Case Western Reserve Law ReviewVolume 35 Issue 11984Rethinking Regulation of IndependentExpenditures by PACsWilbur C. LeatherberryFollow this and additional works at: of the Law CommonsRecommended CitationWilbur C. Leatherberry, Rethinking Regulation of Independent Expenditures by PACs, 35 Case W. Res. L. Rev. 13 (1984)Available at: 35/iss1/4This Article is brought to you for free and open access by the Student Journals at Case Western Reserve University School of Law Scholarly Commons.It has been accepted for inclusion in Case Western Reserve Law Review by an authorized administrator of Case Western Reserve University School ofLaw Scholarly Commons.

RETHINKING REGULATION OFINDEPENDENTEXPENDITURES BY PACSWilbur C.Leatherberry*Campaignfinance reform proposalsare as common as election-yearpromisea Independent spending by political action committees (PACs) is a current target of reformers' zeaL According to the author, previous reforms created this specter.Campaign contribution and spending limits imposed out of concern that big moneycorruptedcandidates anddistorted the electoralprocess encouraged the formation ofPACs and their independent spendingfor andagainst candidates. Money that wouldhave gone to candidates now goes to PACs, andPACs which would have contributedto candidates now do their own political spending. The authorargues that currentreform proposals will have similar,unanticipatedadverse effects. He therefore proposes realisticspending andcontributionlimits and improved disclosure requirementsto safeguard the politicalprocess,INTRODUCTIONIN THE1980 federal elections, PACs1 independently 2 spent morethan 12.9 million supporting presidential candidates and nearly 1 million supporting candidates for the Senate and House of Rep* Professor of Law, Case Western Reserve University School of Law. A.B., CaseWestern Reserve University (1965);. J.D., Case Western Reserve University School of Law(1968). The author gained firsthand understanding of election finance reform as legislativeassistant to Representative Louis Stokes (D-Ohio) from 1971-73.1. The Federal Election Campaign Act of 1971 (FECA) defines political committee as"any committee, club, association, or other group of persons which receives contributionsaggregating in excess of 1,000 during a calendar year or which makes expenditures aggregating in excess of 1,000 during a calendar year." 2 U.S.C. § 431(4)(A) (1982). The Presidential Campaign Fund Act's definition is "any committee, association, or organization (whetheror not incorporated) which accepts contributions or makes expenditures for the purpose ofinfluencing, or attempting to influence, the nomination or election of one or more individualsto Federal, State, or local elective public office." Id. § 9002(9).2. FECA defines independent expenditure asan expenditure by a person expressly advocating the election or defeat of a clearlyidentified candidate which is made without cooperation or consultation with anycandidate, or any authorized committee or agent of such candidate, and which isnot made in concert with, or at the request or suggestion of, any candidate, or anyauthorized committee or agent of such candidate.Id. § 431(17).

CASE WESTERN RESERVE LAW REVIEW[Vol. 35:13resentatives.3 In addition, PACs spent more than 2 million fornegative advertising in which they attacked one candidate withoutpromoting another.' In the 1982 congressional election, PACsspent nearly 1.2 million supporting Senate and House candidates.'They also doubled their 1980 total in negative advertising by spending more than 4 million.' PACs not affiliated with any corporation, union, or trade association made nearly all the independentexpenditures.7 Conservative Republicans were the principal beneficiaries; liberal Democrats were the primary targets. 83.FED. ELECTION COMM'N, 1979-1980 INDEX OF INDEPENDENT EXPENDITURES 318(1981).4. 1 FED.ELECTION COMM'N, 1979-1980 REPORTS ON FINANCIAL AcTIvrrY, FINALREPORT: PARTY AND NON-PARTY POLITICAL COMMrrTEES 125 (1982) [hereinafter cited as1979-1980 FEC PAC REPORT].5. 