Legal Library
DISTRICT OF VERMONT
BURLINGTON DIVISION
No. 2:99-CV-146
Marcella Landell, et al.,
Plaintiffs,
v.
William H. Sorrell, et al.,
Defendants,
And
Vermont Public Interest Research Group, Inc., et al.,
Defendant-Intervenors.
Neil Randall, et al.,
Plaintiffs,
v.
William H. Sorrell, et al.,
Defendants,
And
Vermont Public Interest Research Group, Inc., et al.,
Defendant-Intervenors.
Vermont Republican State Committee,
Plaintiff,
v.
William H. Sorrell, et al.,
Defendants,
And
Vermont Public Interest Research Group, Inc., et al.,
Defendant-Intervenors.
Pursuant to this Court’s order, defendants[1] and defendant-intervenors[2] jointly submit this Trial Brief and its accompanying Addendum in support of the contribution and expenditure limitations contained in 17 V.S.A. §2801, et seq. Contrary to the allegations of plaintiffs, these Vermont laws are permissible under the provisions of the Constitution of the United States.
I. INTRODUCTION
A. Act 64.
The 1997 Session of the Vermont General Assembly adopted a series of campaign finance reforms in Act 64 (codified at 17 V.S.A. §2801, et seq.). The Act constitutes a measured, carefully delineated statute that was designed to further a number of critical governmental objectives, including: preventing political corruption and its appearance and promoting the integrity of and the public’s confidence in Vermont elections, officials and government.
Specifically, Act 64 includes limits on contributions to candidates, political parties, and political committee, id. at §2805(a); limits on the portion of contributions which may be received from out-of-state contributors, id. at §2805(c); limits on the campaign spending of candidates, id. at §2805a; as well as a system of public financing for candidates for Governor and Lt. Governor who choose that option, id. at §2853, et seq. Additionally, it attributes expenditures to candidates that are made by individuals or groups that have coordinated their activities with candidates, while treating those payments as contributions to the candidate. Id. at §2809. Act 64 does not regulate the amount individuals or groups may spend, independently of the candidate, to promote the candidate or any issue.
When the Vermont Legislature took up the issue of campaign finance reform in 1997, it addressed itself to a question of the utmost importance: the legitimacy of democratic government. The democratic ideal of one person, one vote is incompatible with a system in which the limitless need for campaign donations gives large contributors greater access to and influence with elected officials than is available to ordinary citizens.
The Vermont Legislature deliberated carefully on the need for campaign finance reform, holding 65 hearings at which over 145 witnesses testified. The record before the Legislature showed that the Vermont electoral process, despite its tradition of low-spending election campaigns and accessible public officials, was being threatened by the same trends toward money-centered politics that have led to increasing public cynicism and distrust of government at the federal level. The actual and perceived corruption in such a system was evident in the hearings before the Legislature. Indeed, the Legislature had attempted to deal with concerns about such dangers in the past.
B. History Of Campaign Finance Reform In Vermont.
Public concern about the cost of election campaigns and the improper role of money in politics is not new to Vermont. It was one impetus for the adoption of direct primary elections, instituted in 1916 after two statewide referenda votes. The Direct Primary law included a corrupt practices act that required public disclosure (after the primary election) of the sums of paid by the candidate or anyone else on his behalf for the purpose of securing or influencing his nomination. 1915 Vt. Laws 4, §22; 1916 Vt. Laws (Sp. Sess.) 4, §1. In 1910, in an article urging the adoption of the direct primary, the editors of the Vermonter newspaper discussed the distorting influence of money in elections:
No one can raise any objection to the two basic principles upon which such a law is founded. First, the individual expression of each voter, by ballot, for his own personal choice for a candidate for public office. Second, prohibiting the use of money by any person to aid or promote his own nomination to a public office…. What is it that is becoming a stench to the nostrils of every true Vermonter? Need you answer when you hear the remark so often made that a man must have a "fat pocket book" in order to be Governor.
Vermont Voices, 1609 Through the 1990s: A Documentary History of the Green Mountain State 269 (J. Graffagnino, S. Hand, G. Sessions, eds., 1999). Noting voter apathy and unwillingness of candidates to run for office due to the expense, the writers sought reform.
In the eighty years since that first campaign reform, the People of Vermont and their representatives in the Vermont General Assembly have continued to address the corrupting, distorting influence of money in electoral campaigns in various ways, citing these very same concerns. Act 64 represents the Legislature’s best estimation of the most appropriate method for addressing these issues today. It reflects the knowledge gained through the state’s experiments with other forms of controls. After requiring only the disclosure of finances from 1916 through 1960, Vermont adopted limits on campaign spending in primaries in 1961.[3] 1961 Vt. Laws 178, reprinted in Addendum, Tab 9.[4] The limits were $7,500 for every candidate for state office. In addition, the law prohibited persons other than the candidate from contributing toward the cost of any media advertising without the candidate’s consent. It provided further that any such contributions toward media expenses would be counted towards the candidate’s spending limit.
In 1971, the expenditure limits were increased and were applied to the general election as well. 1971 Vt. Laws 259, Tab 9. These were supplemented with contribution limits as well: $1,000 limit on contributions to candidates "from a single source, except a contribution from a political party." Political parties were left free to contribute as much money as they wanted to candidates until Act 64. A limit of $1,000, however, was imposed on the amounts that could be contributed to political parties.
In 1976, after the U.S. Supreme Court’s decision in Buckley v. Valeo, Vermont repealed the spending limits while maintaining the contribution limits. 1975 Vt. Laws (Adj. Sess.) 188, Tab 9. By the time the Legislature prepared to revise the law in 1997, the limits on contributions to candidates varied depending on the type of contributor: individuals, corporations, and labor unions were limited to contributing $1,000 to a candidate in any election;[5] political committees[6] were limited to contributing $3,000 to a candidate in any election. These same limits applied to contributions made to political committees. Again, political parties were given special treatment and were subject to no limits in their ability to make or receive contributions.
As for expenditures by candidates, the scheme in place from 1994 through 1998 allowed candidates to sign an affidavit voluntarily limiting campaign expenditures to amounts prescribed under the statute. Former 17 V.S.A. §§2841-2842, Tab 4. While 85% to 90% of candidates subscribed to these voluntary limits in their first year of existence, the rate plummeted to less than 20% in the second year, and less than 10% in the third year–with no candidates for statewide office adopting the voluntary limits in 1998. Landell and Randall Admissions 51-54. With this experience behind them, the General Assembly searched for another avenue through which to curb the distortion and corruption caused by large campaign contributions and excessive spending on electoral campaigns.
The scheme adopted by the Legislature in 1997 drew on features of the past statutes while refining them to apply to the context of the day. Act 64, thus, attempts to address the same concerns raised by Vermonters for nearly eighty years. Indeed, it embodies principles from Vermont’s Constitution of 1777:
That all elections ought to be free and without corruption, and that all voters, having a sufficient, evident, common interest with, and attachment to the community, have a right to elect officers, and be elected into office, agreeably to the regulations made in this constitution.
Vt. Const., Ch. I, Art. 8.
C. Plaintiffs’ Claims.
Plaintiffs -- various individuals, candidates, political parties and groups -- have brought the instant cases seeking to invalidate nearly all of the provisions of Act 64. They principally challenge as unconstitutional the contribution limits of Section 2805, the out-of-state contribution limits of Section 2805(c), the "related party expenditure" provisions of Section 2809, and the limits on candidate expenditures contained in Section 2805a. Contrary to plaintiffs’ contentions, Act 64 is supported by government interests of the highest degree, is closely drawn and is fully constitutional.
II. VERMONT’S LIMITATIONS ON CONTRIBUTIONS ARE CONSTITUTIONAL.
Vermont’s campaign finance law places reasonable limitations on the amounts of money that may be contributed to candidates, political committees and parties. As found by the Vermont Legislature, those limits are necessary to avoid corruption and the appearance of corruption in our governmental system. The specific levels of contribution limits established by the Vermont Legislature are entitled to deference by the Court and are not so low for Vermont elections as to render the limits unconstitutional.
A. The Legal Bases For Contribution Limitations.
The United States Supreme Court has examined two cases involving limitations upon the sums individuals and groups may contribute to political candidates: Nixon v. Shrink Missouri Government PAC, 120 S.Ct. 897 (2000) ("Shrink") and Buckley v. Valeo, 424 U.S. 1 (1976) (per curiam). In both instances, the contribution limitations were upheld in the face of constitutional attacks that mirror plaintiffs’ claims in this case. In affirming the constitutionality of such legislation, the Court noted that contribution limitations have only a minimal impact upon free speech rights under the First Amendment.
[A] limitation upon the amount that any one person or group may contribute to a candidate or political committee entails only a marginal restriction upon the contributor's ability to engage in free communication. A contribution serves as a general expression of support for the candidate and his views, but does not communicate the underlying basis for the support. The quantity of communication by the contributor does not increase perceptibly with the size of his contribution, since the expression rests solely on the undifferentiated, symbolic act of contributing. At most, the size of the contribution provides a very rough index of the intensity of the contributor's support for the candidate. A limitation on the amount of money a person may give to a candidate or campaign organization thus involves little direct restraint on his political communication, for it permits the symbolic expression of support evidenced by a contribution but does not in any way infringe the contributor's freedom to discuss candidates and issues.
Buckley, 424 U.S. at 20-21.
The principal constitutional hurdle facing contribution limitations comes, instead, from the right of association. Id. at 24-25.[7] While such limits do implicate important associational interests, "’(n)either the right to associate nor the right to participate in political activities is absolute.’" Buckley, 424 U.S. at 25 (quoting CSC v. Letter Carriers, 413 U.S. 548, 567 (1973)). The Court has found that contribution limits merely regulate one way in which a donor can associate with a candidate. Such limits still "’leave the contributor free to become a member of any political association and to assist personally in the associations efforts on behalf of candidates.’" Shrink, 120 S.Ct. at 904 (quoting Buckley, 424 U.S. at 22).
Both the Buckley and Shrink Courts concluded that even a contribution limit "involving ‘significant interference’ with associational rights, could survive if the Government demonstrated that contribution regulation was ‘closely drawn’ to match a ‘sufficiently important interest, though the dollar amount of the limit need not be ‘fine tun[ed].’" Shrink, 120 S.Ct. at 904 (quoting Buckley, 424 U.S. at 25 & 30) (internal citations and quotations omitted). Shrink confirmed that the Supreme Court does not subject contribution limitations to full strict scrutiny review. Id. at 903-04; see id. at 910-11 (Breyer, J., concurring) (simple application of strict scrutiny standard would not address the "difficult constitutional problem that campaign finance statutes pose").
The justifications for contribution limits that the Court found constitutionally sufficient in Buckley and Shrink are the same as the State’s justifications here: avoidance of corruption or the appearance of corruption in electoral politics and government.
To the extent that large contributions are given to secure a political quid pro quo from current and potential office holders, the integrity of our system of representative democracy is undermined….
Of almost equal concern as the danger of actual quid pro quo arrangements is the impact of the appearance of corruption stemming from public awareness of the opportunities for abuse inherent in a regime of large individual financial contributions…. Congress could legitimately conclude that the avoidance of the appearance of improper influence "is also critical . . . if confidence in the system of representative Government is not to be eroded to a disastrous extent."
Shrink, 120 S.Ct. at 905 (quoting Buckley, 424 U.S. at 27 and Letter Carriers, 413 U.S. at 565) (emphasis added).
The Court has given these weighty governmental interests a broad interpretation, not limited to money-for-vote chicanery.
In speaking of "improper influence" and "opportunities for abuse" in addition to "quid pro quo arrangements," we recognized a concern not confined to bribery of public officials, but extending to the broader threat from politicians too compliant with the wishes of large contributors. These were the obvious points behind our recognition that the Congress could constitutionally address the power of money "to influence governmental action" in ways less "blatant and specific" than bribery.
Shrink, 120 S.Ct. at 905 (quoting Buckley, 424 U.S. at 28) (emphasis added). As Chief Judge Hornby of the District of Maine recently stated, political influence derived from large contributions "cannot be measured solely by what happens on high profile votes . . . [but rather] counts in all the unseen political decisions — the decision on what gets reported out of Committee, the timing of legislation’s being taken up on the floor, [and] the creation of legislation . . . ." Daggett v. Webster, 81 F. Supp. 2d 128, 134 n.13 (D. Me. 2000) ("Daggett I"), aff’d, Daggett v. Comm’n on Governmental Ethics and Election Practices, 205 F.3d 445 (1st Cir. 2000) ("Daggett II"); see Buckley, 424 U.S. at 27, 29 & 45 (corruption concerns "improper influence"); id. at 28 (corruption concerns "attempts . . . to influence"); id. at 45 (corruption concerns "groups desiring to buy influence"); id. at 67 (corruption concerns "post-election special favors that may be given in return" for generous support).
Indeed, the Court has indicated that the public’s perception of political corruption can become destabilizing unless countered:
Leave the perception of impropriety unanswered, and the cynical assumption that large donors call the tune could jeopardize the willingness of voters to take part in democratic governance. Democracy works "only if the people have faith in those who govern, and that faith is bound to be shattered when high officials and their appointees engage in activities which arouse suspicions of malfeasance and corruption."
Shrink, 120 S.Ct. at 906 (quoting United States v. Mississippi Valley Generating Co., 364 U.S. 520, 562 (1961)).
In light of these vital governmental interests, the proof necessary to validate contribution limitations is not exacting. The Shrink Court flatly rejected a line of cases from the Eighth Circuit Court of Appeals that had required empirical proof of actual corruption or its perception before contribution limitations would be upheld. The Supreme Court stated that the level of proof required to uphold a justification depends upon the "novelty and plausibility of the justifications raised." Id. at 906. With regard to limits on contributions, the Court found that its earlier decision in Buckley "demonstrates that the dangers of large, corrupt contributions and the suspicion that large contributions are corrupt are neither novel nor implausible. . . . . ‘[T]he deeply disturbing examples surfacing after the 1972 election demonstrate that the problem [of corruption] is not an illusory one.’" Shrink, 120 S.Ct. at 906 (quoting Buckley, 424 U.S. at 27); see Buckley, 424 U.S. at 29-30 (noting difficulty of establishing instances of actual corruption).
As to the precise dollar amounts of the contribution limitations, the Buckley and Shrink Courts held that legislative determinations in that regard are entitled to deference. Shrink, 120 S.Ct. at 908-09; Buckley, 424 U.S. at 21 (courts have no "scalpel to probe" the amount at which a limit should be set to achieve its purpose). Such deference to the conclusion of the legislature continues until it can be shown that the limitation is "so low as to impede the ability of candidates to ‘amas[s] the resources necessary for effective advocacy,’ . . . . [I]n other words, whether the contribution limitation was so radical in effect as to render political association ineffective, drive the sound of a candidates voice below that level of notice, and render contributions pointless." Shrink, 120 S.Ct. at 909 (quoting Buckley, 424 U.S. at 21).
Shrink made clear that the $1,000 limitation upheld in Buckley was not "a constitutional minimum below which legislatures could not regulate." 120 S.Ct. at 909. Appropriate limits will likely vary based upon the jurisdiction involved. See State v. Alaska Civil Liberties Union, 978 P.2d 597, 620 (Alaska 1999) ("AkCLU") (each legislative body addressing these problems should determine for itself the appropriate contribution limit based upon the circumstances existing in each jurisdiction), cert. denied, 120 S.Ct. 1156 (Feb. 22, 2000).[8]
B. Vermont’s Limitations On Contributions To Candidates Are Permissible.
Vermont’s limits on contributions to candidates fall well within the parameters established by the Supreme Court in Buckley and Shrink.[9] Since corruption and the appearance of corruption stemming from large contributions are the justifications for the Vermont limits, the quantum of proof necessary to validate those justifications is exceedingly small. As the Court stated in Shrink, the findings made in the course of the Buckley litigation are in themselves sufficient to establish that legislative concerns about corruption and the appearance of corruption in electoral politics are not "illusory." Shrink, 120 S.Ct. at 906. The Court found that there "is little reason to doubt that sometimes large contributions will work actual corruption of our political system, and no reason to question the existence of a corresponding suspicion among voters." Id. at 908.
This Court need go no further to uphold the limits at issue in this case. The simple fact that evidence exists that validates fears of corruption and the appearance of corruption at the federal level and elsewhere should be enough to sustain Vermont’s limitations as well. While the precise amount of appropriate contribution limits may differ from state to state, see AkCLU, 978 P.2d at 620, the validation of the legislative fear of corruption and its perception should not. Following Shrink, it is simply too late in the day to claim that fears of actual and perceived corruption in politics and government are illusory.
Even if plaintiffs could establish — which they can not — that Vermont itself has not experienced corruption or the perception of corruption, legislatures are not required to wait for misdeeds to occur before they may act. Given the evidence of corruption and its appearance that has been upheld by the Supreme Court and the compelling nature of such governmental concerns, the Vermont Legislature would have been acting constitutionally in passing legislation designed to ensure that such corruption does not occur here in the days to come. As the Supreme Court has held in upholding a ballot access restriction law:
[I]t appears obvious to us that the one-year disaffiliation provision furthers the State's interest in the stability of its political system. There is no indication that we held California to the burden of demonstrating empirically the objective effects on political stability that were produced by the 1-year disaffiliation requirement.
To require States to prove actual voter confusion, ballot overcrowding, or the presence of frivolous candidacies as a predicate to the imposition of reasonable ballot access restrictions would invariably lead to endless court battles over the sufficiency of the "evidence" marshaled by a State to prove the predicate. Such a requirement would necessitate that a State's political system sustain some level of damage before the legislature could take corrective action. Legislatures, we think, should be permitted to respond to potential deficiencies in the electoral process with foresight rather than
reactively, provided that the response is reasonable and does not significantly impinge on constitutionally protected rights.
