[Congressional Record (Bound Edition), Volume 149 (2003), Part 8]
[Senate]
[Pages 10478-10480]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  McCAIN-FEINGOLD CAMPAIGN FINANCE LAW

  Mr. FEINGOLD. Mr. President, at 3:45 p.m. on Friday afternoon, a 
three-judge panel of the United States District Court for the District 
of Columbia released a long-awaited decision in the case of McConnell 
v. FEC. That is the lawsuit challenging the constitutionality of the 
Bipartisan Campaign Reform Act of 2002, sometimes known as the McCain-
Feingold bill.
  Over 80 different plaintiffs participated in the case, which was 
defended by the Department of Justice and the Federal Election 
Commission. Six congressional sponsors of the law, Senator John McCain, 
Senator Olympia Snowe, Senator James Jeffords, Representative 
Christopher Shays, Representative Marty Meehan, and I, intervened as 
defendants in the case.
  A number of commentators and lawyers for the parties have commented 
that the most important aspect of this decision is that it has finally 
come down. I agree with that. From the very beginning of our effort to 
reform the campaign laws over a period of 7 years, we knew that the 
Supreme Court of the United States would decide the fate of the law. We 
provided for expedited consideration of any challenge to the law's 
constitutionality by having a three-judge panel hear the case as the 
trial court with a direct appeal to the Supreme Court.
  Discovery and briefing in the case proceeded on a very fast track, 
and the court heard oral argument on December 4, 2002, an argument 
which I had a chance to attend in part. At that argument, the chief 
judge of the panel suggested that the panel would rule by the end of 
January. It took considerably longer than that, and now we know why. On 
Friday, the court released over 1,600 pages of opinions. A shifting 
majority among the three judges upheld some of the most important 
portions of the law while it struck down some others.
  Now that the three-judge panel has finally ruled, the Supreme Court 
can take the case and begin its consideration of the constitutional 
issues raised by the law. I hope the Court will act quickly, but I also 
hope it will act carefully and judiciously as, of course, we assume it 
will. The decision of the Court will shape the conduct of elections and 
fundraising in this country for many years to come.
  While the district court opinion will become a mere footnote to 
history once the Supreme Court rules, I believe it is useful to comment 
on the decision today because the press coverage of the details of the 
ruling has been sometimes contradictory, and unfortunately in a number 
of cases the press reports were simply inaccurate about what had 
happened with the court decision. This is not surprising given the 
complexity of the ruling and the length of the opinions. For the 
benefit of my colleagues, particularly those who supported our long 
effort to pass reform, I wanted to discuss today what the court did and 
did not do.
  The court's ruling was shaped by two different 2-1 majorities. U.S. 
Circuit Judge Karen Henderson would have struck down much of the law, 
while U.S. District Judge Colleen Kollar-Kotelly would have upheld most 
of it. The deciding vote in most cases was U.S. District Judge Richard 
Leon, who sided with Judge Henderson on some issues and with Judge 
Kollar-Kotelly on others. The three judges were unanimous on a handful 
of issues, mostly on some of the minor provisions in the bill, but also 
on one very significant portion of the soft money ban.
  Let me start with soft money, especially in light of the headlines 
that screamed ``soft money ban struck down.'' Those headlines were not 
correct.
  Let me start with soft money, which was the core of the reform effort 
and was dealt with in title I of the McCain-Feingold bill.
  The court struck down our prohibition on national parties raising 
soft money. Under this ruling, national party committees may again 
raise unlimited contributions from unions, corporations, and wealthy 
individuals. That, of course, assumes that the Supreme Court agrees 
with this point, which frankly I believe they will not. State parties 
were never prohibited from raising such money under McCain-Feingold. 
Each State's fundraising activities are governed by State law. That is 
quite key to understanding exactly what happened by the ruling.
  The court left intact, however, the prohibition on the national 
parties spending soft money on public communications, such as broadcast 
advertising, television ads, that promotes, supports, attacks, or 
opposes a Federal candidate. Over the past four election cycles, dating 
back to the 1996 campaign, both Federal and State parties have spent 
millions upon millions of dollars of soft money on television ads 
attacking candidates of the other party.
  Frankly, it was this practice, the use of soft money for television 
ads, that more than anything else drove Senator McCain and I, and the 
other authors and supporters of the bill, to work so hard for 7 years.
  This court, this district court, upheld the ban on ads being paid for 
by soft money.
  The so-called issue ads are the biggest end run around the campaign 
finance laws out there, and they were the core of what McCain-Feingold 
is trying to stop. I am pleased to say the district court upheld our 
efforts in that area.
  Under this ruling, party committees can raise soft money but they 
cannot spend it on all those phony issue ads you see on television all 
throughout the campaigns and about which so many people have 
complained. They can spend it, however, under this rule, on other 
activities that Congress determined in BCRA had a significant effect on 
Federal elections, such as voter registration drives conducted near in 
time to Federal elections and voter identification and voter 
registration efforts.
  In upholding the prohibitions on the parties spending soft money to 
finance election-related advertising, I firmly believe the basic 
principle of McCain-Feingold was upheld. The court recognized the 
corrupting effect of this money and the power of Congress to regulate 
it when it affects Federal elections. That is a significant finding.
  Note that the court did not find that the first amendment or free 
speech rulings or practices restrict or prevent a complete ban on ads 
paid for by soft money. That was the biggest issue out here in the 
debate over 7 years, and even this district court agreed with that 
fundamental principle of McCain-Feingold.