1 FED. ELECTION COMM'N, 1981-1982 REPORTS ON FINANCIAL ACTIvrrY, INTERIM REPORT No. 4: PARTY AND NON-PARTY POLITICAL COMMITrEE 118 (1983) [hereinafter cited as 1981-1982 FEC PAC REPORT).6. Id. at 119.7. In 1980, unaffiliated PACs accounted for more than 11 million in expenditures forfederal candidates. Trade association and health field PACs spent nearly 800,000 and laborunion PACs only 80,000. In the negative spending category, unaffiliated PACs spent approximately 1.8 million, trade association PACs 190,000, and labor union PACs nearly 11,000. 1 1979-1980 FEC PAC REPORT, supra note 4, at 124-25. In 1982, with no presidential election, these figures decreased dramatically. Unaffiliated PACs independently spentonly 372,000 in support of candidates. Trade, membership, and health PACs accounted for 807,000, while labor PACs expended 41,000. 1 1981-1982 FEC PAC REPORT, supra note5, at 118. However, unaffiliated PACs spent an astounding 4 million in negative advertising,whereas trade, membership, and health PACs expended a mere 7,561, and labor PACs spentnothing for negative advertising. Id. at 119.8. Approximately 11.25 million was spent in the presidential campaigns to supportRepublican candidates. 1 1979-1980 FEC PAC REPORT, supra note 4, at 117. CandidateReagan received about 78% of this funding. Candidates John Connally and John Andersonreceived 14% and 9%, respectively. These percentages likely understate the Reagan sharesince they were derived from the percentages individual candidates received during the prenomination period. Reagan, of course, received 100% of the postnomination support. SeeFED. ELECTION COMM'N, 1979-1980 REPORTS ON FINANCIAL ACTIVITY, FINAL REPORT:PRESIDENTIAL PRE-NOMINATION CAMPAIGNS 8 (1981) [hereinafter cited as PRESIDENTIALPRE-NOMINATION REPORT].A committee to draft Senator Edward Kennedy spent more than 500,000 before he became a candidate. Kennedy supporters also spent 56,000 on behalf of his campaign after hebecame a candidate. Id. In contrast, the Carter campaign benefited from only 18,000 in theprenomination period and 27,000 in the 1979-80 period. Id.; 1 1979-1980 FEC PAC REPORT, supra note 4, at 117. The 1980 and 1982 congressional elections also reflected substantial PAC support for Republican candidates. In the 1980 Senate races, nearly 342,000 wasspent independently in support of candidates. Id. at 120. In the House races the comparablefigure was approximately 569,000. Id. at 122. In the 1982 elections, more than 421,000was spent independently in support of Senate candidates, and 757,000 was expended onHouse races. 1 1981-1982 FEC PAC REPORT, supra note 5, at 114-16. Roughly two-thirdsof this money aided Republican candidates. See id.The most glaring disparity between the parties with respect to independent spending arosein the negative spending category. Nearly 2 million was spent in opposition to Democratic

1984RETHINKING REGULATION OF INDEPENDENT EXPENDITURES15Although independent expenditures were a small percentage ofthe total funds spent by PACs in the 1980 federal elections,9 theywere substantial in a few races, especially the presidential campaign.Independent expenditures supporting Ronald Reagan were morethan one-third the amount the Reagan campaign could spend underthe public financing law."0 PACs raised large sums for the 1984elections; much of this money was disbursed as independentexpenditures. 1'candidates in 1980, while less than 100,000 was spent against Republican candidates. 11979-1980 FEC PAC REPORT, supra note 4, at 125. These figures rose dramatically in 1982,with more than 3.5 million being spent in opposition to Democrats, and only 544,000against Republicans. 1 1981-1982 FEC PAC REPORT, supra note 5, at 119.In the 1980 presidential election, Democrats fared better than Republicans in only onecategory, "communication costs." This category measures corporate, union, and other membership organization treasury funds used to communicate with members or shareholders insupport of candidates. For further discussion of communication costs, see infra note 187 andaccompanying text. Approximately 4 million of spending in this category was reported in1980. H. ALEXANDER, FINANCING THE 1980 ELECTION 122-23 (1983). Democratic presidential candidates received nearly 2.2 million of support, and Republican presidential candidates just 321,000. Id. Much of the spending in this category is not reported. FECArequires reporting of only those costs that exceed 2,000 per candidate. 