Munro v. Socialist Workers Party, 479 U.S. 189, 196 (1986) (citations and internal quotations omitted); see FEC v. Nat’l Conservative Political Action Committee, 470 U.S. 480, 500 (1985) ("NCPAC") (acknowledging the "proper deference to a congressional determination of the need for a prophylactic rule where the evil of potential corruption had long been recognized"); FEC v. National Right to Work Comm., 459 U.S. 197, 210 ("[W]e accept Congress’s judgment that it is the potential for such influence that demands regulation. Nor will we second-guess a legislative determination as to the need for prophylactic measures where corruption is the evil feared."); First Nat’l Bank of Boston v. Bellotti, 435 U.S. 765, 788 n.26 (1978) ("The overriding concern behind the enactment of statutes such as the Federal Corrupt Practices Act was the problem of corruption of elected representatives through the creation of political debts. . . . The importance of the governmental interest in preventing this occurrence has never been doubted.").
Unfortunately, however, the evidence in this case will establish that the Vermont Legislature’s concern over corruption and the appearance of corruption is not limited to its future importation into this State. The Legislature held at least 65 hearings regarding Act 64 and heard from over 145 witnesses. These numbers do not include the Legislators’ own experiences as candidates and the myriad constituents with whom they no doubt communicated before and during the time Act 64 was pending. After that careful consideration, the Legislature made a number of specific findings relevant to the contribution limits it was setting for Vermont elections. The Legislature found:
Some candidates and elected officials, particularly when time is limited, respond and give access to contributors who make large contributions in preference to those who make small or no contributions. Act 64, Finding (a) (2), Tab 1.
Limiting large contributions, particularly from out-of-state political committees or corporations . . . will encourage direct contact and small group contact between candidates and the electorate and will encourage the personal involvement of a large number of citizens in campaigns, both of which are crucial to public confidence and robust debate of issues. Act 64 Finding (a) (8), Tab 1.
Large contributions . . . by persons or committees, other than the candidate and particularly from out-of-state political committees or corporations, reduce public confidence in the electoral process and increase the appearance that candidates and elected officials will not act in the best interests of Vermont citizens. Act 64 Finding (a) (9), Tab 1.
This act is necessary in order to implement more fully the provisions of Article 8 of Chapter I of the Constitution of the State of Vermont, which declares "That all elections ought to be free and without corruption, and that all voters, having a sufficient, evident, common interest with, and attachment to the community, have a right to elect officers, and be elected into office, agreeably to the regulations made in this constitution." Act 64 Finding (b), Tab 1.
These findings are entitled to deference from the Court concerning the fear of governmental corruption or the perception of such corruption in Vermont. Following exhaustive proceedings and debate, both the Senate and the House of the Vermont Legislature agreed that the above Findings accurately reflected the situation in this State. See Rostker v. Goldberg, 453 U.S. 57, 73-74 (1981) (report adopted by both House and Senate, "is considerably more significant than a typical report of a single House, and its findings are in effect findings of the entire Congress"). The Legislators who voted for these Findings are duly elected to represent the interests of all Vermonters in the Legislature. Moreover, these are the persons most "intimately involved in the political process" in Vermont. Daggett II, 205 F.3d at 456. Their conclusions are entitled to deference. Cf. Shrink, 120 S.Ct. at 908; Daggett, 205 F.3d at 458 (both relying upon statewide votes to support perception of corruption).
While such findings may not be totally insulated from review, "[e]ven when the resulting regulation touches on First Amendment concerns, we must give considerable deference, in examining the evidence, to Congress’ findings and conclusions . . . ." Turner Broadcasting System, Inc. v. FCC, 520 U.S. 180, 199 (1997). The basis for this deference was succinctly stated by Justice Kennedy: "We owe Congress’ findings deference in part because the institution is far better equipped than the judiciary to amass and evaluate the vast amounts of data bearing upon legislative questions." Id. at 195 (internal citation and quotation marks omitted); see Walters v. National Ass’n of Radiation Survivors, 473 U.S. 305, 330 (1985) ("When Congress makes findings on essentially factual issues such as these, those findings are of course entitled to a great deal of deference, inasmuch as Congress is an institution better equipped to amass and evaluate the vast amounts of data bearing on such an issue."). The job of a reviewing court is "not to reweigh the evidence de novo, or to replace Congress’ factual predictions with our own." 520 U.S. at 211 (internal quotation marks omitted). Instead, it is to determine whether the findings are supported by substantial evidence. Id.
The Legislative History of Act 64 — an important resource sought but unavailable in both Shrink and Daggett -- provides ample evidence of the corruption and the appearance of corruption justifying Act 64.[10] Former Administration Secretary David Wilson, one of Vermont’s most experienced and prominent lobbyists, testified that "campaign fundraising and lobbying are inextricably, completely linked in Vermont." H. Ways & Means, 3/24/97, p.73.[11] The legislative committees considering the bill heard testimony that corporations gave contributions to Legislators’ campaigns and then subsequently lobbied the same legislators. H. Loc. Gov., 1/21/97, p.15. Some of the highest ranking state officials acknowledged that "money does buy access, and we’re kidding ourselves and Vermonters if we deny it." Governor Howard Dean’s Inaugural Address 1997 to General Assembly. The Senate President testified similarly before one committee, stating:
I’ve got to tell you that I thought the Governor did a huge favor when he said this fall, I know he’s been criticized, that money does buy access to the process. And I’ve got to tell you that I wish I could walk up and down this hall now as President Pro Tem and tell you that I know with a clear conscience that I’m not making decisions that are based upon that whole load of money that I raised.
S. Gov Ops., 2/4/97, p.13. A former legislator testified to the influence she had seen wielded by opponents to the bottle bill some years before. H. Loc. Gov. 1/21/97, p.15. Lobbyist Wilson, questioned the contributions to the Governor made by the presidents of three healthcare companies and their wives, saying that they raised suspicions, and that the public should be questioning them. H. Ways & Means, 3/24/97, p.92.[12]
The Legislative History also shows that the Legislators were greatly concerned about the perceptions of ordinary Vermonters. The Legislators saw and discussed a 1995 poll conducted by the University of Vermont Center for Rural Studies. This poll revealed that 94% of Vermonters agree that there is too much money spent in politics, 69% believe that a $100 limit on private donations would help make government more responsive to the needs of all people, and 70% believe that the political system is a mess and needs to be completely rebuilt. The public’s concern about the power of special interest groups was illustrated by the 76% who believe that ending private contributions to political campaigns will reduce the power of special interest groups. To government officials who believe in the electoral process, these public opinions were disheartening. The chair of one legislative committee spoke of her desire for "the little people to feel confident that their voice is heard as much as the CEO of AT&T [or] NYNEX." S. Gov. Ops. 3-21-97, p.102. That, she stated, was her goal.
Moreover, as the members of the General Assembly looked over the horizon, they saw dark clouds ahead. The were very aware of the scandals and problems outside Vermont, especially those involving political fundraising in Washington.[13] H. Loc. Gov. 1-15-97, pp.29-30; S. Gov. Ops. 2-12-97, p.19; S. Gov. Ops. 2-13-97, p.14; S. Gov. Ops. 3-19-97, p.8. They spoke frequently about the need to prevent the spread of corruption and keep it from making further inroads into Vermont. H. Loc. Gov. 1-29-97, p.64; S. Gov. Ops. 2-4-97, pp.13-14. Consequently, they discussed the need to bolster public confidence in Vermont’s political system, increase voter participation, and generally strengthen the credibility of our elected representative government. In the process, they educated themselves and considered the reforms enacted in Maine, which have now been upheld by the Court in Daggett II.[14] H. Loc. Gov. 2/6/97, pp. 24-32, 62-66.
Defendants and defendant-intervenors anticipate that the evidence at trial will further validate the fear of corruption and its perception in Vermont. Much of this evidence echoes the material examined by the Legislators, and provides even more substantiation of their findings. First, a poll taken by Lake Sosin Snell Perry & Associates in 1998 shows that Vermonters are very concerned about the amount of influence held by certain groups over politics and government, with 70% saying that wealthy individuals and large corporations have too much influence. In contrast, 74% of those polled feel that ordinary voters do not have enough influence over politics. See Ex. L.[15]
Second, numerous newspaper articles and editorials from Vermont papers provide the foundation for the public’s perception of political corruption both in Vermont and elsewhere.[16] Some of those articles detail alleged connections between the Treasurer of Vermont and a Wall Street concern which obtained a no-bid contract from the Treasurer to do business with the State. Others correlate campaign contributions with public policy decisions and raise questions about those connections, such as those between pharmaceutical and tobacco companies and the public officials who received their contributions. Yet other articles and editorials lament the distortion of the entire political process as candidates focus on raising money rather than on garnering votes, which pits donors against voters as competitors for the candidate’s attention. Many of them cite the need to restore public confidence in the system, remove the distortions imposed by the fundraising process, and realign candidates and officials with the true interests of the citizens. The articles even note alleged fundraising abuses by the sitting President and Vice-President of the United States.
Third, testimony from trial witnesses, including present and former members of the Vermont Legislature of different political parties, a former Vermont Secretary of State, a former Lt. Governor, and current candidates for Governor and Auditor of Accounts, will establish that the fear of corruption in Vermont is not "illusory" and that there is a palpable perception of it among the electorate. Specifically, defendants and defendant-intervenors anticipate that witness testimony will include the following examples, among others: (1) testimony describing the voters’ concerns about corruption and the appearance of corruption; (2) the impact of officials’ concerns about past and future ability to obtain contributions on votes and other decisions; (3) tobacco companies and their agents personally passing out checks to members of the Vermont House while the Vermont House was considering legislation that would regulate tobacco products; (4) segments of an industry and its agents contributing money to Vermont Senate committee members who were considering whether or not to grant that industry an exemption to one of Vermont's permitting requirements; (5) a Vermont Senator being informed that a party leader would not support a bill regulating an industry because the political party could not afford to lose contributions from this industry; and (6) a Vermont Senator being asked by her political party's leadership to attend a meeting sponsored by an interest group because the group was a contributor to the party.
Finally, the critical importance of the Legislature’s actions in passing Act 64 are underscored by principles set out in the Vermont Constitution. Legislative Finding (b) specifically mentions the fact that the Legislature believed the law necessary to fulfill the Constitution’s guarantee of elections that are "free and without corruption." Tab 1. The Vermont Constitution directly addresses the possibility of corruption and its damaging effects on lawmaking; it provides that: "No member of the General Assembly shall, directly or indirectly, receive any fee or reward, to bring forward or advocate any bill, petition, or other business to be transacted in the Legislature . . . ." Vt. Const. ch. II, §12. Furthermore, it addresses one potential outside influence on Vermont’s government officials, by prohibiting anyone who holds "any office of profit or trust under authority of Congress" from holding Vermont Legislative, Executive, or Judicial office. Vt. Const. ch. II, §54.
In addition, the Constitution embraces the idea that all persons, regardless of their wealth or power, should have equal access to the members of the legislature: "The doors of the House in which the General Assembly of this Commonwealth shall sit, shall be open for the admission of all persons . . . ." Vt. Const. Ch. II, §8. This is a powerful concept: It envisions open access to government and to the lawmakers for the benefit of the people. To ensure that accessibility for the farmer, shopkeeper, mechanic, and teacher, they must be able to compete with corporate executives and well-heeled business interests. The latter should not be able to rely solely upon their ability to contribute large sums of money to electoral campaigns to secure an advantage over the regular citizens of Vermont.
In sum, substantial evidence supports the legislative determination that Act 64 is necessary to combat the evils of corruption and the public’s perception of it in Vermont and to further the principles of the Vermont Constitution. The Court’s rulings in Buckley and Shrink, the Findings of the Vermont Legislature, the Legislative History of Act 64, the Lake Sosin Poll, the newspaper articles and editorials, and the expected trial testimony, "clearly surpass[ ] the quantum of evidence offered and accepted as sufficient in Shrink Missouri PAC and would meet an even higher standard if one were applicable." Daggett II, 205 F.3d at 458.
C. Vermont’s Contribution Limitations Are Not Impermissibly Low.
Vermont’s contribution limits of $200 for House candidates, $300 for Senate candidates and $400 for statewide candidates are not unconstitutionally low. As required by Buckley, they are "closely drawn" to deter corruption and its appearance in Vermont politics. Without setting a minimum level, the Buckley Court indicated that the proper focus of such limits was "large" contributions. 424 U.S. at 26-27; Shrink, 120 S. Ct. at 909. The Supreme Court has instructed that legislative judgments as to the level of contribution limitations are entitled to judicial deference: "If it is satisfied that some limit on contributions is necessary, a court has no scalpel to probe, whether, say, a $2,000 ceiling might not serve as well as $1,000." Buckley, 424 U.S. at 30 (quotation omitted); see Daggett I, 81 F. Supp. 2d at 139 ("If contribution limits are permissible, differences in their level from state to state should reflect democratic choices, not court decisions." (internal quotation and citation omitted)). Like in Buckley, Vermont’s limits leave "persons free to engage in independent political expression, to associate actively through volunteering their services, and to assist to a limited but nonetheless substantial extent in supporting candidates and committees with financial resources." 424 U.S. at 28.
Under the Shrink/Buckley standard, contribution limits may be struck down only where they are set so low that they prevent candidates from amassing "the resources necessary for effective advocacy" and are "so radical in effect as to render political association ineffective, drive the sound of a candidates voice below the level of notice, and render contributions pointless." 120 S.Ct. at 909. In Vermont, that is simply not the case.
The Legislative Findings supporting Act 64, again, provide powerful evidence supporting the dollar figures established in Section 2805. The Legislators, themselves former and future candidates and elected representatives of the People of Vermont, found:
In the context of Vermont, contributions larger than the amounts specified in this act are considered by the legislature, candidates and officials to be large contributions. Act 64, Finding (a) (3), Tab 1.
In the context of Vermont, contributions scaled in proportion to the size of the electoral district of the office and up to the amounts specified in this act adequately allow contributors to express their opinions, level of support and their affiliations. Act 64, Finding (a) (6), Tab 1.
In the context of Vermont, candidates can raise sufficient monies to fund effective campaigns form contributions no larger than the amounts specified in this act. Act 64, Finding (a) (7), Tab 1.
As the Findings of the Legislature suggest, Vermont contributions and Vermont campaigns may not be typical of some that exist in the United States. The Findings are the complete answer, however, to any claim that these limits are so "radical" as to be unconstitutional. The amounts were considered by the Legislators in the precise context required by the Supreme Court: do these amounts constitute a significant contribution and do they permit candidates to amass enough resources to run an effective campaign? The affirmative answers to both questions -- provided by the democratically-elected members of the Vermont Legislature -- give the best evidence that the contribution limitation amounts are sound.
Empirical evidence of historical contribution levels and campaign spending levels provides additional support for the limits. Professor Anthony Gierzynski has compiled a database of information gathered from the 1994, 1996 and 1998 campaign finance disclosure reports on file with the Secretary of State. That compilation indicates that for House races, only 3.5%, 5.4% and 11.9% of contributions were received over the $200 limit in 1994, 1996, and 1998 respectively. See Ex. V. Therefore, 88% to 96% of the campaign contributions to the House races would have been unaffected by the new limits. This reflects the Legislature’s attempt to restrict only that small portion of contributions made in large sums. It confirms their finding that sums over $200 are large contributions in Vermont.
The effect on candidates is also small. Of candidates for the House in the 1994, 1996, and 1998 races respectively, 89.6%, 82.6% and 73.6% would have to make no adjustment whatsoever in their fundraising under the law since they received no contributions over the $200 limit. Of the portion of House candidates who received any contributions over the limit, less than one percent received more than three contributions over the limit in the 1994 and 1996 races, and barely 3% received more than three in the 1998 race. Making up the difference in revenue represented by these tiny numbers of contributions over the limit would be relatively easy, since the average total revenue lost by the House candidates in those years was only about $100.
With regard to the Senate races, only 6.0%, 4.7% and 17.2% of contributions were received over the $300 limit in 1994, 1996, and 1998 respectively. Therefore, approximately 95% of the campaign contributions to the 1994 and 1996 Senate races would have been unaffected by the new limits. Even in the more heavily funded 1998 race, over 82% of contributions would have been unaffected. This substantiates the Legislature’s conclusion that restrictions on sums over $300 would affect only a minor portion of contributions. See Ex. V.
The impact on Senate candidates is, similarly, not very significant. Forty to 47% of candidates for the Senate in the 1994-98 races would have to make no adjustment whatsoever in their fundraising under the law since they received no contributions over the $300 limit. Of the portion of Senate candidates who received any contributions over the limit, it was only in the 1998 race that any received more than 10 contributions over the limit. Indeed, in the 1994 and 1996 races only 17-22% of Senate candidates even received more than 3 contributions over the limit. Making up the difference in revenue represented by these contributions would require only four additional contributions, since the average total revenue lost by the Senate candidates in those years was only about $1000. See Ex. V.
As for statewide races, only 9.5%, 9.9% and 7.8% of contributions were received over the $400 limit in 1994, 1996, and 1998 respectively. Therefore, over 90% of the campaign contributions to the statewide candidates would have been unaffected by the new limits. The small, less than 10%, portion of contributions to statewide candidates that were made over $400 were truly large in the context of Vermont’s political system. Statewide candidates did not all receive contributions over the limit.
As one would expect from the historical spending data above, the trial evidence is expected to show that campaigning in Vermont is typically done at the "retail level," with correspondingly less expenditures of financial resources. Testimony, which will be provided by former and future candidates for the Legislature and statewide office will show that successful Vermont campaigns for state office involve numerous personal contacts, door-to-door meetings, community meals and debates. None of these involves significant cost. Indeed, the average cost of winning campaigns for House in 1994, 1996, and 1998 was $1,008, $1,094, and $1,648 respectively; and the average for Senate was $7,713, $7,873, and $11,999, respectively. The cost of any major party candidate’s race for Lt. Governor hovered just over $100,000 in two of the last three election cycles, and the average for the lesser statewide races was $14,592, $28,175, and $25,052. The candidates for Governor in 1994 and 1996 spent less than $200,000, and only Governor Dean exceeded the limits in the 1998 race. See Ex. V. In fact, Vermont ranked 49th among the fifty states in one analysis of spending for gubernatorial campaigns in the United States from 1978 to 1993. T. Beyle, "Governors: The Middlemen and Women in Our Political System," in V. Bates & H. Jacob, Politics in the American States: A Comparative Analysis (1996) 216-17.
