Justices lift cap on individuals’ campaign gifts

WASHINGTON - The U.S. Supreme Court struck down decades-old limits on the total amount a single donor can give to federal candidates and political parties Wednesday in an election cycle, dealing a fresh blow to efforts to curb the role of money in American politics.

Voting 5-4 along ideological lines, the court said the caps violated the speech rights of Shaun McCutcheon, an Alabama Republican official seeking to give candidates, parties and political committees more than the combined maximum of $123,200. It was the court’s biggest campaign-finance decision since its 2010 Citizens United ruling allowed unlimited corporate spending.

The overall limits “intrude without justification on a citizen’s ability to exercise the most fundamental First Amendment activities,” Chief Justice John Roberts wrote in the court’s lead opinion.

“There is no right in our democracy more basic,” he wrote, “than the right to participate in electing our political leaders.”

The court stopped short of undercutting a 1976 ruling that allows caps on contributions to individual candidates. That means donors will still be limited to giving $2,600 to a federal candidate for each election.

Similarly retained under the ruling is the cap of $32,400 per year to each national party committee, there being three for each party - a presidential committee, a House one and a Senate one. With the aggregate cap of $123,200 now gone, more donors will likely be able to give the full amounts to each committee.

The court’s five Republican appointees constituted the majority, with Justices Samuel Alito, Anthony Kennedy, Clarence Thomas and Antonin Scalia joining Roberts. Thomas said in a separate opinion that he would have gone further and overturned the 1976 ruling.

The four Democratic appointees - Justices Stephen Breyer, Elena Kagan, Ruth Bader Ginsburg and Sonia Sotomayor - dissented.

The loosening of campaign-finance restrictions has become a hallmark of the Roberts court. The Citizens United ruling helped fuel an explosion of campaign money, with spending from candidates, parties and outside groups topping $6 billion in 2012. Wednesday’s ruling may pump new money into November’s congressional elections as Republicans seek to take control of the Senate.

Taken together with Citizens United, the decision “eviscerates our nation’s campaign-finance laws, leaving a remnant incapable of dealing with the grave problems of democratic legitimacy that those laws were intended to resolve,”Breyer wrote in dissent. He took the unusual step of reading a summary from the bench.

“If the court in Citizens United opened a door,” he said, “today’s decision may well open a floodgate.”

Wednesday’s ruling in McCutcheon v. Federal Election Commission, No. 12-536, enlarges the pipeline for donors who prefer to give their money to candidates and parties. It doesn’t affect pathways that previous Supreme Court rulings have opened for contributors to super political action committees and politically active nonprofit organizations.

For example, billionaire former hedge-fund manager Tom Steyer has pumped $11 million this year and last into a super PAC he formed to help Democratic candidates interested in environmental issues. And billionaire energy executives Charles and David Koch invest in Republican-aligned organizations that don’t disclose their donors.

The aggregate limits included a cap of $48,600 to federal candidates and $74,600 to political parties and political action committees during each two-year election cycle.

Those restrictions, which date from laws enacted in the 1970s after the Watergate scandal, were designed to supplement better- known restraints known as base limits. Under those, donors can contribute a maximum of $2,600 to particular candidates per election, $5,000 per year to individual PACs and $32,400 per year to each national party committee. The limits are indexed for inflation and increase every election cycle.

In the last election cycle, 1,323 donors reached what was then a $117,000 limit for contributions to parties and candidates, according to a report by the Sunlight Foundation, a Washington-based nonprofit that tracks campaign spending.

The group identified 20 donors who are nearing or have hit this cycle’s $123,200 limit, including Charles Schwab, the chairman of the discount brokerage firm that bears his name; George Krupp, co-founder of Boston-based Berkshire Group, a privately held investment company; and Scott Bommer, president of SAB Capital Management LP, a New York based hedge fund.

While Citizens United allowed unlimited corporate and union spending, the latest case focused on contributions, rather than spending. It raised questions about the 1976 ruling, Buckley v. Valeo, which said the government had broad latitude to limit contributions to guard against corruption.

