(L) United States Court of Appeals For the Second Circuit

Transcription

1 (L) United States Court of Appeals For the Second Circuit MARCELLA LANDELL, Plaintiff-Appellee, DONALD R. BRUNELLE, VERMONT RIGHT TO LIFE COMMITTEE, INC.-POLITICAL COMMITTEE, NEIL RANDALL, GEORGE KUUSELA, STEVE HOWARD, JEFFREY A. NELSON, JOHN PATCH, VERMONT LIBERTARIAN PARTY, VERMONT REPUBLICAN STATE COMMITTEE AND VERMONT RIGHT TO LIFE COMMITTEE-FUND FOR INDEPENDENT POLITICAL EXPENDITURES, v. Plaintiffs-Appellees-Cross Appellants, WILLIAM H. SORRELL, JOHN T. QUINN, WILLIAM WRIGHT, DALE O. GRAY, LAUREN BOWERMAN, VINCENT ILLUZZI, JAMES HUGHES, GEORGE E. RICE, JOEL W. PAGE, JAMES MCNIGHT, KEITH W. FLYNN, JAMES P. MONGEON, TERRY TRONO, DAN DAVIS, ROBERT L. SAND AND DEBORAH MARKOWITZ, Defendants-Appellants / Cross-Appellees, (Caption continued on inside cover) On Appeal From the United States District Court of Vermont BRIEF OF THE BRENNAN CENTER FOR JUSTICE AT NEW YORK UNIVERSITY SCHOOL OF LAW AS AMICUS CURIAE SUPPORTING APPELLANTS / CROSS-APPELLEES NANCY NORTHUP GILLIAN E. METZGER Brennan Center for Justice at New York University School of Law 161 Avenue of the Americas, 12th Floor New York, NY (212) Attorneys for Amicus Curiae

2 VERMONT PUBLIC INTEREST RESEARCH GROUP, LEAGUE OF WOMEN VOTERS OF VERMONT, RURAL VERMONT, VERMONT OLDER WOMEN S LEAGUE, VERMONT ALLIANCE OF CONSERVATION VOTERS, MIKE FIORILLO, MARION GREY, PHIL HOFF, FRANK HUARD, KAREN KITZMILLER, MARION MILNE, DARYL PILLSBURY, ELIZABETH READY, NANCY RICE, CHERYL RIVERS AND MARIA THOMPSON, Intervenors-Defendants-Appellants/Cross-Appellees.

3 INTEREST OF AMICUS CURIAE With the consent of the parties, the Brennan Center for Justice at New York University School of Law submits this brief amicus curiae in support of Appellants/Cross-Appellees. Letters of consent are attached hereto. The Brennan Center for Justice is a nonpartisan institute dedicated to a vision of inclusive and effective democracy. The Center unites the intellectual resources of the academy with the pragmatic expertise of the bar in an effort to assist both court and legislatures in developing practical solutions to difficult problems in areas of special concern to the late Justice William Brennan, Jr. The Center works to advance more equal and broad-based participation in our democracy, with a special emphasis on the issue of campaign finance reform. The Center represents reformers in lawsuits throughout the United States, counsels reformers on drafting new campaign finance legislation, and testifies before Congress, the FEC, and state legislatures about the constitutionality of reforms. Amicus submit this brief in the hope that it will prove useful to the Court in considering the difficult First Amendment issues raised by efforts to regulate the financing of election campaigns. INTRODUCTORY STATEMENT The District Court invalidated Vermont s attempt to impose mandatory campaign spending ceilings in connection with elections for the Vermont legislative

4 and statewide offices, ruling that it was bound by the doctrine of stare decisis to adhere to the Supreme Court's decision in Buckley v. Valeo, 424 U.S. 1 (1976), in which mandatory spending ceilings for congressional elections were invalidated. Landell v. Sorrell, 118 F. Supp.2d 459, 483 (D. Vt. 2000). The District Court acknowledged that fully effective campaigns for the Vermont Senate can be run under the limits established by Act 64 and that public faith in the democratic process was being eroded in Vermont by the prior system of campaign financing. Id. at 472, 483. However, the Court considered itself bound by Buckley to invalidate the Vermont spending ceiling, particularly absent Second Circuit case law on whether expenditure limits could be constitutional after Buckley. See id. at 483. The Buckley Court drew a bright line distinction between campaign contributions and expenditures. It upheld the limits on contributions to candidates contained in the Federal Election Campaign Act ( FECA ), concluding that limiting large contributions would not materially diminish a contributor s First Amendment rights and that large campaign contributions risk both the appearance and reality of corruption. See Buckley, 424 U.S. at However, the Court equated expenditures with political speech, and found that the Act s expenditure ceilings impose[d] direct and substantial restraints on First Amendment rights. Id. at 19-20, 39. It then ruled that the state s compelling interests of preventing the appearance 2

