 422 Therefore, the government interests promoted by the restrictions are not significant enough when applied to contributors to minor parties and candidates. 423 A point of contention among the justices was the application of FECA disclosure requirements to recipients of minor party expenditures. The majority found that these requirements also should not apply to minority parties. However, Justice OConnor, joined by Justices Rehnquist and Stevens, argued that although contributors to minor parites might experience hostility, recipients of expenditures cannot claim the same fears of retribution. 424 The justices also disagreed on the extent of congressional deference necessary in analyzing the government interest ostensibly advanced by campaign finance law provisions. In FEC v. Massachusetts Citizens for Life (MCFL), 425 the Court analyzed the constitutionality of provisions 420 Brown v. Socialist Workers 74 Campaign Committee, 459 U.S. 87 (1982). 421 Id. at 92. 422 Id. at 93. 423 Id. 424 Id. 425 479 U.S. 238 (1986). 98

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limiting corporate campaign spending to spending via PACs when applied to corporations formed for ideological purposes. The opinion of the Court, written by Justice Brennan, held that these provisions were unconstitutional when applied to ideological organizations because these type of organizations do not present the corrupting influence that the average corporation does. 426 However, Justice Rehnquist wrote a dissenting opinion in which he admonished the Court for second-guessing Congress decision that corporations, no matter their stated purpose, required additional legislation. 427 MCFL was a nonprofit corporation formed to foster respect for human life and to defend the right to life of all human beings, born and unborn, through educational, political and other forms of activities. 428 The Court noted that MCFL did not accept any donations from corporations, but gathered its resources from individual donors and fundraising activities. 429 MCFL published a newsletter periodically to inform members and readers about the organization and relevant issues, such as the results of legislative and administrative hearings, proposals for constitutional amendments, status of legislation, and the outcome of referenda. 430 These newsletters were produced using money from MCFLs general treasury. During the 1978 election cycle, the MCFL newsletter included a section that listed candidates by name and 426 Id. at 241. Justice Brennan wrote the opinion for the Court. Parts I and II, which consisted of mostly case facts and history, was joined by all justices. Part III-A, which discussed the burdens imposed on MCFL, was joined by Justices Marshall, Powell, and newly appointed Antonin Scalia. Parts III-B and III-C, which discuss the constitutionality of the challenged provisions, were joined by Justices Marshall, Powell, Scalia, and OConnor. 427 Id. at 268 (Rehnquist, C.J., dissenting). Chief Justice Rehnquist was joined in his dissent by Justices Blackmun, Stevens, and White. Id. at 265. 428 479 U.S. 238, 241 (quoting MCFLs articles of incorporation). 429 Id.at 242. 430 Id. at 243. 99

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reported on the candidates views on abortion. This expenditure was challenged under the FECA, which prohibited corporate spending in support of a candidate from general treasury accounts. 431 Although the Court found that MCFLs expenditure on the special edition newsletter was controlled by the FECA corporation provisions, it found that application of these provisions to MCFL was unconstitutional. In the plurality portion of the decision, Justice Brennan reasoned that applying the FECA provisions that limited corporate spending would require that MCFLto occasionally make independent expenditures on behalf of candidates, meet more extensive requirements and more stringent restrictions than an unincorporated organization with similar purposes. Brennans opinion noted that the restrictions imposed on corporations might hamper political expression because the alternative means of communication a PAC is more burdensome than the one it forecloses. 432 Justice OConnor, in a concurring opinion, focused on the burdens created by the organizational restraints of establishing and operating a PAC. OConnor noted that these burdens are not insurmountable, but found that the government failed to show that groups such as MCFL pose any danger that would justify infringement of its core political expression. 433 Brennans opinion for the Court noted that limits on corporate spending were intended to prevent the corporate form from providing an unfair advantage in the political marketplace. 434 The marketplace of ideas could be corrupted by influences of the economic marketplace. However, a majority of the Court also found that groups such as MCFL do not pose that 431 Id. at 244. 432 Id. at 255. 433 Id. at 266 (OConnor, J., concurring). 434 Id. at 257-260. 100

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danger of corruption. MCFL was formed to disseminate political ideas, not to amass capital. 435 MCFL was not the type of corporation that engendered concern over corruption of the political marketplace because its wealth was not amassed in the economic marketplace. The Court identified three characteristics that distinguished MCFL from traditional corporations: 1) MCFL operated solely in the political marketplace; 2) MCFL had no shareholders or interested investors; and 3) MCFL was not formed by and did not accept donations from corporations or unions. 436 Therefore, the Court concluded that there was no compelling justification to apply the spending limitations to the MCFL. 437 The law as applied was unconstitutional. Justice Rehnquist wrote a dissenting opinion that accused the majority of stepping over the Courts constitutional boundary. Rehnquist joined by Justices White, Blackmun, and Stevens argued that the distinction the Court drew between MCFL and other corporations was a distinction in degree not a difference in kind. 438 Rehnquist noted that Congress had judged that all corporate political activity called for additional legislative restrictions to prevent corporate corruption of the political process. To question that judgment, Rehnquist wrote, is legislative in nature. Rehnquist cited past precedent in which the Court had upheld corporate restrictions. He reasoned that as MCFL was a corporation, the application of the law was constitutional. He concluded that it was not the Courts duty to draw such distinctions as the majority undertook in MCFL. 439 435 Id. 259. 436 Id. at 264. 437 Id. at 263. 438 Id. at 267 (Rehnquist, C.J., dissenting). Justice White joined Rehnquists dissent, but also wrote separately to briefly affirm his previous dissent in Buckley v. Valeo. Id. at 270. 439 Id. 101

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However, the Court did not find that all non-profit corporations were deserving of the MCFL exception to the FECA corporation requirements. In Austin v. Michigan State Chamber of Commerce, the Court found that provisions similar to those challenged in MCFL, were constitutional when applied to a state chamber of commerce, because it resembled a traditional corporation. 440 This case involved a provision of the Michigan Campaign Finance Act that prohibited corporations from using general treasury funds for expenditures that supported or opposed a state office candidate. The Michigan Chamber of Commerce attempted to use its general treasury to fund a newspaper advertisement in support of a particular candidate. The chamber sought a declaratory judgment that would enjoin the state from enforcing the regulation against the chamber. 441 Although the U.S. Supreme Court looked back to its 1986 decision in MCFL, the Court said that the chamber of commerce did not exhibit the same characteristics as the MCFL did. 442 Rather, the Court said the chamber of commerce resembled a traditional corporation and presented the same threat of corruption as a corporation. 443 As such, the Court held that the application of the Michigan law was permissible under the First Amendment. Justices Scalia and Kennedy wrote dissenting opinions in this case. Justice Scalia argued, in a lengthy dissent that the limits on corporate spending are counter to the free political exchange guaranteed by the First Amendment. The newly appointed Justice Anthony Kennedy also offered a dissent, which Scalia joined along with Justice OConnor. Kennedy argues that independent expenditures whether funded by a corporation or an individual are at the core of 440 494 U.S. 652 (1990). 441 Id. at 656. 442 Id. at 661-65. 443 Id. at 664. 102

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political speech protected by the First Amendment. He concluded that the Court had become a censor of political speech by selectively restricting speech based on the speaker. 444 Buckley Loses Support In the years since Buckley, the makeup of the Court had changed significantly. Justices, Marshall, Brennan, White, Blackmun, Stewart, Burger and Powell left the Court. The new associate justices were OConnor, Scalia, Kennedy, Ginsburg, and Breyer. The only two justices who sat on the Court in 1976 were Justice Rehnquist and Stevens although Justice Stevens did not participate in the Buckley decision. Beginning with Buckley, the justices had questioned the First Amendment distinction between contributions and expenditures. However, this concern became more obvious in 1996 some justices thought the First Amendment scrutiny applied to expenditures was too rigorous; others thought contribution limits should be subjected to stricter review. Some justices also began to emphasize a more systemic based approach to First Amendment analysis rather than a focus on individual free speech rights. This debate is evident in the cases pled by the Colorado Republican Federal Campaign Committee 445 and in Nixon v. Shrink Missouri Government PAC. 446 In Colorado Republican Federal Campaign Committee v. FEC (Colorado I) 447 and FEC v. Colorado Republican Federal Campaign Committee (Colorado II), 448 the Court analyzed a portion of the FECA that restricted spending by political parties on behalf of candidates. In 444 Id. at 712 (Kennedy, J., dissenting). 445 See Colorado Republican Federal Campaign Committee v. FEC, 518 U.S. 604 (1996) (Colorado I); FEC v. Colorado Republican Federal Campaign Committee, 121 S. Ct. 2351 (2001) (Colorado II). 446 528 U.S. 377 (2000). 447 518 U.S. 604. 448 121 S. Ct. 2351. 103

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Colorado I, the main issue was whether political parties could be limited in the amount of funds spent on political communications absent any coordination with candidates. The majority found that such restrictions were akin to the restrictions placed on individual independent expenditures, which the Court struck down in Buckley. 449 However, the broader question the Court did not answer in Colorado I was whether limits on expenditures coordinated with candidates were constitutional. The majority opinion found it imprudent to answer this question on the facts presented in Colorado I. The Court did take up the issue of coordinated expenditure limits in Colorado II four years later. 450 The Colorado Republican Federal Campaign Committee argued that limits on any type of expenditure by a political party, including those coordinated with a candidate, were unconstitutional as it imposed a significant burden on the partys ability to express its political views. The FEC argued that traditionally coordinated expenditures were treated as the equivalent to contributions. In fact, Congress defined contributions to include this functional equivalent, and the Court in Buckley upheld this definition. The Court in Colorado II, continued to adhere to the Buckley precedent. The Court continued to accept coordinated expenditures as comparable to contributions. The challenge to limits on coordinated expenditures by political parties was rejected. In 2000, the year before the second Colorado case, the Court analyzed the contribution/expenditure dichotomy in Nixon v. Shrink Missouri Government PAC in relation to state contribution limits. 451 Until Shrink, the Court had continued to adhere, at least in rhetoric, to 449 518 U.S. at 617. 450 533 U.S. 431. 451 528 U.S. 377 (2000). Nixon v. Shrink Missouri Government PAC presented a question to the Court of whether Missouri state contribution limits ranging from $275 to approximately $1,000 were constitutional. Using the Buckley test of strict scrutiny, the Eighth Circuit Court of Appeals held that Missouri had not provided any evidence to 104

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the language in Buckley that both expenditures and contributions were due core First Amendment protection. However, the force of the holdings seemed to create a stronger constitutional difference between the two types of expression. In Shrink, the Court explicitly articulated this difference limits on contributions are subjected to a lower level of scrutiny. In these three cases, the justices questioned, in concurring and dissenting opinions, the application of the contribution/expenditure dichotomy developed in Buckley and its progeny. In Colorado I, Justice Stevens and Justice Ginsburg said that all money spent by a political party to secure the election of its candidate should be treated the same as a contribution. Stevens and Ginsburg argued that, in the case of political parties, limits on both contributions and expenditures should be subject to a lower standard of review. Justice Thomas argued more broadly that the distinction between contributions and expenditures established in Buckley was invalid. He said both types of expression should be treated as the core First Amendment expression that they are and be held to equally strong scrutiny. 452 Thomas continued this line of argument in his dissent in Colorado II when he declared that Buckley v. Valeo should be overruled. Thomas objected to the lower level of protection that the application of an intermediate standard of scrutiny provided political speech via the Buckley framework. Political speech is the primary object of First Amendment protection, and it is the lifeblood of a self-governing people. I remain baffled that this Court has extended the most generous First Amendment safeguards to filing lawsuits, wearing profane jackets, and exhibiting drive-in movies with nudity, but has offered only tepid protection to the core speech and associational rights that our Founders sought to defend. 453 even suggest a problem of corruption. Further, even if the court could recognize a compelling interest to ward off corruption, the Eighth Circuit found that the particular limits in this case are so small that they run afoul of the Constitution by unnecessarily restricting protected First Amendment freedoms. Shrink Mo. Govt. PAC v. Nixon, 161 F.3d 519, 522. The Supreme Court overturned the Eighth Circuits ruling. See 528 U.S. 377. 452 Id. at 636-640. 453 533 U.S. at 465-66 (Thomas, J., dissenting). 105

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Justice Thomas considered the dichotomy in his dissent in the Shrink case as well. Thomas, joined by Justice Antonin Scalia, argued again that contributions deserve the same level of First Amendment protection as expenditures because the contribution enables the dissemination of messages. The decision of individuals to speak through contributions rather than through independent expenditures is entirely reasonable Citizens recognize that the best advocate for the candidate tends to be the candidate himself. 454 The justices also continued to question the general framework of First Amendment protection for money spent in elections. Justices Stevens and Ginsburg, in Colorado I, argued that the First Amendment is not necessarily at odds with campaign finance limits. They argued that individual free speech rights should not be the only First Amendment interests considered and that the integrity of the electoral process may actually benefit from limiting the flow of money into campaigns. It is quite wrong to assume that the net effect of limits on contributions and expenditures which tend to protect equal access to the political arena, to free candidates and their staffs from the interminable burden of fund-raising, and to diminish the importance of repetitive 30-second commercials will be adverse to the interest in informed debate protected by the First Amendment. 455 Justice Stevens went one step further in his concurring opinion in Shrink. Money is property; it is not speech. 456 While Justice Stevens recognized that money could be used to enhance speech, or accomplish the same goals of speech inspiring listeners he did not support First Amendment protections for the use of that money. Rather, Justice Stevens urged the Court 454 528 U.S. 377 at 415-416. 455 518 U.S. at 649-650 (Stevens, J., dissenting). 456 528 U.S. at 398 (Stevens, J., concurring). 106

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to protect such spending through the doctrine of substantive due process, which protects the use of property. 457 Justice Breyer and Justice Ginsburg, also concurring in the Shrink decision, argued that while First Amendment interests are at issue, they lie on both sides of the question. 458 Disagreeing with Justice Stevens, Breyer and Ginsburg argued that contributions and expenditures are entitled to First Amendment protection because spending money enables speech. 459 On the other side of the question, the justices argued that campaign finance limits protect the integrity of the electoral process and promote the open discussion and participation at the core of First Amendment values. 460 Justices Breyer and Ginsburg called on a Meiklejohnian reasoning to strongly oppose a simple strict scrutiny review. With First Amendment interests on both sides of the campaign finance reform debate, the justices advocate a deferential approach that relied on the expertise of the congressional branch. 461 As the Court continued to struggle with the application of a law and precedent from 1976, Congress also kept trying to reconfigure the laws. Congress was attempting to address some of the questions that the Court had both raised and created. Congresss attempts culminated in the Bipartisan Campaign Reform Act of 2002. 462 457 Id. at 399. 458 528 U.S. 377, 400 (Breyer, J., concurring). 459 Id. 460 Id. at 401. 461 Id. at 402-404. 462 See Ch. 3. 107

