THE FEDERAL ELECTION CAMPAIGN-FINANCE PROBLEM

A Partial Remedy

William G. Grigsby

March2015

Professor Emeritus, City and Regional Planning, University of Pennsylvania

emgrigsby@earthlink.net

Executive Summary
1. The foundation of America's representative democracy is the right of its citizens to
choose at the ballot box the persons whom they wish to govern them. It is prescribed in
Articles I and Il of the Constitution and expanded on in five different constitutional
amendments.
2. The residency requirement with respect to this right is strictly defined by each of the 50
individual states. In every state, in order to vote in a federal election, a person must be a
legal resident of the state or congressional district in which the election is being held.
3. In sharp contras4 the right to make campaign contributions in federal elections has no
residency requirement. People are free to make donations to any candidate for federal
office anywhere in the country regardless of where they themselves live.
4. This huge difference between the two sets of rules is striking because the right to make
campaign contributions is the child of [[the]] our right to vote; that is, without the right
to vote, campaign contributions would not even exist. Making residency requirements

for contributions the same as they are for voting would give recognition to this familial
relationship and in the process would bring some consistency to this area of election law.
5. Even more important than bringing consistency to one piece of election law,
prohibition of contributions by non-residents would enable states to have some assurance
that outside interest groups are unable, through campaign donations to members of the
states' Congressional delegations, to gain influence in the promotion of policies and
programs that are at odds with the states' own interests. By taking this step, states could
have some expectation that the persons whom their citizens elect to federal office would
more adequately represent them in Washington. The possibility of quid pro quo
corruption is not the issue here. It is simply one of proper representation of constituents.
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6. Prohibition on outside contributions would include contributions to the independent

expenditure campaigns of so-called Super PACs and 501 (c)(4) organiz.ations and also the
donations to political parties that are passed through to candidates.
7. Reflecting the difference between contributions and ordinary speech, prohibition
against outside contributions would not prevent outsiders from speaking out for or against

a candidate, either singly or in groups. They would, however, be required to appear

prominently in their electioneering ads, so that voters could adequately evaluate the
presentation.
8. The restriction would apply to Presidential as well as Congressional elections. Each
state primary would be treated as a separate election. In the general election in the Fall,
the selection in each state of representatives to the Electoral College would also be treated
as a separate election.

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Throughout the entire 225 year history of the United States, no one has questioned the
right of American citizens to financially support candidates for federal office anywhere in
the country. A resident of one state may contribute to the campaigns of candidates in the
other 49 states without limit This right is so much a part of the political fabric of the
United States that not only is it not questioned but to do so would likely be seen as simply
foolish. Over the years, there have been numerous attempts to regulate the dollar amount
of these donations, but not their geographic origins. The right of individuals and
organiz.ations to contribute wherever they please regardless of where they are domiciled
has been unchallenged.
In sharp contrast to the absence of geographic restrictions on campaign contributions
geographic restrictions on voting -- which has precisely the same purpose as campaign
contributions; i.e. to elect a favored individual to federal office -- [[is a right that is
strictly]] are shmply circumscribed [[with respect to residency]] by state laws. To be
eligible to vote in a particular federal election, an individual must be a legal resident of
the state or congressional district in which that election is being held. Voters cannot in
each election cycle choose the district in which they wish to cast their ballot, based on
their assessment of which electoral outcome they would most like to influence. Thus,
while the right to engage in "contribution-speech" is almost unlimited, the residency
restriction attached to its close companion, "voting-speech" is severely restricted.
As a consequence of the Supreme Court's sweeping 5-4 decisions in Citizens United v