5 and reality of corruption were insufficient to justify the expenditure limitations, since the candidate is simply spending money the candidate has already raised. See id. at Amicus acknowledges that language in Buckley can be read to impose an absolute ban on all campaign expenditure ceilings. See id. at 48-49, 54, 57-58; see also Kruse v. City of Cincinnati, 142 F.3d 907, (6th Cir.) (rejecting spending limits because interests advanced in their defense were rejected as constitutionally insufficient in Buckley), cert. denied, 525 U.S (1998). However, it is neither necessary nor appropriate to read the Buckley opinion as absolutely outlawing all efforts to place mandatory limits on campaign spending. It is a mistake to read the language of any judicial opinion including Buckley v. Valeo as an abstract pronouncement divorced from the fact pattern and statutory scheme that was actually before the Court. A judicial opinion is, after all, not a statutory command; it is a reasoned explanation for the resolution of a particular case or controversy. When explanatory language in an opinion appears to describe a rule far broader than necessary to resolve the particular case before the Court, the language is entitled to respect as the Court's considered dictum, but is not entitled to blind obedience in different factual and legal settings. See, e.g., Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 379 (1994) ("[i]t is to the holdings of our cases, rather than their dicta, 3

6 that we must attend"); Kastigar v. United States, 406 U.S. 441, (1972) ("broad language" that is unnecessary to a decision "cannot be considered binding authority"); Humphrey's Executor v. United States, 295 U.S. 602, 627 (1935) ("general expressions" in an opinion that "go beyond the case" may be respected "but ought not to control the judgment in a subsequent suit, when the very point is presented for decision") (quoting Cohens v. Virginia, 19 U.S. (6 Wheat) 264 (1821)). Notably, moreover, several Justices have indicated a willingness to reconsider the constitutionality of spending limits, at least in some circumstances. See Nixon v. Shrink Missouri Gov t PAC, 528 U.S. 377, 120 S. Ct. 897, 913 (2000) (Breyer, J,, joined by Ginsburg, J., concurring); id. at (Kennedy, J., dissenting); Colorado Republican Fed. Campaign Comm. v. FEC, 518 U.S. 604, (1996)(Stevens, J., joined by Ginsburg, J., dissenting). Even if this Court reads Buckley as adopting an absolute ban on mandatory expenditure limits, it is important that the Supreme Court be presented with the factual evidence and legal arguments supporting such limits so that it will have an opportunity to revisit its unduly broad statements on the constitutionality of expenditure limits in Buckley. Cf. Agostini v. Felton, 521 U.S. 203, (1997) (noting that the Court remains free to overrule its earlier decisions, particularly in the constitutional arena, and commending the lower court for entertaining a Rule 60(b)(5) motion for relief even though the lower court 4

7 concluded it was bound by a Supreme Court decision on point to deny the relief requested). Whatever the strength of the Court's reasoning under the facts of Buckley, 1 Vermont's spending ceilings are distinguishable from the ceilings at issue in Buckley on at least two grounds. First, over twenty years of experience with Buckley has revealed a new compelling interest supporting expenditure ceilings on which Vermont now relies: combating the corrosive impact of massive and uncontrolled campaign spending on the operation of American democracy. In Point I, amicus accepts as applicable to this case the Buckley Court's direct equation of campaign spending and speech, and its refusal to recognize the prevention of corruption as a sufficiently compelling justification for campaign spending limits. Amicus argues, however, that the new compelling interest in preventing the demonstrably corrosive effects of uncontrolled campaign spending on the democratic process justifies imposing generous campaign spending limits. A second difference is in this case the District Court found that effective races for House, Senate and statewide office could be run under Vermont s spending limits. 1 Amicus has no quarrel with the narrow holding of Buckley striking down the draconian expenditure limits actually before the Court as undue interferences with political speech. It is because amicus believes that the size and contextual justification for a given set of spending limits is relevant to the First Amendment analysis that amicus opposes a mechanical reading of Buckley as outlawing all expenditure limits, no matter what the circumstances. 5

8 In Point II, amicus argues that Buckley s assumptions (1) that money and speech are perfectly interchangeable concepts, (2) that all campaign expenditures are completely voluntary, and (3) that a regime of unlimited expenditures poses no significant threat of corruption are questionable when campaign expenditures exceed a generous ceiling. At high levels of expenditure, the spender's First Amendment interest is somewhat diminished, while the threat of corruption is significantly increased. In the context of generous spending limits that allow for effective campaigns, the proper First Amendment balance is far closer to that used by the Buckley Court to uphold limits on large campaign contributions than that used to invalidate FECA s unreasonably low spending limits. ARGUMENT I. VERMONT HAS A COMPELLING INTEREST IN IMPOSING LIMITS ON CAMPAIGN EXPENDITURES IN ORDER TO PREVENT THE DEMONSTRABLY CORROSIVE EFFECTS OF UNCONTROLLED CAMPAIGN SPENDING ON THE DEMOCRATIC PROCESS. The post-buckley electoral regime that emerged from limiting campaign contributions but not expenditures has had devastating consequences for the conduct of elections and the practice of democracy at all levels of government. The citizens of Vermont were confronted with the four unintended consequences of Buckley: (1) uncontrollably spiraling campaign costs; (2) candidates under desperate pressure to 6

