Monday, November 17, 2008, 4:48 PM


There is no nostalgia for the losing candidate of a Presidential general election. In the days and weeks preceding the election, the country is consumed with the candidate’s every speech and gesture; on the day after, we couldn’t care less. This year, the RNC has brought new zeal to this American tradition, filing suit just nine days after the election to overturn a central provision of the landmark campaign finance law bearing the name of their candidate.

The provision under fire is the McCain-Feingold law’s “soft money” ban, which bars national party committees from soliciting or receiving funds from individuals in excess of federal limits and from sources prohibited from making contributions under federal law (namely, corporations and unions). Prior to the passage of McCain-Feingold, these soft money contributions were ostensibly used for activity unrelated to federal elections, such as issue advocacy, voter mobilization, and litigation.

A “corrupt soft money shakedown” is the blunt way that Warren Buffett, Paul Volcker, and about 250 other business leaders characterized soft money fundraising prior to the law’s passage. Indeed, it may surprise some to look back at the hard-hitting brief they filed in the Supreme Court in support of the soft money ban:

[T]hese contributions - often made in response to high-pressure solicitation by
Members of Congress, party leaders, and others - are motivated by stark
political pragmatism, not by ideological support for either party or their
candidates. Because the stakes are potentially so high for solicited businesses,
the reality is that soft money payments are ‘voluntary’ only in the narrowest
sense of that term. In truth, they are commonly made out of fear of the
consequences of refusing to give – or refusing to give enough.

While a facial challenge to the soft money ban was rejected by the Supreme Court, recent turnover on the Court could lead to a different result - if the case proceeds that far. Such an outcome would complete the Republican Party’s repudiation of the candidate who until just a couple of weeks ago carried its banner. And it will potentially revive pressures on corporations and unions to serve as patrons of the national parties.

And if that’s not enough to dishearten the former Republican standard bearer. . .
The RNC’s soft money challenge comes in the same week that the Supreme Court decided to hear Citizens United v. FEC, a case questioning the McCain-Feingold law’s regulation of so-called electioneering communications – ads that mention federal candidates and are run in the days preceding primaries and general elections. At issue is the required disclosure of contributors who help pay for these political messages. Last year, the Supreme Court in another matter, Wisconsin Right to Life v. FEC, significantly undermined the restriction on corporate and union financing of electioneering communications.

We’ll have more to say on both of these cases as they progress.


Colorado: Colorado voters passed Amendment 54 with 51.4% of the votes. This measure bars contributions to campaigns and ballot committees by recipients of no-bid state and local government contracts totaling $100,000 or more. The contribution prohibition applies not just to companies, but also to their officers, directors, trustees and 10% owners. The measure also applies to unions that enter into collective bargaining agreements with government agencies.

Florida: A federal district judge in Tallahassee issued a preliminary injunction, barring the State from enforcing a law patterned on the federal “electioneering communications” provision. The Florida law regulates ads that refer to or depict a clearly identified candidate, or refer to an issue to be voted on at an election, and that reach 1000 or more people in the relevant electorate. It calls for organizations that fund such communications to register with the government, file periodic reports, place “disclaimers” on their communications, refuse contributions from 527s and 501(c)(4)s that are not themselves registered, and disclose all donors, even those who never intended their donations to go toward political speech.

North Carolina: The Supreme Court declined to review a ruling of the U.S. Fourth Circuit Court of Appeals that upheld North Carolina’s public financing system. The North Carolina law, which took effect in 2004, provides public financing for appellate judicial candidates. It is funded by a tax check-off and voluntary contributions from lawyers.

South Dakota: Voters handily defeated a ballot measure that would have barred holders of no-bid contracts (and their officer and employees) from making political contributions, and prohibited persons who employ legislators from obtaining government contracts.

Oregon: Voters in Oregon narrowly defeated Ballot Measure 64 which would have prohibited individuals and organizations from using money for political purposes if public resources are used to collect such funds. Among other things, the ballot measure would have prevented public unions from using payroll deduction systems to raise PAC funds.

Washington: The Washington Public Disclosure Commission is debating how to regulate Internet-based lobbying activity, such as sending e-mails to influence legislation or rulemakings, using websites to promote grassroots lobbying, and blogging. Among other issues, the Commission is considering what activity, if any, should be publicly reported. These issues will next be discussed at a meeting on December 4.

If you have any questions or would like more information, please feel free to contact Larry (, (202) 857-4429) or Jim (, (202) 857-4417).
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