1. Rethinking the Unconstitutionality of Contribution and Expenditure Limits in Ballot Measure Campaigns Professor Rick Hasen Loyola Law School, Los Angeles

2. With special election in California looming in 2005 and new FPPC regulations, consider I consider the constitutionality of three possible laws: 1. Contribution limits for candidate- controlled ballot measure committees (FPPC rule) 2. Contribution limits for all ballot measure committees 3. Expenditure limits for ballot measure activity against unions and corporations

3. What does the analysis tell us about the Supreme Court’s approach to evidence? The Supreme Court’s approach to evidence in the campaign finance cases is shifting and apparently result-oriented.

4. Early Supreme Court campaign finance case law Buckley v. Valeo (1976)  Upheld contribution limits in candidate campaigns Contributions could be limited because of the government’s interest in preventing corruption and its appearance. Contribution limits had only a marginal effect on speech

5. Buckley Court struck down limits on independent expenditures in candidate elections Not enough proof of a danger of corruption; ban on independent expenditures would burden core political speech and violate First Amendment

6. NCPAC case (1981) made clear that Court would not look closely at evidence of corruption of candidates through independent expenditures [Court upheld expenditure limits against corporations in candidate elections in the 1990 Austin case]

7. The Court on Campaign Finance Law in Ballot Measure Elections Bellotti (1978): limit on expenditures in ballot measure elections violates First Amendment No candidate to corrupt No proof that limits were necessary to sustain “voter confidence” Strong corporate speech rights

8. Citizens Against Rent Control (CARC) (2001): limit on contributions in ballot measure elections violates First Amendment No candidate to corrupt No proof that limits were necessary to sustain “voter confidence”

9. The “New Deference Quartet”  Shrink Missouri (2000)  Colorado II (2001)  Beaumont (2003)  McConnell (2004)

10. Components of the New Deference  Ratcheting down level of scrutiny  Redefine corruption and appearance of corruption  Lowered state’s evidentiary burden  Tough standard on plaintiff to prove that campaign finance law “prevents effective advocacy”

11. Does the New Deference Quartet open up the possibility of rethinking campaign finance limits in ballot measure campaigns?

12. Contribution limits for candidate- controlled ballot measure committees? Such limits, as in the new FPPC regulation, may be justified to prevent corruption and the appearance of corruption of candidates 1. Better evidence than in CARC 2. New Deference/anti-circumvention

13. California Elected officials and the Ballot Measure Process  Extensive party involvement  At least 43 candidate-controlled ballot measure committees 1990- 2004, raising at least $84 million  63% of ballot measures feature argument or rebuttal in pamphlet signed by elected official

14. The Arnold Factor  Major use of initiatives as part of his political strategy against legislature dominated by other party  Extensive fundraising efforts; over $14 million so far for his main (but not only) controlled committee

15. Table 1. Six-Figure Donors to California Recovery Team (controlled by Gov. Schwarzenegger) as of Nov. 1, 2004 (top part of chart only ) NAME OF CONTRIBUTORAMOUNT AMERIQUEST CAPITAL CORPORATION/LONG BEACH ACCEPTANCE CORP$750,000.00 JERRY PERENCHIO LIVING TRUST$750,000.00 MR. ALEX G. SPANOS$500,000.00 WILLIAM LYON HOMES, INC.$250,000.00 AG SPANOS COMPANIES$250,000.00 WILLIAM A. ROBINSON TTEE$250,000.00 AMERICAN STERLING CORPORATION$250,000.00 PAUL F. FOLINO$250,000.00 HEWLETT - PACKARD COMPANY$250,000.00 ROBIN P. ARKLEY II$250,000.00 TWENTIETH CENTURY FOX FILM CORPORATION$200,000.00 TARGET CORPORATION$200,000.00

16. 2. Contribution limits for all ballot measure committees? Possible justifications: 1. Anti-circumvention? (But only 40 of 622 committees are candidate controlled) 2. Voter confidence--- Is it still the onerous Bellotti standard?

17. Can voter confidence arguments support contribution limits in ballot measure campaigns? Table 2. California Attitudes on Ballot Measure Elections (Field poll survey data, 1999, 2004) 48 43 0 30 60 90 19992004 Years Percentage of Voters 0 30 60 90 Ballot proposition elections come out "the way a few organized Special Interests Want"

19. Expenditure limits for ballot measure activity against unions and corporations? Traditional rationale to prevent corruption of candidates has never justified expenditure limits? What of the special Austin rationale applied in candidate elections?

20. Expenditure limits Austin justification, reaffirmed in McConnell and extended (without explanation) to unions: Preventing “the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public's support for the corporation's political ideas.”

21. Austin rationale does not depend upon candidates being corrupted. Its equality-like (“corrosion”) rationale applies equally in ballot measure elections. Ninth Circuit left issue to Supreme Court in Argersinger.

22. Table 3. Evidentiary Standards in Ballot Measure Campaign Finance Cases State Interest: Corruption and the appearance of corruption Voter confidence in the electoral process Corporate “distortion” (barometer equality) Evidentiary standard Deferential in contribution context; onerous in expenditure context Onerous, but subject to revision none Supporting case law New Deference Quartet; NCPAC Bellotti, CARCAustin, McConnell

23. How to deal with evidence question? Pildes approach: no close examination of evidence; look instead at whether legislative motive is democracy- enhancing or incumbent protecting How would this apply in ballot measure context?

24. My proposal for the use of evidence in campaign finance cases Court deference to value judgments made by legislatures but closer scrutiny of means and ends E.g., do campaign finance laws passed in the name of promoting voter confidence or political equality really promote those interests?