In the most important test of a campaign finance reform law since last year’s Citizens United decision, the US Supreme Court on Monday is set to examine the constitutionality of an Arizona statute that guarantees government money to certain political candidates in a dollar-for-dollar match of funds raised by opposing candidates through private donations.

At issue is whether Arizona’s system of public financing of state election campaigns violates the First Amendment rights of candidates who decide not to participate in the state-funded campaign system.

Candidates who opt-out are free to raise and spend as much money as they wish provided they abide by the state’s limits on individual contributions.

But the Arizona system is designed to encourage candidates to participate in the publicly-financed program. It does so by rewarding participants with automatic payments of matching funds whenever their privately-funded opponent spends certain amounts of money to advocate his or her political views.

The law, known as the Citizens Clean Elections Act, also applies to spending by independent advocacy groups. Expenditures by such groups either for a privately funded candidate or against a publicly funded candidate trigger state-provided matching funds to help the publicly funded candidate counter the group’s political activities.

A central issue in the case is whether the law punishes speech by privately funded candidates or merely enhances speech by candidates who accept only public funding.

Last year, the high court ruled in Citizens United v. Federal Election Commission that Congress under the First Amendment may not restrict the political speech of corporations and unions during election season.

Is 'equalizing' political speech constitutional?

The current case examines whether the First Amendment allows a state government to use a privately-funded candidate’s level of campaign spending to trigger matching funds from the government in a way that helps equalize the amount of speech by publicly funded candidates in the election.

Leveling the playing field among candidates to decrease the influence of money in politics is a major goal of many campaign finance reform advocates. The Arizona case may test the constitutionality of that approach.

Supporters of the Arizona public finance system say it helps fight corruption or the appearance of corruption by eliminating the need for state candidates to raise money to fund their election campaigns.

Opponents say the matching funds provision of the law exerts a chilling effect on the political speech of candidates who want to fund their own campaigns. Under the law, the more money a traditional candidate spends, the more money his or her publicly funded opponents will receive.

“Public financing in Arizona’s matching funds system forces a yoke around the neck of traditionally funded candidates,” said Nicholas Dranias in his brief to the court on behalf of candidates challenging the law.

“The State of Arizona … compels individuals to help disseminate private political speech, which they abhor, as a consequence and condition of speaking freely about politics,” said Mr. Dranias, a lawyer with the Goldwater Institute in Phoenix.

State officials say the matching funds system does not penalize traditionally funded candidates. Instead, they say, it is a calibrated mechanism to ensure that publicly-funded candidates are provided with sufficient money to run competitive races.

Since the total amount of matching funds for candidates is capped, privately funded candidates are free to outspend publicly funded candidates, Assistant Attorney General James Barton said in his brief defending the law.

“Petitioners alleged that the matching funds provision may burden their ability to speak, but it imposes no ceiling on campaign-related activities and does not prevent petitioners from speaking,” Mr. Barton wrote.

The state also argues that the public funding program protects Arizona from quid pro quo corruption and the appearance of corruption by freeing participating candidates from having to rely on special interest groups for campaign contributions.

“A system which eliminates the need for a candidate to accept private dollars would prevent financial quid pro quo: dollars for political favors,” Barton said in his brief.

Opponents dispute corruption-fighting rationale

Opponents of the public finance system dispute this claimed corruption-fighting rationale. They say the public funding mechanism is really designed to “level the playing field” among competing candidates by restricting the amount of money candidates are likely to spend trying to get elected.

“The matching funds provision exists to ‘level’ the speech of privately financed candidates and independent expenditure groups who speak against publicly financed candidates,” wrote William Maurer, a lawyer with the Institute of Justice, in his brief on behalf of candidates and organizations challenging the law.

“It does so by creating disincentives for candidates and independent expenditure groups to engage in political activity above the expenditure limit set by the act,” he said.

Any effect on corruption, he says, is too far removed from the more direct effect of chilling political speech, he said.

The case began as lawsuits filed on behalf of two groups of candidates for state office and political committees that make independent expenditures in state elections. They argued that the matching fund provision of Arizona’s public finance system violated their free speech rights by deterring them from making campaign expenditures that might trigger a new source of funds for their publicly financed political opponents.

Lower courts came to different conclusions

A federal judge agreed with the candidates, and ordered the state to stop disbursing matching funds. A panel of the Ninth US Circuit Court of Appeals reversed, finding that Arizona’s public finance system was justified as a means to prevent corruption and that the matching funds provision did not amount to a significant impediment to political speech.

“Based on the record before us, we conclude that any burden the act imposes on Plaintiffs’ speech is indirect or minimal,” the appeals court said.

“Plaintiffs bemoan that matching funds deny them a competitive advantage in elections,” the panel said. “The essence of this claim is not that they have been silenced, but that the speech of their opponents has been enabled.”

A few weeks after the Ninth Circuit panel’s decision, the US Supreme Court blocked the decision and reinstated the federal judge’s injunction prohibiting enforcement of the matching funds provision.



The cases are Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett (10-238) and McComish v. Bennett (10-239).