What SCOTUS’s Campaign Finance Ruling Means for Parties

The Supreme Court just issued one of the most consequential campaign finance decisions since Citizens United.

Like Citizens United, the argument in National Republican Senatorial Committee v. Federal Election Commission centered around the First Amendment right to free speech. More specifically, the court had to examine whether the First Amendment allows Congress to cap how much political parties may spend in coordination with their candidates in what are called coordinated expenditure limits. 

Ultimately, the court struck down the federal limits on coordinated party expenditures, giving political parties significantly more room to work directly with their candidates.

The average American voter probably has no idea what these limits are or that they even existed. Basically, party committees may make direct contributions of $5,000 per election to candidate committees, but national and state party committees also have the ability to spend money on behalf of candidates in full coordination with those candidates, up to certain limits. 

These limits can vary drastically depending on the state and office of the candidate – and that was one of the many criticisms of the coordinated expenditure restrictions. The limits in support of Senate candidates, for example, are based on voting-age population. Why should a party only be allowed to spend $130,600 for a Senate candidate in Wyoming when a state party can spend $4,071,800 for a Senate candidate in California?

If the justification of these limits was to prevent either corruption or the appearance of corruption, these widely varying limits would seem to suggest that it takes much less money to corrupt a candidate in states like Wyoming and Idaho than in states like California and New York. That just defies common sense and erodes the government’s justification for the heavy handed and arbitrary regulation of coordinated expenditure limits.

This decision could significantly change how political spending is structured. Since the Citizens United decision in 2010, a lot of political spending gravitated towards the faceless and often short-lived entities called super PACs, which can raise unlimited sums and make independent expenditures, but generally cannot coordinate with candidates or candidate committees at all.

By contrast, party committees are permanent institutions with direct accountability to donors, voters, candidates and party leadership. That is why many people view party committees as more responsible stewards of political spending. For example, if a party runs an advertisement that people feel is out-of-line, it is clear which individuals are responsible for the content. Donors and voters can then punish or reward candidates and parties with their dollars and their votes if they don’t like how campaigns or messaging are conducted.

With the elimination of coordinated expenditure limits, the bulk of political spending could shift away from super PACs and back to party committees, especially in hotly contested races where coordination with the candidate can make spending all the more efficient and strategically beneficial. 

At the same time, state parties can utilize non-profit mail permits for significant savings on political communications.

In terms of compliance and reporting, one big thing will be different: Party committees will not have to worry about monitoring the coordinated limits anymore. That doesn’t mean all campaign finance rules go out the door. Contribution limits, source prohibitions, allocation rules and reporting obligations remain. The public will still be apprised of how much parties are spending for particular candidates, and it will still be important for parties to work closely with their compliance teams to make sure spending is appropriately tracked and reported.

With that being said, here’s some things that state parties need to know:

1. Non-Profit Mail Permit

One of the most important tools that state parties have in their arsenal is the use of their non-profit mail permit. Using this permit for party approved communications allows for a near 50 percent savings in postage costs, which can amount to hundreds of thousands of dollars in savings in a single election cycle.

With the increased ability to coordinate spending, this tool is something that can be further utilized to help candidates who don’t have access to the same savings. Utilizing the mail permit to its fullest legal advantage can easily be the difference maker in the messaging wars later this campaign season.

2. Approval Processes and Communication Channels

Whether it’s coordinated mailing or any other communication done in conjunction with campaigns, creating clear and understandable communication channels between the state party, candidates and other principals is key. Beyond just a standard legal review, state parties should ensure any approval process for communications protects themselves and the candidates. This could include checking for correct sourcing, overall quality review, etc.

3. Legal review

Any piece of paid media should be reviewed by counsel. Period. The extra time it takes to ensure that all communications are legally compliant with state and federal campaign finance laws is well worth avoiding the headaches of potential fines or worse if something is found after the fact to be out of compliance with the law.

4. Candidate Education

Given the novelty of this ruling, it shouldn’t be assumed that most candidates or campaign professionals will fully understand the newfound benefits of working with a state party. Consistent outreach in your state and helping others in your party understand the new effects of this ruling will go a long way in ensuring everyone is paddling in the same direction.

5. Compliance Audit

Given the new legal landscape we live in, now is as good a time as any to audit your compliance processes to ensure your state party is a well oiled machine heading into November. 

Bradley Crate is the president of Republican compliance firm Red Curve Solutions.