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Applying Buckley to BCRA The Courts opinions following the passage of BCRA herald changes in the paradigm of campaign finance reform jurisprudence. The first change observable in the Courts opinions is an increased deference to congressional judgment. The Courts opinions since BCRA demonstrate a willingness to accept limitations with little to no evidence of the necessity of the resulting restriction on speech. A second major trend in campaign finance jurisprudence is the change in the focus of the First Amendment analysis in which the Court engages. The Court has begun to shift this focus from the individual to the system of democracy both of which the Court argues are protected by the First Amendment. These changes may be a signal of a new era of campaign finance reform. The Court Shows Deference The first case decided by the Supreme Court after the passage of BCRA was Beaumont. In this case the Court demonstrated once again its faltering adherence to the principles laid out in Buckley v. Valeo. Christine Beaumont served as officer of the non-profit corporation North Carolina Right to Life, Inc. (NCRL). 463 NCRL brought suit against the FEC to challenge the prohibition against spending treasury funds to make contributions to candidates. NCRL based the challenges on the MCFL case discussed above, which some nonprofit organizations do not present the same concerns of corruption as traditional corporations. In upholding the contribution limits, the Court further distinguished the constitutional standard of review between contributions and expenditures. Unlike limits on expenditures or other types of political speech, limits on political contributions are subject to relatively 463 FEC v. Beaumont, 539 U.S. 146 (2003). 108

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complaisant review under the First Amendment. 464 Under this lower level of scrutiny, the Court showed extreme deference to the legislature. The Court accepted without evidence the contention that contributions made through a corporations general treasury even a non-profit, ideological corporation poses a threat of corruption. 465 The Courts willingness to accept without question the legislatures claim of corrupting influences as a justification for suppression of expression is a harbinger of further distortion of the Buckley paradigm. Justice Thomas, in a more abridged manner than in previous cases, continued to admonish the Court for using such a low standard of review. 466 Thomas persisted that all campaign finance regulations should be considered using strict scrutiny. 467 Although Beaumont was the first case decided after the passage of BCRA, the Court first reviewed the constitutionality of that law in McConnell v. FEC. 468 The Court rejected the First Amendment challenges to the BCRA, showing great deference to the congressional findings of threats of corruption. In its decision, the Court addressed, among smaller claims, the two major provisions of the BCRA the ban on soft money and the ban on corporate electioneering communications. 464 538 U.S. at 161. 465 Id. at 157. 466 Id. at 164 (Thomas, J., dissenting). 467 Id. 468 540 U.S. 93 (2003). 109

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In addressing the ban on soft money, the Court treated this provision of BCRA as a contribution limit. 469 The Court found that the soft money provisions met the lesser demand for contribution limits because they were closely drawn to meet the sufficient interest of preventing corruption. The majority relied on common sense and the ample record to support Congress claim that soft money contributed to corruption or the appearance of corruption. 470 The Court noted that this lesser standard shows proper deference to Congress ability to weigh competing constitutional interests in an area in which it enjoys particular expertise and provides Congress with sufficient room to anticipate and respond to concerns about circumvention of regulations designed to protect the integrity of the political process. Four of the justices dissented from this portion of the opinion, including Chief Justice Rehnquist. 471 The Chief Justice found that the majority was too willing to accept anti-circumvention as a legitimate government interest. Rehnquist argued that the ban on soft money, was not closely drawn to prevent corruption and that showing such broad deference equated to a blow to the First Amendment. Todays decision, by not requiring tailored restrictions, has significantly reduced the protection for political speech having little or nothing to do with corruption or the appearance of corruption. 472 The Court next turned to the challenges raised against Title II of BCRA, under which electioneering communications were subject to specific disclosure requirements. 473 469 The majority opinion quickly dismissed the challenge that some of the soft money provisions prevent spending and are therefore deserving of a strict scrutiny analysis. For purposes of determining the level of scrutiny, it is irrelevant that Congress chose to regulate contributions on the demand rather than the supply side. Id. at 658. 470 McConnell v. FEC, 124 S. Ct. at 661. 471 Id. at 777. The Chief Justise was joined by Justices Scalia and Kennedy in his dissent of the Courts ruling with respect to Title I. Justices Kennedy, Thomas, and Scalia also filed separate dissenting opinions for this part. 472 Id. at 781. 473 2 U.S.C. 434. For a complete discussion of these provisions, see infra. 110

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Additionally, corporations and unions were prohibited from directly funding these communications. 474 This new definition diminished the bright line previously applied to distinguish express advocacy ads with issue ads. 475 However, plaintiffs challenged this definition, arguing that speakers had an inviolable First Amendment right to engage in expression through issue advertisements. 476 The Court disagreed, concluding that plaintiffs had misconstrued the previous decisions that had created the express advocacy and issue ad distinction. 477 Further, the majority held that such a distinction is counterproductive in preventing actual or apparent corruption. The new definition, however, avoids the vagueness of the express advocacy rule, provides a clear and predictable application of FECA provisions, and targets potential corrupting advertisements. 478 In a general and sweeping dissent, Justice Scalia criticized the underlying principles of the Courts decision in McConnell. Scalia contended that the majority espoused the view that because money is not speech, regulating the use of money to create speech is not constricted by the high standards of First Amendment analysis. Scalia said that the Courts cavalier attitude toward regulating the financing of speech frustrates the purpose of the First Amendment. 479 Further, Scalia argued that pooling money was also essential to the First Amendment and that subjecting such activity to less than full First Amendment protection threatens the existence of 474 FECA 316(b). 475 See infra. 476 McConnell, 124 S. Ct. at 687. 477 Id. at 687. 478 Id. at 689. 479 Id. at 722. 111

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all political parties. 480 And, in reference to the restriction of corporate speech, Scalia invoked the marketplace of ideas to combat the sweeping restrictions. The premise of the First Amendment is that the American people are neither sheep nor fools, and hence fully capable of considering both the substance of the speech presented to them and its proximate and ultimate source. If that premise is wrong, our democracy has a much greater problem to overcome than merely the influence of amassed wealth. Given the premises of democracy, there is no such thing as too much speech. 481 Despite the strong dissents, the Beaumont and McConnell cases demonstrate the Courts increasing willingness to accept a broadening concept of corruption based on Congressional claims. The deference shown in both these cases indicate an opportunity for more expansive campaign finance reforms to survive constitutional challenges. Particularly the language in the McConnell majority opinion that permits Congress to anticipate and respond to concerns about circumvention seems to be a harbinger of future acquiescence to Congressional decision making. The Court Signals a New Direction for Campaign Finance Law Another key directional shift evident in the McConnell decision was the recognition of a broader sense of corruption. Instead of relying on the traditional notion of big money buying a candidate, the Court examined the threat of systemic electoral corruption. 482 This systemic value of the First Amendment seemed to burst into prominence in the first campaign finance case decided by the new Roberts Court, but was quickly extinguished when the Chief Justice wrote his first campaign finance majority opinion. The fate of this competing value remains uncertain. In Randall v. Sorrell, the Court was presented with a new challenge. Vermont had imposed not only contribution limits but maximum expenditure limits for candidates. With this case, the 480 Id. at 725. 481 McConnell, 124 S. Ct. at 726 (Scalia, J., dissenting). 482 McConnell, 524 U.S. at 116. 112

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Court surprised commentators by striking down both the expenditure limits and the contribution limits, focusing on a lack of evidence as to the necessity of these limits. The Court noted that the limits were so low that they could not be closely drawn. Justice Breyer wrote the plurality opinion in which he weighed five factors that led the Court to strike down the limits: 1) the limits significantly restrict available funding for challengers; 2) the equating of political parties to individuals for the purpose of contribution caps threatens the ability of individuals to politically associate; 3) the limits restrict the amount volunteers can incur as part of their individual contribution limit; 4) the limits are not subject to inflation; and 5) the record did not present any justification for these problems. 483 The plurality opinion clearly displayed Justice Breyers theory of the First Amendment what he has termed active liberty in other writings. 484 He has argued that individual rights are a byproduct of the true meaning of the First Amendment the integrity of self-government. 485 In his opinion, Justice Breyer articulated that this larger goal rather than an individuals right of free expression should be the interest protected by the Court in campaign finance cases. 486 The opinion was a stark departure from the Courts previous cases in which individual rights of freedom of expression were pitted against campaign finance laws. Breyer, in the Randall case, shifted the argument to suggest that campaign finance laws can be congruent with First Amendment interests, thus signaling a change in the Courts direction on campaign finance. 487 483 548 U.S. 230, 126 S. Ct. 2479, 2495-98. 484 See generally STEPHEN BREYER, ACTIVE LIBERTY: INTERPRETING OUR DEMOCRATIC CONSTITUTION (2005). 485 Stephen Breyer, Madison Lecture: Our Democratic Constitution, 77 N.Y.U. L. REV. 245, 253 (2002). 486 Randall, 126 S. Ct. at 2492. 487 See, e.g., Lillian R. BeVier, First Amendment Basics Redux: Buckley v. Valeo to FEC v. Wisconsin Right to Life, 2006-07 CATO SUP. CT. REV 77, 84-87; Richard Briffault, WRTL and Randall: The Roberts Court and the Unsettling of Campaign Finance Law, 68 OHIO ST. L.J. 807, 829 (2007); Rachel Gage, Randall v. Sorrell: Campaign Finance Regulation and the First Amendment as a Facilitator of Democracy, 5 FIRST. AMEND. L. REV. 113

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However, the plurality opinion in Randall was joined only by three justices, and for only parts of the opinion. The other members of the Court offered separate opinions that resulted in a divisive precedent. 488 Although Justice Thomas concurred in the decision, he disagreed with the reasoning in Justice Breyers opinion. 489 Thomas, joined by Justice Scalia, reiterated that Buckley provides insufficient protection to political speech and should be overturned. 490 Justice Stevens also called for the overturn of Buckley in his dissenting opinion. 491 However, Stevens quite adamantly disagreed with Thomas assessment of the First Amendment interests involved in campaign finance regulation. Rather, Stevens chastised the Court for ever having entertained First Amendment interests in the regulation of money, which is property, not speech. 492 Justice Souter, joined by Justice Ginsburg, argued that the expenditure limits categorically struck down by the plurality opinion were indeed not foreclosed by Buckley. 493 The 1976 decision held that expenditure limits were subject to exacting scrutiny. Souter argued that the expenditure limits deserved a full review on the merits. 494 The interest advocated by the state of Vermont 341 (2007); Richard L. Hasen, The Newer Incoherence: Competition, Social Science, and Balancing in Campaign Finance Law After Randall v. Sorrell, 68 OHIO ST. L.J. 849, 852 (2007). 488 Justice Alito delivered a one-paragraph concurring opinion, distancing himself only from the portion of Breyers opinion that discussed respondents request for the Court to revisit the Buckley decision. Randall, 126 S. CT. AT 2500. Alito argued in his concurrence that the respondents made this plea as a sort of last ditch effort without any real conviction. Therefore, Alito concluded differently than Breyer that the Court need not reach the issue of reexamining Buckley. Justice Kennedy also offered a brief concurring opinion arguing that the Court need not decide whether to reexamine Buckley under the issues presented in the Randall case. Id. at 2501. However, Kennedy expressed concerns about the current system of campaign finance, created in part by the Court itself. Id. The concurring and dissenting opinions of Justices Thomas, Stevens, and Souter are discussed in text. 489 Randall, 126 S. Ct. at 2502. 490 Id. 491 Randall, 126 S. Ct. at 2506-2511. 492 Id. 493 Id. at 2511. 494 Id. at 2512. 114

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redirecting candidates and office holders from the demands of fundraising back to the affairs of governing was not adequately analyzed in Buckley. Souters dissenting opinion argued that this interest, paired with potentially significant evidence of the problem, could meet the First Amendment scrutiny laid out in Buckley. 495 In 2007, the Roberts Court continued to reshape the structure of campaign finance law when it reevaluated portions of the McConnell decision in FEC v. Wisconsin Right to Life. 496 This case resulted in a dramatic shift from the McConnell decision, due in some part to the change in membership on the Court. 497 The dissenters in McConnell won the day in the WRTL II case, with the additional votes of the new Chief Justice, John Roberts, and new Associate Justice Samuel Alito. The majority decision found that the new BCRA electioneering communication provisions were unconstitutionally applied to Wisconsin Right to Life, an incorporated right-to-life organization. The majority opinion ostensibly adhered to the McConnell decision, but in effect turns that precedent on its head. Chief Justice Roberts opinion invalidates the corporate bans on electioneering communications and weakens the application of the definition of electioneering communications. 498 The Court, in a direct turn on precedent invalidates the ban on corporate electioneering communications as applied to WRTL. 499 This is not only a deviation from the McConnell decision, but also from previous cases that determined as-applied challenges to 498 WRTL II, 127 S. Ct. at 2667-74. 495 Id. 496 127 S. Ct. 2652 (2007). 497 Chief Justice Rehnquist died in 2005 and Justice Sandra Day OConnor retired in 2006. President Bush nominated John Roberts as Chief Justice and Samuel Alito as Association Justice; both were confirmed and took part in the WRTL II decision. 499 Id. 115

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FECA. WRTL differs significantly from the Massachusetts Citizens For Life case because WRTL accepted corporate donations. The fact that MCFL was independent of corporate influence was a significant factor when the Court found the corporate spending provisions unconstitutional as applied to MCFL. The WRTL spending would carry the corruption concerns of a traditional corporation because of the corporate donations. Therefore, the WRTL case is more similar to the Michigan Chamber of Commerce, which was held to corporate spending provisions by the Court because of its strong ties to corporations. Even more striking than the deviation from precedent, however, is the Chief Justices discussion of competing interests. In McConnell and Randall v. Sorrell, the Court had begun to emphasize the systemic First Amendment value of protecting the integrity of the electoral process. This value had traditionally been seen as the government interest at odds with the First Amendment. Chief Justice Roberts employed the traditional value system when he discussed the regulations framed solely against the individualistic First Amendment freedom of speech. This supports a marketplace conception of political discussion that echoes Scalias previous dissent: Given the premises of democracy, there is no such thing as too much speech. 500 Conclusion The particulars of campaign finance reforms have changed over the years, but the basic foundation has remained stable for more than thirty years. Since the Court announced its decision in Buckley v. Valeo, campaign finance reform has been defined by the line drawn between contributions and expenditures. Under the Buckley framework, contributions can be constitutionally restricted, but expenditures cannot. In the per curiam opinion issued in that seminal case, the justices indicated that limits on both contributions and expenditures were 500 McConnell, 124 S. Ct. at 726 (Scalia, J., dissenting). 116

