Nonprofit Argues for Direct Contributions

Posted March 21, 2003 at 6:36pm

Commenting on the tendency of Americans to band together in groups, Alexis de Tocqueville noted that “the right of association therefore appears to me almost as inalienable in its nature as the right of personal liberty. No legislator can attack it without impairing the foundations of society.”

The Supreme Court on Tuesday is scheduled to hear arguments on whether modern-day associations — ideological advocacy groups structured as nonprofit corporations — can be prohibited from contributing directly to federal candidates in a case that many view as a curtain-raiser to a broader ruling on the nation’s new campaign finance law.

In a frontal challenge to the longstanding prohibition on direct corporate contributions to candidates, North Carolina Right to Life, a small nonprofit antiabortion group, argues that it should be allowed under the protection of the First Amendment to directly contribute to candidates with money it collects from raffles, bake sales and individual and corporate donations.

“The association liberty, like political speech, is a First Amendment right, and the constitutional guarantee of the First Amendment has its fullest and most urgent application precisely to the conduct of campaigns for political office,” NCRL attorney James Bopp argued in his brief to the court.

For-profit corporations, of course, and labor unions are barred from making donations to candidates under the theory that such prohibitions prevent the corruption of the electoral process. But in 1986, the Supreme Court, in an opinion authored by then-Justice William Brennan, created a small exception for nonprofit, ideological advocacy groups that wanted to make independent expenditures on behalf of candidates.

Now, the North Carolina group wants to extend that ruling to cover direct contributions. The 4th Circuit Court of Appeals, in a 2-1 ruling, agreed, saying the logic the high court applied in the 1986 case should extend to protect contributions as well as independent expenditures.

While the circuit courts have split on the issue, the Federal Election Commission did not seek to appeal the 4th Circuit ruling. That decision was made by Solicitor General Theodore Olson and the Justice Department, which in an unusual move, independently sought the high court’s review.

The court accepted the case last November, even as a special three-judge panel was preparing to hear oral arguments on the constitutionality of the new McCain-Feingold campaign finance law. That court, however, has yet to issue a ruling despite expectations of quick action, leaving the NCRL case as the only campaign finance matter before the high court this term.

While the direct question raised in the NCRL case, FEC v. Beaumont, isn’t an issue in the challenge to McCain-Feingold, the issue of the role of nonprofit groups in electoral politics has taken on added significance with the reduced role of political parties and the ban on unregulated soft money.

In its brief, the government argues that the high court should not second guess a Congressional decision to limit the influence of corporations on the political system.

“Congress has unambiguously determined that all corporations — including nonprofit advocacy corporations such as NCRL — should be subject to the prohibition on direct campaign contributions in connection with federal elections,” the FEC said in its brief.

That argument may be aimed at Chief Justice William Rehnquist, who dissented in the 1986 case by arguing that the court should not second-guess Congress on where the line should be drawn in setting limits on corporations.

The FEC noted in its brief that Congress has recognized, and the courts have long upheld, that corruption as well as the possibility of corruption justify the need to limit some political activities.

But Bopp scoffed at the notion that small advocacy groups would engage in the type of activity that most would consider corrupting.

“Factually, a pro-life group such as NCRL is among the least likely of all public interest groups to engage in quid pro quo corruption because it would never give money to a legislator who favored abortion rights in an effort to procure a favorable vote on pro-life legislation,” the group said in its brief.

Public Citizen, Common Cause and a number of other groups in favor of campaign finance regulation argued in an amicus brief that a decision in favor of NCRL would cause a “breach in the dike” that has prevented direct contributions to candidates from for-profit corporations and labor unions. They pointed out that donations to advocacy groups are unlimited and undisclosed and that such groups could well become conduits for corporations or wealthy individuals who are seeking to evade the limits imposed by the broader campaign finance law.

But the American Taxpayers Alliance, a group that argued it would benefit from being allowed to make campaign contributions, maintained that the prohibition sweeps far too wide to pass First Amendment concerns.

“It cannot be disputed that associations do good. What should not get lost in the background of this case is that, first and foremost, nonprofit organizations are groups of individuals that have associated for some social purpose, and are not simply some abstract, soulless commercial corporate entity. It is the rights of these associated individuals which the Constitution ultimately seeks to protect.”