A Belated Response to Tim Lee and American Free Enterprise v. Bennett

I've been traveling the past three weekends and thus been too busy during the week to keep up with all my reading. I only just read my friend Tim Lee's  take on Arizona Free Enterprise v. Bennett, the most recent campaign finance case before SCOTUS. I respectfully disagree with him and would like to explain why here.

Some set-up to Tim's argument:

Let’s start by reviewing the broader campaign finance debate, and especially the arguments in Citizens United. Advocates of regulation argued that “independent expenditures”—that is spending on political speech by people unconnected to any campaign—were a grave threat to the integrity of the democratic process. They warned that a wealthy interest group could walk into the offices of a member of Congress and threaten that if the member didn’t vote the way the group wanted, the group would pour millions of dollars into negative ads in the member’s district. Faced with a threat to his political survival, the member will be forced to do what the interest group wants.

First Amendment zealots like me had two responses. First, running ads praising or criticizing a candidate in the weeks before an election is precisely the kind of “core” political speech the First Amendment is supposed to protect. Therefore, we’d better have an extremely solid reason for restricting such speech.

Second: if it were really true that elections were decided based on which candidate had the most spent on his behalf, this would be a pretty strong argument for regulating independent expenditures. But fortunately, voters are not mindless automatons. They evaluate the messages being presented to them and compare them with elected officials’ records in office. An incumbent with a good record will find his ads reach a receptive audience. Conversely, an interest group whose agenda is broadly unpopular with voters is going to have a harder time using ads to reduce the candidate’s poll numbers.

Relatedly, as Meg Whitman recently learned, advertising dollars are subject to diminishing returns. If the average voter sees candidate A’s ad 10 times and candidate B’ ad only once, that’s likely to give candidate A a sizable advantage. But if the average voter sees candidate A’s ad 1000 times and candidate B’s ad only 100 times, the gap is unlikely to matter. Indeed, some voters might get so tired of seeing candidate A’s ads that they vote for candidate B out of spite.

I'm with him all the way up to the Whitman reference. Whitman's doomed gubernatorial run was plagued with more problems than money could solve--and she didn't have the advantage of name recognition that a former governor (and governor's son) has. Add to that, she was a Republican following an unpopular Republican governor in the midst of a national and state-wide budget calamities...in a famously Democrat-friendly state. Furthermore, as such a visible candidate of one of the most important states in the Union, she was targeted by powerful and experienced advocacy and activist groups who knew how to spend money more wisely than her campaign did. In short, that a lot of money didn't help her doesn't mean the general ability to spend it freely is not important to a candidacy or idea.

Regardless, the Whitman example is one of a predominantly self-financed campaign and doesn't address the role of fundraising in a political campaign. In a campaign, money acts as more than just candidate's speech--it is a signal of political viability of the candidate and, more importantly, is the material product of the speech of his donors. Ron Paul has shown that fundraising doesn't guarantee electoral victory--but it is very effective if you're trying to get a particular message out to people who haven't been exposed to it. Ron Paul made a national name for himself in large part because of the money he raised and then the use of that money on the campaign. A publicly balanced system neutralizes the power of those donations.

People who donated to Ron Paul didn't want to give Sam Brownback or Mike Huckabee a platform: they wanted to say that the Paul brand of limited government is something they supported and wanted explicated to a wider audience. Matching funds, the issue in the present case, would neuter the voices of those people in favor of the status quo in the name of "more speech."(N.B.: I'm using a national figure for illustrative purposes. The AZ state law never would have effected national office.)

Take a more local hypothetical: say there is an open at-large county council seat. There is one private candidate who supports allowing medical cannabis dispensaries in the county and three public candidates who expressly do not. Under the matching funds provision, if Candidate A is supported by people who really want to license a dispensary, public financing triples his opposition without candidates B, C, and D lifting a finger to solicit it. It isn't as if Candidate A was going to have an easy go of it anyway, but now any decided advantage he may have had as a fundraiser is eliminated. As a county council seat, the media deluge that is commonplace to the governorship of California or the United States presidency is absolutely not going to occur so he is unlikely to experience the diminishing returns Tim referenced in Whitman's race--and Candidate A is battling against three times the competition she was. Adding insult to injury, B,C, and D are each using the money he campaigned for against him. Ironically, those who oppose his plan can donate to his campaign to effectively triple their money in opposition. (I fully grant that candidate A could win because the anti-cannabis vote is divided, but in this hypothetical it's certainly not an assumption that he would.)

As this demonstrates, matching funds are as likely, if not more so, to support the status quo--in a voting system that already overwhelmingly favors incumbents. Moreover, the use of matching funds is just another way the state can decide who gets to say what in an election. (Most of the electoral systems in the country have been set up to protect the duopoly of the major parties by crowding out third party or independent challengers, but that's another entire blogpost in itself.) It's hard to understand how a libertarian--or even a liberaltarian--could think of this as liberty-friendly.

And then we get to the constitutionality of the matter--which Tim concedes, sort of:

Obviously, a candidate isn’t going to want his opponent to get a larger public subsidy, and so at the margin it does provide some disincentive to campaign spending.

[...]

Here [unlike Citizens United], the “punishment” is much more indirect and indeed its status as a punishment is somewhat speculative. So First Amendment scrutiny is called for, but the justification probably doesn’t need to be as compelling as you’d need to justify direct censorship.

Government providing "some disincentive" to exercising free speech is akin to saying a man got a woman "a little pregnant."

If we're talking about a marginal candidate--or, more to the point, a candidate with heretofore marginalized ideas who has managed to earn the respect, trust, and money of enough supporters who want to give him a platform--that disincentive can prove most chilling. If every dollar given to Ron Paul is a government dollar to each of three or more mainstream candidates when spent, the mainstream candidates are granted government support to further marginalize him. If Paul supporters understand that their donations will trigger 1:1 financing to each member of the field of GOP candidates, their incentive to support him is greatly diminished. That is a chill on expressly political speech and thus cannot withstand the strict scrutiny test required for acceptable regulation of speech at any level of government.

Tim continues:

Second, the degree to which having your opponent subsidized will be perceived as a “punishment” greatly depends on the circumstances. If the privately candidate is handsome and charismatic with an impressive record, while the publicly-financed incumbent is a politically tone-deaf hack with a long record of corruption and incompetence, then the challenger might welcome his opponent having more money to spend putting his ugly mug on TV. Similarly, if an independent organization is running ads in order to get candidates to talk more about its pet issue, it might not care at all about whether its spending causes certain candidates to get more money in the process.

A donation to a candidate is a private individual's voice of positive support for a particular person. Matching that donation with public money changes the effect of that donation to supporting political speech generally--or, at least, speech among the state-approved candidates. Such a change perverts the essential component of that speech: explicit support with intent to provide material advantage.

Tim concludes:

Finally, the state’s interest in reducing corruption seems pretty compelling. Not compelling enough to justify censorship, but strong enough to justify a system of subsidies that creates a mild disincentive to private spending on political speech.

For actual political corruption, we have a justice system. A nebulous 'appearance of corruption' (as noted in the parties' briefs and page 26 of the majority opinion) is not a compelling justification to chill the speech of political contributors or candidates.

I understand and agree with Tim's underlying principle: more speech--and specifically more free speech--is a good thing. But the present case isn't free speech: it is a state-sanctioned balance of speech that comes at the direct cost of individual speech. Individual political contributions are not value-neutral and their use by a candidate should not render them such by way of matching funds to the candidates' opponents. Such distortion of political speech by government action is bad policy and wholly incompatible with the First Amendment.

bellum medicamenti delenda est