Tom OGNIBENE, Yvette Velazquez Bennet, Viviana Vazquez-Hernandez, Martin Dilan, Marlene Tapper, Robert Perez, Fran Reiter, Sheila Andersen-Ricci, Martina Franca Associates, LLC, Reiter/Begun Associates, LLC, Denis Gittens, Oscar Perez, Kings County Committee of the New York State Conservative Party, and New York State Conservative Party, Plaintiffs-Appellants, v. Joseph P. PARKES, S.J., in his official capacity as Chairman of the New York City Campaign Finance Board, Dale C. Christensen, Jr., in his official capacity as Member of the New York City Campaign Finance Board, Katheryn C. Patterson, in her official capacity as Member of the New York City Campaign Finance Board, Mark S. Piazza, in his official capacity as Member of the New York City Campaign Finance Board, Mark Davies, in his official capacity as Executive Director of the New York City Conflicts of Interests Board, Monica Blum, in her official capacity as Member of the New York City Conflicts of Interests Board, Steven Rosenfeld, in his official capacity as Member of the New York City Conflicts of Interests Board, Andrew Irving, in his official capacity as Member of the New York City Conflicts of Interests Board, Angela M. Freyre, in her official capacity as Member of the New York City Conflicts of Interests Board, and Michael McSweeny, in his official capacity as Acting City Clerk of New York City, Defendants-Appellees.
Docket Nos. 09-0994-cv (Lead), 09-1432-cv (Con)
United States Court of Appeals, Second Circuit
Argued: Oct. 18, 2010. Decided: Dec. 21, 2011. Amended: Jan. 12, 2012.
671 F.3d 174
Archer endeavored to satisfy his burden of production on the issue of whether a client would have paid a fee had he known of the fraud by evidence of attorney-shopping on the part of some of the clients. That evidence, however, does not suffice to raise a triable issue of whether such clients would have paid a fee had they known of the fraud. Attorney-shopping is explicable by many reasons, the most likely of which is attempting to find an attorney who charges a more reasonable fee. With respect to a client like Manzoor Ahmad, however, Archer‘s evidence that Ahmad had previously submitted a similar application for legalization with the same false information later included on his I-687 form satisfied Archer‘s burden of production with respect to this client. The burden was therefore on the government to prove by a preponderance that Ahmad would not have paid a fee had he known of the fraud. With respect to other clients, Archer has not yet satisfied his burden of production to raise a triable issue as to whether they would have paid a fee had they known of the fraud.18
Because the determination of victim status was not made with the evidentiary burdens allocated as set forth above, we will remand to afford the district court an opportunity to reconsider which of Archer‘s clients are entitled to restitution. And because restitution is a matter of sentencing,
III. CONCLUSION
We hereby AFFIRM the defendant‘s conviction. We VACATE his sentence, including the restitution order, and REMAND for further proceedings as outlined above.
James Bopp, Jr., Joe LaRue, of counsel, Bopp, Coleson & Bostrom, Terre Haute, IN, and Charles Capetanakis, Davidoff Malito & Hutcher LLP, New York, NY, for Plaintiffs-Appellants.
Jane L. Gordon, Senior Counsel (Edward F.X. Hart, Jonathan Pines, Lisa F. Grumet, Andrew J. Rauchberg, on the brief), for Michael A. Cardozo, Corporation Counsel of the City of New York, New York, NY, for Defendants-Appellees.
Paul M. Smith, Luke P. McLoughlin, David Newman, Jenner & Block, LLP, New York, NY, for Amicus Curiae 2009 City Counsel Candidates Brad Lander and Mark Winston Griffith.
John H. Snyder, Proskauer Rose LLP, New York, NY, for Amicus Curiae Citizens Union.
Before: LIVINGSTON, CALABRESI, Circuit Judges, and CROTTY, District Judge.**
Judge CALABRESI and Judge LIVINGSTON concur in separate opinions.