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deserving of strict scrutiny under a First Amendment analysis. However, since issuing that opinion, individual justices have questioned the validity of the contribution/expenditure dichotomy and the deserving analysis for each category of limitation. Many members of the current Supreme Court have written concurrences and dissents that call into question the lasting validity of this framework. Justice Thomas has been a consistent advocate of overturning the Buckley decision, specifically in reference to the distinction between contributions and expenditures. More generally, the level of review for these types of limitations has also been an issue for the justices some have advocated for an intermediate scrutiny for all reform methods, while others, namely Justice Thomas, have articulated the need to hold all reform efforts to the highest level of scrutiny. More recently, the debate has centered on the depth of analysis that the Court should enter into when addressing campaign finance laws. During the early Buckley progeny, the Court focused on balancing individual First Amendment rights with the compelling interests advanced by the government. However, current case law indicates a shift in this jurisprudential outlook. Rather, the Court, as evidenced in Randall, begins the analysis of campaign finance laws from the perspective that these laws may not necessarily be at odds with the First Amendment. Instead, the Court suggested that these reforms may be in furtherance of First Amendment ideals. Wisconsin Right to Life seems to call into question more than any other case the campaign finance structure created under BCRA. Although the Court upheld this law in 2003 in McConnell, the decision in WRTL has deconstructed most of the framework created by that legislation. 117

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The most recent cases, Randall and WRTL, have also placed the underlying values of campaign finance jurisprudence on the table for discussion and evaluation. Randall particularly emphasized a new framework for First Amendment interest that focused on the system of democracy. This value would have supported, rather than been in direct opposition, to many of the regulations imposed on election speech. Additionally, this value, as articulated by Justice Breyer, allows for significant congressional deference. In WRTL, however, the individualistic values of the First Amendment guarantees of free political speech and an open, robust debate won the day. These traditionally stand opposed to heavy regulation and require exacting scrutiny of Congress methods in regulating speech. It is unclear how these values will be applied in future campaign finance cases. This chapter has discussed the changes in the Court and the trends in campaign finance jurisprudence. Chapter 3 reviewed the current statutory and administrative laws governing campaign communications. The next chapter will discuss the application of these laws to the Internet. 118

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CHAPTER 5 REGULATING CAMPAIGN SPEECH ONLINE The Internet has been heralded as an open, inexpensive and decentralized medium that offers ordinary citizens an opportunity to express political opinions and participate in electoral activities. 501 Since the 2000 election cycle, the Internet has become an increasingly integral part of elections in the United States for citizens, advocacy groups, political committees, and candidates. 502 But as the Internet became a more powerful tool in campaigns, members of Congress identified a need to regulate online campaign communications. However, when the FECA was passed in the 1970s, the Internet was not even a consideration for lawmakers. And when Congress amended the campaign finance law in 2002, Internet users and political communicators were only beginning to glimpse the potential of online communication. Congress did not specifically enumerate this new medium as part of the definitions under the Bipartisan Campaign Reform Act of 2002 (BCRA). As a result, the FEC regulation of the Internet was driven by the commissions interpretation of congressional intent. The FECs interpretation of the BCRA in regard to the Internet has been at the heart of controversy in the four years preceding the 2008 election cycle. Although the FEC had applied the FECA to a restricted class of online communications from 1995 to 2002, the FECs rulemaking for the application of the BCRA included an express exemption of Internet communications from the BCRA regulations. 503 As a result, none of the provisions of the BCRA applied to any campaign activities conducted on the Internet. This administrative decision was 501 Center for Democracy and Technology, Political Speech, http://www.cdt.org/speech/political (March 29, 2006). 502 See supra Ch. 1. 503 Prohibited and Excessive Contributions: Non-Federal Funds or Soft Money, 67 FR 49064 (July 29, 2002) (codified at 11 C.F.R. 300.2 et seq.). 119

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overturned by a U.S. District Court. The FEC, on direction from the district court, adopted a subsequent rulemaking that included regulation of online communications. 504 This chapter will trace the history of Internet regulation under the FECA. The first rulings on the online application of campaign finance laws were FEC advisory opinions. Political committees began requesting rulings from the FEC in the mid-1990s. The FEC first issued a proposed rulemaking in 2001 in an effort to codify the application of the FECA to the Internet. However, the FEC failed to adopt this rulemaking before Congress significantly amended the FECA in 2002. The FEC then initiated the controversial rulemaking that was the focus of Shays v. FEC in 2004. In 2006, the FEC adopted a rulemaking that included in the definitions for expenditures and contributions online communications placed on a third-partys web site for a fee. This chapter will discuss each stage of this evolution of regulating the Internet. Advisory Opinions Offer First Look at Internet Regulations Through advisory opinions, the FEC began shaping the regulation of campaign speech online in 1995. In these opinions, the FEC addressed several key issues of concern in regard to the regulation of this medium. The Commission protected individuals and organizations rights to make independent expenditures on the Internet, but maintained the regulations that would normally be applied to the traditional mass media. Specifically, the FEC examined corporate expenditures, independent expenditures by individuals and organizations, disclaimer requirements, non-partisan activity, and the media exemption. The FEC first addressed the use of the Internet in campaigns in 1995. This advisory opinion offered a range of issues that would be further explicated in later opinions. Newt Watch 504 Internet Communications, 71 Fed. Reg. 18589 (Apr. 12, 2006) (codified at 11 CFR Parts 100, 110, 114). 120

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PACs mission is to provide a forum for publicly available information on selected public officials, most notably Speaker of the House Newt Gingrich. Newt Watch existed primarily as a virtual PAC on the World Wide Web. The online forum offered information on Gingrichs voting record, Ethics Committee and FEC complaints, campaign contribution data, personal finances, honors, and bill sponsorship. Additionally, the PAC used the web site to solicit contributions. The FEC concluded that a web site operated by a political committee should be deemed general public political advertising. The significance of this was to determine whether disclaimer requirements and reporting regulations would apply to communications transmitted via the Internet. The FEC further found that Newt Watch PAC met the disclaimer requirements by placing at the end of the home page and immediately following requests for contributor information a disclaimer statement of the source of the site. This statement was consisten in size and type with the rest of the text on the web site. The FEC found these to be clear and conspicuous. 505 The FEC further discussed the application of the disclaimer requirements to the Intenret in a 1998 advisory opinion issued in response to an independent voter in Connecticut. Leo Smith requested that the FEC advise him as to the reporting and disclaimer responsibilities attached to a web site he created for the purpose of defeating a Republican candidate for the U.S. House of Representatives. 506 Additionally, the web site called for the election of the Republican candidates opponent. The FEC found that because the web site expressly advocated the defeat of one candidate and the election of another, it was something of value. The cost of 505 FEC Advisory Op. 1995-09, 2 (Apr. 21, 1995). This advisory opinion also determined that online solicitation of contributions by a PAC is permissible under the FECA. 506 FEC Adv. Op. 1998-22, 1 (Nov. 20, 1998). 121

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maintaining the web site was determined to be a campaign expenditure and categorized as a general public political advertisement. As a result, the site must carry a disclaimer statement providing the sponsorship of the advertisement and the link to the candidateor lack of a link. 507 Leo Smith noted in his request for advisory opinion that the Supreme Court recognized a First Amendment right to anonymous political publications. Therefore, Smith argued, the disclaimer requirements were unconstitutional. The FEC found that it was not necessary to address this issue because the Supreme Court recognized that right in its analysis of a state statute, not the federal campaign finance law. 508 In addition to requiring disclaimer statements to be published on the web site, the FEC found that it may be necessary for Mr. Smith to report to the FEC the expenses related to the maintenance and set up of the web site. 509 Should the activity qualify as an independent expenditure, [Smith] would be required to file reports with the Commission if the total value of [Smiths] expenditures exceeds $250 in one year. 510 If the online activities are coordinated with the campaign, then the expenses would be reported to the FEC by the campaign as contributions in kind. 511 The FEC found that the reporting obligations for political committees differed significantly from that of an individual such as Leo Smith. 512 X-Pac, a political committee, requested an advisory opinion from the FEC detailing the reporting requirements associated with 507 FEC Adv. Op. 1998-22, 3-4. 508 FEC Adv. Op. 1998-22, 4. 509 FEC Adv. Op. 1998-22, 5. 510 FEC Adv. Op. 1998-22, 5. 511 FEC Adv. Op. 1998-22, 5. 512 FEC Adv. Op. 1999-37, 4. 122

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a web site advocating the election of a candidate for federal office. Political committees are required to report any independent expenditure of more than $200 or a series of expenditures to a single payee that aggregates to more than $200 in a calendar year. The FEC suggested that for a political committee operating an advocacy web site these expenditures could include registration and maintenance of the web site and domain name as well as the costs of any necessary hardware or software for producing the communications. 513 X-Pac also requested the FEC to address was whether the expenditures would need to be reported on a one-time production basis, or whether the number of times the online communications were downloaded would act as a sort of multiplier for expenditures. 514 The FEC found that the expenditure reporting requirements only attached to X-PACs production and initial distribution costs. 515 Users downloading and further use of the communications did not add any attributable costs to X-PAC. Nor was X-PAC required to collect personally identifying information from individuals downloading the materials for republication. 516 In its response to X-PAC, the FEC also delineated the manner in which disclaimers must be attached to e-mail communications. 517 The FEC likened e-mails to traditional mailers and reasoned that, like mass mailings, e-mails would require a disclaimer if substantially similar messages were sent to more than 100 separate e-mail addresses. 513 FEC Adv. Op. 1999-37, 5. 514 FEC Adv. Op. 1999-37, 5. 515 FEC Adv. Op. 1999-37, 5. 516 FEC Adv. Op. 1999-37, 6. 517 FEC Adv. Op. 1999-37, 5. 123

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Another FEC advisory opinion in 1999 addressed several issues relevant to Internet campaign activity. 518 The George W. Bush for President Exploratory Committee, Inc. was seeking the opinion of the FEC on how the campaign should or must, under the FECA, valuate potential uses of the Internet, such as a web site supportive of Mr. Bush established by either Committee volunteers or by individuals unconnected with the campaign, links from third-party web sites to the campaign web site, and mentions on web sites owned by media outlets, e-mail solicitations, republication of campaign materials, and Internet polling. The Bush Committee, in requesting this opinion, stated that because the Committee is uncertain as to the Commissions position on these issues, it has been forced to discourage Internet activity. In responding to this request the FEC advised that only certain types of online activities would constitute contributions, trigger disclosure requirements, or necessitate disclaimer statements. 519 Specifically, the FEC found that third-parties providing links to a campaigns web site was a service and something of value to the campaign and could, under certain circumstances, meet the definition of a contribution under the [FECA] and Commission regulations. 520 If third-party web sites provided links to the campaign web sites, it must be provided at ordinary market cost in order to avoid being considered a contribution to the campaign. Therefore, if the web site owner ordinarily offered links to other web sites (including non-political sites) for free, then a campaign web site link would not be a contribution. However, if the web site owner would ordinarily charge for a link, then any free or reduced rate would be considered a contribution in-kind to the campaign. 521 Likewise, any payment the campaign committee was to make to secure 518 Advisory Op. No. 1999-17 (Nov. 10, 1999), available at http://www.fec.gov. 519 FEC AO 1999-17, 7-8. 520 FEC AO 1999-17, 7. 521 FEC AO 1999-17, 8. 124

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such a link on a web site would be an operating expenditure and must be reported and filed with the FEC. 522 Even when a link or other mention on a third-party web site does not constitute a contribution, it may require a disclaimer. The FEC found that web sites that expressly advocate the election or defeat of a Federal candidate must carry disclaimer statements, unless an exemption applies. 523 Specifically addressing whether the inclusion of a link to a campaign web site would require a disclaimer, the FEC opined that it would depend on the surrounding text. 524 The FEC established that individuals, whether volunteers for the campaign or not, were entitled to create and maintain web sites supporting a candidate without triggering reporting regulations under the FECA. 525 Volunteers using personal time and equipment to send e-mails urging support of a candidate did not equate to a contribution. 526 The FEC reasoned that any costs associated with this activity would be nominal. 527 Volunteers also may use, without restraint, materials downloaded from campaign web sites that were originally produced by the campaign. 528 This mirrors the traditional volunteer exception in the FECA that is applied to traditional media, such as print publications. 529 522 Id. at 8-9. 523 Id. at 9. 524 Id. 525 Id. 526 Id. at 10. 527 Id. 528 Id. at 12. 529 For a full discussion of this exception, see infra Ch. 3. 125

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Corporations Must Adhere to Contribution and Expenditure Prohibitions Corporations may not expressly advocate the election of a candidate for federal office on a web site that is available to the general public. 530 Although the cost of this communication would be minimal, the FEC determined that the reach would be far beyond its restricted membership. This would violate sections of the FECA, which prohibit corporations from using any general funds to communicate with the general public. 531 In another advisory opinion, the FEC further addressed the use and valuation of Internet communications by corporations and corporate employees. Corporate employees may use corporate facilities to send e-mails or create Internet materials on behalf of a campaign, so long as the use of the facilities does not increase the expenses of the corporation. 532 If the overhead or operating expenses of the corporation increase due to the employees use of the facilities for campaign activity, the campaign must reimburse the corporation for these expenses. If no reimbursement is made, the increased expenses are counted as a contribution, which corporations are generally prohibited from making. This ban also applies to any Internet activity that would be considered a contribution. For example, if a corporation included for free a link on its web site to the campaign web site, when normally the corporation would charge to include a link, the corporation has made an illegal contribution to the campaign. 533 However, the FEC failed to address whether corporations bore any responsibility under the FECA if the links were provided without the urging or cooperation of the campaign. 534 530 FEC Adv. Op. 1997-16, 6-7 (Sept. 19, 1997). 531 Id. at 3-4. 532 FEC AO 1999-17, 10. 533 See id. at 8. 534 Id. at 8 (finding that the question as to whether independent posting of links by the corporation constituted campaign activity was outside the scope of the advisory opinion). 126

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Non-Partisan Activities Are Permissible and Exempt from the FECA Government officials may engage in nonpartisan activities to promote voter participation. The FEC determined that these nonpartisan activities may include providing free hyperlinks between a government web site (in this case the web site for the Secretary of State for Minnesota) and any candidate who provides a URL for a campaign web site. The FEC later found that limited liability companies and tax-exempt organizations operating informational web sites to promote voter participation also operated under the non-partisan exemptions to the FECA. 535 The organizations were operating web sites that provided information and limited, mediated voter interaction with all ballot-qualified candidates. The FEC also issued a perfunctory advisory opinion that found that a non-profit organization could contract with an ISP to send pop-up political ads to the ISP customers for academic research purposes. 536 Media Exemption Applies to Online Web Sites that Provide a News Function In 2000, the FEC was asked whether a for-profit corporations online activities qualified for the media exemption to the FECA. 537 The corporation owned iNEXTV, which controlled a network of online webcasting channels, such as www.istyletv.com and www.aetv.com 538 The channel at issue in the 2000 advisory opinion was Executive Branch Television at www.exbtv.com EXBTV provided webcasting of political news, interviews, and coverage of meetings. Some of EXBTVs programming featured commentary by Hugh Downs and other 535 See FEC Adv. Op. 1999-25 (Oct. 29, 1999); FEC Adv. Op. 1999-24 (Nov. 15, 1999). 536 FEC Adv. Op. 2000-16 (Aug. 28, 2000). 537 FEC Adv. Op. 2000-13, 1 (June 23, 2000). 538 Id. at 1. 127

