This topic is monitored by Moritz Law Professor Edward B. Foley
Independent Spending by Political Parties
Recent news accounts suggest that the Democratic National Committee (DNC) is contemplating developing an "independent expenditure" unit to fund advertising in support of Senator Kerry. 1 The proposed operation purportedly would create an advertising arm for the DNC that is not coordinated with Senator Kerry's campaign or with any members of the DNC that work directly with the Senator's campaign. The key figures of the proposed DNC operation include campaign managers, ad makers, and media consultants from the campaigns of John Edwards, Richard Gephardt, and Wesley Clark. 2
A subsidiary of this nature could be extremely beneficial to Senator Kerry's campaign. A recent article highlighted the beneficial timing of such an operation by stating:
A DNC 'independent expenditure' on Kerry's behalf could be especially helpful to him between late July, when he receives the Democratic nomination, and early September, when Bush is nominated by his party. During that five-week interim, Kerry can no longer spend private donations; he must draw from the $74.7 million in federal money for the general election. Bush can keep spending from his war chest during that period, meaning that his $74.7 million, when he takes it on September 2, will go farther. 3
It is possible, of course, that the Republican National Committee might undertake similar efforts on behalf of President Bush's campaign. The legal issue is the same in either case: whether, under current law, a political party can subdivide itself into two distinct operating units, so that one is actively working with the presidential candidate, while the other is maintaining an arms-length relationship with the candidate, so as to take advantage of the party's right to engage in unlimited independent spending on behalf of the candidate.
In order to analyze this issue, it is important to examine what the Supreme Court and Federal Election Commission (FEC) have said concerning political party coordination with candidates. Below is an examination of two Supreme Court cases directly speaking to the issue of independent expenditures by political parties (Colorado Republican I and Colorado Republican II) and also the current FEC regulations on political party coordination.
The analysis in this memo is based on the fundamental distinction between coordinated and independent expenditures. This distinction is discussed in detail in What Counts as Coordinated Campaign Activity under Current Law? Very briefly, coordinated spending is where a group works with a candidate to decide how to spend the group's money in support of the candidate, and this coordinated spending counts as a contribution to the candidate, subject to dollar limits on the amount a group can contribute in any given year. Conversely, independent spending is where a group acts to support a candidate without such coordination, and this independent spending is not considered a contribution to the candidate, and not subject to dollar limits.
I. Colorado Republican I Held that Political Parties Are Capable of Making Independent Expenditures.
In 1986, the Federal Election Commission (FEC) brought an action against the Colorado Republican Party claiming the Party had exceeded the dollar limit allowed for expenditures made in connection with a congressional campaign. 4 The expenditures in question involved the purchase of radio advertisements attacking a likely rival, before the Colorado Republican Party had selected a candidate. 5
The central issue before the Court in Colorado Republican I was whether a political party could make independent expenditures. 6 Specifically, the Court analyzed whether 2 U.S.C. § 441 a(d)(3) 7, as applied to the facts of the case, was unconstitutional. During the case, the FEC argued that all party expenditures should be treated "as if they had been coordinated as a matter of law." 8 The Court, in a plurality decision, disagreed with the FEC and concluded that a political party is capable of making an independent expenditure. 9 The plurality also stated that the specific expenditures in question in the case should be treated as independent expenditures. 10
In reaching the conclusion that a political party is capable of independent expenditures, the plurality noted that independent expenditures by political parties serve many roles. The plurality stated that "[a] political party's independent expression not only reflects its members' views about the philosophical and governmental matters that bind them together, it also seeks to convince others to join those members in a practical democratic task, the task of creating a government that voters can instruct and hold responsible for subsequent success or failure." 11 The plurality also stated that the "independent expression of a political party's views is 'core' First Amendment activity no less than is the independent expression of individuals, candidates, or other political committees." 12
The Court also noted several times that a political party's independent expenditures should not be treated any differently from other individuals or groups. The Court stated "[w]e do not see how a Constitution that grants to individuals, candidates, and ordinary political committees the right to make unlimited independent expenditures could deny the same right to political parties." 13 But, the Court did state that a political party cannot simply channel unlimited funds from individuals to candidates. Such earmarked funds, the Court noted, are properly treated as contributions under the law. 14
In determining when an expenditure is independent, the Court simply stated that "the constitutionally significant fact ... is the lack of coordination between the candidate and the source of the expenditure." 15 Also, the Court stated that in every case of this nature, the Court must confront the key balancing test which "weigh[s] the First Amendment interest in permitting candidates (and their supporters) to spend money to advance their political views against a 'compelling' governmental interest in assuring the electoral system's legitimacy, protecting it from the appearance and reality of corruption." 16
Following the holding of Colorado Republican I, it is clear that the Democratic National Committee is allowed to make independent expenditures on behalf of Senator Kerry's campaign.
