SYMPOSIUM
Emerging Constitutional Paradigms and
Justifications for Campaign Finance Regulation:
The Case of 527 Groups
MIRIAM GALSTON*
TABLE OF CONTENTS
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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I. SECTION 527 ORGANIZATIONS UNDER THE INTERNAL REVENUE
CODE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1188
II. WHAT IS A POLITICAL COMMITTEE? THE RELEVANT ELECTORAL
ACTIVITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1195
A.
THE DEFINITION OF “CONTRIBUTION” AND “EXPENDITURE”
......
1198
1.
The Narrow Construction of the Influencing Language . .
1199
2.
The Ambiguity of the Express Advocacy Standard . . . . .
1203
3.
Broader Constructions of the Influencing Language . . . .
1206
a.
The First Two Paradigms: The Nature of the
Recipient and the Nature of the Spender. . . . . . . . . .
1206
The Third Paradigm: Empirical Evidence of Intent
and Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1209
The Fourth Paradigm: Historic Financially
Cooperative Relationships. . . . . . . . . . . . . . . . . . . .
1211
The Fifth Paradigm: Circumvention and
Coordination. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1215
Provisional Application to 527 Groups . . . . . . . . . . . . . . .
1218
........................
1220
b.
c.
d.
4.
B.
THE MAJOR PURPOSE STANDARD
* Associate Professor, The George Washington University Law School. © 2007, Miriam Galston.
B.A. Cornell University, Ph.D., University of Chicago, J.D. Yale Law School. I am appreciative of the
Law School’s generous support during my sabbatical. Mary Cheh, Greg Colvin, Bill Galston, Michael
Malbin, Steve Weissman, and Dick Pierce commented on earlier versions of this Article and improved
its content and structure greatly. I relied repeatedly and gratefully on the fine research of Matthew
Mantel, Maria Daraban, Kaitlin Dunne, Mary Wrightson, and Virginia Wolk. All errors are my own.
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1.
The Applicability of the Major Purpose Standard . . . . . .
1220
2.
What Campaign Activity Must Be Major? . . . . . . . . . . .
1223
III. WHAT IS A POLITICAL COMMITTEE? CONSTITUTIONAL
JUSTIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1229
A.
CORRUPTION AND CANDIDATE BENEFIT
...................
1229
B.
CONTRIBUTIONS VERSUS EXPENDITURES
...................
1235
C.
THE NATURE OF THE SPEAKER
.........................
1239
D.
APPLICATION TO 527 GROUPS
..........................
1240
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1242
INTRODUCTION
The 2004 presidential election season witnessed the usual stream of acerbic
epithets: “completely nauseating,” “barrage of harsh attack ads,”1 and “negative
onslaught.”2 The objects of this opprobrium were the now infamous “527
groups,”3 which spent more than $400 million on federal elections in 2004.4
Attack ads, simply negative or completely nauseating, are hardly new. Spending
hundreds of millions of dollars of soft money on elections is also not new.5
Even designing creative ways to evade campaign finance laws, through legal
“loopholes”6 or arguably illegal ones, is hardly new.
What, then, accounts for the intense, negative publicity accorded 527 groups?
The most frequent criticism heaped upon 527 groups is that many of the 527
groups active in federal elections, including most of those with the greatest
revenues and expenditures during the 2004 election cycle, were operating in
1. See Editorial, Big Campaign Donors on the Run, CHRISTIAN SCI. MONITOR, Nov. 2, 2004, at 8
(describing the soft money advertising funded by 527 groups). For the meaning of the terms “hard” and
“soft” money, see infra note 10.
2. Joan Vennochi, Campaign Finance Joke, BOSTON GLOBE, Aug. 26, 2004, at A19.
3. These groups, which are organized under section 527 of the Internal Revenue Code, are analyzed
infra Part I.
4. According to the Campaign Finance Institute, after correcting for intergroup transfers, the sum
spent by all federal 527 groups during the 2004 campaign cycle was $424,000,000. See Stephen R.
Weissman & Ruth Hassan, BCRA and the 527 Groups, in THE ELECTION AFTER REFORM: MONEY,
POLITICS, AND THE BIPARTISAN CAMPAIGN REFORM ACT 79, 81 (Michael J. Malbin ed., 2006). The authors
calculate that the majority of soft money raised in the 2002 election cycle and eliminated by the
campaign finance reform law enacted that year, see infra note 8, was not replaced by the increase in
amounts raised by federal 527 groups in 2004. Weissman & Hassan, supra, at 81–82.
5. See Thomas E. Mann, The Rise of Soft Money, in INSIDE THE CAMPAIGN FINANCE BATTLE: COURT
TESTIMONY ON THE NEW REFORMS 17, 27 (Anthony Corrado et al. eds., 2003) (listing the amounts of hard
and soft money raised by Democrats and Republicans from 1976 to 2000). The amount of soft money
raised during a presidential election year exploded in 1996 and then doubled to almost $500,000,000 in
2000. Id.
6. See 151 CONG. REC. S973 (daily ed. Feb. 3, 2005) (statement of Sen. Russell Feingold).
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flagrant disregard of applicable federal campaign finance law (“FECA”7), especially the provisions enacted as part of the 2002 McCain-Feingold campaign
finance reform (“BCRA”8) to reduce the prevalence of soft money.9 According
to the view of these critics, most of the federally active 527 groups should have
registered as “political committees” under FECA. As political committees, they
would have been subject to comprehensive FECA regulation. Had they been
subject to such regulation, the 527 groups would not have been permitted to
receive contributions in excess of $5000 from any individual during an election
cycle.10 In fact, however, during the 2004 election cycle 527 groups received
soft money contributions in excess of $5000 from almost 2000 individuals,
including amounts of $100,000 or more from 150 individuals and two million
dollars or more from 24 others.11 In addition, if the groups had been registered
as political committees under FECA, they could not have accepted contributions
from corporate or union general treasury funds.12 In fact, however, unions
contributed large amounts of such funds to unregistered 527 groups during the
2004 election.13
In short, according to the critics, if the controversial 527 groups had been
bound by campaign finance restrictions applicable to political committees, their
fundraising efforts would have been far more arduous than they were, and they
might have raised and spent considerably less money than they in fact did.14
7. Federal Election Campaign Act of 1971, Pub. L. No. 92-225, 86 Stat. 3 (codified as amended in
scattered sections of 2 U.S.C.).
8. Bipartisan Campaign Reform Act, Pub. L. No. 107-155, 116 Stat. 81 (2002) (“BCRA”) (codified
as part of FECA, in scattered sections of 2 U.S.C. and 36 U.S.C.).
9. See 150 CONG. REC. S9527 (daily ed. Sept. 22, 2004) (statement of Sen. John McCain) (calling the
practices of certain section 527 organizations “illegal” and “already prohibited”). According to both
McCain and Sen. Feingold, who cosponsored BCRA in the Senate, current law would adequately
address the 527 group problem if the FEC would implement and enforce the provisions of FECA. See
153 CONG. REC. S1440–41 (daily ed. Jan. 31, 2007). In 2004 they sued the FEC to compel enforcement.
See infra note 17.
10. 2 U.S.C. § 441a(a)(1)(C) (Supp. II 2002). The money that can be raised under the amount and
source restrictions described in this paragraph is known as “federal” or “hard” money. Money that can
be raised without these restrictions is known as “nonfederal” or “soft” money. See McConnell v. FEC,
540 U.S. 93, 122–23 (2003). Entities raising hard money are also subject to registration and reporting
requirements contained in 2 U.S.C. §§ 432–437 (2000 & Supp. 2004).
11. See PoliticalMoneyLine, 2004 Cycle Large Donors to PoliticalMoneyLine’s Key 527 Groups,
http://www.fecinfo.com/cgi-win/irs_ef_527.exe?DoFn⫽&sYR⫽2004 (last visited Nov. 19, 2006) (based
upon IRS filings, listing large contributors to 527 groups in the 2004 election cycle). Some of the 527
groups listed were registered as political committees under FECA and maintained both federal and
nonfederal accounts. Id.
12. See 2 U.S.C. § 441b(a) (2000). However, they are permitted to accept money from corporate or
union separate segregated funds (“PACs”), subject to FECA’s restrictions on PACs. See 2 U.S.C.
§ 441b(b)(2)(C) (Supp. II 2002).
13. See Weissman & Hassan, supra note 4, at 90–91.
14. Some of the uproar over unregistered 527 groups can also be traced to the transparency of the
groups’ finances, including the identities of their contributors, which resulted from disclosure rules
enacted in 2000. See I.R.C. § 527(i) (West 2002 & Supp. 2006); id. § 527(j). The notoriety of 527
groups also seems to have stemmed from the suddenness with which they became major campaign
players, seemingly eviscerating the soft money reforms enacted barely two years earlier. See David S.
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Even if the 527 groups in question are seen as exploiting a loophole in existing
law rather than operating illegally, critics of the groups favor enacting new
legislation compelling the groups to register with the FEC and abide by the
rules for political committees.15
In response to these concerns, bills to rein in nonregistering 527 groups active
in federal elections were introduced in the House and Senate even before the
2004 election took place, and similar bills have been introduced every year
since.16 Members of Congress also took the unusual step of filing suit to compel
the Federal Election Commission (“FEC”) to enforce existing campaign finance
laws against many 527 groups believed to be operating illegally outside the
strictures of FECA.17 The controversy over nonregistering 527 groups escalated
to the point that, by the time the 2004 presidential election was held, lawmakers
and campaign finance experts alike had called for the abolition of the FEC and
its replacement with a new entity with greater independence and enforcement
powers.18
Despite widespread calls to increase regulation of federally active 527 groups,
Broder, What McCain-Feingold Didn’t Fix, WASH. POST, May 20, 2004, at A29. Some of the shrillness
of the reporting on 527 groups simply reflected the shrillness of the presidential campaign in general.
15. See, e.g., Hearing To Examine and Discuss S. 271, a Bill Which Reforms the Regulatory and
Reporting Structure of Organizations Registered Under Section 527 of the Internal Revenue Code
Before the S. Comm. on Rules and Admin., 109th Cong. (2005) (opening statement of Sen. Trent Lott,
Chairman, S. Comm. on Rules and Admin.).
16. See 527 Reform Act of 2004, H.R. 5127, 108th Cong. (2004); 527 Reform Act of 2004, S. 2828,
108th Cong. (2004) (neither was passed). A revised version was introduced in 2005. See 527 Reform
Act of 2005, H.R. 513, 109th Cong. (2005); 527 Reform Act of 2005, S. 271, 109th Cong. (2005). S.
271 became S. 1053 after the Chairman’s markup. Bills introduced in 2006 included the Lobbying
Accountability and Transparency Act of 2006, H.R. 4975, 109th Cong. (2006), the 527 Reform Act of
2006, H.R. 513, 109th Cong. (2006), and the 527 Reform Act of 2006, S. 2511, 109th Cong. (2006). On
May 3, 2006, the U.S. House of Representatives passed H.R. 4975, which included the 527 Reform Act
provision. See also 527 Reform Act of 2007, H.R. 420, 110th Cong. (2007); 527 Reform Act of 2007,
S. 463, 110th Cong. (2007). For a summary of these and related bills, see JOSEPH E. CANTOR ET AL.,
CONG. RESEARCH SERV., SECTION 527 POLITICAL ORGANIZATIONS: BACKGROUND AND ISSUES FOR FEDERAL
ELECTION AND TAX LAWS 29–31 (2007). These reform proposals are discussed infra notes 167–69 and
accompanying text, note 188, notes 208–11, 233 and accompanying text.
17. The suit was filed in September 2004, and the court’s decision was issued in March 2006. Shays
v. FEC, 424 F. Supp. 2d 100, 103 (D.D.C. 2006) (ordering the FEC either to “articulate its reason for its
decision to proceed by case-by-case adjudication or to promulgate a rule if necessary”). This was not
the first time the FEC had been sued to compel enforcement of the political committee provisions of
FECA. See Akins v. FEC, 101 F.3d 731, 733 (D.C. Cir. 1996) as amended (D.C. Cir. 1997) (en banc),
vacated on other grounds, 524 U.S. 11 (1998); Bush-Cheney ’04 v. FEC, No. 04-1501, 2004 WL
3708392 (D.D.C. Sept. 9, 2004). The Bush-Cheney case was joined to Shays v. FEC. The FEC did not
appeal the Shays decision. Instead, it issued a Supplemental Explanation and Justification. See Notice
2007-3 (“Political Committee Status”), 72 Fed. Reg. 5595–96 (Feb. 7, 2007) (to be codified at 11
C.F.R. pt. 100).
18. See Federal Election Administration Act of 2003, H.R. 2709, 108th Cong. (2003); Federal
Election Administration Act of 2003, S. 1388, 108th Cong. (2003). For more recent bills, see H.R.
5676, 109th Cong. (2006), S. 3560, 109th Cong. (2006), and S. 478, 110th Cong. (2007). The new
agency would have three members, making inaction due to deadlock less likely than is the case with the
current six-member Commission, and it would conduct enforcement actions in conjunction with
administrative law judges.
2007] CONSTITUTIONAL PARADIGMS AND CAMPAIGN FINANCE REGULATION
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some commentators and public officials, including some who voted for the 2002
McCain-Feingold campaign finance reform measures, have argued against requiring all federally active 527 groups to register as political committees because
the result would be unconstitutional, contrary to sound public policy, or ineffective.19 This Article examines the first of these concerns, namely, the constitutional issues raised by current proposals to subject most federally active 527
groups to more stringent FECA regulation either as political committees or
through some other means.
Because the view that federally active 527 groups should be regulated as
political committees under FECA is founded on the notion that 527 groups
represent to the Internal Revenue Service that they operate primarily to influence elections,20 and “political committees” are defined for FECA purposes in
terms of groups operating to influence federal elections, this Article begins by
comparing the meaning of “influencing elections” in the tax and campaign
finance laws. Part I explores the origin and application of section 527 of the
Code, emphasizing the differences between the Code’s treatment of certain
electoral activities and the counterpart treatment of the same activities by
federal campaign finance law. The analysis reveals that the tax law definition of
electoral activity is much broader than the FECA definition, largely because the
policy underlying section 527 is to encourage political discourse. In contrast,
because federal campaign finance regulations necessarily restrict political speech,
the Supreme Court tends to construe narrowly the types of electoral activity that
can be subject to particular provisions of FECA. This Part concludes that
federally active 527 groups do not necessarily engage in electoral politics in the
same fashion as political committees regulated by FECA. Thus, it is necessary
to examine how individual 527 groups actually operate rather than assume an
identity between their activities and those of political committees. As a consequence, the constitutional status of 527 group reforms will depend upon assessing the degree to which the types of regulations envisioned accord with the
constitutional norms that have been developed for protecting political speech
during elections.
Whenever regulation of electoral speech is challenged as unconstitutional, the
Supreme Court examines two issues: the extent to which the regulation burdens
constitutionally protected speech and whether the government has a compelling
interest that justifies imposing this burden. The Court’s examination in such
cases is complex and the outcome often unpredictable because several considerations affect the Court’s analysis at both stages. Further, the inquiry into the
nature of the political speech at issue is highly contextual, so that the same type
19. See Amy Keller, 527 Battle Moves to Senate, ROLL CALL, Mar. 9, 2004, at 1, 18 (noting eight
Democratic senators opposed to further regulation of independent 527 groups).
20. See, e.g., Edward B. Foley & Donald Tobin, Tax Code Section 527 Groups Not an End-Run
Around McCain-Feingold, 72 U.S.L.W. 2403, 2405 (2004). Recently the FEC published an extended
rebuttal to the view that section 527 status should automatically trigger political committee status. See
Notice 2007-3, supra note 17, at 5597–5601.
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of political speech may be regulated constitutionally in some contexts, but not
in others. Finally, the Court’s jurisprudence has evolved in the thirty-five years
since FECA was first enacted, in response to both new issues arising and
changes in campaign practices.
Part II of this Article addresses the constitutional status of efforts to increase
regulation of section 527 groups under FECA by analyzing the types of political
speech that would trigger the new restrictions under existing proposals. This
entails resolving issues first discussed in 1976 in Buckley v. Valeo21 and
developed in 2003 in McConnell v. FEC,22 specifically, the outer boundaries of
Congress’s ability to burden political speech engaged in for electoral purposes.
In 1976, the Buckley Court invalidated some provisions of an early version of
FECA, and it narrowly construed the type of electoral speech reached by other
provisions, based upon the distinction between the discussion of issues, on the
one hand, and express advocacy to elect or defeat one or more candidates for
federal office, on the other.23 Although the meaning and application of this
distinction was the subject of controversy among courts and commentators for
the next twenty-five years, it was widely believed that express advocacy was the
sole type of political speech that Congress could regulate. For reasons discussed
below, in 2003 the McConnell Court concluded that the distinction between
discussion of issues and express advocacy was unworkable and had, in fact,
facilitated the evasion of campaign finance laws.24 As a consequence, the Court
upheld several provisions of BCRA that do not necessarily involve express
advocacy.
The implication of the reasoning in McConnell is that express advocacy and
discussion of issues do not exhaust the types of political speech relevant to
constitutional analysis. Rather they represent two poles along a continuum, and
some of the terrain between these extremes can be regulated by Congress under
appropriate circumstances. Determining which 527 groups can be subjected to
comprehensive FECA regulation based upon the types of electoral activity they
engage in thus entails, as a threshold matter, ascertaining the nature of that
continuum and the level of protection likely to be accorded to speech at
different points along it by the post-McConnell Court. Based upon the paradigms implicit in Supreme Court decisions upholding FECA regulation of
campaign speech other than express advocacy, Part II concludes that there is a
constitutional basis for compelling 527 groups to register under FECA if they
engage in certain electoral activities clearly focusing on the prospects of specific
21. 424 U.S. 1 (1976).
22. 540 U.S. 93 (2003).
23. See Buckley, 424 U.S. at 14, 41–44, 80.
24. See McConnell, 540 U.S. at 126–28 (observing that “[w]hile the distinction between ‘issue’ and
express advocacy seemed neat in theory, the two categories of advertisements proved functionally
identical in important respects. Both were used to advocate the election or defeat of clearly identified
federal candidates”). The Buckley Court had already noted that the distinction between the two “may
often dissolve.” Buckley, 424 U.S. at 42.
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federal candidates or maintain strong relationships with entities engaged in such
activities. However, the constitutional argument is weak when the actors involved are both independent of federal candidates and political parties and
engage in voter mobilization or communications that do not promote or oppose
the election of specific candidates.
Part III of this Article develops the constitutional analysis by examining the
three most prominent constitutional justifications supporting regulations that
burden campaign speech. It looks first at the sole government interest that the
Supreme Court accepts as sufficiently compelling to justify burdens on campaign speech in any context, namely, corruption or the appearance of corruption
in elections.25 The Court’s jurisprudence concerning prevention of corruption
has undergone change in the last decade, and this Part locates the controversy
surrounding 527 groups in this evolving jurisprudence. Part III also compares
the constitutional treatment of contributions as compared with expenditures26 as
well as the degree of First Amendment protection afforded entities, such as
corporations and unions, for purposes of campaign finance laws.27 This Part
concludes that the precedents relating to contributions, corporations, and unions
provide ample support for the constitutionality of current efforts to amend the
definition of political committee in FECA to include most types of 527 groups
active in federal campaigns. In contrast, evidence that 527 reform proposals will
satisfy the standard for preventing corruption or the appearance of corruption is
less convincing. The corruption justification is the weakest when 527 groups
operate independently of candidates and their activities are limited to encouraging voter registration and turnout, even on behalf of specific political parties, as
long as the groups refrain from supporting or opposing specific federal candidates in an election.28
The Article concludes that determining whether all federally active 527
groups can be made subject to comprehensive FECA regulation as a constitutional matter depends in significant part on better empirical information about
the actual operations of 527 groups in recent elections. It suggests that distinctions may need to be made among the types of electoral activities they engage
in so that the burdens of federal campaign regulation fall only on those groups
actively engaged in the core area of electoral activities that the Constitution
allows Congress to restrict.
The conclusion also questions the desirability, as a policy matter, of requiring
section 527 groups to be subject to federal campaign finance laws.29 What can
be done constitutionally is not necessarily what should be done as a matter of
public policy. The conclusion of the Article thus invites inquiry into the distinct
types of electoral activities engaged in by 527 groups in light of theories of
25.
26.
27.
28.
29.
See infra Part III.A.
See infra Part III.B.
See infra Part III.C.
See infra Part III.D.
See infra CONCLUSION.
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civic participation and the positive effects on voter mobilization attributed
largely to certain 527 groups during the 2004 election cycle. In other words,
assuming that section 527 groups can to some extent operate legally outside of
FECA, either under current law or as a result of legislation, legislators should
consider the potential civic benefits from 527 groups engaged in voter mobilization when assessing potential harms from soft money funding as long as the
independence of 527 groups from candidates and political parties can be
assured.
I. SECTION 527 ORGANIZATIONS UNDER THE INTERNAL REVENUE CODE
Section 527 of the Internal Revenue Code was enacted in 1974 as part of
Congress’s attempt to clarify the tax status of organizations organized and
operated for political purposes.30 Until that time, the status of contributions
given to such organizations was unsettled, as was the status of income received
or earned by the entities themselves.31 With the enactment of section 527,
Congress determined that contributions to groups qualifying as “political organizations” under section 527 would not be considered income in the hands of the
organizations if raised and used for purposes enumerated in the statute, nor
would the contributor be subject to gift tax on any amounts above the annual
gift tax limit.32 Political organizations are, however, required to pay tax on the
sale of gifts of appreciated property, investment income, and business income, if
any, amounts raised or spent for nonexempt purposes, and amounts not segregated in accordance with IRS regulations.33
To qualify for the favorable tax treatment set forth in section 527,34 an
30. See Upholstery Regulators Act, Pub. L. 93-625, § 10(a), 88 Stat. 2108, 2120 (1975); see also
William P. Streng, The Federal Tax Treatment of Political Contributions and Political Organizations,
29 TAX LAW. 139 (1976).
31. The IRS changed its view of the tax status of the organizations and taxability of contributions to
them more than once during the period from 1939–1973. See Streng, supra note 30, at 141–43. In
addition, during much of this period, there was no provision for political organizations, whether
political parties or campaign committees, to file a tax return. See Rev. Rul. 73-84, 1973-2 C.B. 461.
32. For the gift tax as applied to contributors to political organizations prior to the passage of section
527, see Rev. Rul. 59-57, 1959-1 C.B. 626; Rev. Rul. 72-355, 1972-2 C.B. 532; I.RS. Announcement
73-84, 1973-2 C.B. 461. The Court of Appeals for the Fifth Circuit rejected the Service’s interpretation.
See Stern v. United States, 436 F.2d 1327, 1330 (5th Cir. 1971). The Service acquiesced in the decision,
but only in that circuit. Rev. Rul. 72-583, 1972-2 C.B. 534. For the current provision exempting
contributions to section 527 groups from gift tax, see I.R.C. § 2501(a)(4) (West 2002 & Supp. 2006).
Senator Adlai E. Stevenson proposed an amendment to the bill in the Senate to subject contributions to
political organizations to gift tax because he feared that the consequence of the bill would be “large,
illegal contributions in Federal campaigns.” 120 CONG. REC. 30, 40386–87. Because the result was a tie
vote (45 to 45), the amendment failed. Id. at 40387 (1974).