9 raise enormous sums of money; (3) an increasingly cynical public on the verge of losing faith in democracy; and (4) a steady decline in electoral participation. They sought to reinforce their beleaguered democracy by imposing generous ceilings on campaigns for state office. The District Court found that Vermont s spending ceilings were, in fact, generous enough to assure the vigorous marketplace in ideas that is a precondition of a genuine election. Accordingly, Vermont is entitled to urge a new compelling interest in support of its approach an interest that was not considered in Buckley precisely because it was not foreseen the need to rescue democracy from the now demonstrable consequences of placing unlimited campaign spending beyond the reach of law. A. Uncontrolled Campaign Spending Is Having a Corrosive Effect on Our Democratic Institutions and the Public s Confidence in Government. 1) Campaign spending has been spiraling upward since Buckley. In the years since Buckley, the costs of running for political office at the local, state and federal levels have spiraled out of control. In Vermont, for example, the Legislature found that [e]lections were becoming too expensive, and as a result many Vermonters were financially unable to seek election to public office. Landell, 118 F. Supp.2d at 468. Vermont's experience with spiraling campaign costs mirrors national statistics. Campaign spending at all levels of American politics local, state, 7

10 and federal was at a worrisome $540 million in Overall spending has grown dramatically each four-year election cycle since then, reaching an estimated total of $4.2 billion in 1996 an increase of almost 800% over 20 years. See John Green, Financing the 1996 Elections I 15 (1997); see also Don Van Natta, The 2000 Campaign: Fundraising, with Finish Line in Sight, an All-Out Race for Money, N.Y. Times, Nov. 3, 2000, at A26 (Federal spending alone in 2000 campaigns estimated at $3 billion). In part, the enormous expense of modern campaigning is attributable to the high costs and extensive use of advertising on television. Increasingly, however, it is becoming clear that the spiraling cost of running for public office is an inadvertent consequence of the Buckley Court's dictum refusing to permit expenditure ceilings, even when the ceilings are generous enough to assure robust political campaigning. In a world where no enforceable ceilings are possible, an upward spiral in campaign spending is inevitable, fueled by fear that an opponent will spend more. See infra Part II.B. 2) Uncontrolled campaign spending harms the quality of democratic representation. The addiction to ever-spiraling campaign spending assured by Buckley adversely affects the quality of democratic representation in at least two ways. Most obviously, it forces officeholders and candidates to spend inordinate time and energy 8

11 raising the necessary money, deflecting them from the substantive business of governance and actual campaigning. Here, the Vermont legislature found that candidates for statewide office were spending inordinate amounts of time raising campaign funds, and that the growth in campaign expenditures in Vermont has been accompanied by a decrease in [r]obust discussion of issues. Landell, 118 F. Supp. at 468. Raising necessary campaign funds has turned into a full-time job for many candidates and officeholders. As Professor Vincent Blasi has argued, the quality of representation suffers "when legislators continually concerned about re-election are not able to spend the greater part of their workday on matters of constituent service, information gathering, political and policy analysis, debating and compromising with fellow representatives, and the public dissemination of views." Vincent Blasi, Free Speech and the Widening Gyre of Fund-Raising: Why Campaign Spending Limits May Not Violate the First Amendment After All, 94 Colum. L. Rev. 1281, (1994); see also Martin Schram, Speaking Freely: Former Members of Congress Talk About Money in Politics (1995) (former Members of Congress discuss the extensive time and attention they had to devote to fundraising when they were in office at the expense of their legislative duties); Rena Pederson, Is There Life After Politics?, Dallas Morning News, May 7, 2000 (quoting former Sen. Sam Nunn) 9

12 (quoting former Sen. Sam Nunn as stating that distracting pressures of fund raising have gotten out of hand when the Senate has to adjourn at midday just so a senator can go to a fund raiser and then has to... [reconvene] at 10 p.m. to catch up ). The average cost for a winning U.S. Senate race in 1996 was $3.6 million. See Congressional Research Service, Campaign Financing 2 (Jan. 21, 1997). To raise this sum, a Senator needed to raise an average of over $11,500 every week for six years. Anecdotal evidence of the time constraints imposed by the necessity of constant fundraising abounds. One former Member of Congress estimated that during a campaign he and his staff spent 80% of their time fundraising. See Jamin Raskin & John Bonifaz, The Constitutional Imperative and Practical Superiority of Democratically Financed Elections, 94 Colum. L. Rev. 1160, 1188 (1994) (citing Philip M. Stern, Still the Best Congress Money Can Buy 119 (1992)). In declining to run for re-election, a high-ranking Senator explained that he "detest[ed]" the idea of raising $5 million to run for office, which would have required his raising $100,000 a week for 20 months. Kentucky's Sen. Ford Is Retiring; Democrat Complains Campaign Costs Have Become Detestable, Chicago Trib., Mar. 11, 1997, at 16. One political consultant has reported that even President Clinton had complained "bitterly" at having to spend so much time fundraising, saying: "I can't think. I can't act. I can't do anything but go to fundraisers and shake hands. You 10