Plaintiffs have already admitted that most House and Senate candidates do not use television advertising, that cable television companies offer free public access channels in many Vermont communities, and that most candidates for the House and Senate do not hire any paid campaign staff. See Landell and Randall Admissions 49, 80, 82, 87. In addition, the evidence will show that television advertising is considered a luxury for Vermont state races and is not the most effective way to communicate with citizens. As the Lake Sosin poll of Vermonters well illustrates, voters themselves put much more reliance on public debates and newspaper and other media coverage when deciding how to vote in Vermont elections. See Ex. L. Even if that were not the case, a 30-second political advertisement on one of Vermont’s television affiliates costs as low as $5 for a pre-emptible advertisement at an unspecified time of day, to $500 for a non-pre-emptible advertisement run just before the evening news.
Also very useful in confirming that the contribution limits are not impermissibly low is the experience in the 1999 Burlington mayoral race -- the only large election held under the statute’s limits. See Daggett II, 205 F.3d at 460 (examining the one special election run under Maine’s contribution limits). Section 2805(a) applies the $200 contribution limit to local elections and was in effect for the 1999 mayoral election. The limit on contributions appeared to have no effect on the ability of candidates to amass sufficient funds to run adequate campaigns. Whereas in 1997 the total amount raised by candidates for mayor was $10,823, in 1999, the total raised was five times that amount--$58,025. See Ex. V (Gierzynski Report).
Cases following Shrink have approved of contribution limitations similar to those in effect in Vermont. In Daggett, the First Circuit examined a Maine law that limited contributions to $250 for House and Senate candidates. The Court initially compared the limit with the $1,075 limit per 250,000 constituent limit upheld in Shrink. Given that Maine House Districts averaged 8,000 constituents and Senate Districts averaged 34,000, the Court found the $250 limit not dissimilar to the Shrink limit. 205 F.3d at 459. It then examined the historical spending and contribution patterns of Maine elections. In light of the non-expensive nature of the typical Maine campaign and the limited impact of the limits on the historical levels of giving, the Court upheld the limits. Daggett II, 205 F.3d at 458-462; see AkCLU, 978 P.2d at 624 (upholding $500-per-year limit).
Similarly, in Florida Right to Life v. Mortham, slip op., No. 98-770-Civ-Orl-19A (M.D. Fla. March 20, 2000), Tab 10, the District Court upheld Florida’s $500 limit on contributions to candidates. The Court found that: (1) the number of statewide registered voters in Florida is over 8.2 million and that candidates for statewide office typically raise millions of dollars; (2) the average amount raised for Senate campaigns was $250,000; and (3) House Districts average 90,000 residents and candidates raised $108,000 on average. The Court concluded that, under the deferential standard set forth in Shrink, the limits must be upheld — "even though candidates in Florida are raising fewer funds than they are capable of raising and fewer funds than were actually raised under previous limits." Id. at 20-21. The Court rejected plaintiffs’ contention that spending large amounts on television advertising is a necessary part of an effective campaign, id. at 19 n.12, and noted that technological advances such as faxes, e-mail and Internet websites may provide cheap and effect methods for candidates to promulgate their views, id. at 20 n.13. The Court was simply unable to find that the $500 limit in place in Florida had resulted in a "dramatically adverse effect on the funding of campaigns.’" Id. at 16 n.10 (quoting Buckley, 424 U.S. at 21) (emphasis added by Florida Right to Life).
If a $500 limit can survive challenge in a state such as Florida, which is much larger and extremely more populous than Vermont,[17] certainly the limits set out in Act 64 are permissible.[18] While House Districts in Florida contain 90,000 residents, the largest House Districts in Vermont are barely one-tenth the size, with 4,000 constituents in a one-member district, and 8,000 in a two-member district. While Senate campaigns in Florida typically cost $250,000, the average Senate campaign in Vermont over the past three election cycles has been in the $7,000 to $12,000 range.
Vermont’s limits are reasonable in comparison to those of Missouri as well. Vermont’s ratio of the contribution limit to the size of the constituency is .00068 for statewide elections, whereas the same ratio for Missouri is .00040. That is, Vermont’s statute allows over 50% more money to be contributed per constituent than does Missouri. Placing the Vermont contribution limits in the context of Vermont elections and in proper juxtaposition with limits upheld in Maine, Missouri and Florida, thus, reveals their appropriateness.[19]
While lower courts have typically examined such historical data in examining contribution limits, the Daggett II Court has counseled that reliance upon evidence of past campaigns provides an imperfect lens through which to evaluate contribution limitations. It forces the Court to focus upon:
"worst-case" scenario statistics, which consider the historical funding pattern and discount any contribution made over the limit . . . . These statistics, however, do not account for adaptations in human behavior and the likelihood that patterns will change to recoup whatever may be lost. Thus, the only picture that we can create by utilizing past statistics is one which likely overpredicts the resultant loss of contributions. Indeed, with such a bellwether, the flock would never go anywhere.
Daggett II, 205 F.3d at 460 (emphasis added).[20] As to the uncertain future, the Court stated:
Because some candidates will opt for public funding, there will be fewer candidates competing for donors’ dollars. . . . Moreover, there exists, as appellants’ expert acknowledged, the obvious opportunity for more members of a family, or officers and employees of a company, to make individual contributions. And there is the open-ended possibility for new PACs to form in support of a candidate, a group of candidates, or a legislative objective.
Id. at 461.
Indeed, the fact that contribution limits might require candidates to change their past fundraising tactics or seek funds from a greater number of persons, does not make the limits impermissible. The Buckley Court noted that candidates and donors would likely adapt their behavior as a result of the limits imposed:
The overall effect of the Act's contribution ceilings is merely to require candidates and political committees to raise funds from a greater number of persons and to compel people who would otherwise contribute amounts greater than the statutory limits to expend such funds on direct political expression, rather than to reduce the total amount of money potentially available to promote political expression.
Buckley, 424 U.S. at 21-22.
The Daggett II Court’s words and those of Buckley, along with the historical giving and spending information in Vermont, provide compelling reassurance that candidates will be able to fund effective campaigns under the limits set forth in Act 64 and that contributions permitted under the law are not pointless.[21]
D. Vermont’s Limits On Contributions To And By PACs Are Constitutional.
17 V.S.A. §2805(c) permits political committees to receive donations of up to $2,000 from any single source. In Vermont, political committees are free to make contributions directly to candidates as well as to engage in independent expenditures on behalf of a candidate. In making contributions to candidates, political committees are subject to the same contribution limits that apply to donations by individuals and political parties.
The Supreme Court’s decision in California Med. Ass’n v. FEC, 453 U.S. 182 (1981) ("Cal-Med"), establishes that limits on contributions to PACs are fully constitutional. See id. at 199 (plurality opinion); id. at 203-04 (Blackmun, J., concurring in part and concurring in the judgment). Without such a limit on donations to PACs, the Court held, individuals could evade the $1,000 limit on contributions to candidates by making donations to a multicandidate political committee. Further, Buckley itself upheld an aggregate limit of $25,000 on individual contributions to candidates, PACs, and political parties combined, based on the potential that would otherwise exist for evasion of the individual contribution limits. Buckley, 424 U.S. at 38. A limit on contributions to PACs, therefore, is "no more than a corollary of the basic individual contribution limitation." Id.
Since Buckley and Cal-Med, the lower courts repeatedly have held that states have the power to limit contributions to PACs. See, e.g., Kentucky Right to Life v. Terry, 108 F.3d 637 (6th Cir. 1997) (upholding $1500 aggregate annual limit on contributions by an individual to all permanent committees (equivalent to PACs)); Florida Right to Life v. Mortham, No. 98-770-Civ-Orl-19A, slip op. at 21 (M.D. Fla. March 20, 2000) (upholding $500 limit on contributions to political committees), Tab 10; cf. Russell v. Burris, 146 F.3d 563, 571 (8th Cir. 1998) (implicitly acknowledging state’s right to impose some limit on contributions to political committees, but invalidating limitation of $200 as too low); Citizens for Responsible Government v. Buckley, 60 F. Supp. 2d 1066, 1088 (D. Colo. 1999) (acknowledging that "the State has a compelling interest in limiting contributions to political committees, but holding that limit of $250 was too low).[22]
The Vermont Right to Life Committee — Fund for Independent Political Expenditures ("Fund") makes a separate claim that a $2,000 contribution limitation is unconstitutional as applied to it. This claim is without merit. For several years, the Vermont Right to Life Committee has had a political committee ("Right to Life PC") that makes donations to candidates for office as well as independent expenditures advocating the election or defeat of candidates for office. In order to posture itself for a challenge to Act 64, the Right to Life PC created a new entity the day before filing its amended complaint, called the Vermont Right to Life Committee — Fund for Independent Expenditures. The Fund now alleges that, because its sole purpose is to make independent expenditures, and it does not intend to make contributions to candidates, the $2,000 contribution limit is unlawful as to the Fund.
This claim elevates form over substance. Because there is nothing in Vermont law that would prevent the Fund from making direct contributions to candidates if it wishes to, there is no basis for exempting it from the $2,000 contribution limit. But even if Vermont law recognized a separate category of PACs that exclusively engage in independent expenditures, there is no cogent basis for holding that contributions to so-called independent expenditure committees must remain free of any limits. This would simply encourage circumvention of the individual contribution limits by permitting unlimited contributions to a committee with a strong track record of supporting particular candidates.
In addition, Act 64 does not place any limit on the amount that a political committee may spend on independent expenditures. Both Buckley and Cal-Med reject the argument that a limit on contributions should be suspect because of the possibility that it will limit the funds available to the donee for making expenditures. "‘While contributions may result in political expression if spent by a candidate or an association to present views to the voters, the transformation of contributions into political debate involves speech by someone other than the contributor.’" Cal-Med, 453 U.S. at 197 (plurality opinion) (quoting Buckley, 424 U.S. at 21). Cf. Cal-Med, 641 F.2d 619, 626 n.5 (9th Cir. 1980) (Kennedy, J.) (denying contention that the "effect of the limitation in restricting money spent by committees for independent expenditures, rather than candidate contributions, should be given serious consideration in evaluating the constitutionality of the limitation"), aff’d, 453 U.S. 182 (1981); Florida Right to Life v.
Mortham, 1998 U.S. Dist. LEXIS 16694, *16-*23 (M.D. Fla. 1998) (denying request to enjoin limit of $1,000 on contributions to independent expenditure committees).[23]
In their preliminary injunction memorandum, the Randall plaintiffs make a further argument that the $2,000 limit is constitutionally infirm because the Vermont definition of a "political committee" might cover committees that engage in "issue advocacy" along with advocacy of the election or defeat of candidates, and might reduce the funds available for the former as well as the latter. Memorandum in Support of Motion for Preliminary Injunction at 42. This argument is incorrect. Most importantly, it erroneously attempts to equate a limitation on contributions with a limitation on expenditures. As already noted, the mere fact that a contribution limit might affect the amount of funds available for expenditures does not turn a contribution limit into an expenditure limit. Cal-Med, 453 U.S. at 197.[24]
E. Vermont’s Limits On Contributions To And By Political Parties Should Be Upheld.
1. Vermont’s limit of $2,000 on contributions to political parties is constitutional.
Prior to the enactment of Act 64, individuals, corporations, unions and any other donors were able to make totally unlimited contributions to the political parties in Vermont. Act 64 placed a reasonable limit of $2,000 per election cycle on such contributions. 17 V.S.A. §2805(a). Notably, that limit is five times higher than the $400 limit that applies to direct contributions to candidates for statewide office in Vermont, and ten times higher than the $200 limit applicable to contributions to Vermont House elections. Id.
Act 64 thus facilitates party activities by allowing much higher donations to parties than to candidates. Indeed, donors may give $2,000 to a Vermont political party even if they have already made direct contributions to any number of individual candidates of the same party for Vermont office.
Because 17 V.S.A. § 2805(a) limits only contributions, and not expenditures, plaintiffs face a heavy burden in attempting to show that Vermont’s $2,000 limit will unconstitutionally impair effective campaigning. See Shrink, 120 S.Ct. at 909. As discussed above in Part II.A., plaintiffs cannot prevail absent proof that "the contribution limitation [is] so radical in effect as to render political association ineffective, drive the sound of a . . . [political party’s] voice below the level of notice, and render contributions pointless." Id. As the expert and fact testimony will demonstrate, a $2,000 contribution is a very large contribution in the context of Vermont politics. In addition, under Act 64, a donor may contribute $2,000 to the party’s state committee, and then make additional $2,000 donations to legislative PACs devoted to promoting that party’s candidates. There is no need for Vermont political parties to accept even larger contributions in order to survive.
Instead, as the record will show, a limit on contributions to political parties is necessary to carry out Act 64’s goal of deterring improper influence by large contributors and restoring confidence in government. In Vermont, as elsewhere, fundraising by political parties has contributed to the public perception of corruption in politics. See Ex. J: Bringing Politics Home, Burlington Free Press, June 22, 1997 ("It’s disturbing that tobacco giant Philip Morris donated a whopping $10,000 last year to the state Republican Party"); The Party’s Over, Rutland Herald, May 1, 1997 (quoting Sen. Peter Shumlin as saying "We took back the Senate because, frankly, we spent soft money on our candidates . . . . That doesn’t make it right."). See also S. Gov. Ops. 2/4/97, pp. 24-25 (testimony of Sen. Peter Shumlin, describing role of soft money raised from large donors by party leadership and stating "when your leadership raises that money, your leadership gives them access").
Plaintiffs are incorrect in arguing that the constitutional analysis applicable to political party contributions is somehow radically different from the analysis applicable to candidate contributions. Although Buckley v. Valeo did not directly address the constitutionality of the federal limit on individual contributions to national political parties,[25] related portions of the Buckley ruling, as well as other Supreme Court and lower court decisions, make it clear that such limits are a constitutional means to avoid evasion of limits on individual contributions to candidates. In Buckley, the Court upheld FECA’s $25,000 aggregate annual limit on contributions by an individual, which is computed by combining an individual’s contributions to all federal candidates, national political parties, and political committees in a given year. Buckley at 38; see 2 U.S.C. §441a(1),(3). The Court explained that the aggregate limit on contributions to all those entities was justified "because it serves to prevent evasion of the $1,000 contribution limitation [on donations to candidates] by a person who might otherwise contribute massive amounts of money to a particular candidate through the use of . . . huge contributions to the candidate’s political party." Buckley, 424 U.S. at 38.
The Supreme Court confirmed the compelling governmental interest in preventing evasion of individual contribution limits in Cal.-Med., where it upheld the $5,000 federal limit on individuals’ contributions to multi-candidate political committees (PACs):
If the First Amendment rights of a contributor are not infringed by limitations on the amount he may contribute to a campaign organization which advocates the views and candidacy of a particular candidate, the rights of a contributor are similarly not impaired by limits on the amount he may give to a multi-candidate political committee, . . . which advocates the views and candidacies of a number of candidates.
453 U.S. at 197 (plurality opinion).
Furthermore, the various opinions in Colorado Republican Federal Campaign Committee v. FEC, 518 U.S. 604 (1996), clearly indicate that the majority of Justices would uphold limits on contributions to political parties. The plurality opinion, while invalidating limits on independent expenditures by political parties, indicated that direct donations to political parties could be limited in order to forestall evasion of the individual contribution limits:
The greatest danger of corruption . . . appears to be from the ability of donors to give sums up to $20,000 to a party which may be used for independent party expenditures for the benefit of a particular candidate. We could understand how Congress, were it to conclude that the potential for evasion of the individual contribution limits was a serious matter, might decide to change the statute’s limitations on contributions to political parties.
Id. at 617 (plurality opinion of Justices Breyer, O’Connor and Souter) (emphasis added). The two dissenting Justices in Colorado Republican would have sustained even the limits on independent expenditures by parties that were directly at issue in the case and, therefore clearly would sustain limits on direct contributions to and by parties. Id. at 649. Finally, Justice Kennedy’s opinion, which was joined by Chief Justice Rehnquist and Justice Scalia, carefully distinguished between limits on coordinated expenditures, which Justice Kennedy viewed as protected expression by the party itself, and "undifferentiated political party contributions," id. at 629, stating that "Congress may have the authority to regulate" the latter, but noting that such a regulation was not at issue in the case.
Finally, lower courts consistently have upheld the constitutionality of state limits on contributions to political parties. Citizens for Responsible Government State PAC v. Buckley, 60 F. Supp. 2d 1066, 1094-1096 (D. Colo. 1999) (upholding annual limit of $2,500 on individual contributions to political parties in Colorado);[26] AkCLU, 978 P.2d at 625 (upholding limit of $5,000 on contributions to political parties in Alaska). Indeed, in AkCLU, the limits were upheld despite evidence showing that state Republican party revenues had declined from $362,525 in 1995 to $119,917 in 1997. 978 P.2d at 623. As the Alaska Supreme Court explained, quoting Buckley: "’If it is satisfied that some limit on contributions is necessary, a court has no scalpel to probe, whether, say, a $2,000 ceiling might not serve as well as $1,000.’" 978 P.2d at 625; see Buckley, 424 U.S. at 30.
Thus, plaintiffs cannot establish the unconstitutionality of Vermont’s $2,000 limits simply by predicting that party revenues may decline compared to prior years when there was no limit whatsoever on the amount a donor could contribution to a Vermont political party. The First Amendment does not require a regime of totally unlimited contributions, and plaintiffs cannot establish that a $2,000 limit is somehow outside the broad authority granted to state legislatures under the principles of the Shrink decision.
2. Vermont’s limits on contributions by political parties to candidates are constitutional.
Prior to the enactment of Act 64, Vermont placed no limit whatsoever on the amount that a political party could contribute to a candidate for office. Vermont’s laws were quite lax in that regard; indeed, even at the federal level, FECA treats direct transfers of funds from political parties to federal candidates as contributions, which are subject to the $5,000 per election limit imposed on multi-candidate PACs. See Colorado Republican, 518 U.S. at 616-617 (citing 2 U.S.C. §441a(a)(2), (8)).
