In reading this morning’s decision striking down portions of Arizona’s public-financing laws, I am struck by one aspect of the argument. The Supreme Court’s reasoning suggests the danger that complex campaign finance regulations can be manipulated, leading – perversely – to precisely the sort of corruption those regulations purport to prevent.
The case, Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, has an unwieldy title. But the title is no more unwieldy than the law at issue.
Arizona’s law was intended to allow publicly-funded candidates to match the spending of privately-funded candidates, with money coming directly from the state treasury. Most discussion of this case has assumed a two-candidate general election, where one privately-financed candidate runs against one public-financed candidate.
But the Supreme Court’s majority (of all people) know politics is more complicated than that. For one thing, elections are often crowded and acrimonious. For another, groups other than the candidates spend money – independent expenditures – to comment on the candidates themselves. And under Arizona’s law, money spent by these outside groups is also matched.
An illustrative scenario shows the corruption this system makes possible.
Suppose there is a crowded primary with one leading candidate – let’s call him Ritt Pomney – and that a union or industry group does not wish Ritt to receive his party’s nomination. Further assume that Ritt, as the leading candidate, decides not to accept public financing and its associated limitations, but that his six opponents are publicly financed.
What is our hypothetical outside group to do? Simple – run a half-hearted series of ads in favor of Ritt. Why? Because each dollar spent on those ads will provide an additional dollar to each of Ritt’s opponents – a six-to-one payoff. And those funds will go directly to the candidates, to be spent in keeping with their overall strategy, while the dollar spent “for” Ritt was uncoordinated and, potentially, harmful to his message. Talk about bringing politics into disrepute.
This scenario combines two of the Court’s concerns, the “multiplier effect” when there are multiple publicly-financed opponents, and the lack of candidate control over funds triggered by independent expenditures. (Consider pages 11-12 of the opinion).
Similarly, there are elections in which multiple candidates are elected, for instance to state boards or Arizona’s two-seat legislative districts. A slate of candidates may run together. Imagine three such candidates run as a team, with one privately financed and the others accepting public financing. Now, whenever an independent expenditure is run supporting the private candidate, his two partners would each receive matching funds – which they can then spend themselves in support of the entire slate. Voila! Two-to-one state-funded financing! In fact, if you read the papers in this case, the Court was informed of something very similar actually happening. Gaming the system has become common in Arizona.
While the Court’s emphasis was – properly – on the chilling effect these burdens placed on political speech, “reform” efforts are invariably targeted at the potential “corruption” of unrestrained political speech. This morning’s decision reminds us that, sometimes, regulation can itself pose a risk of political corruption.
