North Carolina Right to Life contends that it and other nonprofit advocacy groups should be allowed to donate money directly to candidates and political partiest… High Court to Review at Least One Campaign Finance Case this Term

In what might be considered an appetizer before the much anticipated main course is served up by the constitutional challenge to the Bipartisan Campaign Reform Act, the U.S. Supreme Court agreed Monday to decide whether a law banning corporate contributions to federal candidates goes too far and violates the free speech rights of advocacy groups organized as nonprofit corporations.

The case was brought by North Carolina Right to Life, a tax-exempt, pro-life advocacy group, and challenges a section of the Federal Election Campaign Act of 1971 that prohibits corporations and labor organizations from making "contribution[s] … in connection with any [federal] election."

North Carolina Right to Life contends that it and other nonprofit advocacy groups should be allowed to donate money directly to candidates and political parties, and that the federal prohibition against such contributions runs afoul of the First Amendment.

Thus far, both lower courts that have heard the case have agreed.

In January, the U.S. Court of Appeals for the 4th Circuit affirmed the ruling of a federal district court finding that the corporate contribution ban was unconstitutional when applied to nonprofit advocacy groups, such as North Carolina Right to Life.

The 2-1 decision of a panel of the 4th Circuit noted that "the Supreme Court has …made it clear that the '[r]egulation of corporate political activity …has reflected concern not about the use of the corporate form per se, but about the potential for unfair deployment of wealth for political purposes.' This potential presents a real danger when for-profit corporations are involved. However, such danger is not present when the corporation at issue is a nonprofit advocacy corporation."

As a result, the 4th Circuit ruled nonprofit advocacy groups that pose no special threat to the political process "may not be banned from participating in political activity simply because they have taken on the corporate form."

The 4th Circuit's decision relied heavily on a 1986 decision from the Supreme Court finding the 1971 law unconstitutional when it prohibited nonprofit advocacy groups from independently spending money on commercials supporting or opposing candidates.

"'[T]he distinction between contributions and expenditures [is] immaterial in this case,'" quoted the 4th Circuit approvingly from the district court's opinion. "The rationale utilized by the [Supreme] Court …to declare prohibitions on independent expenditures unconstitutional as applied to [nonprofit advocacy] corporations is equally applicable in the context of direct contributions. In neither case is there the threat of … corruption that the prohibitions seek to prevent."

Nevertheless, the decision of the Supreme Court may indeed turn on a constitutional distinction between independent expenditures and direct contributions to candidates and political parties. The brief asking the Supreme Court to review the case filed by Solicitor General Theodore Olson noted "that 'the Government enjoys greater latitude in limiting contributions than in regulating independent expenditures.'"

The Court will hear arguments in the case, Federal Election Commission v. Beaumont, No. 02-403, in the spring and will issue a decision before the current term ends in June.

November 22, 2002
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