Under Act 64, political parties’ contributions to candidates in Vermont, like those of individuals and political committees, are subject to limits of $400 for statewide candidates, $300 for state senate candidates, and $200 for house candidates. 17 V.S.A. §2805(a). For the same reasons explained above in Parts II. A.-D., plaintiffs’ challenge to these limits must fail under the authority of Buckley and Shrink. The contribution limits are justified by Vermont’s compelling interests in avoiding corruption and the appearance of corruption, and are by no means "so radical in effect as to render political association ineffective, drive the sound of a . . . [political party’s] voice below the level of notice, and render contributions pointless." Shrink, 120 S.Ct. at 909.
Plaintiffs appear to argue that even if Vermont’s contribution limits are constitutional with respect to individuals, states are barred from applying the same limits to contributions by political parties. That argument was squarely rejected, however, in one of the first appellate decisions on campaign finance handed down following the Supreme Court’s Shrink decision. In Daggett II, the First Circuit upheld against facial challenge Maine’s contribution limits of $250 per election in legislative elections. These limits applied to contributions by political parties as well as to contributions by individuals. See 205 F.3d at 462. The First Circuit specifically rejected the contention that political party contributions could not be subjected to the $250 limits. See id.[27]
To the extent plaintiffs argue that no limits whatsoever may be placed on political party contributions to candidates, not only the First Circuit, but other courts as well, have held to the contrary, ruling that limits on political party contributions are a reasonable measure to deter corruption or the appearance of corruption. See Citizens for Responsible Government, 60 F. Supp. 2d at 1094-96 (noting that "there is genuine potential for corrupting undue influence on a candidate’s campaign if political parties are not restricted in their ability to contribute to individual candidates); AkCLU, 978 P.2d at 626 ("Absent any limits on contributions by parties, we believe there would be substantial potential for undue influence, i.e., quid pro quo corruption or the appearance of corruption. The natural tendency of successful candidates who receive unlimited contributions from a party would be to reduce independent consideration of issues and adhere to positions taken by the party itself.").[28]
Contrary to the likely contentions of plaintiffs, the Supreme Court’s Colorado Republican decision does not bar limits on the amounts political parties may contribute to candidates. That decision struck down federal limits on independent expenditures by political parties, not limits on contributions directly to candidates. The FECA provision that treats direct transfers of funds from political parties to federal candidates as contributions, which are subject to the $5,000 per election limit imposed on multi-candidate PACS, was not at issue in Colorado Republican, nor was it at issue in the most recent decision of the District Court in the remand of that case following the Supreme Court’s decision. FEC v. Colorado Republican Federal Campaign Committee, 41 F. Supp. 2d 1197 (D. Colo. 1999) (striking down limits on parties’ coordinated expenditures).[29] Thus, those opinions provide no authority for striking down Vermont’s limit on direct contributions by political parties to candidates. See AkCLU, 978 P.2d at 626 (noting that Supreme Court’s Colorado Republican decision addressed independent expenditures, not contributions, and therefore does not apply in analyzing constitutionality of limits on contributions).
Finally, Missouri Republican Party v. Lamb, 87 F. Supp. 2d 912 (E.D. Mo. 2000), cited by plaintiff Republican State Committee, fails to support plaintiff’s claim that limits on party contributions to candidates are unconstitutional. In explaining its decision to leave in place, pending trial, a previous injunction against limits on political party contributions in Missouri, the District Court cited Missouri’s failure to treat all branches of a political party as one unit. This omission from the statute, the District Court held, left the contribution limits open to evasion because different county, state and local political party units could each contribute the maximum amount to one candidate — fostering an end run around the contribution limits. Id. at *5 & n.5. In Vermont, however, the Secretary of State has issued a ruling providing that contributions by the various state and local party committees to a single candidate will be aggregated for purposes of determining whether they exceed the contribution limit. See Exhibit D to Verified Complaint, Vermont Republican State Party v. Sorrell. As such, Vermont’s law is designed to avoid the very flaw which led the Missouri district court to question the effectiveness of the Missouri statute.
Ironically, the very feature whose absence troubled the district court in Missouri is the feature whose constitutionality is challenged by the Randall plaintiffs and the Vermont Republican State Committee in this case. See Vermont Republican State Party v. Sorrell, Verified Complaint, Para. 22 (contending that Vermont’s provision is unconstitutional because it aggregates contributions made by different state and local committees to the same candidate). The Secretary of State’s letter setting forth this interpretation and Chapter 45 of Title 17 of the Vermont Statutes provide the basis for treating different state party organizations as one unit for purposes of computing the contribution limit.[30] See Exhibit D to Verified Complaint, Vermont Republican State Party v. Sorrell. The Missouri decision cited by plaintiffs only confirms the reasonableness of that approach.[31]
The discussion above shows that plaintiffs’ attack on the party contribution limits is legally groundless. It is also wrong as a factual matter. Political parties can and will continue to play a vital role in Vermont politics without making unlimited financial contributions to candidates. Plaintiffs’ claims to the contrary ignore several pertinent facts that will be demonstrated by the evidence at trial.
First, Act 64 continues to recognize an enhanced role for political parties by allowing donors to make much larger contributions to political parties than to candidates themselves. As discussed above in Part E.1., the $2,000 donations that parties may continue to accept are very large donations by Vermont standards.
Second, the major parties in Vermont have what are purported to be independent legislative election committees, which operate as PACs, even though their purpose, like that of the parties, is to assist in electing the party’s candidates to office. These legislative PACs are allowed to make their own donations to candidates for Vermont office, in addition to any donation made by the state or local party committees themselves. Thus, taken together, the parties and the legislative PACs are able to donate at least twice as much money to candidates as any individual can donate.
Third, political parties retain their ability to participate in Vermont elections by making unlimited independent expenditures to promote the party’s candidates. Plaintiffs’ argument that 17 V.S.A. § 2809 bars such independent expenditures is based on a misreading of the statute, as this Brief discusses in Part III.B.
Fourth, because Act 64 now makes public financing available to candidates for Governor and Lieutenant Governor in Vermont, such candidates are likely to need less funding from the state parties in Vermont. Furthermore, to the extent that candidates for the two top statewide offices take advantage of the public financing option, the finances of the state parties will be freed up for use in other activities.[32] Indeed, legislators discussed this very consideration in the course of determining where the contribution limits should be set. See H. Loc. Gov., 2/21/97, pp. 135-38.
Fifth, and perhaps most important, plaintiffs’ arguments ignore the fact that contributing money to candidates is not the sole or even primary means by which political parties carry out their function. Mobilizing voters, get-out-the-vote efforts, articulating and debating issues, and educating voters about the party platform all are important party functions in which parties can engage quite apart from any financial contributions to candidates. Plaintiffs ignore all this in using the rallying cry of "strong parties" as if it meant nothing more than money-centered politics.
F. Vermont’s Limitation On Out-Of-State Contributions Is Constitutional.
Section 2805(c), which prescribes a limitation on the amount of out-of-state contributions that may be received by a candidate, political committee or party, is constitutional. Specifically, Section 2805(c) provides:
A candidate, political party, or political committee shall not accept, in any two-year general election cycle, more than 25 percent of total contributions from contributors who are not residents of the state of Vermont or from political committees or parties not organized in the state of Vermont.
Section 2805(c) is aimed not at limiting individual contributions but, instead, at limiting cumulatively vast amounts of out-of-state contributions.
Under the principles established in Buckley and numerous other cases, such a limitation is permissible to prevent significant out-of-state contributions from distorting and corrupting Vermont’s campaigns and government. As found by the Vermont Legislature, Section 2805(c) is necessary to avoid such corruption and its appearance in Vermont’s political system. As also found by the Legislature, this provision is necessary to restore public confidence in government, increase citizens’ involvement in campaigns, and to increase the robust debate of ideas.
1. The Legal Bases for Out-Of-State Contribution Limits.
While the United States Supreme Court has not had the opportunity to consider a federal or state campaign finance law provision that limits out-of-state contributions, it has consistently recognized the rights of the states and their subdivisions to protect their political processes and resources for their own residents. For example, in Holt Civic Club v. City of Tuscaloosa, the Court, while recognizing that the city’s policies and decisions may impact non-residents, held that Alabama did not have to provide non-residents with the right to vote in its cities’ elections because "a government unit may legitimately restrict the right to participate in its political processes to those who reside within its borders." 439 U.S. 60, 68, 70 (1978). In Martinez v. Bynum, plaintiffs challenged a Texas provision that allowed public schools to deny access to children who lived apart from their parents if the child’s presence in the district was "for the primary purpose of attending free public schools." 461 U.S. 321, 323 n.1 (1983). The Court upheld the provision, recognizing that there is a "substantial state interest in assuring that services provided for its residents are enjoyed only by the residents." Id. at 328. Similarly, in Sugarman v. Dougall, an government employment case, the Court explicitly recognized that states have an obligation to "preserve the basic conception of a political community." 413 U.S. 634, 647 (1973) (citation omitted). The Sugarman Court noted that this obligation gives the states "power to prescribe the qualifications of its officers and the manner in which they shall be chosen," and that this power and responsibility "applies not only to the qualifications of voters, but also to [the qualifications of various elected and unelected officers]." Id. (citations omitted).
The Court provided additional protection of the electoral process in Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990). There, a business organization challenged a statute that prohibited all corporations from spending money from their general funds for independent expenditures in support of or in opposition to candidates in elections for state office. See id. at 654. The Court recognized that "corporate wealth can unfairly influence elections when it is deployed in the form of independent expenditures, just as when it assumes the guise of political contributions." Id. at 660. The Court concluded that the statute "ensures that expenditures reflect actual public support for the political ideas espoused by corporations." Id. (emphasis added). While the Austin Court did not define "actual public support" with respect to minimizing the impact of unfair influences on elections, the phrase is clearly limited to eligible voters, i.e., residents of the impacted voting district.
Finally, in a string of voting cases, the Supreme Court has consistently upheld not only the need for equal representation but also the rights of the states to determine requirements for voting. See, e.g., Board of Estimate v. Morris, 489 U.S. 688, 693 (1989) (noting that voting is the only way in which most residents participate in the political process); Carrington v. Rash, 380 U.S. 89, 91 (1965) (states have wide latitude in establishing residency requirements, as long as states do not violate the constitution).
As a whole, these cases indicate that states have a valid and compelling interest in defending the integrity of their electoral district boundaries. Because the Supreme Court has held that states have latitude in setting residency requirements for voters and candidates and in limiting non-residents’ access to certain state services, it logically follows that states also have a vital interest in ensuring that their elections are decided by those who vote and not by out-of-state interests or individuals.
Indeed, recognizing the strong interest in regulating out-of-state contributions to political parties, groups, and candidates, the Alaska Supreme Court recently upheld a provision limiting such contributions. AkCLU, 978 P.2d at 617. In its decision, the Court concluded that because "[t]he state’s power to preserve the political community by excluding nonresidents from voting is self-evident," Alaska also had the power to regulate out-of-state contributions. Id. at 616 n.123. The Court upheld the provision because it was based upon a compelling state interest, namely, the need to minimize the "potential for distortion" in the electoral process. Id. at 617.
Alaska has a long history of both support from and exploitation by nonresident interests. Its beauty and resources have long been lightning rods for social, developmental, and environmental interests. More than 100 years of experience, stemming from days when Alaska was only a district and later a territory without an elected governor or voting representation in Congress, have inculcated deep suspicions of the motives and wisdom of those who, from outside its borders, wish to remold Alaska and its internal policies for dealing with social or resource issues. Outside influence plays a legitimate part in Alaska politics, but it is not one that Alaskans embrace without reservation. The Act's restraints on nonresident contributions attempt to limit this influence, and attempt to prevent elected officials from becoming beholden to those influences. Through mass marketing and solicitations, organizations can marshal vast numbers of contributions by individuals. These nonresident contributions may be individually modest, but can cumulatively overwhelm Alaskans' political contributions. Without restraints, Alaska's elected officials can be subjected to purchased or coerced influence which is grossly disproportionate to the support nonresidents' views have among the Alaska electorate, Alaska's contributors, and those most intimately affected by elections, Alaska residents. These restraints therefore limit the "potential for distortion." We hold that this is a sufficiently compelling state interest.
Id. (emphasis added).[33]
While VanNatta v. Keisling, 151 F.3d 1215, 1220-21 (9th Cir. 1998), struck down an Oregon constitutional amendment that restricted all out-of-district contributions made to state candidates, the provision at issue there is easily distinguishable from Section 2805(c). To begin with, the Oregon law was applicable to both out-of-state contributors and in-state contributors. In addition, the Oregon statute set forth an outright ban on contributions from out-of-state and out-of-district contributors. Section 2805(c), however, is fundamentally different. This provision applies only to out-of-state contributors and does not impact the First Amendment rights "of those most likely to be directly affected by the outcome of a campaign" — in-state contributors. AkCLU, 978 P.2d at 616. Furthermore, Section 2805(c) permits out-of-state contributors to contribute up to 25% of the total contributions collected by Vermont candidates, political committees, and political parties. Thus, Section 2805(c) does not constitute a complete ban on out-of-state contributions. See id.
2. Vermont’s Limitation On Out-Of-State Contributions Is Permissible.
As with Alaska, the purpose of Vermont’s limit on out-of-state contributions is to protect its political processes from corruption and the appearance of corruption caused by large amounts of out-of-state contributions being introduced into Vermont’s political process and structures. The Legislature held numerous hearings and exhaustive debate concerning this provision. After careful consideration, the Legislature made a number of specific findings relevant to the out-of-state contribution limits it was setting for Vermont elections. It found:
Increasing campaign expenditures require candidates to seek and rely on a smaller number of larger contributors, often outside the state, rather than a large number of small contributors. Act 64, Finding (a)(5), Tab 1.
Limiting large contributions, particularly from out-of-state political committees or corporations, and limiting campaign expenditures will encourage direct and small group contact between candidates and the electorate and will encourage the personal involvement of a large number of citizens in campaigns, both of which are crucial to public confidence and the robust debate of ideas. Act 64, Finding (a)(8), Tab 1.
Large contributions and large expenditures by persons or committees, other than the candidate and particularly from out-of-state political committees or corporations, reduce public confidence in the electoral process and increase the appearance that candidates and elected officials will not act in the best interests of Vermont citizens. Act 64, Finding (a)(9), Tab 1.
These findings are entitled to deference regarding the Legislature’s fear of political corruption or the perception of such corruption in Vermont. See Part II.B. Indeed, what would be more corrupting in this republic than the perception that officials might be making decisions in favor of out-of-state interests rather than the best interests of the Vermont electorate? Furthermore, these Findings indicate that the Legislature recognized the actual and threatened distortions of the political process caused by out-of-state contributions and that a limit on such contributions was necessary to restore public confidence, to increase citizens’ involvement in campaigns and to increase the robust debate of ideas. Regarding this portion of Act 64, Senator William Doyle stated that as a result of increasing reliance upon out-of-state funding "the average Vermonter has been, to some degree, disenfrahchised because the average Vermonter cannot afford the price of admission." Journal of the Vermont Senate 1338 (June 12, 1997), Tab 6 at 82.
The Legislative History of Act 64 provides further support to the Legislature’s conclusions regarding out-of-state contributions and its impact on Vermont’s political processes and structures. For example, Legislators and witnesses who appeared in the various legislative committee hearings on Act 64, recognized and discussed the public’s perception that out-of-state contributions were a corrupting influence on Vermont’s political process and structures. See, e.g., S. Gov. Ops., 2/6/97, pp.9-11; H. Loc. Gov., 1/21/97, p.28.
Defendants and defendant-intervenors anticipate that the evidence at trial will provide even further substantiation justifying the fear of corruption caused by these contributions and its perception in Vermont. First, numerous newspaper articles and editorials from Vermont papers provide the foundation for the public’s perception of political corruption both in Vermont and elsewhere.[34] Some of these articles detail the amounts and sources of out-of-state contributions to various campaigns in the past. Some articles discuss the distortion of Vermont’s political process and structures caused by these contributions. Finally, some detail specific out-of-state contributions that have been made to certain candidates and the public perception that such contributions buy access and undue influence.
Second, testimony from trial witnesses, including present and former members of the Vermont Legislature of different political parties, and a current candidate for statewide office, will establish that the fear of corruption from out-of-state contributions is real and that there is a tangible perception of it among the electorate.
Third, various admissions by both plaintiffs establish that the duty of Vermont’s elected officials is to represent their constituents and not people, organizations, and special interest groups that are not residents of their respective districts. See Landell Admissions #64-67, 69, 71; Randall Admissions #64-66, 68, 70-72.
Finally, the compelling nature of Vermont’s interest here is underscored by the fact that this provision of Act 64 was designed to further a number of principles set out in the Vermont Constitution itself. Legislative Finding (b) provides that Act 64 was necessary to guarantee the Vermont Constitution’s guarantee "[t]hat all elections ought to be free and without corruption, and that all voters, having a sufficient, evident, common interest with, and attachment to the community, have a right to elect officers, and be elected into office, agreeably to the regulations made in this constitution." Vt. Const. ch. I, art. 8 (emphasis added). The Constitution further sets forth how long a person must reside in Vermont before he or she may become a candidate for public office. See Vt. Const. ch. II, §§15, 23, 66 (setting various residency requirements for candidates for the House, Senate, Governor, Lt. Governor, and Treasurer). The Constitution also directs the General Assembly to establish residency requirements for persons to be qualified to vote in Vermont elections.[35] See Vt. Const. ch. II, §42. Taken together, these provisions provide ample evidence of the great State interest manifest in ensuring that Vermont candidates and officials will act in the best interest of the Vermont electorate.
3. Vermont’s Out-Of-State Contribution Limits Are Closely Drawn.
The limits set forth in Section 2805(c) are closely drawn to advance the above interests. First, the provision is not underinclusive. Both individual out-of-state contributors and in-state contributors are permitted to contribute to candidates, political committees, and political parties. Section 2805(c) only caps the total amount of out-of-state contributions at 25% to ensure that Vermont’s compelling interests are achieved.