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reputable journalists and public officials. 539 EXBTV proposed to the FEC to cover, gavel-to-gavel, the national conventions of both the Republican and Democratic parties. 540 The FEC found that this online coverage of the conventions met the requirements for the media exemption to the FECA. 541 In its analysis, the FEC noted that EXBTV is viewable by the general public and similar to traditional news program or periodical. The FEC also noted that the network provides a news function, offering direct access to governmental and business news events, and its prominent journalists generate reports, interviews, and commentary on current affairs. Key in the analysisas it is with traditional media applying for the exemptionwas that iNEXTV is not owned or controlled by a political party, political committee, or candidate. 542 Initial FEC Rulemakings The FEC attempted to further clarify the status of campaign-related Internet activity when it issued a notice of inquiry in 1999 and a notice of proposed rulemaking in 2001. 543 These rules focus[ed] on the application of the contribution and expenditure definitions and exceptions to Internet campaign activity conducted by individuals, corporations and labor organizations. 544 These rules proposed regulations on three specific areas: 1) application of the volunteer exemption to Internet activity by individuals; 2) hyperlinks placed on corporate or labor organization web sites; and 3) candidate endorsements announced on corporate and labor 539 Id. at 2. 540 Id. 541 Id. at 3. 542 Id. 543 64 FR 60360 (Nov. 5, 1999); The Internet and Federal Elections; Candidate-Related Materials on Web Sites of Individuals, Corporations and Labor Organizations, 66 FR 50358 (Oct. 3, 2001). The FEC said that the advisory opinions did not address all the potential issues, such as the broad exemptions to the FECA. See 66 FR 50359-60. 544 66 FR 50360. 128

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organization web sites. 545 For the most part, these rules enumerated the Internet communications that would not be assessed value as contributions or expenditures. 546 These included any activities an individual engages in using his or her own computer or software, hyperlinks on corporate web sites, and publicly available press releases on labor organization web sites. 547 The rules were consistent with the previously issued advisory opinions. However, the proposed rules were never adopted. Six months after the FEC proposed these rules, the Bipartisan Campaign Finance Reform Act was signed into law. With the amendments to the FECA, the FEC reevaluated its approach to applying the FECA to Internet communications. In 2002, the FEC sought comments on this and adopted new rules that exempted the Internet from the scope of the FECA. 548 A key provision in the 2002 rules was the interpretation and explication of the definition of public communication. The BCRA defined public communication as a communication by broadcast, cable, satellite, newspaper, magazine, outdoor advertising facility, mass mailing or telephone bank to the general public, or any other form of general public political advertising. The FEC determined that the Internet should not be included in the definition of general public political advertising. 549 Further, the FEC determined that electronic mail did not constitute mass mailing nor did Internet communications over the telephone lines constitute a telephone bank regardless of the number of communications transmitted. 550 545 Id. at 50361. 546 See id. at 50358-66. 547 Id. 548 67 FR 49063, 49071-72, 49111. 549 67 FR 4911; CFR 100.26. 550 67 FR 49111; CFR 100.27, 100.28 (2002). 129

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The FEC considered both legislative history and policy arguments in its exclusion of the Internet from these definitions. The FEC found no evidence that Congress intended to include the Internet as part of the public communication definition. 551 The FEC noted that the public communication section did not mention the Internet, while other section in the BCRA and other contemporary legislation specifically mentioned and differentiated the online communication. 552 Nor did the legislative history present evidence of Congress even contemplat[ing] including the Internet in this definition. 553 The FEC also determined that the underlying justification for campaign finance laws prevention of corruption is not present on the Internet. 554 The FEC said that the Internet is a medium that allows almost limitless, inexpensive communication across the broadest possible cross-section of the American population. 555 The FEC, in agreeing with comments from a public interest group, determined that there is significant public interest in leaving the Internet unregulated by campaign finance laws. 556 Challenging the Internet Exemption: Shays v. FEC Shortly after the FEC adopted these rules that excluded the Internet from the scope of the FECA, Congressmen Shays and Meehan 557 challenged the FECs interpretation. 558 The Shays 551 67 FR 49072. 552 Id. 553 Id. 554 Id. 555 Id. 556 Id. 557 Christopher Shays and Martin Meehan are a members of the U.S. House of Representatives. Shays is the representative from the Fourth Congressional District of the State of Connecticut; Meehan is the representative from the Fifth Congressional District of the Commonwealth of Massachusetts. 558 Shays v. Federal Election Commission, 337 F.Supp.2d 28 (D.D.C. 2004). 130

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court invalidated the FECs definition of public communication. Congress defined public communication in BCRA as 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. 559 The FEC specifically excluded communications over the Internet from this definition. 560 Therefore, Internet communications, no matter how closely coordinated with political parties or a candidates campaign, could not be considered contributions or expenditures. A central argument put forth by Shays and Meehan against this definition was that the FEC rules were contrary to the statutory instructions provided by Congress. 561 In order to decide this issue, the court looked at whether the agencys construction of the statute is faithful to its plain meaning, or, if the statute has no plain meaning, whether the agencys interpretation is based on a permissible construction of the statute. 562 In applying this test to the exclusion of Internet communications, the court first looked at whether Congress ha[d] directly spoken on the precise question at issue. The FEC, in its Explanation and Justification of the promulgated rules, noted that Congress did not include the Internet in the statutory definition; therefore the exclusion of the Internet in the rules was consistent with Congress intent. 563 Shays and Meehan argued that [T]he phrase any other form of general political advertising plainly includes at least certain communications over the Internet. There can be no question that political advertising takes place on the Internet (in exponentially increasing amounts), and that 559 2 U.S.C. 431(22). 560 11 C.F.R. 100.26. 561 Shays, 337 F. Supp. 2d at 51. 562 Id. (citing Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837, 81 L. Ed. 2d 694, 104 S. Ct. 2778 (1984).) 563 Id. at 66. 131

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there are various mechanisms by which such advertising over the Internet is targeted at the general public. 564 The court found that any other form of general political advertising did not cover all Internet communications, but did clearly include some Internet communications. 565 Therefore, the court found that there could be no reasonable wholesale exclusion of any definition of public communication. 566 The court further found that even if Congress had not spoken specifically to this issue, the FECs interpretation would have been counter to the purpose of the FECA. The court noted that excluding all Internet communications from the definition of public communications would thereby exclude a whole class of coordinated communications from regulation. The court found that allowing [A]n entire class of political communications to be completely unregulated irrespective of the level of coordination between the communications publisher and a political party or federal candidate, would permit an evasion of campaign finance laws, thus unduly compromis[ing] the Acts purposes, and creat[ing] the potential for gross abuse. 567 The Court therefore concluded that the wholesale exclusion of Internet communications was an impermissible interpretation of the BCRA. The court remanded the issue to the FEC for further consideration, specifically delineating which Internet communications constitute general public political advertising. 564 Id. 565 Id. at 68. 566 Id. 567 Id. at 65. 132

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Final FEC Rulemaking In response to the Shays ruling, the FEC undertook to draft regulations that would only encompass those aspects of the Internet constitute general public political advertising. 568 In adopting the Final Draft Rules, 569 the FEC Commissioners attempted to balance the interests in political speech on the Internet, recognizing the vast opportunities the medium provides citizens, with the interests promoted by campaign finance regulation. 570 The regulations that the Commission approved limit the application of campaign finance regulation to paid communications appearing on a third-partys website. These regulations include Internet advertisements as part of the definition of public communication in the BCRA. Under the BCRA, all public communications retain certain restrictions to support campaign finance regulation and reform. 571 However, this change in the rules does not affect individuals independent Internet activity. 572 The media exemption that applies to other campaign finance laws also applies to the regulations governing Internet activity; media organizations may engage in news stories, commentaries and editorials online without triggering the campaign finance regulations. 573 Email is also offered specific protections from incurring the restrictions of campaign finance laws. These regulations adopted by the Commission appear to successfully balance these interests, however, it is still unclear how these will be applied to the Internet. 568 FEC Commission Mtg., Mar. 27, 2006 (Statement by Vice Chairman Robert D. Lenhard and Commisioner Ellen L. Weintraub, FEC). 569 Internet Communications, 71 Fed. Reg. 18612 (to be codified at 11 CFR Parts 100, 110, 114). 570 FEC Commission Mtg., Mar. 27, 2006 (Statement by Commissioner Hans A. von Spakovsky, FEC). 571 See supra Part II History of Campaign Finance. 572 Activities of unpaid individuals or groups are exempted from the regulations. Rules, 100.94, 100.155. 573 Rules, 100.73, 100.132. 133

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The FEC Redefines Public Communication Under BCRA, Congress defined public communications as one of the triggers for requirements such as disclosure, disclaimers, and contribution limits. 574 In striving to include only the Internet communication that would qualify as public communication, the FEC determined that content placed on another persons website for a fee constituted general public political advertising. 575 Therefore, this particular type of Internet communications qualifies as public communication that is regulated by BCRA and the corresponding FEC regulations. The FEC offered examples of this paid content: banner, video, and pop-up advertisements, streaming video, and directed search results. 576 In its Explanation and Justification of the new regulations, the FEC reasoned that by only including paid Internet communications it was conforming to the spirit of Congress original definition of public communication. 577 In its definition, Congress specifically enumerated television, radio, and newspapers. The FEC noted that for an individual to communicate via any of these methods, he or she must pay a third-party for the time or space. Thus, only Internet communications that are arranged through an intermediary for a fee would be analogous to this type of communication. This interpretation avoid[s] infringing on the free and low-cost uses of the Internet that enable individuals and groups to engage in political discussions and advocacy. 578 574 BCRA 431(20)(iii). Congress defined a public communication as 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. Id. at 431(22). 575 Internet Communications, 71 Fed. Reg. 18589, 18613 (Apr. 12, 2006) (to be codified at 11 C.F.R. 100.26). 576 Internet Communications 71 Fed.Reg. 18589, 18594 (Apr. 12, 2006). 577 Id. at 18594. 578 Id. 134

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The new rules also comply with the letter of BCRA; Congress did not include the Internet in its list of specific media incorporated in the definition of public communication. But, Congress did leave open the possibility of other types of communication by including any other general public political advertising as part of the definition. 579 By consulting several dictionaries, the FEC concluded that Internet communications could only be included under this catch-all if the communications appeared on a forum controlled by another person for a fee. 580 The FEC Applies Media Exemption to the Internet The new rules also extend the media exemption in BCRA to Internet communications, specifying that any cost incurred for the purpose of news stories, commentaries, or editorials by media companies are not considered contributions or expenditures unless the [media] facility is owned or controlled by any political party, political committee, or candidate. 581 The FEC further specified that this exemption extends just as much to media entities with only online presence as it does to traditional media entities that incorporate online components. 582 This decision also brought to the forefront a question that is currently affecting many areas of legal policies: what about bloggers? The FEC considered this and determined that the press exemption would extend to bloggers only in the same way that it extends to traditional media. Traditionally, this means that the FEC will undertake a two-part analysis. 583 First, the Commission asks whether the entity engaging in the activity is a press entity as described by the Act and Commission regulations. Second, in determining the scope of the 579 Id. 580 Id. 581 Id. at 18613 ( 100.73, 100.132). 582 Id. at 18609. 583 Id. at 18607. 135

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exemption, the Commission considers: (1) Whether the press entity is owned or controlled by a political party, political entity is acting as a press entity in conducting the activity at issue (i.e., whether the entity is acting in its legitimate press function). 584 The FEC Exempts Individual Internet Activity The new rules also make clear that uncompensated individual Internet activity, even if in coordination with a candidate, party or committee, is not considered a contribution or exemption. 585 The use of equipment or other services in the purpose of these activities is also not a contribution or expenditure. 586 This is likened to the extant exemptions for individuals engaging in political activity; the FEC exempts the value of services for individuals volunteering. 587 The Commission also made clear that this exemption applies to groups of individuals as well. 588 This means that an individual can download and republish campaign materials on their own sites without incurring any reporting requirements. 589 However, this does not permit an individual to download campaign materials and pay to have them republished somewhere else that would constitute a public communication. 590 The FEC provided a nonexclusive list of activities in an effort to define Internet activity: sending or forwarding electronic messages; providing a hyperlink or other direct access to another persons Web site; blogging; creating, maintaining or hosting a Web site; paying a nominal fee for the use of another persons Web site; and any other form of communication 584 Id. 585 Id. at 18613 ( 100.94, 100.155). 586 Id. 587 Internet Communications, 71 Fed. Reg. 18603. 588 Id. 589 Id. at 18604. 590 Id. 136

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distributed over the Internet. 591 Likewise, the FEC offered a list of equipment and services to support the exemption for independent activity: computers, software, Internet domain names, Internet Service Providers (ISP), and any other technology that is used to provide access to or use of the Internet. 592 These illustrative definitions were intended to be broad enough to encompass any future technologies. 593 This exemption extends to a corporation that is wholly owned by one or more individuals, that engages primarily in Internet activities and that does not derive a substantial portion of its revenues from sources other than income from its Internet activities. 594 In explaining this extension, the FEC noted that the U.S. Supreme Court acknowledged that some corporations have features more akin to voluntary political associations than business firms, and therefore should have to bear burdens solely because of their incorporated status. 595 This exemption takes into account the benefits of incorporation, while noting that not everyone that takes advantage of those benefits exert the same influence as a traditional corporation. 596 Only incorporated individuals that do not derive any substantial revenue from offline activities are eligible for this exemption. 597 The individual activity exemption also leaves open the possibility for individuals to pay for communications to be placed on another persons website without incurring requirements 591 Internet Communications, 71 Fed. Reg. 18613 (codified at 11 C.F.R. 100.94, 100.155). 592 Id. 593 Id. at 18605. 594 71 Fed. Reg. 18613 (codified at 11C.F.R. 100.94(d), 100.155(d)). 595 Id. at 18606 (citing FEC v. Massachusetts Citizens for Life, 479 U.S. 238, 263 (1986)). 596 Id. 597 11 C.F.R. 100.94(d), 100.155(d). 137

