Court rejects Republican National Committee bid to raise unlimited money

Court rejects GOP bid to raise unlimited money

WASHINGTON — Two court decisions Friday are likely to help set the ground rules for 2010 election fundraising: The Republican Party lost its bid to raise unlimited contributions, while a conservative group won approval to raise big donations for ads but must regularly disclose its givers.

The two rulings are the first major campaign finance decisions since the Supreme Court said earlier this year that corporations, unions and groups of individuals can spend unlimited sums supporting or opposing candidates — as long as they do it independently of campaigns. The high court so far has upheld campaign finance disclosure rules and the McCain-Feingold law’s ban on the raising and spending of “soft money” by national party committees and presidential and congressional candidates.

Republican National Committee Chairman Michael Steele said the RNC will appeal its case to the Supreme Court. If the court takes the case, it would be unlikely to rule before the November elections.

In the RNC case, a three-judge panel of the U.S. District Court in Washington said it lacks the authority to overturn a 2003 Supreme Court ruling that upheld the ban on the raising of soft money — unlimited donations from corporations, unions and others — by national party committees. That ban is a cornerstone of the McCain-Feingold law and one of the few major parts of the law to survive court challenges.

The RNC argues it should be able to raise soft money for state elections, congressional redistricting after the 2010 census, legal costs, mobilizing voters around political issues and to cover other expenses it says have nothing to do with federal elections. It contends the soft money ban leaves it at a disadvantage in elections compared with interest groups and unions that can spend freely on ads.

“The very core of the First Amendment protects the ability of political parties not only to nominate and elect candidates at every level, but also to engage in discussions about public policy issues of national importance,” Steele said in a statement. “As a matter of course, we plan to appeal this matter to the Supreme Court.”

The Federal Election Commission contends the soft money ban should be upheld.

Joining the RNC in the lawsuit were the California Republican Party, San Diego County Republican Party and Steele. The court also rejected their arguments that the law’s soft money ban shouldn’t apply to their fundraising for various activities.

In a separate case, the U.S. Court of Appeals for the District of Columbia Circuit said the conservative group SpeechNow.org can raise unlimited donations from individuals for election ads it plans to run independently of candidates, in line with a recent Supreme Court ruling. But the group will have to periodically file reports with the FEC detailing its fundraising and spending and follow other rules that apply to political committees, the appeals court said.

The group is considering whether to appeal the disclosure requirement ruling to the Supreme Court.

SpeechNow.org wanted to operate free of the fundraising and many of the disclosure and organizational requirements that the FEC places on political committees. It believes the FEC’s political action committee rules, including requirements that it have a treasurer and periodically file fundraising and itemized spending reports, make it too hard for individuals who decide to jump in close to elections to join forces and air ads on candidates, Bert Gall, one of its lawyers, said Friday.

“The PAC administrative and organizational requirements do not allow any organization to be as nimble as it needs to be,” Gall said. He said the group wanted to file campaign finance reports only after it ran election-time ads on particular candidates.

The SpeechNow.org ruling is significant because it makes it clear that besides spending unlimited sums on independent ads targeting federal candidates, the group can also raise unlimited amounts from individuals specifically for ads, said David Keating, its president and co-founder.

That may clarify a fine point in the Supreme Court’s January ruling on ads.

While it is clear that the high court allowed corporations, unions and others to spend unlimited amounts from their general treasuries on ads calling for the election or defeat of candidates, lawyers have disagreed on whether such spenders can launch special fundraising drives seeking unlimited donations specifically for such ads without running afoul of the FEC’s fundraising rules. No one has yet asked the commission to rule on the question, however.

Neither the Supreme Court ruling nor Friday’s appeals court decision changed the donation and spending restrictions placed on political action committees when they give directly to congressional and presidential candidates and national party committees. Spending that PACs coordinate with candidates or parties also is not affected.

PACs can still accept only limited donations from individuals and other PACs and give or spend limited amounts in concert with campaigns and party committees.

The FEC had no immediate comment on either ruling.

Republican National Committee v. Federal Election Commission: www.dcd.uscourts.gov/

SpeechNow.org v. FEC: pacer.cadc.uscourts.gov/common/opinions/201003/08-5223-1236837.pdf