Federal Appeals Court Rules Finance Law Contributions Are Unconstitutional

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A Washingon D.C. court has handed down a ruling that could mean even more political ad money flowing into the mid-term election cycle.

The Federal Court of Appeals for the D.C. Circuit Friday, saying that the Supreme Court's decision in Citizens United had resolved the appeal, ruled that the campaign finance law, limiting contributions by individuals to SpeechNow, a 527 group advocating the election of federal candidates, is unconstitutional.

The ruling came by unanimous decision from all nine members of the court in SpeechNow.org vs. the FEC. And just as in Citizens United, the D.C. court held that while the contribution limits -- or expenditure limits in the case of Citizens United --  were unconstitutional, reporting and organizational requirements for the group were not.

"The public has an interest in knowing who is speaking about a candidate and who is funding that speech," said the court, which also upheld the requirement that the group register as a political committee.

In Citizens United, the Supreme Court back in September removed the ban on direct corporate and union funding of campaign ads, though not the reporting requirements, calling it an unconstitutional restriction on political speech.

The FEC had argued that because Citizens United was about expenditure and not contribution limits, the Supreme Court decision did not apply. But, writing for the court Friday, Chief Judge David Sentelle disagreed: "[B]because Citizens United holds that independent expenditures do not corrupt or give the appearance of corruption as a matter of law, then the government can have no anti-corruption interest in limiting contributions to independent expenditure-only organizations. No matter which standard of review governs contribution limits, the limits on contributions to SpeechNow cannot stand."

Given that finding, he said, "this simplifies the task of weighing the First Amendment interests implicated by contributions to SpeechNow against the government's interest in limiting such contributions.... Thus, we do not need to quantify to what extent contributions to SpeechNow are an expression of core political speech. We donor need to answer whether giving money is speech per se, or if contributions are merely symbolic expressions of general support, or if it matters in this case that just one person, David Keating, decides what the group will say. All that matters is that the First Amendment cannot be encroached upon for naught."

The Center for Competitive Politics, which supported the Supreme Court's call, praised the D.C. Circuit's decision.

"We are grateful that the court recognized the importance of the right of association in politics and speech," said CCP vice president and SpeechNow co-counsel Stephen Hoersting in a statement. "The court affirmed that groups of passionate individuals, like billionaires-and corporations and unions after Citizens United-have the right to spend without limit to independently advocate for or against federal candidates."

But CCP was not as pleased with the court's upholding of the requirement to register as a political committee. "It's unfortunate that the court did not recognize how political committee status regulation by the FEC places restrictive burdens on grassroots political groups," said CCP and former FEC chairman Bradley Smith. "The court's decision means that the FEC regulatory regime will continue to favor large, established special interests over ad hoc groups of like-minded citizens who gather together to enhance their voices in politics."

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