Appellants seek declaratory and injunctive relief, alleging that recently-enacted amendments to the New York City Administrative Code, commonly known as the “pay-to-play” rules, violate the First Amendment to the U.S. Constitution by unduly burdening protected political
I. Facts
In 1988, after a recent wave of local scandals, the New York City Council passed the Campaign Finance Act (“CFA“), establishing the Campaign Finance Program (“Program“). (A-819.) The Campaign Finance Board (“Board“) administers the Program and provides public matching funds to candidates running for the three citywide offices of Mayor, Comptroller, and Public Advocate; the five offices of Borough President; and the fifty-two offices of the City Council. The CFA imposes certain obligations on all candidates, including the filing of financial disclosure statements reporting contributions and expenditures, limitations on the amount of contributions from any single donor, and the obligation to respond to the Board‘s requests to verify compliance with the Program.
Additionally, candidates who seek to participate in the public financing system must agree to limitations on the total amount of money the campaign spends promoting the candidate‘s nomination or
In 1998, the New York City Charter Revisions Commission (“Commission“) sought to resolve problems that the existing law did not address. (A-314-A-316.) It proposed, and the City‘s voters passed by referendum, a Charter amendment that directed the Board to prohibit corporate contributions for all participating candidates; required these candidates to disclose contributions from individuals and organizations doing business with the City; and directed the Board to promulgate rules fleshing out these “doing business” limitations. N.Y.C. Charter §§ 1052(a)(11), (a)(12)(a). In its recommendation, the Commission identified concerns about contractor and lobbyist contributions, but noted the lack of evidence that such contributions had actually influenced the award of a particular contract or passage of a bill. Report of the New York City Charter Revision Commission 12-13 (Aug. 20, 1998) (“1998 Commission Report“). Nevertheless, the Commission concluded that there was “no doubt that these contributions have a negative impact on the public because they promote the perception that one must ‘pay to play.‘” Id. at 19. The City Council later enacted a separate ban on corporate contributions to all candidates, including non-participating candidates.
In 2006, after several public hearings and studies, the Board reported that over twenty percent of the contributions in the 2001 and 2005 election cycles were from individuals and entities doing business with the City, who comprised less than six percent of contributors, and that large contributions were more likely than small contributions to come from such donors. N.Y.C. Campaign Fin. Bd., Interim Report on “Doing Business” Contributions 12, 13 (June 19, 2006) (“Interim Report“). In addition, incumbents—considered to have greater influence on city decisions—were more likely to receive these large donations than challengers. N.Y.C. Campaign Fin. Bd., Public Dollars for the Public Good: A Report on the 2005 Elections 122 (2006) (“2005 Election Report“). In order to improve the CFA, the Board recommended banning all organizational contributions (including partnerships, LLCs, PACs, and unions) and regulating contributions by individuals and entities doing business with the City. 2005 Election Report, 120, 122.
That year, the City passed Local Laws 15 and 17, which created a mandatory electronic filing system for lobbyists; required full lobbyist disclosure of all fundraising and consulting activities; banned all gifts from lobbyists to City Officials; and excluded contributions from lobbyists and the individuals identified on their statements of registration from the definition of “matchable contribution.”
In 2007, the City Council voted 44-4 to pass Local Law 34, requiring disclosure of, and restricting contributions from, individuals and entities who have business dealings with the City, as defined in the CFA.
[w]hile there is nothing intrinsically wrong with contributions from those doing business with the City, the ability of such individuals to contribute could create a perception, regardless of whether such perception is accurate, that such individuals have a higher level of access to the City‘s elected officials. It is important to eradicate this perception and reduce the appearance of undue influence associated with contributions from individuals doing business with the City.
(N.Y.C. Council, Comm. on Govt‘l Affairs, Report of the Govt‘l Affairs Div., for Int. No. 586-2007, 24-25 (June 12, 2007) (“Committee Report“).) The Committee Report explained that the expansion of the corporate contribution ban addressed a “loophole” that allowed similarly structured business entities to circumvent the contribution limits. (Id. at 29.)
The “doing business” limits apply to contributions from any natural person who is a chief executive officer, chief financial offi-
Section 3-702 of the Administrative Code contains two definitions of “lobbyist.” The first is narrow, referencing § 3-211‘s definition of “every person or organization retained, employed or designated by any client to engage in lobbying.” The second is broader, encompassing anyone included in § 3-211, as well as the lobbyist‘s spouse or domestic partner; unemancipated children; and, for entities, the organization‘s officers and employees who engage in lobbying or work for a division of the organization that engages in lobbying activities and their family members.8
pellee‘s Br. 11 n. 5). Contributions from individuals who are affiliated with lobbyists (i.e., included in the broader definition) are ineligible for matching even if they are not, under the narrower lobbyist definition, subject to the lower “doing business” limits.