13 want me to issue executive orders; I can't focus on a thing but the next fund-raiser." Dick Morris, Behind the Oval Office: Winning the Presidency in the Nineties 150, 151 (1997). A second, less visible price of uncontrollably spiraling campaign spending is the exclusion of ideas and approaches unlikely to translate into campaign cash from the intellectual agendas of candidates and officials. For a candidate who needs to raise an unlimited amount of money, each vote, each sponsorship of a bill, each speech, each inquiry, each hearing presents a potential for gaining or losing fundraising support. The pressure manifests itself not just in action, but also in inaction: The bill never introduced, the speech never given, the hearing never held. New approaches to community problems that do not appeal to constituencies able to translate preferences into cash will not be seriously considered. The net result is an artificially constrained public agenda tilted strongly towards those who can back their preferences with significant amounts of cash. See, e.g., Schram, supra, at 16-23, 27-35, 61-68, (former officeholders explain how fundraising compromised legislative decisions); Elizabeth Drew, The Corruption of American Politics: What Went Wrong and Why (1999); Alan Rosenthal, Drawing the Line: Legislative Ethics in the States (1996). Even sitting Members of Congress have acknowledged that the growing pressures of fundraising may endanger the integrity 11

14 of the legislative process. See, e.g., 144 Cong. Rec. S10157 (daily ed. Sept. 10, 1998) (statement of Sen. McCain describing a 1996 Democratic Party document outlining privileges that would be extended to large contributors); id. at S10159 (reprinting two documents showing party benefits offered to large Republican contributors); id. at S10166 (statement of Sen. Kennedy) (arguing that political contributions guided Republican congressional votes on bankruptcy, tobacco and health care legislation). 3) Uncontrolled campaign spending is undermining faith in the democratic process. Public confidence in American democracy is in a dangerous free fall. According to the Vermont legislature, public involvement and confidence in the electoral process have decreased as campaign expenditures have increased. Landell, 118 F. Supp. at 468; see also id., at (finding that state proved that concerns with loss of public s faith in democracy and unequal access to political arena exist). Surveys repeatedly confirm that a disturbingly large proportion of Americans view the political process with undisguised cynicism based on their belief that special interest money determines legislative outcomes. See, e.g., Fred Wertheimer & Susan Weiss Manes, Campaign Finance Reform: A Key to Restoring the Health of Our Democracy, 94 Colum. L. Rev. 1126, (1994) (citing 1992 Gordon S. Black poll in which 74% of voters polled agreed that "Congress is largely owned by the special interest groups" and 1992 Washington Post/ABC News poll in which 75% of 12

15 voters polled worried that "[s]pecial interest groups have too much influence over elected officials"); Center for Responsive Politics, 10 Myths About Money in Politics 19 (1995) (citing 1994 Yankelovich poll in which 75% of those polled agreed: "Our present system of government is democratic in name only. In fact, special interests run things.") [ Princeton Survey Research Associates, Newsweek Poll (1999) (finding that 59% of those surveyed believe it is a major problem that contributions have too much influence on elections and government policy, 31% believe it is somewhat of a problem, and only 7% believe it is not much of a problem ). That this should be so in the United States at the dawn of the 21st century is a sad irony. For much of the last century, the very idea of democracy was under violent siege by totalitarian ideologies of the left and right. This country, by acting as democracy's arsenal through two World Wars and a bitter undeclared struggle with the Soviet Union, and as democracy's exemplar through periods of economic crisis and massive social change, is largely responsible for the triumph of democracy on the global stage. As the 21st century begins, for the first time in human history, more than half the world's population lives under democratic rule. Yet, in the United States, confronted by the spectacle of officials and candidates engaged in the singleminded pursuit of money that is the inevitable consequence of unlimited campaign 13

16 spending, many Americans increasingly view the fundraising practices of our democracy as morally questionable. 2 4) Uncontrolled campaign spending has a harmful impact on voter turnout. A predictable result of growing public cynicism about the democratic process caused by behavior inevitably associated with unlimited campaign spending has been a decline in voter turnout. Too many average Americans no longer believe that they can make a difference in a political system where candidates and elected officials are preoccupied with the need to raise unlimited amounts of cash. Predictably, they do not bother to vote. See, e.g., Todd Paulson & David Schultz, Bucking Buckley: Voter Attitudes, Tobacco Money, and Campaign Contribution Corruption in Minnesota Politics, 19 Hamline J. Pub. L. & Pol y 449, 469 (1998) (noting that a third of potential voters surveyed responded that they were less inclined to vote because large campaign contributors have too much influence over elected officials). In the 1996 election, voter turnout declined to approximately 49% of the eligible voting population, the lowest level of participation in a presidential election in the 20th 2 Today s system of financing elections is viewed as so abusive to the tenets of American democracy that most Americans want nothing short of major changes or a complete overhaul of campaign finance laws. Gallup Organization, Poll: Campaign Finance Oct. 8-10, 1999 (1999) [ poll/indicators/ indcamp_fin.asp]; Gallup organization, Poll: Campaign Finance Jan. 30-Feb. 2, 1997 (1997)[ 14

