A Big Deal: NRSC vs. FEC

The Supreme Court agrees to hear the case, National Republican Senatorial Committee v. the Federal Election Commission, which may help restore some sanity to our political campaigns.

While Supreme Court watchers were mesmerized by a catfight between the newest justices in Trump v. CASA, a decision to hear another case next term slipped through the transom.

No, not the decision to hear cases over transgender athletes, wading again into our never-ending culture wars after their ruling last week in the very welcome Skrmetti decision involving Tennessee’s ban on life-altering gender treatments for minor children. The new cases they’ll hear when the new term starts on October 1 deal with bans on biological men competing in women’s sports. However, the case that has my attention involves how political parties support their nominees’ campaigns for the US House and Senate. That’s a bigger deal than the media realizes, but no surprise there.

Longtime readers of this blog (both of you) know that I have long considered the Federal Election Campaign Act of 1974 (from the same heavily Democratic Congress that foisted our failed budget process upon us) a major factor behind our current and growing polarization, gridlock, and dysfunction in Congress. The way we elect our Members of Congress matters, and it’s been a mess for 50+ years. Among other things, the law neutered the historic role of political parties and opened the door to well-financed special interests.

Since every incumbent Member of Congress thinks they’re an expert on campaign finance reform, they can’t agree on anything to fix the current failures of our system. Solutions run from full government taxpayer financing of political campaigns to unlimited individual contributions with enhanced transparency (which sounds pretty good to me). Some states, ranging from New Jersey (matching taxpayer funding) to Virginia (permitting unlimited individual and corporate contributions), feature the extremes of both approaches.

Of course, there is much more to our governmental dysfunction than a 51-year-old law and the court decisions and amendments that followed. However, that’s where it essentially began, and it’s long overdue to replace it. The Supreme Court can’t and shouldn’t fix it all—that’s up to Congress—but it can start the fire.

It deals with something called “coordinated expenditures,” which refers to the ability of a political party committee, such as the National Republican Senatorial Committee (NRSC) or the Democratic Congressional Campaign Committee (DCCC), to support its candidates financially. At the risk of oversimplification, let me try to explain what that is and why the SCOTUS case, NRSC vs. FEC, is potentially consequential. Not just in the way political parties financially support their candidates, but even help with party discipline in Congress. That is, the ability to move legislation and get stuff done.

The lack of accountability by rank-and-file members to their leadership, at least on the GOP side (congressional Democrats seem to have no problem marching in lockstep these days, doing what they’re told), is a real problem. Due to strict limits on what parties can contribute or coordinate with candidates, many have become increasingly reliant on coalitions of special interests to which they are more beholden than their leadership. Just look at their clickbait fundraising appeals.

I know I’m treading on thin ice with that assertion but stick with me.

Source: Wikipedia

The last time I successfully explained what “coordinated expenditures” were was in mid-1990, when I was urgently dispatched to South Dakota to help rescue the failing campaign of incumbent US Senator Larry Pressler (R-SD), the first Vietnam Veteran elected to Congress. I sat down with the young executive director of the South Dakota Republican Party, John Thune (yes, him), at his office in Pierre (pronounced “peer”), the state capitol, to walk through how the NRSC wanted to use roughly $100,000 in coordinated expenditures to help get Pressler over the finish line (that was a lot of money for a small state like South Dakota). Thune immediately grasped it, and we worked together on a plan of action.

We went to work and won. Pressler, a Rhodes Scholar and briefly a wannabe President in 1980, would go on to serve one more term before losing reelection to Tim Johnson in 1996, the only incumbent Senator to lose that year.

Source: Institute for Free Speech

Let me get this out of the way. Spending on political campaigns these days is obscene. It was only a few years ago that total political spending on campaigns in an election cycle (usually two years) reached $1 billion. Today, you can raise and spend that much money to lose a presidential campaign, and that’s not counting separate and “independent” political action committees, such as the Harris Victory Fund (how did that work out?), which raised even more ($1.2 billion). Harris outraised the Trump campaign(s) from billionaire donors alone nearly 5:1, proving the adage that money alone doesn’t buy votes (but it helps). And which is the party of “the rich?”

My theory on why campaign spending has erupted is that the growth of government and its role and influence in our businesses and lives has also exploded. Want to reduce campaign spending? Eliminate government programs, simplify and neutralize the tax system, and cut federal spending. A lot. An extensive and intrusive government, combined with massive campaign contributions, often leads people to believe that many of our policies and regulations go to the highest bidders.

