A panel of federal judges upheld the so-called “Millionaires’ Amendment” found in 2002 McCain-Feingold campaign finance reform laws, rejecting a claim the provision violates free speech and equal protection rights.
The amendment in question benefits candidates competing against wealthy contenders that significantly fund their federal campaigns with their own fortunes.
It was invoked in 2006 by Republican Arizona Sen. Jon Kyl during his 2006 campaign against Democratic challenger Jim Pederson, a real estate developer who contributed almost $11 million of his own money in his unsuccessful attempt to unseat Kyl.
Under the provision, once self-financed candidates spend more than $350,000 on their campaigns, his or her opponent may be eligible to collect contributions three times greater than limits established for the given election cycle until parity is achieved.
Individual donors who have already maxed out their legally acceptable contribution limits to individual candidates, or reached the cap on aggregate amounts to numerous candidates, are also permitted to continue making contributions under the law.
The uncertainty of a candidate being able to benefit from the amendment rests on a formula that considers the amount of personal funds spent by each candidate and the amount each raised during the year prior to the election.
The Aug. 9 ruling by the U.S. District Court for the District of Columbia rejected claims by Jack Davis, a 2006 candidate for New York’s 26th Congressional District, that the amendment chills the free speech rights of wealthy candidates by discouraging them from paying for their own campaigns.
The court found the amendment in no way hampered what candidates could spend on their own campaigns, nor does it reduce the amount of money they can raise from contributors.
“The Millionaires’ Amendment does not limit in any way the use of a candidate’s personal wealth in his run for office,” wrote Judge Thomas Griffith. “Instead, it provides a benefit to his opponent, thereby correcting a potential imbalance in resources available to each candidate.”
The amendment, Davis argued, dissuaded self-financing by giving their opponents a competitive advantage, allowing candidates to access “even more corrupt special interest money,” and by burdening candidates running on their own dime with more reporting requirements and “prescribed calculations.”
As part of the Bipartisan Campaign Reform Act of 2002, the Millionaire’s Amendment is intended to offset “what Congress deemed an inequity” when the U.S. Supreme Court in 1971 ruled limiting what candidates could donate to their own campaigns violated their free speech rights in Buckley v. Valeo, according to the opinion.
While candidates were left free to contribute to their campaigns under Valeo, the high court also ruled that establishing limits on other types of contributions was acceptable to protect against corruption and the appearance of corruption.
The 2002 act is commonly referred to as McCain-Feingold laws, named after the bill’s key sponsors, Sens. John McCain, R-Ariz., and Russell Feingold, D-Wis.
Griffith also cites the amendment’s similarity to a variety of state campaign finance systems that provide higher contribution limits for candidates who opt for public financing of campaigns, which have been “consistently upheld against First Amendment challenges,” according to the document.
And several failed free speech-based challenges to provisions of publicly funded campaign systems are cited to back the opinion, including a failed strike against matching fund provisions found in the Maine Clean Elections Act.
The Federal District Court agreed with Davis that certain regulatory measures could create competitive advantages large enough to present an unconstitutional burden on a candidate’s First Amendment rights.
Amendment seeks to ‘level the playing field’
But at the same time, it found the Millionaires’ Amendment “does not create disparities, but seeks to reduce them by “leveling the playing field” between candidates who are able to spend large amounts of personal wealth on their campaigns and those who cannot.”
Davis’ voluntary decision to campaign twice with his own money is also an indicator that his constitutional rights were not trampled, according to the opinion.
“We struggle to see how Davis can credibly argue that his speech has been “chilled” in light of the fact that he has chosen to pay for his campaign and has spent, after all, a considerable amount of his own money in excess of the $350,000 cap,” wrote Griffith. “Many a candidate would welcome the opportunity to be similarly “chilled.””
Attorney: Law can be used for other motives
The 17-page opinion left at least one national campaign finance attorney disappointed. Bob Bauer, counsel for the Democratic Senatorial and Congressional Campaign Committees, criticized the opinion for failing to answer a critical question: whether laws intended to safeguard against corruption can be used for other motives, such as establishing “notions of political fairness.”
“Davis tries to spark the court’s interest by pointing out that, to counter his use of his own, non-corrupting money, the Congress has authorized his opponent to raise money well over the threshold of corruptibility written into the contribution limits,” wrote Bauer, on his Web site www.moresoftmoneyhardlaw.com. “There is here a fair question — why the donor giving well over the contribution limits puts a candidate in less danger of corruption just because his or her opponent is well-financed≠ The court can’t rouse itself to raise an eyebrow.”
Davis, a Democrat challenger to Republican incumbent Rep. Thomas Reynolds, spent $2.3 million of his own money on his campaign and collected about $135,000 from individuals, political action committees and party committees. In total, he disbursed $2.4 million campaigning, according to Federal Election Commission (FEC) campaign finance reports.
Reports on Reynolds’ campaign show he spent $5.3 million on his 2006 campaign for re-election. He collected $2.5 million in contributions from individuals, $1.8 million from political action committees and $44,000 from party committees and began the election cycle with $1.15 million cash on hand, according to FEC reports.
In October, the campaign committee for Kyl announced his largely self-financed opponent Pederson triggered the Millionaires’ Amendment, and described the law as “being designed to prevent wealthy candidates from buying public office.”
Kyl spent $15.6 million on his 2006 re-election campaign, with the vast majority of funding coming from individual donors, political action committees and cash on hand, according to the FEC.
Pederson disbursed $14.7 million, while contributing $11 million of his own money. He collected $2.9 million in contributions from individuals and received approximately $780,000 from various types of committees.
Reporter Tasya Grabenstein contributed to this article.