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placed on public communications if the payment is nominal. 598 The Commission took into account public comments, which pointed out that the Internet has effectively put the power of advertising communication into the hands of every citizen. 599 Recognizing that many individuals wishing to use the Internet do not maintain their own sites, the Commission excepted nominal fees. 600 However, the Commission failed to adequately define nominal; it simply cautioned that it would be the aggregate expense of the advertisement that would be analyzed in determining whether the cost was nominal. 601 Although the Commission created these exemptions to protect individuals participation in the political process, it clearly included the purchase of email lists as contributions and expenditures. 602 Individuals payments for such lists are not exempt if the purchase is at the direction of a political committee or if the list is transferred to a political committee. 603 However, if the email list is purchased for individual use, the purchase does not produce in an expenditure or contribution. 604 The FEC Applies Disclaimer Requirement Based on Speaker The new regulations extend BCRA disclaimer requirements to certain Internet communications depending on the speaker and the content. 605 The regulations distinguish between political committees and all other persons. Political committees must include 598 11 C.F.R. 10094(e)(1), 100.155(e)(1). 599 Internet Communications, 71 Fed. Reg. 18607. 600 Id. 601 Id. 602 11 C.F.R. 100.94(e)(2)-(3), 100.155(e)(2)-(3). 603 Id. 604 71 Fed. Reg. 18607. 605 11 C.F.R. 110.11. 138

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disclaimers on all public communications for which they disburse funds; all websites run by political committees available to the general public and all unsolicited electronic mail totaling more than 500 communications. 606 The Commission found that this treatment was consistent with BCRA and the offline rules. 607 For all other persons, disclaimers must appear only on public communications that expressly advocate the election or defeat of a clearly identified candidate and that solicit any contribution as well as all electioneering communications, which are ads that clearly identify a federal candidate within 30 days of a primary or 60 days of a general election. 608 Conclusion When the Federal Election Commission was first confronted with applying the FECA to online communications, it took what could be considered a common sense approach. The advisory opinions issued on this topic prior to the adoption of the BCRA indicate that the FEC was incorporating online communications into the definitions of expenditure and contribution. Indeed, the FEC issued a notice of proposed rulemaking that exempted certain online activity from the FECA, indicating that there was online communications that would constitute a contribution or expenditure. However, when BCRA introduced the term public communication as part of the definitions for expenditure and contribution, it failed to include Internet communications in any relevant provision. Recognizing the capacity of the Internet as a unique outlet for political speech, the Federal Elections Commission left the medium out of the realm of campaign finance regulation under the new BCRA definitions. However, when the U.S. District Court for the 606 11C.F.R. 110.11. 607 Internet Communications, 18600. 608 11 C.F.R. 110.11 (a)(2)-(4). 139

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District of Columbia found this to be unlawful and out of sync with congressional intent, the FEC began the process of determining which Internet communications should be regulated. The rules adopted in 2006 attempted to balance the interests of the integrity of the elections process and of the individuals right to participate in that process. The rules narrowly expanded the definition of public communication to comply with the Shays court, but protected individual speech rights by incorporating only online communications that appear on a third-partys website for a fee. Additionally, the FEC specifically exempted most individual, uncompensated Internet activities from the definitions of contribution and expenditure. Further, the disclaimer requirement was extended to online speech only in a manner that mirrored the disclaimer requirements placed on traditional mass media. In its Explanation and Justification of these rules, the FEC has consistently noted the unique character of the Internet and its ability to foster widespread participation in political discussion. These new rules are an effort to respect that goal as well as the goals of protecting the election process from undue influence. 140

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CHAPTER 6 ANALYSIS AND CONCLUSION The purpose of this study was to evaluate the current model of regulating online campaign communications using a First Amendment analysis. Specifically, this study examined the policy adopted by the Federal Election Commission in 2006 to regulate online communications under the Federal Election Campaign Act. As discussed in Chapter 4, the FEC determined that online communications should be regulated only when they are placed on third-party web sites for a fee. 609 As this dissertation demonstrated, campaign finance law is continually evolving. This study examined the current status of campaign finance laws with specific attention paid to the regulation of campaign communications online. This included a review of statutes, Supreme Court cases, and administrative law. The statutes and cases discussed in Chapter 3 laid the foundation for the analysis of the current approach to regulating the Internet under campaign finance law. This chapter begins with a review of the key findings of this dissertation framed by the research questions. First, this chapter will discuss the interests that have been balanced in campaign finance jurisprudence. This traditionally has been an individual First Amendment free speech interest, explicated by the marketplace of ideas and self-government theories of free speech, weighed against the government interest in preventing corruption, or the appearance of corruption, of the political process. Next, this chapter will summarize the trends in campaign finance jurisprudence. Then, this chapter will summarize the current statutory and administrative laws that govern campaign finance, including online communications. 609 See supra Ch. 4; 11 CFR 100, et seq. (2006). 141

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After reviewing the legal framework that exists for campaign finance reform, this chapter will discuss whether that framework applied to online communications adequately protects the First Amendment interests of speakers on the Internet. This First Amendment analysis will begin with a discussion of the main theories that have been applied by the U.S. Supreme Court in campaign finance jurisprudence: marketplace of ideas, self-government, and active liberty. After these theories have been applied to the current framework for regulating online campaign communications, the analysis will continue using a strict scrutiny review of the FEC regulations. This analysis will find that, while there are areas in need of clarification and revision, the current regulations survive a strict scrutiny analysis. Summary of Findings The first three research questions were broad, expository questions designed to determine the current status of campaign finance law and the underlying theories. Special emphasis was placed on the application of these laws and theories to the Internet. This section will review the findings in Chapters 2, 3, and 4. Chapter 2 discussed theories of the First Amendment, which explain the interests in free speech, and the justifications often offered for campaign finance reform. This section will include a review of those theories as well as a discussion of how those theories apply to the online environment. Chapter 3 outlined in detail the current legal requirements for campaign communications through a review of statutes, administrative materials, and case law. Chapter 4 continued this discussion of campaign finance laws by reviewing Federal Election Commission advisory opinions and rulemakings that applied these legal requirements to online communications. These chapters generally correspond to the first three research questions. 142

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Research Question 1: What Are the First Amendment Concerns Associated with Applying Campaign Finance Laws to Internet Communications? Political speech is widely recognized as the core of the First Amendment. Campaign communication is the paragon of political speech. As a result, the First Amendment is often placed in opposition to campaign finance reform laws, which limit campaign communications. Some limitations are explicit infringements on political speech corporations and unions are prohibited from spending money to influence federal elections. Some limitations are indirect infringements contributions are capped and expenditures amounting to more than $200 must be reported to the FEC. Contribution limits controls the amount of association individuals and organizations can have with the candidates and political committees. The latter indirect infringement the reporting requirement may prevent some individuals from engaging in campaign communications to avoid reporting to the FEC. Whether direct or indirect, campaign finance laws have an impact on the discussion of political candidates. The interaction of political free speech and campaign finance laws must be balanced as campaign finance laws continue to evolve. Chapter 2 discussed the prevailing First Amendment theories as well as the theories that support campaign finance reform. The free speech theories most prominent in the debate over campaign finance, particularly in the Supreme Court, are marketplace of ideas and self-government. However, Justice Steven Breyers theory of active liberty has gained support on the Court. 610 The prevailing justification of campaign finance reform in jurisprudence is the prevention of corruption, although political equality has gained a strong foothold in the academic debate. When communication is made via the Internet, the First Amendment interests do not change. The theories of marketplace of ideas, self-government, and active liberty are as relevant as they are when the communication is delivered in print or on 610 Randall v. Sorrell, 548 U.S. 230 (2006). Justice Stevens was joined in a plurality opinion by 143

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television. Similarly, the government and reform advocates will purport to advance the same interest by regulating campaign communications online as they do in the more traditional media corruption and political equality. It is the balance of these interests free speech and prevention of corruption that may evolve when the campaign communications are delivered online. The balance is more favorable to the free speech interests when applied to the Internet. The marketplace of ideas theory imagines a public market in which all ideas are available for consumption. The consumers or listeners or viewers determines which ideas they value and accept and which ideas they reject. The supposition of this theory is that through market forces the true ideas will rise to the top. Critics of the marketplace argued that television, radio and the institutional print media distorted the marketplace by limiting access to these channels that dominated the marketplace. Although the marketplace theory never required all voices to be heard equally, these media outlets disproportionately affected access to the marketplace. To protect the political debate in the marketplace, the Supreme Court upheld restrictions on campaign financing. 611 In addition to the marketplace theory, the Supreme Court has framed its campaign finance jurisprudence in the frame of the self-government theory of the First Amendment. 612 This theory, most closely associated with Alexander Meiklejohn, focuses on the necessity of open debate to support a functioning democracy. 613 This theory has been included as a sub-theory of the 611 See, e.g., Buckley v. Valeo, 424 U.S. 1 (1976); FEC v. Massachusetts Citizens for Life, 479 U.S. 238, 263 (1986) (Brennan, J., writing for the plurality) (acknowledging the legitimacy of protecting the political marketplace with restrictions on entering or using the marketplace); Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990). Cf. Citizens Against Rent Control v. City of Berkely, 454 U.S. 290 (1981) (striking down restrictions that too heavily burdened the marketplace). 612 McConnell v. FEC, 540 U.S. 93 (2003); see also Richard L. Hasen, Buckley is Dead, Long Live Buckley: The New Campaign Finance Incoherence of McConnell v. Federal Election Commission, 153 U. PA. L. REV. 31 (Nov., 2004); infra Ch. 2. 613 Alexander Meiklejohn, POLITICAL FREEDOM: THE CONSTITUTIONAL POWERS OF THE PEOPLE (HARPER & BROS. 1960); see also infra Ch. 2. 144

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marketplace of ideas because part the political debate is to seek out the truth. The important element to Meiklejohn was that the debate would result in an informed electorate. This theory focused on the individual level of a functioning democracy the sovereign individual. Other scholars and jurists have advocated for an approach that focuses more on the necessity of deliberation for the structure of democracy than on the individuals decision making process. 614 Cass Sunstein and Owen Fiss have argued for the protection of deliberative democracy. 615 This deliberative democracy approach centers not on the speakers right of free expression, but on the necessity of deliberation, of public debate. Similarly, Justice Steven Breyer has advocated a theory of active liberty, arguing that the individual speech rights gained from the First Amendment are merely byproducts of the Amendments ultimate goal of sustaining a democracy. However, a self-governing democracy can be sustained only with citizen participation in government. That was the centerpiece of active liberty. In principle, these theories are congruent. They all promote societal purposes ascertainment of truth, an informed electorate, wide participation in government. However, the application of these theories in the Supreme Court would yield very different results. The Court has traditionally advanced the marketplace and self-government theories in conjunction with individual rights. 616 This approach has considered free speech as a presumptive necessity to the open, debate required to achieve the purposes of the theories. The Court thereby engaged in a strict scrutiny analysis of any government action that might diminish those individual rights. 614 See e.g., Stephen Breyer, Our Democratic Constitution, 77 N.Y.U. L. REV. 245, 252-53 (May, 2002); CASS R. SUNSTEIN, DEMOCRACY AND THE PROBLEM OF FREE SPEECH (1995); Owen M. Fiss, State Activism and State Censorship, 100 YALE L.J. 2087 (1991). 615 See, e.g., CASS R. SUNSTEIN, DEMOCRACY AND THE PROBLEM OF FREE SPEECH (1995); Owen M. Fiss, State Activism and State Censorship, 100 YALE L.J. 2087 (1991). 616 See, e.g., N.Y. Times v. Sullivan, 145

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Active liberty relegates the individual rights associate with the First Amendment by taking out the presumption in favor of free speech. Rather, Justice Breyer, argued that free, unregulated debate does not always promote participation. A more flexible approach would be necessary to balance the First Amendment interests that lie on both sides individual free speech rights and advancement of participation. 617 This approach would strip away the strict scrutiny that has been the basis for free speech cases, including campaign finance jurisprudence. Active liberty would place the prevention of corruption not in opposition to the First Amendment, but in the direct advancement of the First Amendment. Traditionally, the prevention of corruption, as advanced by campaign finance reforms has been placed in direct conflict with individual free speech rights and the marketplace of ideas. 618 This has been the prevailing justification for upholding campaign finance reforms, such as contribution limits and disclosure requirements. This rationale aims to prevent elections from being bought, and, in its most liberal reading, to prevent the voters from perceiving an election as having been bought. 619 Another justification that has not received majority support on the Court, but has played a key role in the academic debate is political equality. 620 The political equality argument suggests that limits on campaign finance promote political equality for voters during an electionequalizing the voices of all citizens. This argument hinges on the idea that campaign finance reforms promote political discourse by limiting the effects of wealth disparity. 621 This theory is 617 See Breyer, supra note 6. 618 See, e.g., Buckley v. Valeo, 424 U.S. 1; FEC v. Massachusetts Citizens for Life, 479 U.S. 238, 263; Citizens Against Rent Control v. City of Berkely, 454 U.S. 290. 619 See Buckley, 424 U.S. 1; Kathleen M. Sullivan, Political Money and Freedom of Speech, 30 U.C. DAVIS L. REV. 663, 671-86 (Spring, 1997). 620 Sullivan, supra note 11. 621 See Sunstein, supra note 52. 146

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often aligned with the self-government theory, and recently with active liberty, because it purports to equalize and enhance public debate. 622 New technology, specifically the Internet, has served to significantly enhance participation in the public debate. The Internet offers an alternative outlet for communications that more closely creates the exchange of ideas envisioned in the marketplace of ideas theory. The Supreme Court has in fact heralded the Internet as the new marketplace of ideas. 623 Many of the criticisms of the marketplace model are mitigated online. Particularly, the theorys assumption of access to the marketplace is realized. The marketplace of ideas theory, assumed that everyone had access to the marketplace. Critics of the marketplace theory cited the expense and gatekeepers of mass media outlets as a limitation of the marketplace theory only a select few could access the channels of communication. However, there are no gatekeepers on the Internet, and costs are nominal. The justifications for campaign finance reform corruption, and to some extent political inequality also are mitigated when the political debate occurs online. In general, online communications are inexpensive. 624 The threat of corruption via online communications is considerably less than in the traditional mass media or the physical world. Similarly, political inequality is lessened by the wide access to the Internet. Individuals can create blogs, videos, and web sites that attract users from all over the world. The Center for Democracy and Technology (CDT) pointed to one Internet user who coordinated more than 100 protests against the Republic 622 CASS R. SUNSTEIN, DEMOCRACY AND THE PROBLEM OF FREE SPEECH (1995); Owen M. Fiss, State Activism and State Censorship, 100 YALE L.J. 2087 (1991); Breyer, supra note 6. 623 Reno v. ACLU, 521 U.S. 844, 885 (1997); see also Stephen C. Jaques, Comment: Reno v. ACLU: Insulating the Internet, the First Amendment, and the Marketplace of Ideas, 46 Am. U.L. Rev 1945, 1947 (Aug. 1997). 624 Center for Democracy and Technology, et al., Joint Statement Responding to Notice of FEC Inquiry (Jan. 6, 2000). 147