Federal Election Commission, 130 S. Ct. 876 (2010), and McCutcheon v. Federal
Election Commission, 134 S. Ct. 1434 (2014), the chasm between contribution-speech
rights and voting-speech rights has become even wider. Throughout its Citizens United
opinion. the Court majority treats contributions as being virtually synonymous with
speech itself, reasoning that since contributions are usually absolutely essential if political

speech is to be heard, they are the equivalent of speech and therefore that any constraint
on the size of a campaign contribution is an abridgement of speech itself in violation of
the First Amendment. So now, individuals may donate virtually as much as they wish.
In addition, in the Citizens United decision, the Court majority ruled that the contributionspeech of organizations merits the same First Amendment protection as that of natural
persons. Again by contrast, voting-speech can be exercised only by natural persons and
only in the state or congressional district where they legally reside.
Not unexpectedly, in neither Citizens United nor McCutcheon did any questions
concerning the geographic origins of campaign contributions arise. Except for foreign
contributions, where donors legally reside has never been an issue. This is unfortunate
because there are at least two compelling reasons for greatly narrowing their First
Amendment protection in federal election campaigns to include only donors who are in
the state or congressional district where they wish to make a campaign contribution.
The first reason has to do with the origin of contributions-speech. It is the child of the
right to vote. Were voting-speech not a part of our political system, contributions-speech
would not even exist, much less be in need of First Amendment protection. This unique
provenance of contribution-speech as an outgrowth of voting-speech strongly argues for
contributions-speech not being more broadly protected than its progenitor.
First Amendment protection for campaign contributions, it should be emphasized, is to
enable candidates to be heard, not the donors. Potential donors do not need such
protection. They already have it in the language of the First Amendment regarding
speech generally. If prohibited from making a donation, they have the money to speak
out either individually or in groups, just as newspapers and other media outlets already

do. They would be required only to make it abundantly clear in their ads who is doing the
speaking, so that voters would be fully aware of the out-of-state or out-of-district origins
of the ads and evaluate them accordingly. ((What about anonymous bloggers?))
The second reason, and an even more compelling one, for allowing only legal residents to
make campaign contributions can perhaps best be explained through reference to an
actual election campaign, that of Montana Senator Max Baucus in 2008. According to
reports filed with the Federal Election Commission by the Baucus campaign during the
Senator's re-election bid (well before Citizens United), the campaign received the bulk of
its more than $8 million in donations from out-of-state contributors. Among the most
prominent contributors were Big Pharma and the health care industry. It is unlikely that
these contributors were interested at all in the current and future well-being of Montana.
They were focused instead, as they should have been, on the financial well-being of their
stockholders. Indeed, many of them would have been hard pressed to pick out Montana
on a map. Their efforts were intended, nevertheless to help determine who would
represent Montana in the Senate for the next six years.
And their efforts no doubt made a difference, not only in the election outcome but also in
whose names appeared on the ballot. Even before the Baucus re-election campaign got
underway, the Senator's huge, largely out-of-state financed war chest certainly must have
deterred at least a few potential opponents from entering the primary race. So even the
candidates appearing on the ballot were no doubt determined in part by outside interests.
The most significant damage of unlimited contribution-speech to our representative
democracy occurs, however, after the votes have been counted. The outside donors who
have contributed large sums to various campaigns [[or who have threatened not to
contribute]] expect quite rightly to be well treated in return. Buying such access has not

been viewed as quid pro quo corruption by the Court but rather has been described as the
very nature of politics: "Ingratiation and access ......are not corruption.. " Citizens United,
558 U.S. at 360. Such arrangements are, indeed, the very essence of politics.
Although buying access may be acceptable if the donor is a constituent, when the access
is purchased by out-of-state funding sources, the political equation changes in an
important way. The interests of inside-the-state donors and those of outside donors will
come into conflict. Maybe not often, but certainly such occasions will inevitably arise.
And it is equally inevitable that on some of these occasions the contribution-speech of
non-residents who have paid for access will affect the vote of a member of Congress in a
way that is not in the interest of the member's constituents even though no quid pro quo
corruption is involved. An elected official may not consciously decide to be more
responsive to non-resident donors than to constituent non-donors, but it would be a
natural tendency to sometimes do so, and, therefore, at times unavoidable. Simply
banning contributions from outsiders would prevent this from happening.
Such a ban would lead to another much-to-be-desired change in federal election
campaigns. Members of the House and Senate complain about the huge amount of time
they must spend raising money to fund their election efforts. Time devoted to marketing
themselves to non-constituent donors is also time not spent with constituents. This
situation raises no constitutional issues, but it is one which some states may find to be not
in their interest to facilitate. Although a law prohibiting non-residents from making
campaign donations might not reduce the time that candidates spend raising money, it
would force them to engage more often and more intimately with their constituents.
And such a ban would not affect the actual speech qua speech of anyone, only the
contribution-speech of out-of-staters.