17 century. 3 See Jim Nesbitt, Polls Apart: Candidates Dump Tons of Money into Strident Campaigns, but Voters Turn Away in Record Numbers, San Diego Union- Trib., Nov. 17, 1996, at G4. In the 1994 federal elections, arguably one of the most important legislative elections in modern times, only approximately 39% of the electorate voted. See Richard L. Berke, The 1994 Election: The Voters, Nov. 12, 1994, at 10. Voter turnouts below 50% are not just mere indications of civic disaffection; they are threats to the viability of democratic governance. Thus, when President Clinton took office for his second term, his popular "mandate" was not the 48% of the popular vote he received, but 48% of the 49% of the electorate who bothered to vote, or less than 24%. Similarly, when the 1994 elections shifted control of the House of Representatives to the Republican Party, the "mandate" for legislative change was, at most, just over half of the 39% of the population who voted, or less than 20% of the electorate. Low levels of voter turnout do not, of course, diminish the formal power of elected officials. But, over time, a democracy that consistently fails to provide its officials with a genuine popular mandate rests on a foundation of sand. 3 Voter turnout was only 44% in 1924, but this statistic is deceiving since women had just been given the right to vote and did not vote in large numbers. See Curtis Gans, Voter Malaise Hobbles the Nation, Newsday, Nov. 11, 1996, at A33. 15

18 B. Vermont Has A Compelling Interest In Protecting the Democratic Process Against these Harms From Uncontrolled Campaign Spending and the Expenditure Limits It Adopted Are A Constitutional Means of Achieving this Goal. The government surely has a compelling interest in addressing these harms to the democratic process. Buckley certainly did not disavow such a compelling interest; on the contrary, the Court affirmed the importance of protecting the public s confidence in government and the functioning of democratic institutions when it recognized that the government had a compelling interest in preventing the appearance or actuality of corruption. See 424 U.S. at As the District Court noted, [s]pending limits are an effective response to certain compelling interests not addressed in Buckley such as freeing office holders so they can perform their duties, [p]reserving faith in our democracy, and protecting access to the political arena. 118 F. Supp. at ; see also Rosenstiel v. Rodriguez, 101 F.3d 1544, 1553 (8th Cir. 1996) (in context of assessing constitutionality of a public funding scheme, holding it "well settled" that the state has a compelling interest in "a 4 The only government interests considered by the Court in Buckley were the interest in avoiding the appearance or actuality of corruption, which the Court accepted as a compelling interest, and the government s interests in restraining the cost of elections for its own sake and equalizing the financial resources of candidates, which the Court rejected. See 424 U.S. at 25-26, 48-49,

19 diminution in the time candidates spend raising contributions, thereby increasing the time available for discussion of the issues and campaigning"). As the District Court below found, Vermont s expenditure limits provide a means of addressing these harms associated with uncontrolled campaign spending. Landell, 118 F.Supp. at 483. Generous spending ceilings do not remove the pressures of fundraising entirely, as candidates still need to appeal to the general public for campaign funds, 5 nor do they remove the increased influence wielded by monied interests. Similarly, onerous registration rules, inconvenient voting procedures, and a deficient civic culture will continue to exert negative effects on voter participation. But such expenditure limits mean that candidates are free from the desperation of an open-ended race for money and the intense pressure to subordinate imagination to pragmatic considerations related to campaign cash. And ending the cynicism caused by questionable behavior inevitably associated with limitless campaign spending at least will remove an important rationalization for not voting and lack of faith in government. 5 As a result, therefore, such expenditure limits would not interfere with any legitimate function that fundraising is said to play in monitoring elected representatives. See Bradley A. Smith, Faulty Assumptions and Undemocratic Consequences of Campaign Finance Reform, 105 Yale L. J. 1049, 1076 (1996) (arguing that contributions from political action committees perform a valuable monitoring function on elected officials). 17

20 Critically, Vermont s expenditure limits achieve this goal with very little effect on House, Senate and statewide races. Id. at The District Court expressly found that fully effective campaigns can be run under the limits for state Senate, that average spending in [House] districts was almost uniformly below the levels chosen and that [s]pending in Vermont statewide races is very low as well. Id.. The Vermont legislature should be entitled to address the corrosive impact of massive and uncontrolled campaign spending on the operation of American democracy through a system of generous spending limits that allows each candidate ample resources to make her case. 6 II. CRITICAL ASSUMPTIONS UNDERLYING THE BUCKLEY ANALYSIS ARE NOT JUSTIFIED AT HIGH LEVELS OF CAMPAIGN SPENDING. A generous campaign spending cap is distinguishable from an unreasonably low spending limit in ways that are constitutionally significant with respect to (1) the 6 The Supreme Court's cases since Buckley that have struck expenditure caps in connection with election campaigns have all involved extremely low spending limits. See Colorado Republican Fed. Campaign Comm., 518 U.S. at (complete ban on independent expenditures by a political party); FEC v. Massachusetts Citizens for Life, Inc., 479 U.S. 238, (1986) (complete ban on independent expenditures by nonprofit corporations organized to advance a political position); FEC v. National Conservative Political Action Comm., 470 U.S. 480, (1985) ($1,000 ceiling on independent expenditures by PACs in presidential elections). 18