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Party. 625 The CDT also noted that the Internet engages larger numbers of citizens in the political and campaign processes and encourages an increase in smaller contributions. 626 Research Question 2: What Is the Current Framework for Campaign Finance Reform? Campaign finance reform is an evolving area of the law. Chapter 3 traced the history of campaign finance laws in Congress and the Supreme Court. The current framework that Congress relies on was announced by the Court in the 1976 case Buckley v. Valeo. 627 The broad strokes of this framework are that limits on contributions are acceptable, while limits on independent expenditures are constitutionally invalid. The Court has continued to explore this dichotomy through more than 30 years of case law. Only five years after the Buckley decision, members of the Court began to disagree over the extent of the distinction between contributions and expenditures. 628 Justices, often in the majority or plurality opinions, countered that contribution limits are subject to a less than exacting scrutiny. Some justices, particularly in concurring and dissenting opinions, argued that Buckley set the constitutional standard for both contributions and expenditures at an exacting scrutiny. As the debate continued, some justices considered whether there should be any distinction at all. In Colorado I, Justice John Paul Stevens and Justice Ruth Bader Ginsburg argued that all 625 Id. (citing Jon Oram, "Will the Real Candidate Please Stand Up?: Political Parody on the Internet," 5 Journal of Intellectual Property Law 467 (Spring, 1998). 626 Campaign Finance Regulation and the Internet Principles, Center for Democracy and Technology & Institute for Politics Democracy & the Internet, May 11, 2005, available at http://www.cdt.org/speech/political/principles_w_background.pdf. 627 424 U.S. 1. 628 See, e.g., California Medical Association v. FEC, 453 U.S. 182 (1981); Citizens Against Rent Control v. City of Berkeley, 454 U.S. 290 (1981); Nixon v. Shrink Mo. Govt PAC, 528 U.S. 377 (2000). 148

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money spent on campaign communications should be considered a contribution. 629 Although this argument was limited to political parties, it generally questioned the Buckley framework. In the same case, Justice Clarence Thomas countered that the contribution/expenditure distinction was invalid. 630 Rather, he argued, all campaign communications, including contributions, deserve the highest First Amendment protection. This division continued as Justice Stevens, in Nixon v. Shrink Missouri PAC, strengthened his argument. Money is property; it is not speech. 631 Justice Stevens argued that as a property interest, the activities of making contributions or expenditures should be protected under substantive due process, not the First Amendment. 632 However, Justices Steven Breyer and Ginsburg argued that contributions and expenditures are entitled to some First Amendment protection because those activities enable speech. Breyer and Ginsburg, while recognizing some First Amendment protection, did not support a simple strict scrutiny. Rather the justices noted the First Amendment interests not only in making contributions and expenditures, but in limiting contributions and expenditures. Justice Thomas continued his assault on the Court for adhering to a low standard of review for campaign finance laws. 633 In addition to questioning the contribution/expenditure dichotomy, three justices considered a shift in focus to the institutional goals of the First Amendment from the traditional frame of individual free speech rights. The Courts traditional balancing test focused on individual free speech rights as the First Amendment interests pitted against the governments 629 Colorado Republican Federal Campaign Committee v. FEC, 518 U.S. 604 (1996) (Colorado I). 630 Id. 631 528 U.S. 377, 398 (Stevens, J., concurring). 632 Id. 633 Id.; FEC v. Beaumont, 539 U.S. 146, 164 (2003) (Thomas, J., dissenting); McConnell v. FEC, 540 U.S. 93 (2003). 149

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interest is promoting campaign finance reform. The emerging focus on institutional goals approach is in accord with Justice Breyers theory of active liberty discussed in Chapter 2. Active liberty was the foundation for the plurality opinion in Randall v. Sorrell in 2006. 634 Justice Breyers opinion for the Court, joined by Chief Justice John Roberts and Justice Alito, emphasized that the First Amendment served the institutional interest of maintaining an effective democracy. As such, campaign finance laws, although infringing on some individual free speech rights, were not necessarily at odds with the First Amendment. Scholars argued that Breyers opinion in Randall signaled a dramatic change in the direction of campaign finance jurisprudence. 635 However, the remaining eight justices, in concurring and dissenting opinions, continued to focus on the individual right of freedom of speech particularly in the realm of political speech. Individual rights also was the focus of the 2007 majority opinion in FEC v. Wisconsin Right to Life. Chief Justice John Roberts authored his first campaign finance reform opinion, an opinion that narrowly blocked the developing focus on the institutional First Amendment in a 5-4 vote. Instead, Chief Justice Roberts framed the challenge to the Federal Election Campaign Act, as amended by the Bipartisan Campaign Reform Act, in terms of individual First Amendment right of free speech. This explication of the competing interests reinforced the focus of a marketplace model for political discussion. Even with the divisive opinions on the Court, the basic foundation of campaign finance law has remained the same. Contribution limits are generally permissible under the First Amendment. Expenditure limits for individuals and ideological organizations are constitutionally 634 Randall v. Sorrell, 548 U.S. 230 (2006). 635 Rachel Gage 150

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impermissible infringements on free speech. A shift in this paradigm could significantly impact how these laws are applied to campaign communications in the mass media. It is unlikely that either of these trends a disruption of the contribution/expenditure dichotomy or a shift away from individual free speech rights will gain significant traction in the Supreme Court. The justices are too divided to substantially support either of these. (Discuss Gages tally here). 636 Research Question 3: How Are the Different Communication Media Treated by Current Campaign Finance Laws, Including FEC Regulations? This research question is actually two parts. First, this question requires an explication what the current campaign finance laws are. Second, this question requires an analysis of how these laws apply to the different mass media. In Chapter 3, this study discussed the evolution of campaign finance reform laws. This involved a review of congressional efforts, which culminated in the Bipartisan Campaign Reform Act of 2002; case law; and the Code of Federal Regulations. The discussion emphasized provisions that impacted communications. In general, the provisions of the BCRA apply equally to the different media. There are limited exceptions to this general rule. The first exception is that the FEC promulgated specific requirements for the application of disclaimer statements for the broadcast and print media. These differences were intended to match the requirements to the specific medium. Second, in legislation outside the FECA, Congress placed additional requirements on broadcasters in regard to campaign communications. This section will review the current state of the FECA, as well as briefly summarize the additional requirements on broadcasters. Current campaign finance law limits contributions but places no limits on expenditures that are not coordinated with a candidate or a campaign (independent expenditures). Expenditures, 636 The effect of these trends on Internet communications will be discussed later in the chapter. See supra p. 151

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although unlimited in amount, are subject to disclosure requirements. The definition of contributions and expenditures includes any money spent on public communications. Public communications are any communications that promote or oppose a clearly identified candidate for federal office. Congress specifically included communications via broadcast, cable, satellite, newspaper magazine, outdoor advertising, mass mailing, and telephone banks, as well as any other form of general public political advertising. Public communications are required to carry disclaimer statements that specify the sponsorship of the communication, as well as a statement as to the authorization of the communication by the candidate. All disclaimer statements must be clear and conspicuous. Congress has exempted from the definition of contribution and expenditure certain activities including non-partisan activities, volunteer services, and news organizations. 637 Non-partisan activities include get-out-the-vote drives and voter registration campaigns. Any money spent on these communications is not considered a contribution or expenditure. 638 Uncompensated activities are also exempt from the definitions of contribution and expenditure. This includes services on behalf of a candidate or committee, use of personal property for campaign activities, and transportation costs incurred during volunteer activities. 639 Likewise, money spent in covering or carrying a news story by a broadcast station, newspaper, magazine or other periodical is not a contribution or expenditure. 640 For example, any expenses attached to assigning a reporter to cover the Republican presidential candidates campaign would not be considered an expenditure. Nor would the resulting broadcasts or publications be considered 637 For a full discussion of these exemptions, see Ch. 3. 638 2 U.S.C. 431(C)-(D). 639 Id. 640 Id. 152

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public communications. This exemption is applied to all the different media equally. The criterion is not the media format, but the function of the organization. These exemptions are applied to the varying media equally. The process for determining the application of these exemptions focuses on the content of the communication and the speaker, not the media that is used. However, Congress has placed additional requirements on the broadcasting medium. Requirements for providing access and opportunity for candidate communications are not textually included in the FECA. The Equal Opportunity and Reasonable Access rules in the Communications Act of 1934 guarantee candidates the ability to purchase time on the public airwaves. 641 This burden is not placed on print, cable, satellite, or online media. The only difference in the treatment of media are the specific disclaimer formatting requirements and the broadcast opportunity rules. The general provisions of the FECAlimits on contributions, reporting requirements for expenditures, and disclaimer requirements for public communicationsare applied across the media. The focus of analysis is not the medium of delivery, but the content and source of the communication. Research Question 4: What Are the Current Campaign Finance Laws and Regulations that Govern Internet Campaign Communications? Although the general provisions of the FECA apply across the different media, there was significant disagreement over whether these provisions should be applied, at all, to the Internet. 642 The FECs approach to regulating the Internet under the Federal Election Campaign Act and the Bipartisan Campaign Reform Act has been evolving since the mid-1990s. The first 641 47 U.S.C. 312, 315 (2008). 642 See Comments in Response to FEC Notice of Proposed Rulemaking on Internet Communications, http://www.fec.gov/pdf/nprm/internet_comm/nprm_comments.shtml. 153

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efforts were made through advisory opinions. 643 In these opinions, the FEC attempted to mirror the application of these laws to other, familiar media formats, particularly the print media. 644 The FEC began in 1999 to engage in a rulemaking process to codify the application of the FECA to online communications. However, before this rulemaking was adopted by the FEC, Congress passed the BCRA, significantly amending the FECA. After BCRA passed in 2002, the FEC reevaluated its approach to regulating the Internet. Interpreting the BCRA provisions that defined public communication, the FEC determined that Congress had not intended for online communications to be regulated at all. In accordance with this interpretation, the FEC adopted rules that explicitly exempted the Internet from the definition of public communication in 2002. 645 Sponsors of BCRA challenged this interpretation in the courts, arguing that the Internet was too influential a medium to leave wholly unregulated. The U.S. District Court for the District of Columbia agreed and ordered the FEC to reconsider the regulations to include appropriate online communications as part of the definition of public communication. The regulations that the FEC adopted in 2006 resulted from nearly a year-long public comment period. In the final rules, the FEC explicitly protected individual speakers in the form of blogs, volunteers, and all other independent endeavors online. The FEC limited the application of campaign finance laws to expression that is placed on a third-party web site for a fee. For example, if an individual purchased a banner ad on the DailyKos.com that expressly advocates the election of a candidate, that would be considered a public communication for the purposes of 643 These advisory opinions are still reliable guidelines for the application the FECA to online communications because BCRA did not adversely address any issues decided in these opinions. 644 For full discussion of these advisory opinions, see Ch. 4. 645 See 67 FR 49064 (July 29, 2002) (codified at 11 CFR 100 et al.) (2002). 154

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FECA. That advertisement ostensibly would be required to carry a disclaimer statement. All online communications that do not occur through a paid intermediary, such as the DailyKos.com, would not be considered a contribution or expenditure. Although the new rules adopted by the FEC narrowly expand the definition of public communication to include minimal Internet communications, there are several provisions of the 2006 rules require further explication. The disclaimer requirements for online communications are unclear and lack specific guidance on formatting requirements. Also, the concept of paid communications can be difficult to delineate online. The FEC also chose to extend its explicit exemption of individual Internet activity to incorporated bloggers. This broadly exempted an entire category of corporations from the FECA. The FEC also broadly applied the media exemption to online communications a decision that has drawn criticisms from the academic community. 646 Public communications are required to carry disclaimers of sponsorship and connection to the candidate. The FEC has clarified the formatting requirements for the print and broadcast media. However, the Internet presents an amalgam of these media and it is unclear what specific disclaimer requirements will be most appropriate for this medium. Former FEC Commissioner Hans von Spakovsky expressed his concern that this was left unclear. 647 Spakovsky suggested that the media specific requirements would be applied to the Internet. For example, he believed that the stand by your ad requirement for television and radio would not apply for Internet 646 See, e.g., David Stevenson, A Presumption Against Regulation: Why Political Blogs Should Be (Mostly) Left Alone, 13 B.U. J. Sci. & Tech. L. 74 (Winter, 2007); Niki Vlachos, The Federal Election Commission & Political Blogging: A Perfect Balance or Just Not Enough?, 24 J. Marshall J. Computer & Info. L. 611 (Summer, 2006). 647 Id. 155

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communications. 648 Nor would the box, font-size, color disclaimer requirements for print advertisements. 649 The concerns of the formatting requirements are relatively minor compared to the larger concern of whether the FEC has limited the application of disclaimers online too much. By restricting the online application of the definition of public communications to paid, third-party communications, the FEC effectively exempted all independent activity from carrying disclaimers. This opens the door for compensated Internet authors to surreptitiously advocate for the candidate who is paying the author. The FEC considered this issue during its rulemaking process. In its final decision, the FEC determined that candidates would be required to disclose the expenditure to the FEC. Therefore, there would be a record of the payment available to the public without compelling the online author to include the disclaimer. The FEC limited the application of campaign finance laws online to communications placed on a third partys web site for a fee. The activity that the FEC seemed to be imagining was traditional advertising rather than sponsored Internet speech. The advertisements on web sites are considered expenditures or contributions (depending on whether they are coordinated with the candidate) and must carry disclaimers. However, the content of web sites, no matter how expressly it may advocate for or against a particular candidate, is exempt as individual activity. The concern is that the author of the web site may be paid to post positive comments, without revealing relationship. The payment may come in the form of paid advertisements, which support the bloggers activities. The blogger may agree to post positive statements about a candidate in the content 648 Id. For a full discussion of these requirements, see Ch. 3. 649 Id. 156

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portion of the web site in exchange for the purchase of advertising space on the site. This is less likely in the traditional media because there are so many more people involved in the process of information distribution; but blogs generally operate with very small staffs, if any. There seems to be a high probability of influence with the purchase of advertisements. Disclaimers would give readers the necessary information regarding any potential collaboration or paid sponsorship for the content. Incorporated bloggers also raise a concern of undue influence. The FEC extended the individual blogger exception to blogger who choose to incorporate for liability purposes. 650 The FEC did limit this extension to any corporation that is wholly owned by one or more individuals, that engages primarily in Internet activities, and that does not derive a substantial portion of its revenues from sources other than income from its Internet activities. 651 Although the regulation is broadly tailored to protect individuals, this seems to overstep the bounds of the prohibitions on direct corporate contributions and expenditures. The FEC should perhaps institute a regulation patterned after the Massachusetts Citizens for Life case. In MCFL, the Supreme Court excepted a class of corporations from the corporate prohibitions that met three requirements: 1) operates solely in the political marketplace; 2) has no shareholders or interested investors; and 3) was not formed by and did not accept donations from corporations or unions. 652 The FEC has exempted an entire class of online corporations without engaging in the test that the Court laid out in MCFL. As the Internet expands, there are a host of 650 Incorporation would ostensibly shield the blogger from personal liability for damages from lawsuits arising from such things as defamatory statements. 651 11 C.F.R. 100.94(d), 100.155(d). 652 Id. at 264. 157