2 U.S.C.§ 431(9)(B)(iii) (1982).9. Most PACs use their resources primarily to make contributions to candidates. In the1979-80 reporting period, PACs contributed more than 60 million while independent expenditures on behalf of candidates totaled 12 million. 1 1979-1980 FEC PAC REPORT,supra note 4, at 101. In the 1981-82 reporting period, PACs contributed more than 87million to candidates while independent expenditures totaled slightly more than 1.2 million.1 1981-1982 FEC PAC REPORT, supra note 5, at 95. In 1980, unaffiliated PACs were theonly group spending less on direct candidate contributions than on independent expenditures.See 1 1979-1980 FEC PAC REPORT, supra note 4, at 101. They made expenditures of 11.3million and contributions of 5.2 million. Id. In contrast, in the 1981-82 campaign period,unaffiliated groups contributed 11 million to candidates but spent only 372,000 independently in support of candidates. 1 1981-1982 FEC PAC REPORT, supra note 5, at 95.10. The statute which provides for public funding of presidential general election campaigns requires candidates who accept public funding to agree to a spending limit for thegeneral election of 20 million, increased every election to allow for inflation. 2 U.S.C.§ 441a(b)-(c) (1982); see generally 26 U.S.C. §§ 9003-9004 (1982) (public financing requirements). The limit set for each major party candidate in 1980 was 29.44 million; Carter andReagan each received that amount. FED. ELECTION COMM'N, 1981 ANNUAL REPORT 7(1981).11. For example, the National Conservative Political Action Committee (NCPAC),which is the largest and best known of the conservative PACs, ran a 2 million independentspending campaign against Walter Mondale and planned to spend another 2 million againstthree Democratic senatorial candidates. Rebuilding the Right, Wall St. J., Mar. 14, 1984, at48, col. 1.Labor unions spent heavily on voter education, get-out-the-vote drives, and communication costs to help Mondale win the Democratic presidential nomination. See Old Time Politics, Wall St. J., July 5, 1984, at 6, col. 4; Stunned by Mondale Defeats, Unions Face aProblem: Ally Hart Is Hardto Criticize, Wall St. J., Mar. 7, 1984, at 52, col. 1.Union PACs also contributed heavily to the delegate committees ostensibly organized byMondale convention delegate slates. These committees engaged in what they alleged was

CASE WESTERN RESERVE LAW REVIEW[Vol. 35:13The channeling of political campaign funds into PACs and ofPAC money into independent expenditures is a direct result of previous campaign finance reforms, as modified by Supreme Court decisions. Although limits on contributions to and from PACs maywithstand Supreme Court scrutiny, it is unlikely that restraints onPACs' independent spending will be upheld. 2 During the 1984Term, the Court is expected to decide the constitutionality of theonly remaining limits on campaign spending by PACs. 3The results of earlier reforms demonstrate that political moneyis like toothpaste in a giant tube: "If the top is squeezed, it moves tothe bottom. If the bottom is squeezed, it moves to the top. If themiddle is squeezed, it moves to both ends. But it is always there,14and it will always move to the point of least resistance."'This Article examines the genesis of independent expendituresby PACs, 5 discusses the issues such spending raises,16 and considers proposed means of regulation. 7 Finally, it advocates changes inthe overall system of federal campaign finance regulation that willcurb further growth in independent spending by PACs. 8I.GENESISNeither the PAC nor the independent expenditure of campaignfunds is new. Corporations and labor unions have used both deindependent spending in support of Mondale in their local areas. One reason for the tacticwas Mondale's vow that he would accept no PAC contributions. See HartAttacks MondaleDelegate Groups, N.Y. Times, Apr. 23, 1984, at 37, col. 1. This device also enabled theMondale campaign to exceed spending ceilings in some states. E.g., Mondale Spending Exceeded Ceiling in New Hampshire, Wall St. J., Apr. 30, 1984, at 46, col. 1. Vigorous criticismby his opponents and by the media forced Mondale to terminate the committees and to takesteps to