"CAMPAIGN FINANCE REFORM" FAILS ITS FIRST TEST
 

WASHINGTON   A ruling by a federal district judge will protect issue advocacy groups and allow them to engage in political speech, despite new campaign finance regulations by the Federal Election Commission.

U.S. District Judge Henry H. Kennedy Jr. of the District of Columbia on Nov. 26 granted a preliminary injunction to Hawaii Right to Life, Inc., that will allow it to run issue ads for upcoming special elections.  The elections are for the second congressional district in Hawaii and will be held on Nov. 30 and Jan. 4.  The Nov. 30 election will fill the remainder of the current term of U.S. Rep. Patsy Mink, who died Sept. 25 but remained on the Nov. 5 ballot and was re-elected.  The Jan. 4 election will chose a representative for the term beginning in January.

Hawaii Right to Life sought to run issue advocacy ads giving the positions of candidates on pro-life issues in advance of both elections.  However, new FEC regulations enacted following the passage of the Bipartisan Campaign Finance Reform Act of 2002, commonly known as McCain-Feingold or Shays-Meehan, banned all corporations from engaging in any "electioneering communication," which is any broadcast ad that mentions the name of a candidate within 60 days of an election.  The FEC regulations thereby regulated Hawaii Right to Life's issue advocacy, despite Supreme Court holdings that issue advocacy is always protected under the First Amendment.

Judge Kennedy held that Hawaii Right to Life is an MCFL-type not-for-profit ideological corporation and therefore has a First Amendment right to be exempt from any regulation of its political speech, including "electioneering communications."  Judge Kennedy's decision sends a strong signal that the First Amendment protects issue advocacy in general, and speech by MCFL-type not-for-profit ideological corporations in particular.

Hawaii Right to Life contended in the District Court that it is an MCFL-type not-for-profit ideological corporation even though it engages in limited business activities and receives limited donations from business corporations.  Under the FEC definition of such a corporation, either of these facts meant that Hawaii Right to Life could not be defined as such a corporation. 

"It is unbelievable that in American a group that has $8,000 worth of income in a year has to come to a federal court to get permission to mention the name of a candidate in its advertising," said James Bopp, general counsel for the James Madison Center for Free Speech, which represented Hawaii Right to Life.  "This is an important issue to advocacy groups and their role in political process."

The U.S. Supreme Court recognized in 1986 in FEC v. Massachusetts Citizens for Life ("MCFL") that political speech by not-for-profit ideological corporations could not be prohibited (hence "MCFL-type" corporation).  MCFL specifically held that the First Amendment protects independent expenditures by such corporations.  This month the Supreme Court agreed to consider in Beaumont v. FEC whether the First Amendment also protects contributions to candidates by such corporations.  The U.S. Court of Appeals for the Fourth Circuit held that the First Amendment does protect such contributions.  Oral argument in Beaumont is expected in March, with a decision by June.

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