II. Colorado Republican II Held that Coordinated Expenditure Laws Applicable to Political Parties Are Constitutional.
While Colorado I was a challenge to the constitutionality of the Party Expenditure Provision applied to the particular facts of that case, Colorado II was an across-the-board challenge stating that any coordinated expenditure limit placed on political parties is unconstitutional. 17 The Court disagreed and held that "a party's coordinated expenditures, unlike expenditures truly independent, may be restricted to minimize circumvention of contribution limits." 18
In support of the across-the-board challenge, the Colorado Republican Party argued that its coordinated spending, like its independent spending, should be unrestricted because "a party's most important speech is aimed at electing candidates and is itself expressed through those candidates, any limit on party support for a candidate imposes a unique First Amendment burden." 19 The Party also argued that "the point of organizing a party ... is to run a successful candidate who shares the party's policy goals" 20 and that "financial support of candidates is essential to the nature of political parties as we know them." 21 Basically, the Party was arguing that coordinated expenditures should not be limited because such spending is critical to parties "because 'a party and its candidate are joined at the hip.'" 22 The argument continued by stating that "[p]arties, thus formed, have an especially strong working relationship with their candidates, and the speech this special relationship facilitates is much more effective than independent speech." 23
The Court agreed with the Party that candidates and political parties normally have very close working relationships. But, the Court stated that political parties serve more functions than just electing particular candidates. 24 The Court said "[t]he money parties spend comes from contributors with their own personal interests. PACs, for example, are frequent party contributors who 'do not pursue the same objectives in electoral politics' that parties do." 25 Because political parties receive money from many different sources, the Court stated that "like it or not, they act as agents for spending on behalf of those who seek to produce obligated officeholders." 26 When acting as a conduit, party expenditures of this nature potentially raise issues of corruption, as when such donors give directly to candidates. Therefore, party spending coordinated with a candidate must be considered comparable to party donations to a candidate — and subject to the same potential abuse as a "pass through" of donations from special interests to the party, designed to influence the candidate improperly.
But, the Court also pointed out that political parties make independent expenditures as well. The Court stated that a party "may spend independently every cent it can raise wherever it thinks its candidate will shine, on every subject and any viewpoint." 27 As in Colorado Republican I, the Court said that the key fact is whether there is coordination between the candidate and the source of the expenditure. The Court noted that circumvention of the laws via coordination is often very difficult to detect. Under a system where political parties are not covered by coordinated expenditure laws, such circumvention would likely increase dramatically. Therefore, the Court held that in order to prevent increased circumvention, political parties can be restricted by coordinated expenditure limits.
III. Current Law on Party Expenditures
A. Independent Party Communications
Following the decisions in Colorado I and II, the FEC promulgated 11 C.F.R. §109.30, which states that "Political party committees may make independent expenditures" subject to §109.35 and §109.36. 28 Section 109.36 says "The national committee of a political party must not make independent expenditures in connection with the general election campaign of a candidate for President of the United States if the national committee of that political party is designated as the authorized committee of its Presidential candidate pursuant to 11 CFR 9002.1(c)."
Section 109.35 was basically a regulation requiring a political party to choose between making either independent expenditures or coordinated expenditures with a candidate after the political party nominated the candidate. This provision was struck down in McConnell v. Federal Election Commission because the Court determined that requiring parties to choose between coordinated and independent expenditures placed an unconstitutional burden on the parties' right to make unlimited independent expenditures. 29 For more information on the McConnell decision, see McConnell and Coordination.
B. Party Coordinated Communications
Under current FEC regulation, communications paid for by a political party are coordinated with a candidate when (1) the communication satisfies one of the three content standards and (2) the communication satisfies one of the six conduct standards. 30 Such coordinated party communications shall be treated as either an in-kind contribution under 11 C.F.R. §100.52 (d) or a coordinated party expenditure under 11 C.F.R. §109.32. 31 (For an in-depth look at the FEC's Coordinated Communication test, see What Counts as Coordinated Campaign Activity under Current Law?