return the funds. See Mondale Directs Disputed Groups to End Operation, N.Y.Times, Apr. 26, 1984, at 1, col. 8. Despite Mondale's directive, it appeared that severalmonths would elapse before the delegate groups ceased operations. See Delegate Groups Continue Despite Mondale's Pledge, N.Y. Times, May 28, 1984, at 1, col. 6.12. See infra notes 124-43 and accompanying text.13. See Democratic Party v. National Conservative Political Action Comm., 578 F.Supp. 797 (E.D. Pa. 1983) (three-judge district court found unconstitutional the PresidentialElection Campaign Fund Act's limit of 1,000 on independent spending by PACs in presidential campaigns), prob.juris noted sub nom. Federal Election Comm'n v. National Conservative Political Action Comm., 104 S.Ct. 1906 (1984). For further discussion of this case,see infra notes 44-51 and accompanying text.14. J. ARMOR, TAX MONEY VS. PRIVATE MONEY: PRACTICAL, THEORETICAL & CONSTITUTIONAL CONSIDERATIONS IN THE FUNDING OF FEDERAL ELECTIONS 9 (1983) (pamphlet published by Public Service Research Foundation).15. See infra notes 19-54 and accompanying text.16. See infra notes 55-143 and accompanying text.17. See infra notes 144-81 and accompanying text.18. See infra notes 182-93 and accompanying text.

1984]RETHINKING REGULATION OF INDEPENDENT EXPENDITURES17vices for years to avoid prohibitions against making direct politicalcontributions and expenditures.' 9One of the purposes of the prohibitory legislation was to preventcorruption of the electoral process and of candidates.2 0 Over theyears, courts allowed unions and corporations to make what arenow called independent expenditures, perhaps because they thoughtthe corruption potential of such expenditures was minimal. 2 Thecourts permitted political publications and media advertising directed at union members even when the message also reached nonmembers.2 2 Voter registration drives and other "nonpartisan"19. President Theodore Roosevelt urged the prohibition of corporate contributionswhich Congress enacted in 1907. See Act of January 26, 1907, ch. 420, 34 Stat. 864 (currentversion at 2 U.S.C. § 441b (1982)); Bolton, ConstitutionalLimitations on Restricting Corporate and Union PoliticalSpeech, 22 ARIz. L. REv. 373, 375-81 (1980). Union contributionswere first limited to 5,000 by the Hatch Act in 1940, ch. 640, § 13, 54 Stat. 767, 770 (1940)(repealed 1943), then altogether barred by the War Labor Disputes (Smith-Connally) Act, ch.144, § 9, 57 Stat. 163, 167 (1943) (current version at 2 U.S.C. § 441b (1982)). The LaborManagement Relations (Taft-Hartley) Act of 1947 made permanent this provision of theSmith-Connally Act, which was scheduled to expire six months after the end of World WarII. Ch. 120, § 304, 61 Stat. 136, 159 (1947). Taft-Hartley also initiated the prohibition ofpolitical expenditures by corporations. Bolton, supra, at 385.20. Commentators differ over President Theodore Roosevelt's precise motivation for opposing corporate contributions. Compare Note, Corporate Democracy and the CorporatePoliticalContribution, 61 IOWA L. Rav. 545, 546-49 (1975) (asserting that avoidance of candidate corruption by corporations was Roosevelt's principal objective) with Bolton, supranote 19, at 375-79 (asserting that Roosevelt's main purpose was protecting shareholders'rights and that the corruption which concerned Roosevelt was corruption of the electorate,not candidates). The first court to construe the original prohibition of corporate politicalcontributions stated that the statute's "purpose is to guard elections from corruption."United States v. United States Brewers' Ass'n, 239 F. 163, 169 (W.D. Pa. 1916). That court'sopinion lends credence to the idea that Congress feared corruption of the electorate ratherthan of candidates. The court stated that "the concerted use of money is one of the manydangerous agencies in corrupting the elector and debauching the election." Id.21. See, e.g., Buckley v. Valeo, 424 U.S. 1 (1976) (per curiam), which discounts thecorruption potential of independent expenditures.22. Soon after political expenditures were prohibited, the CIO and its president wereindicted for using union funds to publish a union newspaper urging union members to votefor a candidate. In United States v. CIO, 335 U.S. 106 (1948), the Court avoided first amendment issues and held that the statutory prohibition did not apply to union funds used topublish and distribute a regular periodical, even if the publication endorsed a candidate. 