In another context, the Supreme Court and Congress have already implicitly recogniz.ed
the danger to the American political community that is posed by not recognizing the
possibly conflicting interests between residents and non-residents when it comes to the
question of contribution-speech rights. Under current law (2 U.S.C. 441e) it is a crime
for non-U.S. citizens (other than those who are lawful permanent residents) to exercise
contribution-speech in federal elections, but it is not a crime for them to engage in other
types of political activity, including speech When a recent challenge to this law, Blumen

v. Federal Election Commission, 132 S. Ct. 1086 (2012), reached the Supreme Court in
2012, the Court affirmed per curiam the lower court's ruling that it is reasonable to
prohibit campaign contributions if such action is necessary to prevent persons not having
"a long-term stake in the flourishing of American society" from unduly influencing the
outcome of our elections. "Temporary resident foreign citizens by definition have
primary loyalty to other national political communities, many of which have interests that
compete with those of the United States." Blumen, 800 F. Supp. at 291. (See John Paul
Stevens, Six Amendments, New York, Little Brown, 2014, Chapter ID.)
It is true, of course, that American citizens, unlike foreigners, have an obvious long-term
stake in the country's future, but a large proportion of campaign contributions that move
across state lines are for the purpose of furthering the interests of the non-resident donors,
not either the national interest or the interests of the state in which the donation is made.
Thus, much more than an inconsistency in election law between voting rights and
contribution rights is at issue here. Pursuant to a carefully crafted plan by our Founding
Fathers for the governance of our country, the 13 sovereign states relinquished some of
their powers to the Federal government and retained -- through the Constitution - other
powers for themselves, including, most importantly, the right of their citizens to choose,
either directly or indirectly, whom they wish to represent their state in Congress and in
the selection of their President by the Electoral College. In order to retain this power,
states have a compelling interest in

The restriction would not apply to so-called issue ads that seek to promote ideas but not
candidates. The Sierra Club, the National Rifle Association, and other advocacy groups
could continue to promote their views however they wished short of actual electioneering.
The restriction would also put no limit on the size of contributions that residents of a state
or Congressional District can make to a candidate or to an independent expenditure
campaign in their state. Big donors, such as George Soros and the Koch brothers, would
still be kings of the hill, but only in their own states and congressional districts.
The restriction on contributions should apply not only to Congressional campaigns but
also to Presidential campaigns. These campaigns should be treated as a series of separate
state-wide contests, not a single national election. There are justifiable reasons for doing
so. Not only are Presidential primaries held sequentially, their participatory rules vary
widely across states, as do their rules regarding apportionment of national convention
delegates among winning and losing candidates and the instructions that delegates to the
national convention must follow. And although the general election in the Fall might
seem by contrast to be a truly national affair, it is not. Since Presidents are chosen in the
Electoral College by representatives from each state and the District of Columbia, not by
direct popular vote, the general election is really just an amalgamation of 51 separate
contests.
It is not necessary to wait for Congress to initiate legislation prohibiting non-residents

from making campaign contributions. Since states already prevent non-residents from
exercising voting-speech in their elections, surely they have the constitutional authority to
stop non-residents from exercising voting-speech's derivative right -- contribution-speech.
Any one of the SO states could be the first to do so. Prohibition of contribution-speech by
non-residents would obviously be only a partial solution to the total campaign finance
problem. However, all of the other proposed interventions that are being considered also
address only pieces of the problem and none has any likelihood of being enacted.