Independent spending, the court said in Buckley, is political speech protected by the First Amendment. But contributions may be capped, the court said then, in the name of preventing corruption. The court added that aggregate contribution limits were a “quite modest restraint upon protected political activity” that “serves to prevent evasion” of the base limits.

McCutcheon, a businessman, contended that the donation caps violated his free speech rights, limiting his political participation without serving a clear purpose.

He gave a symbolic $1,776 to each of 15 challengers trying to unseat incumbents in the 2012 election. He said he would have given to a dozen more had the aggregate limits not blocked him. He didn’t challenge the base limits.

McCutcheon also contended that post-Buckley restrictions on contributions to parties and PACs have made the aggregate limits unnecessary. He also said federal law restricts the ability of donors to earmark their contributions.

Republican National Committee Chairman Reince Priebus called Wednesday’s ruling “an important first step toward restoring the voice of candidates and party committees and a vindication for all those who support robust, transparent political discourse.” The committee argued alongside McCutcheon in the case.

President Barack Obama’s administration had defended the aggregate caps, saying that without the caps donors might be able to give large sums to a variety of candidates and political committees, anticipating that the money would be spent in support of a single favored candidate.

Josh Earnest, a White House spokesman, said that “Justice Breyer summed up the disappointment” felt by administration officials.

MUCH BIGGER MONEY

For this year’s elections, when 36 Senate seats and all 435 House seats are up, a super-donor could invest $3,643,600 - almost 30 times the aggregate limit that the court struck down Wednesday.

That money would fan out to the candidates and to the three national party committees, as well as the federal arms of the party committees in all 50 states.

Political entrepreneurs will quickly set up giant joint-fundraising committees so that donors aren’t saddled with the task of writing hundreds of checks, said Bob Biersack, a senior fellow at the Center for Responsive Politics and a retired Federal Election Commission employee.

These new committees would need to file FEC paperwork - something Biersack predicted was happening Wednesday.

The ruling’s most significant effects will be on the parties and on congressional races, which were previously hemmed in by the aggregate limits, Biersack said.

Breyer expressed concern that a wealthy donor would be able to give $3.6 million to his political party and its candidates over a two-year election cycle.

Roberts dismissed that concern. “Experience suggests that the vast majority of contributions made in excess of the aggregate limits are likely to be retained and spent by their recipients rather than rerouted to candidates,” he wrote.

Roberts also said the aggregate limits couldn’t be justified as a means to prevent corruption. Previous Supreme Court rulings have said Congress may target only “quid pro quo” corruption - that is, donations aimed at extracting specific political favors. “The government may not seek to limit the appearance of mere influence or access,” Roberts wrote.

A single donor now will be able to contribute the maximum $32,400 per year to each of the three national party committees. That donor also may give $10,000 per year to the federal arms of the 50 state parties. Those state parties can transfer money freely to one another, enabling those with hotly contested races to stockpile funds from less-competitive states.

Had the court gone further and overturned the limits on checks to individual candidates, wealthy donors would have gained even more influence. The current limit of $2,600 to a candidate per election comes even as competitive U.S. House races generate millions of dollars in spending.

Congressional reaction to the decision broke largely along partisan lines, with many Republicans praising it and Democrats calling it potentially destructive.

“Freedom of speech is being upheld,” House Speaker John Boehner, R-Ohio. “You all have the freedom to write what you want to write, donors ought to have the freedom to give what they want to give.”

Sen. Mitch McConnell, a Kentucky Republican and minority leader, said the court “has once again reminded Congress that Americans have a constitutional First Amendment right to speak and associate with political candidates and parties of their choice.” McConnell backed McCutcheon in the case.

Sen. John McCain, an Arizona Republican and an advocate for limits on campaign money, broke from other Republicans and said recent court decisions would lead to “scandals involving corrupt public officials and unlimited, anonymous campaign contributions.”

Sen. Charles Schumer, D. N.Y., called the decision “another step on the road to ruination.”

“It could lead to interpretations of the law that would result in the end of any fairness in the political system as we know it,” he said in a statement.

Information for this article was contributed by Greg Stohr, Julie Bykowicz, Greg Giroux,Annie Linskey, Kathleen Hunter and Derek Wallbank of Bloomberg News and by Adam Liptak of The New York Times.