123. The indictment did not specifically allege that the periodical went to nonsubscribersor nonmembers. The Court assumed that the newsletter went "to those accustomed to receive copies." Id. However, some nonmembers must have been "accustomed to receive copies." Rauh, Legality of Union PoliticalExpenditures, 34 S. CAL. L. REV. 152, 156 n.19(1961). In United States v. Painters Union, 172 F.2d 854 (2d Cir. 1949), the court held thatthe statute did not prohibit the use of union treasury funds to buy political advertisementssupporting a candidate on a commercial radio station and in a newspaper of general circulation. The court noted that the union had no house periodical. Id. at 856. In a subsequentcase, the Supreme Court avoided the first amendment issue and refused to hold that thestatute permitted all union expenditures for political advertising. The Court reversed the

CASE WESTERN RESERVE LAW REVIEW[Vol. 35:13political activities, conducted by unions with union funds, were heldnot to violate the prohibitions even though the unions designedthese drives to help favored candidates. 23A second apparent purpose of the prohibition against corporateand union contributions was to prevent misuse of funds which belonged to union members or corporate shareholders. Although corporate or union treasury funds could not be used for politicalcontributions, courts began to allow union members and corporateshareholders voluntarily to contribute money for political causes.2 4PACs began to collect these voluntary contributions from individual members or shareholders and then disburse these sums to candidates. Candidates could identify the PAC contribution with theinterests of the parent corporation or union.Independent expenditures enabled corporations and labor unions to use treasury funds for political purposes, and the formationof PACs enabled them to collect, aggregate, and contribute nontreasury political money. These devices gave corporations and unions political influence which the reformers had neither expectednor desired. Contribution and spending limits imposed in the1970's further stimulated the formation of PACs and the growth oftheir independent expenditures."During the 1970's, Congress reformed and regulated the financing of federal political campaigns by enacting the Federal Electionlower court's dismissal of an indictment which charged that the defendant had "used uniondues to sponsor commercial television broadcasts designed to influence the electorate to selectcertain candidates for Congress." United States v. UAW, 352 U.S. 567, 585 (1957). The casewas remanded to the trial court for proof on several factual issues deemed important by theCourt: (1) whether the money was from dues or voluntary contributions; (2) whether thebroadcast reached the public or just the membership; (3) whether the union was engaged in"active electioneering," or was just stating the candidates' records; and (4) whether the unionintended to influence the outcome of the election. Id. at 592. On remand, the union wasacquitted by a jury "even though the union did not contest the bare allegations of the indictment." Rauh, supra, at 160 n.40.23. "[S]urely it could not have been the intention of the Congress to deprive any group,labor organization or corporation from making expenditures. . . in connection with the registration of voters, for such registration is beneficial to all candidates. . . and to all politicalparties." United States v. Construction & Gen. Laborers Local 264, 101 F. Supp. 869, 875(W.D. Mo. 1951). Unions have, however, used supposedly nonpartisan voter registrationactivity to support particular candidates. Bolton, supra note 19, at 392-93; Rauh, supra note22, at 154-55.24. See, e.g., United States v. UAW, 352 U.S. 567, 592 (1957); United States v.Anchorage Cent. Labor Council, 193 F. Supp. 504, 507 (D. Alaska 1961).25. The number of PACs has increased from 609 to 3,803 in the last decade. Behind Allthe Fuss Over Election Money, U.S. NEWS & WORLD REP., Oct. 8, 1984, at 73.