I see you nodding. Vigorously. Wait until you see a future blog post on the addiction that so many interest groups have to borrow federal taxpayer money on everything from elder care to painting crosswalks. It’s a huge problem.

Additionally, several aspects of our current campaign finance system are worth noting and honoring. Cash contributions are limited to $100, and most campaigns refuse them, since cash is an accounting nightmare. It is relatively transparent, with federal candidates publicly reporting the source of every contribution totaling $200 or more for each election at least once per quarter. Individual contributions are limited, and corporations and unions can’t give directly to campaigns, but that’s about it. Ridiculously low individual campaign limits and the high expense of elections, which can sometimes run into the tens of millions of dollars, force incumbents to spend countless hours dialing for dollars or hosting endless fundraising events.

I know the game. I used to accompany my congressman to the National Republican Congressional Committee across the street from the House office buildings for a couple of hours, most afternoons they were in town to dial for dollars. As a lobbyist, I would get anywhere from 5 to 15 calls every Tuesday through Thursday afternoon. I sent most of them to voicemail. A few I would pick up, because I had my own requests (boy, do members of Congress hate that. They just want you to show them the money).

Side note: I am a fan of political action committees, also known as PACs. They are committees created so that employees or compatriots can pool their resources and, on behalf of shared interests, make transparent contributions to favored political campaigns. Federal law and regulations protect employees from being coerced by their bosses into giving strictly voluntary contributions. Yes, lobbyists and political professionals often run them, and they’re valuable tools as part of any government relations program (I’ve run two in my day). And yes, parties have an additional ability to support their nominees financially, but it’s constrained, which is why there's the lawsuit above.

What I’m not a fan of are so-called “independent expenditure” political action committees that are often set up by “friends” or associates of candidates and political professionals to raise unlimited funds for separate advertising and voter contact efforts, supposedly “independent” of the candidates they support. Special interests also establish independent PACs to influence election outcomes or pressure incumbents to vote in a certain way. This is how you hear of big money contributors spending millions to help elect favored candidates; there’s no limit on what any person or even a corporation may give, and the IEs, as they’re called, often spend more collectively on a campaign than the candidates themselves. Some are structured so contributions and contributors aren’t disclosed - so-called “dark money.”

That’s wrong and is harmful to our political system. It takes away the candidates’ ability to control the messaging of their campaigns. As a matter of policy, we need to make it easier to steer campaign contributions transparently into the official campaign committees of individual candidates or their respective political parties, rather than those of special interests. The Supreme Court has consistently and repeatedly determined that money is speech, and some limits are unconstitutional (such as aggregate limits on what any one person can spend on all federal campaigns, which were struck down by the Supreme Court a few years ago in McCutcheon v FEC).

Only laws carefully crafted to prevent “quid pro quo corruption” (promising a particular action in return for payment, or a bribe) can limit political contributions, or should. And that’s what the NRSC vs. FEC case may hinge on: are arbitrary limits on a political party’s coordinated spending for its candidates necessary to prevent “corruption?”

Source; fec.gov

This is money that a party committee, state or federal, can spend on behalf of a federal candidate. In many instances, I transferred the money to a state political party with an agreed-upon plan for how the money would be spent. The party committee can “coordinate” with the campaign on how the money is spent. During my work on over 35 House and Senate campaigns spanning several years, I’ve primarily used the money for voter contact, including producing and airing television commercials, sending direct mail, and helping to pay for phone banks to turn out voters.

The NRSC’s lawsuit argues that the strict financial limit on a party's ability to support its candidates financially is unconstitutional.

“NRSC v. FEC gives the Supreme Court an opportunity to begin untangling the constitutional mess created by decades of campaign-finance regulation and jumbled court decisions,” wrote former FEC Commissioner Bradley Smith for the Wall Street Journal. “Rather than managing arbitrary lines between different types of political speech, the high court should return to first principles: Political campaigns are speech, and political speech is what the First Amendment protects above all else.” Smith now chairs the Institute for Free Speech.

“The First Amendment commands that ‘Congress shall make no law . . . abridging the freedom of speech,’” wrote the NRSC in its original 2022 lawsuit. “But the Federal Election Campaign Act (FECA) abridges the political speech of party committees by strictly limiting how much of their own money they can spend to influence federal elections in cooperation—or ‘coordination’—with their candidates.”