33. I.R.C. § 527(b)–(c) (West 2002 & Supp. 2006).
34. For the view that section 527 of the Code primarily clarified the existing exempt status of
contributions to the recipient political organizations prior to the section’s enactment, but did not confer
substantial tax benefit to the organizations, see Roger Colinvaux, Regulation of Political Organizations
and the Red Herring of Tax Exempt Status, 59 NAT’L TAX J. 531, 535–37 (2006); Gregg D. Polsky &
Guy-Uriel E. Charles, Regulating Section 527 Organizations, 73 GEO. WASH. L. REV. 1000, 1015–16
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organization must be a “party, committee, association, fund, or other organization . . . organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt
function.”35 Exempt function, in turn, is defined as
the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any Federal, State, or local
public office or office in a political organization, or the election of Presidential
or Vice-Presidential electors . . . . Such term includes the making of expenditures relating to an office described in the preceding sentence which, if
incurred by the individual, would be allowable as a deduction under section
162(a).36
Because of the broad reach of the definition of exempt function, section 527
affords favorable tax treatment to organizations that engage in federal, state, or
local political activity as well as to groups engaged in non-electoral advocacy,
such as influencing the nomination or appointment of individuals to courts or
other non-elective public offices. Of course, attempts to defeat the nomination,
appointment, or election of individuals are also considered part of a 527 group’s
exempt function.37
The controversy surrounding 527 groups concerns primarily the 527 groups
active in federal elections that do not register as political committees under
(2005); William Mayton, The Myth of 527 Organizations 22–29 (Emory Pub. Law Research Paper No.
05-15, 2005), available at http://papers.ssrn.com/abstract⫽746604. If this view is correct, the main
benefit to 527 organizations from the Code’s provisions would be their enhanced ability to raise funds
owing to the exemption from gift tax for donors of large contributions and relief from the costs of
uncertainty, and possibly litigation, with respect to the treatment of contributions and other sources of
revenue (proceeds from bingo, dues, entertainment events, or the sale of campaign materials) in the
hands of the groups themselves. Given the size of contributions to 527 groups in recent years, the
savings from the gift tax provision alone would be substantial. See Shays v. FEC, 424 F. Supp. 2d 100,
104 (D.D.C. 2006) (stating that 527 groups “receive various tax exemptions from that status”); Donald
B. Tobin, Anonymous Speech and Section 527 of the Internal Revenue Code, 37 GA. L. REV. 611, 623,
641–44 (2003) (stating that it was Congress’s understanding and the correct interpretation of tax law
precedents that 527 organizations receive a tax benefit); id. at 675–78 (organizations that do not meet
the requirements of section 527 are subject to tax).
35. I.R.C. § 527(e)(1) (West 2002 & Supp. 2006). An organization is also required to register as a
political organization and file periodic reports with the Service in order to qualify for section 527
exempt status unless it is registered as a political committee with the FEC or certain other exceptions,
not relevant here, apply. See id. § 527(i)–(j); see also STAFF OF JOINT COMM. ON TAXATION, 107TH CONG.,
GENERAL EXPLANATION OF TAX LEGISLATION ENACTED IN THE 106TH CONGRESS 79–80 (2001).
36. I.R.C. § 527(e)(2) (West 2002 & Supp. 2006).
37. See Judith E. Kindell & John Francis Reilly, Election Year Issues, in EXEMPT ORGANIZATIONS
CONTINUING PROFESSIONAL EDUCATION TECHNICAL INSTRUCTION PROGRAM FOR 2002, at 321, 335, 403
(2002). The Exempt Organizations Continuing Professional Education Technical Instruction Program is
an official publication of the IRS that, until recently, was published annually. It is written to train
employees of the IRS of the current state of specific areas of exempt organization tax law. Although
they cannot be used or cited for authority settling or sustaining a technical position, positions discussed
in the publication are widely regarded as indications of the Service’s thinking, especially in areas in
which there is no precedential authority on point.
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FECA. Since 527 exempt status under the Code requires a group to be primarily
engaged in influencing or attempting to influence the nomination or election of
any individual for federal, state, or local office, it might seem that the federally
active 527 groups necessarily conform to FECA’s definition of a “political
committee” simply by satisfying the Code’s definition of a “political organization.” However, the congruence of federally active 527 political organizations
under the Code with political committees under FECA should rest upon the
equivalence of their activities rather than the similarity of the language used to
describe them in the two statutes.38 There are numerous differences, discussed
in what follows, between the range of activities covered by the influencing
language in the two bodies of law. Determining the correct treatment of the
nonregistering 527 groups under FECA thus will depend on the salience of
these differences from the perspective of the purposes of the campaign finance
legal regime.
The most striking difference between the tax and campaign finance regimes is
that the Service has interpreted the influencing language expansively through its
regulations and rulings, whereas the FEC tends to interpret the influencing
language narrowly. For example, expenditures made in connection with a
candidate testing the waters fall squarely under the influencing language for
purposes of the tax law. Thus, exempt function income for a 527 group will
include contributions it receives and funds it spends to enable an individual to
hire polling firms, political consultants, and research firms, to travel to speak to
groups on public issues or meet with “opinion makers,” and in general to
engage in any activity that enables him or her to decide whether to run for
office.39 Contributions made to a group established to enable an individual to
explore the desirability of running for office will, based upon the same reasoning, not be subject to gift tax.40 Under campaign finance law, in contrast,
contributions and expenditures for exploratory campaign purposes will not be
classified as contributions and expenditures and thus, should not count in
determining whether an organization qualifies as a political committee.41 In
short, the costs of testing the waters for a federal office will count as electoral
for purposes of a 527 political organization, but will not count as electoral under
38. The similarity of the language is not, however, accidental. When Congress enacted section 527,
it assumed that all 527 groups would be political committees under FECA. See Mobile Republican
Assembly v. U.S., 353 F.3d 1357, 1359 n.1 (11th Cir. 2003) (citing statement of Senator Carl Levin);
Anthony Corrado, Money and Politics: A History of Federal Campaign Finance Law, in THE NEW
CAMPAIGN FINANCE SOURCEBOOK 7, 34 (Anthony Corrado et al. eds., 2005).
39. I.R.S. Priv. Ltr. Rul. 82-43-142 (July 28, 1982). Private Letter Rulings do not serve as precedent
for any person other than the taxpayer who requested the ruling. These rulings are, however, taken as
indications of the Service’s positions on the subjects addressed.
40. The gift tax status of contributions made for the various purposes discussed in this passage are
the same, but this fact will not be repeated each time.
41. See 11 C.F.R. § 100.72(a) (2006); id. § 100.131(a). There are anti-abuse measures, however. The
exemption is lost, for example, if the individual conducts activities in close proximity to the election or
over a protracted period of time or if significantly more money is raised than can reasonably be spent
on testing the waters. Id. § 100.72(b); id. § 100.131(b).
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FECA’s contribution and expenditure definitions. Were such an exploratory
group to disband when the individual reaches a decision to run (or not), it would
have been a legal 527 group for purposes of the favorable section 527 tax
regime, whereas the same group would not have been a political committee for
purposes of federal campaign finance law.
The inclusive nature of the Service’s approach to the influencing language
can also be seen from its position that activities engaged in between elections
are considered to meet the tax law’s influencing standard if they support “the
process of selection, nomination, or election of an individual in the next
applicable political campaign.”42 Given that Senators are elected every six
years, a 527 organization can raise and spend funds for a wide variety of
activities in the five years between campaigns that would unlikely be considered
electoral activity under FECA. Among other things, a 527 organization’s exempt function for Code purposes will include expenses such as those incurred to
train staff for the next election, even though the group does not during that time
“support any particular individual for public office.”43 The influencing language
associated with most FECA provisions, in contrast, requires the existence of a
clearly identified candidate.44 To take another example, the regulations implementing section 527 discuss an organization that “finances seminars and conferences which are intended to influence persons who attend to support individuals
to public office whose political philosophy is in harmony with the political
philosophy of [the organization].”45 Although the impact, if any, of the seminars
on the election prospects of any particular candidate is speculative and at best
indirect, the Service takes the position that expenditures for such activities
would be part of the exempt function of a 527 organization.46 In contrast, it is
unlikely that funding such seminars would constitute an expenditure under
FECA required to be paid with hard money, except in unusual circumstances.
A similar discrepancy between the two legal regimes can occur with respect
to state ballot referenda and other voter initiatives. Ordinarily, such activities
would not be considered as part of a 527 group’s exempt function, and therefore
not entitled to section 527 tax treatment, because they involve issues and
legislation rather than campaigns for public office. However, a 527 group
successfully argued to the IRS that its involvement in state and local ballot
42. Treas. Reg. § 1.527-2(c)(1) (as amended in 1985).
43. Treas. Reg. § 1.527-2(c)(5)(vii).
44. See 2 U.S.C. § 431(17) (Supp. II 2002) (defining an independent expenditure); id. § 431(20)(A)(iii)
(defining public communications in terms of the “promotes or supports” or “attacks or opposes”
standard (“PASO”)); id. § 434(f)(3)(A)(I) (defining an electioneering communication); id. § 441d(a)
(2000 & Supp. II 2002) (regulating publication of statements); id. § 441i(b)(2)(B)(i) (Supp. II 2002)
(regulating soft money); id. § 431(9)(B)(iii) (defining expenditure). But see Trevor Potter, The Current
State of Campaign Finance Law, in THE NEW CAMPAIGN FINANCE SOURCEBOOK, supra note 38, at 48, 78
(noting that the Supreme Court in McConnell v. FEC, 540 U.S. 93 (2003), made no mention of the
requirement that a particular candidate be identified).
45. Treas. Reg. § 1.527-2(c)(5)(vii).
46. Id.
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referenda and initiatives had the purpose and likely effect of promoting its
federal electoral agenda more effectively and more cheaply than if it made
donations directly to the campaigns of individual candidates for federal office. It
reasoned that contested ballot measures on the ticket would increase voter
turnout and force candidates to state their views on the subjects involved
whether they wanted to or not.47 Under federal campaign finance law, in
contrast, funding of such voter initiatives would not be considered federal
election activity because they involve legislation or constitutional amendments
rather than candidates for federal office.
Other tax law positions reflect the inclusive nature of the influencing standard
for purposes of section 527. Costs incurred by a former office holder after
leaving office are considered to be part of a section 527 group’s exempt function
under the Code during the period in which the individual considers another run
for office, as long as the expenses reasonably relate to making a decision about
a future candidacy.48 The cost incurred by a candidate or potential candidate to
take voice and speech lessons would count as an exempt function expenditure
for a 527 group,49 as would the costs associated with an office holder attending
certain dinners and political events related to his office.50 Certain expenses
incurred after an election is over are also considered to be for the purposes of
influencing an election, according to the Service, because they form an integral
part of the election process.51 Moreover, the Service has repeatedly concluded
that the intent of the party making an expenditure is integral to determining
whether or not the activity is part of a group’s section 527 exempt function.52
These examples capture the central difference between the tax law’s influencing standard and that of campaign finance law. The tax law standard encompasses activities that, directly or indirectly, relate to and support any aspect of
the process of influencing or attempting to influence the nomination or election
of an individual to a public office,53 whereas the campaign finance standard
seeks to subject to regulation only those types of political speech that have a
47. See I.R.S. Tech. Adv. Mem. 92-49-002 (June 30, 1992); see also I.R.S. Priv. Ltr. Rul. 199925051 (June 25, 1999) (noting that generally expenditures to support or oppose ballot initiatives are not
for an exempt function activity); Kindell & Reilly, supra note 37, at 401. Foley and Tobin note that,
while the IRS and the FEC generally treat partisan voter mobilization efforts the same, that is, as
influencing an election, the Service’s interpretation of partisan is far more expansive than is that of the
FEC. Foley & Tobin, supra note 20, at 2405 n.10. The consequence is that a wider range of voter
mobilization activities would be considered to influence an election for Code purposes than for
purposes of FECA.
48. See I.R.S. Tech. Adv. Mem. 93-20-002 (June 14, 1993).
49. Treas. Reg. § 1.527-2(c)(5)(iii) (as amended in 1985).
50. Treas. Reg. § 1.527-2(c)(5)(iv).
51. See Rev. Rul. 87-119, 1987-2 C.B. 151 (holding that the cost of an election night party and
post-election bonuses for campaign staff can be classified as part of a 527 group’s exempt function
activities).
52. See I.R.S. Tech. Adv. Mem. 92-49-002 (June 30, 1992); I.R.S. Tech. Adv. Mem. 91-30-008 (Apr.
16, 1991); I.R.S. Priv. Ltr. Rul. 98-08-037 (Nov. 21, 1997), I.R.S. Priv. Ltr. Rul. 97-25-036 (Mar. 24,
1997).
53. Treas. Reg. § 1.527-2(c)(1); see also Kindell & Reilly, supra note 37, at 397.
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clear and concrete bearing on the election of one or more specific candidates.
The rationale for the different approaches by the two bodies of law is instructive. The tax law standard is capacious because the consequence of an activity’s
meeting the influencing test is a tax benefit to the person who funds and the
organizations that engage in the activity, and the drafters of section 527 had as
one of their goals encouraging political speech by providing a tax-favored
vehicle within which political speech could, and should, be carried out.54
Campaign finance law, in contrast, tends toward narrow constructions of the
influencing standard to avoid the constitutional issues raised when political
speech is burdened by intrusive regulation, regulation that cannot be justified by
a compelling state interest, or regulatory measures not narrowly tailored to
further that interest.55 Relatedly, the tax law regime assesses a group’s activities
in light of the influencing standard based upon a broad facts and circumstances
test, so that all relevant factors can be appreciated in aggregate.56 Given that
long-term as well as short-term impacts, direct and indirect effects, and subjective as well as objective criteria are intended by the Service to be part of the
calculation, the facts and circumstances method is reasonable. In contrast, and
in keeping with campaign finance law’s concern about the inhibiting effects on
political speech caused by imprecise boundaries, campaign finance law eschews
facts and circumstances tests to the greatest degree possible and strives for
bright-line rules to clarify behavior that does or does not carry the risk of FECA
consequences.
Compiling and circulating lawmakers’ voting records and voter guides is
common to many types of exempt entities, that is, section 501(c)(3) organizations that are prohibited from engaging in campaign activity altogether; other
entities described in section 501(c), which are generally permitted to engage in
campaign activity to the extent the activities are consistent with their exempt
purposes; and 527 organizations, which are subject to no limits on the amount
or type of campaign intervention they are permitted. Voter education activities
of this kind are the most troublesome for any attempt to distinguish political
organizations from political committees. The Service has developed a short list
of rules that helps organizations determine whether their voter education activities will be considered related to a campaign or not. Some of these rules are
obvious. For example, timing the publication and distribution of a voting record
or a voter guide with an election or targeting them to a geographical area in
which elections are occurring are factors that suggest electioneering.57 Other
rules seem idiosyncratic. For example, the Service has stated categorically that a
voter guide that is limited to specific subject areas (for example, environmental
54. See H.R. REP. NO. 93-1502, at 104 (1974).
55. See infra Parts II and III.
56. Treas. Reg. § 1.527-2(c)(1) (1980); see Rev. Rul. 2004-6, 2004-1 C.B. 328 (discussing the facts
and circumstances test for determining if activity is legislative or educational, on the one hand, or
section 527 exempt function activity, on the other, for purposes of section 527(f)).
57. See Rev. Rul. 78-248, 1971-1 C. B. 174; see also Rev. Rul. 80-282, 1980-2 C. B. 178.
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issues or stem cell research) suggests electioneering, whereas a voter guide that
covers a wide range of topics of general interest to the population at large does
not, even though the organization publishing the voting records is itself a single
issue interest group.58 Because of the Service’s established rules, voter education materials limited to a narrow range of subjects might cause a 527 group to
be considered engaged in campaign activities under the Code, but not necessarily under FECA.59 Again, because the two regimes are animated by different
principles—one cautious, the other inclusive—similar activities could well be
judged differently.
Voter mobilization is another area in which campaign finance and tax laws
will frequently treat similar activities differently. For FECA purposes, efforts to
encourage turnout will not be subject to regulation and can be funded without
hard money as long as they do not entail individualized assistance, such as
one-on-one personal or phone contact that includes, for example, helping
potential voters to fill out registration forms or offering to transport individuals
to the polls.60 In contrast, for tax law purposes, general efforts to encourage
individuals to vote, for example, through mass mailings, speeches in front of
groups, and leaving written materials on doorknobs or in bulk at community
centers, would be considered an attempt to influence the outcome of an election.61
Clearly then, the two regulatory regimes have distinct principles and purposes
and, thus, to some extent their prescriptions target different conduct or treat the
same conduct in different ways. The question that must be raised in connection
with the federally active nonregistering 527 groups is whether, in light of the
actual operation of such groups in recent elections, the legal differences outlined above suggest the necessity, as a constitutional matter, or the desirability,
as a policy matter, of retaining an area for independent 527 groups engaged in
federal election activity that is outside the strictures of the rules applicable to
political committees.
One aspect of this question could be illuminated by an empirical analysis of
what most 527 groups in the past several election cycles have actually been
doing or funding. Are large parts of their operations devoted to activities of the
58. See id.
59. See, e.g., Op. FEC 1989-28 (Feb. 14, 1990) (stating that candidate survey questions “limited
only to abortion and ‘right-to-life’ issues” and distributed by a pro-life organization prior to an election
were “not so explicitly partisan as to convert an otherwise nonpartisan voter guide into one that
improperly conveys election messages and candidate advocacy,” even though the organization’s
position was clear from its name, the name of the newsletter, and articles elsewhere in the same
publication).
60. See Notice 2006-2 (“Definition of Federal Election Activity”), 71 Fed. Reg. 8926, 8927–30 (Feb.
22, 2006).
61. See I.R.S. Tech. Adv. Mem. 91-17-001 (Sept. 5, 1990) (concluding that a mailing urging
conservatives to register and to participate in registering conservatives to vote was intervention in a
political campaign). Although discussing a section 501(c)(3) organization, the analysis would be the
same for a 527 group.
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kind just described, that is, activities such as testing the waters, long-range staff
training, and voter education, registration, and mobilization that are not the kind
subject to FECA regulation? To what extent have the activities of the controversial 527 groups been focused on party building or holding events to attract and
enlarge the pool of people sympathetic to the political philosophy or ideology of
one party and thus, indirectly for candidates that are or may come to be
affiliated with those ideas? If only a small proportion of 527 groups in fact
devote the larger part of their operations to activities currently outside the
framework of FECA regulation, then it may be reasonable to presume that 527
groups oriented toward federal elections should be considered political committees and required to register and abide by the political committee regulatory
regime.62 Such a presumption might, however, need to be rebuttable in order to
satisfy constitutional standards, which are discussed in Parts II and III. If, on the
other hand, only a small proportion of 527 groups devote a significant part of
their operations to the type of campaign activities characteristically subjected to
the full panoply of FECA restrictions, then a presumption that all federally
active groups must register as political committees with the FEC may well be
overinclusive and would impose rigorous campaign finance rules to significantly more organizations than is warranted by the logic of FECA’s legal
framework.
In the last analysis, however, empirical work cannot answer the most fundamental question, namely, which campaign related activities should be classified
as “influencing elections” for FECA purposes? The present Part has sought to
demonstrate that it is simplistic to equate the influencing standards in tax and
campaign finance law based upon the similarity of the statutory terms. But the
underlying normative question remains: which campaign related activities of
527 groups so resemble the electoral activities identified by existing constitutional doctrines or otherwise conform to constitutional standards that they may
be subject to comprehensive FECA restrictions despite the resulting burden on
the groups’ political speech? It is this foundational question that Parts II and III
address.
II. WHAT IS A POLITICAL COMMITTEE? THE RELEVANT ELECTORAL ACTIVITY
Not all groups organized under section 527 of the Internal Revenue Code are
required to register with the FEC. Registration with the FEC is mandatory only
if a 527 group qualifies as a “political committee,” a term that is defined in
section 431(4) of FECA.63 Involvement in a federal election is a threshold
62. This is the approach taken by most of the proposals to regulate 527 organizations. See, e.g., 527
Reform Act of 2007, S. 463, 110th Cong. § 2(b); 527 Reform Act of 2006, H.R. 513, 109th Cong.
§ 2(b) (2006); 527 Reform Act of 2005, S. 1053, 109th Cong. § 2(b) (2005) (clarifying when 527
organizations must register as political committees).
63. In the 2004 election cycle, many of the top fifty 527 groups did register as political committees.
See OpenSecrets.org, http://www.opensecrets.org/527s/527cmtes.asp?level⫽C&cycle⫽2004 (last vis-
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condition for being classified as a political committee. As a consequence,
certain 527 groups, such as state and local political organizations whose activities focus exclusively on nonfederal elections or state or local referenda, do not
need to register with the FEC, although they may be subject to state election law
registration and related requirements.64 Similarly, 527 organizations devoted
exclusively to influencing the nomination or appointment of federal judges do
not need to register, because such organizations operate to influence nonelective offices. The FEC has also, through regulation, exempted additional
types of groups from the definition of a political committee.65
At first glance, the definition of a political committee is straightforward.
According to the section of FECA containing definitions, four types of entities
qualify as political committees. The first definition is “any committee, club,
association, or other group of persons which receives contributions aggregating
in excess of $1000 during a calendar year or which makes expenditures
aggregating in excess of $1000 during a calendar year.”66 Political committees
also include “any separate segregated fund established under the provisions of
section 441b(b)” of FECA and certain political party committees.67 The last two
types of political committees listed in the definition are not relevant to the
controversy over 527 groups and thus will not be discussed further.
Several considerations make it difficult to determine which groups engaged
in influencing federal elections qualify as political committees. First, although
both “contribution” and “expenditure” are defined in terms of transfers of value
for the purpose of influencing federal elections, the meaning of the influencing
standard is not spelled out in FECA or FEC regulations.68 As a regulatory
matter, therefore, the two terms are indeterminate and require interpretation.
Second, the Supreme Court has explained the meaning of the influencing
elections standard in different ways in different decisions, and it has suggested
ited Nov. 11, 2006) (listing fourteen of the top twenty 527 groups as registered under FECA). As will be
discussed, even groups that are not subject to the comprehensive FECA regulatory regime as political
committees may be subject to specific provisions of FECA, e.g., the requirement that electioneering
communications be funded exclusively with “regulated” or “hard” money. See 2 U.S.C. § 441b(b)(2)
(Supp. II 2002); id. § 441b(c)(1).
64. Acknowledging the inapplicability of the political committee definition to such groups, every
version of 527 reform legislation proposed to date has carved out exceptions for the types of groups
described in the text. See, e.g., S. 463, 110th Cong. § 2(b) (2007) (proposing new 2 U.S.C. §
431(27)(B)–(C)); H.R. 513, 109th Cong. 2(b) (2006) (same); S. 271, 109th Cong. § 2(b) (2005) (same).
65. For example, a group formed to “test the waters” for a potential candidate for a federal office is
not a political committee. See 11 C.F.R. § 100.72 (2006) (exempting funds donated solely for such
purposes from the definition of a contribution); id. § 100.131 (exempting funds expended for such
purposes from the definition of an expenditure).
66. 2 U.S.C. § 431(4)(A) (2000).
67. Id. § 431(4)(B); id. § 431(4)(C). The former type of political committee is established and
administered by a national bank corporation or labor union. See id. § 431(4); id. § 441b. The latter type
is comprised of certain kinds of local committees of a political party. See id. § 431(4)(c).
