Here Come the Independent Expenditure PACs

The dominoes are tumbling. Last week the Federal Election Commission issued two advisory opinions, AO 2010-9 and AO 2010-11, exempting the funding of PACs making independent expenditures (i.e., not making direct contributions) from federal contribution limits. In an editorial criticizing these FEC opinions, the New York Times noted, “the sluice gates are open on both ends.”

The FEC explained it was simply following the logic of court rulings in Citizens United v. FEC  and SpeechNow.org. v. FEC. Because “‘independent expenditures do not lead to, or create the appearance of, quid pro quo corruption’”, the FEC found no basis to limit contributions to these independent expenditure PACs, including contributions by corporations and labor unions.

Here is the power of Citizens United at full throttle. While the Supreme Court disclaimed application of its holding to the statutory prohibition on direct corporate contributions to federal political committees and SpeechNow did not purport to address contributions by corporations at all, the FEC nevertheless rather readily conceded that statutory prohibitions could not be constitutionally sustained in case of corporate and union giving to independent expenditure PACs.

And there’s no reason to think that only federal dominoes will fall. For example, in 1994 the New York State Board of Elections reached a very different conclusion. Its formal opinion No. 1994-3 applied New York’s statutory contribution limits to contributions made to an “independent committee.” That hallowed decision now appears to be on rather shaky ground.

Especially in light of the difficulties encountered in the legislative pushback, it appears that campaign finance regulators may find themselves opening new vistas to campaign spending in response to court rulings for some time to come.