Setback for Municipal Campaign Finance Reform

Yesterday's Supreme Court decision in Randall v. Sorrell is a setback for municipal efforts at campaign finance reform (CFR). CFR is a municipal ethics issue, because the justification for campaign spending and contribution limits is that such limits help to prevent corruption.

The main decision of Justice Breyer, joined by Justices Roberts and Alito, was that campaign expenditure limits continue to be unconstitutional pursuant to Buckley v. Valeo (1976). However, with respect to Vermont's contribution limits ($400 for statewide offices over a two-year election cycle; $200 for non-statewide offices), Buckley v. Valeo was found not to apply.

In Buckley v. Valeo, the Supreme Court found that contribution limits were acceptable because the need to prevent corruption and the appearance of corruption overrides First Amendment free speech guarantees. Justice Breyer noted five factors to determine whether contribution limits are too low for the Buckley v. Valeo case to apply:

1. Contribution limits cannot significantly restrict the amount of funding available for challengers to run competitive campaigns.
2. Political party contribution limits cannot be the same low limits as are imposed on individuals.
3. When contribution limits are very low, volunteer expenses cannot be considered contributions without impeding a campaign's ability to use volunteers. This impedes individuals' First Amendment right to associate in the form of a campaign.
4. Contribution limits must be adjusted for inflation.
5. There must be special justification for contribution limits lower than those in Buckley v. Valeo ($1,000).

Some municipalities have simply ignored the ruling in Buckley v. Valeo and will likely ignore this ruling, too. The reason they can do this is that it is extremely expensive to bring suits on constitutional issues, and many municipal campaign finance laws are popular and bipartisan. However, it is more difficult to pass such a law when the opposition can point out that it is unconstitutional. And sometimes suits are brought: for example, in 1998, Cincinnati's spending limits were declared unconstitutional, and soon thereafter the city's entire CFR bill was eliminated.

One solution to the unconstitutionality of spending limits has been voluntary spending limits. Chapel Hill, NC was the first to seek this solution, in 1995. Another solution is public financing of campaigns, which is becoming increasingly popular at the state level. Unlike limits, this system does not favor incumbents. Both New York and Los Angeles, as well as some smaller cities, have used this approach.

A third approach is to consider a large contribution a conflict of interest. Such an approach does not require a separate law, but only the expansion of an existing ethics code. Westminster, CO used this approach in 1996.

For more information on municipal CFR approaches, see two excellent National Civic League reports, the original 1998 Local Campaign Finance Reform report, which former Senator Bill Bradley originated (a summary can be found here) and a 2001 Addendum, outlining the approaches and updating case studies.

Robert Wechsler
Director of Research-Retired
City Ethics, Inc.