68. In contrast, exceptions are specified in some detail. See 11 C.F.R. §§ 100.71–.92 (2006); id.
§§ 100.130–.154. For the language of the statutory definitions, see infra notes 78–80 and accompanying
text.
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that “contributions” and “expenditures” should be construed narrowly or broadly
depending upon the context, that is, the specific provision of FECA in which the
terms occur and the governmental interest served by that provision.69 This
variability exists because the regulation of electoral activity necessarily burdens
the political speech of one or more participants in the electoral process. As a
consequence, the Court will uphold regulation of political speech only to the
extent necessary to serve a compelling interest in the least restrictive fashion
possible—a legal standard that is highly factual and context dependent.
In addition to the preceding interpretive difficulties, in the last several years
the Supreme Court has increasingly taken note of the ways campaigns, institutions, and political actors actually behave, so that “facts on the ground” appear
to drive the Court’s application of doctrine to the same degree as do the
purposes of individual provisions of the Act and the government interests served
by the provisions. The Court has made explicit reference to the plastic nature of
election law in commenting upon lawmakers’ continuing need to revise campaign finance legislation in the face of ongoing efforts on the part of some
participants in campaigns to evade the law’s reach.70 The Court has been
somewhat less candid, however, in noting how its own jurisprudence has been
influenced by the need to restate, rather than merely apply, its own doctrines in
response to the evolving nature of campaigns.71
The fourth obstacle to determining which 527 groups qualify as political
committees is that, in its decision upholding the McCain-Feingold legislation,
the Supreme Court announced that the legal doctrine restricting government
regulation introduced in the landmark Buckley decision did not reflect the outer
limits of the type of electoral activity that can be regulated constitutionally by
Congress, but was instead the product of statutory interpretation tailored to the
immediate context.72 This development, which was largely unexpected by
lawyers versed in campaign finance law,73 added another layer of uncertainty to
an already unsettled area.
Finally, even if it were clear which electoral activities are the type envisioned
by the definition of a political committee, it would still be uncertain which 527
groups engaged in federal elections would fall under the definition. Although
the statutory definition of a political committee is cast solely in terms of
contributions or expenditures in excess of $1000, the Supreme Court in Buckley
appeared to stipulate that, to be a political committee, a group must be “an
69. The Supreme Court’s decisions are discussed infra Part II.A.
70. See McConnell v. FEC, 540 U.S. 93, 224 (2003) (“We are under no illusion that BCRA will be
the last Congressional statement on the matter. Money, like water, will always find an outlet.”).
71. See infra notes 218–26 and accompanying text (describing the evolution of the meaning of
corruption).
72. See McConnell, 540 U.S. at 190–92, 202–03.
73. For an analysis that anticipated the substance of the McConnell ruling on this issue, see generally
THE CAMPAIGN FIN. INST. TASK FORCE ON DISCLOSURE, ISSUE AD DISCLOSURE: RECOMMENDATIONS FOR A
NEW APPROACH (2001), http://www.cfinst.org/disclosure/pdf/issueads_rpt.pdf.
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organization under the control of a candidate” or else its “major purpose” must
be “the nomination or election of a candidate.”74 The Court’s statement suggests
that before a group can be classified as a political committee, it must satisfy
both the statutory quantitative contribution or expenditure test and a judicially
created candidate control or major purpose test. Although there is some authority questioning whether the Court’s statement should be thus interpreted,75 most
commentators are of the view that there are in fact two prongs to the definition
of a political committee, one statutory and one judicially created.76 This view
raises the question of the proper method for ascertaining an organization’s
major purpose, and it invites inquiry into the differences, if any, between the
federal election activities that make up the electoral component of the definition
and those relevant in determining a group’s major purpose. The issues raised by
the judicially created prong of the definition are discussed in Part II.B.
As a consequence of these considerations, it is impossible to take the
language of any Supreme Court precedent interpreting the meaning of “contribution,” “expenditure,” or “in connection with a federal election” and simply
transfer it to the definition of these terms when they form part of the definition
of a political committee. Rather, the Court’s rulings must be analyzed in light of
the logic of the interpretive framework created by the Court in each decision in
order to apply the precedents to provisions of FECA not yet adjudicated.
Because the Court’s reasoning inevitably involves multiple competing principles, the logic of each decision is similarly multifaceted.77
A. THE DEFINITION OF “CONTRIBUTION” AND “EXPENDITURE”
For election law purposes, a contribution includes “anything of value . . . for
the purpose of influencing any election for Federal office,” whether it takes the
form of a gift, loan, or deposit of money.78 This definition covers not only value
given directly or indirectly to a candidate, but also applies to expenditures made
74. Buckley v. Valeo, 424 U.S. 1, 79 (1976).
75. See Akins v. FEC, 101 F.3d 731, 741–42 (D.C. Cir. 1996), as amended (D.C. Cir. 1997) (en
banc), vacated on other grounds, 524 U.S. 11 (1998); Richey v. Tyson, 120 F. Supp. 2d 1298, 1310–12
(S.D. Ala. 2000); infra Part II.B.
76. See Foley & Tobin, supra note 20, at 2403–04; Notice 2007-3, supra note 17, at 5604–05.
77. Professors Polsky and Charles have argued that the limits of constitutional regulation depend
upon whether “core regulated entities” are the subject of FECA regulation and whether a “primary
rationale” is articulated. Polsky & Charles, supra note 34, at 1032–33. The analysis in this Part and Part
III is consistent with this aspect of the interpretation of Polsky and Charles, but it focuses on the ways
in which the specific type of electoral activity interacts with the characteristics of the parties involved
and the nature of the relevant justifications to determine if particular types of regulation proposed
between 2004 and 2007 would survive a First Amendment challenge.
78. 2 U.S.C. § 431(8)(A)(i) (2000 & Supp. II 2002). The statutory provision adds that a contribution
also includes payment of any person compensating another person for rendering personal services to a
political committee. Id. § 431(8)(A)(ii). For regulations implementing the definition, see 11 C.F.R.
§§ 100.51–.57 (2006). For exceptions to the contribution rules, see 2 U.S.C. § 431(8)(B) (2000) and 11
C.F.R. §§ 100.71–.92 (2006).
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as a result of coordination with the campaign.79 The definition of “expenditure”
similarly includes “anything of value . . . for the purpose of influencing any
election for Federal office” or includes “a written contract, promise or agreement to make an expenditure.”80
Understanding the reach of the phrase “for the purpose of influencing any
election for Federal office” is thus indispensable for knowing what constitutes a
contribution or expenditure and, by the same token, what constitutes the statutory prong of the definition of a political committee. According to the Court,
there is no legislative history for the influencing language.81 As was noted
earlier, the Supreme Court precedents, as early as Buckley and as recently as
McConnell, have interpreted the range of electoral activities encompassed by
the influencing standard narrowly or broadly, depending in part upon whether a
narrow construction is necessary to prevent a regulation of campaign speech
that is so vague or broad as to impose an unconstitutional burden on the affected
parties. These precedents are discussed in the sections that follow.
1. The Narrow Construction of the Influencing Language
Organizations that fail to register as political committees take the view that,
for purposes of determining political committee status, the influencing language
in the contribution and expenditure definitions encompasses only what is commonly called “express advocacy.”82 The phrase “express advocacy” is not
defined in FECA. The concept was introduced in the Buckley decision, when the
Supreme Court illustrated the types of communications that qualify as “express
words of advocacy of election or defeat” as including “vote for,” “elect,”
“support,” “cast your ballot for,” “Smith for Congress,” “vote against,” “de79. See 2 U.S.C. § 441a(a)(7)(B)(i) (2000 & Supp. II 2002); id. § 441a(a)(8). Thus, in general, a
coordinated expenditure is treated as a contribution and is subject to FECA’s contribution limits. In
addition, any contribution “earmarked or otherwise directed through an intermediary or conduit to a
candidate” will be considered a contribution to the candidate. Id. § 441a(a)(8). What constitutes
coordination has long been debated. In 2002, as part of BCRA, Congress repealed the existing FEC
regulation defining coordination on the grounds that it failed to cover any but the most explicit forms of
coordination and directed the FEC to write a regulation covering a wider range of understandings
between a candidate or campaign and persons making expenditures on their behalf. Portions of the
FEC’s post-BCRA coordination regulation were successfully challenged for being too lenient by
sponsors of the 2002 campaign finance reform legislation. See Shays v. FEC, 337 F. Supp. 2d 28, 38,
55–65 (D.D.C. 2004), aff’d, 414 F.3d 76 (D.C. Cir. 2005). In response, the FEC issued a Notice of
Proposed Rulemaking (NPRM) to revise aspects of the regulation invalidated by the Shays decision.
See Coordinated Communications, 70 Fed. Reg. 73,946 (Dec. 14, 2005).
80. 2 U.S.C. § 431(9)(A) (2000). For regulations implementing the definition, see 11 C.F.R.
§§ 100.110–.114 (2006). For exceptions to the expenditure rules, see 2 U.S.C. § 431(9)(B) (2000); 11
C.F.R. §§ 100.130–.154 (2006).
81. Buckley v. Valeo, 424 U.S. 1, 77 (1976).
82. See Wis. Right to Life, Inc. v. Paradise, 138 F.3d 1183, 1184 (7th Cir. 1998); see also Nat’l Fed’n
of Republican Assemblies v. United States, 218 F. Supp. 2d 1300, 1323 (S.D. Ala. 2002), rev’d sub
nom. Mobile Republican Assemblies v. United States, 353 F.3d 1357 (10th Cir. 2003) (summarizing the
position of plaintiffs); James Bopp, Jr. & Richard E. Coleson, The First Amendment Is Still Not a
Loophole: Examining McConnell’s Exception to Buckley’s General Rule Protecting Issue Advocacy, 31
N. KY. L. REV. 289, 323 (2004).
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feat,” and “reject.”83 This type of express advocacy has become known as the
“magic words” standard.84 Because their electoral communications do not
constitute express advocacy, nonregistering 527 groups argue that, thus, they do
not qualify as political committees because the funds given to them do not
qualify as contributions and funds spent by them do not qualify as expenditures.
The Buckley Court introduced the magic words standard when it analyzed the
constitutionality of rules for dollar limits on independent expenditures enacted
as part of the 1974 amendment to FECA and reporting and disclosure rules for
expenditures enacted as part of the 1971 amendments to FECA.85 The rules in
question applied to individuals other than candidates and owners of institutional
press facilities and to groups other than political committees and campaign
organizations,86 in other words, participants in the political process that were
independent of candidates and parties. Violators of the rules at issue would have
been subject to criminal sanctions.87 The Buckley Court expressed concern
about the ambiguity of the influencing language in the definition of an expenditure in both the proposed dollar limit and the disclosure provisions because it
could be construed to reach “both issue discussion and advocacy of a political
result”88 and it would apply harsh sanctions to speakers unconnected with
candidates and parties.89
Any burden on the discussion of issues during a campaign, the Court noted,
was subject to strict scrutiny, both by virtue of “so closely touching our most
precious freedoms” and because the speech in question would be engaged in by
independent political actors rather than persons connected to a candidate or
party.90 To prevent the provisions from being “impermissibly broad” or so
vague as to inhibit the core protected speech of individuals and groups other
than candidates and political committees, the Court held that the term “expenditures” for purposes of the dollar limits and the disclosure rules should be
construed “to reach only funds used for communications that expressly advocate the election or defeat of a clearly identified candidate.”91 The birth of the
express advocacy standard in Buckley was thus the outgrowth of the Court’s
desire to limit strictly the types of speech by independent participants in
campaigns that Congress could restrict and subject to criminal punishment.
83. Buckley, 424 U.S. at 44 n.52.
84. L. PAIGE WHITAKER, CONG. RESEARCH SERV., CAMPAIGN FINANCE REFORM: A LEGAL ANALYSIS OF
ISSUE AND EXPRESS ADVOCACY 2 (2002).
85. See Buckley, 424 U.S. at 39–44 (analyzing expenditure limits); id. at 74–81 (analyzing reporting
requirements and disclosure).
86. See id. at 161 (citing 2 U.S.C. § 434(e) (1974)); id. at 189 (citing 2 U.S.C. § 608(e)(1) (1971));
id. at 40, 74–75.
87. See id. (citing 2 U.S.C. § 441 (1974)).
88. See id. at 39–44, 63–64, 78–79. The Court proceeded to invalidate the independent expenditure
limits despite (or because of) its narrow construction. Id. at 44–51. In contrast, it upheld the reporting
requirements once the scope of their application was circumscribed. Id. at 79–84.
89. Id. at 40–41, 76–77.
90. Id. at 41 (quoting NAACP v. Button, 371 U.S. 415, 438 (1963)).
91. Id. at 39–44, 79–80.
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The concept of express advocacy was also used to limit FECA’s prohibition
against certain corporations and labor unions making “a contribution or expenditure in connection with any [federal] election,” including primaries, conventions, or caucuses for selecting such federal candidates, if the money came from
the group’s general treasury funds (as contrasted with its PAC funds).92 Relying
on the vagueness rationale advanced in Buckley,93 the Supreme Court held in
1986 that the prohibition on the use of treasury funds would pass constitutional
muster only if it was construed to apply exclusively to expenditures for express
advocacy, and not a wider range of election related activities.94 The consequence of this ruling was to enable unions and corporations to use their general
treasury funds, rather than PAC money, to fund election-related advertising and
voter mobilization as long as they avoided express advocacy.95
In short, in connection with three separate provisions of FECA, the Supreme
Court has found that the potentially expansive reach of the influencing language
made the regulation of expenditures constitutionally unacceptable because of
the protected nature of the type of speech to be regulated. To support the
position that, as a matter of law, express advocacy should also constitute the
standard for the influencing language embodied in the definition of a political
committee, however, it is not sufficient to note that these precedents impose a
92. See 2 U.S.C. § 441b(a) (2000); id. § 441b(b)(2) (2000 & Supp. II 2002). Although the
influencing language is not used in this provision, courts and commentators generally equate the reach
of the influencing language and the electoral activity referenced in this prohibition, and the Supreme
Court has raised the same vagueness and overbreadth concerns in connection with this provision as it
had with the influencing language in Buckley. Corporations and unions are permitted to use their
treasury funds to establish and pay the administrative costs of affiliated political committees, popularly
known as PACs, and corporations can solicit contributions for their associated PACs from shareholders
and certain high-level employees, while unions can solicit contributions from their members (collectively the “restricted classes”). See id. However, they are not allowed to contribute their general funds
to the PACs for the latter to spend. See id. § 441b(b)(2)(C). This is true regardless of whether the PACs
engage in express advocacy or not.
The earliest version of the federal prohibition against corporate spending on federal campaigns was
enacted in 1907, and the restriction was expanded and strengthened in the following decades. For a
detailed account of the history of these laws, see United States v. Auto. Workers, 352 U.S. 567, 570–84
(1957); FEC v. Beaumont, 539 U.S. 146, 152–55 (2003). Certain corporations are exempted from the
prohibition. See FEC v. Mass. Citizens for Life, Inc., 479 U.S. 238, 263–64 (1986) [hereinafter MCFL]
(exempting from the prohibition a nonprofit advocacy organization described in section 501(c)(4) of the
Code that accepted no contributions from corporations and did not itself engage in any business
activities). Certain other entities incorporated only for liability purposes are also exempt.
93. See supra notes 88–91 and accompanying text.
94. MCFL, 479 U.S. at 248–49; see also Beaumont, 539 U.S. at 162–63 (upholding the constitutionality of § 441b on the grounds that it is a “limit” rather than a “ban” on use of treasury funds in the
political arena); Austin v. Mich. State Chamber of Commerce, 494 U.S. 652 (1990) (upholding a state
law that prohibited independent expenditures made by corporations using general treasury funds); First
Nat’l Bank of Boston v. Bellotti, 435 U.S. 765, 788 n.26 (1978) (affirming, in dictum, the legitimacy of
a state law prohibiting corporate expenditures using general treasury funds).
95. As a result of a provision enacted in BCRA, however, unions and corporations are now also
prohibited from using their treasury funds to pay for electioneering communications in the thirty days
preceding a primary and the sixty days preceding an election. See 2 U.S.C. § 434(f)(3) (Supp. 2004); 2
U.S.C. § 441b(b)(2) (2000 & Supp. II 2002); id. § 441b(c)(1).
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narrow construction on the meaning of the influencing language in connection
with the provisions at issue in those cases. In addition, one would have to
demonstrate that the precedents create a presumption that the influencing language should be construed narrowly to refer to express advocacy in other
contexts unless there is an affirmative reason, based upon the character of a
specific context, to interpret it more broadly.
Nonetheless, the belief that these precedents should be seen as creating such a
presumption is shared by numerous state and federal public officials. Several
times in the last decade, for example, former Senator Fritz Hollings introduced
a joint resolution in the Senate to amend the Constitution in order to permit
greater regulation of contributions and expenditures that are “made by, in
support of, or in opposition to” a candidate for federal office.96 It was the
perception of those who backed the resolution that without such an amendment,
the constitutional jurisprudence developed by Buckley and its progeny would
stymie any effort to regulate expenditures on a basis broader than express
advocacy. Most federal and state courts that have reviewed portions of state
campaign finance laws with definitions similar or identical to those in FECA
have also concluded that the electoral activities that trigger application of the
expenditure definition or political committee status are limited to express
advocacy.97
It is unclear whether Congress shares this presumption. Independent expenditures are defined in FECA as expenditures that are not coordinated with a
candidate (or the candidate’s committees or agents) and that “expressly advocat[e] the election or defeat of a clearly identified candidate.”98 That the statute
explicitly includes express advocacy in the definition of “independent expenditure” may suggest that Congress did not view the term “expenditure” standing
alone as implying express advocacy. Pointing in the opposite direction, however, is the fact that as part of BCRA, Congress expanded several provisions of
FECA that involved restrictions on “expenditures” to include in their reach
disbursements made for “electioneering communications.”99 A reasonable inter-
96. See S.J. Res. 4, 107th Cong., 147 CONG. REC. S2853 (daily ed. Mar. 26, 2001); S.J. Res. 35, 102d
Cong., 137 CONG. REC. S440 (daily ed. Jan. 14, 1991); S.J. Res. 48, 101st Cong., 135 CONG. REC. S1025
(daily ed. Feb. 2, 1989). The proposed amendments were never acted upon.
97. See, e.g., N.C. Right to Life v. Leake, 108 F. Supp. 2d 498, 504 (E.D.N.C. 2000); Brownsburg
Area Patrons Affecting Change v. Baldwin, 714 N.E.2d 135 (Ind. 1999); Fla. Right to Life, Inc. v.
Mortham, No. 98-770-CIV-ORL-19A, 1998 U.S. Dist. LEXIS 16694 (M.D. Fla. Sept. 30, 1998).
98. 2 U.S.C. § 431(17) (Supp. II 2002).
99. For example, prior to BCRA, FECA stated that expenditures made by anyone “in cooperation,
consultation, or concert, with, or at the request or suggestion of a candidate” or his or her committees or
agents would be treated as a contribution for FECA purposes rather than as an independent expenditure.
2 U.S.C. § 441a(a)(7)(B)(i) (2000 & Supp. II 20002). BCRA added a new subsection to this
coordination provision stating that disbursements for electioneering communications, see id.
§ 434(f)(3)(A) (Supp. II 2002), will be treated as contributions, rather than as independent expenditures, if they are coordinated with a federal candidate or a federal or nonfederal political party. Id.
§ 441a(a)(7)(C) (2000 & Supp. II 2002). (This provision covers coordination with political parities and
their committees and agents as well as coordination with candidates.) BCRA also added a parallel
2007] CONSTITUTIONAL PARADIGMS AND CAMPAIGN FINANCE REGULATION
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pretation of such BCRA additions is that the term “expenditure” in the existing
version of FECA was understood by Congress to refer only to express advocacy
and, as a result, Congress thought it necessary to amend the provision to specify
electioneering communications in order to broaden the range of election related
expenditures covered. This interpretation of Congress’s actions strengthens the
argument for presuming that express advocacy is in general the meaning of the
influencing test in the definition of expenditure and, by analogy, in the definition
of contribution, although it is also possible that Congress merely intended the
BCRA additions to make explicit what it considered implicit in these provisions.100
2. The Ambiguity of the Express Advocacy Standard
Even if political committee status is properly determined based upon the view
that disbursements should be considered expenditures or contributions only if
they contain express advocacy, there will still be considerable uncertainty as to
which organizations need to register as political committees with the FEC. The
claim that the express advocacy standard creates a bright line rule relies on
construing the Supreme Court’s magic words standard literally, rather than as
illustrative of the type of communication that clearly advocates support or
opposition to a candidate for federal office. As a consequence of this view,
organizations seeking to avoid express advocacy typically design their electoral
communications to deviate in some respect from the magic words paradigm.
The organization under review in MCFL, for example, argued that its newsletter
had not engaged in express advocacy when it urged readers to “Vote Pro-Life”
and then listed which candidates endorsed pro-life positions. In its view, there
was no express advocacy because it had never closed the “gap” between the
exhortation to vote and the list of specific candidates.101 The Court, however,
rejected the organization’s literal interpretation of the magic words standard and
concluded that the newsletter’s content did in fact constitute express advocacy,
even though the words of exhortation to voters never directly preceded the
names of specific candidates.102 That the organization’s “gap” position was
argued before the Supreme Court captures the extremes to which the literal
provision that treats expenditures made in coordination with a party as contributions to the party. Id.
§ 441a(a)(7)(B)(ii); see also Buckley v. Valeo, 424 U.S. 1, 46–49 (1976) (applying independent
expenditure rules to individuals and unincorporated groups other than political committees); Colo.
Republican Fed. Campaign Comm. v. FEC, 518 U.S. 604, 618–19 (1996) (Colorado I) (applying
independent expenditure rules to parties). Such expenditures do, however, have to be reported to the
FEC if they exceed a certain threshold. See § 434(c)(1) (2000 & Supp. II 2002).
100. See, for example, the McConnell Court’s claim that in one such instance Congress was merely
clarifying what the pre-BCRA statute already meant as written. See infra notes 159–61 and accompanying text.
101. FEC v. MCFL, 479 U.S. 238, 249–50 (1986). The newsletter also contained a disclaimer stating
that it was not “an endorsement of any particular candidate.”
102. Id.
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interpretation of the Buckley footnote has been taken.103
The literal interpretation of the magic words standard was further eroded the
year after MCFL. In FEC v. Furgatch the Ninth Circuit elaborated a range of
communications that would count as express advocacy. The Court held that the
concept extended to communications that “when read as a whole, and with
limited reference to external events, [must] be susceptible of no other reasonable interpretation but as an exhortation to vote for or against a specific
candidate.”104 The FEC responded by promulgating a definition of express
advocacy that reflected the Ninth Circuit’s decision.105 The regulation describes
three types of communications that qualify as express advocacy: the literal
magic words route seemingly advanced in Buckley, the compound (“gap”)
paradigm adjudicated in MCFL, and a narrow facts and circumstances approach
intended by the FEC to codify the less restrictive interpretation of the Furgatch
decision. According to the third approach, express advocacy occurs if,
when taken as a whole and with limited reference to external events, such as
the proximity to the election, [a communication] could only be interpreted by
a reasonable person as containing advocacy of the election or defeat of one or
more clearly identified candidate(s) because—1) The electoral portion of the
communication is unmistakable, unambiguous, and suggestive of only one
meaning; and 2) Reasonable minds could not differ as to whether it encourages actions to elect or defeat one or more clearly identified candidate(s) or
encourages some other kind of action.106
The Supreme Court has never reviewed the FEC’s reasonable person/
unmistakable advocacy standard, and there are few cases applying the standard
to concrete situations because most appellate courts, other than the Ninth
Circuit, have declared that the third approach contained in the regulation
103. For another example, see Kean for Congress Comm. v. FEC, 398 F.Supp.2d 26 (D.D.C. 2005).
104. FEC v. Furgatch, 807 F.2d 857, 864 (9th Cir. 1987), cert. denied, 484 U.S. 850 (1987). For
criticism of this decision, see infra notes 107–09 and accompanying text. The communication in
question contained criticism of a particular candidate and included the words “Don’t let him do it.”