21 burden on the candidate's First Amendment interest, and (2) the compelling nature of the government's interest in combating corruption. Given the extremely low spending limits at issue, the Buckley Court correctly concluded that such limits represented "substantial rather than merely theoretical restraints on the quantity and diversity of political speech," 424 U.S. at 19, and would not materially advance the governmental interest in combating corruption, id. at But the premise that restrictions on campaign expenditures are the direct equivalent of a ban on political speech simply does not hold when one considers the decreasing marginal effectiveness of campaign spending at generous levels. Moreover, the Court's assumptions that campaign expenditures above a generous ceiling are unrelated to corruption and represent wholly voluntary speech are undermined by recognizing that campaign spending is often a prisoner's dilemma in which candidates feel compelled to engage in a destructive and potentially corrupting fundraising arms race. A. The Intensity of the Link Between Money and Speech Diminishes as Campaign Expenditures Rise Above a Generous Level. In striking campaign spending limits, the Buckley Court's analysis rested in part on the assumption that a campaign's expenditure of money and political speech are so closely related that an effort to regulate campaign spending is always the exact legal equivalent of an effort to regulate the speech itself. The Court assumed that the qualitative relationship between spending and speech is always identical, no matter 19

22 how much money is involved: "A restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached." Id. at (emphasis added). In fact, the relationship between money and speech in political campaigns is not constant. Candidates spend money in order to persuade the electorate to go to the polls and vote for them on election day. 7 To achieve that goal, candidates in contested elections must advertise themselves to the voters. Advertising, however, is subject to the law of diminishing returns "the more of it is done, the less effective each unit becomes." Ross D. Petty, The Impact of Advertising Law on Business and Public Policy 38 (1992) (discussing commercial advertising); see also Robert W. McAuliffe, Advertising, Competition, and Public Policy 26 (1987) ("Most research has shown that there are diminishing returns to [commercial] advertising.") (emphasis in original). While other factors also influence the marginal effectiveness of each additional dollar a candidate spends for example, the candidate's name recognition, 8 7 To the extent that a candidate's speech is a manifestation of her autonomy and self-expression, a campaign spending limit does not affect this interest. A campaign spending cap leaves a candidate free to speak her mind. 8 See, e.g., Kevin B. Grier, Campaign Spending and Senate Elections, , 63 Pub. Choice 201, (1989) (candidate spending to buy name 20

23 whether the candidate is an incumbent, 9 and the amount of money her opponent has spent 10 over a threshold level, the marginal effectiveness of additional campaign expenditures declines. See King Banaian & William A. Luksetich, Campaign Spending in Congressional Elections, 29 Econ. Inquiry 92, 93 (1991) ("additional [campaign] expenditures are not likely to be as effective as previous expenditures") (citing Gary Jacobson & Samuel Kernell, Strategy and Choice in Congressional Elections (1982)); Kevin B. Grier, Campaign Spending and Senate Elections, , 63 Pub. Choice 201, 216 (1989) (while the relative productivity of campaign spending by challengers and incumbents varies with respect to the level of expenditures, "both types of spending have diminishing returns"); Steven D. Levitt, Using Repeat Challengers to Estimate the Effect of Campaign Spending on Election Outcomes in the U.S. House, 102 J. Pol. Econ. 777, 793 (1994) (finding that "the recognition has a relatively larger effect at low expenditure levels when compared to the spending of a candidate that is already well known). 9 See, e.g., Grier, supra, at 209 ("at lower spending levels, challenger spending is more effective than equal amounts of incumbent spending, while incumbent spending is productive longer than is challenger spending"); id. at 210 ("challengers start with higher marginal productivity that declines faster than incumbents'"). 10 See, e.g., Keith T. Poole et al., The Revealed Preferences of Political Action Committees, 77 Am. Econ. Rev. 298, (1987) ("At the margin, a dollar of spending is more 'productive' in a close race than in one that is not highly competitive."). 21

