CAMPAIGN FINANCE REFORM: CONSTITUTIONAL ISSUES RAISED BY DISCLOSURE REQUIREMENTS
CRS Report for Congress
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Campaign Finance Reform: Constitutional
Issues Raised by Disclosure Requirements
L. Paige Whitaker
American Law Division
Current federal election law contains reporting and disclosure requirements related
to campaign financing.1 The Supreme Court has generally upheld such provisions,
although imposing disclosure requirements on spending for communications that do not
meet the strict standard of “express advocacy” may be held unconstitutional.
Campaign finance reform legislation often contains provisions that would impose
additional reporting and disclosure requirements under the Federal Election Campaign
Act (FECA). For example, S. 27 (McCain/Feingold), would require disclosure of
disbursements of expenditures over $10,000 for “electioneering communications,” which
are defined to include broadcast ads that “refer” to federal office candidates, with
identification of donors of $500 or more. S. 22 (Hagel/Landrieu) would increase and
expedite current disclosure requirements under FECA. H.R. 380 (Shays/Meehan) would
lower the current FECA threshold for contribution reporting from $200 to $50 and
impose reporting requirements for soft money disbursements by persons other than
political parties. This report will discuss some of the constitutional issues relating to
these and other such disclosure requirements.
Reporting of Contributions and Candidate/Party Expenditures
In its landmark decision, Buckley v. Valeo,2 the Supreme Court upheld the reporting
and disclosure requirements of the Federal Election Campaign Act (FECA) applicable to
contributions and expenditures by candidates and political parties. In Buckley, the Court
determined that disclosure requirements can serve three governmental interests that were
1 2 U.S.C. §§ 432, 433, 434. Furthermore, since the promulgation of Federal Election Commission
(FEC) regulations in 1991, disclosure of political party soft money has been required. 11 C.F.R.
§§ 104.8(e),(f), 104.9(c),(d),(e) (2000).
2 424 U.S. 1 (1976). For further discussion of the Supreme Court’s holdings in Buckley and
subsequent related decisions, see CRS Report RL30669, Campaign Finance Regulation Under
the First Amendment: Buckley v. Valeo and its Supreme Court Progeny, by L. Paige Whitaker.
Congressional Research Service The Library of Congress
sufficient to outweigh possible free speech infringements: (1) providing the electorate with
information about the sources of campaign money and how it is spent, (2) deterring the
reality and appearance of corruption by exposing large contributions and candidate
expenditures, and (3) providing the government with the data necessary to detect violations
of law.3 However, with regard to independent expenditures, the Court found that reporting
requirements can only apply to those independent expenditures that expressly advocate the
election or defeat of a clearly identified candidate.4
In a noteworthy portion of the decision, the Court expressly deferred to legislative
judgment in upholding the reporting and disclosure requirements. In Buckley, the plaintiffs
argued that FECA provisions, which require political committees to maintain records with
the name and address of contributors donating over $10 and to report the name, address,
occupation, and employer of contributors who donate, in the aggregate, over $100, were
unconstitutional. While the Court agreed that these thresholds were “indeed low,” it
nevertheless found that “we cannot require Congress to establish that it has chosen the5
highest reasonable threshold.” Indeed, the Court concluded, such determinations are “best
left in the context of this complex legislation to congressional discretion.”6
Court deference to legislative determinations may be limited, however, when a court
finds that the legislature has established a series of differing disclosure thresholds without
sufficiently demonstrating its reasoning for such disparities. For example, in Vote Choice,
Inc. v. DiStefano,7 the U.S. Court of Appeals for the First Circuit struck down a Rhode
Island law requiring political action committees (PACs) to disclose the identity of every
contributor, even contributors donating as little as $1, a practice sometimes referred to as
“first dollar disclosure,” while only requiring candidates to disclose contributors donating
more than $100. The First Circuit did not express concern with first dollar disclosure per
se, but with the disparity between disclosure requirements applicable to PACs versus the
requirements applicable to candidates. According to the Vote Choice court, the
government’s interest in disclosure is generally constant, that is, the interest is the same
regardless of whether the disclosure requirement applies to individuals or to an association
of individuals. The subject Rhode Island law, however, was not only inconsistent, the
court found, but imposed “a particularly virulent strain of unevenness into its statutory
scheme,” without serving “any cognizable government interest.”8
Disclosure requirements can also raise constitutional questions concerning the right
of contributors to organizations subject to disclosure requirements to enjoy freedom of
association.9 According to the Supreme Court in its 1958 decision, NAACP v. Alabama,10
3 Id. at 66.
4 Id. at 79.
5 Id. at 84.
7 4 F.3d 26, 29 (1st Cir. 1993).