The content standard is fairly straightforward to apply and is often met when a group — such as a political party — is speaking publicly about a candidate. Thus, the key question, in examining the proposed independent expenditure operation, concerns the conduct standard for a coordinated party communication. In order to remain independent, the DNC must keep the proposed unit isolated from the coordination activities taking place between the DNC and the Kerry campaign. In order to do so, the DNC will likely have to prevent the employees from one group from working on tasks in the other group, to prevent material involvement or substantial discussion from taking place between Senator Kerry and the proposed operation. Also, it is possible that both units must report to and receive instruction from separate management. If management or employees are participating in both units, coordination may be very difficult to avoid. Thus, it appears that all personnel working for the independent expenditure operation must be completely independent from the personnel working with the Kerry campaign. As such, it appears that independence is possible, but more facts are needed to better understand the nature and organization of the proposed unit.
The Court stated in Colorado Republican II that "[d]espite years of enforcement of the challenged limits, substantial evidence demonstrates how candidates, donors, and parties test the limits of the current law ... ." 32 The proposed "independent expenditure" operation by the DNC is testing the limits of the current law. As the Court has noted, sometimes it is very difficult to see the difference between coordinated expenditures and independent expenditures. Often, the Court said, evidence of coordination is difficult to find. However, the Court has said that a political party is free to make independent expenditures, just like any other group. As long as the party does not coordinate with the candidate, the party can spend as much money as it desires. Still, political reality suggests that party expenditures may be different from spending by non-party groups. It is plausible that expenditures by a political party are more attractive to a candidate because the relationship between the party and candidate is likely much closer and stronger than a relationship between a candidate and other groups or individuals. This relationship between a candidate and political party is grounds for scrutinizing independent expenditures by parties more closely than expenditures made by other groups.
In sum, it is possible that the DNC can create an independent expenditure operation that is isolated from Senator Kerry's campaign and from other employees of the DNC that work with Senator Kerry's campaign. Supreme Court jurisprudence allows political parties to make independent expenditures. But, isolation is practically required to ensure that the DNC avoids one of the six conduct standards (Part B above). While such isolation is certainly possible, it may prove very difficult — based on the structure and purpose of a political party — for the DNC to achieve.
An important question left explicitly unanswered by the FEC is who bears the burden of proof if the DNC's activities are challenged. If the DNC bears the burden of proof, disproving the six conduct standards could be difficult. Likewise, if the FEC or another group bringing the action bears the burden of proof, evidence demonstrating actual coordination will also be very difficult to discover.
1. Brian C. Mooney, Supporters Find New Source of Cash for Kerry Campaign, Boston Globe, June 17, 2004.
2. Brian C. Mooney, Supporters Find New Source of Cash for Kerry Campaign, Boston Globe, June 17, 2004.
4. Colorado Republican Federal Campaign Committee v. Federal Election Commission, 518 U.S. 604, 608 (1996).
6. Id. at 619.
7 2 U.S.C. §441a(d)(3) (2004). "The national committee of a political party, or a State committee of a political party, including any subordinate committee of a State committee, may not make any expenditure in connection with the general election campaign of a candidate for Federal office in a State who is affiliated with such party which exceeds — (A) in the case of a candidate for election to the office of Senator, or of Representative from a State which is entitled to only one Representative, the greater of — (i) 2 cents multiplied by the voting age population of the State (as certified under subsection (e) of this section); or (ii) $20,000."
10. Id. at 614.
11. Id. at 615-16.
12. Id. at 616.
13. Id. at 618.
14. Id. at 616.
15. Id. at 617.
16. Id. at 610.
17. Federal Election Commission v. Colorado Republican Federal Campaign Committee, 533 U.S. 431, 440 (2001).
18. Id. at 465.
19. Id. at 445.
22. Id. at 448.
24. Id. at 450-51.
25. Id. at 451.
26. Id. at 452.
27. Id. at 455.
28. 11 C.F.R. §109.30 (2004).
29. McConnell v. Federal Election Commission, 124 S.Ct. 619, 700-04 (2003).
30. 11 C.F.R. §109.37 (2004).
32 Colorado Republican II, 533 U.S. at 457.