1984]RETHINKING REGULATION OF INDEPENDENT EXPENDITURES19Campaign Act of 1971. u2 This statute largely relied on disclosureof individual contributions and candidate expenditures. The onlylimit was on candidates' media expenditures. Amounts spent byothers for media on behalf of a candidate were counted toward thecandidate's expenditure limit.u7 This provision was the first that at-tempted to reach independent expenditures.2 8The conduct of the presidential election of 1972 and the subsequent Watergate investigation spurred efforts to improve the 1971legislation. The Senate Select Committee that conducted theWatergate investigation recommended limits on contributions in all29federal campaigns and on expenditures in presidential campaigns.Senate and House committees studying the proposals believed thatdisclosure alone, without limits on contributions and expenditures,was inadequate. 30 The result was the Federal Election CampaignAct Amendments of 1974. 3t In the 1974 amendments, Congressimposed limits on contributions to federal candidates and on candidate and independent expenditures. Congress also provided publicfinancing for presidential campaigns.In the 1974 legislation, the definition of a "contribution" included virtually any transfer of money to a candidate or his committee for campaign uses.32 "Expenditure" was defined to cover all26. Pub. L. No. 92-225, 86 Stat. 3 (1972) (current version at 2 U.S.C. §§ 431-455(1982)).27. Id. § 104(a)(6), 86 Stat. at 6 (repealed 1976).28. "[A]mounts spent for use of communications media on behalf of any . . candidatefor Federal . office . [were to] be deemed to have been spent by the candidate.whether or not the person making the expenditure is authorized by the candidate to do so."S. CONF. REP. No. 580, 92d Cong., Ist Sess. 25-26, reprintedin 1972 U.S. CODE CONG. &AD. NEws 1866, 1871.29. See S. REP. No. 981, 93d Cong., 2d Sess. 567-71 (1974).30. The Senate Committee on Rules and Administration stated in its report on the billthat the scurrying to raise funds before the disclosure provisions of the 1971 Act becameeffective "resulted in broad and grave dissatisfaction with the Act and led to a demand fornew and more comprehensive controls." S. REP. No. 689, 93d Cong., 2d Sess. 2, reprintedin1974 U.S. CODE CONG. & AD. NEws 5587, 5588. The Committee on House Administrationstated the matter more bluntly:The unchecked rise in campaign expenditures, coupled with the absence of limitations on contributions and expenditures, has increased the dependence of candidateson special interest groups and large contributors. Under the present law the impression persists that a candidate can buy an election by simply spending large sumsin a campaign.H.R. REP. No. 1239, 93d Cong., 2d Sess. 3 (1974).31. Pub. L. No. 93-443, 88 Stat. 1263 (1974) (current version at 2 U.S.C. §§ 431-455(1982)).32. Id. § 102(c), 88 Stat. at 1269-70 (current version at 2 U.S.C. § 431(8)(A)-(B)(1982)).

CASE WESTERN RESERVE LAW REVIEW[Vol. 35:13payments to others to promote a candidate's election.33 Althoughcandidates and their committees make most expenditures, Congressimposed limits on independent spending as well. The dollar limiton independent expenditures in Senate and House campaigns was 1,000 for all individuals and PACs. 34 The limit on contributionsin congressional campaigns was 1,000 for individuals and PACsbut 5,000 for multicandidate PACs. 35 Although there was no limiton individuals' independent expenditures in a presidential campaign, a PAC could spend no more than 1,000.36 Contributions topresidential candidates who accept public financing were barred inthe general election campaign. 37 The statutory dollar limits encouraged contributions rather than independent expenditures because of the higher limit for contributions by multicandidate PACs.Buckley v. Valeo, 38 a 1976 Supreme Court decision, changed thewhole scheme. In Buckley, the Court struck down all expenditurelimits, except for publicly funded candidates and independentlyspending political committees in presidential campaigns. The Courtfound that expenditure limits restricted political speech in violationof the first amendment, but that the provision of basic funding fromthe public treasury justified the spending limits on publicly fundedcandidates in the presidential campaign. 