24 impact of spending caps on election outcomes is extremely small" and that higher spending limits would alter the outcome of fewer elections than lower spending limits). Thus, contrary to the Buckley Court's unqualified equation of campaign expenditures with political speech, the qualitative nature of the First Amendment interest of the candidate and the electorate marginally diminishes with each additional expenditure over a generous ceiling for both incumbents and challengers. 11 In arguing that a generous spending cap would have less impact on First Amendment rights than would a low expenditure ceiling, amicus does not suggest that the impact is de minimis. Campaign expenditures above a generous spending cap would enable candidates to issue more campaign advertisements, just as allowing contributors to give more than $1,000 to a candidate for federal office would enable a contributor to communicate more strongly the intensity of her support for a candidate. The point 11 It is sometimes argued that spending ceilings have a greater impact on challengers than incumbents, largely because challengers must spend more to overcome the incumbency advantage of high name recognition. See, e.g., Gary Jacobson, The Effects of Campaign Spending on Congressional Elections, 72 Am. Pol. Sci. Rev. 469, 470 (1978). Although this claim is hotly contested in the political science literature, see, e.g., Donald Green & Jonathan Krasno, Rebuttal to Jacobson s New Evidence for Old Arguments 34 Am. J. of Pol. Sci. 363, (1990) (arguing that other factors, such as challenger quality, determine spending patterns and votes received), the argument is not directly pertinent in this case as the spending ceilings in Vermont are generous and are not likely to stifle challenger spending. 22

25 is instead that just as the First Amendment value of money contributed to candidates decreases over a threshold amount, see Buckley, 424 U.S. at 20, the First Amendment value of money spent by candidates decreases at the high end of a diminishing marginal impact curve. B. Candidates Trapped in an Uncontrollable Campaign Spending Spiral Are Intensely Vulnerable to Corruption and Not Always Truly Voluntary Speakers. In striking the campaign expenditure limits before it, the Buckley Court also assumed that candidates were each free to choose whether to raise and spend increasingly large sums on their election campaigns, and that the level of expenditures was unconnected to the threat of corruption. See 424 U.S. at 57 ("candidates... must retain control over the quantity and range of debate on public issues in a political campaign."); id. at (campaign spending limits do not address the threat of corruption stemming from candidate dependence on large contributions). When applied to high levels of campaign spending, however, neither assumption is justified. Candidates functioning in an unregulated campaign expenditure setting are trapped in a prisoner's dilemma. In the classic account of the prisoner s dilemma, two prisoners are arrested and held separately with no means of communication. If neither cooperates with the prosecutor, both will be convicted of 23

26 a lesser offense and sentenced to two years' imprisonment; if only one agrees to testify against the other, that one will go free and the other prisoner will receive the maximum sentence of ten years' imprisonment; and if both cooperate, each will be prosecuted for the more serious crime but receive a six year sentence instead of the maximum penalty. The prisoner's dilemma predicts that both prisoners will cooperate with the prosecutor and be worse off than if they had been able to reach an agreement to keep silent. Each prisoner would reason that he will be better off confessing whether his codefendant stays silent (in which case he will receive no prison time instead of two years) or also confesses (in which case he will receive six years in prison instead of ten). See Douglas G. Baird et al., Game Theory and the Law (1994); William Poundstone, Prisoner's Dilemma (1992); Russell Hardin, Collective Action 2-3 (1982). In the candidate s version of the prisoner s dilemma, each candidate must continue to raise and spend funds, not because he or she would freely choose to do so, but because the candidate fears that an opponent will do so, and thereby gain an advantage. Each [politician] would prefer expenditures to be limited, but if they are not limited, each must struggle to raise and spend as much as possible. Ronald Dworkin, Free Speech and the Dimensions of Democracy, in If Buckey Fell: A First Amendment Blueprint for Regulating Money in Politics 63, 83 (E.J. Rosenkranz, ed. 24

27 1999). The resulting uncontrollable spiral intensifies candidates' dependence on contributions, rendering them vulnerable to the appearance and reality of corruption. The effect of the candidate's dilemma is that candidates and society are both worse off than if a generous spending ceiling had been in effect. Except for the very wealthy, all candidates must raise money to run for office. As discussed in Point I, supra, an unending round of fundraising is not always in the best interests of candidates. It is inordinately time-consuming; it is personally demeaning; it deflects them from the substantive business of governance and campaigning; it exposes them to the reality and appearance of corruption; and it constrains their legislative agenda. Moreover, as discussed in Point II.A, supra, campaign spending follows the law of diminishing returns at extremely high levels, it is unlikely to change the outcome of the election at all, especially when matched by an opponent. For these reasons, a rational candidate would seek to engage in no more fundraising than is necessary to persuade the electorate to vote for her. Acting alone, however, no candidate can set a reasonable campaign spending (and therefore fundraising) limit. Campaign spending is not a static event. See generally Steven Ansolabehere & Shanto Iyengar, Winning Through Advertising: It's All in the Context, in Campaigns and Elections American Style 101, (James A. Thurber & Candice J. Nelson eds., 1995) (the impact of one candidate's 25