Furgatch, 807 F.2d at 858.
105. The FEC referenced the Furgatch decision in its Explanation and Justification that was issued
with the final regulation. Notice 1995-23, 60 Fed. Reg. 64,260, 64,260 (Dec. 14, 1995); see also Notice
1995-10, 60 Fed. Reg. 35,292, 35,294 (July 6, 1995). However, while the Furgatch court stated that
advocacy must contain “a clear plea for action,” Furgatch, 807 F.2d at 864, several courts have noted
that the regulation does not expressly make a call to action an element of express advocacy. See, e.g.,
Va. Society for Human Life, Inc. v. FEC, 263 F.3d 379 (4th Cir. 2001) (arguing that regulation of
speech based upon “the understanding of the audience” rather than the actual message of the advocate
violated the teaching of Buckley because it created too much uncertainty); FEC v. Christian Action
Network, 110 F.3d 1049, 1064 (4th Cir. 1997) (awarding the plaintiffs in Christian Action Network fees
and costs, under the Equal Access to Justice Act, on the grounds that the FEC’s position in enforcing
the regulation was not “substantially justified”); FEC v. Christian Action Network, 894 F. Supp. 946,
952 n.6 (W.D. Va. 1995), aff’d, 92 F.3d 1178 (4th Cir. 1996) (per curiam).
106. 11 C.F.R § 100.22(b) (2006).
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constitutes an unconstitutional departure from the Buckley paradigm.107 According to these courts, the Buckley express advocacy doctrine requires more than an
implication that a communication is encouraging people to vote for or against a
particular candidate.108 Describing a specific candidate’s political view “does
not per se translate into an exhortation to vote,” even if the audience “is
addressed as a member of the voting public.”109
Despite the near consensus among lower courts that the FEC regulation’s
third type of express advocacy is unconstitutionally vague or broad, the reasoning of the McConnell decision suggests that the Supreme Court is likely to
uphold the reasonable person/unmistakable advocacy standard. Recall that the
Buckley Court’s fundamental concern was to protect pure issue discussion from
intrusive rules that could inhibit or unduly restrict a speaker rather than to
protect all political speech other than express advocacy.110 The obstacle to
achieving protection of pure issue discussion was said by the Court to be
“line-drawing problems” posed by the vague influencing language.111 The
express advocacy doctrine was elaborated by the Court in order to prevent the
line from being drawn in a way that could subject issue discussion to certain
campaign finance regulations (thereby avoiding overbreadth) as well as to
ensure that speakers would be on notice regarding which of their activities
required disclosure (avoiding vagueness) in situations where the context alone
did not preclude such defects. Given that Buckley’s express advocacy standard
was never intended to be more than the means to an end, the McConnell Court’s
rejection of the magic words version of the standard because it was easily
evaded,112 and the same Court’s acceptance of regulation of electioneering
communications113 and even communications simply “supporting” or “attacking” a candidate in certain contexts,114 the Court might well find the reasonable
person/unmistakable advocacy approach sufficiently precise and narrow to serve
107. Va. Society for Human Life, Inc., 263 F.3d at 392; Iowa Right to Life Comm. v. Williams, 187
F.3d 963, 969–70 (8th Cir. 1999); Faucher v. FEC, 928 F.2d 468, 471–72 (1st Cir. 1991), cert. denied
sub nom. FEC v. Keefer et al., 502 U.S. 820 (1991); Right to Life of Dutchess County, Inc. v. FEC, 6 F.
Supp. 2d 248, 253–54 (S.D.N.Y. 1998); Me. Right to Life Comm., Inc. v. FEC, 914 F. Supp. 8, 13 (D.
Me. 1996), aff’d, 98 F.3d 1 (1st Cir. 1996) (per curiam), cert. denied sub nom. Moore v. Chamber of
Commerce of the U.S., 537 U.S. 1018 (2002); see also Christian Action Network, Inc., 110 F.3d at
1052–55, 1061. In contrast, in dictum, the Seventh Circuit indicated that the teachings of Buckley and
MCFL do “not dictate one outcome rather than another” in the types of cases that generated the
disagreement between the Furgatch and Christian Action Network courts. See Wis. Right to Life v.
Paradise, 138 F.3d 1183, 1186 (7th Cir. 1998). In his opinion in McConnell, Justice Thomas stated that
the McConnell Court had overturned all of these opinions, with the “possible exception” of Furgatch,
when it upheld the electioneering provisions of BCRA. 540 U.S. 93, 278 n.11 (2003) (Thomas, J.,
dissenting in part, concurring in part).
108. Christian Action Network, 894 F. Supp. at 953–54.
109. Id. at 954.
110. See Buckley v. Valeo, 424 U.S. 1, 79 (1976).
111. Id. at 78–79.
112. McConnell v. FEC, 540 U.S. 93, 193 n.77 (2003).
113. See infra notes 135–37.
114. See infra note 142 and accompanying text.
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as a useful replacement for the problematic magic words version of the express
advocacy standard in the future.115
3. Broader Constructions of the Influencing Language
One difficulty, then, in equating the influencing language embedded in the
definition of a political committee with express advocacy is that the express
advocacy standard may include a facts and circumstances test of the kind
endorsed by the Ninth Circuit in Furgatch and included in the FEC’s express
advocacy regulation. A more daunting obstacle is the fact that the Supreme
Court has not in fact limited the influencing language to express advocacy in
every provision of FECA that it has examined. The instances in which the Court
has validated FECA provisions that apply to a broader range of electoral
activities than express advocacy reveal how the Court has determined the outer
limit of political speech that Congress can restrict in specific contexts. This
section explores these precedents and concludes that there are five distinct
paradigms underlying the decisions in which the Court has upheld broader
campaign finance regulation of electoral activity against constitutional attack.
a. The First Two Paradigms: The Nature of the Recipient and the Nature of the
Spender. The first two paradigms occur in the Buckley decision, where they
provide the conceptual foundation for the Supreme Court’s decision to uphold
dollar limits on certain contributions and disclosure rules for certain expenditures, both without regard to express advocacy, whereas other disclosure rules
for expenditures had to be construed as limited to express advocacy in order to
be constitutional. In examining the dollar limits Congress had imposed on
contributions to candidates and their political committees as part of its 1974
campaign finance legislation,116 the Court did not perceive a need to resolve the
ambiguity in the meaning of the influencing language in the definition of a
contribution nor to limit the reach of that language to express advocacy.117
Implying that the ambiguity inherent in the influencing language could be
troublesome in other contexts, the Court nonetheless argued that the language
“presents fewer problems” for the statutory contribution ceilings “because of
the limiting connotation created by the general understanding of what constitutes a political contribution.”118
115. Only three cases have cited Furgatch since McConnell was decided, and they all arose in the
Ninth Circuit. See Alaska Right to Life v. Miles, 441 F.3d 773 (9th Cir. 2006); ACLU of Nevada v.
Heller, 378 F.3d 979 (9th Cir. 2004); FEC v. Cal. Democratic Party, No. CIVS030547 FCD DAD, 2004
WL 865833 (E.D. Cal. Feb. 13, 2004) (not reported).
116. See Buckley, 424 U.S. at 189 (appendix to per curiam opinion) (limiting contributions per
election by individuals to $1000 and by political committees to $5000). The statute also limited
aggregate contributions made by individuals in any calendar year to $25,000. Id.
117. See id. at 24 n.24.
118. Id.; see id. at 78 (noting that the Court has interpreted the term contribution “to include not only
contributions made directly or indirectly to a candidate, political party, or campaign committee, and
contributions made to other organizations or individuals but earmarked for political purposes, but also
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In the same decision, in discussing the recordkeeping and reporting rules for
expenditures made by candidates and political committees, the Court observed
that “vagueness problems” could arise in the process of trying to determine
which disbursements of a candidate or political committee count as expenditures for recordkeeping and reporting purposes because of the ambiguity of the
influencing language.119 The Court concluded, however, that “[e]xpenditures of
candidates and of ‘political committees’ so construed can be assumed to fall
within the core area sought to be addressed by Congress. They are, by definition, campaign related.”120 In short, in both of these contexts discussed in
Buckley, the ambiguity inherent in the influencing language did not create
unconstitutional burdens on the speech rights of donors to, or participants in, a
campaign.
At first glance, these outcomes seem anomalous, given the reasoning in
Buckley discussed above that disclosure rules applicable to independent expenditures would be constitutional only if they were construed as limited to disbursements for express advocacy so as to avoid the potential vagueness or overbreadth
of the influencing language.121 In the case of the dollar limits on contributions
to groups controlled by a candidate or to a FECA political committee, for
example, such groups would not necessarily be engaged in express advocacy all
the time, yet the FECA rules would uniformly treat transfers of value to such
entities as contributions under the Act, that is, as made for the purpose of
influencing a federal election. Similarly, disbursements by candidates and political committees would uniformly be deemed to be expenditures under FECA,
that is, as made for the purpose of influencing a federal election, regardless of
whether they involved express advocacy. To take another example, a group that
has the nomination or election of a candidate as its major purpose would not
necessarily have express advocacy as its major purpose or the major part of its
activities. In other words, as a practical matter, express advocacy cannot be
assumed to be the dominant, much less the exclusive type of action or mode of
communication by candidates or political committees.122 Yet the Buckley Court
saw no need to narrow the construction of a contribution or an expenditure to
expenditures placed in cooperation with or with the consent of a candidate, his agents, or an authorized
committee of the candidate”).
119. The Court had just noted that lower courts had construed the definition of a political committee
narrowly to encompass “only . . . organizations that are under the control of a candidate or the major
purpose of which is the nomination or election of a candidate.” Buckley, 424 U.S. at 79. This aspect of
the Buckley decision is discussed infra Part II.B.
120. Buckley, 424 U.S. at 79. The FECA provision at issue imposed disclosure requirements on
individuals and groups other than candidates and political committees as well. The Court construed the
influencing language narrowly when applied to these groups in order to avoid unconstitutional
vagueness.
121. See supra Part II.A.1.
122. In fact, recent empirical analysis has revealed that ads funded by candidates and their
committees typically include express advocacy a mere five percent of the time, largely because more
subtle ads are considered by marketing experts to be more effective than direct exhortations to vote for
a candidate. See McConnell v. FEC, 540 U.S. 93, 127, 194 n.77, 206 (2003).
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contexts involving only express advocacy for purposes of the contribution limit
or expenditure disclosure rules in order to keep the influencing language from
constitutional infirmity, even though the application of the rules could capture a
very broad spectrum of activities related to federal campaigns and, in some
instances, might even cover the discussion of issues.
The Court’s logic in the two situations in Buckley in which it did not impose
an express advocacy requirement on the influencing language is instructive. In
the case of the contribution limits, the potential constitutional defects of overbreadth and vagueness inherent in the influencing language were cured by what
the Court called “the limiting connotation created by the general understanding
of what constitutes a political contribution.”123 It is not immediately obvious
what the Court meant by this abstract formulation. Since the contributions in
question in Buckley were those given to candidates or their campaign committees, it would seem that the Court had in mind that the transfers were to
recipients whose characteristic mission is to influence the outcome of elections
for specific candidates for federal office in whatever manner possible. The
implication of the Court’s explanation, in other words, is that the indeterminacy
of the influencing language in the abstract was made determinate by the nature
of the recipient. Because of the nature of the recipients’ characteristic mission,
contributors and recipients alike would have the requisite notice that the contributions would be subject to FECA restrictions. There would thus be no uncertainty or chilling of the donor’s speech. Notably, according to this paradigm
implicit in the Court’s reasoning, it is the characteristic mission of the recipients, not the express advocacy standard, that eliminates constitutional vagueness
or uncertainty.
A similar logic can be discerned in the Buckley Court’s conclusion that the
provision requiring recordkeeping for and disclosure of all expenditures made
by candidates and political committees need not be interpreted narrowly to
avoid vagueness. In this context, the general understanding of candidates’ and
political committees’ characteristic missions can be seen as the basis for the
Court’s willingness to dismiss threats of vagueness or overbreadth when Congress chose to treat all of their disbursements as expenditures, that is, as made
for the purpose of influencing the outcome of a campaign for federal office. As a
result of the Court’s analysis, the influencing language will apply as properly to
funds spent on the dry charts and off-putting graphs used by Ross Perot to
discuss issues with voters as those spent on the most polished, Madison Avenue
negative ads approved by a campaign director pushing the envelope. Implicit in
the Court’s reasoning is thus a second paradigm, in which the nature of the
spender dispels the ambiguity of the abstract influencing language.124 In short,
even in Buckley, the border police, in the form of express advocacy, is not
123. Buckley, 424 U.S. at 24 n.24.
124. See id. at 79–80 (stating that “when the maker of the expenditure is not within these
categories,” a more restrictive interpretation of “expenditure” will apply).
2007] CONSTITUTIONAL PARADIGMS AND CAMPAIGN FINANCE REGULATION
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needed to stand guard when the characteristic mission of either the recipient or
the spender carries with it a limiting connotation that cures constitutional
concerns.
This analysis clarifies why Buckley interpreted the disclosure rules for independent expenditures to apply only in cases of express advocacy, whereas it did not
impose such a restriction on counterpart rules for candidates and political
committees, on the one hand, nor on contribution limits, on the other. In the
case of independent expenditures, individuals and entities that are not themselves candidates or political committees and that are not contributing to
candidates or political committees lack either a recipient or spender whose
characteristic mission is commonly understood to make determinate the influencing language’s potential ambiguity. As a consequence, the Supreme Court
reviews disclosure rules for campaign spending by such individuals and groups
with strict scrutiny,125 and it has limited the risk of vagueness and overbreadth
through the express advocacy constraint.126 Of course, such persons could
become subject to a “general understanding” accompanied by a “limiting
connotation”127 that would override considerations of vagueness or overbreadth
if they were to coordinate their spending with a candidate or party. In that event,
because of the characteristic mission of the other party to the coordinated
arrangement, their spending would be treated as a campaign contribution by
FECA regardless of whether they intend to or in fact fund express advocacy.128
b. The Third Paradigm: Empirical Evidence of Intent and Effect. The logic of
the Court’s reasoning in the McConnell decision, which upheld four amendments to FECA involving regulation of electoral activities broader than express
advocacy, sheds light on additional contexts in which a broad interpretation of
the influencing language is compatible with constitutional protections for political speech. One of the amendments upheld in McConnell was occasioned by
Congress’s attempt to address what it and many commentators labeled “socalled issue ads.”129 These communications were clearly intended to create
support for or opposition to particular candidates for federal office, while at the
same time avoiding express advocacy, so as to avoid being required to fund the
ads with hard money. Communications of this kind occur throughout campaign
cycles but are especially pronounced in the final months of a campaign and in
battleground districts and states. Because such ads avoid express advocacy,
those who fund them have traditionally paid with soft money, that is, money not
125. See id. at 75.
126. See supra Part II.A.1.
127. See Buckley, 424 U.S. at 24 n.24.
128. See Buckley, 424 U.S. at 46 & n.53; infra notes 160–62 and accompanying text (on coordination). Given the lack of precise standards defining relationships that are considered coordinated and
those considered truly independent, this aspect of campaign finance law imposes its own line drawing
problems that could give rise to constitutional infirmities.
129. See McConnell v. FEC, 540 U.S. 93, 126 (2003).
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subject to FECA regulations limiting the source and amount of campaign funds.
Thus, corporations and unions have used their treasury funds rather than their
PAC money to pay for such ads, and FECA disclosure of the expenditures was
not required. However, research has revealed that more than ninety percent of
those who viewed the ads saw them as advocating for or against a particular
candidate. There was thus a general understanding by the viewing public that
the ads were express advocacy, and it was the intent of those who designed the
ads that they should be thus interpreted by viewers.130 Under the legal precedents outlined earlier, however, it was possible to argue that express advocacy
was not involved because exhortations of support or attack avoided the magic
words or because the exhortations were not immediately followed by the names
or likenesses of specific candidates, that is, because there was a “gap” between
the exhortation to act and the specific candidate who was the object of the
action.131
To curb the most troublesome instances of this practice, BCRA introduced
the concept of an “electioneering communication,” defined as a radio, television, or other broadcast communication that clearly identifies a candidate for a
federal office, occurs in the thirty days prior to a primary or sixty days prior to a
general election, and can be received by at least 50,000 people in the area in
which the election for that office will be held.132 BCRA added electioneering
communications to the types of campaign activity that corporations and unions
are prohibited from underwriting with their treasury funds.133 It also added
electioneering communications to the campaign activity subject to the disclosure provisions governing individuals and groups other than candidates and
political committees.134 As a consequence, since the passage of BCRA, corporations and unions can only fund such communications with FECA regulated
(therefore, PAC) money, and persons (other than candidates and political committees) who make expenditures for such ads must now disclose them to the FEC
within twenty-four hours after a certain dollar amount has been disbursed for
communications of this kind in a year.
Why did the Supreme Court uphold the electioneering communication provisions as constitutional, even though they involve restrictions on political speech
that is not express advocacy? Neither of the two paradigms implicit in the
Buckley decision can explain the McConnell Court’s decision in this instance
because electioneering communications do not necessarily implicate a speaker
or a recipient whose characteristic mission is campaign related. Instead, these
provisions suggest the existence of a third paradigm for the type of situation in
130. See McConnell, 540 U.S. at 193; supra note 122.
131. See supra Part II.A.2.
132. BCRA § 201(a), 116 Stat. 81, 88–90 (codified at 2 U.S.C. §§ 434(f)(3), 441b(c)(1) (Supp. II
2002)).
133. Id. §§ 203(a), 214(d) (codified at 2 U.S.C. § 441b(b)(2) (2000 & Supp. II 2002)).
134. Id. § 201(a) (codified at 2 U.S.C. § 434(f) (Supp. II 2002)). Candidates and political committees were already subject to disclosure rules for all expenditures.
2007] CONSTITUTIONAL PARADIGMS AND CAMPAIGN FINANCE REGULATION
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which the Court will be willing to find a “general understanding” with “a
limiting connotation” that cures constitutionally suspect overbreadth,135 namely,
when empirical evidence demonstrates that a particular activity or communication is both intended and generally, if not universally, understood as advocacy
for or against one or more specific candidates for federal office.
For purposes of the third paradigm, empirical data derived from the operation
of contemporary campaigns, rather than statutory concepts, appears to have led
the Court to find a characteristic electoral meaning for broadcast communications that mention a candidate, occur in proximity to a primary or a general
election, and are targeted to those who will vote for or against that candidate.
The McConnell Court conceded that some pure issue discussion or grassroots
lobbying for legislation could be captured by the electioneering communication
provisions and thus become subject to funding by hard money exclusively, yet it
determined that the resulting overbreadth would be inconsequential,136 presumably because of the powerful statistical evidence of the likely electoral purpose
and effect of such communications when they are broadcast during the most
intense campaign time frame.137 The logic of the McConnell Court’s reasoning
can also be seen as validating the FEC’s contested reasonable person/
unmistakable advocacy interpretation of express advocacy,138 given that the
record in McConnell was replete with statistics and expert testimony confirming
that the selected class of communications was unlikely to be mistaken for
anything but an attempt to influence the election or defeat of a candidate for
federal office.
c. The Fourth Paradigm: Historic Financially Cooperative Relationships. The
second BCRA provision regulating campaign activity other than express advocacy that was approved in McConnell involved restrictions on the type of
funding required of state and local parties engaged in campaign activities during
an election in which a federal candidate is on the ballot. BCRA prohibited
federal candidates and national political parties from raising or spending soft
135. See Buckley v. Valeo, 424 U.S. 1, 24 n.24 (1976). Vagueness was not an issue in the case of
electioneering communications, probably because of the specific elements Congress included in the
definition. See McConnell, 540 U.S. at 204–08 (rejecting plaintiffs’ challenge that section 203 of BCRA
was overbroad, underinclusive, and discriminatory in favor of media companies); see also id. at 194
(observing that the definition raised no vagueness concerns).
136. See McConnell, 540 U.S. at 207 (stating that even if some constitutionally protected political
speech would be burdened, the provision would not be unconstitutional unless the burden was
substantial).
137. See id. at 206. It is also possible that the decision can be seen as upholding the restrictions on
electioneering communications primarily in order to prevent circumvention of the express advocacy
rules during the time frame when the incentive to circumvent is the strongest. See id. (expressing
concern that “in the future corporations and unions may finance genuine issue ads during those time
frames by simply avoiding any specific reference to federal candidates, or in doubtful cases by paying
for the ad from a segregated fund”); infra notes 234–35 and accompanying text (discussing circumvention). Even if the government interest is to avoid circumvention of constitutional regulations of
campaign speech, however, the means it chooses must still conform to constitutional standards.
138. See 11 C.F.R. § 100.22(b) (2006); supra notes 105–09 and accompanying text.
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money.139 To prevent federal candidates from circumventing this prohibition by
benefiting from the soft money still permitted at the state level, Congress
prescribed that state and local parties must use regulated federal (“hard”) money
or a mix of hard and soft money (“Levin funds”) to fund a range of campaign
activities that it enumerated under the heading “Federal election activity.”140
According to the statute, these include voter registration in the 120 days
preceding a federal election; voter identification, get-out-the-vote (“GOTV”)
activities, “generic” (party specific) mobilization; and making a public communication that “promotes or supports” or “attacks or opposes” a clearly identified
federal candidate (often referred to as the “PASO” standard).141
The Supreme Court’s reasoning in upholding this state and local funding
provision is especially useful for understanding the outer limits of electoral
activity that can be constitutionally regulated in certain circumstances because
the concept of influencing federal elections applies to funding of activities far
beyond express advocacy—for example, voter registration and mobilization for
a political party—in addition to public statements that may resemble express
advocacy by supporting or opposing specific individuals competing for a federal
office. Several of these activities, such as generic voter identification or nonpartisan voter registration during the 120 days preceding an election, do not necessarily entail mentioning a clearly defined federal candidate, which has been one
element of express advocacy since Buckley. The PASO standard was deliberately drafted to include statements that do not expressly advocate the election or
defeat of a candidate. The standard is less precise in its reach than either express
advocacy or electioneering communications, and it is only a few notches less
general than the influencing language deemed constitutionally infirm in Buckley. Nonetheless, the McConnell Court rejected the plaintiffs’ claim that the
standard was unconstitutionally vague. According to the Court, the terms “promote,” “support,” “attack” and “oppose” set forth “explicit standards for those
who apply them” and “give the person of ordinary intelligence a reasonable
opportunity to know what is prohibited.”142
Viewed in the abstract, it is difficult to reconcile the McConnell Court’s
deference to Congress in upholding these state and local funding provisions
with the Buckley Court’s concern for the chilling effects of the broad and
ambiguous influencing language on core political speech. The reasoning of the
McConnell decision was, however, true to the logic of Buckley because the
139. See BCRA § 101(a), 116 Stat. 81, 82–85 (codified at 2 U.S.C. § 441i(a), (e) (Supp. II 2002)).
140. See 2 U.S.C. § 431(20) (Supp. II 2002).
141. See id. §§ 431(20), 441i(b)(1). “PASO” is easier to pronounce than would be the more accurate
acronym “PSAO.” The statutory provision also includes restrictions on the source of financing state or
local party employees who spend more than one-fourth of their time in one month on “activities in
connection with a Federal election.” Id. § 431(20)(A)(iv).