Second, Section 2805(c) is not overinclusive. As discussed in more detail above, the Legislative History of Act 64, the numerous newspaper articles and editorials, the expected trial testimony, and the principles set forth in the Vermont Constitution, all show that out-of-state contributions corrupt or are perceived to corrupt Vermont’s political process and structures. The Legislative Findings further indicate that the Legislature concluded that out-of-state contributions needed to be capped at 25% to limit this corruption and its perception. Such findings should be accorded considerable deference. See National Right to Work Committee, 459 U.S. at 209-10 (holding that while challenged federal statute "restricts the solicitation of corporations and labor unions without great financial resources, as well as those more fortunately situated, we accept Congress’ judgment that it is the potential for such influence that demands regulation"); Austin, 494 U.S. at 661 (in rejecting overinclusiveness argument, Court favorably cited National Right to Work Comm. and held that challenged provision addresses the potential for distortion). As the Court has stated, it would not "second-guess a legislative determination as to the need for prophylactic measures where corruption is the evil feared." Nat’l Right to Work Comm., 459 U.S. at 210.
The Alaska Supreme Court upheld an even more restrictive provision in AkCLU. In that case, the Court found that a 10% cap on out-of-state contributions was "closely drawn to achieve the goal of preventing non-resident contributors from drowning out the voices of Alaska’s residents. 978 P.2d at 617. Cf. VanNatta, 151 F.3d at 1224 (Brunetti, J., dissenting) (finding Oregon’s complete prohibition on out-of-district contribution to be closely drawn to advance Oregon’s interest in eliminating the potential for undue influence).
In conclusion, the recognition by the United States Supreme Court that states have a critical interest in protecting their political processes for their own residents and minimizing or eliminating corruption and the perception of corruption, the Findings of the Vermont Legislature, the Legislative History of Act 64, the numerous newspaper articles and editorials, the expected trial testimony, and the principles set forth in the Vermont Constitution, are enough to uphold the limits imposed on out-of-state contributions as set forth in §2805(c).[36]
III. VERMONT’S REGULATION OF "RELATED EXPENDITURES" IS PERMISSIBLE.
17 V.S.A. §2809 provides a mechanism for attributing to the candidate certain expenditures made by third parties. Specifically, it states that a "related campaign expenditure made on the candidate’s behalf" will be counted as a contribution to the candidate and an expenditure by the candidate. A payment by a third party may be considered a "related campaign expenditure made on the candidate’s behalf" only if the expenditure was "intended to promote the election of a specific candidate or group of candidates, or the defeat of an opposing candidate or group of candidates" and was "intentionally facilitated by, solicited by or approved by the candidate or the candidate’s political committee." 17 V.S.A. § 2809(c). Under the principles of Buckley, such coordinated payments fall within the scope of campaign activities that may be regulated by the State.
A. Buckley And Its Progeny Approve Of The Regulation Of Coordinated Expenditures As Contributions.
Buckley itself considered and approved the regulation of expenditures that were made by third persons acting in coordination with the candidate. 424 U.S. at 36-37, 46-47. Like Act 64, under the Federal Election Campaign Act ("FECA"), expenditures that have been coordinated with a candidate are considered contributions to the candidate. In upholding this provision of FECA, the Supreme Court stated:
If, as we have held, the basic contribution limitations are constitutionally valid, then surely these provisions are a constitutionally acceptable accommodation of Congress' valid interest in encouraging citizen participation in political campaigns while continuing to guard against the corrupting potential of large financial contributions to candidates. The expenditure of resources at the candidate's direction for a fundraising event at a volunteer's residence or the provision of in-kind assistance in the form of food or beverages to be resold to raise funds or consumed by the participants in such an event provides material financial assistance to a candidate. The ultimate effect is the same as if the person had contributed the dollar amount to the candidate and the candidate had then used the contribution to pay for the fundraising event or the food. . . . Treating these expenses as contributions when made to the candidate's campaign or at the direction of the candidate or his staff forecloses an avenue of abuse without limiting actions voluntarily undertaken by citizens independently of a candidate's campaign.
Buckley, 424 U.S. at 36-37 (emphasis added).
The rationale for the Buckley Court’s conclusion is plain. Expenditures made under the direction of or in coordination with a candidate, may legitimately be seen as de facto contributions to the candidate. If avoidance of corruption or the appearance of corruption suffices to justify regulation of direct contributions to candidates, it is inconceivable that those interests would not pass muster to regulate payments that were made at the behest of or in coordination with the candidate’s campaign. It is precisely the link between the donor and the candidate that is the potential source of corruption and its appearance. Where an expenditure is approved or endorsed by the candidate, it poses virtually the same dangers as a direct contribution. That a superficially "independent" third party payment is, in fact, a payment directed or coordinated by the candidate, could cause even greater concern about corruption or its appearance. Clifton v. FEC, 114 F.3d 1309, 1329 (1st Cir. 1997) (Bownes, S.J., dissenting) ("The majority protects the freedom of corporations to meet face-to-face with a candidate, in order to secretly plan the content and presentation of voter guides that the corporation will distribute to the public. I believe this concern should be secondary to protecting the integrity of our electoral process.").
As the Supreme Court has stated, what raises concerns about such coordinated expenditures is their lack of "independence" from the candidate. 424 U.S. at 46-47. In the absence of the purifying force of independence, the government is justified in maintaining its vigilance against corruption and its appearance. Moreover, such regulation is necessary to avoid evasion of the direct contribution limits of the law via "coordinated" payments. See 424 U.S. at 36-37. The Buckley Court contrasted such coordinated expenditures with those that are truly independent:
Section 608(b)'s contribution ceilings rather than § 608(e)(1)'s independent expenditure limitation prevent attempts to circumvent the Act through prearranged or coordinated expenditures amounting to disguised contributions. By contrast, § 608(e)(1) limits expenditures for express advocacy of candidates made totally independently of the candidate and his campaign. Unlike contributions, such independent expenditures may well provide little assistance to the candidate's campaign and indeed may prove counterproductive. The absence of prearrangement and coordination of an expenditure with the candidate or his agent not only undermines the value of the expenditure to the candidate, but also alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate.
424 U.S. at 46-47 (emphasis added).
In Colorado Republican Campaign Committee v. FEC, a plurality of the Court confirmed this understanding of Buckley, at least with regard to coordinated contributions of individuals and political committees.[37] 518 U.S. at 624-25 (Breyer, J., for plurality). In describing Buckley, the Colorado Republican Court stated:
The provisions that the Court found constitutional mostly imposed contribution limits — limits that apply both when an individual or political committee contributes money directly to a candidate and also when they indirectly contribute by making expenditures that they coordinate with the candidate.
Id. at 610 (emphasis added); see Clifton, 114 F.3d at 1311 ("expenditures directed by or ‘coordinated‘ with the candidate could be treated as contributions"); United States v. Goland, 959 F.2d 1449, 1452 (9th Cir. 1992) (upholding criminal conviction based upon expenditure that was made "in concert" with a candidate and was, therefore, considered a contribution).
The Colorado Republican Court refused to permit regulation of what it concluded were party expenditures made, not in concert with candidates, but independently of candidates. The "constitutionally significant fact" that precluded regulation of the expenditures in that case was "the lack of coordination between the candidate and the source of the expenditure." 518 U.S. at 617-18; Shrink, 120 S.Ct. at 907 (lack of coordination kept the Colorado Republican Court from "assuming" absent strong evidence that independent expenditures posed a substantial danger of corruption).
FEC v. Christian Coalition, 52 F. Supp. 2d 45 (D.D.C. 1999), is not to the contrary. While that court mistakenly[38] attempted to fashion a new category of coordinated expenditures — dubbed "expressive coordinated expenditures" — that "might" not be subject to regulation, id. at 85, it ultimately verified the potential dangers of corruption inherent in coordinated expenditures, id. at 88, and created a multi-part test to determine whether such coordination exists regarding particular payments, id. at 91-92.
Vermont’s provisions on "related campaign expenditures made on a candidate’s behalf" are consistent with the coordination case law just described. They seek, in a closely drawn manner, to guard against the same corruption and the appearance of corruption identified in Buckley and Colorado Republican. Section 2809 says absolutely nothing about expenditures made independently of a candidate. Persons wishing to make expenditures, on their own, to promote a candidate are completely free to do so in any amounts they might desire. Only where such expenditures have been "intentionally facilitated by, solicited by or approved by the candidate or the candidate’s political committee" are they regulated by Act 64.
As such, the test for coordination under Section 2809, establishes a higher bar than necessary to pass scrutiny under the Constitution. Cf. Clifton, 114 F.3d at 1311 (suggesting that coordination under Buckley merely requires "some measure of collaboration beyond a mere inquiry as to the position taken by a candidate on an issue"). Significantly, Vermont law establishes a weighty mens rea of intentional conduct. This standard regulates only those expenditures that the candidate has made a conscious decision to facilitate, solicit or approve. As the Proposed Administrative Rule interpreting Section 2809 provides, a candidate must have "some knowledge of the fact, or willful blindness toward the fact that the action will be used in connection with an activity or expenditure on the candidate’s behalf." Proposed Administrative Rule 2000-1, Tab 3.[39]
Expenditures that are "intentionally facilitated" by the candidate pose the same types of dangers identified in Buckley. 424 U.S. at 36-37 & 47. This statutory phrase is explained by Proposed Administrative Rule 2000-1(2) (b), which states: " ’Intentionally facilitated’ means for a candidate or the candidate’s political committee to have consciously, and not accidentally, done an action to make the activity or expenditure possible." Tab 3. This provision retains the intentionality requirement and is necessary as a prophylactic measure to ensure that candidates and third parties are not skirting the contribution and expenditure limits of Act 64 through the ruse of "independent" expenditures that are, in fact, coordinated with the candidate. Unlike in Buckley, such expenditures are simply not "made totally independently of the candidate and his campaign." 424 U.S. at 46-47. As a result, they may be deemed to be contributions and regulated as such.
Likewise, the solicitation and approval provisions of Section 2809 do not deserve a great deal of discussion. Solicitation requires a direct or indirect effort by the candidate or her agent to procure the expenditure. Proposed Administrative Rule 2000-1(2) (b), Tab 3. Approval requires that a candidate "have consciously, and not accidentally, taken any prior action or inaction that indicates permission or approval. Simply knowing that an activity or expenditure is taking place does not, alone, constitute approval." Proposed Administrative Rule 2000-1(2) (d), Tab 3. Such expenditures pose all of the concerns about corruption and the appearance of corruption that Buckley discussed. In short, they certainly have "sufficient contribution-like qualities" to be considered contributions. Christian Coalition, 52 F. Supp. 2d at 91-92. Moreover, they are necessary to ensure that persons or entities do not evade the direct contribution limitations of Act 64. See Buckley, 424 U.S. at 36-37 (restricting coordinated expenditures necessary to avoid circumvention of other limits).
B. "Related Expenditures" By PACs And Political Parties Are Entitled To No Greater Protection.
Similarly, the provisions of 17 V.S.A. § 2809(d), which apply specifically to related expenditures by political parties and political committees, are constitutional. Section 2809(d) applies specifically to political parties and committees, which (as the evidence at trial will show) frequently engage in related or coordinated expenditures that should be attributed to the candidate to avoid evasion of the contribution and expenditure limitations of Act 64. Section 2809(d) distinguishes between related expenditures that are made to support more than six candidates and are intended to serve general party or committee functions (such as promoting voter turnout, platform promotion, and organizational capacity), on the one hand, and those made in support of a few targeted candidates (six or fewer), on the other. The latter are "presumed" to be related expenditures, under the statute, while the former are not. 17 V.S.A. § 2809(d).
Plaintiffs apparently misunderstand this provision, claiming that it requires all party or political committee expenditures on behalf of six or fewer candidates to be treated as "related expenditures," whether or not they are in fact "intentionally facilitated by, solicited by or approved by the candidate or the candidate’s political committee."
That, however, is not the proper interpretation of the statute. The presumption is just that — a presumption, not a categorical determination that all expenditures on behalf of six or fewer candidates are related expenditures. This is clear from the Proposed Administrative Rule promulgated by the Secretary of State pursuant to the authority granted under §2809(f). Proposed Administrative Rule 2000-1(3)(d) provides that, even with respect to a party or political expenditure targeted to six or fewer candidates, the presumption is rebuttable by appropriate evidence showing that the expenditure was not intentionally facilitated, solicited, or approved by the candidate(s). This Proposed Rule is entirely consistent with the legislative history of Act 64, which clearly shows that the presumption was intended to be rebuttable. H. Loc. Gov., 4/10/97, p. 18 (comments of Representative Terry Bouricius, who sponsored amendment addressing coordination that benefits six or fewer candidates, explaining that, if the expenditure is in fact independent, "you can rebut the presumption. . . .So it’s not an absolute.").
Furthermore, Section 2809(d) specifically provides that low-budget events held for the purpose of providing a group of voters the opportunity to meet the candidate personally "shall not be considered" a related expenditure under Section 2809, and are therefore exempt from regulation as related expenditures. This exemption applies if the purpose of the expenditure is to provide voters with the opportunity to meet the candidate personally, the expenditures are made only for refreshments and related supplies consumed at the event, and the amount of the expenditure is less than $100. 17 V.S.A. §2809(d)(1)-(3). As the Secretary of State’s Proposed Rule makes clear, such expenditures are exempt from the statute even if they were, in fact, intentionally facilitated, approved, or solicited by the candidate. Proposed Administrative Rule 2000-1(3)(d). The same is true of any expenditure of less than $50 on a candidate’s behalf, 17 V.S.A. § 2809(b), regardless of whether facilitated solicited or approved by the candidate.
The statute’s presumptions and exemptions are intended to provide guidelines that will facilitate compliance with the statute by political parties and political committees. The mere presumption that certain types of expenditures by such entities are "related expenditures" does not run afoul of cases such as Colorado Republican and NCPAC, when the presumption in question is fully rebuttable as a factual matter. The "constitutionally significant fact" in Colorado Republican was "the lack of coordination between the candidate and the source of the expenditure." 518 U.S. at 617. Colorado Republican merely rejected the FEC’s bald, conclusive presumption that all party expenditures should be deemed to have been coordinated with the candidates. Id. The NCPAC Court also pointed out, in striking down federal limits on independent expenditures by political committees, that the expenditures under review had not been coordinated with the candidates. NCPAC, 470 U.S. at 490 ("On the record before us, these expenditures were ‘independent’ in that they were not made at the request of or in coordination with the official Reagan election campaign committee or any of its agents."); see also Colorado Republican, 518 U.S. at 610 ("The provisions that the [Buckley] Court found constitutional mostly imposed contribution limits — limits that apply both when an individual or political committee contributes money directly to a candidate and also when they indirectly contribute by making expenditures that they coordinate with the candidate.") (plurality opinion). These cases hold only that party or PAC expenditures which are in fact independent cannot be limited. Thus, as long as the presumption established in 17 V.S.A. §2809(d) is not irrebuttable, the statute is consistent with the holdings of Colorado Republican and NCPAC.
Moreover, coordinated expenditures by parties and PACs create the same potential for evasion of direct contribution limits that led the Buckley Court to uphold FECA’s challenged limits on coordinated expenditures. Cf. Buckley, 424 U.S. at 36-37. It would undermine the purposes of Act 64, or any other law limiting contributions to candidates, to forbid regulation of party or PAC expenditures that are coordinated with candidates.
The political party plaintiffs (the Libertarian Party and Vermont Republican State Committee) further argue that, even if the presumptions established by 17 V.S.A. §2809(b) are permissible, the First Amendment should be read to erect an absolute bar on any regulation of coordinated or related party expenditures. This argument rests on the District Court decision in FEC v. Colorado Republican Federal Campaign Comm., which addressed, on remand from the Supreme Court’s 1996 decision in the same case, an issue not decided by the Supreme Court: whether the First Amendment forbids any regulation of coordinated expenditures made by political parties on behalf of candidates, even when the expenditures concededly were coordinated directly with the candidate. The District Court held — for the first time ever -- that Congress does not have the authority to place any restrictions on expenditures coordinated by a party with a candidate.
The Colorado District Court decision, however, rested on an extremely narrow view of the type of corruption that must be demonstrated to support campaign finance regulations, holding that the FEC’s regulation must be struck down in the absence of proof of quid pro quo corruption resulting from party coordinated expenditures. 41 F. Supp. 2d at 1211-1212. In support of this contention, the District Court cited Turner Broadcasting System, 512 U.S. at 664, apparently accepting the plaintiff’s argument that Turner Broadcasting established a new, higher standard for proving the necessity of anti-corruption measures. Id. at 1211. The District Court’s decision, of course, preceded the Supreme Court’s decision in Shrink, which expressly rejected the argument that Turner Broadcasting and other cases established a new standard of proof in campaign finance cases:
[R]espondents are wrong in arguing that in the years since Buckley we have "supplemented" its holding with a new requirement that governments enacting contribution limits must " ‘demonstrate that the recited harms are real, not merely conjectural,’" (quoting United States v. Treasury Employees, 513 U.S. 454, 475 (1995) (in turn quoting Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622, 664 (1994)).
Shrink, 120 S.Ct. at 906-907.
While noting that mere "conjecture" had never been the standard, the Shrink Court held that the sufficiency of the record in Shrink was "not a close call" based on evidence such as "newspaper accounts of large contributions supporting inferences of impropriety," an affidavit by a legislator pointing out the "potential" for large contributions to buy votes, and a statewide vote supporting the campaign reform in question. 120 S.Ct. at 907. Further, Shrink directly rejected the contention that government may not act to regulate campaign finance practices absent quid pro quo corruption:
In speaking of "improper influence" and "opportunities for abuse" in addition to "quid pro quo arrangements," we recognized a concern not confined to bribery of public officials, but extending to the broader threat from politicians too compliant with the wishes of large contributors.
Shrink, 120 S.Ct. at 905 (quoting Buckley, 424 U.S. at 28) (emphasis added). The District Court’s reasoning in Colorado Republican is directly at odds with that of the Supreme Court concerning the type of proof of corruption needed to sustain a campaign finance regulation. Cf. Colorado Republican, 41 F. Supp. 2d at 1211 (criticizing FEC for not providing evidence of quid pro quo corruption).
In sum, there is no valid basis for plaintiffs’ argument that the spending of party resources at a candidate’s direction should be exempt from Buckley’s basic observation that coordinated expenditures, because of their similarity to contributions, present the potential for corruption and its appearance. The "related expenditure" provisions of 17 V.S.A. §2809(d) should be upheld.
