Supreme Court, Meet Salomon Melgen and Senator Menendez

Supreme Court

According to five Justices on the current Supreme Court, the First Amendment protects the right of wealthy individuals, corporations and unions to spend unlimited sums of money on “independent expenditures” to elect a candidate because the lack of coordination with the candidate ensures there is little chance of corruption.  It is not often that current events so persuasively demonstrate how cut off from reality is the Supreme Court, but we now have a teaching moment for the Court with the indictment of Senator Bob Menendez (D-NJ).  While not yet tried or convicted, even the bare-bones facts, if true, should lead the Court to consider getting out in the real world a little more often.  

The Menendez indictment undermines many aspects of what the Supreme Court has said about corruption, but offers an especially important lesson about the potential for corruption arising from “independent expenditures” and efforts to stem that corruption with coordination rules.  This lesson is brought into even sharper focus by a recent blog post, Fresh Questions About “Coordination” Rules, authored by Robert Bauer, who was general counsel to both of President Obama’s presidential campaigns. While never referencing the Menendez indictment, Bauer provides a strong argument for why the Court’s fixation on corruption being a problem when money is spent in coordination with a candidate, but not when it is spent independently, is irrelevant in today’s world.

The thrust of Bauer’s argument is that corruption arising from someone spending large sums to support a candidate is not solvable by coordination rules.  According to Bauer, coordination rules, no matter how strict, are of limited value since “a spender can comply with the law, spending ‘independently’ for a candidate, but still offer the politician value that can be ‘cashed in’ later.” 

The politician need not know that payment will be in the form of an ad, and she does not have to request, control or directly influence the timing or content of an ad so long as she has confidence that ads eventually run will have this threshold value: “some value,” perhaps enhanced by the level of funding that is committed to it.

The problem stems from Supreme Court’s conception of independent expenditures found in Buckley v. Valeo.  In 1976, the Court believed that independent advocacy did not “presently appear to pose dangers of real or apparent corruption comparable to those identified with large campaign contributions.” (Emphasis added.)  According to the Court:

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.  Rather than preventing circumvention of the contribution limitations, [the law] severely restricts all independent advocacy despite its substantially diminished potential for abuse.

However, Bauer points out that “[i]ndependent groups now stirring up controversy are not the ones the Court in Buckley had in mind: outfits springing up to voice concerns as they please, indifferent or insensitive to the candidate’s needs.  Now we have highly professional groups finely tuned to those needs and savvy about satisfying them.” 

What Bauer describes is brought to life with the allegations regarding the political contributions made by Dr. Melgen.  According to the indictment, in order to curry favor with Senator Menendez, Dr. Melgen made $600,000 in contributions to Majority PAC, a Super PAC, that were intended to pay for independent expenditures to support the election of Senator Menendez.  Majority PAC’s only purpose is to support the election of Democrats to the Senate.   Nowhere does the indictment state that the expenditures to be made by the Super PAC with Dr. Melgen’s money were coordinated with the Senator or his campaign.  Nevertheless, the indictment alleges that Senator Menendez took actions to support Dr. Melgen in return for those contributions.  So much for the belief that independent expenditures pose little danger of corruption.

Unfortunately, the Supreme Court’s decisions prohibiting the regulation of money spent on independent expenditures is leading a growing number of candidates and party officials to argue that the solution to the super megaphones only the wealthy can afford is to gut the limits on what the wealthy can give directly to political parties and candidates.  In short, fight money with money, and let those without the financial resources to be heard be damned.

Forty years ago, in Buckley, the Supreme Court recognized that large contributions made directly to candidates and officeholders pose a serious threat of corruption that can undermine our democracy—a truth that was confirmed by the substantial legislative record leading to the passage of the Bipartisan Campaign Reform Act of 2002.  Nothing since then would lead anyone to believe human nature has changed.  So, one has to ask how making it easier to corrupt our officeholders is now the answer?  It’s not.  

This means we have to continue to fight for strong coordination rules, since those are the cards the Supreme Court has dealt.  It is possible that only five people in this country believe “independent expenditures” do not have the power to corrupt the beneficiary.  Unfortunately, they are on the Supreme Court.

At the same time, however, we have to try to change the framework for the debate.  Because the current Supreme Court’s conception of corruption in a democracy is sadly, perhaps dangerously, divorced from the real world, we have to build the case for another possibility; one that does not involve dismantling the campaign finance system or accepting influence buying and other forms of corruption as a necessary part of our democracy.

This means building the record and laying the groundwork to show the Court that, regardless of what it thought in 1976, independent expenditures today do “presently appear to pose dangers of real or apparent corruption.”  The Menendez allegations, as well as other situations, including those involving so-called independent expenditure committees connected to presidential candidates, are evidence of what the Supreme Court has yet to see.  In today’s world, coordination rules will never truly be sufficient to prevent the real or apparent corruption that arises when an individual, organization, corporation or labor union spends a large sum of money, either directly or through a Super PAC, to support a candidate from whom they expect something in return.

It may be a long fight, but at some point the Supreme Court will have to face reality and consider the possibility that the First Amendment is not offended by laws intended to prohibit corruption in the form of attempts to obtain favors by spending large sums of money to support a candidate, regardless of whether the spending is coordinated or independent.  If the rights of speech and association apply to individuals regardless of their financial station in life, such reforms can only strengthen the First Amendment.  If, on the other hand, we settle for First Amendment rights being a luxury affordable to only the wealthiest among us, we will turn a brilliant founding principle of democracy into an expensive commodity and a cheap sentiment.


Larry is the former general counsel of the FEC and an expert and adviser on campaign finance and ethics.