Federal Election Commission v. Beaumont, Christine, et al. (06/16/2003)

Questions presented: Whether the Federal Election Campaign Act (FECA), 2 U.S.C.S. @ 441b(a) and its two implementing regulations, 11 C.F.R. @@ 114.2(b) and 114.10 violate the 1st Amendment rights of a nonprofit political advocacy group to make expenditures in connection with federal elections.

BY: ADRIENNE KOVALSKY, MEDILL NEWS SERVICE

In 1971 Congress passed the Federal Election Campaign Act preventing corporations and labor unions from financially endorsing federal election campaigns in any way. The act didnt differentiate for-profit from nonprofit organizations.

On Jan. 3, 2000, North Carolina Right to Life (NCRL) decided to challenge the act by suing the Federal Election Commission (FEC) in federal court in North Carolina. Joining the NCRL in the suit were some officials of the nonprofit group and Christine Beaumont, an eligible voter in North Carolina.

NCRL is an anti-abortion organization founded in 1973 in order to educate the public about abortion, euthanasia and infanticide. It is the umbrella for three separate branches of the organization with different functions lobbying and legislation, political candidate endorsements and educational outreach.

The organization felt that, as a nonprofit, the act banning corporate contributions violated its 1st Amendment rights to free expression and association.

The district court ruled on Oct. 3, 2000, in favor of NCRL, declaring that the organizations "First Amendment rights were unconstitutionally infringed by the ban on corporate contributions and expenditures and its implementing regulations."

"The importance of campaign contributions and expenditures as political speech is beyond question," wrote Judge Terrence Boyle. "Such speech is central to the Ôunfettered interchange of ideas in the political sphere."

He compared the case to a 1986 decision, FEC v. Massachusetts Citizens for Life (MCFL), in which the U.S. Supreme Court ruled the ban on corporate expenditures could not constitutionally be applied to Massachusetts Citizens for Life, also a "non-profit, non-stock corporation with an ideological purpose."

"Stemming from a concern over the corrosive influence of concentrated corporate wealth, the Federal Election Campaign Act significantly restricts corporate activity in the political realm," Judge Boyle wrote of the Supreme Court decision. "The Act is part of a history of regulation of corporate political activity that has sought to prevent corporate political war chests from hampering the integrity of political ideas...[but] that certain non-profit, ideological corporations pose no threat to the political marketplace."

Because NCRL qualified under the criteria from the MCFL precedent as a "qualified nonprofit corporation [that] may be exempt from the prohibition on corporate independent expenditures," Boyle argued that the act also infringed on NCRLs rights for corporate expenditures.

The argument for corporate contributions relied on the 1982 Supreme Court decision in FEC v. National Right to Work Committee (NRWC), which upheld that "prohibition of corporate campaign contributions" for NRWC, also a nonprofit, would not infringe on the corporations 1st Amendment rights. The Court argued in NRWC this was in order to prevent the "substantial aggregation of wealth of corporations from being converted into political war chests used to incur political debts and also to protect individuals who have paid money into a corporation or union for purposes other than the support of candidates."

"Neither interest is compelling in this case," Boyle wrote. He said NCRL could not be considered a "political war chest," because, based on MCFL, it is more a "voluntary political association than a business firm." And unlike in the case of NRWC, "individuals who contribute to NCRL and other MCFL-type organizations are fully aware of its political purposes, and in fact contribute precisely because they support those purposes."

The district court did not find that the act was "facially unconstitutional," but rather applied only in the case of NCRL.

On Jan. 25, 2002, a divided 4th Circuit Court of Appeals panel affirmed.

"The commission asks us to hold that an absolute ban on every direct contribution by every nonprofit advocacy corporation in American is altogether legitimate," Chief Judge J. Harvie Wilkinson wrote for the majority.

He argued that the FEC does not differentiate corporate contributions by size of organization, contribution, or potential threat "to the political process."

"This position overlooks the difference between for-profit corporations and nonprofit advocacy groups funded overwhelmingly by individual donors who simply happen to believe in their ideas. ... Yet the FEC would require that the full panoply of regulatory requirements be imposed upon nonprofit corporations before they can begin to participate in the political process in what the Supreme Court has emphasized in a meaningful and important way," he wrote, in holding that the act infringed on 1st Amendment rights.

"However, because the provisions at issue are constitutional in the overwhelming majority of applications, we decline to invalidate them facially and affirm the judgment of the district court."

Judge H. Emory Widener, Jr. concurred with all of the opinion except the question as to whether the regulations were facially unconstitutional, a question he said the court should have declined to consider because it raised constitutional issues when it was not "absolutely necessary."

Judge Roger Gregory dissented only with respect to the aspect of the courts opinion that held, based on the MCFL decision, NCRL should also qualify for exemption for campaign contributions. He felt the comparison was inconsistent with the 1982 Supreme Court decision in NRWC, which upheld that "prohibition of corporate campaign contributions" for NRWC, also a nonprofit, would not infringe on the corporations 1st Amendment rights.

"[T]he majority turns a blind eye not only to NRWC, but to the extended discussion of NRWC contained in both the MCFL majority and dissenting opinions" by relying "almost exclusively on [MCFL]," Gregory wrote.

The full 4th Circuit denied the FEC's petition for a rehearing en banc by a 7-4 vote.

Solicitor General Theodore Olson then appealed to the U.S. Supreme Court on behalf of the FEC, which in fact voted against asking Olson to appeal. Olson wrote in his petition for writ of certiorari that as the case "involves the constitutionality of a federal statute, the Solicitor General is responsible for conducting and controlling any litigation in this Court on behalf of the FEC and, more generally, the United States."

The Solicitor General argued in the petition that the Court should review the case because the 4th Circuit's opinion conflicts with the 6th Circuit's 1997 decision in Kentucky Right to Life, Inc. v. Terry, which upheld a state-law prohibition on corporate campaign contributions by nonprofit advocacy corporations.

On Nov. 18, 2002, the U.S. Supreme Court granted certiorari in the case.

On June 16, 2003, the Court upheld the Federal Election Campaign Act by a vote of 7-2. Writing for the majority, Justice David Souter concluded that the act's direct contribution prohibition to nonprofit advocacy corporations is consistent with the 1st Amendment.

Justice Clarence Thomas filed a dissent for himself and Justice Antonin Scallia.

Attorneys: For Federal Election Commission:Theodore B. OlsonSolicitor General, Counsel of RecordRobert D. McCallum, Jr.Assistant Attorney GeneralPaul D. ClementDeputy Solicitor GeneralGregory G. GarreAssistant to the Solicitor GeneralDouglas N. LetterJonathan H. Levy