IV. VERMONT’S LIMITATIONS ON CANDIDATES’ EXPENDITURES ARE CONSTITUTIONAL.
After careful deliberation, the Vermont Legislature decided that comprehensive and meaningful regulation of campaign finance should include overall limits on the amounts of money that candidates spend on their campaigns. 17 V.S.A. §2805a(a) establishes a generous spending limit of $300,000 for gubernatorial candidates (except for a sitting incumbent running for re-election, whose spending limit is set 15% lower, at $255,000). Id. at §§2805a(a)(1), 2805a(c). The Act also establishes limits on spending by candidates for other statewide and legislative office, which take into account the costs of running for those offices and, in the case of the legislature, make adjustments pegging the limit to the number of seats in the legislative district.[40] Again, all of these limits are set at a lower level for incumbents than for challengers. Id. at §2805a(c).[41]
Plaintiffs contend that this Court must overrule Buckley v. Valeo in order to sustain the statute’s limits on campaign spending. That contention is incorrect. Buckley did not announce a per se ban on any and all limits on campaign spending. Instead, it held that the congressional spending limits established by FECA should be given "exacting scrutiny" because of their potential impact on First Amendment rights of political expression, 424 U.S. at 44-45, and that the FECA limits were not justified based on the record before the Court. The facts do matter, even when courts are applying the strictest standard of constitutional review.[42] As the Supreme Court has cautioned: "[W]e wish to dispel the notion that strict scrutiny is ‘strict in theory, but fatal in fact.’" Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 237 (1995) (quoting Fullilove v. Klutznick, 448 U.S. 448, 519 (1980) (Marshall, J., concurring in judgment)).
Accordingly, plaintiffs’ bare invocation of Buckley cannot establish the unconstitutionality of Vermont’s spending limits. As the record will show, Vermont’s spending limits are closely drawn to serve compelling governmental interests, including interests whose sufficiency was not tested in Buckley.
A. Buckley Did Not Hold That Campaign Spending Limits Are Per Se Unconstitutional.
In Buckley, the Supreme Court addressed the constitutionality of a broad range of post-Watergate campaign reforms adopted by Congress for federal elections, including limits on contributions to candidates and on expenditures in support of such candidates, provisions for partial public financing of presidential elections, reporting and disclosure provisions, and other measures. The Court ruled that "both contribution and expenditure limitations operate in an area of the most fundamental First Amendment activities," 424 U.S. at 14, but found that FECA’s expenditure ceilings "impose significantly more severe restrictions on protected freedoms" than did its limits on contributions. Id. at 23. Under Buckley, therefore, limits on campaign spending are subject to exacting scrutiny. 424 U.S. at 44-45.
Where plaintiffs err, however, is in asserting that this means automatic invalidation of any limit on campaign spending. Exacting scrutiny of limits on campaign spending is not the same as a per se ban on such limits. In recent years, the Supreme Court has upheld a number of electoral regulations against First Amendment challenge even while applying strict scrutiny. See Austin, 494 U.S. 652 (applying strict scrutiny to Michigan statute restricting independent expenditures by corporations in political campaigns, but upholding restriction); Burson v. Freeman, 504 U.S. 191 (1992) (applying strict scrutiny to state ban on electioneering activity near polling places, but upholding ban).[43]
Buckley’s discussion of whether FECA’s spending limits were necessary to deter corruption or the appearance of corruption demonstrates the factually contingent nature of the Court’s ruling on this point. While the appellate court in Buckley had ruled that "the expenditure restrictions [of FECA] are necessary to reduce the incentive to circumvent direct contribution limits," the Supreme Court found: "There is no indication [in the record] that the substantial criminal penalties for violating the contribution ceilings combined with the political repercussion of such violations will be insufficient to police the contribution provisions." Buckley, 424 U.S. at 55-56. Thus, the assertion that spending caps were a necessary concomitant to contribution limits was rejected in Buckley only as a matter of fact, not of law. What if the record in Buckley had established that contribution limits, and the criminal and political consequences of violating them, had proved insufficient to serve the government’s compelling interest in deterring corruption and the appearance of corruption? Clearly, Buckley leaves the door open for a determination that expenditure limits might be justified upon a factual record different from that presented in Buckley.
Furthermore, Buckley was careful to note that only three possible state interests had been offered to justify FECA’s congressional campaign spending limits: (1) deterring corruption and preventing evasion of the contribution limits; (2) equalizing the financial resources of candidates; and (3) restraining the cost of election campaigns for its own sake. Buckley, 424 U.S. at 55-56. Therefore, in addition to leaving the door open for a different factual showing, Buckley also leaves the door open for states to identify new and different interests supporting the enactment of spending limits.
In the 24 years since Buckley, the Supreme Court has not again reviewed any statutory scheme establishing limits on the amount that candidates may spend on their election campaigns.[44] In the Court’s most recent cases addressing other campaign finance issues, however, a total of four Justices have now gone on record suggesting (or stating outright) that neither Buckley nor the First Amendment should be read as an inflexible bar to campaign finance regulation, even with respect to spending limits. See Shrink, 120 S.Ct. at 913 (concurring opinion of Breyer, J., joined by Ginsburg, J.) (calling for approach that balances competing constitutional interests and stating "it might prove possible to reinterpret aspects of Buckley in light of the post-Buckley experience stressed by Justice Kennedy [in his dissenting opinion], making less absolute the contribution/expenditure line, particularly in respect to independently wealthy candidates, whose expenditures might be considered contributions to their own campaigns"); id. at 916 (Kennedy, J., dissenting) (noting difficulty of constitutional issues surrounding campaign regulation but stating "For now, however, I would leave open the possibility that Congress, or a state legislature, might devise a system in which there are some limits on both expenditures and contributions, thus permitting officeholders to concentrate their time and efforts on official duties rather than on fundraising"); Colorado Republican, 518 U.S. at 649-50 (Stevens, J., joined by Ginsburg, J., dissenting) ("It is quite wrong to assume that the net effect of limits on contributions and expenditures — which tend to protect equal access to the political arena, to free candidates and their staffs from the interminable burden of fund-raising, and to diminish the importance of repetitive 30-second commercials — will be adverse to the interest in informed debate protected by the First Amendment.").
Two justices have taken the opposite position, stating that limits on contributions, as well as limits on spending, violate the First Amendment. Shrink, 120 S.Ct. at 916 (Thomas, J., joined by Scalia, J., dissenting). The remaining justices, Chief Justice Rehnquist, Justice O’Connor, and Justice Souter, have refrained from taking any position on whether the First Amendment presents a per se bar to any legislation limiting spending in candidate campaigns.[45]
In recent years, only one circuit has had the occasion to consider the constitutionality of a locally enacted spending limits law. In Kruse v. City of Cincinnati, 142 F.3d 907 (6th Cir.), cert. denied, 525 U.S. 1001 (1998), the Sixth Circuit struck down spending limits enacted by the City of Cincinnati for its city council elections. Two members of the panel concluded — contrary to the analysis presented above — that Buckley should be read as a complete ban on campaign spending limits, regardless of the facts and circumstances that may be presented to support such limits. The third member of the panel, while concurring in the ruling striking down Cincinnati’s limits, disagreed with the majority’s interpretation of Buckley, concluding that Buckley does not render spending limits unconstitutional as a matter of law:
The Supreme Court’s decision in Buckley . . . is not a broad pronouncement declaring all campaign expenditure limits unconstitutional. It may be that the interest in freeing officeholders from the pressures of fundraising so they can perform their duties, or the interest in preserving faith in our democracy, is compelling, and that campaign expenditure limits are a narrowly tailored means of serving such an interest.
Id. at 920 (concurring opinion of Cohn, D.J., sitting by designation). Notably, Judge Cohn recognized the factually contingent nature of the Buckley ruling even before the Supreme Court’s Shrink decision, in which Justices Breyer and Kennedy added their voices to those of Justices Ginsburg and Stevens in stating that Buckley should not foreclose the possibility of upholding limits on campaign spending.
For all the reasons identified above, Buckley is not a complete prohibition on all limits on campaign spending. Accordingly, it is not necessary for this Court to overrule Buckley in order to sustain Vermont’s spending limits.[46] Rather, the question before this Court is whether Vermont’s spending limits satisfy exacting scrutiny; that is, whether, based on the particular factual record to be presented to this Court, they are closely drawn to serve a compelling governmental interest. As canvassed in the following two sections, the record will show that Vermont’s spending limits meet that standard and should be upheld by this Court.
B. Vermont’s Limits Serve Compelling State Interests.
1. Vermont’s Spending Limits Are Justified By The Compelling Interest In Avoiding The Reality And Appearance Of Corruption And Assuring Citizen Confidence In Government.
As discussed above, Buckley and subsequent Supreme Court decisions recognize that avoiding both corruption and the appearance of corruption are governmental interests of the highest order. "Congress could legitimately conclude that the avoidance of the appearance of improper influence ‘is also critical . . . if confidence in the system of representative Government is not to be eroded to a disastrous extent.’" 424 U.S. at 27, (citing Letter Carriers, 413 U.S. at 565).
While the record before the Buckley Court in 1976 may have suggested that contribution limits alone were sufficient to limit the improper influence of money and restore citizens’ faith in the integrity of government, the record before this Court 24 years later demonstrates the opposite. Although campaign contributions in federal elections have remained limited to $1,000 per election since Buckley was decided, candidates’ pursuit of ever-larger campaign war chests has fueled greater and greater public cynicism about the ability of elected officials to act in the public interest. Voter turnout and participation has declined even as campaign spending has skyrocketed. If the federal system of limited contributions and unlimited spending had been working to deter corruption and its appearance for the past 24 years, the Vermont Legislature would not have heard witness after witness point out how the money chase at the national level "is corrupting the political process and creating a cynicism that’s affecting us here in the state of Vermont." H. Loc. Gov., S. Gov. Ops., 2/13/97, pp. 31-32.[47] Instead, as the Vermont Legislature specifically found in enacting Act 64:
Robust debate of issues, candidate interaction with the electorate, and public involvement and confidence in the electoral process have decreased as campaign expenditures have increased. Act 64, Finding (a)(4), Tab 1.
Citizen interest, participation and confidence in the electoral process is lessened by excessively long and expensive campaigns. Act 64, Finding (a)(10), Tab 1.
Survey research by Celinda Lake, a nationally recognized expert public opinion researcher, confirms that Vermonters are extremely concerned about the influence of special interests in the political process. Nearly three quarters of voters say that ordinary citizens do not have enough influence over politics and government in Vermont (74 %), while similar percentages believe that wealthy individual and large corporations exercise too much influence over politics and government (70 and 71 %, respectively). See Ex. M, Declaration of Celinda Lake, at 7-8.
The testimony of knowledgeable Vermont legislators, citizen activists, and expert witnesses will further confirm at trial how a system of unlimited campaign spending undermines public confidence in government. Under such a regime, an "arms race" mentality causes candidates to amass greater and greater war chests, not because they are needed to conduct an adequate campaign, but simply because of the candidates’ fear of being outspent by an opponent. See E. Drew, Politics and Money, at 94. The public sees and understands that the pressure to raise unlimited amounts continues to make fundraising a central preoccupation of candidates, even when individual contributions are limited. See, e.g., Campaign Spending Fuels Voter Cynicism, Burlington Free Press, Dec. 29, 1996 (reporting charge that "[A]s elections get more expensive . . . the potential for special interests to abuse the system increases").
Spending limits will address the reality and perception of corruption in ways that contribution limits alone cannot do. To understand this, consider the potential contributions that can be made by one hypothetical family that owns a business in Vermont. Even under Vermont’s new contribution limits, that family, if it wishes to influence the election of a candidate for statewide office, can still contribute the following: $400 from the husband, $400 from the wife, and $400 from the corporation, all directly to the candidate’s campaign; $2,000 from the husband, $2,000 from the wife, and $2,000 from the corporation to the candidate’s political party; and $2,000 from the husband, $2,000 from the wife, and $2,000 from the corporation to the political party’s legislative PAC. The party and the legislative PAC, in turn, can contribute another $400 each to the candidate. Thus, from just one family that controls a business in Vermont, $9,200 can still pour into the coffers of a Vermont candidate and his party, with $2,000 of that ending up in the candidate’s own campaign fund.[48] That does not even take into account the likelihood that the family may encourage other officers and employees of the family’s business to make similar contributions, further magnifying the influence that may be brought to bear by wealthy interests that may have business before the state. Nor does it take into account the potential that the candidate is also supported by one or more PACs (such as the Vermont Right-to-Life Committee Political Committee) that can take additional contributions from the husband, wife and corporation and then make another $400 contribution to the candidate.
The Vermont Legislature correctly understood that the "bundling" of contributions, and the ability of donors to multiply their contributions through different vehicles, such as a party or a PAC, are problems that cannot be remedied by limiting contributions alone. See H. Loc. Gov., 1/21/97, p.36 (testimony of Anthony Pollina) (noting that states that have limited contributions alone find that it encourages bundling of contributions).[49] Further, the Vermont public is aware of how contribution limits can be circumvented in this manner through extensive discussion of these practices in the Vermont press. See He’s a Lock, But Funds Still Roll Right In, Rutland Herald, Oct. 2, 1996 (reporting how several executives of a Norfolk, Virginia, health care corporation, and their families, bundled large contributions).
Thus, under a regime where campaign spending is unlimited, the influence that can be brought to bear on a candidate by large donors can continue, even when individual contributions are limited.[50] Only if all candidates are subject to a reasonable cap on spending can the public be confident that there is little need for candidates to curry favor with large donors. With a candidate’s overall spending limited, he or she will no longer face an unlimited need for funds. The candidate will no longer fear that, by opposing the interests of significant donors, the candidate may face a severe disadvantage in the arms race for unlimited campaign funds. The candidate’s knowledge that overall spending is limited makes the contributions of any single set of interests less important and therefore less influential. The Vermont Legislature thus properly concluded that spending caps provide the only means of balancing the need to promote public confidence in government with the need to permit some level of continued contributions to candidates.
Further, the defendants and defendant-intervenors will present at trial the findings of recent social science research on campaign spending limits and how they can serve to bolster voter interest in and connection to the electoral system. Professor Donald Gross of the University of Kentucky will explain that, based on studies of congressional elections, direct forms of voter mobilization efforts (such as personal contact from a party or a candidate) have a much more profound and positive effect on individual citizen participation than indirect forms measured by overall campaign spending. See Ex. X, Report of Donald Gross. Unlimited campaign spending cannot be justified as a means of increasing voter interest in or connection to the electoral process. Instead, as Professor Gross’s research confirms, simply increasing the amount of money in campaigns is as likely to reduce, as it is to increase, voter turnout. High spending campaigns often work to reduce voter participation by encouraging candidates to rely on negative advertisements and indirect forms of voter mobilization that tend to be ineffective. Spending limits, by encouraging greater candidate reliance on direct contact with voters, have the potential to increase voter interest in and connection to the process. See excerpts from Goidel, Gross & Shields, Money Matters, Tab 13.
Thus, social science research bolsters the finding of the Vermont Legislature that campaign spending limits are needed to foster "[r]obust debate of issues, candidate interaction with the electorate, and public involvement and confidence in the electoral process," see Act 64, Finding 4, and confirms the compelling interests supporting Vermont’s limits on campaign expenditures.
2. Vermont’s Expenditure Limits Are Necessary To Assure That Candidates And Officeholders Will Spend Less Time Fundraising And More Time Interacting With Voters And Performing Official Duties.
Vermont also has a compelling interest in freeing its elected officials and candidates for office from the pressures of fundraising so that they may carry out their representative duties without interference. The findings of Act 64 specifically note the legislature’s conclusion that "candidates for statewide office are spending inordinate amounts of time raising campaign funds." Act 64, Finding (a)(1), Tab 1.
Although campaigns in Vermont are less expensive than in many jurisdictions, expenditures have been increasing, and the increasing amount of time candidates spend raising money for their campaigns has fueled the erosion of public confidence in the democratic process. As noted by a prominent Vermont lobbyist in explaining his support for reform, "Politicians are forced to spend as much time begging as they do campaigning." David Wilson, Vermont Legislature Needs Campaign Finance Reform, Burlington Free Press, Jan. 30, 1997, Tab 7. Prominent elected officials were even blunter, with Senator Peter Shumlin testifying that the time he spent in a massive fundraising effort prior to the 1996 elections "was one of the most distasteful things that I’ve had to do in public service." S. Gov. Ops., 2/4/97, pp. 11-12. See also Democratic Process Relies On Reform, Burlington Free Press, Oct. 6, 1997 (stating "Money not only threatens to corrupt the process, it sabotages the political dialogue as well. Candidates spend too much time begging for dollars and too little time talking issues.")
As shown above, Buckley left the door open to proof of new facts and circumstances that would demonstrate why spending limits are necessary to serve the compelling governmental interest in deterring corruption and the appearance of corruption. It also left the door open for a showing that new and compelling governmental interests not directly addressed in Buckley would justify a state’s decision to limit campaign expenditures. See also NCPAC, 470 U.S. at 496-497 (stating that "preventing corruption or the appearance of corruption are the only legitimate and compelling government interests thus far identified for restricting campaign finances"(emphasis added)). Vermont’s interest in freeing officeholders and candidates from the pressures of fundraising is a new and compelling justification for spending limits that is not foreclosed by the Supreme Court’s ruling in Buckley. See Kruse, 142 F.3d at 920 (Cohn, D.J., concurring) ("It may be that the interest in freeing officeholders from the pressures of fundraising so they can perform their duties, or the interest in preserving faith in our democracy, is compelling, and that campaign expenditure limits are a narrowly tailored means of serving such an interest"); Shrink, 120 S.Ct. at 916 (leaving open possibility of "a system in which there are some limits on both expenditures and contributions, thus permitting officeholders to concentrate their time and efforts on official duties rather than on fundraising.") (Kennedy, J., dissenting).[51]
3. Vermont’s Expenditure Limits Serve The State’s Compelling Interest In Electoral Competition And In Protecting the Fundamental Right to Equal Political Participation.