142. McConnell, 540 U.S. at 170 n.64 (2003) (internal quotation marks omitted). The Court added
that, should any ambiguity in the standard remain, the parties could seek an FEC advisory opinion for
clarification. Id.
2007] CONSTITUTIONAL PARADIGMS AND CAMPAIGN FINANCE REGULATION
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Court justified its holding on the basis of the historically close connection
between the national parties and federal candidates, on the one hand, and state
and local parties, on the other.143 Addressing the plaintiffs’ challenge to the
PASO standard in particular, the Court recalled the special characteristics of
political committees that made vagueness or overbreadth concerns in Buckley
less pressing than they were for independent expenditures, namely, that a
political committee’s expenditures “are, by definition, campaign related.”144
The implication is that the uncertainty inherent in classifying as PASO statements some communications that name a federal candidate but may be issue
advocacy or grassroots lobbying is made constitutionally tolerable when the
purveyors of such communications are state or local party committees. Although the Court used general language, because of the context in which the
discussion occurs, the McConnell decision does not imply that the PASO
standard would necessarily be constitutionally permissible if it triggered FECA
restrictions for individuals or groups operating independently of candidates and
their campaigns.
Of course, the characteristic mission of the national parties cannot be equated
with the characteristic mission of the state parties. State parties have their own
distinct interests, many of them wholly independent of the interests of federal
candidates and national parties. Yet the historical proximity and frequent financial dealings between the two enabled the Court to dismiss potential overbreadth and vagueness concerns.145 The Court’s view can thus be understood as
a variant of the third paradigm, just discussed, that allows empirical data to
make determinate what would otherwise be unacceptable indeterminacy in the
influencing concept. In the previous instance, empirical data established the
general understanding of those who create and those who receive certain
communications. In this instance, in contrast, empirical data established a close,
cooperative, and longstanding relationship between state or local actors and
national candidates and entities whose characteristic mission is to influence
federal elections.
Another way to formulate this part of the Court’s holding is that the historical
relationship served for the Court as a proxy for coordination, broadly construed
to include consultation and suggestion as well as outright requests.146 In other
words, by raising or spending soft money to fund the activities specified by
143. Id. at 164–66.
144. Buckley v. Valeo, 424 U.S. 1, 79 (1976); see McConnell, 540 U.S. at 170 n.64 (citing Grayned
v. City of Rockford, 408 U.S. 104, 108–09 (1972)).
145. See McConnell, 540 U.S. at 165 & nn.60–61 (describing the frequency with which federal
candidates and national parties have historically solicited soft money donations to the state and local
parties when their donors have given as much hard money as is legally permitted and noting instances
in which the national party arranged opportunities for access to federal officials for those who made
“substantial donation[s]” to state party committees and candidates).
146. Two FECA provisions treat expenditures as coordinated if they are made “in cooperation,
consultation, or concert, with, or at the request or suggestion of” candidates or party committees. See 2
U.S.C. § 441a(a)(7)(B)(i)–(ii) (2000 & Supp. II 2002).
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Congress, state and local parties could be seen as effectively contributing soft
money to national candidates and parties, which would violate BCRA’s ban on
the national parties receiving or spending as well as soliciting or directing soft
money.
The statutory language does not require this interpretation, however. FECA’s
coordination provision is triggered by “expenditures” made for any purpose,
assuming coordination, whereas the soft money restrictions on state and local
parties are triggered by a specific, albeit broad, list of activities that could
impact the election of a federal candidate.147 As the Court noted, the state and
local funding provisions were “reasonably tailored, with various temporal and
substantive limitations designed to focus the regulations on the important
anticorruption interests to be served.”148 In other words, the state and local
funding restrictions are activated by a less expansive notion of disbursements
that influence federal elections than is the case for coordinated expenditures. It
is possible, therefore, that the funding restrictions would not have passed
constitutional muster if they had not been “reasonably tailored” by the enumeration of specific influencing activities to which they apply. In that event, the state
and local funding restrictions may have overcome potential constitutional concerns, not because the Court assumed the existence of coordination, but due to
the combination of the parties’ historically close connection (suggesting the
possibility of coordination) and the specificity and relevance of the activities
enumerated in the statute to the influencing concept.
This reasoning suggests a fourth paradigm, namely, one in which an entity
without a characteristic mission of involvement in federal elections is so closely
associated with political actors with such a mission that the Supreme Court will
accept Congress’s decision to require the nonfederal actors to fund a wide range
of specific electoral activities with regulated or hard money. The list of activities
comprising “Federal election activities” may indicate the latitude that the Court
is now prepared to give Congress to regulate a wide range of electoral activities
in those contexts where a federal candidate or political party actor is not directly
involved, yet empirical evidence reveals a relationship with such actors significant enough to dispel theoretical concerns about the chilling effects of uncertainty or overbreadth on those affected. This paradigm would not, however,
justify comparably intrusive FECA regulation of political actors completely
independent of federal candidates or national parties and the committees or
agents of either.
147. See id. § 431(20) (Supp. II 2002); id. § 441i(b) (2000 & Supp. II 2002). In addition, section
441a(d), which permits national and state party committees to make expenditures in connection with a
federal election in amounts that exceed contribution limits, also presupposes that the committees of
national and state political parties can act independently of candidates. See FEC v. Nat’l Conservative
Political Action Comm., 470 U.S. 480, 489 (1985) (observing that political committee spending can be
independent of and even counterproductive for a candidate’s campaign).
148. McConnell, 540 U.S. at 167.
2007] CONSTITUTIONAL PARADIGMS AND CAMPAIGN FINANCE REGULATION
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d. The Fifth Paradigm: Circumvention and Coordination. A third provision
of BCRA upheld in McConnell prohibits a political party committee, national or
otherwise, from soliciting nonfederal (or soft) money for, or making or directing
donations of nonfederal money to, an organization described in section 501(c)
of the Code if the latter organization “makes expenditures or disbursements in
connection with an election for Federal office (including expenditures or disbursements for Federal election activity).”149 The prohibition applies regardless of
whether the party committee earmarks its contributions for electoral purposes.150 The purpose of the provision is to prevent political parties from
evading the soft money ban of BCRA by raising soft money for certain
organizations exempt under the federal tax laws when the latter are not regulated by FECA and could use the money for federal election purposes.151 By
implication, the statutory language clearly suggests that party committees can
raise nonfederal money without limit for exempt organizations that do not make
expenditures or disbursements in connection with a federal election.
To make clear that “expenditure” in this context refers to more than express
advocacy, Congress expressly stipulated that it includes “Federal election activities,” which include certain voter and party mobilization activities as well as
“PASO” statements that support or oppose a clearly defined candidate for
federal office.152 The logic of the provision appears to be similar to the logic of
the provision requiring state and local party committees to use federal money or
Levin funds to pay for “Federal election activities.” Regulation is justified when
it applies to the combination of electoral activities of a certain kind and political
party committees raising money for entities engaged in such activities.153 In the
case of national parties, which are subject to an absolute prohibition against
149. 2 U.S.C. § 441i(d)(1) (Supp. II 2002). The provision extends to any entity established or
controlled by party committees and persons acting on their behalf or as their agent. Id. The statute
refers to “any funds.” However, the McConnell Court construed the language to refer solely to
nonfederal funds because the ban would be unconstitutional if applied to hard money. See McConnell,
540 U.S. at 174–78. The subsection also contains a parallel prohibition for 527 groups, 2 U.S.C.
§ 441i(d)(2) (Supp. II 2002), discussed infra Part II.A.4.
150. The rationale may be that, because money is fungible, tracing the use made of specific funds
would be meaningless. See 2 U.S.C. § 441a(a)(8) (2000) (treating contributions to an intermediary
earmarked for use by a candidate as contributions to the candidate).
151. Although 501(c)(3) organizations are not permitted to intervene in political campaigns, other
groups described in section 501(c) may. Further, the political intervention standards under the Code for
501(c)(3) groups and electoral activities for FECA purposes are not entirely congruent. See, e.g.,
Elizabeth Kingsley & John Pomeranz, A Crash at the Crossroads: Tax and Campaign Finance Laws
Collide in Regulation of Political Activities of Tax-Exempt Organizations, 31 WM. MITCHELL L. REV. 55
(2004); Steven H. Sholk, A Guide to Election Year Activities of Section 501(c)(3) Organizations, in 6
TAX STRATEGIES FOR CORPORATE ACQUISITIONS, DISPOSITIONS, SPIN-OFFS, JOINT VENTURES, FINANCINGS,
REORGANIZATIONS & RESTRUCTURINGS 1299 (2004).
152. See supra note 141 and accompanying text.
153. See supra p. 1214. The statutory provision is not, however, limited to 501(c) organizations
engaged in “Federal election activities.” It applies to such organizations engaged in electoral activities
more broadly. For example, the term “Federal election activities” applies only to voter registration in
the 120 days preceding an election. Section 441i(d)(1) would apply to entities engaged in voter
registration outside that period.
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raising or directing nonfederal money,154 the provision appears to be redundant,
since they are prohibited from raising soft money in any context.155 State and
local party committees, in contrast, are prevented from themselves spending
nonfederal funds (except, in certain cases, Levin funds) on “Federal election
activities” by the previous provision discussed, but they could raise money for
other entities engaged in such activities, were it not for this BCRA provision.
Thus, this provision is clearly an extension of the state and local party funding
rules, designed to prevent such party entities from funding with soft money
through an intermediary, what they could not fund with soft money directly.156
Finally, in McConnell the Supreme Court approved the coordination provision in BCRA that adds disbursements for electioneering communications to the
types of expenditures that will be reclassified as contributions subject to contribution limits if the person funding the communications is acting at the suggestion of a candidate (or candidate committee or agent) or political party (or party
committee or agent).157 This addition could be construed as an acknowledgment
by Congress that “expenditure” in the original version referred only to express
advocacy.158 In upholding the new provision, however, the McConnell Court
referred to it as one that “clarifies the scope of the preceding subsection . . . which states more generally” that coordinated expenditures will be
treated as contributions.159
The quoted language makes clear that the Court viewed the original coordination provision, which spoke only of expenditures, as reaching a more general
category of campaign speech than express advocacy. Hence, “expenditure” in
this coordination provision already included electioneering communications in
principle and possibly other types of campaign speech not specified, or not yet
specified, by Congress or the FEC. The BCRA provision merely “clarifies” what
existing law, properly understood, already covered. Whether the provision was
added due to Congress’s desire to put to rest the controversies surrounding the
reach of the influencing language in the definition of expenditure for coordina-
154. See 2 U.S.C. § 441i(a) (Supp. II 2002).
155. In promulgating its regulation implementing section 441i(d), the FEC conceded the redundancy. See Notice 2005-8, 70 Fed. Reg. 12787, 12788 (March 16, 2005) (noting that the prohibition in
section 441i(d) “is consistent” with section 441i(a), which prohibits such soft money fundraising “more
generally”).
156. The 501(c) provision does not purport to limit individuals, groups, and political committees
(other than party committees) from fundraising for 501(c) organizations engaged in “Federal election
activities” or otherwise making expenditures or disbursements in connection with a federal election. It
is doubtful that the Supreme Court would have countenanced such regulation of individuals, and
groups, other than parties or their committees, based upon the five paradigms elaborated in this section,
given that neither the contributors nor the recipients of the transfers at issue have influencing federal
elections as their characteristic mission nor do they have a historically close relationship with political
actors that do.
157. 2 U.S.C. § 441a(a)(7)(C) (Supp. II 2002).
158. See supra notes 99–100 and accompanying text (making a parallel argument in connection with
a related BCRA amendment).
159. McConnell v. FEC, 540 U.S. 93, 202 (2003) (emphasis added).
2007] CONSTITUTIONAL PARADIGMS AND CAMPAIGN FINANCE REGULATION
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tion purposes or due to its own misunderstanding of the reach of the provision
prior to the amendment is immaterial in light of the Court’s interpretation. The
Court reinforced the suggestion that the BCRA amendment was not needed to
enable the concept of an expenditure for coordination purposes to encompass
electioneering communications by explaining further that the BCRA addition
“pre-empts a possible claim that [the original provision] is . . . limited, such that
coordinated expenditures for communications that avoid express advocacy cannot be treated as contributions.”160 The Court concluded that “there is no reason
why Congress may not treat coordinated disbursements for electioneering communications in the same way it treats all other coordinated expenditures.”161
The unambiguous implication of the Court’s comments is that, in the context
of coordination with a candidate or political party, disbursements made in
connection with the campaign can, in general, be treated as influencing activity
under FECA regardless of the precise nature of the specific electoral activities
actually involved in a particular case. We can thus speculate with considerable
confidence that, were the FEC to write regulations specifying that funding for
any activities comprehended by the term “Federal election activities” will be
considered a contribution to a candidate or political party if coordinated with
them, it is likely that the Court would uphold the regulation based upon its
reasoning quoted, even without an amendment to the provision in FECA
expressly adding “Federal election activities” to “expenditures” and “electioneering communications.”162
The Court’s expansive approach to the meaning of “expenditure” in the
context of this coordination provision is not, however, repeated anywhere else
in the McConnell opinion. The paradigm implicit in the Court’s analysis is that
a disbursement made pursuant to some arrangement with a person or entity
whose characteristic mission is the election of one or more specific candidates
for federal office is no longer independent and, as a consequence, its character
should be determined as if it had been made by the other party to the arrangement. The participant in a campaign that coordinates with a candidate or party
acquires, for practical purposes, the characteristic mission of the candidate or
party in the relationship, and thus there is no constitutional bar to subjecting that
participant to restrictions that assume the presence of the other party’s characteristic mission.
This paradigm would apply in fewer circumstances than either of the two
previous paradigms because it presupposes actual contact between two parties
160. Id.
161. Id. at 203.
162. For the current regulation, see 11 C.F.R. § 109.21(c) (2006). Because the Court did not state the
boundaries of the meaning of expenditure in the context of coordination, that is, whether it extends to
any and all disbursements made at the suggestion of or in coordination with a candidate or party, there
is some uncertainty as to the scope of the FEC’s authority. For example, it is unclear if the FEC could
classify as contributions genuine expenditures for discussion of issues that are coordinated with a
candidate or party.
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rather than assumptions about the nature of a relationship based upon statistical
probabilities or historical patterns. By the same token, the influencing concept
assumed in coordination transactions applies to the broadest range of arguably
electoral activities, whereas the statistically and historically based paradigms
apply to a narrower range of electoral activities (electioneering communications, in one case, and “Federal election activities,” in the other).
4. Provisional Application to 527 Groups
Section 441i(d)(2), added by BCRA, prohibits a political party committee,
national or otherwise, from soliciting nonfederal money for, or giving or
directing such money to, nonregistering 527 groups. As was the case with the
parallel provision for organizations exempt under section 501 of the Code,163
the purpose of section 441i(d)(2) is to prevent parties from circumventing their
inability, post-BCRA, to raise soft money for themselves by raising it for
“like-minded” exempt organizations that would then spend the money to benefit
the parties’ federal candidates.164 The prohibition applies to solicitations for all
527 organizations other than those that have registered as political committees
under FECA or are regulated by state campaign finance laws.165
Although the provision does not spell out the characteristics of the nonregistering 527 groups to which it applies, the provision makes no sense unless some
federally active 527 groups exist to which the provision could apply. Thus,
Congress must have assumed that one or more types of 527 organization exist
that are not political committees under FECA or regulated under state campaign
finance laws and that could be the recipients of parties’ soft money fundraising,
were it not for this prohibition. The implication of section 441i(d)(2), in other
words, is that some of the 527 groups that have given rise to the current
controversy are permitted under current law to raise and spend soft money as
long as they raise it independently of candidate or party fundraisers and as long
as they abide by any relevant FECA disclosure rules that may be triggered by
the nature of the activities they engage in.166 Of course, that the statute
163. See supra notes 149–51 and accompanying text.
164. See McConnell, 540 U.S. at 175.
165. See 2 U.S.C. § 431(4)(C); id. § 431(5); id. § 431(6) (2000) (calling “political committees” all
candidate committees and any local party committee that receives more than $5000 in contributions in a
year or itself makes more than $1000 in contributions or expenditures in a year).
166. For example, even nonregistering 527 groups must report independent expenditures and
electioneering communications. See 2 U.S.C. § 434(e) (Supp. II 2002); id. § 434(f). It is also possible to
interpret section 441i(d)(2) as referring to 527 groups that engage exclusively in nonfederal or
non-electoral activities, that is, the groups expressly excepted from the registration requirements of all
versions of the 527 Reform Act of 2005. See supra note 16. This interpretation is not persuasive,
however, because section 441i(d)(2) would then prohibit state and local parties from raising soft money
for 527 groups engaged exclusively in state and local activities. This is unlikely to have been
Congress’s intention. According to one commentator, the prohibition may be a Congressional response
to the fact that the FEC routinely refuses to enforce FECA rather than a reflection of Congress’s
interpretation of the scope of FECA restrictions accurately understood and enforced. See Letter from
Steve Weissman, Assoc. Dir. of the Campaign Fin. Inst., to author (June 1, 2005) (on file with author).
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presupposes there will be some nonregistering 527 groups engaged in federal
elections does not legitimate any specific 527 group attempting to influence a
federal election that fails to register with the FEC. It also does not preclude
subsequent efforts by Congress to reduce or eliminate the types of 527 groups
that can influence federal elections without registering, such as the 527 reform
legislation proposed in both houses of Congress in 2003–2007.
Most of the current 527 group reform proposals are predicated upon an
extremely broad understanding of the types of electoral activities that can be
said to influence the election of a candidate for federal office and thus trigger
political committee status. In most versions, any organization that registers for
section 527 treatment with the IRS will automatically be considered a political
committee for FECA purposes unless one of several narrow exceptions applies.
In general, under these exceptions, an organization established and operated to
promote one or more state or local candidates or state or local ballot issues
would nonetheless be deemed a political committee for FECA purposes if it has
any federal involvement, however minimal. For example, the proposals would
classify as a political committee an organization that mentions a political party
during its voter drive activities if there is a federal candidate in addition to
nonfederal candidates or issues on the ballot167 or an organization that spends
more than $1000 on a public communication supporting or attacking a federal
candidate, regardless of how extensive its disbursements for nonfederal candidates and issues.168
Would the Court be likely to uphold such legislation given that it would
require groups to register as political committees subject to comprehensive
FECA regulation if they engaged in minimal federal activity and even if they
engaged in no activities to influence the election of a specific candidate or
candidates? This Part has identified several situations in which Congressional
efforts to regulate specific types of electoral activity beyond express advocacy
have been upheld because particular features of the context to be regulated
remove or diminish the likelihood of vagueness or overbreadth. These precedents provide a conceptual framework with which to evaluate the constitutional
status of campaign related activities not yet considered by the Court. Congress
will have to argue that the groups’ purposes and activities justify the increased
regulation proposed, whether by classifying them as political committees or
otherwise. Based upon the paradigms discussed above, Congress could defend
current proposals to characterize virtually all federally active 527 groups as
political committees regardless of the level of the groups’ federal involvement if
it could show actual coordination or demonstrate statistically based or historic
167. And spends more than $1000 on such activities. See 527 Reform Act of 2006, H.R. 513, 109th
Cong. § 2(b) (2006) (proposing 431(27)(D)(ii)); 527 Reform Act of 2007, S. 463, 110th Cong. § 2(b)
(2007) (same). These provisions include an exception if a political party is mentioned solely to identify
a nonfederal candidate or the organization that funded the mobilization activities in question. See H.R.
513 § 2(b) (proposing 2 U.S.C. § 431(27)(F)(i)–(ii)); S. 463 § 2(b) (same).
168. See H.R. 513 § 2(b) (proposing 2 U.S.C. § 431(27)(D)(i)); S. 463 § 2(b) (same).
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relationships between parties and 527 groups similar to the relationships between national and state parties discussed in this Part.169 Absent evidence of this
kind, however, Congress would have to identify specific campaign related
activities of independent 527 groups that both satisfy the influencing language
in the FECA sense and also avoid constitutional infirmity based upon vagueness
or overbreadth. The likelihood of success when the emphasis is exclusively on
the nature of a group’s activities rather than on the activities coupled with the
nature of the relationships between and among the actors is discussed in the
following sections.
B. THE MAJOR PURPOSE STANDARD
1. The Applicability of the Major Purpose Standard
As noted earlier, the Supreme Court in Buckley stated that FECA’s rules
requiring disclosure by political committees of all their disbursements could be
considered overbroad, but concluded that this possibility would not rise to the
level of constitutional significance based, in part, on the circumstance that
[t]o fulfill the purposes of the Act [the words “political committee”] need only
encompass organizations that are under the control of a candidate or the major
purpose of which is the nomination or election of a candidate. Expenditures of
candidates and of “political committees” so construed can be assumed to fall
within the core area sought to be addressed by Congress. They are, by
definition, campaign related.170
Some commentators have interpreted the Court’s words to mean that, because
of the burdensome nature of the disclosure restrictions imposed upon the
political speech of a political committee, no organization can be required to
register as a political committee, unless it is controlled by a candidate, or its
major purpose is nominating or electing (or attempting to defeat the nomination
or election of) one or more federal candidates.171 According to this interpretation, classification of a group as a political committee presupposes that the
group satisfies both a statutory and a judicially created test.
The FEC did not accept the existence of a major purpose test for over a
decade after the Buckley decision was rendered.172 In recent years, however, the
169. See supra Part II.A.3.b–d.
170. Buckley v. Valeo, 424 U.S. 1, 79 (1976).
171. See Foley & Tobin, supra note 20, at 2404; see also Potter, supra note 44, at 77.
172. See, e.g., 1988-22 Op. FEC (July 5, 1988), available at http://ao.nictusa.com/ao/no/
880022.html (stating that a group seeking to have more Republicans elected in a certain area would
become a political committee if its distributions or expenditures exceeded $1000 per year); 1979-41
Op. FEC (Sept. 13, 1979), available at http://ao.nictusa.com/ao/no/790041.html (stating that the
National Committee for a Democratic Alternative would become a political committee if it ran ads
opposing Jimmy Carter’s nomination as the Democratic candidate for President); 1978-51 Op. FEC
(Sept. 1, 1978), available at http://ao.nictusa.com/ao/no/780051.html (stating that an unincorporated
Native American tribe would become a political committee if it contributed more than $1000 to federal
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agency has usually taken the position that political committee status presupposes satisfying both the statutory and the judicially created tests.173 In some
instances, the FEC has justified its failure to compel a specific group to register
as a political committee on the grounds that the group does not have the
requisite major purpose.174 On one occasion, in contrast, the FEC argued that
the major purpose test, strictly construed to refer to influencing the nomination
or election of one or more specific candidates, is properly required only in the
case of groups that are not primarily “electoral.” According to the agency,
groups engaged in “partisan politics,” for example, those dedicated to electing
or defeating a class of candidates (Democratic or Republican, liberal or conservative, for example), do trigger political committee status even though the major
purpose test, based upon a strict construction of “contribution” or “expenditure,” is not satisfied.175
The Buckley Court’s language that is the source of the major purpose
standard is more ambiguous than is commonly thought. The passage quoted
above seems to say that, if either of two conditions is met (candidate control or
major purpose), constitutional concerns potentially raised by an absolute disclosure rule are satisfied without further inquiry, assuming the group’s contributions or expenditures exceed $1000. But the Court’s observation that political
committees “so construed” are “by definition campaign related” leaves open the
possibility that the term “political committee” might also include other groups
that, though not by definition campaign related, could nonetheless be shown to
be campaign related and, in fact, operating in what the Court called “the core
candidates or political committees in a single year). In addition, in Notice 2001-3 (“Definition of
Political Committee”), 66 Fed. Reg. 13681, 13683 (Mar. 7, 2001), the FEC proposed a new regulation
that would elaborate the definition of “contribution” and stated that the receipt of contributions and
expenditures in excess of $1000 would qualify the recipient as a political committee. This rulemaking is
considered to be “in abeyance.” See FEC, Definition of Political Committee, http://www.fec.gov/law/
RulemakingArchive.shtml#polcomm01 (last visited Mar. 19, 2007).