8 Id. at 35.
9 We observe that the result of any litigation involving disclosure requirements could very well turn
on the identity of the challenger, whether it be an organization or an individual contributor to an
it is well established that freedom to engage in association for the advancement of beliefs
and ideas is an inseparable aspect of the liberty rights guaranteed by the Due Process
Clause of the 14th Amendment11 and that there is an important relationship between12
freedom to associate and privacy in one’s associations. Accordingly, the NAACP Court
held that compelled disclosure of an association’s membership lists is unconstitutional, if
it can be shown that disclosure is likely to constitute an effective restraint on members’
freedom of association rights. The Court found that disclosure of the NAACP’s members
had exposed those members to economic reprisal, loss of employment, threat of physical
coercion, and other manifestations of public hostility. Therefore, the Court held, compelled
disclosure of members would detrimentally affect the association’s ability to exercise its
rights to advocate its beliefs and further, it might induce members to quit the association13
and dissuade others from joining.
Drawing from its reasoning in NAACP, in Buckley v. Valeo, the Supreme Court
upheld the current FECA disclosure requirements as applied to minor as well as major
parties. In Buckley, the plaintiffs argued that the First Amendment rights of minor parties
were significantly burdened by contributor disclosure requirements since they were more
susceptible to harassment and that the government had little interest in information
regarding minor parties having only a small chance of winning elections. The Court
determined, however, that unlike the evidence presented in NAACP, “any serious
infringement on First Amendment rights brought about by compelled disclosure of
contributors is highly speculative.”14 That is, according to the Court, absent a case being
made that the threat to constitutionally protected rights is so great and the governmental
interest furthered by compelled disclosure is so insubstantial that the law cannot be
constitutionally applied, disclosure laws will pass constitutional muster.15 Nevertheless, the
Buckley Court did recognize that, in the future, a specific minor party might be able to
demonstrate with a “reasonable probability” that disclosure requirements would subject its
party contributors to “threats, harassment, or reprisals,” and accordingly, such a party
could qualify for an exemption.16
The Supreme Court applied this principle again in Brown v. Socialist Workers ‘7417
Campaign Committee (Ohio), that disclosure rules generally will be upheld as applied to
minor political parties, unless the minor political party can demonstrate, as the party in this
case did, that such disclosure will subject the identified parties to a “reasonable probability”
10 357 U.S. 449 (1958).
11 Id. at 460.
12 Id. at 462.
13 Id. at 463-64.
14 Buckley, 424 U.S. at 70.
15 Id. at 71.
16 Id. at 74.
17 459 U.S. 87 (1982).
of “threats, harassment, or reprisals from either Government officials or private parties.”18
In view of these Supreme Court holdings, if a case could be made that a disclosure
requirement would seriously infringe on the First Amendment rights of contributors to
organizations subject to the requirements, then as applied to those cases, the regulations
might be overturned.
Reporting of “Express Advocacy” Independent Expenditures
Versus “Issue Advocacy” Expenditures
In Buckley v. Valeo, the Supreme Court upheld FECA disclosure requirements for
independent expenditures.19 Under FECA, when an organization or individual (other than20
a political committee) makes an independent expenditure, aggregating over $250 in a
year, expressly advocating the election or defeat of a clearly identified candidate, it is21
subject to disclosure requirements.
On the other hand, the current prevailing view of the courts is that disclosure
requirements for non-candidate expenditures, which do not expressly advocate the election
or defeat of a clearly identified candidate, are unconstitutional. That is, according to most
courts, expenditures for communications that merely relate to political issues, without
meeting the “express advocacy” standard, are constitutionally protected issue advocacy
communications, which cannot be subject to disclosure requirements or any other22
Reporting of “Issue Advocacy” Expenditures by Tax-Exempt
Even if a disclosure requirement is found to result in an unconstitutional regulation
of First Amendment protected issue advocacy, some have argued that conditioning receipt
of tax-exempt status under the Internal Revenue Code (IRC) on compliance with a
disclosure requirement might provide a basis for regulating beyond the express advocacy
standard to permit disclosure regulation of First Amendment protected issue advocacy. It
has been a principle of federal constitutional law, however, that the government may not
condition the receipt of a public benefit upon a requirement to relinquish one’s protected