[[Page 10479]]

  When the case goes to the Supreme Court, congressional supporters of 
the law and the United States will urge the Court to recognize that the 
corrupting effect of soft money on our political process is not 
eliminated by simply restricting its use to so-called party-building 
activities. So there is no question, we hope for an even stronger 
ruling from the Supreme Court. Furthermore, there is ample evidence, we 
believe, that the kinds of activities the district court determined can 
still be financed with soft money do, in fact, have a major impact on 
Federal elections.
  The same 2-to-1 majority that struck down the ban on national parties 
raising soft money also held unconstitutional the prohibition of 
parties raising soft money for or transferring soft money to advocacy 
groups. The other 2-to-1 majority upheld the prohibition on State 
candidates spending money on advertisements that mention Federal 
candidates and promote, support, attack, or oppose these candidates.
  Again, not only did the court say that at the Federal level the 
parties could not buy soft money TV ads, but also the State parties 
cannot run ads on behalf of Federal candidates using soft money--again, 
very different from what you might have assumed had you been watching 
CNN late Friday afternoon.
  All three judges, however--and I think this is very significant--
uphold the crucial portion of the new law that simply prohibits Federal 
officeholders and candidates from raising and spending soft money. This 
is a significant blow to those who wanted to believe when they first 
heard about this decision that it had somehow restored the status quo 
of political fundraising and campaign spending in this country.
  Even Judge Henderson, who ruled against our side on virtually every 
other matter, rejected most of the new justifications of the new law 
offered by its proponents. Even she recognized the fact that there is 
an appearance of corruption created when Members of Congress or other 
Federal officials seek to raise huge donations from corporations, 
unions, or wealthy individuals. She upheld this provision under the 
highest standard of review, strict scrutiny.
  Today, just like last Thursday, it is still against the law--a 
criminal violation--for a Member of Congress to call up a union, an 
individual, or a corporate entity and ask for unlimited campaign 
contributions. It cannot be done today any more than it could have been 
done a few days ago.
  It is important to know that the provision of the law upheld in this 
part of the court's opinion includes a prohibition not only on Members 
themselves doing this, raising soft money for purposes of broadcast, 
but also on entities directly or indirectly established, financed, 
maintained, or controlled by Federal candidates or officeholders. As a 
matter of fact, this is a complete prohibition on soft money 
fundraising by these entities.
  I misspoke a minute ago saying it only related to broadcast. This 
prohibition on Federal officeholders and entities directly or 
indirectly established by them relates to any kind of fundraising for 
any kind of soft money whatever. Therefore, leadership PACs maintained 
by Members of Congress may still not raise soft money under this 
ruling; nor can the congressional campaign committees which are clearly 
established and controlled by Members of Congress to aid the reelection 
efforts of themselves and their colleagues.
  Now, unfortunately the former head of one such committee quickly 
announced he would begin raising soft money immediately anyway. He 
might want to get some legal advice first. Although the soft money 
portion of the court's ruling certainly changes much in the political 
fundraising landscape, it leaves one very important part of the new 
regime imposed by the McCain-Feingold bill: Members of Congress and the 
executive branch must stay out of the soft money game altogether. 
Especially in this period of uncertainty between now and when the 
Supreme Court issues its decision, the spectacle of Members of Congress 
getting out their old soft money Rolodexes and dialing for dollars 
again would be more than the American people would stand.
  So I am not only very pleased but relieved that the district court 
recognized the importance of stopping the part of the soft money system 
that some of us have referred to as legalized extortion or legalized 
bribery or, more directly, simply a shakedown.
  Title II of the McCain-Feingold bill dealt with what we called 
electioneering communications, the phony issue ads by outside groups 
that commanded so much attention during the last few election cycles. 
Here again, the court was divided. It did strike down the primary 
definition of electioneering communications we had referred to on the 
floor as the bright line test. Actually, we also referred to it as the 
Snowe-Jeffords provision. Under that formulation, an ad that ran within 
60 days of a general election or 30 days of a primary could be financed 
only with hard money; that is, only through a PAC set up by the 
company, union, or group running the ad.
  Now, a majority of the district court panel believed this definition 
was overly broad because it would capture a substantial number of 
``true issue ads'' as well as those aimed at electioneering.
  Again, despite the initial erroneous reports, there was more to the 
decision than that--quite dramatically more. The court upheld a 
fallback definition which was originally added on the floor by Senator 
Specter during the debate in 2001. That definition uses language 
similar to that which we employed in the soft money ban to address 
phony issue ads run by the parties. So if an ad promotes, supports, 
attacks, or opposes a candidate, it still must be paid for with hard 
money. The court also upheld the Wellstone amendment that applied this 
definition to ads run by advocacy groups in addition to labor unions 
and for-profit corporations and upheld the disclosure requirements in 
the law.
  The definition upheld by the district court actually is not limited 
to a 30- or 60-day window. So at any time during the election cycle, 
including today, groups may not use soft money to run ads attacking 
candidates in this manner. This is very significant. The definition is 
broader and will very likely cover many more ads in the primary 
definition of electioneering communications that we passed. The court 
even threw out a clause included by Senator Specter to attempt to 
narrow the definition, declaring it made the overall definition too 
vague. Frankly, I don't know whether this ruling will survive when the 
Supreme Court rules on the case.
  What is most interesting here is the majority of the court decided 
that Congress is not limited to regulating advertisements that use the 
so-called magic words of express advocacy. Year after year, opponents 
of McCain-Feingold said you could only limit this to the magic words, 
vote for or vote against. That is not true under this court's ruling, 
and that is a major step forward, potentially. It recognizes the 
Constitution is not a straitjacket leaving the Congress powerless to 
address clear efforts to evade the law through phony issue ads.
  In our appeal to the Supreme Court, we will argue that the 30/60 
provision drafted by Senators Snowe and Jeffords is constitutionally 
defensible because it gives groups certainty over what ad is covered 
and what is not. But either definition is preferable to the current 
very narrow magic words test that allows a massive evasion of 
disclosure and source requirements for the attack ads that tend to 
dominate the airways in the weeks before an election.
  The court reached decisions on a number of other provisions of the 
bill. A number of these decisions were unanimous, and I will not take 
time right now to go through each of them. I ask unanimous consent that 
a summary of those rulings be printed in the Record at the end of my 
statement.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. FEINGOLD. Mr. President, in the next few days a decision will be 
made

