An Important Victory in the Supreme Court

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U.S. Supreme Court
Mark Thomas - Pixabay

Campaign finance reformers scored an important victory when the Supreme Court declined to grant certiorari in Vermont Right to Life Comm. v. Sorrell.  The Court let stand a Second Circuit decision that held that an “independent” political committee must be truly independent to qualify for the right to receive unlimited individual contributions. The Second Circuit accepted the district court's fact-finding of extensive connections between the committee and candidates and other political groups, and therefore found that this committee was not entitled to operate outside the state contribution limits. This decision provides an important foundation to attempts to ensure that “Super PACs” remain independent of candidates and political parties as a condition for relief from limits on their fundraising – a requirement that has been ever more ignored in recent federal elections.

The plaintiff Vermont Right to Life Committee (VRLC) asked the court to invalidate the state contribution limits as applied to its associated committee that allegedly made only independent expenditures.  As urged by the Campaign Legal Center in its amicus brief, however, the Second Circuit declined to take the plaintiffs’ unsupported allegations of independence at face value.  After reviewing the district court’s extensive factual analysis, the Second Circuit determined that the “independent” committee was functionally indistinguishable from VRLC, which contributed to and communicated with candidates, due to “the overlap of staff and resources, the lack of financial independence, the coordination of activities, and the flow of information between the entities.”  As a result, the Court refused to block application of the state’s contribution limits to the fundraising of VRLC’s purportedly independent committee.  The VRLC’s Super PAC was no longer so “super” after all.

This thorough analysis stands in stark – and very welcome – contrast to the federal law’s development in this area.  The FEC has allowed a federal Super PAC to hire former associates, employees and vendors of the candidates it supports, to stay in close communication with candidates, to invite candidates its events, and to benefit from candidates’ fundraising efforts on its behalf – all while maintaining sufficient “independence” to be free of the contribution limits.  While the facts of the VRLC case are different from the Super PAC scenarios we see so frequently at the federal level, the court’s careful review of the real world operations of the plaintiff groups is an analysis that has been sorely lacking from the FEC’s approach to coordination.  It is a relief to see a court take seriously its responsibility to ensure that an “independent” group is in fact independent and to delineate precisely what forms of coordinated activity may give rise to quid pro quo corruption and its appearance in our political system.

To read the amici brief filed with the Second Circuit by the Legal Center, joined by Democracy 21, click here.

To read the Second Circuit decision, click here.

Finally, to end on a technical note, it was satisfying to see the Supreme Court’s apparent rejection of – or disregard for – plaintiffs’ attempt in their petition to amp up a “Circuit split” on the question of “hybrid committees.”  In Carey v. FEC, the U.S. District Court of the District of Columbia held that a political committee had a First Amendment right both to make contributions to candidates from funds raised under the contribution limits (“hard money”) and to make independent expenditure from funds raised outside the limits (“soft money”).  But this dispensation was based on the condition that such a “hybrid committee” would maintain strict separation between its hard money and soft money accounts, and go so far as to proportionally allocate its administrative expenses between the two accounts.  The FEC blessed the decision by formally allowing hybrid committees to operate at the federal level.

The plaintiffs cite a Tenth Circuit case as an example of a different Circuit that has also endorsed the right to operate a “hybrid committee,” i.e. , to “make both independent expenditures and candidate contributions” from “separate accounts for these purposes.”[1] They then analogize the VRLC operation to a hybrid committee, arguing that even if its constituent committees effectively functioned as “one organization,” this “organization” should be allowed to operate a hard money account for contributions to candidates and a separate soft money account for independent spending.  According to plaintiffs, by forbidding these activities, the Second Circuit deviates from the Tenth, as well as the D.C. Circuit.  But to advance this argument, plaintiffs must turn a blind eye to a glaring distinction between the VRLC operation and the hybrid committee envisioned by the Carey court.  The most damning fact found by the district court was that VRLC commingled the funds from its different committees: “[t]here is a fluidity of funds between [the committees],” and “it is difficult to determine which fund is supporting which activity of VRLC.” [2] Thus, even putting aside the wisdom of the Carey and RPNM decisions, it is clear that the VRLC plaintiffs did not meet their demand that hybrid committees strictly segregate the funding for their hard money and soft money activities.  While different Circuits have expressed varying degrees of confidence in the notion that separate bank accounts alone will ensure that a group’s independent activities remain insulated from the group’s direct contributions,[3] no Court has found that such a presumption is valid when the accounts are clearly permeable.

Further, in claiming that the Second Circuit decision caused a Circuit split on the issue of whether contribution limits could be applied to the “independent” account of such a hybrid committee, plaintiffs ignore that the VRLC operation did not simply make direct contributions, but also may have coordinated its activities with candidates.  The Tenth Circuit case cited by plaintiffs was careful to recognize that while a hybrid committee was entitled to make both hard money contributions and soft money expenditures, it still must “respect . . . anti-coordination laws.”[4]Otherwise put, the “independence” of a hybrid committee’s soft money account would be called into question if the committee engaged in coordinated activities with a candidate or political party.  In VRLC, the district court found that VRLC’s Executive Director was also part of the “independent” committee’s management.  At the same time, this director advised a Republican gubernatorial candidate, whom VLRC endorsed and provided with VRLC’s phone lists.  Thus, there is an additional reason to question the independence of VRLC’s “independent” committee.  The VRLC operation was not simply a variant of a hybrid committee; instead, the case raises the broader question of the degree to which a Super PAC must maintain independence from candidates and parties – and from groups with closer ties to such political players – in order to remain “super.”

1] Republican Party of New Mexico v. King, 741 F.3d 1089, 1097 (10th Cir. 2013) (“RPNM”).

[2] VRLC v. Sorrell, 875 F.Supp.2d 376, 407 (D. Vt. 2012)

[3] Seee.g., N.C. Right to Life, Inc. v. Leake, 525 F.3d 274, 294 n.8 (4th Cir. 2008)

[4] Id. at 1101.