18 Id. at 92.
19 Buckley, 424 U.S. at 80-81.
20 FECA defines “independent expenditure” as “an expenditure by a person expressly advocating
the election or defeat of a clearly identified candidate which is made without cooperation or
consultation with any candidate, or any authorized committee or agent of such candidate, and which
is not made in concert with, or at the request or suggestion of, any candidate, or any authorized
committee or agent of such candidate.” 2 U.S.C. § 431(17).
21 2 U.S.C. § 434(c).
22 For a discussion of the constitutional issues relating to the regulation of issue advocacy versus
express advocacy, see CRS Report 98-282, Campaign Finance Reform: A Legal Analysis of Issue
and Express Advocacy, by L. Paige Whitaker.
First Amendment rights.23 In other words, the government may not accomplish indirectly
what it would not be permitted to do directly. For example, in Speiser v. Randall, the
Supreme Court held that a state could not condition a veteran’s tax exemption upon the
recipient’s execution of a loyalty oath, which the Court found to be in violation of
recipient’s First Amendment rights.24
On the other hand, Regan v. Taxation With Representation of Washington25 is
sometimes cited in support of the government’s ability to limit the exercise of a First
Amendment right as a condition of receiving the public benefit of tax-exempt status.26 In
Regan, the Supreme Court upheld the restrictions on lobbying by IRC Section 501(c)(3)27
organizations, to which contributions are tax deductible, because they operate as a28
government subsidy directly supporting the activities in which the charity engages. That
is, if a charity engages in lobbying activities, then the government subsidy would be paying
for those lobbying activities. As noted by the Court, “Congress has merely refused to pay
for lobbying out of public moneys.”29
A disclosure requirement of issue advocacy expenditures by tax-exempt groups,
however, does not involve a situation where the government is subsidizing the exercise of
a First Amendment right. Instead, such a requirement might be held to infringe on a First
Amendment right, (i.e. the right not to disclose or speak concerning constitutionally
protected issue advocacy communications), by requiring disclosure as a condition of
receiving the benefit of tax-exempt status. Although the matter is not free from doubt, it
seems likely that a court could find this type of disclosure requirement to be less in the
23 For discussion of the doctrine of unconstitutional conditions, see Perry v. Sinderman, 408 U.S.
593 (1972); Speiser v. Randall, 357 U.S. 513, 516 (1956); FCC v. League of Women Voters, 468
U.S. 364, 381 (1984); see also Legal Services Corp. v. Velazquez, No. 99-603 (slip op. Feb. 28,
2001), at 4157. The prohibition was distinguished in Rust v. Sullivan, 500 U.S. 173, 194-201
(1991), where restrictions on abortion counseling under a federal program were upheld because the
restriction applied to the “program or service” and did not place “a condition on the recipient of the
subsidy”; and Buckley v. Valeo, 424 U.S. 1, 95-96 (1976), where, although no party directly
challenged the constitutionality of the current FECA provision providing federal funds to a
qualifying presidential candidate in exchange for voluntary compliance with spending limitations,
the Supreme Court appeared favorably disposed to the voluntary limitation since it believed that
providing federal funds to private parties for campaigning enhanced, rather than restricted,
opportunities to communicate and advocate to the public.
24 357 U.S. 513 (1958).
25 461 U.S. 540 (1991).
26 Id. at 545.
27 26 U.S.C. § 501(c)(3).
28 461 U.S. 540, 545 (1991).
29 Id. It may be constitutionally significant to note that in the case of the presidential public
financing system, the government is actually paying for the campaign advocacy activities in
question. That is, unlike the partial tax-exempt benefits that an Internal Revenue Code (IRC)
Section 527organization, 501(c)(4), (c)(5) or (c)(6) organization may realize or the fully tax-
exempt benefits that a Section 501(c)(3) may realize, as a result of their IRC tax-designated status,
the benefit or money involved is an actual payment or direct subsidy from federal funds for the
specific purpose of financing the campaign advocacy in question.
nature of a permissible provision that merely denies federal funds for a particular First
Amendment activity and more in the nature of an impermissible provision that denies
federal benefits to those who engage in protected activities.