The suit made its way to the US Supreme Court after the Sixth Circuit Court of Appeals, on a 10-judge en banc decision, upheld the limits. Judge Judy Stranch, an Obama nominee, opined this in her concurrence: “…the limit on coordinated party expenditures is constitutional because it prevents donors from using political parties to circumvent limits on individual contributions to candidates.” But as Judge Chad Readler, a Trump nominee, opined in his dissent, the theory that this law prevents corruption is based on “mere conjecture” and not enough to justify the restriction.

There is no evidence that a political party’s “coordinated expenditures” involve quid pro quo political corruption; no one has ever produced one. A decision by the Supreme Court to strike down the limit might finally force Congress to act on a long-overdue rewrite of federal election law.

Why is that a good thing? First, as mentioned previously, federal law should encourage the flow of campaign contributions to party committees under the control or with the coordination of the candidates themselves. Second, it would be consistent with the First Amendment (and previous court decisions) that equate political spending with speech.

Third, it would provide Congress with an excellent opportunity to reduce the time individual members spend on fundraising and allocate more time for lawmaking and serving constituents. Fourth, it would strengthen the role of parties in recruiting, nominating, and electing their candidates, with less reliance on special interests.

Historically, political parties have played a significant role in recruiting and electing candidates. Abraham Lincoln was elected to the United States House of Representatives in 1846. Lincoln wanted to run for reelection but was reportedly told by party leaders that no, he’d had his turn. That’s not the way it works anymore, and that’s a good thing, but parties have a legitimate role in determining who carries their banner into general elections and beyond.

Imagine a Chevy dealer running ads saying, “I don’t like the cars my company is selling.” Imagine US Rep. Tom Massie (R?-KY).

No doubt, party leaders in Congress would see their role strengthened, although political parties and their leaders are typically independent of elected leaders in Congress (and should be). Still, the failure of, say, Tom Massie to support his conference on major votes, time and time again, might incentivize party leaders in the Bluegrass State to find a more supportive nominee. And Massie might start to act like a real legislator and member of the Republican Conference, for a change.

It wouldn’t stop any “renegade” from running and winning, and, throughout history, many have (see: June’s New York Democratic mayoral primary election). But political parties and their leaders would matter more than they do now.

What would other elements of a good campaign reform law look like, aside from eliminating limits on party-coordinated spending? Here are a few ideas.

• Incentivize small donor contributions by reinstating a 50% tax credit for contributions up to $200 for those who earn less than $100,000 annually. Index it for inflation every few years. Non-profit groups often dislike this and mistakenly view it as a form of competition. Still, we should encourage citizens to participate in the political process, both financially and otherwise. And while we’re at it, impose standards on political fundraising to prevent the kind of “straw” donations we’re now learning about from ActBlue. This will at least help prevent corrupt foreign and other fraudulent contributions. I’m wholly in favor of mandatory biennial audits of all major political party-sponsored online fundraising machines, including the GOP’s WinRed.

• Dramatically increase the current limit on individual contributions from $3,500 to $25,000, indexed for inflation every few years. No one is “buying” or renting a member of Congress for $25,000 when they have to raise hundreds of thousands, if not millions, of dollars. We can quibble about the limit, but I question why one is even needed if you have complete and immediate transparency.

• Increase transparency by requiring all recipients of campaign contributions, including PACs and candidates, to publicly disclose all contributions totaling $200 or more within 48 hours directly to the Federal Election Commission (take the House Clerk and Secretary of the Senate out of it), and require the agency to publish it. Require the FEC to establish a free online subscription service so that interested Americans (including the media) are immediately notified when those contributions are reported. The FEC already has the power to punish those who don’t comply with disclosure laws with fines or prosecutorial referrals.

• Require monthly, not quarterly, FEC reports by all federal committees, including candidate committees, parties, and PACs.

Also, give the FEC more money and responsibility to entirely, randomly, and automatically audit most if not all political organizations. Decisions to audit committees like ActBlue that are credibly accused of engaging in nefarious activities shouldn’t rely on a bipartisan vote of a 3-3 split commission (FEC commissioners are evenly split between Democrats and Republicans).

We can and should debate this, as well as many other ideas. Let’s hope the Supreme Court starts the fire a few months from now.

Disclosure: The author was nominated to a GOP seat on the Federal Election Commission in 1996 by President Bill Clinton on the recommendation of outgoing Senate GOP leader Bob Dole. He withdrew his nomination in the waning days of the 104th Congress.