In the 24 years since Buckley was decided, Vermonters and the nation as a whole have witnessed how unlimited campaign spending serves to discourage electoral competition and turn the electoral process as a whole into a preserve that is closed to average citizens. At the federal level, Buckley’s legacy of limited contributions and unlimited spending has led to congressional elections in which the winners outspent the losers, on average, by more than two to one in 1996. See Ex. X, Report of Professor Donald Gross, at 22 n.28. Candidates amass campaign war chests not for the purpose of fostering greater public debate, but to scare off potential challengers who are unable to raise similar sums. Incumbents benefit most from this arms-race mentality, because donors have far more incentive to contribute to those who already hold sway over important public policy initiatives than to candidates who have not yet won office. As a result, more and more elections are decided without a serious contest, or any contest at all.
The implications for democratic governance are deeply disturbing. As Professor Gross’s report points out:
Electoral competition is . . . a central component of democratic governance. In many respects, the ultimate weapon of public accountability in a democratic system is the ability of citizens to remove political actors through elections. And, electoral competition is the mechanism that keeps accountability viable.
Electoral competition requires that voters be given a choice among at least two viable candidates. High levels of campaign spending poses a threat to such competition because large incumbent war chests tend to discourage serious challengers.
Ex. X, at 7-8. See also J. Box-Steffensmeier, "A Dynamic Analysis of the Role of War Chests in Campaign Strategies," American Journal of Political Science, 40: 352-371 (1996).
In Vermont, spending on election campaigns has remained much lower; the state’s small population and tradition of retail politics has kept spending far below the levels seen in most other states. Yet the Legislature saw unequivocal evidence that the special character of Vermont elections was starting to change. The Governor’s inaugural address reported that, in the eight years between 1988 and 1996, the amount spent in the highest-spending Vermont State Senate race had more than doubled, from $14,500 in 1988 to $30,600 in 1996. As Republican Senator William Doyle noted in debate on Act 64:
In the 1970s, the limit on campaign spending for a statewide race for the general election was $40,000. In 1972, Representative Tom Salmon of Rockingham, who announced for governor in August, spent $29,000. His opponent, Fred Hackett, of South Burlington spent $39,000. Two years later, in 1974, the top spender for governor spent $39,000.
A few years after Buckley, aggregate spending for governor on several occasions totaled over $1 million — a more than 10-fold increase . . . .
Journal of the Vermont Senate, June 12, 1997, at 133, Tab 6 at 81-82.
Witnesses before the Vermont Legislature repeatedly cited the threat to electoral competition that results from the massive war chests that can be compiled under a system of unlimited spending. H. Loc. Gov., S. Gov. Ops., 2/13/97, pp. 52-53 (testimony of Nat Frothingham, pointing out how "war chest" phenomenon "has a chilling effect on the democratic process and frightens people from participating"); S. Fin., 5/15/97, p. 12 (Testimony of Anthony Pollina) ("[O]ne reason incumbents win is because they don’t get serious challengers because people say, ‘Why should I bother devoting the next year of my life in running for state-wide office when I know the incumbent is going to have a half a million dollars before I am ready to announce.’").
Unlimited campaign spending not only deters electoral competition, but does so in a way that is fundamentally at odds with the basic tenets of American democracy. It erects a wealth barrier to electoral participation, making candidates’ ability to seek office depend upon their personal wealth or access to wealth rather than the power of their ideas. Such wealth-based barriers to electoral participation conflict directly with principles of equal protection long recognized by the Supreme Court. In Bullock v. Carter, 405 U.S. 134 (1972), for example, the Court struck down candidate filing fees imposed as a prerequisite to running in party primaries. The right to equal political participation, the Court held, is violated when:
potential office seekers lacking both personal wealth and affluent backers are in every practical sense precluded from seeking the nomination of their chosen party, no matter how qualified they might be, and no matter how broad or enthusiastic their popular support.
405 U.S. at 143. Such wealth barriers to electoral participation, moreover, infringe the rights of voters who would support candidates lacking the price of admission as well as the rights of candidates themselves. Bullock, 405 U.S. at 144 ("[W]e would ignore reality were we not to find that this system falls with unequal weight on voters, as well as candidates, according to their economic status"). Cf. M.L.B. v. S.L.J., 519 U.S. 102, 124 (1996) (expressly reaffirming the principle that the "basic right to participate in political processes as voters and candidates cannot be limited to those who can pay...").
Despite Buckley’s dismissal of cases such as Bullock, see 424 U.S. at 49 n.55, it defies logic to suggest that the same Constitution that forbids states to condition electoral participation on wealth also forbids states to protect the ability of non-wealthy candidates and voters to participate meaningfully in the political process. Plaintiffs rely upon Buckley’s statement that "the concept that government may restrict the speech of some elements of our society in order to enhance the relative voice of others is wholly foreign to the First Amendment." 424 U.S. at 49. As Justice Breyer points out in his concurrence in Shrink, however, "those words cannot be taken literally." 120 S. Ct. 912 (Breyer, J., joined by Ginsburg, J., concurring). The Constitution, he points out,
often permits restrictions on the speech of some in order to prevent a few from drowning out the many — in Congress, for example, where constitutionally protected debate, Art. I., §6, is limited to provide every Member an equal opportunity to express his or her views. Or in elections, where the Constitution tolerates numerous restrictions on ballot access, limiting the political rights of some so as to make effective the political rights of the entire electorate. See, e.g., Storer v. Brown, 415 U.S. 724.
Id.; see also id. at 911 (noting that "in the context of apportionment, the Constitution ‘demands’ that each citizen have ‘an equally effective voice’") (Breyer, J., joined by Ginsburg, J., concurring) ( quoting Reynolds v. Sims, 377 U.S. 533, 565 (1964).
Cases subsequent to Buckley confirm that the Court has not turned a blind eye to the harmful effects of concentrated wealth on the political process, even when considering restrictions on expenditures. In Austin, the Court upheld a Michigan criminal statute preventing corporations from spending general funds as independent expenditures in support of candidates in state elections. The Court found that Michigan had a compelling interest in combating a "different type of corruption in the political arena: the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public’s support for the corporation’s political ideas." 494 U.S. at 660. As one constitutional scholar writes, the Austin Court "squarely acknowledged — for the first time in constitutional discourse — that inequalities of private economic power tend to reproduce themselves in the political sphere and displace legitimate democratic governance." S. Loffredo, Poverty, Democracy and Constitutional Law, 141 U. Pa. L. Rev. 1277, 1285 (1993).
When spending in election campaigns is unlimited, the degree of political participation a citizen enjoys becomes directly tied to his or her financial resources. If money equals speech — a statement that Buckley never really made — then those without wealth have no political voice. But, as Justice Stevens noted in Shrink, "Money is property; it is not speech." 120 S. Ct. at 910 (Stevens, J., concurring). He explained:
Speech has the power to inspire volunteers to perform a multitude of tasks on a campaign trail, on a battleground, or even on a football field. Money, meanwhile, has the power to pay hired laborers to perform the same tasks. It does not follow, however, that the First Amendment provides the same measure of protection to the use of money to accomplish such goals as it provides to the use of ideas to achieve the same results.
Justice Stevens made the same point in somewhat different terms in Colorado Republican:
I believe the Government has an important interest in leveling the electoral playing field by constraining the cost of federal campaigns. As Justice White pointed out in his opinion in Buckley, ‘money is not always equivalent to or used for speech, even in the context of political campaigns.’ [Justice White dissented in Buckley on the campaign spending limits question.] It is quite wrong to assume that the net effect of limits on contributions and expenditures — which tend to protect equal access to the political arena, to free candidates and their staffs from the interminable burden of fund-raising, and to diminish the importance of repetitive 30-second commercials — will be adverse to the interest in informed debate protected by the First Amendment.
518 U.S. at 649-50 (Stevens, J., joined by Ginsburg, J., dissenting).
By setting reasonable spending limits, Act 64 protects the promise of political equality while still enabling candidates to run viable, effective campaigns. Act 64 thus serves Vermont’s compelling interest in promoting healthy electoral competition and protecting the right of all citizens to participate equally in the electoral process.
4. Vermont’s Expenditure Limits Serve The Compelling State Interest in Promoting Robust Debate Of Ideas And An Informed Citizenry.
A system of unlimited spending also impoverishes public debate by limiting the candidate field to those who can raise the ever-higher amounts that become necessary to remain competitive, and encouraging candidates to bypass direct contact with voters and their opponents in favor of reliance on less informative media expenditures. As the Vermont Legislature found:
Robust debate of issues, candidate interaction with the electorate, and public involvement and confidence in the electoral process have decreased as campaign expenditures have increased. Act 64, Finding (a) (4), Tab 1.
Although Buckley stated that a restriction on spending "necessarily reduces the quality of expression by restricting the number of issues discussed, the depth of their exploration, and the size of the audience reached," 424 U.S. at 19, the record before the Court in Buckley did not demonstrate otherwise. The record before this Court, 24 years, later is different. Meaningful electoral debate cannot take place in the absence of meaningful electoral competition. As the previous discussion demonstrates, a regime of unlimited spending undermines the very conditions needed for a robust debate of the issues by deterring electoral competition.
Moreover, Professor Gross’s research contradicts the contention that unlimited campaign spending is necessary as a means for citizens to make a more informed voter choice. Professor Gross found that, in congressional elections, increased campaign spending generally had either no effect or a negative effect on respondents’ political interest, concern about the election outcome, and attentiveness to news reports about the campaign, instead merely increasing candidate familiarity to some extent. It did not make citizens any more certain in the ideological placement of candidates. Gross Report Ex. X, at 6-7, and Money Matters, Tab 13.
Again, in contrast to the ineffectiveness of high campaign expenditures, direct contact by a candidate or political party with a voter significantly increased voters’ interest in the election, their concern about the outcome, and their ability to accurately place the candidates on ideological scales. "Just as direct personal contact with citizens seems to be the key to stimulating voter participation, it also seems to be the key to enhancing voter information and citizens’ connection to the electoral process." Ex. X, at 7. Accordingly, to the extent that Vermont’s expenditure limits encourage greater reliance on direct mobilization efforts, they are likely to further, not infringe, First Amendment values, by promoting more informed voter choices by an engaged and active citizenry. Cf. Anderson v. Celebrezze, 460 U.S. 780, 796 (1983) (noting, in context of ballot access restrictions: "There can be no question about the legitimacy of the state’s interest in fostering informed and educated expressions of the popular will in a general election.").[52]
C. Vermont’s Limits Are Closely Drawn To Serve The State’s Compelling Interests.
The evidence will show that the spending limits established by Act 64 are closely drawn to serve the state’s compelling interests while permitting candidates to run robust and effective electoral campaigns. During the process of enacting Act 64, Secretary of State James Milne presented campaign finance summaries for all the statewide offices for 1978 through 1996 to inform the Legislature’s debate on appropriate levels for spending and contribution limits. See S. Gov. Ops., 1/23/97, pp. 13-15. Of course, the Legislature also relied upon the members’ first-hand experience with campaign spending in setting the expenditure limits. The Legislature also considered the limits that had been established in Vermont’s former voluntary spending limit provision (17 V.S.A. § 2842, repealed by Act 64, Tab 4), but made adjustments where appropriate. For example, the Legislature raised the limits for Treasurer, Secretary of State, and Auditor from $40,000 to $45,000, while lowering the gubernatorial and Attorney General limits from $400,000 and $50,000, respectively, to $300,000 and $45,000.
The limits are not intended to, nor will they, deprive candidates of the ability to communicate with voters and run an effective campaign. Instead, the limits are pegged at a level that encourages full and vibrant discussion and debate on the issues. Indeed, Vermont’s system will enhance public debate by allowing ideas rather than fund-raising to be the focus of political campaigns.
Professor Gierzynski’s analysis further demonstrates that the spending limits are in keeping with past patterns of spending in Vermont elections. With respect to the Legislature, most candidates over the past three election cycles have spent less than the amounts allowed under the new limits. For the Senate, average spending by major party candidates in all but the single member senate districts was below the spending limits for those districts. Contrary to plaintiffs’ arguments about the detrimental impact of limits on challengers, senate incumbents spent more money than challengers in each of the three election cycles that were studied, and thus would be more affected by the limits than challengers. Ex. V, Table 20.
House candidates are even less likely to be hampered by the new spending limits, given their past patterns of spending. In 1998, all categories of candidates -- incumbents, challengers, Democrats, Republicans, Progressives — spent less than the new spending limits on average. Incumbents, on average, spent $623 less than the limit, while nonincumbents spent $493 less than the limit on average. In 1996, only Progressive Party candidates spent, on average, more than the expenditure limit. In 1994, the average candidate in a single member district spent $10 more than the limit. Ex. V, Table 21.
Similarly, the spending limits will not impede the ability of statewide candidates to mount effective campaigns. In 1994 and 1996, neither of the major party gubernatorial candidates spent in excess of the limits that will now apply to gubernatorial races. In the 1998 race, only the incumbent, Governor Dean, would have exceeded the new spending limit. The majority of all major party candidates for all statewide offices in the three election cycles spent less than what the new spending limits would allow. None of the third party candidates for statewide office came anywhere near the new limits in their spending. Ex. V, Tables 17-19.
Moreover, specific examples from past statewide elections confirm that the spending limits permit effective campaigning. Jim Milne unseated incumbent Secretary of State Don Hooper in 1994 while spending $26,733, an amount that was $18,276 below the new expenditure limits (and $13,000 less than what Hooper spent). Ex. V, Table 19. Milne was later unseated by Deborah Markowitz, who won while only slightly exceeding the new limit. Ruth Dwyer mounted a serious challenge to Governor Dean in 1998 while spending about $50,000 less than the new limits would allow. Ex. V, Tables 17-19.
This quantitative evidence of the reasonableness of the new limits will be supplemented by the testimony of legislators, candidates and past officeholders who are thoroughly familiar with the requirements of an effective campaign for Vermont office.
Survey research on the views of Vermonters also confirms that, in evaluating the importance of various sources of political information, Vermont voters place more importance on free or inexpensive sources of information, such as public debates and unaffiliated news coverage of candidates, than on paid political advertisements. Eighty percent of voters find public debates important in deciding how to vote in Vermont state elections, including a solid majority (59 %) who find them very important. By contrast, more than two-thirds of voters say they see too many political ads for or against state and local candidates in a typical year (69%). This holds true across all demographic and partisan lines, with a majority of voters in every subgroup reporting that they see too many political ads in a typical election year. Ex. M, Lake Declaration, at 6-7.
Still other evidence confirms that Vermont’s mandatory spending limits are closely drawn to serve the state’s compelling interests. In particular, the record will demonstrate that Vermont first tried to achieve its goals through voluntary spending limits, but that effort failed. A particularly dramatic drop in adherence to Vermont’s voluntary spending limits occurred between 1994 and 1996. The plaintiffs’ responses to defendants’ Requests for Admission concede the following:
Although 86% of Vermont House candidates filed affidavits promising to adhere to the voluntary limits on campaign spending in 1994, only 7% of Vermont House candidates did so in 1996, and 9% did so in 1998. Landell and Randall Admission #51.
Although 87% of Vermont Senate candidates filed affidavits promising to adhere to the voluntary limits on campaign spending in 1994, only 16% of Vermont Senate candidates did so in 1996 and 3% did so in 1998. Landell and Randall Admission #52.
Although 90% of candidates for Vermont statewide office filed affidavits promising to adhere to the voluntary limits on campaign spending in 1994, only 16% of candidates for statewide office did so in 1996, and none did so in 1998. Landell and Randall Admission #53.
Voluntary spending limits have not been adhered to by most candidates for state office in Vermont in the last two election cycles. Landell and Randall Admission #54.
When spending limits are voluntary, many candidates perceive that accepting the limits will open themselves up to a competitive disadvantage against an opponent who declines to accept them. The testimony will show that even candidates who personally preferred to observe Vermont’s voluntary spending limits, and felt they could run more than adequate campaigns without them, felt compelled to reject the limits because of the possibility that they would be overwhelmed by a opponent who might reject the limits. Thus, Vermont did not act precipitously in deciding that mandatory limits were necessary, but acted only after exploring less restrictive alternatives and finding them to be ineffective.
V. VARIOUS PLAINTIFFS LACK STANDING TO RAISE THE CHALLENGES SET FORTH IN THE COMPLAINTS.
Following the February conference with the Court and to afford all parties the opportunity to complete discovery and trial preparation in these expedited cases, defendants and defendant-intervenors did not file pretrial motions for summary judgment based upon standing. These cases, however, raise serious questions as to whether all of the plaintiffs’ have standing to assert all of the claims raised in the complaints. These questions concern, inter alia, whether plaintiffs have suffered the requisite injury-in-fact necessary to invoke Article III standing regarding the specific provisions attacked, Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992); Daggett II, 205 F.3d at 462-63 (rejecting concept of "listener standing"); and whether plaintiffs can overcome the presumption against permitting persons to raise the rights of third parties, Warth v. Seldin 422 U.S. 490, 499 (1975).
As plaintiffs bear the burden of proving the factual basis necessary for standing, Warth, 422, U.S. at 518, defendants and defendant-intervenors anticipate addressing the issue of standing in Motions for Judgment as a Matter of Law, pursuant to Fed. R. Civ. P. 50, following completion of plaintiffs’ case-in-chief.
VI. CONCLUSION.
In light of the foregoing and the evidence to be submitted at trial, defendants and defendant-intervenors, respectfully request that the Court uphold the challenged provisions of Act 64.
Submitted this 1st day of May, 2000.
Timothy B. Tomasi (000509045)
Eve Jacobs-Carnahan (000409704)
Richard A. Johnson, Jr. (000696760)
Assistant Attorneys General
109 State St.
Montpelier, VT 05609-1001
(802) 828-3176
Counsel for Defendants
Brenda Wright, Esq.
Bonita Tenneriello, Esq.
John Bonifaz, Esq.
Gregory Luke, Esq.
National Voting Rights Institute
294 Washington Street
Suite 713
Boston, MA 02108
(617) 368-9100
Peter F. Welch, Esq.
(000389724)
Welch, Graham & Manby
110 Main Street
Burlington, VT 05401-8451
(802) 864-7207
Counsel for Defendant-Intervenors
FOOTNOTES
[1] William H. Sorrell, Attorney General; Deborah Markowitz, Secretary of State, and each of the Vermont State's Attorneys.
