Supreme Court Upholds 'Soft Money' Limits

A divided Supreme Court upheld the broadest restrictions on campaign donations in nearly 30 years Wednesday, ruling the nation is better off with limits on the financial influence of deep-pocket donors even if money never can be divorced from politics.

Rooting out corruption, or even the appearance of it, justifies limitations on the free speech and free spending of contributors, candidates and political parties, the court said in a 5-4 decision.

"We are under no illusion that [the law] will be the last congressional statement on the matter," Justices John Paul Stevens and Sandra Day O'Connor wrote for the majority. "Money, like water, will always find an outlet. What problems will arise, and how Congress will respond, are concerns for another day."

• Raw Data: Opinion, McConnell v. FEC (pdf)

Indeed, that already has happened, with groups being formed to collect donations and spend money in ways not covered by the law.

Dissenting were Chief Justice William H. Rehnquist (search) and Justices Antonin Scalia (search), Anthony M. Kennedy and Clarence Thomas (search).

"No doubt Congress was convinced by the many abuses of the current system that something in this area must be done," Rehnquist wrote. "Its response, however, was too blunt."

The court divided along the same 5-4 line to uphold new restrictions on political advertising in the weeks before an election.

The ruling means the restrictions put in place by Congress last year will apply to the 2004 election, including the first presidential delegate selection contests in Iowa and New Hampshire next month.

The unlimited and often large donations known as "soft money" from rich people, corporations and labor unions had come to dominate elections for Congress and the White House, and evidence shows the money bought access for the wealthy or well-connected, a majority of the court said.

"Just as troubling to a functioning democracy as classic quid pro quo corruption is the danger that officeholders will decide issues not on the merits or the desires of their constituencies, but according to the wishes of those who have made large financial contributions valued by the officeholder," Stevens and O'Connor wrote.

O'Connor, a moderate who often is the swing vote on 5-4 decisions, is the only member of the court who was held elective office. She was a state senator and county judge in Arizona.

Justices David Souter, Ruth Bader Ginsburg and Stephen Breyer also voted to uphold the soft-money ban.

Scalia called it "a sad day for the freedom of speech."

"Who could have imagined," Scalia wrote, that the same court that gave free-speech protection to tobacco advertising and sexually explicit cable TV shows "would smile with favor upon a law that cuts to the heart of what the First Amendment is meant to protect: the right to criticize the government."

The justices struck down two provisions of the new law -- a ban on political contributions from those too young to vote and a limitation on some party spending that is independent of a particular candidate.

The law passed by Congress last year was the broadest reform since 1974, when in the wake of the Watergate scandal, President Ford signed a law creating the Federal Election Commission. It limited individual and political action committee contributions to candidates to $1,000 and $5,000 per election, respectively.

Soft money donations were not included in the law, and the parties sought to exploit this loophole. In the last election cycle, the three Democratic campaign committees raised about $246 million in soft money, compared with $250 million for Republicans.

The nearly 300-page Supreme Court ruling settles legal and constitutional challenges from the political right and the left.

The campaign finance law is often known as "McCain-Feingold" -- named for its chief Senate sponsors, Sens. John McCain, R-Ariz., and Russ Feingold, D-Wis. McCain built his maverick 2000 presidential campaign largely around the assertion that the old system was full of holes.

Soft money is a catchall term for money not subject to existing federal caps on the amount individuals may give and which is outside the old law that prohibits corporations and labor unions from making direct campaign donations.

Federal regulators had allowed soft money donations outside those restrictions if the money paid for political party programs such as get-out-the-vote activities.

Supporters of the new law said that soft money generally was funneled to influence specific political races, and that donors, parties and candidates all knew it.

"This opinion represents a landmark victory for the American people in the effort to reform their political system," congressional authors of the law said. "Now that the court has spoken, we must make sure that the law is properly interpreted and enforced," said a joint statement by McCain, Feingold, and Reps. Christopher Shays, R-Conn., and Marty Meehan, D-Mass.

Feingold also said the ruling would prompt further reform efforts, including public financing of campaigns and requirements that television stations offer free air time.

"The whole ruling really helps further campaign finance legislation because it gets away from the irrational fear that doing anything about it gets into free speech problems," he said.

The law's advertising restrictions were meant to cast sunshine on what critics called sham issue advertisements.

The ads don't expressly urge voters to support one candidate over another, but there was no distinction in practice, the court majority said. Candidates and political parties used the ads to do an end-run around donation and spending limits, the court said.

The case is McConnell v. FEC, 02-1674.