[[Page 10480]]

whether to seek a stay of the district court's decision. I think the 
arguments for such a stay are strong. The parties have been working 
under the new campaign finance rules since November of last year.
  To shift to another system for a few months while the Supreme Court 
reviews the case only to shift again when the Supreme Court rules, 
whatever its decision might be, does not make much sense. It would be 
preferable for a variety of reasons to keep things the way they are now 
until the Supreme Court makes a final decision. That decision should 
come in plenty of time for the parties to prepare for the upcoming 
elections.
  One of the main arguments for a stay is that in order to put the 
district court's decision in place, the FEC would almost certainly have 
to undertake a whole new set of rulemaking proceedings. The FEC worked 
to put implementing regulations in place in a timely manner, as 
instructed by the new law. Many of those regulations are not 
particularly useful under the law established by the district court's 
decision. In any event, I call on the parties to act with restraint, 
especially until the courts rule on any requests for a stay.
  As I mentioned at the outset, we have always known that this case was 
headed to the Supreme Court. I am pleased that the decision of the 
three judge panel has come down and that the final stage of this legal 
process can now begin. I have great confidence in the Department of 
Justice and in the legal team that is representing the congressional 
sponsors. They did an extraordinary job in assembling a factual record 
and laying out the arguments for the law's constitutionality in the 
district court.
  These lawyers are acting to defend a legislative product that 
reflects not only political compromise, but also great care and 
attention to constitutional principles and the American people's desire 
for a political system that is based on ideas and not money. I am proud 
to continue the fight for campaign finance reform in the courts, and I 
again thank my colleagues for their support in this long effort.
  I chose to come to the floor because if anybody had read the news 
accounts on Friday and Saturday, frankly, they would not have any idea 
of what the actual effect of this ruling was which was, on balance, 
positive, in favor of campaign finance reform. But we do hope the U.S. 
Supreme Court will even go further and complete the job.

                               Exhibit 1

       Coordination--A 2-1 majority of the court rejected 
     challenges to the coordination provisions. It held that a 
     challenge to the provision that requires the FEC to issue new 
     regulations was premature.
       Independent/coordinated party expenditures--By a 3-0 vote, 
     the court struck down the provision of the bill that requires 
     parties to choose once a candidate had been nominated between 
     making independent or 441a(d) expenditures.
       Millionaire provisions--By a 3-0 vote, the court decided 
     that the plaintiffs lacked standing to challenge the 
     millionaire amendments.
       Stand by your ad--By a 3-0 vote, the court determined that 
     the candidate plaintiffs do not have standing to challenge 
     the Wyden amendment requiring candidates to personally appear 
     in ads that attack their opponents in order to get the lowest 
     unit rate.
       Increased contribution limits--By a 3-0 vote, the court 
     ruled that the Adams plaintiffs do not have standing to 
     challenge the increased contributions limits.
       Minors' contributions--By a 3-0 vote, the court struck down 
     the ban on contributions by minors.
       ID of sponsors--The court upheld the Durbin amendment 
     requiring more identifying information on the identification 
     of the sponsor or sponsors of a political ad.
       Disclosure of broadcasting records--By a 3-0 vote, but for 
     differing reasons, the court struck down the Hagel amendment 
     requiring broadcasting stations to maintain and make publicly 
     available records of requests to purchase political 
     advertising time.

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