[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.
[3] Since the Republican Party entirely dominated state politics for roughly 100 years, these first reforms applied only to primary elections: the winner of the Republican primary was virtually assured victory in the general election in those days. Report of Professor Anthony Gierzynski, at 5-6, intended to be offered as Defendants' and Defendant-Intervenors' Exhibit V. [Exhibits hereinafter referred to as "Ex. __"].
[4] References to the Addendum to this brief are hereinafter referred to as "Tab __."
[5] Contributions from candidates for federal office to candidates for Vermont office were also limited to $1000. Former 17 V.S.A. §2805(c), Tab 4.
[6] Political committees were defined to include groups "not including political parties," which received contributions or made expenditures "for the purpose of supporting or opposing one or more candidates or affecting the outcome of an election." Former 17 V.S.A. §2801(4), Tab 4.
[7] The Supreme Court proceeds "on the understanding that a contribution limitation surviving a claim of associational abridgement would survive a speech challenge as well . . . ." Shrink, 120 S.Ct. at 904.
[8] The Court denied the Petition nearly a month after its ruling in Shrink.
[9] It is unclear which party bears the burden of proof in this area of the law, although the Supreme Court appears to have rejected the idea that contribution limits are presumptively invalid. Shrink, 120 S.Ct. at 911 (Breyer, J., concurring). At least one court has indicated that the burden of establishing that contribution limits would have a severe impact on their speech should rest with those challenging such laws. Only if that showing were made would the burden then shift to the government to justify the intrusion. Daggett I, 81 F. Supp. 2d at 131 n.7.
[10] It is appropriate for the Court to examine the Legislative History in determining the validity of the statute. The Shrink Court specifically looked for legislative history, although Missouri does not preserve it. Thus, the Court relied upon statements of a legislator involved in the passage of the bill. 120 S.Ct. 907. The Daggett II Court relied upon statements of lawmakers as well, since there was no legislative history for the law that had been enacted by referendum. 205 F.3d at 456. In other contexts too, the Supreme Court has consistently depended on evidence of Congressional proceedings in evaluating the constitutionality of federal statutes. See, e.g., Turner Broadcasting, 520 U.S. at 196- 208.
[11] "H" and "S" references are to transcripts of legislative hearings regarding Act 64 that were held before the following Committees of the Vermont General Assembly: House Committee on Local Government, House Committee on Ways and Means, Senate Committee on Government Operations, and the Senate Committee on Finance. Transcripts of the audio tapes of legislative committee hearings are expected to be offered as Ex. D.
[12] The influence gained by donors through contributions to candidates for government office is also recognized in the academic literature. T. Stratmann, "The Market for Congressional Votes: Is Timing of Contributions Everything?" 61 J. Law & Econ. 85-113 (1998), Tab 11; T. Stratmann, "What Do Campaign Contributions Buy? Deciphering Causal Effects of Money and Votes," 57 So. Econ. J. 606-20 (1991), Tab 12; see also Shrink, 120 S.Ct. at 908 (collecting academic works noting same). Moreover, the public has been made increasingly aware of the unseemly connections between contributions and public policy formation through in-depth investigative reports. C. Lewis, The Buying of Congress: How Special Interests Have Stolen Your Right to Life, Liberty and the Pursuit of Happiness (1983)(addressing the public perception of corruption and detailing influence of particular industry sectors on Congress, such as tobacco, pharmaceutical, communications and food industry concerns), Tab 14; D. Clawson, A. Neustadtl, & M. Weller, Dollars and Votes: How Business Campaign Contributions Subvert Democracy, (1998) (analyzing how some businesses use political contributions to subvert the democratic process by shaping legislation in ways that either benefit or minimize the impact of legislation on them), Tab 15; E. Drew, Politics and Money: The New Road to Corruption (1983) (explaining the damage to the American political system caused by the focus of elected representatives on the money chase rather than on issues of public policy; the lack independent thinking by elected representative; the effect on the recruitment of candidates; and the "arms race" mentality in which the pursuit of campaign money is impelled by its own momentum and not by the cost of campaigning); see also Lieberman, "A Republic - If we can Keep it," Atlantic Monthly (July 1998) (similar comments by U.S. Senator Joseph Lieberman), Tab 17.
[13] As the Daggett I Court stated: "In this information/media age, where citizens are as aware of what is happening in Miami Beach, Florida, and Washington, D.C., as in Rumford, Maine, we cannot demand that either citizens or legislators ignore trends or events elsewhere. National standards naturally and understandably affect citizens' attitudes toward their own politicians and thus the public awareness of opportunities for abuses." 81 F. Supp. 2d at 134 n.14.
[14] Reliance on experiences of other states is permissible. Shrink, 120 S. Ct. at 908, n.6.
[15] Opinion polls and other barometers of public sentiment, such as statewide votes, are legitimate sources of evidence for Courts assessing the validity of statutes such as this. Shrink, 120 S.Ct. at 908; Daggett II, 205 F.3d at 457-58.
[16] Newspaper articles are important and relevant for the Court to examine in determining the constitutionality of the statute. Both the Shrink and Daggett II Courts relied heavily on such evidence. 120 S.Ct. at 907, 205 F.3d at 457. See newspaper articles in Ex. J, e.g., With Ruse Stepping Out, Amestoy Must Step In, Burlington Free Press, July 24, 1994; Bryan Pfeiffer, He's A Lock But Funds Still Roll Right In, Rutland Herald, Oct. 2, 1996, at 1; Democratic Process Relies On Reform, Rutland Herald, Oct. 6, 1997.
[17] Vermont's population is less than 600,000 people, while Florida's is 12.9 million. World Almanac and Book of Facts 2000 384-85 (1999).
[18] AkCLU, 978 P.2d at 620-24, affirmed a $500-per-year contribution limitation. Though decided prior to Shrink, the Alaska Supreme Court had no trouble validating Alaska's concerns over corruption and its appearance and declined plaintiffs' invitation to "fine tune[ ]" the precise limits established by the Legislature. Id. at 624. The Court determined that it need not even hold a trial to affirm those limitations in the context of Alaska elections.
[19] Plaintiffs' likely contention that Vermont's contribution limits are the lowest in the country, is incorrect. Vermont's limits compare favorably with other states of similar population size. Unopposed legislative candidates in Maine face a contribution limit of $250 compared to Vermont's $200 and $300 for House and Senate, respectively. Daggett II, 205 F.3d at 452. In Montana, the limit is $100 per contested legislative primary and general election. M.C.A. § 13-37-216(1)(a)(iii); M.C.A. §13-37-216(5).
[20] Nor can plaintiffs undermine the contribution limits by focusing upon possible negative impacts upon certain candidates. A "showing of one affected individual does not point up a system of suppressed political advocacy that would be unconstitutional under Buckley." Shrink, 120 S.Ct. at 909; see id. at 913 (campaign finance laws will always have an adverse impact on some candidates) (Beyer, J., concurring).
[21] Nor can Vermont's limits be seen as violative of the equal protection rights of non-incumbents. Both Buckley and Shrink rejected just such an argument. The Court "found no support for the proposition that an incumbent's advantages were leveraged into something significantly more powerful by contribution limitations applicable to all candidates . . . ." 120 S. Ct. at 905 n.4; Buckley, 424 U.S. at 32-33; accord Daggett II, 205 F.3d at 461 (denying same argument); see also 17 V.S.A. §2805a(c) (providing greater limitations on expenditures of incumbents).
[22] In striking down limits of $200 and $250 on political committee contributions, Russell and Citizens for Responsible Government did not have the benefit of the Supreme Court's decision in Shrink. The Shrink decision calls into question these courts' holdings that the $200 and $250 limits were too low. In any event, Vermont's limit of $2,000 on contributions to political committees is far higher than limits struck down in Russell and Citizens for Responsible Government, and clearly withstands First Amendment scrutiny under Shrink.
[23] In a later decision upholding limits of $500 on contributions to candidate and political committees, the Florida Right to Life district court declined to rule on the merits of Florida's $1,000 limit on contributions to independent expenditure committees, holding that plaintiffs had presented no case or controversy with respect to that provision. Florida Right to Life v. Mortham, No. 98-770-Civ-Orl-19A, slip op. at 23-24, Tab 10.
[24] Moreover, none of the Randall plaintiffs is a political committee, and accordingly the Randall plaintiffs are unable to advance this claim for lack of standing. The Landell plaintiffs include political committees, but their complaint nowhere raises any claim concerning an alleged unconstitutional restriction on "issue advocacy." That question, accordingly, is not properly before this Court.
[25] Federal law currently permits $20,000 in individual contributions to national parties' political committees, see 2 U.S.C. §441a(a)(1).
[26] The same court, ruling prior to the Supreme Court's Shrink decision, struck down contribution limits of $100 for legislative elections and $500 for statewide elections in Colorado. That portion of the district court's decision is based on its view that the state faced a heavy burden in justifying limits lower than $1,000 through specific proof of corruption caused by the smaller contributions. This reasoning is clearly in conflict with the Supreme Court's decision in Shrink. See Part II.A.
[27] The Daggett II decision rejected plaintiffs' facial challenge to the political party provisions, leaving open the possibility of a future as-applied challenge to the contribution limits "once the effect of their application to parties becomes clear." 205 F.3d at 463. But the Vermont Republican State Committee is in no better position to mount a successful as-applied challenge at this time than were the parties in the Daggett II case. As was true there, no election has yet taken place under the new system, and there is accordingly nothing but speculation and self-serving predictions of disaster to support a claim that the new campaign rules are unworkable for the Vermont Republican State Committee.
[28] The limits upheld in the Colorado and Alaska cases are higher than either the Maine limits upheld in Daggett II or the limits established by Vermont. This is immaterial, however, in light of Shrink's teaching that state legislatures are owed great deference in determining the appropriate contribution limits for their state elections.
[29] At issue in the Colorado Republican case was a different provision of FECA that authorizes national committees of political parties to make further expenditures "in connection with" general election campaigns of candidates for federal office, beyond the $5,000 direct contribution that may be made by multi-candidate PACS. See 2 U.S.C. §441a(d)(2)-(3). The Supreme Court's decision in Colorado Republican held that such expenditures may not be limited when made independently of a candidate, but left open the question whether such expenditures may be limited when made in coordination with a candidate. Neither question is implicated by 17 V.S.A. §2805(a). A different section of the statute, 17 V.S.A. §2809, addresses "related expenditures" on behalf of candidates, and the constitutionality of that provision is discussed separately in Part III. of this Brief.
[30] The Republican State Committee's challenge to this interpretation is unconvincing. Chapter 45 sets forth the framework under which a political party may be formed in Vermont--the town caucuses elect members to county committees, whose chairs in turn become part of the state committee. This integrated system creates a political party which encompasses the town, county, and state committees as one unified entity.
[31] To the extent the Missouri District Court decision suggests that the Supreme Court's Colorado Republican decision calls into question the constitutionality of limits on contributions by political parties, we respectfully contend that the Court is in error.
[32] Moreover, if particular candidates decide not to accept public funding, that presumably indicates these candidates' belief that they do not need public funding because they can continue to raise funds effectively notwithstanding Vermont's new campaign limits.
[33] Following its ruling in Shrink, the United States Supreme Court denied the Petition for Writ of Certiorari in AkCLU. 120 S.Ct. 1156 (Feb. 22, 2000). The failure of the Court to remand in light of Shrink, provides an indication that the Court believed AkCLU decision to be consistent with Shrink. Cf. Bray v. Shrink Missouri Government PAC, 120 S.Ct. 1156 (Feb. 22, 2000) (remanding in view of Shrink); see A. Hellman, The Supreme Court's Second Thoughts: Remands for Reconsideration and Denials of Review in Cases Held for Plenary Decision, 11 Hastings Const. L. Q. 5, 15-17 (1983).
[34] See newspaper articles in Ex. J. For example: Bryan Pfeiffer, Most of Dean's Funds From Out of State, Rutland Herald, Aug. 25, 1994, at 1.
[35] The Vermont Constitution even requires voters to take an oath swearing that they will exercise their vote for the "best good" of Vermont. Vt. Const. ch. II, §42.
[36] In addition to direct contributions, out-of-state contributors may also make independent expenditures with respect to candidates and issues. Section 2805(c) does not prohibit these expenditures. See Austin, 494 U.S. at 660 (noting challenged act was not an absolute ban because it permitted independent expenditures from corporations' segregated funds); Buckley, 424 U.S. at 22-23 (limits only restrict one avenue of association leaving contributor free to support and associate in other ways).
[37] The Plurality did not address whether coordinated expenditures by political parties might require an exception to the standards set forth in Buckley. Colorado Republican Campaign Comm., 518 U.S. at 619-22. This argument is dealt with, in Part III.B.
[38] As argued above, Buckley and a majority of the Justices in Colorado Republican, all note the propriety of government regulation of coordinated expenditures.
[39] The public comment period for this proposed rule has ended, and no comments were received. The rule is expected to be submitted to the Legislative Committee on Administrative Rules during the week of May 1, 2000.
[40] The limits for statewide offices other than governor range from $100,000 for lieutenant governor down to $45,000 for secretary of state, state treasurer, auditor of accounts or attorney general. 17 V.S.A. §2805a(2)-(3). For the legislature, the limit is $4,000 for a single-member senate district, with an additional $2,500 for each additional seat in the district, and $2,000 - $3,000 for a house seat, depending on whether it is a single-member or two-member district. Id. at §2805a(a)(4)-(5).
[41] For statewide offices, incumbents are limited to spending only 85% of the limit; for the legislature, incumbents are limited to spending 90% of the amount. Id. at §2805a(c).
[42] While the Buckley Court referred to "exacting scrutiny," 424 U.S. at 44, it did not, at any time in the opinion, cite strict scrutiny as the standard of review, nor did it employ the commonly understood language for strict scrutiny, requiring that a measure be "narrowly tailored" to satisfy a compelling state interest. See also Shrink, 120 S.Ct. at 903 (noting that Buckley "referred generally to 'the exacting scrutiny required by the First Amendment,'" while treating FECA's expenditure limits as a more direct restriction on expression than its contribution limits) (citing Buckley, 424 U.S. at 16). As explained above, however, even if strict scrutiny applies, expenditure limits are not unconstitutional per se.
[43] Even decisions that strike down particular campaign restrictions demonstrate that the constitutionality of a restriction is factually contingent, not based on per se rules. For example, Colorado Republican: "the lack of coordination between the candidate and the source of the expenditure . . . prevents us from assuming, absent convincing evidence to the contrary, that a limitation on political parties' independent expenditures is necessary to combat a substantial danger of corruption in the electoral system." 518 U.S. at 617 (emphasis added).
[44] Subsequent decisions such as NCPAC, 470 U.S. 480 (1985) and Colorado Republican, 518 U.S. 604 (1996), on which plaintiffs rely, address spending limits on independent expenditures by political action committees and political parties, not spending limits on expenditures by candidate campaigns.
[45] To the extent plaintiffs rely upon Shrink as establishing that a majority of the Supreme Court views spending limits as per se unconstitutional, they are manifestly incorrect. Justice Souter's majority opinion for the Court in Shrink studiously declined to take on any issue beyond the constitutionality of Missouri's contribution limits under Buckley. 120 S.Ct. at 909. Its discussion of the Court's past treatment of campaign expenditures limits is dicta.
A further point should be added to clarify the position of defendants and defendant-intervenors. Our central contention that Buckley is not a absolute ban on spending limits does not depend on counting up the four concurrences and dissents in Shrink and Colorado Republican described above. That proposition, instead, is established by Buckley itself, and by the nature of exacting scrutiny as applied by a majority of the Supreme Court in cases such as Austin v. Michigan Chamber of Commerce and Burson v. Freeman.
If, however, this Court were to reject the contention of the defendants and defendant-intervenors on this point, and to conclude that Vermont's spending limits initiative could be sustained only if Buckley were overruled, then defendants and defendant-intervenors respectfully wish to preserve the alternative argument that Buckley should, indeed, be overruled.
[46] In addition, unlike the law at issue in Buckley, nothing in Act 64 limits the amounts that groups or individuals may spend, on their own, to promote a candidate. Vermont's law only regulates the expenditures of candidates and coordinated payments. Candidates choose to run for office. They may be required, inter alia, to obtain a certain number of signatures to be on the ballot or to be a resident of the state to even qualify as a candidate. This recognizes that by entering the political arena, candidates must agree to abide by certain rules and regulations to maintain the integrity of and public confidence in the electoral process. Vermont's expenditure limits, imposed solely upon those who voluntarily seek and may obtain elective office, follow in that tradition.
[47] As the Supreme Court held in Shrink, states are entitled to rely upon the experiences of other jurisdictions in the development and enactment of campaign finance legislation. 120 S.Ct. at 908 n.6.
[48] If such contributions were done to evade the provisions of the law, however, they would be in violation of 17 V.S.A. §2805(e).
[49] See, e.g., F. Wertheimer and S. Weiss Manes, Campaign Finance Reform: A Key to Restoring the Health of Our Democracy, 94 Colum. L. Rev. 1126, 1140-1142 (1994) (describing practice of bundling).
[50] Plaintiffs, of course, argue that the option of further limiting contributions to Vermont candidates and parties as a way of limiting the impact of bundled or conduit contributions is absolutely foreclosed to the legislature. They contend that the contribution limits should be higher, not lower, to protect contributors' associational freedoms.
[51] See V. 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).
[52] As noted above, defendants and defendant-intervenors believe the interests asserted above can, on the proper record, justify campaign expenditure limits without requiring Buckley to be overruled. If, however, recognition of any of these important interests were deemed to be barred outright by Buckley, defendants and defendant-intervenors wish to preserve their argument that the time has come for Buckley to be overruled to the extent required to uphold the challenged provisions of Act 64. In addition to the arguments already presented, defendants and defendant-intervenors specifically wish to preserve, inter alia, the arguments that limitations on expenditures should be analyzed and reviewed as limitations on conduct rather than speech under United States v. O'Brien, 391 U.S. 367 (1968), or as reasonable time, place and manner regulations under cases such as Kovacs v. Cooper, 336 U.S. 77 (1949).