Amdt1.3.19.2 Campaign Finance Contribution Limits and Source Restrictions

First Amendment:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

The Supreme Court in Buckley v. Valeo held that contribution limits are subject to a more lenient standard of review than expenditure limits because they impose only a marginal restriction on speech and will be upheld if the government can demonstrate that they are a “closely drawn” means of achieving a “sufficiently important” governmental interest.1 Unlike expenditure limits, which reduce the amount of expression, the Court opined that contribution limits involve “little direct restraint” on the speech of a contributor.2 While acknowledging that a contribution limit restricts an aspect of a contributor’s freedom of association by affecting a contributor’s ability to support a candidate, the Court determined that a contribution limit still permits symbolic expressions of support and does not infringe on a contributor’s freedom to speak about candidates and issues.3

Under the First Amendment, the Supreme Court has evaluated the constitutionality of specific types of contribution limits. In Buckley, the Court upheld the constitutionality of the Federal Election Campaign Act (FECA)4 base limits, which cap the amounts of money an individual can contribute to a candidate, party, or political committee.5 In assessing whether a contribution limit is closely drawn, the Court determined it necessary to examine whether the limit is so low that it significantly impedes a candidate from raising the necessary funds for effective advocacy.6 In Nixon v. Shrink Missouri Government PAC, the Court announced that while limits must be closely drawn to a sufficiently important interest, the amount of the limitation “need not be ‘fine tuned.’” 7 In contrast, in Randall v. Sorell, in a plurality opinion, the Court determined that contribution limits were too low to comport with First Amendment free-speech guarantees when they were substantially lower than limits previously upheld by the Court and limits in effect in other states.8

Similarly, in McConnell v. FEC, the Supreme Court upheld against facial constitutional challenges, among other things, a prohibition on national political parties fundraising or spending federally-unregulated funds, known as soft money.9 The Court determined that the subject provisions of law are, in effect, contribution limits and source restrictions—not expenditure limits because they do not limit the total amount of funds that parties can spend.10 Hence, the Court applied the “less rigorous” standard of scrutiny that it applied in Buckley to contribution limits.11 However, the McConnell Court invalidated a prohibition on individuals age 17 and under from making contributions, reasoning that minors enjoy First Amendment protection and that the prohibition was not closely drawn to serve a sufficiently important government interest.12

The Court has considered the constitutionality of aggregate contribution limits, which cap the total amount that an individual can contribute to a candidate, political party, or political committee. In Buckley, the Court upheld the constitutionality of a FECA aggregate contribution limit in effect in 1976, characterizing the limit as a “quite modest restraint” that served to prevent circumvention of base limits.13 In McCutcheon v. FEC, however, in a plurality opinion, the Court invalidated a similar aggregate limit, determining that regardless of whether strict scrutiny or the “closely drawn” standard applies, the Court needed to “assess the fit” between the government’s stated objective and the means to achieve it.14 Observing a “substantial mismatch” between the two, the opinion concluded that even under the more lenient standard of review, the limits could not be upheld.15

In Davis v. FEC, the Supreme Court held that a FECA provision establishing a series of staggered increases in contribution limits for candidates whose opponents significantly self-finance their campaigns violates the First Amendment.16 The Court reasoned that limits on a candidate’s right to advocate for his or her own election are not justified by the compelling governmental interest of preventing corruption because the use of personal funds actually lessens a candidate’s reliance on outside contributions, thereby counteracting coercive pressures and risks of abuse that contribution limits seek to avoid.17

The Supreme Court has also upheld the constitutionality of laws limiting who can make a campaign contribution, known as a source restriction. In FEC v. Beaumont, the Supreme Court upheld the constitutionality of a FECA prohibition on corporations making direct campaign contributions from their general treasuries in connection with federal elections.18 The Court observed that large, unlimited contributions can threaten “political integrity,” necessitating restrictions in order to counter corruption or its appearance.19 In that same vein, while not issuing an opinion, the Supreme Court in Bluman v. FEC affirmed a lower court ruling that upheld the constitutionality of another FECA source restriction that prohibits contributions by foreign nationals.20

Footnotes
1
See 424 U.S. 1, 25 (1976). back
2
Id. at 21. back
3
See id. at 21, 24. back
4
Codified, as amended, primarily at 52 U.S.C. §§ 30101–30146 and sections of titles 18 and 26. FECA was first enacted in 1971, and was amended in 1974, 1976, 1979, and most recently and significantly, by the Bipartisan Campaign Reform Act of 2002 (BCRA), Pub. Law No. 107–155. back
5
See Buckley, 424 U.S. at 29. back
6
See id. at 21. back
7
528 U.S. 377, 387–88 (2000) (quoting Buckley, 424 U.S. at 30, n. 3). back
8
See id. at 261. back
9
540 U.S. 93, 188–89 (2003). back
10
See id. at 138–39. ( “Plaintiffs contend that we must apply strict scrutiny to § 323 because many of its provisions restrict not only contributions but also the spending and solicitation of funds raised outside of FECA’s contribution limits. for purposes of determining the level of scrutiny, it is irrelevant that Congress chose in § 323 to regulate contributions on the demand rather than the supply side.” ) Id. at 138. back
11
Id. 138–39 back
12
See id. at 137, 231–32 (citing Tinker v. Des Moines Indep. Cmty. Sch. Dist., 393 U.S. 503, 511–513 (1969); Buckley, 424 U.S. at 20–22). back
13
See Buckley, 424 U.S. at 38. back
14
See McCutcheon, 572 U.S at 199. back
15
Id. back
16
See Davis v. FEC, 555 U.S. at 740, 744 (2008). See also FEC v. Ted Cruz for Senate, No. 21–12, slip op. at 22 (U.S. May 16, 2022) (holding that a FECA limit on the amount of post-election campaign contributions that may be used to repay a candidate for personal loans made pre-election violates the First Amendment, determining that the limit did not serve the governmental interest of avoiding quid pro quo candidate corruption). back
17
See id. While conceding that the law did not directly impose a limit on a candidate’s expenditure of personal funds, the Court concluded that it impermissibly required a candidate to make a choice between the right of free political expression and being subjected to discriminatory contribution limits, and created a fundraising advantage for his or her opponents. See id. See also Ariz. Free Enterprise Club’s Freedom Club PAC v. Bennett, 564 U.S. 721, 755 (2011) (holding unconstitutional a voluntary public financing system that granted additional financing to a publicly-financed state office candidate in response to a privately-financed opponent engaging in spending, because it subjected privately-financed candidates and independent expenditure groups to “a substantial burden” on their political speech). back
18
539 U.S. 146, 163 (2003). While FECA prohibits contributions by corporations and labor unions from their own funds or “general treasuries,” the law permits contributions from separate segregated funds or political action committees (PACs) that are established and administered by corporations and unions. 52 U.S.C. §§ 30118(a), 30118(b)(2)(C). back
19
Id. at 154–55. Regarding corporations specifically, the Court determined that the corporate structure requires careful regulation to counter the “misuse of corporate advantages.” Id. at 155. back
20
See Bluman v. FEC, 800 F. Supp. 2d 281, 288 (D.D.C. 2011), summ. aff’d, 565 U.S. 1104 (2012) (upholding, inter alia, the constitutionality of the FECA prohibition on foreign nationals making contributions, identifying the compelling governmental interest in limiting foreign citizen participation in the U.S. government by preventing foreign influence over the U.S. political process). back