Supreme Court Invalidates Party Coordinated Expenditure Limits, Freeing Parties to Engage in Unlimited Coordinated Activity with Their Candidates
By: Michael Bayes and Matthew Petersen
On June 30, the U.S. Supreme Court invalidated federal “party coordinated expenditure” limits, paving the way for national party organizations and their candidates to fully coordinate their campaign efforts. By a 6-3 vote in National Republican Senatorial Committee v. Federal Election Commission, the Court held that limits on political party spending that is coordinated with candidates violate the First Amendment.
In a majority opinion authored by Justice Kavanaugh, the Court concluded that the sole legitimate basis for campaign finance restrictions – preventing quid pro quo corruption or its appearance (i.e., “dollars for political favors”) – does not justify party coordinated expenditure limits. The Court rejected the argument that “an individual donor who wants to engage in quid pro quo corruption – that is, donate to a candidate in exchange for official action by that candidate when in office – might give a candidate’s political party large contributions” so that “the party might then spend the money in coordination with the candidate in order to support that candidate’s campaign.” This rationale, while accepted in the past, no longer commands majority support on the Court. Instead, the Court explained that “earmarking” rules, which treat contributions to a political party that the donor designates for a specific candidate as contributions to that candidate subject to applicable contribution limits, combined with modern disclosure requirements, make the party coordinated expenditure limits unnecessary to prevent quid pro quo corruption.
The Court’s decision frees political parties to spend unlimited amounts in coordination with their candidates. Political parties, of course, must still abide by applicable contribution limits when raising funds. Under today’s decision, though, the artificial barriers between parties and candidates that have existed since the mid-1970s no longer apply when it comes to party spending.
Case Background
Federal Election Campaign Act and Coordinated Party Expenditures
Under the Federal Election Campaign Act of 1974 (“FECA”), national political party committees, such as the Republican National Committee (“RNC”) and Democratic National Committee (“DNC”), may support their candidates with two types of financial support: direct contributions and coordinated spending.
Direct party contributions to candidates are subject to contribution limits. A national political party committee may directly contribute up to $5,000 per election to a federal candidate. A separate provision allows the RNC and DNC, and their Senate counterparts, to directly contribute a combined $62,000 per campaign to a Senate candidate.
In addition, the party committees may supplement this relatively small amount with “coordinated party expenditures,” which is party spending made in consultation (i.e., “coordination”) with a candidate. Until today, these expenditures were subject to a separate set of limits. Under FECA, “[t]he national committee of a political party” (i.e., the RNC and DNC) and “a State committee of a political party” had a coordinated party expenditure limit. That limit stood at $65,300 for most U.S. House elections. Limits for Senate elections and House elections in states with only one House district were tied to the states’ voting age populations, and ranged from $130,600 (in Alaska, Delaware, North Dakota, South Dakota, Vermont, and Wyoming) to $4,071,800 (in California).
Coordinated party expenditures take a variety of forms. In many cases, the party committee pays for advertising that is coordinated with the candidate. Other times, the party committee simply pays invoices incurred by the candidate’s campaign.
The national party congressional committees (i.e., the NRSC, DSCC, NRCC, and DCCC) had no explicit coordinated expenditure authority under FECA, although FEC regulations allowed the RNC, DNC, and state party committees to assign their spending authority to these entities, which was common practice.
What Happens Now?
Now that the Supreme Court has ruled, what should we expect next? The lifting of the coordinated party expenditure limits is the most significant change to the federal campaign financing system since Citizens United because it reorders the working relationship between parties and candidates. Anticipating how the political world will ultimately react to the new rules is difficult, and the history of campaign finance law is full of unintended, and unexpected, consequences. With that in mind, five changes in the near term seem likely.
The first, most obvious change is that the national party committees’ IE Units will become obsolete. A separate IE Unit always represented an inefficient—though legally necessary—duplication of efforts. Going forward, we may see “coordination units” that are fully integrated with campaign operations as the national party committees begin to adjust their operations to take advantage of the Court’s ruling. (It’s worth noting that coordinated advertising is entitled to “lowest unit charge” advertising rates under Federal Communications Commission (FCC) rules, while independent advertising is not – in other words, coordinated ads are cheaper.)
Second, campaigns will receive a larger proportion of their total funding from the national parties. With the coordinated expenditure cap removed, candidates in battleground districts and states will see an immediate increase in party funding. Party committees are also now better positioned to assist candidates facing fundraising disadvantages or who exhausted their resources in contested primary or runoff elections. In fact, there now exists the possibility of a candidacy that is fully funded by a party committee.
Third, joint fundraising committees will continue to proliferate. While the trend toward joint fundraising is already well underway, its value just increased. Candidates and national party committees are even more incentivized to raise funds together now that they also may spend those funds together.
Fourth, the national party committees are not the only beneficiaries of today’s decision. Towards the end of his opinion, Justice Kavanaugh made clear that the Court’s ruling is potentially broader than many may have considered. While the statutory provision at issue concerned only the Republican and Democratic state and national party committees, he notes that “the Court’s decision today treats all political parties equally” and “will allow all political parties – including the DNC and RNC and the respective Senate and House campaign committees, as well as other parties and party committees – to participate more freely and compete more fully in the political process, and to coordinate more closely with their candidates.” In other words, so-called “minor” political parties, and even local party committees, will be able to engage in unlimited coordinated spending with their candidates, possibly bolstering “outsider” candidates.
Fifth, Super PACs will remain major players in federal elections, although the functions of parties and Super PACs will be more clearly divided. Eliminating the coordinated party expenditure limits undoubtedly enhances the strategic importance of national party committees by allowing them to work more closely with their candidates. (Justice Kavanaugh suggested the party coordinated expenditure limits “consign[ed] political parties to continued second-tier status as compared to outside groups.”) However, Super PACs retain a significant advantage: they can raise unlimited funds from individuals and other sources that are prohibited from contributing to party committees. As a result, we are likely to see a clearer division of labor as parties assume a larger role in campaign spending and messaging, while Super PACs continue to wield significant independent influence because of the sheer volume of resources they can deploy in targeted races.
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