28 advertising is contingent on the opponent's advertising; political advertisers are interdependent rather than autonomous actors). Although the law of diminishing returns applies to campaign expenditures, each candidate knows that winners usually outspend losers. See, e.g., Poole, supra, at 298; Raskin & Bonifaz, supra, at Accordingly, to set a reasonable budget, each candidate needs to know how much money his opponent will spend on the race. In an unregulated campaign expenditure world, however, a candidate will never know the outer range of his opponent's budget. A rational candidate therefore will engage in limitless fundraising and spending, reasoning that she is better off doing so no matter what her opponents does: she avoids the danger that she will be outspent and suffer because outspending correlates with winning, and given this correlation she may gain advantage by outspending her opponent. The result of this candidate s dilemma is a fundraising spiral in which, after a threshold level, each side engages in fundraising primarily out of fear that the other side will gain an advantage. Moreover, as campaign spending spirals to higher and higher levels, candidates become more vulnerable to corruption. Because it considered candidate dependence on "large contributions" as the sole source of the actuality and appearance of political corruption, 424 U.S. at 55, the Buckley Court failed to consider that spiraling campaign costs are also corrupting because they increase a candidate's dependence 26

29 on contributions generally. In the post-buckley world, candidates are desperate to maximize expenditures, but limited in the amount of contributions they can raise from any one donor. Hence, candidates must sell themselves to greater numbers of donors for smaller amounts of money. In such an atmosphere of intense need, both candidates and contributors are intensely vulnerable to an inappropriate temptation to trade badly needed cash for badly needed political favors. In contrast, under a spending cap, contributors become more fungible. If one contributor expects something in return for his contribution, the candidate can move to another without significant risk of strategic loss. The harms caused by the candidate's dilemma can be dealt with only by collective action that promises each side that the other will not gain a competitive advantage in other words, a generous spending cap imposed by law. Under such a cap, neither side will be driven to raise funds out of fear of the other's excesses. Voluntary spending limits cannot achieve this goal. The transaction costs of trying to reach an agreement on spending are too high in races involving more than two candidates and the strategic reasons that cause candidates to engage in the fundraising race to begin with will dissuade any candidate from agreeing if she believes she is the better fundraiser. Even if candidates were able to agree to spending limits, the 27

30 distrust between them and the temptation to outspend each other will make such agreements highly unstable. 12 C. Generous Spending Caps Alter the Buckley Balance in Favor of Their Constitutionality. The Buckley Court conducted a classic First Amendment balance in two contexts. Large campaign contributions were deemed to have a high potential for corruption, and a diminished speech value; accordingly, the Court upheld a $1,000 contribution ceiling, despite its obvious impact on First Amendment activity. See Buckley, 424 U.S. at 20-29, 58. Conversely, the relatively modest campaign expenditures that would have been allowed under the limits reviewed in Buckley were deemed to have no potential for corruption, and an undiluted core speech value. See id. at 17-20, Thus, the stringent limits on campaign spending were invalidated as violations of the First Amendment. Id. at The Buckley balance should not apply mechanically to all efforts to regulate campaign expenditures, no matter how generous the ceiling. When one applies the 12 The inadequacy of voluntary spending limits to deal with the candidate s dilemma is evident in the record below, where the District Court noted that adherence to the voluntary limits Vermont adopted in 1993 plummeted with each election cycle, until no candidates agreed to participate in Landell, 118 F. Supp. at 465; see also Frank Phillips, Kerry Spent $1.7m on Election, Boston Globe, Dec. 6, 1996 (claiming Governor Weld had violated their spending agreement for the 1996 senatorial race, Senator Kerry spent $1.7 million of his own money on election campaign despite agreement to limit use of personal funds to $500,000). 28

31 Buckley analysis to an effort to cap unlimited campaign spending at a generous level sufficient to assure a robust and effective campaign, the balance is dramatically different. As amicus has demonstrated, the potential for corruption escalates as the reciprocal pressures associated with unlimited competitive campaign spending force candidates into an unending and, often, desperate search for funds. Meanwhile, on the other side of the balance, the First Amendment value of money decreases as expenditures mount above a generous ceiling. At high levels of expenditure, the free speech interest is slightly diminished by the fact that at least a portion of a candidate's unlimited spending is of questionable voluntariness. Moreover, the law of diminishing returns lessens the marginal speech effectiveness of each additional dollar over a threshold of spending. While the First Amendment value of money, even at very high expenditure levels, remains significant, its diminished status is analogous to the diminished First Amendment status of campaign contributions recognized in Buckley. When one weighs the enhanced risk of corruption created by the competitive pressures associated with unlimited campaign spending against the somewhat diminished communication value of campaign spending at high expenditure levels, the resulting balance resembles the Buckley Court's treatment of large campaign contributions far more closely than its invalidation of draconian 29

32 spending limits. On this record, the Buckley balance supports the constitutionality of Vermont s spending limits. CONCLUSION The District Court invalidated Vermont's effort to impose generous campaign spending limits because it believed that, under the Supreme Court's opinion in Buckley v. Valeo, it had no choice. Given the District Court s findings that new governmental interests had been established to support Vermont s spending limits and that candidates in Vermont can conduct robust and effective campaigns within these limits, the District Court s order invalidating Vermont's campaign spending limits should be reversed. Dated: December 26, 2000 New York, New York Respectfully submitted, NANCY NORTHUP GILLIAN E. METZGER Brennan Center for Justice 161 Avenue of the Americas, 12 th Fl. New York, NY (212) Attorneys for Amicus Curiae 30

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