173. In the wake of Akins v. FEC and MCFL, the FEC expressly abandoned the view that the
statutory prong alone could trigger political committee status. See 1995-11 Op. FEC n.10 (Apr. 28,
1995), available at http://www.fec.gov/law/advisoryopinions.shtml. In February of 2007, the FEC
published an explanation of how it applies the major purpose test on a case-by-case basis. See Notice
2007-3, supra note 17.
174. See Akins v. FEC, 146 F.3d 1049, 1050 (D.C. Cir. 1998) (en banc); Chairman Bradley A. Smith
and Commissioners David M. Mason and Michael E. Toner, Statement of Reasons for In re Council for
Responsible Government, Inc., MUR 5024, at 7 (Jan. 13, 2004), available at http://eqs.sdrdc.com/eqsdocs/
000006CF.pdf. The FEC’s General Counsel advised the FEC in the latter case that the group in question
(the Council for Responsible Government, a group organized to oppose the election of Kean in the
2000 New Jersey Congressional primary) should have registered as a political committee, but the vote
of the FEC Commissioners, which was three to three, failed to endorse the General Counsel’s advice.
See Kean for Congress Comm. v. FEC, 398 F. Supp. 2d 26, 30 (D.D.C. 2005).
175. See FEC v. GOPAC, Inc., 917 F. Supp. 851, 859–62 (D.D.C. 1996). The FEC lost the case and
did not appeal, although five of the six Commissioners voting on the appeal had voted to bring the
lawsuit against GOPAC in the first place. On this inconsistency, see Statement for the Record in FEC v.
GOPAC, Additional Statement of Vice Chairman John Warren McGarry and Commissioners Danny L.
McDonald and Commissioner Scott E. Thomas, (Apr. 10, 1996) (on file with author).
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area sought to be addressed by Congress.”176
For example, organizations with multiple major purposes might be shown to
be sufficiently campaign related that the Court would not find significant
constitutional concerns in regulating them as political committees.177 This is
because, in the Buckley passage quoted, the Court was concerned that the FECA
provision requiring a committee to disclose all expenditures might be applied
inappropriately “to reach groups engaged purely in issue discussion.”178 The
narrow construction of “political committee” solved the “line-drawing problem”
noted by the Court.179 Line drawing was also the problem that led the Buckley
court to limit the reach of disclosure provisions for independent expenditures
made by individuals or groups independent of campaigns to disbursements
made for express advocacy. Despite Buckley’s concerns, the McConnell decision recently clarified that Buckley’s narrowing construction of the influencing
language through the doctrine of express advocacy does not represent the outer
boundary of constitutionally permissible solutions to the line drawing problems
for which it was proposed.180 In the wake of McConnell, therefore, it is
pertinent to reexamine the Buckley Court’s language to see if other groups
active in federal elections fall safely within the boundaries of constitutionally
valid regulation when they engage in significant amounts of campaign activities,
even though the relevant expenditures constitute less than fifty percent of their
total disbursements. In particular, it might be possible to show that an organization falls within “the core areas sought to be addressed by Congress” if its
campaign related activities become extensive. The MCFL Court’s observation
that an advocacy organization could become a political committee if its “independent spending” on elections became “so extensive that the organization’s major
purpose may be regarded as campaign activity” might permit this construction.181 Alternatively, the constitutional status of Buckley’s line drawing analysis
of certain campaign finance provisions—as clarified by McConnell—may sug176. Buckley v. Valeo, 424 U.S. 1, 79 (1976).
177. Foley and Tobin consider and reject this alternative. See Foley & Tobin, supra note 20, at
2404–05. Some courts, in contrast, have asserted that the practical impact of “the” major purpose is not
different from that of “a” major purpose. See N.C. Right to Life, Inc. v. Leake, 108 F. Supp. 2d 498,
508 (E.D.N.C. 2000) (arguing that the point of the major purpose standard “must be whether a group
may fairly be called ‘campaign-related’”).
178. Buckley, 424 U.S. at 79.
179. Id. at 78–79. The Court of Appeals for the District of Columbia Circuit has also offered a
narrowing construction of the Buckley statement quoted in the text, namely, that it refers only to
situations involving independent expenditures rather than those involving contributions since the
former are afforded a greater degree of constitutional protection than the latter. See Akins v. FEC, 101
F.3d 731, 741–42 (D.C. Cir. 1996) as amended (D.C. Cir. 1997) (en banc), vacated on other grounds,
524 U.S. 11 (1998).
180. See supra Part II.A.3–4.
181. See FEC v. MCFL, 479 U.S. 238, 262 (1986). It might also be possible to reach the same result
by interpreting the major purpose requirement to refer to a qualitative assessment that measures more
than an organization’s outlays. As noted by Polsky and Charles, the MCFL Court never claims that its
reasoning provides the exclusive way for independent advocacy organizations to be classified as
political committees for FECA purposes. Polsky & Charles, supra note 34, at 1011 n.3.
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gest that imposing political committee regulation burdens on certain groups can
pass constitutional muster as long as the groups are not primarily devoted to
issue discussion, which is accorded the highest form of political speech protection.182
Finally, the McConnell clarification may refocus attention on the major
purpose test’s counterintuitive implication: if the test requires more than onehalf of an organization’s activities to seek to influence the election of a federal
candidate, it will shelter a group spending $5,000,000 on such activities from
FECA “political committee” status, as long as that sum represents a small
portion of its annual expenditures, whereas it would subject a group that spends
only $500,000 to the FECA regime, if it has an annual budget of less than
$1,000,000.183 Such a result would be a triumph of form over substance, and it
would protect the organizations most likely to pose a threat to the integrity of
the election process from the political committee regime, namely, groups with
the most money and the greatest potential to gain influence over candidates or
office holders in exchange for campaign spending. Ironically, if the major
purpose test is interpreted as quantitative and is satisfied only when more than
half of a group’s operations qualify as FECA influencing activities, the wealthiest groups will be protected from the burdens of FECA regulation, even though
it is precisely these groups that have the resources to comply with the campaign
finance rules created to diminish such threats.
2. What Campaign Activity Must Be Major?
Assuming that an independent organization should not, as a matter of constitutional law, be required to register as a political committee unless its FECA-type
influencing elections activity is extensive, what type of campaign activity is
relevant to this assessment? The relevant activity will depend partly on whether
constitutional considerations of vagueness or overbreadth dictate a narrow
construction of the influencing language184 and partly on other constitutional
considerations.185
As was discussed earlier, almost every time that the Court has validated a
broad construction of the relevant electoral activities, there has been some party
to the “transaction” whose characteristic mission was the nomination or election
of one or more clearly identified federal candidates, which would not be true if
the group was independent of candidates and parties.186 However, as noted
182. This position, which was argued by the FEC in FEC v. GOPAC, Inc., 917 F. Supp. 851, 859
(D.D.C. 1996), was rejected by the District Court for the District of Columbia. Id. at 861. The decision
was never appealed. It is possible to distinguish between issue discussion and issue advocacy,
moreover. Until the McConnell decision, the Supreme Court always used the phrase “issue discussion”
rather than “issue advocacy.” In McConnell, the Court often refers to “so-called issue ads.” 540 U.S. 93,
190, 193, 194 (2003).
183. See Akins, 101 F.3d at 743–44.
184. See supra Part II.A.1.
185. See infra Part III.
186. See supra Part II.A.3.
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earlier, in MCFL the Supreme Court observed in dictum that the independent
group in question could become a political committee if its independent spending were to become “so extensive that its major purpose could be regarded as
campaign activity.”187 MCFL would thus provide the constitutional basis for
Congressional efforts to include in the definition of a political committee those
federally active 527 groups whose federal electoral activities are extensive.188
One problem with grounding further regulation of 527 groups in the MCFL
dictum, however, is that the independent spending in the case was for express
advocacy.189 It is unclear if the Supreme Court intended to limit “campaign
spending” to electoral activities of this kind and, thus, if MCFL can serve as
authority for designating an independent political advocacy group a political
committee if its electoral activities are extensive but involve little or no express
advocacy.
An important implication of the McConnell Court’s reasoning can provide a
conceptual framework for identifying the appropriate activities, apart from
express advocacy, to count in determining whether a group qualifies as a
political committee. McConnell teaches that, from the vantage point of constitutional doctrine, there are more than two points—express advocacy and issue
discussion—on the political speech axis. The Court’s reasoning suggests that
there is instead a continuum, with issue discussion and express advocacy
located at the two opposite poles. The Buckley Court did not necessarily
disagree with the idea of a continuum; rather, it directed its attention only to
these two points in order to prevent constitutionally salient line drawing problems from arising if the influencing language was taken at face value. Both
Buckley and McConnell, therefore, can be useful in identifying which activities
apart from express advocacy should be considered in assessing whether an
organization independent of candidates and parties is engaged in sufficiently
extensive campaign activity to become a political committee. At a minimum,
electioneering communications, PASO communications, and voter mobilization
187. FEC v. MCFL, 479 U.S. 238, 262 (1986).
188. In contrast, many of the proposals introduced in Congress to date would treat as a political
committee any 527 organization that is not exclusively involved with state or local candidates or issues
or with candidates for nonelective offices. See 527 Reform Act of 2006, H.R. 513, 109th Cong. § 2(b)
(2006) (proposing 2 U.S.C. 431(27)(C)); 527 Reform Act of 2005, S. 271, 109th Cong. § 2(b)
(proposing 2 U.S.C. § 431(27)(D)); Lobbying Accountability and Transparency Act, H.R. 4975, 109th
Cong. § 602(b) (2006) (same); S. 1053, 109th Cong. § 2(b) (2005) (same). An organization will not
satisfy the “exclusively” test if it spends more than $1000 during a calendar year on voter registration
or voter mobilization activities that refer to a political party other than to identify a state or local
candidate or to identify the entity conducting the activity. See H.R. 513, 109th Cong. § 2(b) (2006)
(proposing 2 U.S.C. § 431(27)(D), (F)); S. 463, 110th Cong. § 2(b) (2007) (same). The purpose of the
latter provisions is apparently to classify as a political committee a 527 group engaged in voter
registration or voter mobilization that says “Vote Democratic” or “Vote Republican,” if the group
spends more than $1000 on these activities (and a federal candidate is also on the ballot).
189. See MCFL, 479 U.S. at 249. Many 527 groups differ from MCFL in that they accept
contributions from businesses or unions, but this difference should not affect the constitutional analysis
in the text.
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activities should be considered because regulation of these in specific contexts
has been upheld against constitutional challenge.
Because the Supreme Court upheld BCRA’s electioneering communication
provisions against challenge in two contexts,190 it is tempting to assume that
they should be counted along with express advocacy in determining whether an
organization’s activities satisfy the major purpose standard.191 Electioneering
communications represent a form of political speech on the express advocacy
side of the continuum because they are typically both intended and understood
as an endorsement of the individual named as a candidate for public office.192
Thus, funding electioneering communications should be considered influencing
activity for FECA purposes and count in deciding whether a 527 group’s FECA
influencing activities are extensive. The practical consequences of thus construing the influencing language for purposes of the major purpose standard may
not, however, be very significant because many groups that sought to avoid
becoming subject to the electioneering communications disclosure or hard
money restrictions chose in the 2004 election to avoid engaging in electioneering communications altogether.
A much harder question is posed by the possibility that PASO communications,193 or even all activities subsumed under the heading of “Federal election
activities,” should be counted in determining whether a group satisfies the major
purpose standard.194 The concept of “Federal election activities” includes distinct types of campaign related activities arguably at different degrees of
remove from express advocacy and electioneering communications.195 Employing this notion of degrees of proximity to the two poles on the political speech
190. See supra notes 132–37 and accompanying text (involving both disclosure provisions and an
absolute prohibition for corporations, unions, and banks).
191. See Foley & Tobin, supra note 20, at 2404; cf. Lillian R. BeVier, McConnell v. FEC: Not
Senator Buckley’s First Amendment, 3 ELECTION L.J. 127, 136–38 (2004) (criticizing the McConnell
Court for upholding BCRA’s electioneering communications provisions on the grounds that they are
part of core political speech protected by the First Amendment).
192. See supra notes 130, 137, and accompanying text. See also Corrado, supra note 38, at 42–43
(characterizing the electioneering communications provisions as Congress’s attempt “to redefine the
concept of express advocacy”). Note that electioneering communications are defined to include only
communications using broadcast media that are made in the thirty days preceding a primary or sixty
days preceding a general election. See supra text accompanying note 132.
193. See supra note 141.
194. This is the position endorsed by Foley and Tobin. See Foley & Tobin, supra note 20, at
2404–05 (arguing that it makes sense to include “Federal election activities” because of the McConnell
Court’s statement that such activities afford candidates “substantial benefits”); cf. supra pp. 1213–14
(arguing that the McConnell Court’s holding does not imply regulation of “Federal election activities”
would be constitutional if applied to independent groups) and infra notes 197–211 (arguing that the
different activities encompassed by the term “Federal election activities” are not equally appropriate to
include). Foley and Tobin argue more generally that 527 groups (other than 527 groups focused on state
or local elections), by virtue of the terms of their qualification for exemption under section 527 of the
Code, will necessarily qualify as political committees. See Foley & Tobin, supra note 20, at 2405. See
generally Edward B. Foley, The “Major Purpose” Test: Distinguishing Between Election-Focused and
Issue-Focused Groups, 31 N. KY. L. REV. 341 (2004).
195. See supra note 141 and accompanying text.
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axis, and recalling that the Buckley Court’s ultimate goal was to avoid requiring
burdensome FECA regulation of groups “engaged purely in issue discussion,” it
is possible to analyze each of the specific types of campaign activities subsumed
under the heading of “Federal election activities” individually to determine the
risk that each poses of vagueness or overbreadth if applied to groups that have
not yet been assumed to be campaign related by definition.196
PASO communications include political advertisements using virtually any
public medium—such as print, broadcast, mail, or phone—if they promote,
support, attack, or oppose a clearly identified candidate.197 The Court in McConnell stated that PASO communications have a “dramatic effect” on federal
elections,198 which may suggest that a 527 group’s PASO communications
should be counted in determining if it is also a political committee under FECA.
As was noted earlier, however, the context in McConnell was state party
spending, directly or though an exempt intermediary,199 and the Court dismissed
the possibility of vagueness by referring to groups that are “by definition”
engaged in campaign related activities.200 In the present case, in contrast,
whether certain 527 groups are by definition campaign related is the object, not
the premise, of the inquiry.
The definition of PASO statements encompasses a considerable range of
communications that have a potential impact on a candidate’s election for public
office but may not be inherently campaign related. Grassroots lobbying and
even some issue advocacy may be seen as supporting or attacking a candidate if
they occur in proximity to an election. For example, it is unclear whether an
issue ad arguing for or against stem cell research would, or should, be considered a PASO communication if made in the months preceding an election in a
district in which the candidates have opposing views on the topic. Similarly, it is
unclear whether an advertisement urging voters to go to the polls and “vote
pro-life” would, or should, be a PASO communication if made in the months
preceding an election in which a partial birth amendment to the state constitution is on the ballot along with two federal candidates, one pro-choice and one
not.
Because of these ambiguities, it might be reasonable either to include or
exclude such statements in assessing the character of a 527 group’s primary
purpose under FECA. Other factors might be relevant in reaching a conclusion—
for example, does the group in question also engage in express advocacy or
electioneering communications, and, if so, how often; or is it affiliated in some
way with 527 groups registered with the FEC and spending hard money for
candidates for federal office or with a section 501(c)(4) group engaged in
196. Each activity should also be analyzed in connection with the constitutional doctrines discussed
infra Part III.
197. 2 U.S.C. § 431(20)(A)(iii) (Supp. II 2002); id. § 431(22); id. § 431(23).
198. McConnell v. FEC, 540 U.S. 93, 169 (2003).
199. See supra Part II.A.3.c. and note 156 and accompanying text.
200. See supra note 144 and accompanying text.
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political campaign activities on behalf of federal candidates?201 In such cases,
constitutional concerns of vagueness or overbreadth might be allayed based
upon the affiliation of the independent 527 groups with related groups that are
overtly engaged in FECA-type influencing activities. In other words, not PASO
communications alone, but the combination of the PASO communications and
affiliations with groups clearly engaged in attempting to influence the election
of federal candidates, could justify counting PASO communications in the mix
of activities that trigger classification as a political committee.
In contrast, based upon existing precedents, it is questionable whether PASO
activities alone could cause 527 groups that are independent of candidates and
parties and are also unaffiliated with entities engaged in FECA influencing
activities to be classified as political committees without failing the vagueness
and overbreadth tests.202 In particular, the fact that the PASO rubric seems to
comprehend some activities that clearly count as FECA influencing, some that
clearly would not count as FECA influencing,203 and some that might or might
not count as FECA influencing depending upon the surrounding circumstances
represents exactly the type of ambiguity that the Buckley Court sought to
contain when it circumscribed the scope of FECA’s influencing provisions.204
Although the McConnell Court asserted that the PASO standard was not ambiguous, it did so in connection with national, state, or local political party committees spending funds on or raising funds for other groups to spend for PASO
communications. Thus, it is far from clear that the identification of PASO
communications would also be unambiguous in the context of groups independent of parties and candidates. By the same token, the potential for uncertainty
and overbreadth in making PASO communications a trigger for FECA regulation of independent groups would be correspondingly increased.
Voter registration and voter mobilization are also components of “Federal
election activities.” In general, such voter activities can be conducted in a
201. See Stephen R. Weissman & Kara D. Ryan, Non-Profit Interest Groups’ Election Activities and
Federal Campaign Finance Policy 3–6, 31–32 (July 2006) (unpublished manuscript, Campaign Fin.
Inst.), available at http://www.cfinst.org/books_reports/pdf/NonprofitsWorkingPaper.pdf (arguing, based
upon an empirical analysis of twelve large nonprofit interest groups, that most engage in election
activities through a network of “commonly-managed entities” and that campaign finance regulation
should take into account those networks rather than evaluate individual groups in isolation).
202. This conclusion refers to the groups’ PASO activities that are not also express advocacy or
electioneering communications. If the reasonable person/unmistakable advocacy test of the FEC, supra
notes 105–14 and accompanying text, are upheld by the Supreme Court, fact patterns may arise that
present difficult line drawing questions in distinguishing between PASO communications and messages
that are express advocacy under the reasonable person/unmistakable advocacy test.
203. I would classify the pure stem cell issue discussion advertisement as clearly outside FECA
influencing based upon Buckley v. Valeo, 424 U.S. 1, 57 (1976) (“In the free society ordained by our
Constitution, it is not the government, but the people individually as citizens and candidates and
collectively as associates and political committees who must retain control over the quantity and range
of debate on public issues in a political campaign.”). For the Internal Revenue Service’s effort to create
a multidimensional approach to classifying issue advocacy occurring in proximity to an election as
campaign related or note, see Rev. Rul. 2004-6, 2004-1 C.B. 328.
204. See supra note 88 and accompanying text.
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nonpartisan fashion, in conjunction with a message referencing one or more
specific federal candidates, or with a message that mentions a specific political
party but not any specific candidates (“generic campaign activity”).205 Such
voter activities are included in the definition of “Federal election activities”
unless they are nonpartisan or are voter registration conducted more than 120
days before a federal election.206 Since 2002, FECA has required state and local
parties to fund the included activities with hard money or another type of
regulated money and has prohibited political party committees from raising
funds for organizations described in section 501(c) of the Code if the organizations fund activities in connection with a federal election, including “Federal
election activities.”207
Proposals introduced in the last few years to classify most 527 groups as
political committees typically have used all voter registration and mobilization
activities as triggers for political committee status other than nonpartisan efforts
and efforts that focus exclusively on state and local candidates and issues.208 In
these proposals, voter registration and voter mobilization unaccompanied by
express advocacy, electioneering communications, or PASO messages would
nonetheless trigger political committee status if the 527 group spends more than
$1000 on such efforts. For example, voter activities that include a generic
campaign message and do not mention any federal candidates would trigger
political committee classification if one or more federal candidates are on the
ballot in addition to one or more state or local candidates or issues.209 As a
consequence, under existing precedents,210 these proposals raise overbreadth
concerns similar to, and even stronger than, those raised by counting PASO
communications in determining the political committee status of 527 groups
that are independent of federal candidates and national parties.211
In short, based upon the analysis in Part II.A of the contexts in which the
relevant electoral speech is narrowly or broadly construed, 527 reform proposals that predicate comprehensive FECA regulation on minimal involvement in
federal elections or involvement in campaign related activities not clearly
conforming to the influencing standards of FECA would go beyond existing
Supreme Court precedents. As a result, to uphold such regulations would
205. See 2 U.S.C. § 431(21) (Supp. 2002).
206. 2 U.S.C. § 431(20)(A)(i)–(ii).
207. See 2 U.S.C. § 441i(d)(1) (2000).
208. See 527 Reform Act of 2005, H.R. 513, 109th Cong. (2005); 527 Reform Act of 2005, S.1053,
109th Cong. (2006); Lobbying Accountability and Transparency Act of 2006, H.R. 4975, 109th Cong.
(2006); 527 Reform Act, S. 483, 110th Cong. (2007).
209. Id.
210. Although McConnell upheld a hard money requirement for the costs of voter mobilization, this
applied only to state and local parties. See McConnell v. FEC, 540 U.S. 93, 162–73 (2003).
211. In guidance published in 2006, the FEC raised similar concerns when it defended its regulations
defining voter registration and voter mobilization to exclude mere encouragement to register to vote, as
contrasted with some type of individualized assistance. See Notice 2006-2, supra note 60. For the
application of the corruption justification to this issue, see infra notes 229–32 and accompanying text.
2007] CONSTITUTIONAL PARADIGMS AND CAMPAIGN FINANCE REGULATION
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require especially strong constitutional justifications.