As of June 30, 2008, New York City agencies (excluding affiliated entities) held 19,578 open contracts worth approximately $55.4 billion. (Simpson Decl. ¶ 5). A wide range of for-profit and non-profit entities qualify as having business dealings with the City, including Con Edison, Waste Management of New York LLC, the New York City Ballet, the Legal Aid Society, the Brooklyn Botanic Garden Corporation, various health and social services providers, day care centers, religious organizations, and labor organizations. See generally Doing Business Portal, http://www.nyc.gov/html/doingbiz/home.html (last visited Aug. 10, 2011). Although several labor organizations and union-affiliated entities have business dealings on account of procurement contracts with the City, “collective bargaining with City employee unions is a distinct process that is governed by State law.” (Simpson Decl. ¶ 8). As a result, the procurement rules (and, consequently, the “doing business” limits) do not apply to collective bargaining with City unions or to employer-employee relationships for non-unionized employees. (Id.)
Appellants filed an original and amended complaint in February 2008 and, in April 2008, moved for a preliminary injunction on some of the claims asserted, raising facial challenges to these three provisions. After the district court postponed the hearing on injunctive relief until the trial on the merits, the Appellees moved for summary judgment. The parties then stipulated that there was no need for an evidentiary proceeding in connection with the motions. Several amicus curiae briefs were filed in support of Appellees, both by public interest organizations and by City Council candidates.
II. The District Court Decision on Motion for Summary Judgment
By Order dated February 6, 2009, the district court denied Appellants’ motions for preliminary and permanent injunctive relief and granted Appellee‘s motion for summary judgment on the same grounds: that the challenged limits served a sufficiently important governmental interest—addressing the reasonable concern about actual and apparent corruption by those doing business with the City. While there was no recent evidence of actual corruption with respect to campaign contributions, the district court reasoned, given the public‘s perception of continuing corruption, fueled by actual pay-to-play scandals in the 1980s, the City properly imposed the challenged limits to combat corruption, correct misperceptions, and instill public confidence in the City‘s political and governmental processes. 599 F. Supp. 2d at 445-46. The court also found that the contribution limits were closely drawn to respond to this interest in eliminating actual and apparent corruption, rejecting Appellants’ arguments concerning the failure to index for inflation and viewpoint discrimination. Id. at 454-55.
The district court subjected the non-matching provisions to the same analysis and concluded that they were permissible.
Finally, the district court upheld the ban on contributions from partnerships, LLCs, and LLPs for the same reasons that it found justified prohibiting corporate contributions, specifically, to prevent circumvention of the valid contribution limits and the use of business forms to deploy for political ends business assets amassed for business reasons.
III. Analysis
A. Standard of Review
We review a district court‘s grant of summary judgment de novo. Weinstock v. Columbia Univ., 224 F.3d 33, 40 (2d Cir. 2000). We affirm an order granting summary judgment “only when no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law.” Riegel v. Medtronic, Inc., 451 F.3d 104, 108 (2d Cir. 2006). The parties here agree that these motions present no issue of material fact.
The party requesting permanent injunctive relief must demonstrate (1) irreparable harm (here, a constitutional violation) and (2) actual success on the merits. Cartier v. Symbolix, Inc., 454 F. Supp. 2d 175, 186 (S.D.N.Y. 2006); see also Amoco Prod. Co. v. Vill. of Gambell, AK, 480 U.S. 531, 546 n. 12 (1987) (“The standard for a preliminary injunction is essentially the same as for a permanent injunction with the exception that the plaintiff must show a likelihood of success on the merits rather than actual success.“). Denials of injunctive relief, like grants of summary judgment, are reviewed de novo when they concern rights under the First and Fourteenth Amendments. See Ferris v. Cuevas, 118 F.3d 122, 125 & n. 3 (2d Cir. 1997); Nat‘l Awareness Found. v. Abrams, 50 F.3d 1159, 1164 (2d Cir. 1995). In such cases, “an appellate court has an obligation to ‘make an independent examination of the whole record’ in order to make sure that ‘the judgment does not constitute a forbidden intrusion on the field of free expression.‘” Bose Corp. v. Consumers Union of U.S., Inc., 466 U.S. 485, 499 (1984) (quoting New York Times Co. v. Sullivan, 376 U.S. 254, 284-86 (1964)).
