Metropolitan News-Enterprise


Monday, May 24, 2010


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Court Upholds Matching Funds in Arizona Campaign Finance Law


From Staff and Wire Service Reports


The Ninth U.S. Circuit Court of Appeals on Friday upheld the constitutionality of an Arizona law giving “matching funds” to participants in the state’s voluntary public election campaign financing scheme who face candidates that opt to rely on private fundraising instead.

A three-judge panel said the law did not violate the First Amendment because it imposed only a minimal burden and bore a substantial relation to the state’s important interest in reducing quid pro quo political corruption.

Six past and future candidates for Arizona political office who have, or plan to, run privately financed campaigns, as well as two political action committees who fund such candidates, sued earlier this year to enjoin the matching funds provision. They claimed the provision severely burdened their exercise of protected political speech by punishing them for making, receiving or spending campaign contributions.

Voters approved Arizona’s Citizens Clean Elections Act in a 1998 ballot initiative following a series of massive political corruption scandals in the late 1980s and 1990s, including “AzScam,” in which legislators literally sold their votes for cash bribes, and the “Savings and Loan Scandal,” which led to a U.S. Senate Ethics Committee investigation of Sen. John McCain and then-Sen. Dennis DeConcini, and three senators from other states, over their receipt of contributions and favors from Arizona savings and loan tycoon Charles Keating.

Legal Framework

The act establishes a legal framework for the state to provide public financing to candidates for state political office. Candidates who choose to participate relinquish their right to raise private campaign contributions in exchange for a grant of funds to spend on the campaign.

The act also provides for a grant of additional matching funds from the state where a participant has an opponent who is not participating in the public financing system and the opponent’s campaign expenditures or contributions exceed a certain threshold.

A proposal to establish a similar system for the next two California secretary of state elections as a pilot project is on the June 8 ballot as Proposition 15.

The plaintiffs in the Arizona case argued that their fear of exceeding the threshold and triggering the disbursement of matching funds to their opponents caused them to curb their fundraising and spending, thereby chilling their speech.

They also contended that the law denied them equal protection because it treated candidates differently based on their participation in the public financing scheme.

U.S. District Judge Roslyn O. Silver of District of Arizona, addressing only the First Amendment claim, held that the matching funds provision was unconstitutional, and enjoined enforcement of the act after determining that the matching funds provision could not be severed.

However, the Ninth Circuit reversed in an opinion by Senior Judge A. Wallace Tashima and sent the case back to the district court to consider the equal protection claim.

Intermediate Scrutiny

Reasoning that the act was subject to intermediate scrutiny because the theoretical chilling effect it placed on First Amendment activity was minimal, Tashima said the act was constitutional because there was a substantial relation between its matching funds provision and a sufficiently important government interest.

“The record demonstrates that Arizona has a long history of quid pro quo corruption…,” he wrote. “Arizona voters were justified in concluding that contribution limits alone were not sufficient to combat corruption and its appearance. As the Supreme Court has recognized, the State’s interest in eradicating the appearance of quid pro quo corruption to restore the electorate’s confidence in its system of government is not ‘illusory,’ it is substantial and compelling.”

Tashima also said it was clear that the high rate of participation in the public funding scheme—between 52 and 67 percent of candidates since 2002 have participated in the program, he wrote—promoted the state’s anticorruption interest.

Judge Sidney R. Thomas joined Tashima in his opinion.

Judge Andrew J. Kleinfeld concurred with the result, writing that the most important fact was that the scheme imposed no limitations on contributions or expenditures for one’s own campaign.

Nick Dranias, a Goldwater Institute attorney representing some of those who sued, said an appeal would be filed quickly with the Supreme Court.

“We want to do that so nobody has any reasonable expectation that matching funds will stand for the current election,” Dranias said.

But given the late date, the court should allow matching funds for the upcoming election, a campaign spokesman for Gov. Jan Brewer, who is seeking re-election, said. “For this election cycle, the only fair thing would be to follow the rules as they exist.”

Silver’s ruling has been on hold pending the appeal, and distribution of matching funds is scheduled to start June 22.

The case would not affect publicly funded candidates’ basic allotments but the end of matching funds would open the door for them to be dramatically outspent by opponents.

The early impetus to the challenge to matching funds was the 2002 race for governor, in which Democratic nominee Janet Napolitano squeaked out a narrow win over her Republican rival after receiving $1.2 million of matching funds in the last month of the campaign.

A spokesman for the state agency running the public campaign finance program hailed the latest ruling, saying it was “beneficial for all of Arizona to have the matching funds in place.”

Pending the challengers’ promised appeal and its outcome, “we’ll continue to do what we do and offer an opportunity for all Arizonans to run for office and have their voices heard,” Michael Becker of the Citizens Clean Elections Commission said.

The case is McComish v. Bennett, 10-15165.


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