Bench Memos

A Victory for Political Speech

The United States Supreme Court took another step towards protecting free speech when it blocked Arizona from issuing “matching funds” during the state’s upcoming campaigns for elected office.

Arizona has a public-financing (i.e. taxpayer-financing) system for both legislative races and statewide offices. A candidate can get a lump-sum payment from the government in return for not raising money.

A candidate that doesn’t want to take this government subsidy is severely penalized. Once the candidate spends beyond a threshold amount of money, the subsidized candidate receives matching funds to equalize spending.

For example, if an unsubsidized candidate spends $10,000 above the threshold limit, the subsidized opponent receives $10,000 in matching funds.

Even worse, matching funds aren’t determined simply by looking at an unsubsidized candidate’s expenditures. The state adds both expenditures from the candidate and independent groups.

As a result, independent groups supporting a subsidized candidate can spend an endless amount of money while independent groups that support unsubsidized candidates have to limit their spending or else trigger matching funds.

The effect of matching funds is to chill speech. Neither candidates nor independent groups will want to spend money to further their message if it means helping the opposition. The choice is either to engage in free speech at the expense of helping the opposition, or not speak, so matching funds aren’t triggered.

Such a system is likely to be found unconstitutional in light of the United States Supreme Court decision in Davis v. FEC. In that case, a self-financed candidate for Congress challenged the McCain-Feingold law.

The law penalized self-financed candidates for spending beyond a threshold amount of their own money. The opponent received fundraising advantages that the self-financed candidate couldn’t enjoy.

Matching funds are far worse than the penalties for self-financed candidates. In Davis, the opponent received fundraising advantages that made it easier to raise money. There wasn’t any guaranteed money though. Matching funds, on the other hand, are sums of money that automatically are provided to opponents.

Since the Davis case, two federal district courts, one in Arizona and one in Connecticut, have held that matching funds are unconstitutional.

It seemed fairly obvious that matching funds were unconstitutional, but that was before the Ninth Circuit got involved. It recently heard an appeal of the Arizona district court’s opinion. A three-judge panel, in the case called McComish v. Bennett, held that matching funds were constitutional. The Court, for all practical purposes, ignored the holding in the Davis case.

Given that the elections are coming up quickly, the Goldwater Institute asked the Supreme Court to block the distribution of matching funds. The Court, as stated, recently agreed to do so. If matching funds were still allowed, the free speech rights of candidates and independent groups in Arizona would have been violated as the Court decided whether to hear the case.

The Court’s actions are a strong indication that it will take up the case next fall. It also is a fairly strong indication that it will reverse the Ninth Circuit and rule that matching funds are unconstitutional.

To clarify, public financing of campaigns won’t be found unconstitutional. The Court has made it clear that a true voluntary system of public financing is constitutional.

The constitutional problem is connected to this particular brand of public financing, referred to as “Clean Elections” by its proponents. Central to these taxpayer financing systems are matching funds. If matching funds are struck down, which is likely, then so too will “Clean Elections.”

More speech, not less speech, is critical to our political system. Policies that restrict the amount of political speech should, as a general rule, always be deemed unconstitutional. The Court should hear McComish v. Bennett and finally put an end to matching funds and their detrimental effect on political speech.

Daren Bakst is director of legal and regulatory studies for the John Locke Foundation, a North Carolina–based think tank.

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