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The Constitution and One State's "Campaign Finance Reform" Mess

Atop St. Paul's Cathedral, London

Atop St. Paul's Cathedral, London

From Montana come valuable lessons about campaign finance “reform.”

Montana has a long history of adopting restrictive campaign laws. But such laws often violate citizens’ rights of free speech, as protected by the First Amendment to the U.S. Constitution. They also can be ways of manipulating the electoral process to benefit some interests at the expense of others. Not surprisingly, therefore, the courts have voided many of them.

The Montana story goes back to 1912, when voters approved a measure banning corporations and corporate officers from a range of political activities. Some claim the measure was designed to respond to corporate corruption. Maybe so. But, then again, maybe not. Apparently the real effect of the measure was to expand the power of the Anaconda Company within Montana. This is because Anaconda could exercise influence through its newspapers and its employees, while other corporations were essentially gagged.

The courts gradually have chipped away at the 1912 measure. In a widely-publicized case earlier this year, the U.S. Supreme Court voided more of it. American Tradition Partnership v. Bullock (2012).

There have been other instances over the course of Montana history. For example, in 1996 liberal interests convinced the voters to prohibit corporations from defending themselves during initiative campaigns. The idea, apparently, was to prevent companies from responding to an anti-mining initiative planned for 1998. The federal courts court struck down the restriction in Montana Chamber of Commerce v. Argenbright (2000). But the ruling came too late for mining companies to defend themselves fully. The anti-mining initiative passed narrowly.

Still another Montana anti-free speech statute forbids political parties from participating in elections for state judges.  Whatever the intent of this law, the effects are clear: With political parties silenced, contributions from the plaintiffs’ trial bar exercise an out-sized influence on Montana judicial elections. And because the law prevents parties from stating their case, it helps keep voters ignorant about the records of sitting judges.

In September, the U.S. Court of Appeals for the Ninth Circuit invalidated this measure also. The case was Sanders County Republican Central Committee v. Bullock.

One of Montana’s most pernicious campaign regulations is a statute imposing very low limits on individual contributions to state candidates.  Whatever the purported reasons for this restriction, as a former statewide Montana candidate, I’m personally aware of its real effects:

*    By limiting the money challengers can raise, the measure benefits incumbents and otherinsiders. This is because established figures have access to workers, media, and networks that aren’t counted in the contribution limits.

*    The measure gives disproportionate political power to union leaders, who dispense contributions of the kind not subject to the limits.

*    The low contribution limits force candidates to spend a great deal of time on fund-raising rather than getting their messages out—again, a particular hardship for political outsiders, who don’t enjoy the media access enjoyed by incumbents and those favored by the state’s newspapers.

*    The low contribution limits render it extremely difficult to respond to last-minute rumors and attacks. When faced with such an emergency, the candidate can’t turn to his best supporters for media money. They have already “maxed out.”

* The low contribution limits also render it difficult to meet all campaign expenses. Many, if not most, Montana statewide candidates have to dip into their personal resources to finance the campaign. This system discriminates in favor of wealthy candidates and against those of moderate means.

Last month, in the case of Lair v. Murry, a U.S. District Judge voided Montana’s low contribution limits.  But the case is being appealed, and pending appeal the ruling is on hold.

Montana represents an extreme example, but its history illustrates two lessons about campaign finance regulation: First, a campaign “reform” measure can be manipulated to benefit some people at the expense of others. Second, advocates who honestly hope their “reforms” will improve the situation soon learn about unintended consequences.

Rob Natelson