In November 2022, the National Republican Senatorial Committee (NRSC), the National Republican Congressional Committee (NRCC), and two Republican officeholders filed suit to challenge the federal limits on how much political parties can spend in “coordination” with candidates to advocate their election.

These limits had been previously upheld in a 2001 Supreme Court decision, but the NRSC is now asking the Sixth Circuit Court of Appeals to disregard this controlling precedent because, it alleges, both the Supreme Court’s jurisprudence and the “factual backdrop” have changed in the intervening 20 years.

CLC has joined the case as an amicus curiae to help defend the coordinated spending limits, arguing that neither the law nor the political context has changed in any significant way that would undercut the utility — or constitutionality — of the party coordinated spending limits at issue.

Federal law has long considered the money a donor spends at the direction or suggestion of a federal candidate to be the equivalent of a contribution to that candidate because this type of “coordinated” spending is “as useful to the candidate as cash.” A coordinated expenditure is consequently subject to federal contribution limits and reporting requirements to ensure that it does not corrupt candidates in the same way a large contribution might.

The Supreme Court upheld the limits on party coordinated spending in its 2001 ruling in FEC v. Colorado Republican Federal Campaign Committee — known as the “Colorado II” decision. In so holding, the Court was less worried that the party itself would corrupt candidates, and more concerned that unlimited party coordinated expenditures would make political parties an attractive vehicle for donors seeking to circumvent the individual contribution limits in order to buy influence with candidates and officeholders.  

The route of circumvention is simple: instead of giving their chosen candidate only the $3,300 allowed by the individual contribution limit, a deep-pocketed donor could give another $41,300 annually to the national party committee with the understanding that the party would allocate these funds to their chosen candidate. If the party could spend all this money in coordination with the candidate, then this donor — and countless future donors — could effectively give the candidate a $45,000 contribution.  

If, however, the party must spend this money independently of the candidate, then this spending may well “provide little assistance to the candidate’s campaign,” as the Supreme Court has recognized, greatly diminishing the possibility that the money will secure the donor a quid pro quo. The party coordinated spending limits thus act as a “brake” on the money that would otherwise run through this route of circumvention.

What’s at Stake?

Since the party coordinated spending limits were enacted in the 1970s, these limits have checked the corruptive effect of large contributions flowing through party committees to candidates and prevented the quid pro quo exchanges that such contributions would otherwise facilitate.  

As the Supreme Court explained in Colorado II, if the party coordinated spending limits were eliminated, “the inducement to circumvent would almost certainly intensify”: The individual contribution limits would be greatly “eroded” by donors exploiting the much higher party contribution limits to route over 10 times the amount of the base contribution limits to the party to spend in coordination with their preferred candidates.

Because the limits allow political parties to spend only a prescribed amount of their money in direct coordination with a candidate, however, they moderate the risk that a party committee could effectively pass on every big donation — or six-figure check collected via joint fundraising — to the donor’s chosen candidate in the form of coordinated expenditures. 

In 2023, Minnesota enacted the Democracy for the People Act, which included many pro-democracy policies relating to voting and campaign finance. The Act included provisions prohibiting for-profit corporations and limited liability companies with foreign ownership from making expenditures or contributions to influence voters’ decisions about candidates seeking election and ballot measures. The threshold of ownership that triggers the prohibition is 1% in the case of a single foreign investor or 5% in aggregate in the case of multiple foreign investors.

The Minnesota Chamber of Commerce filed a lawsuit in July 2023 seeking to invalidate this prohibition on campaign spending by foreign-influenced corporations, arguing that it violated its members’ First Amendment rights and was preempted by federal law. 

In December 2023, CLC joined the case as an amicus curiae, filing a “friend of the court” brief defending the ban on foreign-influenced corporate campaign spending. CLC’s brief outlines how state laws seeking to shield state elections from the influence of foreign money are not preempted by federal law, and in fact are a critical tool to protect elections from foreign pressures and “preserve the basic conception of a political community.”

As Minnesota also argued, the U.S. Supreme Court has already approved the federal foreign money ban, affirming that citizens have “a compelling interest for purposes of First Amendment analysis in limiting the participation of foreign citizens in activities of American democratic self-government, and in thereby preventing foreign influence over the U.S. political process.” 

This interest is equally compelling with respect to efforts by states to prevent foreign nationals from spending money in state and local elections, and in particular ballot referenda, where voters participate in direct democracy to enact their own laws. Ten other states — from California to Maryland — have also enacted laws like Minnesota’s to prohibit foreign nationals pending to influence their citizen-initiated ballot measure processes.

What's at Stake?

American government is meant to be of, by, and for the people – free from foreign influence to protect the rights of American citizens to democratic self-governance. However, foreign interests – including foreign-owned businesses and other corporations – have spent substantial sums to influence U.S. elections at the federal, state, and local levels over the last decade, often overwhelming the resources of local citizens and advocacy groups.

Minnesota’s Democracy for the People Act and similar laws in other states are meant to prevent foreign-owned corporations from exerting undue influence over state elections and to vindicate their citizens’ interest in local self-governance.