B. Applicable Legal Standards
The Government bears the burden of justifying its contribution limits in light of a facial challenge. Nixon v. Shrink Missouri Gov‘t PAC, 528 U.S. 377, 387-88 (2000).
The judiciary owes special deference to legislative determinations regarding campaign contribution restrictions. See, e.g., Fed. Election Comm‘n v. Beaumont, 539 U.S. 146, 155 (2003); McConnell v. Fed. Election Comm‘n, 540 U.S. 93, 137 (2003). While paying deference, the judiciary must also protect the fundamental First Amendment interest in political speech. In evaluating constraints on such speech and related activity, Buckley v. Valeo, 424 U.S. 1 (1976), distinguished between campaign expenditures and campaign contributions. Id. at 46. Strict scrutiny applies to restraints on the former, while limits on the latter are more leniently re-
In certain cases, however, contribution restrictions may severely impact political dialogue, for example by preventing “candidates and political committees from amassing the resources necessary for effective advocacy.” Buckley, 424 U.S. at 21. This question focuses on differences in kind, rather than of degree. Id. at 30. A showing of special justification is required for such restrictions to be closely drawn. See Randall v. Sorrell, 548 U.S. 230, 261 (2006).
The Supreme Court has consistently held that the prevention of actual and perceived corruption qualifies as a sufficiently important state interest. See, e.g., McConnell, 540 U.S. at 143; Shrink Missouri, 528 U.S. at 390; Buckley, 424 U.S. at 27; see also Davis, 554 U.S. at 740-41 (noting that the use of personal campaign funds, as opposed to contributions, actually reduces the threat of corruption). It is not necessary to produce evidence of actual corruption to demonstrate the sufficiently important interest in preventing the appearance of corruption. See McConnell, 540 U.S. at 150. On the other hand, “mere conjecture” is insufficient. See Shrink Missouri, 528 U.S. at 392. That is, the threat of corruption cannot be “illusory.” Buckley, 424 U.S. at 27. “The quantum of empirical evidence needed to satisfy heightened judicial scrutiny ... will vary up or down with the novelty and plausibility of the justification raised.” Shrink Missouri, 528 U.S. at 391.
This Court must consider three important decisions that have issued subsequent to the district court‘s opinion: Citizens United, 558 U.S. 310; Arizona Free Enterprise Club‘s Freedom Club PAC v. Bennett, 564 U.S. 721, 131 S. Ct. 2806, 180 L. Ed. 2d 664 (2011); and Green Party, 616 F.3d 189.
In Citizens United, the Supreme Court held that the government cannot prohibit independent expenditures in support of a political candidate based on the source‘s corporate identity. Citizens United, 558 U.S. 310. Contrary to Appellants’ exhortations, however, Citizens United applies only to independent corporate expenditures. It reaffirms existing precedent on the propriety of contribution limits. It therefore has no impact on the issues before us in this case:
[U]nlike limits on independent expenditures, [contribution limits] have been an accepted means to prevent quid pro quo corruption. Citizens United has not made direct contributions to candidates, and it has not suggested that the Court should reconsider whether contribution limits should be subject to rigorous First Amendment scrutiny.
Citizens United, 558 U.S. at 359 (citations omitted). Citizens United confirmed the
Since the Supreme Court preserved the distinction between expenditures and contributions, there is no basis for Appellants’ attempt to broaden Citizens United. Appellants’ selective and misleading quotes carefully skip over the Court‘s clear distinction between limits on expenditures and limits on contributions.10 (See, e.g., Reply Br. 3.) The Supreme Court has repeatedly stated that the Circuit Courts are to apply the law as it exists, unless it is expressly overruled. See Agostini v. Felton, 521 U.S. 203, 237 (1997) (“[I]f a precedent of this Court has direct application in a case, yet appears to rest on reasons rejected in some other line of decisions, the Court of Appeals should follow the case which di-
rectly controls, leaving to this Court the prerogative of overruling its own decisions.“) (quoting Rodriguez de Quijas v. Shearson/Am. Exp., Inc., 490 U.S. 477, 484 (1989) (internal quotation marks omitted)). Citizens United left Buckley intact, and it is not for this Court to stretch Citizens United.