(See "A Note On Other Campaign-Finance Reform Proposals" below.) Although placing
restrictions on whose contribution-speech merits First-Amendment protection is not a
total solution, it is a significant and easy first step that can be taken now.
A Note On Other Campaign Finance Reform Proposals.
The campaign finance reform that is proposed in this paper joins five other quite different
recommended remedies to the perceived problem of excessive influence over election
outcomes by wealthy, often unnamed, donors. In order to put my own proposal in
context, a brief description of the five companion approaches may be helpful. Such a
discussion is not included in the body of the paper lest it obscure the paper's principal
argument.
(a) More complete and timely disclosure of the names of campaign contributors is
fleshed out in detail in the Disclose Act which has been languishing in Congress, even
though the Court itself recommended such legislation in its Citizens United decision.
While greater transparency would be helpful, it would likely not alter campaign financing
practices very muc~ since a large proportion of the more generous contributions currently
come from individuals who do not bother to hide their identity.
(b) Partial public funding of political campaigns is the subject of several different

legislative proposals. However, like full disclosure, it does not seem to be very popular
in Congress, despite the fact that it appears to have been successfully implemented in a
few state and local jurisdictions. One barrier to its acceptance may be the large volume of
negative -- approaching repellent -- political advertising that ordinary citizens see so
frequently on TV. Being forced to directly or indirectly subsidize such speech would not
be widely appealing. Also, partial public funding of campaigns would not by itself touch
independent expenditure campaigns, and so would leave a major part of the problem
unaddressed.
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..
(c) A constitutional amendment ending First Amendment protection for the s,peech of
other than natural persons would reverse Citizens United Its intent, obviously, is to stifle
the perceived undue influence of the contribution-speech of corporations, unions, and
other organiz.ations in federal election campaigns. Various proposals for such an
amendment surfaced almost before the ink was dry on the Citizens United decision. If the
proposed amendment were enacted, it is unclear how much difference it would make. A
large proportion of the funds now received by candidates and independent expenditure
campaigns comes from individuals. And if First Amendment protection for the
contribution-speech of organiz.ations were terminated, much of the financial support from
these sources would likely be re-channeled through individuals.
(d) A constitutional amendment "granting Congress and the states the power to regulate
and set reasonable limits on the raising and mending of money by candidates and others
to influence elections": This amendment, based on former Justice Stevens'
recommendation in Six Amendments, cited earlier and just rejected in the Senate on a
party-line vote, takes direct aim at what most worries critics of Citizens United -- the
dominance in many campaigns of huge contributions by a few wealthy interests. Even
though one might think that members of Congress would be delighted to have restored to
them a right that Citizens United took away, this is clearly not the case. Whether this
re-instated power would have achieved its intended purpose is somewhat doubtful.
Campaign finance excesses were prevalent well before Citizens United, the disturbingly
large amount of outside funding in the Baucus campaign being but one example. And
these excesses occurred after the passage of the laboriously designed McCain-Feingold
bill which was supposed to end campaign finance excesses.
(e) Complete non-disclosure of the sources of campaign contributions so that not only
the public but also the candidates would not know who was contributing to whom. This
approach to campaign finance reform, first proposed over a decade ago, would seem to be
the perfect answer to the underlying concern over the undue influence of big-money
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donors in politics. Political preferences could be freely expressed through contributions

without concomitantly creating a potential quid pro quo situation between donor and
recipient. However, when the idea was tried in a local election in Florida, contributions
dried up. (Lawrence Lessig, Republic. Lost, New York: Hatchette Book Group, 2011, p.
262) Without the possibility of a quo, there was no quid to be had.
What one can conclude from this brief review is that all of the proposed interventions
would be helpful but none by itself would solve the problem it seeks to address More
important, after over four years of effort by many different dedicated groups to overturn,
as it were, the perceived adverse consequences of Citizens United, none of the proposed
reforms has gained traction in Congress or seems likely to do so.

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