III. WHAT IS A POLITICAL COMMITTEE? CONSTITUTIONAL JUSTIFICATIONS
The range of campaign activities subject to regulation is a central consideration when those affected by the regulation bring a constitutional challenge, but
several additional considerations are pivotal in the Supreme Court’s analysis of
the limits on regulation of political speech. First, the state interest advanced is
the critical component of the Court’s analysis: certain interests, such as eliminating corruption or the appearance of corruption, are presumptively valid, whereas
others, such as equalizing the playing field among campaign speakers or
reducing the need for candidates to devote extraordinary amounts of time to
fundraising, are presumptively unconstitutional.212 In addition, constitutional
doctrine privileges some types of campaign speech over others. In particular,
campaign expenditures are generally accorded greater First Amendment protection than campaign contributions.213 Constitutional doctrine also privileges
some speakers over others, according more deference to individuals (other than
candidates) and noncorporate entities than to corporations and labor organizations.214 Further, as would be expected, the type of regulation involved—
reporting and disclosure requirements as compared with limitations of the
amount or source of contributions—also affects the degree of protection afforded campaign speech. Finally, the type and amount of empirical evidence
necessary to support the state’s claims vary in accordance with some of the
preceding considerations.215
A. CORRUPTION AND CANDIDATE BENEFIT
Preventing corruption or the appearance of corruption of candidates by big
spenders seeking to influence their conduct once elected has been seen as an
important government interest since the beginning of the twentieth century.216
In addition, since Buckley, the Supreme Court has consistently maintained that
the need to prevent corruption or the appearance of corruption is the only
government interest that justifies regulation of campaign speech. Such public
purposes as equalizing the ability of individuals or groups with disparate
resources to make their viewpoints known, reducing the exorbitant costs of
campaigns, and enabling candidates without substantial resources to compete
are not, according to the Court, legitimate reasons for regulating speech under
the Constitution, regardless of their desirability from a public policy perspec212. See infra Part III.A.
213. See infra Part III.B.
214. See infra Part III.C.
215. Nixon v. Shrink Mo. Gov’t PAC, 528 U.S. 377, 390–93 (2000).
216. See McConnell v. FEC, 540 U.S. 93, 115–16 (2003); see also Nathaniel Persily & Kelli
Lammie, Perceptions of Corruption and Campaign Finance: When Public Opinion Determines Constitutional Law, 153 U. PA. L. REV. 119 (2004) (challenging the empirical basis of the constitutional
doctrine relating to the appearance of corruption).
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tive.217
The Court’s understanding of the meaning of corruption has, however, evolved
during the three decades since Buckley. Buckley was primarily concerned, not
only with contributions used to bribe public officials, but also with the dangers
posed by large contributions to or on behalf of a candidate because these would
be hidden from public view and were likely to create a sense of obligation on
the part of the candidate toward the contributor.218 “Improper” or “undue”
influence is corrupting because of the possibility, if not the likelihood, that a
contributor’s goals will cloud the official’s judgment or determine an official’s
actions.219 In decisions since Buckley, the Court has expanded its formulation of
the threat posed by large contributions, as well as by coordinated expenditures
and bundled contributions, to include corruption or the appearance of corruption
through the “potential [to] influence”220 and thus the mere granting of access to
lawmakers in exchange for large contributions, regardless of whether there is
any evidence or likelihood that such access will influence a lawmaker’s decisionmaking or votes.221 Access and the possibility of access are thus seen as on a
par with the more traditional notion of corruption as involving some manner of
quid pro quo or influencing officials by creating a sense of obligation.
In addition, the Supreme Court has developed the doctrine of corruption in
connection with corporations in a way that adds to its traditional concerns. In
the last two decades the Court has advanced the belief that corporate officers
spending treasury money do not necessarily represent “public support for the
political ideas espoused by [them].”222 This notion of corruption through distor-
217. See Randall v. Sorrell, 126 S.Ct. 2479 (2006); Buckley v. Valeo, 424 U.S. 1, 25–26 (1976)
(asserting that it was “unnecessary” to consider the impact of contribution limits on equalizing “the
relative ability of citizens to affect the outcome of elections” or to reduce the cost of campaigns since
eliminating corruption or the appearance of corruption was the government’s primary reason for the
legislation at issue).
218. See Buckley, 424 U.S. at 27–28, 45; see also McConnell, 540 U.S. at 144–45. Former FEC
Commissioner Bradley Smith has argued that the Buckley Court never explained its decision to identify
corruption with the exchange of “political” favors (as contrasted with an official’s use of his office for
personal gain), that the exchange of support for political favors is not always considered “corrupt,” and
that the Supreme Court has never enunciated a coherent theory as to when such exchanges should be
viewed as corrupt. Bradley A. Smith, Campaign Finance Reform: Searching for Corruption in All the
Wrong Places, CATO SUP. CT. REV., 2002–2003, at 187, 196–200, 216.
219. See FEC v. Colo. Republican Fed. Campaign Comm., 533 U.S. 431, 440–41 (2001) (Colorado
II).
220. FEC v. Nat’l Right to Work Comm., 459 U.S. 197, 210 (1982).
221. See McConnell, 540 U.S. at 124–25 & n.13, 148 (stating that “the largest corporate donors
often made substantial contributions to both parties,” suggesting that they were often “motivated by a
desire for access to candidates,” and quoting testimony to that effect); id. at 125, 129, 145–53 (noting
evidence that candidates and elected officials sometimes solicited contributions in return for access);
see also id. at 154 (noting that regulation is not justified merely to prevent access or influence, but only
to prevent access and influence from being bought or sold).
222. See Austin v. Mich. State Chamber of Commerce, 494 U.S. 652, 660 (1990); see also FEC v.
Beaumont, 539 U.S. 146, 159 n.5 (2003) (noting that the members or shareholders do not necessarily
approve the political choices funded by the corporation); FEC v. MCFL, 479 U.S. 238, 258 (1986)
(“[T]he power of the corporation may be no reflection of the power of its ideas.”).
2007] CONSTITUTIONAL PARADIGMS AND CAMPAIGN FINANCE REGULATION
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tion of the marketplace of political ideas appears to diverge significantly from
the traditional notion of creating a sense of indebtedness on the part of a
lawmaker and a sense of entitlement on the part of the contributor.223 Yet the
Court links this theme to the threat of corruption by casting the potential effect
of corporate political expenditures in terms of creating “unfair advantage,”
allowing influence “corrosive” to the integrity of the political process, and
giving a false impression of the extent of popular support for a company’s
political ideas.224
Finally, in recent decisions the Court has begun to treat activities that have
the potential to confer “substantial benefit” directly on political parties or
federal candidates generally, as contrasted with specific candidates running for
office, as signaling the possibility of corruption or the appearance of corruption.225 For example, in upholding BCRA provisions regulating the type of
funds that can be used by state parties for voter mobilization when a federal
candidate is on the ballot, the McConnell Court noted that the record in the case
showed that “federal officeholders are grateful to state and local parties” that are
223. In discussing this development, Richard Hasen dubbed the Court’s reasoning the “barometer
equality” argument. See RICHARD L. HASEN, THE SUPREME COURT AND ELECTION LAW: JUDGING EQUALITY
FROM BAKER V. CARR TO BUSH V. GORE 110 (2003); see also Memorandum from Daniel R. Ortiz,
Constitutionality of Limits on Contributions from Individuals to 527 Organizations That Make Only
Independent Expenditures (Mar. 7, 2005), reprinted in DANIEL H. LOWENSTEIN & RICHARD L. HASEN,
ELECTION LAW: CASES AND MATERIALS 52 (3d ed. Supp. 2006) (providing examples of changes in the
Court’s jurisprudence relating to corruption that reveals its concern about the influence of money and
the integrity of the political process); BeVier, supra note 191, at 130–36; Thomas F. Burke, The
Concept of Corruption in Campaign Finance Law, 14 CONST. COMMENT. 127, 130–38 (1997); 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, 41–46 (2004); Dennis F. Thompson, Two
Concepts of Corruption: Making Campaigns Safe for Democracy, 73 GEO. WASH. L. REV. 1036, 1037,
1046–47, 1068 (2005); Samuel M. Taylor, Note, Austin v. Michigan Chamber of Commerce: Addressing a “New Corruption” in Campaign Financing, 69 N.C. L. REV. 1060 (1991). Justice Scalia has
argued that the Court’s campaign finance decisions involving the regulation of corporations often
amount to a constitutionally illegitimate attempt to equalize the impact of speech of participants in
political debate. See Austin, 494 U.S. at 692–95 (Scalia, J., dissenting); see also BeVier, supra note 191,
at 136–37; Prescott M. Lassman, Note, Breaching the Fortress Walls: Corporate Political Speech and
Austin v. Michigan State Chamber of Commerce, 78 VA. L. REV. 759, 760–61, 781–82 (1992). Several
commentators have recommended that the Supreme Court rethink its refusal to recognize equality
concerns as providing constitutional justification for campaign finance regulation in addition to the
corruption rationale. See Richard Briffault, The 527 Problem . . . and the Buckley Problem, 73 GEO.
WASH. L. REV. 949, 954–55, 995–99 (2005); Yoav Dotan, Campaign Finance Reform and the Social
Inequality Paradox, 37 U. MICH. J. L. REFORM 955 (2004); Victoria S. Shabo, “Money Like Water . . .”:
Revisiting Equality in Campaign Finance Regulation after the 2004 “Summer of 527s,” 84 N.C. L.
REV. 221, 257–64, 274–81 (2005); see also Frances R. Hill, Putting Voters First: An Essay on the
Jurisprudence of Citizen Sovereignty in Federal Election Law, 60 U. MIAMI L. REV. 155, 168–71 (2006)
(arguing that Buckley’s equation of money and speech effectively put the interests of candidates,
parties, and contributors ahead of those of voters and reduced voters to passive consumers of political
speech).
224. See Austin, 494 U.S. at 658–59; MCFL, 479 U.S. at 257–60; see also MCFL, 479 U.S. at 259
(stating that the purpose of section 441b is “to ensure that competition among actors in the political
arena is truly competition among ideas”). Justice Scalia joined this part (III.B) of the opinion.
225. See McConnell, 540 U.S. at 167–68.
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used to mobilize voters during an election.226
This development is problematic for several reasons. First, the Court’s generalized substantial benefit approach appears to go well beyond the association of
corruption with the idea of reciprocity embodied in the notion of quid pro quo
and access to candidates. Candidates for federal office will benefit from and feel
gratitude for many things that are not properly regulated by FECA contribution
limits, such as pure issue discussion in elections where specific issues clearly
distinguish opposing candidates227 or express advocacy funded directly by
individuals not acting in coordination with candidates and political parties.228
The generalized substantial benefit approach to corruption also appears to
minimize the difference between benefits accruing in an undifferentiated way to
groups of persons, only some of whom are federal candidates, and benefits
targeted to clearly identified candidates in federal races.229 This issue arises in
connection with generic voter mobilization, for example, mobilization that
promotes a specific political party but not specific candidates.230 For example,
in many states, even battle ground states, there may be enough elections for the
House of Representatives that no single federal candidate of a given party will
necessarily feel so beholden to those who mobilize voters statewide on behalf of
that party as to raise the prospect of corruption or the appearance of corruption.
If, however, the generic voter drive activities were targeted to one or more
contested districts within a state, the risk of corruption could be realistic. In that
event, the reason would be that the benefits of the mobilization were not diffuse,
rather than the possibility of corruption arising from a generalized benefit.
Similarly, if a voter mobilization effort mentioned a political party rather than
specific candidates in its message, it might nonetheless give rise to the possibility of corruption if the effort utilized lists of voters previously identified as
likely to vote for a specific candidate. Here, too, the threat of corruption would
be realistic to the extent that the design and likely impact of the organization’s
efforts would be candidate focused rather than diffuse. Advertising that attacks
one of the political parties without naming any candidates of either party may
produce a generalized benefit for the party not attacked, but the resulting benefit
226. Id. at 168 (asserting, based upon common sense and the absence in the record of testimony to
the contrary, that generic voter mobilization by one political party can have a direct and/or significant
effect on federal elections).
227. The IRS has acknowledged the potential electoral impact of pure issue discussion in particular
races in which signature issues distinguish the candidates by identifying such discussion as a factor
suggesting the presence of electoral activity rather than grassroots lobbying. See Rev. Rul. 2004-6,
2004-1 C.B. 328.
228. Richard Briffault argues that the McConnell Court limited the “benefit doctrine” by confining it
to situations involving close relationships with candidates or officeholders. See Briffault, supra note
223, at 988; see also id. at 994 (asserting that “McConnell rejected a benefit-to-the-candidate test as
sufficient to trigger regulation of independent activity”).
229. Whether the influencing standard should be understood as triggered by the broader or more
narrow interpretation is contested and one of the issues determining the status of 527 groups. See Potter,
supra note 44, at 51, 77–78.
230. See 2 U.S.C. § 431(21) (Supp. 2002); supra notes 209–11 and accompanying text.
2007] CONSTITUTIONAL PARADIGMS AND CAMPAIGN FINANCE REGULATION
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to any specific candidate would seem too attenuated to foster the degree of
gratitude associated with corruption. Also weakening the corruption argument
when a political party engages in statewide voter mobilization, even if the
mobilization is overtly party specific and there is a federal candidate of that
party on the ballot, are studies that show that voters mobilized by one party may
also vote for some candidates (state or federal) of another party because
traditionally voters have split their votes between parties roughly twenty-five
percent of the time.231 In short, to the extent that a generalized substantial
benefit gives rise to a generalized sense of gratitude on the part of candidates, it
is questionable whether the state interest in combating both actual and apparent
corruption in federal elections is strong enough to justify subjecting the groups
thus engaged to comprehensive FECA regulation as a political committee.232
Several recent reform proposals seek to classify as a political committee a
527 group that spends more than $1000 on generic voter registration or voter
mobilization activities, i.e., those that endorse a specific political party but not a
specific candidate for federal office, as long as there is a federal candidate on
the ballot and the communication can be seen as “reflect[ing] support for or
opposition to a federal candidate or candidates.”233 The meaning of the quoted
language is unclear, given that no federal candidate would be mentioned, but the
purpose appears to be to prevent 527 groups from funding with soft money
voter registration or voter mobilization if they include a message such as “Vote
Republican” or “Vote Democratic,” as long as there is a federal candidate on the
ballot along with state or local candidates or issues. Although the purpose of
funding generic voter registration and mobilization might well be to assist any
or all of the federal candidates on the ballot, as long as the entities funding and
engaged in such activities are independent of candidates and their campaigns,
the threat of corruption or its appearance would appear to be too attenuated. The
McConnell Court’s generalized substantial benefit language might be seen as
justifying the reform proposals in question, but only if the groups in question
231. See Richard Born, Congressional Incumbency and the Rise of Split-Ticket Voting, 25 LEGIS.
STUD. Q. 365, 366 (2000) (finding that in 1972 divided ballots increased from 17% to 26% and never
decreased to their prior levels); see also Paul Allen Beck et al., Pattern and Sources of Ticket Splitting
in Subpresidential Voting, 86 AM. POL. SCI. REV. 916, 916–17 (1992) (finding split ticket voting has
stayed at a level of 25% to 28% since 1972); Richard Forgette & Glenn J. Platt, Voting for the Person,
Not the Party: Party Defection, Issue Voting, and Process Sophistication, 80 SOC. SCI. Q. 409, 409
(1999) (finding that ticket splitting more than doubled from 1952 to 1972). But see David C. Kimball, A
Decline in Ticket Splitting and the Increasing Salience of Party Labels, in MODELS OF VOTING IN
PRESIDENTIAL ELECTIONS: THE 2000 ELECTIONS 161 (Herbert F. Weisberg & Clyde Wilcox eds., 2003)
(finding that the frequency of President-House ticket splitting in 2000 was 18%).
232. Also militating against subjecting most 527 groups active in federal elections to comprehensive
FECA regulation under one version of the corruption justification is the fact that they are advocacy
organizations. Thus, the risk that their activities will distort the views of their supporters is negligible.
See FEC v. MCFL, 479 U.S. 258, 259 (1986) (linking the risk of distortion of stakeholders’ views with
the threat of corruption).
233. 527 Reform Act of 2007, S. 463, 110th Cong. § 2(b) (2007) (proposing 2 U.S.C.
§§ 431(27)(D)(ii)(II), (F)(iii)), 431 (28); 527 Reform Act of 2006, H.R. 513, 109th Cong. § 2(b) (2006)
(same).
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also satisfied the major purpose test. The reform proposals, however, would
require a 527 organization to register as a political committee if it spends more
than $1000 on such generic activities, without more. However questionable it
might be to extend the corruption doctrine to situations involving an undifferentiated benefit to numerous candidates for public office when participants independent of the candidates and parties are funding generic voter activities, it is
inconceivable that using relatively modest or de minimis activities as triggers
for political committee status would survive a constitutional challenge.
The strongest corruption justification for increasing 527 group regulation is
the Supreme Court’s repeated acknowledgments that the power to regulate to
avoid corruption or its appearance includes the power to regulate to prevent
circumvention of the rules designed to prevent corruption or its appearance. In
Beaumont234 and McConnell235 the Court relied on the circumvention justification to afford Congress an unprecedented amount of latitude to implement
measures designed to curb, if not eliminate, the worst excesses of the soft
money system and the deluge of sham issue ads paid for with soft money and
aired in the final months of a campaign.
Before this rationale can be successfully applied to the controversial 527
groups, however, the Court should require comparable empirical evidence
tending to show that the soft money streaming into 527 groups during the 2004
election cycle was likely to be linked to the possibility of corruption, for
example, that 527 groups have served as intermediaries for buying or selling
access to public officials.236 There is anecdotal evidence suggesting that in the
2004 election cycle, the impetus for some very large contributions was predominantly ideological (as may have been the case with many donors to Swift Boat
Veterans for Truth and MoveOn.org), rather than influence-peddling and rentseeking.237 In addition, and perhaps relatedly, the significance of the fact that
234. See FEC v. Beaumont, 539 U.S. 146, 155 (2003) (upholding FECA regulations applied to a
nonprofit advocacy group that was incorporated and received only a small amount of funds from
business groups). The Court noted that “recent cases have recognized that restricting contributions by
various organizations hedges against their use as conduits for ‘circumvention of [valid] contribution
limits.’” Id. (citing FEC v. Colo. Republican Fed. Campaign Comm., 533 U.S. 431, 456 n.18 (2001)).
In the context of limiting coordinated expenditures by political parties, the Court observed that
“experience ‘demonstrates how candidates, donors, and parties test the limits of the current law, and it
shows beyond serious doubt how contribution limits would be eroded if inducement to circumvent
them were enhanced.’” Id.
235. McConnell v. FEC, 540 U.S. 93, 165–66 (2003).
236. See Jeffrey P. Geiger, Note, Preparing for 2006: A Constitutional Argument for Closing the 527
Soft Money Loophole, 47 WM. & MARY L. REV. 309, 336–40 (2005) (arguing that 527 groups operated
as “virtual political parties” and were used to circumvent hard money limits); cf. Briffault, supra note
223, at 965–69 (arguing that nonregistering 527 groups were “allies, not agents or arms,” of the
political parties).
237. See Briffault, supra note 223, at 965; Smith, supra note 218, at 197; cf. Foley, supra note 193,
at 345. The statement in the text does not assume that ideological groups do not want to win elections.
They do. Nor does it assume that contributors with ideological motives pose no risk of corruption, but
only that there have been well publicized examples of high wealth donors who give to get their
candidate elected without any expectation of creating a debt on the part of the candidate.
2007] CONSTITUTIONAL PARADIGMS AND CAMPAIGN FINANCE REGULATION
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very few businesses contributed to 527 groups in 2004238 needs to be explored
since the potential for corruption may be different or amenable to different
preventive strategies in the case of individuals than it is for corporations,
unions, or other business entities.
Finally, there is some question whether 527 groups will ever be able to
exercise the type of power over candidates and officeholders that national
parties and their committees exert given the ways in which the parties influence
nominations, transfers of funds, and platforms.239
The corruption justification is thus weaker as applied to independent federally
active 527 groups that receive money exclusively from individuals, including
high wealth individuals, but not from corporations or unions. If in addition such
groups limit their activities to party-specific voter mobilization activities, without endorsing specific federal candidates, and their operations are sufficiently
widespread to diffuse the benefit to numerous candidates for public office, it is
questionable whether the government would have a compelling interest strong
enough to balance the curtailment of the type of political speech at issue.
B. CONTRIBUTIONS VERSUS EXPENDITURES
The Court has the fewest concerns about the constitutionality of regulating
campaign speech when the speech in question takes the form of contributions to
candidates or political committees, rather than expenditures. Expenditures represent expressive speech, according to the Court, because of the significant
financial cost of “virtually every means of communicating ideas in today’s mass
society.”240 To restrict expenditures for campaign speech would necessarily
limit “the number of issues discussed, the depth of their exploration, and the
size of the audience reached.”241
In contrast, the Court has concluded that contributions are a “symbolic
expression of support,” partly because they fail to convey the basis of the
support and partly because the size of the contribution does not necessarily
reflect the intensity of the contributor’s support.242 Further, the speech act
associated with contributions is “symbolic” because it is confined to the act of
transferring resources to someone else, and it is the other person who actually
engages in political speech.243 Finally, people whose symbolic speech is constrained by contribution caps are still free to engage in political expression
above and beyond the caps by spending unlimited amounts on independent
238. See Weissman & Hassan, supra note 4, at 90–91.
239. See Briffault, supra note 223, at 987–88.
240. Buckley v. Valeo, 424 U.S. 1, 19 (1976).
241. Id.
242. See id. at 21 (noting that a person’s financial circumstances and “past contribution history” may
also explain how much is contributed, the Court concludes that “the size of the contribution provides a
very rough index of the intensity of the contributor’s support”); cf. FEC v. MCFL, 479 U.S. 238, 258
(stating that “relative availability of funds is after all a rough barometer of popular support”).
243. See Buckley, 424 U.S. at 21.
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expenditures or by becoming “a member of any political association and . . . assist[ing] personally in the association’s efforts on behalf of candidates.”244
Thus, FECA’s contribution limits constitute only a “marginal restriction” upon a
person’s freedom of speech during a campaign.245 One of the most important
consequences of the contribution/expenditure distinction is that the Court’s
review of restrictions on contributions is significantly less strict than its review
of restrictions on expenditures, and this enhances the likelihood that a restriction on contributions will survive constitutional scrutiny.246
Nevertheless Buckley circumscribed the power of the contribution/expenditure distinction by making clear that contribution limits could be unconstitutional if they were so low as to prevent campaigns from being adequately
financed or individuals from exercising their right of association in a meaningful way, that is, from “effectively amplifying” their voices by joining forces
with like-minded people.247 The Court found that this was not the case with
FECA’s contribution limits because the “overall effect . . . is merely to require
candidates and political committees to raise funds from a greater number of
persons and to compel people who would otherwise contribute amounts greater
than the statutory limits to expend such funds on direct political expression.”248
These teachings of the Buckley decision do not bear directly on whether the
definition of a political committee should be broadly or narrowly construed,249
since the terms “contribution” and “expenditure” were not discussed by the
Court with reference to this definition. The logic of the Court’s reasoning,
however, is useful for assessing the claim some have advanced,250 that only
express advocacy, from among the possible types of electoral activity, should be
counted to determine whether an organization has surpassed either the statutory
or the judicially created components of the political committee definition.
