One Year Later: The Consequences of Arizona Free Enterprise Club v. Bennett

A year ago, during oral arguments in Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, the conservative justices on the Supreme Court were candidly skeptical of the “matching funds” provision in Arizona’s campaign finance law that Freedom Club PAC was challenging. That provision allowed a publicly-funded candidate in Arizona to match and spend the same dollar amount as a privately-funded opponent up to a certain limit. Justice Antonin Scalia, for example, feared that a wealthy donor might refuse to contribute $10 million to a campaign if a publicly financed opponent would then receive the same amount.

The conservative majority on the Supreme Court saw the matching funds provision as placing a “substantial” burden on donors and privately-funded candidates. Burden or not, the Court’s decision certainly made it easier for big donors to influence elections in states like North Carolina and New Mexico, where a total of three public campaign financing systems – two municipal and one for state-wide judicial elections – have come under scrutiny throughout the past year.

In her Bennett dissent, Justice Elena Kagan eloquently described the requisite chutzpah of a political action committee (or PAC) seeking to reduce the amount of money in elections only when it benefits the other candidate. After all, the public funding provided under Arizona’s campaign finance law was equally available to all candidates. A matching funds provision would level the playing field and create more speech, providing voters with better and more information in an election.

But the majority opinion dismissed those goals, arguing that leveling the playing field is not a good enough reason to curtail the influence of money in politics. One year after the Court struck down Arizona’s matching funds provision, the damage to our democracy is clear.

In North Carolina, super PACs are buying state supreme court seats and a federal district court says there is nothing it can do about it. Although unlimited corporate expenditures in elections are a direct result of the Court's decision in Citizens United v. FEC, a matching funds provision in North Carolina could have countered the effect of these corporate expenditures were it not for Bennett.

A similar challenge in New Mexico threatens to dismantle Albuquerque’s excellent public campaign financing system. New Mexico Turn Around, a conservative PAC, brought an action in federal court to enjoin the city of Albuquerque from enforcing its matching funds provision.

Last December, in Western Tradition Partnership v. Bullock, the Montana Supreme Court upheld a state ban on corporate contributions, citing specific circumstances that make Montana particularly vulnerable to the influence of special interests and big corporations in its elections. North Carolina has joined over 20 states and the District of Columbia in asking the U.S. Supreme Court to deny cert in the Montana case. These states hope to establish among lower courts that there are legitimate state interests at stake in campaign finance reform.

Although the Supreme Court temporarily blocked the Montana ruling, it is has not yet decided whether it will hear oral arguments or issue a summary reversal.

Other courts have also sided with states and cities that hope to prevent corruption through creative provisions in their campaign finance reform laws. The Fourth Circuit Court of Appeals distinguished Citizens United and Bennett when upholding North Carolina’s ban on lobbyists’ campaign contributions.

Similarly, the Second Circuit gave hope to reform supporters when it upheld certain provisions from New York City’s campaign finance reform laws. The Second Circuit affirmed a lower court’s finding that neither Bennett nor Citizens United prevented the City from imposing restrictions on corporate contributions and the matching public funds that would be disbursed as a result. The court distinguished independent expenditures from contributions, finding that the latter could be limited under Citizens United and that the City had a legitimate interest in capping those contributions to prevent actual and apparent corruption.

While there is no doubt that the Bennett decision has been detrimental to our democracy, the Second Circuit’s recent ruling suggests a way to create incentives for smaller contributions and to limit the influence of corporate interests without violating the controlling precedent of Bennett.