39 The Court upheld contribution limits because of the risk of corruption and the appearance33. Id. § 102(d), 88 Stat. at 1270-71 (current version at 2 U.S.C. § 431(9)(A)-(B)(1982)).34. Id. § 108(a), 88 Stat. at 1265 (repealed 1976).35. Id. § 101(a), 88 Stat. at 1263 (current version at 2 U.S.C. § 441a(a)(l)-(2) (1982)).36. Presidential Election Campaign Fund Act, Pub. L. No. 92-178, § 9012(0, 85 Stat.562, 572 (1972) (current version at 26 U.S.C. § 9012(0(1) (1982)).37. 26 U.S.C. §§ 9003(b)(2), 9012(b)(1) (1982). The prohibition is directed at the candidate and his authorized committee, not the contributor. Candidates are forbidden to acceptcontributions except to make up a deficiency if federal funds available are less than the spending limit. Id. § 9012(b)(1).38. 424 U.S. 1 (1976) (per curiam).39. Id. at 58. In Republican Nat'l Comm. v. Federal Election Comm'n, 445 U.S. 955,affg summarily 487 F. Supp. 280 (S.D.N.Y. 1980), the Supreme Court upheld public financing of presidential elections, a question which appeared already to have been resolved inBuckley. Suits to "implement or construe" the Presidential Election Campaign Fund Act areto be heard by a district court panel of three judges, with appeal directly to the SupremeCourt. 26 U.S.C. § 9011(b) (1982). The three-judge district court in Republican Nat'lComm. said candidates may forego their rights to unlimited contributions and expendituresin exchange for public funding. 487 F. Supp. at 283-84. Because candidates are not compelled to abide by the spending limit and public funding provides merely an additional funding alternative, the court said the provisions of the Presidential Election Campaign Fund Actdid not violate the first amendment rights of either candidates or supporters. Id. at 285. Thecourt assumed that limits on independent expenditures by PACs in presidential elections hadbeen held unconstitutional in Buckley. Id. at 286.

1984]RETHINKING REGULATION OF INDEPENDENT EXPENDITURES21of corruption when individuals or PACs seeking political favors canmake unlimited contributions to candidates.' The Court foundthat expenditure limits directly burdened speech while the danger ofcorruption and the appearance of corruption outweighed the moreindirect speech involved in political contributions. 4After Buckley, all PACs had an incentive to make independentexpenditures rather than contributions. Contributions were subjectto the 1,000 or 5,000 per candidate per election limits, while theonly limit on independent expenditures was the one restricting PACspending in presidential campaigns.The constitutionality of this limit was dubious after Buckley.Five PACs announced that they intended to raise and spend millions of dollars supporting Ronald Reagan in the 1980 presidentialrace.4 2 They purported to be independent of Reagan and his election committee, so that their spending would not violate contribution limits or be treated as expenditures made by Reagan or hiscommittee.4 3In Common Cause v. Schmitt,' Common Cause and the FederalElection Commission (FEC) sued to enjoin these independent PACexpenditures. However, a three-judge district court panel 45 foundthe 1,000 limit on independent expenditures "facially unconstitutional," 4 6 reiterating the Buckley rationale that there is little risk ofcorruption or apparent corruption from independent expenditures.47 Further, the panel refused to hear Common Cause's claimthat the PACs had coordinated their expenditures with the Reagancampaign, on the ground that the FEC had exclusive jurisdiction toenforce the statute.48On appeal, the Supreme Court split four to four, allowing thepanel's decision to stand.4 9 The battle over the constitutionality ofthe independent spending limit in presidential campaigns may be40. See 424 U.S. at 24-38.41. Id. at 58-59.42. For a listing of the five committees and a description of their activities in 1980, seeNote, The Constitutionality of Regulating Independent Expenditure Committees in PubliclyFunded PresidentialCampaigns, 18 HARV. J. ON LEGIS. 679, 685-88 (1981).43. Id. at 687.44. 512 F. Supp. 489 (D.D.C. 1980), affid without opinion b

7. In 1980, unaffiliated PACs accounted for more than 11 million in expenditures for federal candidates. Trade association and health field PACs spent nearly 800,000 and labor union PACs only 80,000. In the negative spending category, unaffiliated PACs spent ap- 11,000. 1 1979-1980 FEC PAC REPORT, supra note 4, at 124-25. In 1982, with no presi-