As was noted earlier, once an organization registers as a political committee,
it cannot receive more than $5000 from any individual for its hard money
account, nor will it be able to accept contributions from the general treasury
244. See id. at 22, 28.
245. See id. at 20–21; cf. Smith, supra note 218, at 196 (asserting that contribution limits “almost
certainly do limit the total amount of speech”).
246. See Calif. Med. Ass’n v. FEC, 453 U.S. 182, 196 (1981) (plurality opinion) (characterizing
contributions as “not the sort of political advocacy that this Court in Buckley found entitled to full First
Amendment protection” and calling the amount of protection “light”); see also FEC v. Beaumont, 539
U.S. 146, 161 (2003) (stating that the level of review for contributions is “relatively complaisant”);
McConnell v. FEC, 540 U.S. 93, 134–35, 137–39 (2003) (stating no strong presumption against
constitutionality exists in the context of contribution limits because they “tangibly benefit public
participation in public debate”).
247. Buckley, 424 U.S. at 21–22; see Randall v. Sorrell, 126 S. Ct. 2479, 2499 (2006) (concluding
that Vermont’s contribution limits were so low that they violated citizens’ First Amendment rights).
248. Buckley, 424 U.S. at 22.
249. By “broadly construed,” I mean that the influencing standard built into the definition refers to a
wide range of campaign speech other than express advocacy. “Narrowly construing” the definition
would limit its triggering mechanism primarily or exclusively to express advocacy.
250. See supra note 82.
2007] CONSTITUTIONAL PARADIGMS AND CAMPAIGN FINANCE REGULATION
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funds of corporations or labor organizations.251 One argument for limiting the
type of electoral activity that triggers political committee status to express
advocacy is that these fundraising rules greatly obstruct an entity’s ability to
“speak” through the expenditure of money,252 and they similarly reduce the
power of contributors to such groups to magnify their voices and engage in
effective collective action. It follows, according to this view, that tying political
committee status to a broad definition of influencing elections could be constitutionally suspect because of the intrusive nature of the consequences for protected political speech. In addition, because it will be harder to raise funds if
their fundraising is subject to FECA source and amount restrictions, 527
groups’ ability to exercise their own First Amendment right to speak will be
compromised. In short, according to opponents of broadly construing the definition of a political committee, a Buckley analysis should consider 527 groups
independent of candidates and parties as analogous to individuals making
independent disbursements. The Buckley Court invalidated FECA provisions
that placed dollar limits on independent expenditures of individuals; similarly,
the independent spending of 527 groups should not be limited in amount
because of a broad construction of the political committee definition.253
Other aspects of the logic of Buckley, however, favor a broad construction of
the definition of a political committee. In Buckley, the analysis of the rights of
contributors emphasized the symbolic nature of the speech component of
contributions. Although the Court clearly did not contemplate contemporary
multimillion dollar contributions when it said that the size of a contribution was
only a modest reflection of a donor’s expressive speech, it did note that
individuals prevented by contribution limits from further giving to a candidate
were free to engage in independent political expression.254 Since this alternative
would be available if the controversial 527 groups were political committees, it
is unlikely that the Court today would find an unconstitutional interference with
contributors’ rights in reforms that would have as their indirect effect precluding
contributions of greater than $5000 to 527 groups.255
The possible infringement on the right of contributors to associate to amplify
their views resulting from a broad construction of the definition of political
committee is also unlikely to invalidate proposed reforms. First, the groups
251. See supra notes 10 and 12.
252. For the doctrine that money is speech, see Buckley, 424 U.S. at 79.
253. Colorado Republican Fed. Campaign Comm. v. FEC, 518 U.S. 604 (1996) (Colorado I), which
invalidated independent expenditure limits on political parties, is not support for the general proposition
in the text because the measure under review in Colorado I imposed a dollar cap on the amount
political parties could spend independently of a candidate, whereas the impact, if any, on the amount of
funds available to a 527 group for independent expenditures if it becomes a political committee would
be an indirect result of being forced to rely on contributions subject to dollar limits.
254. See Buckley, 424 U.S. at 22, 28.
255. Section 527 organizations that are registered with the FEC are permitted to establish soft
money accounts as well as to have a connected unregistered 527 organization. See 11 C.F.R. § 102.5(a)
(2000); Notice 2007-3, supra note 17, at 5602 n.13.
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would retain the ability to raise aggregate sums of any size by increasing the
number of contributors. Moreover, many contributions to 527 groups during the
2004 election cycle were so large that these donors were the people least in
need of joining a group to have their voices heard.256 The reform proposals that
permit 527 groups required to register as political committees to accept up to
$25,000 from any individual each year for their nonfederal (soft money)
accounts257 in addition to $5000 in hard money would further facilitate the free
speech and associational rights of the contributors and the ability of the entity to
raise sufficient funds to be adequately financed. Finally, when the Supreme
Court upheld a $5000 limit on contributions to political committees, it observed
that contributors to groups do not have a constitutionally recognizable complaint when they exercise their free speech rights through an intermediary.
According to the Court, speaking through an intermediary changes not only the
dynamic of the contributor’s speech, but also the nature of its constitutional
protection.258
In sum, if the 527 groups are required to register with the FEC, neither the
claims of the groups nor those of their contributors based upon contribution
limits is likely to constitute a constitutionally sufficient reason for invalidating
proposals to broaden the definition of a political committee to encompass such
groups. While agreeing with this conclusion, Richard Briffault has nonetheless
questioned the constitutionality of contribution caps for donations made by
individuals to 527 groups that are independent of candidates and political
parties and that do not make contributions to nor coordinate with them.259
Judicial decisions that appear to validate caps on contributions to political
committees always involved entities that were engaged in campaign activities in
addition to independent spending.260 The correct analogy, he argues, is independent individuals making uncoordinated expenditures and not contributing to
candidates, parties, or their committees or agents. The Buckley Court found any
limits on independent expenditures by such individuals would be unconstitutional because there was not a sufficient risk of corruption to justify limiting
such core political speech. Similarly, Briffault argues, such individuals should
be able to pool their resources as long as they are not serving as conduits for
candidates and parties.261
256. See supra note 11 and accompanying text.
257. See 527 Reform Act of 2005, S. 1053, 109th Cong. § 3(a) (2005) (proposing section
325(c)(2)(A)); 527 Reform At of 2006, S. 2511, 109th Cong. § 3(a) (2006) (same); 527 Reform Act of
2007, S. 463 110th Cong. § 3(a) (2007) (same). Without this provision, however, contributions by
individuals to the group’s soft money accounts would presumably be unlimited.
258. See Calif. Med. Ass’n v. FEC, 453 U.S. 182, 196–97 (1981).
259. See Briffault, supra note 223, at 981–90.
260. Id. at 983–86.
261. See id. at 981–82, 984, 992–93. For Briffault’s suggestions for possible ways to cap “megadonations,” see id. at 995–99 (recommending a reconsideration of the Court’s hostility to equality-based
theories for limiting campaign spending).
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C. THE NATURE OF THE SPEAKER
The Supreme Court has long upheld restrictions on campaign expenditures by
unions and corporations using general treasury funds because of the strong state
interest in preventing corruption and the appearance of corruption in connection
with entities capable of amassing large amounts of money.262 Not all federally
active 527 groups raise huge sums of money, of course, and those that do not as
well as those that raise all their money from small contributors would also be
affected adversely by a broad construction of the definition of a political
committee.263 In the past, however, despite acknowledging the disproportionate
impact of certain campaign finance regulations on corporations or labor groups
possessing only modest resources, the Court has validated the restrictions in
question if Congress’s actions were otherwise constitutionally permissible.264
In upholding restrictions on independent campaign spending, the Court has
also emphasized that, as part of its evaluation of the constitutional validity of
campaign finance regulations, it will consider whether the persons regulated
acquired their capacity to amass large amounts of wealth through “special
advantages” made possible by the state.265 Most of these cases involve organizations that are helped in accumulating large sums of money by their corporate
form, which is conferred on them by the business law statute of the state in
which they are organized.
Not all 527 groups benefit from the corporate form. In fact, many eschew the
corporate form so as to avoid the special campaign finance restrictions on
corporations. The Court’s “special advantages” argument in the corporation
cases is, however, germane to assessing the constitutionality of a political
committee definition likely to sweep large numbers of 527 groups into the
comprehensive FECA regulatory regime. Groups exempt under section 527 of
the Code potentially share two of the three attributes of corporations that justify
the especially restrictive campaign finance legal environment accorded to them.
They have the capacity to amass especially large amounts of wealth and,
importantly, to a significant extent this advantage is the result of a government
benefit, namely, the special tax treatment afforded them. Although it is unclear
262. For the special restrictions on corporations and labor organizations, see supra note 12 and
accompanying text. For the discussion of corruption, see discussion supra Part III.A.
263. Current proposals under consideration by Congress create an exception from the new regime
for 527 groups with gross revenues of less than $25,000.
264. See FEC v. Beaumont, 539 U.S. 146, 157 (2003) (noting that the Court has repeatedly upheld
the prohibition preventing corporations from spending funds from their general treasuries on campaign
activities regardless of “the affluence of particular corporations” and even as applied to “nonprofit
corporations ‘without great financial resources’”); Nat’l Right to Work Comm. v. FEC, 459 U.S. 197,
210 (1982); cf. FEC v. MCFL, 479 U.S. 238, 241 (1986) (invalidating the section 441b prohibition as
applied to a section 501(c)(4) advocacy organization). In reaching its conclusion in MCFL, the Court
noted three features of the organization that distinguished it from corporations properly subject to this
restriction: the corporation engaged in no commercial activities; it accepted no contributions from
business entities; and because all of its money came from individuals, it had not accumulated a “large
war chest” and was unlikely to do so. 479 U.S. at 263–64.
265. See id. at 257; Nat’l Right to Work Comm., 459 U.S. at 207.
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how great an income tax advantage 527 groups receive from their exempt
status,266 they benefit greatly because contributions to them are not subject to
gift tax, even if the amounts in question exceed the annual gift tax exclusion
amount (currently $12,000).267 This enables contributors to 527 groups to
contribute large sums tax-free, in contrast to donors to section 501(c) groups
(other than charities, whose donors benefit from the charitable contribution
deduction). Indeed, during the 2004 election cycle, hundreds of millions of
dollars were received by 527 groups in amounts that exceeded the annual gift
tax exclusion.268
Although the special advantages received by 527 groups are not on all fours
with those received by corporations, nonetheless because of the connection
between the tax advantages and the entities’ abilities to accumulate large sums,
the Court’s constitutional campaign finance jurisprudence suggests that it would
be sympathetic to lawmakers’ efforts to control 527 groups’ fundraising by
subjecting them to the FECA source and amount rules that govern political
committees.
D. APPLICATION TO 527 GROUPS
Several observations based upon the reasoning in the cases discussed in this
Part are helpful for assessing how the Court is likely to approach the inclusion
of the controversial 527 groups in the definition of a political committee. First,
despite its belief in the importance of protecting speech at the “core” of the First
Amendment, the Court does not begin with a presumption that campaign
finance regulation should be limited to the greatest extent possible to activities
that expressly advocate the nomination of a candidate for federal office. Rather
it begins with the presumption that Congress has the right, and indeed the
obligation, to prevent corruption or the appearance of corruption in federal
campaigns. That presumption, in turn, rests on Congress’s responsibility for
protecting the integrity of the electoral system. Political speech is a value, but it
is a value alongside of, and even intrinsically connected with, the value of
preserving the legitimacy of the democratic form of government.
Second, although it is hopelessly vague about what the latter value means, the
Court is crystal clear that it precludes public policy—in the sense of legislation
and other acts of government officials or entities—from being for sale or
appearing to be for sale. It rejects the proposition, advanced by some, that the
popularity of candidates can be measured meaningfully by the aggregate amount
that can be raised on their behalf. The marketplace of ideas is also a value.
However, either it is a lesser value than democratic legitimacy, or else the Court
266. It is clear from the language of the statute that Congress saw the exemption as a tax benefit. See
I.R.C. 527(c) (West 2002 & Supp. 2006) (defining the taxable income of 527 groups primarily in terms
of their gross income, but excluding revenues received for their influencing activities, minus the
deductions incurred to produce the gross income). But see supra note 34 for authorities who disagree.
267. See I.R.C. § 2501(a)(4) (West 2002 & Supp. 2006).
268. See supra note 11 and accompanying text.
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believes that by policing the integrity of the electoral process, all or most ideas
will find a forum and be heard. Thus, protecting the integrity of the political
process may be the ultimate end of constitutionally permissible campaign
finance regulation, but it is not an end in itself, because the electoral process is
itself a means to a democratic government, that is, one that is both democratically elected and democratically operated.
The Court does not see itself as policing the operation of government except
when lawmakers act in ways that contravene the boundaries established by the
nation’s Constitution. In all other cases, the Court will not presume to substitute
its wisdom for the wisdom of the legislature. The Court’s mission, given the
nature of the Constitution that guides it, is simply to reduce the likelihood that
lawmakers’ actions will be determined primarily or exclusively because of the
influence or prospect of campaign money. Its mission includes, although it is
not limited to, ensuring that reasonable people will not believe that the laws
governing the conduct of elections permit, much less encourage, campaign
money to influence the decisions and actions of those who are elected. In the
last analysis, this is the reason the Court does not presume that campaign
finance law should regulate only express advocacy rather than a wider range of
electoral activities.
Campaign finance law can afford to burden political speech to the smallest
degree possible when the threat of corruption is the least, namely, when those
who spend money on campaign speech are wholly unconnected to candidates or
parties or their agents. According to the Court, in such cases the likelihood that
a candidate will feel beholden to the person making the expenditure is minimal
because the person who presumes to act on a candidate’s behalf will not
necessarily be advancing the candidate’s campaign agenda.269
But, if such expenditures are so free of the risk of corruption, why regulate
them at all? Perhaps the Court has validated rules mandating disclosure of
independent expenditures for express advocacy (Buckley) and electioneering
communications (McConnell) because in these instances, the content of the
speech so clearly and directly benefits a candidate that Congress can reasonably
assume a candidate may feel beholden to the person making the expenditure,
regardless of the lack of actual or historic connections between those who spend
and the candidates they hope to benefit. Only explicit exhortations to vote for or
against specific candidates (express advocacy) or what a reasonable person
would construe as such an exhortation (“electioneering communications,” which
are broadcast in the run-up to a primary or election) have thus far been subject
to disclosure when the speaker, or the individual or group funding the speech, is
independent of the campaign in question. Perhaps it is for the same reason that
only in these two instances the Court has upheld an absolute prohibition on
independent spending by corporations and unions using their treasury funds
rather than funds from their hard money PACs.
269. See Buckley v. Valeo, 424 U.S. 1, 47 (1976).
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The justifications for regulation discussed in this Part largely suggest the
constitutionality of several current proposals to amend the definition of a
political committee under FECA so that it would comprehend many, if not most,
of the nonregistering 527 groups that collected and spent huge sums of soft
money during the 2004 election cycle. First, the free speech rights of the groups
and their contributors are such that the type of regulation being proposed would
leave both with the means to participate effectively in federal elections.270
Additionally, because of the massive sums involved and the ability of the
groups to serve as conduits for soft money spending that is no longer permitted
to the parties, the government may be able to develop a credible showing that, if
left unregulated by FECA, the groups pose a threat of corruption either directly,
by creating obligations among lawmakers, or indirectly, through their role in
facilitating circumvention of the soft money reforms enacted in BCRA.
By the same token, this Part has argued that, to the extent that some 527
groups are genuinely independent of candidates and parties, the justification
based upon the threat of corruption or its appearance is correspondingly weakened. The constitutional basis also seems less secure when the forms of electoral activity the groups engage in are not express advocacy or political speech
resembling express advocacy on the continuum of electoral speech—for example, PASO communications or grass roots lobbying in connection with issues
that are important for distinguishing opposing candidates. Similarly, this Part
has argued that proposals to treat a party’s generic voter registration and
mobilization on a par with express advocacy, electioneering communications, or
PASO communications made by parties in actual or historic proximity to
specific candidates and campaigns might well be seen as impermissibly broad
when measured against the threat of corruption posed by the probable but
indirect and diffuse benefits such activities may confer.
CONCLUSION
This Article has examined the types of electoral activity regulated under the
Internal Revenue Code and the federal campaign finance laws. It has also
examined which of the activities of nonregistering, federally active 527 groups
should be counted to determine if they satisfy the definition of political committee under the federal campaign finance laws, and thus, should be required to
register with the FEC. As the analysis has made clear, because of the protected
nature of political speech under the Constitution, campaign finance regulation
that circumscribes or otherwise burdens campaign speech has, as it were, a
burden of justification.
It was the position of the Supreme Court in Buckley that “[d]iscussion of
public issues and debate on the qualifications of candidates are integral to the
270. See supra note 244 and accompanying text.
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operation of the system of government established by our Constitution.”271
When confronted by the empirical evidence regarding contemporary campaign
practices, the McConnell Court was forced to say that the distinction between
issue discussion and express advocacy had proven impossible to sustain in the
manner it had hoped.272 At the same time, the McConnell Court’s meticulous
analysis of each of BCRA’s amendments in light of the problems Congress was
addressing and the competing constitutional and statutory considerations, suggests that the Supreme Court has not adopted the view that all discussion of
issues and candidates must be funded with hard money, regardless of how direct
or indirect the connection between the discussion and an election for federal
office. Its analysis also indicates that the intent of parties to influence a federal
election will not be dispositive regardless of the character of the activities
themselves and their context.
Rather, the preceding analysis of FECA, FEC regulations, and court decisions
makes clear the impossibility, based exclusively upon the language or literal
texts of these sources, of reaching a definitive interpretation about the types of
advocacy activities that Congress can constitutionally incorporate into the
definition of a political committee. The Supreme Court has interpreted the
critical phrase—“for the purpose of influencing an election to federal office”273—
broadly or narrowly depending upon the specific campaign finance provision in
which it occurs. Since the Court has not yet addressed the meaning of the
influencing language for purposes of the political committee definition,274 it has
been necessary to mine the logic of the determinations it has made to discern
the principles that guide them.
On the other hand, if the Court were to conclude that the characteristic
mission of such 527 groups is campaigning, in the sense that this is the
characteristic mission of candidates, political parties, and political committees,
it could, under existing precedents, dismiss vagueness and overbreadth concerns
on the grounds that the groups’ characteristic mission provides a “limiting
connotation” that eliminates vagueness and overbreadth, or at least reduces
them to constitutionally manageable proportions. It is, however, unlikely that
the Court will deduce these groups’ characteristic mission predominantly, much
less exclusively, from the way they are characterized in tax law, despite the
similarity between the descriptions in tax and campaign finance law. In a matter
with such wide-ranging ramifications, it would be prudent to follow the tax law
maxim that substance, rather than form, should determine the treatment of a
transaction or an event.
271. Buckley, 424 U.S. at 64.
272. See McConnell v. FEC, 540 U.S. 93, 126–28 (2003).
273. Id. at 93.
274. In FEC v. Akins, 524 U.S. 11, 28–29 (1998), the Court was presented with the opportunity to
review key features of the definition of a political committee, but it remanded the case to the FEC for
further action. The agency dismissed the private party complaint that had triggered the lawsuit. See
Akins v. FEC, 146 F.3d 1049, 1049 (D.C. Cir. 1998).
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Proposals have been introduced in Congress to amend the definition of a
political committee to include most 527 groups involved in federal elections,
including groups whose involvement in federal campaigns is not substantial or
is limited to advocacy on behalf of political parties rather than specific candidates for federal office.275 Using these proposals as a template, this Article has
analyzed the constitutional issues that will be debated and ultimately litigated at
the Supreme Court in the event that the legislation is enacted. Some aspects of
the constitutional analysis favor the likelihood that the Court would uphold
legislation creating a virtual presumption that federally active 527 groups
should register as political committees under FECA, while other aspects suggest
that there is not a sufficiently strong nexus between what 527 groups, as a class,
do and the campaign entities and electoral activities that the Court has permitted
Congress to regulate in the past. However, the analysis of Supreme Court
precedents and the paradigms on which they are based precludes the legitimacy
of subjecting 527 groups without ties to candidates or parties to comprehensive
FECA regulation as political committees simply because they engage in insubstantial amounts of federal election activity.276 Finally, this Article has also
argued that the fate of such legislation will depend to a large degree on the kind
and amount of historical and empirical evidence presented to the Court, given
the tendency of recent decisions to be heavily influenced by the actual practices
characteristic of contemporary campaigns.
Even assuming that Congress can, as a constitutional matter, enact the type of
legislation currently proposed, it is still appropriate to ask whether it should. In
particular, most of the current proposals treat most 527 federal campaign
activities as fundamentally homogeneous. Thus, advertisements on radio and
television are treated as qualitatively the same for election law purposes as voter
registration and other types of voter mobilization activities.
Arguably this one-size-fits-all approach fails to capitalize on one of the more
positive consequences of the high level of 527 group activity in the 2004
election, namely, the extraordinary energy and resources that were dedicated to
mobilizing the voting public. It is still unclear whether some portion of the
fever-pitched partisanship of the recent campaign was a cause or consequence
275. See supra note 16. For groups exempt from the pending legislation, see supra note 64 and
accompanying text.
276. For a different view, see Daniel Ortiz, who argues, based upon the holding in California
Medical Ass’n v. FEC, 453 U.S. 182 (1981) [hereinafter CalMed], that limiting contributions of
individuals to 527 groups to $5000 would be constitutional, even if the groups made only independent
expenditures. See Memorandum from Daniel R. Ortiz, supra note 223. CalMed involved contribution
limits to multicandidate political action committees, i.e., entities whose characteristic mission was to
influence the election of candidates for federal office. In the case of 527 groups that are not registered
as political committees, however, the characteristic influencing mission is what needs to be established.
Further, as Ortiz noted, the CalMed case concerned political committees that made contributions to
candidates as well as independent expenditures. The proposed reforms would apply to 527 groups that
make no contributions to candidates, and even those that made only independent disbursements other
than independent expenditures (the latter of which, by definition, entail express advocacy).
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of the increased level of voter participation, but it is clear that 527 groups were
instrumental in inspiring people of all ages and professions to engage in
registering, canvassing, volunteering, and motivating others to vote. It is also
worth exploring whether, as an empirical matter, the potential benefit to federal
candidates from generic voter mobilization efforts undertaken by 527 groups is
as predictable or as corrupting as the potential benefit to them from positive and
negative political advertisements targeting individuals.277 Given the high social
cost of civic apathy and the importance of civic participation for certain types of
civic goods, it seems prudent at this juncture to consider whether, as a policy
matter, meaningful distinctions can and should be made among the kinds of
political activities engaged in by 527 groups and their likely costs and benefits
for the integrity of the electoral process. If so, reformers in Congress should
consider harnessing the 527 groups’ voter mobilization potential at the same
time that they rein in the groups’ excesses in the area of political advertising
masquerading as nonpartisan voter education.278
277. For generic voter mobilization, see supra note 205 and accompanying text.
278. Senator Charles Schumer (D-N.Y.) added a provision to the proposed 527 Tax Reform Act of
2005 during the mark-up in April of 2005 to except from automatic treatment as political committees
under FECA those 527 organizations engaged exclusively in voter mobilization as long as no candidate
for federal office was mentioned and no communications utilized broadcast, cable, or satellite. See 527
Reform Act of 2005, S. 1053, 109th Cong. § 2(b) (2005) (proposing 2 U.S.C. § 431(27)(B)(iv)).
Subsequent reform proposals have eliminated this provision.