After handing down Citizens United, the Supreme Court invalidated an Arizona public financing scheme under which public matching funds were triggered by a privately financed candidate‘s level of expenditures. Bennett, 564 U.S. 721. Arizona gives publicly financed candidates an initial allotment of public funds to begin their campaigns. Under the challenged law, if a privately financed, opposing candidate‘s expenditures (combined with independent expenditures in support of the privately financed candidate and opposed to the publicly financed candidate) exceeded the amount of this initial outlay, the publicly financed candidate received a proportionate amount of additional matching funds, up to twice the initial amount.
The Supreme Court determined that the provision posed a “markedly more significant burden” than the Millionaire‘s Amendment struck down in Davis, 554 U.S. 724, particularly because it effectively punished the nonparticipating candidate for spending his own money on his own campaign. Bennett, 564 U.S. at 740. The Court repeated its holding that there
Bennett binds us, but for reasons we explain later, it does not control the outcome in this case. Bennett reaffirmed several key holdings: (1) that the lower closely drawn standard applies to contribution limits, Bennett, 564 U.S. at 738; (2) that preventing corruption and its appearance is a compelling state interest,
In addition, this Court recently struck down the State of Connecticut‘s ban on lobbyist contributions. Green Party, 616 F.3d 189. The Court found that there was “insufficient evidence to infer that all contributions made by state lobbyists give rise to an appearance of corruption.” Id. at 206 (emphasis in original). It reasoned that an outright ban was not closely drawn because a limit would have effectively addressed the appearance of corruption created by lobbyist contributions. Id. at 207 & n. 15 (noting that because Connecticut‘s recent corruption scandals “in no way implicated lobbyists,” “a limit on lobbyist contributions would adequately address the state‘s interest in combating corruption and the appearance of corruption on
the part of lobbyists” (emphasis in original)). Implicit in the Court‘s reasoning is the determination that a recent history of corruption is not required for limits to pass constitutional review.
Green Party sustained a ban on contributions from state contractors because they had been implicated in a series of recent scandals. Id. at 204-05. While a limit may address the actual and perceived corruption, it does not entirely eliminate it because some exchange of money is still allowed. When the appearance of corruption is particularly strong due to recent scandals, therefore, a ban may be appropriate.
Appellants urge us to expand Citizens United, Bennett, and Green Party to invalidate the three provisions they challenge. We conclude, however, that their arguments do not comport with the express language and reasoning of these opinions.
C. “Doing Business” Contribution Limit
The doing business limitations have three characteristics that place them outside the scope of Citizens United and Green Party: First, they deal with contributions (as opposed to expenditures). Second, they are limits (as opposed to outright bans). Third, they address the appearance of corruption (as opposed to the appearance of influence). The doing
Citizens United confirms, yet again, that eliminating corruption or the appearance thereof is a sufficiently important governmental interest to justify the use of closely drawn restrictions on campaign contributions. This interest exists even where there is no actual corruption, because the perception of corruption, or of opportunities for corruption, threatens the public‘s faith in democracy. See Colo. Republican, 533 U.S. at 440-41; Buckley, 424 U.S. at 26-27. In fact, as noted in Green Party, while a limit may be sufficient to address actual corruption, the appearance and public perception of corruption may be so grave as to merit a ban.
Although Citizens United stated that mere influence or access to elected officials is insufficient to justify a ban on independent corporate expenditures, improper or undue influence presumably still qualifies as a form of corruption.13 See Bennett, 564 U.S. at 748 (discussing the “interest in alleviating the corrupting influence of large contributions” served by contribution limits (emphasis added) (quoting Buckley, 424 U.S. at 55));
Colo. Republican, 533 U.S. at 440-41 (“[L]imits on contributions are more clearly justified by a link to political corruption than limits on other kinds of unlimited political spending are (corruption being understood not only as quid pro quo agreements, but also as undue influence on an officeholder‘s judgment, and the appearance of such influence).” (citations omitted) (emphasis added)); Republican Nat‘l Comm. v. Fed. Election Comm‘n, 698 F. Supp. 2d 150, 158-60 (D.D.C. 2010). Improper or undue influence includes both traditional quid pro quo and more discreet exchanges of money for favorable outcomes.14
While independent corporate campaign expenditures may influence a candidate, or facilitate access that non-speakers may not enjoy, Citizens United emphasized the right to speech and its independence from the candidate. Direct giving to the candidate, or the candidate‘s campaign committee, stands on a different footing. Since neither candidate nor contributor is likely to announce a quid pro quo, the appearance of corruption has always been an accepted justification for a campaign contribution limitations. See McCormick v. United States, 500 U.S. 257, 272-73 (1991) (holding that an elected official‘s receipt of a campaign contribution amounts to extortion only when an official asserts that his official conduct will be controlled by the terms of the promise or undertaking, but noting that the implicit exchange of benefit for money “in a very real sense is unavoidable so long as election campaigns are financed by private contributions or expenditures“). In other
words, because the scope of quid pro quo corruption can never be reliably ascertained, the legislature may regulate certain indicators of such corruption or its appearance, such as when donors make large contributions because they have business with the City, hope to do business with the City, or are expending money on behalf of others who do business with the City.