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corporations that derive their entire revenues from their Internet activities. Not all of these are the types of incorporated bloggers that the FEC envisioned protecting. Research Question 5: Do the Campaign Finance Regulations Defining Paid Internet Communications Transmitted via Third Party as Regulated Under Campaign Finance Laws Adequately Protect First Amendment Interests? The Supreme Court has said that limits on campaign finance operate in an area of the most fundamental First Amendment activities. 653 Cultivating an open debate on the qualifications of candidates for federal office is paramount for the successful self-government model. The Internet offers an outlet for communications that simulates the exchange of ideas envisioned in the marketplace of ideas theory. The Supreme Court has in fact heralded the Internet as the new marketplace of ideas. 654 Regulations restricting the online political marketplace must be subjected to a First Amendment analysis. The Court reviews most speech restrictions under a strict scrutiny analysis. This requires that to infringe on speech, the government prove there is a compelling interests that is directly advanced by the regulation, and that the regulation is narrowly drawn to address the compelling interest in the least restrictive manner possible. The Court has found that a lower standard of review is warranted for some types of speech. For example, for commercial speech to be limited, the government need only prove that the restrictions on speech substantially advance an important or substantial interest. The Supreme Court has also drawn a distinction between the level of scrutiny for contribution limits and that for expenditure limits. In Buckley, the Court said that expenditure limits restrict political expression more severely than contribution limits. As a result, the Court 653 Buckley v. Valeo, 424 U.S. 1, 14. 654 Reno v. ACLU, 521 U.S. 844, 885 (1997); see also Stephen C. Jaques, Comment: Reno v. ACLU: Insulating the Internet, the First Amendment, and the Marketplace of Ideas, 46 Am. U.L. Rev 1945, 1947 (Aug. 1997). 158

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found in that case that the contribution limits were constitutional, while the expenditure limits were not. Subsequent cases have used this to justify a lower standard of review for contribution limits than the exacting scrutiny required for expenditure limits. 655 The public communications being regulated under the 2006 FEC Rulemaking are expenditures. Therefore, a strict scrutiny analysis is required to determine the constitutionality of regulating campaign-related expenditures on the Internet. The 2006 FEC rules require that all online communications placed on a third-partys web site for fee be considered a public communication for the purpose of regulating campaign finance. By definition, a public communication is considered either a contribution or expenditure. As such, the money spent on the communication, the source, and the recipient must be reported to the FEC in accord with the disclosure requirements of the FECA. Including online communications in the definition of expenditures also applies all prohibitions on direct corporate and union contributions and expenditures to communications over the Internet. Finally, the FEC rules require that all online public communications carry disclaimer requirements. The Internet has become a primary source of political information for citizens. 656 The plaintiffs in Shays v. FEC argued that to leave all communications through this medium completely unregulated would compromise the [FECAs] purpose and create the potential for gross abuse. The regulations that the FEC adopted in 2006 apply the FECA to online communications in a way that parallels the application to other media, if not in a more limited way. 655 656 See Ch. 1 159

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By restricting the application to communications placed on a third-partys web site for a fee, the FEC has narrowly drawn the regulations to affect advertisements as opposed to independent communications. Further, the FEC specifically exempted independent Internet activity, such as blogging and e-mailing, in order to clarify the limits of the regulations. This is parallel to the application of campaign finance laws to the print media. For example, an advertisement placed in the local newspaper by Jane Voter would require a disclaimer statement. However, a brochure that Jane Voter created on her computer at home and printed to distribute on the street would not require such a disclaimer. The same is true online. If Jane Voter purchases an pop-up ad on Slate.com, the ad must carry a disclaimer statement. However, if Jane Voter blogs about her favorite candidate on her own web site, or on a public blog, no disclaimer is required. In the Jane Voter examples, Jane would have to keep a record of all money spent purchasing the advertisements. If the amount spent totaled more than $250 in a calendar year, Jane Voter would have to make a report to the FEC disclosing her expenditures. However, the independent activity of personally distributing brochures or blogging would not require such reporting. The purpose of the FECA is to prevent corruption of the electoral process through the use of money. The costs of independent Internet activity are so nominal that regulation of activities such as blogging could not be supported under the First Amendment. However, advertisements purchased on popular web sites are akin to those purchased in major newspapers and broadcast stations. Wealthy individuals and organizations can heavily influence the political debate through this medium. Applying the same disclosure and disclaimer requirements to the Internet that are in place for print and broadcast, is not an unreasonable extension of the law. 160

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Under both the marketplace of ideas theory and the self-government theory of the First Amendment, the Court has allowed regulations when they further the political debate. The FEC has limited the regulations of online campaign communications in accord with previous holdings and with the tenets of these theories. The disclaimer and disclosure requirements give voters more information and make the political process more transparent. Although these requirements may deter some citizens from purchasing advertisements, there is a plethora of alternative avenues available to communicate to the public online. Further, the goals of campaign finance reform is to protect the integrity of the political debate. The protection of political debate is the central tenet of Meiklejohns self-government theory of the First Amendment. Meiklejohn argued that political speech should not be limited. However, speakers, he argued could be limited in order to allow for all ideas to be heard and expressed. The end goal of Meiklejohns theory was an informed electorate. The campaign finance regulations act to ensure that the source and sponsors of paid communications is revealed. This allows voters to more accurately assess the information with which they are presented. In conclusion, the FEC 2006 Rules adequately protect the First Amendment as defined by the strict scrutiny analysis. The regulations are aimed at continuing to prevent corruption of the political process, an interest that has long been held as compelling. The regulations directly advance this interest by mandating the disclosure of online expenditures and requiring that public communications online carry sponsorship disclaimers. The regulations are narrowly tailored to paid advertisements on third party web sites. This statement, as explicated in the Explanations and Justifications in the FECs 2006 Rulemaking, is facially valid and narrowly tailored. As applied challenges may require that the FEC further explicate the term paid to include 161

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compensation of bloggers for positive postings. However, as written, these regulations are not restrictive of individual free speech rights beyond what is necessary to accomplish preventing corruption in the political process. Conclusions The current laws regulating campaign communications on the Internet survive First Amendment scrutiny. The FEC has created regulations that are consistent with both the marketplace of ideas theory and the self-government theory. These are the optimum theories to operate under when regulating speech on the Internet, particularly the marketplace theory. This theory will permit the least restrictive regulations. Had the FEC not exempted so broadly all independent Internet activity, the regulations perhaps would have acted as an unacceptable burden on the political marketplace. Although the regulations survive strict scrutiny, there are areas that the FEC should clarify and revise. First, the disclaimer requirements should be clarified as to the formatting requirements for online communications. The FECs rulemakings address the particular formats required for broadcast and print to ensure that the language is clear and conspicuous. Given the variety of media content that the Internet supports, the format or formats required for these media messages should be clarified. Also, the FEC should reconsider the broad exemption for incorporated bloggers. This exemption was aimed at protecting from the campaign finance law requirements those bloggers who choose to incorporate. However, the language extends this exemption not only to individual or small groups of bloggers, but to any corporation deriving its revenues solely from Internet activities. This is a much broader exemption than the Supreme Court offered ideological entities that incorporated for liability purposes. The FEC should consider an approach that would extend 162

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the blogger exemption to those online corporations that meet the test announced in Massachusetts Citizens for Life. Also, the FEC should reconsider the use of paid for the purposes of defining a public communication. Content on the Internet can be sponsored in a number of ways that are not as likely in the traditional media because there are so many more people involved in the process of information distribution. Bloggers can be influenced by the purchase of unrelated advertisements or direct sponsorship. The content that is posted in response to these types of payments might be the equivalent of a paid advertisement, but does not carry the same disclaimer requirements. This would be difficult to monitor and enforce, but is a potential for abuse and corruption that the FEC should continue to examine. However, more research is required to determine if the campaign finance laws are effective at preventing corruption, particularly on the Internet. The Internet mitigates much of the concern of corruption in the political process by the inexpensive nature and the capacity for user-generated content. The question of effectiveness cannot be answered with legal research and is outside the scope of this study. If the regulations adopted by the FEC do not in fact prevent corruption, or the appearance of corruption, then they do not directly advance that goal. More or less regulation, particularly with respect to disclaimer statements, may be needed to effectively combat corruption in the electoral process. More research is also needed to determine how these regulations are impacting online speech. At this point, no advisory opinion has been issued by the FEC in response to a direct challenge to these regulations. Advisory opinions have been requested and filed with the FEC on other Internet activities such as fundraising, matching funds, and solicitation of funds by online political committees. However, no affirmative action had been taken on any of these requests at 163

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the time of this writing due the fact that the FEC has been all but shut down. Congress has failed to confirm any commission nominees for the four vacant commission seats since the fall of 2007. The commission requires a quorum of four commissioners for any official action; it currently only has two active commissioners. The issue of online campaign communications is not limited to federal elections, though. Research into how the states are addressing online campaign speech is also needed. The FECA only regulates activities related to federal elections. The majority of campaign activity occurs in state and local elections. The researcher is proposing to conduct a 50-state study to determine the different approaches states are taking to apply campaign finance laws to the Internet. 164

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LIST OF REFERENCES Articles, Books, and Reports Jerome A. Barron, Access to the Press A New First Amendment Right, 80 Harv. L. Rev. 1641 (1967). C. Edwin Baker, Scope of the First Amendment Freedom of Speech, 25 UCLA L. Rev. 964, 974 (1978). J.M. Balkin, Populism and Progressivism as Constitutional Categories, 104 YALE L.J. 1935, 1965 (May, 1995) Robert F. Bauer, Democracy as Problem Solving: Campaign Finance and Justice Breyers Theory of Active Liberty, 60 U. MIAMI L. REV. 237 (2006). Robert F. Bauer, The Demise of Reform: Buckley v. Valeo, the Courts, and the Corruption Rationale, 10 STAN. L. & POLY REV. 11 (1998) Sandy Bergo, Center for Public Integrity, A Wealth of Advice: Nearly $2 billion flowed through consultants in 2003-2004 federal elections, http://www.publicintegrity.org/consultants/report.aspx?aid=533 (last visited Sept. 27, 2007). Lillian R. BeVier, First Amendment Basics Redux: Buckley v. Valeo to FEC v. Wisconsin Right to Life, 2006-07 Cato Sup. Ct. Rev 77 Lillian R. BeVier, Full of SurprisesAnd More to Come: Randall v. Sorrell, the First Amendment, and Campaign Finance Regulation, 2006 SUP. CT. REV. 173. Lillian R. BeVier, Money and Politics: A Perspective on the First Amendment and Campaign Finance Reform, 73 Cal. L. Rev. 1045 (1985). The Bivens Group, The Internets Role in Political Campaigns: Utilization by 2006 United States Senatorial Candidates (May 23, 2006). BLACKS LAW DICTIONARY (8th ed. 2004). Vincent Blasi, The Checking Value in First Amendment Theory, 1977 AM. BAR FOUND. RES. J. 521 (1977). Vincent Blasi, Free Speech and the Widening Gyre of Fund-Raising: Why Campaign Spending Limits May Not Violate the First Amendment After All, 94 COLUM. L. REV. 1281 (1994). Scott J. Bloch, The Judgment of History: Faction, Political Machines, and The Hatch Act, 7 U. PA. J. LAB. & EMP. L. 225, 231 (Winter, 2005). William J. Brennan, The Supreme Court and the Meiklejohn Interpretation of the First Amendment, 79 HARV. L. REV. 1 (1965). 165

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STEPHEN BREYER, ACTIVE LIBERTY: INTERPRETING OUR DEMOCRATIC CONSTITUTION (2005). Stephen Breyer, Our Democratic Constitution, 77 N.Y.U. L. REV. 245 (May, 2002). Richard Briffault, The Future of Reform: Campaign Finance After the Bipartisan Campaign Reform Act of 2002, 34 ARIZ. ST. L.J. 1179 (2002). Richard Briffault, WRTL and Randall: The Roberts Court and the Unsettling of Campaign Finance Law, 68 Ohio St. L.J. 807, 829 (2007) Thomas F. Burke, The Concept of Corruption in Campaign Finance Law, 14 Const. Comment. 127, 128-130 (1997). BurstMedia, Likely Presidential Voters Already Using the Internet, Online Insights (March 2007). THE CAMPAIGN LEGAL CENTER, CAMPAIGN FINANCE GUIDE 5 (2004). Center for Democracy and Technology, Political Speech, http://www.cdt.org/speech/political (March 29, 2006). COMMISSION ON CAMPAIGN FINANCE REFORM, THE ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK, DOLLARS AND DEMOCRACY: A BLUEPRINT FOR CAMPAIGN FINACE REFORM (2000). Anthony, Corrado, Money and Politics: A History of Federal Campaign Finance Law, in Campaign Finance Reform: A Sourcebook. Washington, DC: Brookings Institution Press (1997). Anthony Corrado, Money and Politics: A History of Federal Campaign Finance Law, in THE NEW CAMPAIGN FINANCE SOURCEBOOK 7, 14 (Anthony Corrado et al. eds., 2005). Richard A. Davey, Jr., Buckleying the System: Is Meaningful Campaign Finance Reform Possible Under Reigning First Amendment Jurisprudence?, 34 Gonz. L. Rev. 509 (1999). Phillip H. Dougherty, Advertising; the Other Superbowl: I.B.M. v. Apple, N.Y. TIMES, Jan. 23, 1984, at D11. Election 2006 Online, The Pew Research Center, January 17, 2007; Ira Teinowitz, Note to Politicians: Its Not the Spending, Stupid, ADVERTISING AGE, vol. 79, p. 17 (Mar. 17, 2008). ThOMAS I. EMERSON, THE SYSTEM OF FREEDOM OF EXPRESSION (1971). Deborah Fallows, Election Newshounds Speak Up: Newspaper, TV and Internet Fans Tell How and Why They Differ, PEW INTERNET & AMERICAN LIFE PROJECT (Feb. 6, 2007). Daniel A. Farber, First Amendment 1 (2003). 166

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FEC, Congressional Campaigns Spend $966 Million Through Mid October, Press Release (Nov. 2, 2006). FEC, Congressional Campaigns Spend $711 Million Through Pre-Election Period, Press Release (Oct. 28, 2004). Owen Fiss, Free Speech and Social Structure, 71 IOWA L. REV. 1405 (1986). Owen M. Fiss, State Activism and State Censorship, 100 YALE L.J. 2087 (1991). Rep. Harold E. Ford, Jr. & Jason M. Levien, A New Horizon for Campaign Finance Reform, 37 HARV. J. ON LEGIS. 307 (2000). Eric Freedman, Campaign Finance and the First Amendment: A Rawlsian Analysis, 85 Iowa L. Rev. 1065 (2000). Rachel Gage, Randall v. Sorrell: Campaign-Finance Regulation and the First Amendment as a Facilitator of Democracy, 5 FIRST AMEND. L. REV. 341 (2007). Gallup Poll, Campaign Financing (Oct. 18, 2000). Guiliani Gets Exposed as Fraud by Firefighters, TricomAssociates (Posted on YouTube July 10, 2007), http://www.youtube.com/watch?v=vaCYEEO-58I Richard L. Hasen, Buckely is Dead, Long Live Buckley: The New Campaign Finance Incoherence of McConnell v. Federal Election Commission, 153 U. PA. L. REV. 31 (Nov., 2004). Richard L. Hasen, Campaign Finance Laws and the Rupert Murdoch Problem, 77 TEX. L. REV. 1627 (1999). Richard L. Hasen, The Newer Incoherence: Competition, Social Science, and Balancing in Campaign Finance Law After Randall v. Sorrell, 68 Ohio St. L.J. 849, 852 (2007). Patrick Healy, Clinton as Big Brother Draws Attention, N.Y. TIMES, Mar. 20, 2007, at A14. Patrick Healy, Blog Exposes Creator of Ad Portraying Clinton as Big Brother, N.Y. TIMES, Mar. 22, 2007, at A20. Arianna Huffington: Be a Part of HuffPosts Online-Only Presidential Candidate Mashup, The Huffington Post, Politics News and Opinion, http://www.huffingtonpost.com/politics/ (last visited Aug. 2, 2007). Stephen C. Jaques, Comment: Reno v. ACLU: Insulating the Internet, the First Amendment, and the Marketplace of Ideas, 46 Am. U.L. Rev 1945, 1947 (Aug. 1997). Michael S. Kang, From Broadcasting to Narrowcasting: The Emerging Challenge for Campaign Finance Law, 73 Geo. Wash. L. Rev. 1070 (2005). 167

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Cecil C. Kuhne, III, Rethinking Campaign-Finance Reform: The Pressing Need for Deregulation and Disclosure, 38 J. Marshall L. Rev. 633 (2004). Leading Cases, Constitutional Law, Freedom of Speech and Expression, Campaign Finance Regulation, 120 HARV. L. REV. 283 (2006). Kenneth J. Levit, Campaign Finance Reform and the Return of Buckley v. Valeo, 103 YALE L.J. 469 (1993). Michael Marcucci, Speech or Not: Applying Election Law Strict Scrutiny to Campaign Finance Regulations, 42 B.C.L. Rev. 173 (2000). William P. Marshall, The Last Best Chance for Campaign Finance Reform, 94 NW. U. L. REV. 335 (2000). John McCain, Reclaiming Our Democracy: The Way Forward, 3 ELECTION L.J. 115, 115 (2004). ALEXANDER MEIKLEJOHN, POLITICAL FREEDOM: THE CONSTITUTIONAL POWERS OF THE PEOPLE (Harper & Brothers 1960) (1948). JOHN STUART MILL, ON LIBERTY (D. Spitz ed. 1975)(1859). John Milton, Areopagitica, A Speech for the Liberty of Unlicensed Printing to the Parliament of England (Nov. 23, 1644). Robert E. Mutch, Campaigns, Congress, and Courts: The Making of Federal Campaign Finance Law 3-7 (Praeger 1988). Farah Nawaz, Campaign Finance Reform Dollar for Votes The American Democracy, 14 ST. JOHNS J. LEGAL COMMENT. 155 (1999). Justin A. Nelson, The Supply and Demand of Campaign Finance Reform, 100 COLUM. L. REV. 524 (2000) Burt Neuborne, One Dollar-One Vote: A Preface to Debating Campaign Finance Reform, 37 WASHBURN L.J. 1 (1997). GEORGE ORWELL, NINETEEN EIGHTY-FOUR (Secker & Warburg 1949). Spencer Overton, The Donor Class: Campaign Finance, Democracy, and Participation, 153 U. Pa. L. Rev. 73 (2004). John G. Peters & Susan Welch, Political Corruption in America: A Search for Definitions and a Theory, or If Political Corruption Is in the Mainstream of American Politics Why Is It Not in the Mainstream of American Politics Research?, 72 AM. POL. SCI. REV. 974 (1978). Trevor Potter, The Current State of Campaign Finance Law, in The New Campaign Finance Sourcebook 48, 56 (Anthony Corrado et al., eds. 2005). 168

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Lindey Powell, Getting Around Circumvention: A Propoosal for Taking FECA Online, 58 Stan. L. Rev. 1499 (2006). Press Release, The Campaign Legal Center, Watchdog Groups Urge FEC to Exclude Bloggers from Internet Regulation; Say Soft Money Ban Should Apply to Online Activity by State Parties (June 3, 2005), available at http://www.campaignlegalcenter.org/press-1689.html. Lee Rainie, Micheal Cornfield, and John Horrigan, THE INTERNET AND CAMPAIGN 2004, The Pew Research Center (March 6, 2005), available at http://www.pewinternet.org Jamin Raskin & John Bonifaz, The Constitutional Imperative and Practical Superiority of Democratically Financed Elections, 94 COLUM. L. REV. 1160, 1161-62 (1994). John Rawls, POLITICAL LIBERALISM (Cambridge, Mass., 1993). JOHN RAWLS, THEORY OF JUSTICE (Belknap Press 2005) (1971). Alissa J. Rubin, History of Changes in Campaign Law, Congressional Quarterly Weekly Report 794 (Apr. 5, 1995). Marc Santora, Video by Firefighters Union Urgres Opposition to Giuliani, NY. TIMES, JULY 12, 2007, at A18 Scott Shepard, Wassup? Debate a bit Unconventional, Atlanta Journal and Constitution (Ga.), July 24, 2007. Katharine Q. Seelye, Allies Urge Republicans to Join YouTube Debate, New York Times, Aug. 2, 2007, at A12. Bradley A. Smith, Campaign Finance Reform: Searching for Corruption in all the Wrong Places, 2003 CATO SUP. CT. REV. 187. Bradley A. Smith, The Sirens Song: Campaign Finance Regulation and the First Amendment, 6 J.L. & POLY 1 (1997). BRADLEY A. SMITH, UNFREE SPEECH: THE FOLLY OF CAMPAIGN FINANCE REFORM (2003). Stephanie A. Sprague, The Restriction of Political Associational Rights Under Current Campaign Finance Reform First Amendment Jurisprudence, 40 NEW ENG. L. REV. 947 (2006). Gary S. Stein, The First Amendment and Campaign Finance Reform: A Timely Reconciliation, 44 Rutgers L. Rev. 743 (1992). David Stevenson, A Presumption Against Regulation: Why Political Blogs Should be (Mostly) Left Alone, 13 B.U. J. SCI. & TECH. L. 74 (2007). David Strauss, Corruption, Equality, and Campaign Finance Reform, 94 Colum. L. Rev. 1369, 1370 (1994). 169

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Kathleen M. Sullivan, Political Money and Freedom of Speech, 30 U.C. DAVIS L. REV. 663, 671-86 (Spring, 1997). Kevin P. Sullivan, But These Times Were Supposed to be a Changing How Congress Should Regulate 527 Groups in Light of the Bipartisan Campaign Reform Act, the Vote for Change Tour, and the 2004 Presidential Election, 16 SETON HALL J. SPORTS & ENT. L. 130 (2006). Cass R. Sunstein, Exchanges in the Welfare State: Free Speech Now, 59 U. CHI. L. REV. 255 CASS R. SUNSTEIN, DEMOCRACY AND THE PROBLEM OF FREE SPEECH (1995) Cass R. Sunstein, Political Equality and Unintended Consequences, 94 COLUM. L. REV. 1390 (1994). Lisa Tozzi, Obama Girl, the Sequel, N.Y. TIMES, July 17, 2007, at A19. Eugene Volokh, Why Buckley v. Valeo is Basically Right, 34 Ariz. St. L.J. 1095 (2002). Vote Different, ParkRidge47 (Posted on YouTube Mar. 5, 2007), http://www.youtube.com/watch?v=6h3G-lMZxjo Audra L. Wassom, Campaign Finance Legislation: McCain-Feingold/Shay-MeehanThe Political Equality Rationale and Beyond, 55 SMU L. REV. 1781 (2002). Adam Winkler, Other Peoples Money: Corporations, Agency Costs, and Campaign Finance Law, 92 GEO. L.J. 871, 892 (2004). Alexis Wright, The Power of the Internet, Center for the Study of American Government, John Hopkins University (Nov. 2004), available at http://www.campaignsonline.org/reports/1104.html. Case Law and Related Documents Abrams v. U.S., 250 U.S. 616 (1919). Austin v. Michigan Chamber of Commerce, 494 U.S. at 659 Bigelow v. Virginia, 421 U.S. 809 (1975). Brief for the Attorney General and the FEC at 23, Buckley v. Valeo, 424 U.S. 1, 1975 WL 171459 (1976). Brown v. Socialist Workers Campaign Committee, 459 U.S. 87 (1982). Buckley v. Valeo, 424 U.S. 1 (1976). California Medical Association v. FEC, 453 U.S. 182 (1981). 170

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Citizens Against Rent Control v. City of Berkeley, 454 U.S. 290 (1981). Colorado Republican Federal Campaign Committee v. FEC, 518 U.S. 604 (1996) (Colorado I). Complaint for Declaratory and Injunctive Relief, Shays v. Federal Election Commission, 337 F. Supp. 2d 28 (D.D.C. 2004) (No. 1:02-cv-01984-CKK). FEC v. Beaumont, 539 U.S. 146 (2003). FEC v. Colorado Republican Federal Campaign Committee, 533 U.S. 431, 121 S. Ct. 2351 (2001) (Colorado II). FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986). FEC v. Natl Conservative Political Action Comm., 470 U.S. 480, (1985). Garrison v. Louisiana, 379 U.S. 64 (1964). Healy v. James, 408 U.S. 169 (1972). Jacobus v. Alaska, 338 F.3d 1095, 1107 (9th Cir. 2003) Keyishian v. Board of Regents of the University of the State of New York, 385 U.S. 589 (1967). Kleindeinst v. Mandel, 408 U.S. 753 (1972). Lamont v. Postmaster General of the United States, 381 U.S. 301 (1965). Landell v. Sorrell, 406 F.3d 159, 162 (2d Cir.) McConnell v. FEC, 540 U.S. 93 (2003). Miami Herald Publishg Co. v. Tornillo, 418 U.S. 241 (1974), New York Times Co. v. Sullivan, 376 U.S. 254 (1964). Nixon v. Shrink Missouri Government PAC, 528 U.S. 377 (2000). Randall v. Sorrell, 548 U.S. 230 (2006). Red Lion Broadcasting Co., Inc. v. FCC, 395 U.S. 367 (1969). Reno v. ACLU, 521 U.S. 844 (1997). Saxbe v. Washington Post. Co., 417 U.S. 843 (1974). Shays v. Federal Election Commission, 337 F.Supp.2d 28 (D.D.C. 2004). Shrink Missouri Government PAC, 528 U.S. 377 (2000). 171

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Tinker v. Des Moine Ind. Comm. Sch. Dist., 393 U.S. 503, 512 (1969). Richmond Newspapers v. Virginia, 448 U.S. 555, 586-87 (1980). Virginia Board of Pharmacy v. Virginia Citiznes Consumer Council, 425 U.S. 728. Wisconsin Right to Life v. FEC, 127 S. Ct. 2652 (2007). Congressional Materials Bipartisan Campaign Reform Act of 2002, Pub. L. No. 107-155 (2002) (codified at 2 U.S.C. 431, et seq.). Federal Corrupt Practices Act, ch. 368, 43 Stat. 1053, 1070 (1925) (repealed in 1971). Federal Election Campaign Act of 1971, 2 U.S.C. 431, Pub. Law No. 92-225. Publicity Act of June 25, 1910, ch. 392, 36 Stat. 822, 823 (1910). S. Rep. No. 92-96, at 1774 (1971). Tillman Act, ch. 420, 34 Stat. 864 (1907). U.S. Const., amend. 1. Administrative Materials Audio: Commissioner Hans A. von Spakovsky, FEC Commission Meeting for approval of the Draft Final Rules on Internet activity (Mar. 27, 2006), available at http://www.fec.gov/audio/2006/20060323_03.mp3. BCRA Technical Amendments, 67 FR 78679 (Dec. 26, 2002) (codified at 11 C.F.R. 300.2 et seq.) FEC Advisory Op. 1995-09, 2 (Apr. 21, 1995). FEC Adv. Op. 1997-16, 6-7 (Sept. 19, 1997). FEC Adv. Op. No. 1999-17 (Nov. 10, 1999). FEC Adv. Op. 1998-22, 1 (Nov. 20, 1998). FEC Adv. Op. 1999-24 (Nov. 15, 1999). FEC Adv. Op. 1999-25 (Oct. 29, 1999). FEC Adv. Op. 1999-37 (Feb. 11, 2000) FEC Adv. Op. 2000-13, 1 (June 23, 2000). 172

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FEC Adv. Op. 2000-16 (Aug. 28, 2000). FEC Commission Meeting, Mar. 27, 2006 (Statement by Vice Chairman Robert D. Lenhard and Commisioner Ellen L. Weintraub, FEC). FEC Commission Meeting, Mar. 27, 2006 (Statement by Commissioner Hans A. von Spakovsky, FEC). Internet Communications, 70 Fed. Reg. 16967 (Apr. 4, 2005) (to amend 11 CFR Parts 100, 110, 114). Internet Communications, 71 Fed. Reg. 18589 (Apr. 12, 2006) (codified at 11 CFR Parts 100, 110, 114). Prohibited and Excessive Contributions: Non-Federal Funds or Soft Money, 67 FR 49064 (July 29, 2002) (codified at 11 C.F.R. Parts 100, 102, 104, 106, 108, 110, 114, 300, and 9034). The Internet and Federal Elections; Candidate-Related Materials on Web Sites of Individuals, Corporations and Labor Organizations, 66 FR 50358 (Oct. 3, 2001). Use of the Internet for Campaign Activity, 64 FR 60360 (Nov. 5, 1999) (to amend 11 CFR Parts 100, 102, 103, 104, 106, 107, 109, 110, 114, and 116). 173

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BIOGRAPHICAL SKETCH Courtney Anne Barclay completed both a J.D. and a Ph.D. in Mass Communications during her tenure at the University of Florida. During this time, Courtney focused her studies on media law. She was a research assistant for the Marion Brechner Citizen Access Project, which examines open government laws in the 50 states and the District of Columbia. In her last semester at UF, Courtney served as Interim Director for the Project. Courtney also worked as a law clerk for the Electronic Privacy Information Center in D.C. The most rewarding experience during her Ph.D. program was teaching classes for the departments of Public Relations and Journalism. Courtney is a native Floridian. She received a B.S. in Public Relations and a M.A. in Mass Communication from UF before pursuing her doctoral studies. After graduation, Courtney will work as an Assistant Professor at Syracuse University in the S.I. Newhouse School of Public Communication. There she will teach undergraduate and graduate courses in media law. 174