Furthermore, such donations certainly feed the public perception of quid pro quo corruption, and this alone justifies limitations or perhaps an outright ban. Citizens United, 558 U.S. at 359. When those who do business with the government or lobby for various interests give disproportionately large contributions to incumbents, regardless of their ideological positions, it is no wonder that the perception arises that the contributions are made with the hope or expectation that the donors will receive contracts and other favors in exchange for these contributions. The threat of quid pro quo corruption in such cases is common sense and far from illusory. See, e.g., NCRL v. Bartlett, 168 F.3d 705 (4th Cir. 1999) (upholding prohibition on in-session lobbyist contributions); Blount v. S.E.C., 61 F.3d 938 (D.C. Cir. 1995) (upholding SEC Rule that prohibits municipal securities brokers and dealers from engaging in municipal securities business for two years after contributing more than $250 to state officials from whom they obtain business); cf. United States v. Harriss, 347 U.S. 612 (1954) (dismissing a First Amendment challenge to a lobbying disclosure act).
Appellants argue that Green Party requires evidence of recent scandals in order to justify any contribution restriction, not just a ban. (See Letter of July 14, 2010). This is not what Green Party says. There is no reason to require the legislature to experience the very problem it fears before taking appropriate prophylactic measures. See Citizens United, 558 U.S. at 359 (noting the preventative nature of contribution limits because the scope of quid pro quo corruption “can never be reliably ascertained” and those instances that are known are covered by bribery laws (quoting Buckley, 424 U.S. at 27)); see also Anthony W. Crowell, New Lobbying Laws: More Sunlight, More Teeth, 12 CityLaw 73, 73 (July/Aug. 2006) (noting that recent Washington scandals involving lobbyist Jack Abramoff, former Representative Randy Cunningham, and Representative William Jefferson “illustrate the potential for corrupt lobbying to erode citizens’ faith in their government” and that New York City enacted reforms, including making lobbyist contributions ineligible for matching with public funds, to enhance integrity and transparency in municipal government, “[r]ather than waiting for New York City to see its own lobbyist scandals“). Appellants essentially propose giving every corruptor at least one chance to corrupt before anything can be done, but this dog is not entitled to a bite. Green Party only considered whether an outright contribution ban was closely drawn to the anti-corruption interest. As to limits, Green Party set the justificatory burden somewhere between a concrete showing of actual quid pro quo corruption and the sort of “mere conjecture” that the Supreme Court has deemed out of bounds. Shrink Missouri, 528 U.S. at 391.
Indeed, as the district court reasoned, Ognibene, 599 F. Supp. 2d at 448 n. 12, to require evidence of actual scandals for contribution limits would conflate the interest in preventing actual corruption with the separate interest in preventing apparent corruption. In other words, if every case of apparent corruption required a showing of actual corruption, then the former would simply be a subset of the latter, and the prevention of actual corruption would be the only legitimate state interest for contribution limits. Green Party is consistent with Supreme Court precedent rejecting this argument, due to the difficulty of detecting actual corruption and the equal importance of eliminating apparent corruption. See McConnell, 540 U.S. at 153; Buckley, 424 U.S. at 27.
Appellants do not dispute that the generally applicable contribution limits responded to actual pay-to-play scandals in
In addition, it is clear that the City Council properly studied this issue before concluding that doing business contributions are particularly problematic and merit special treatment. The record contains several reports and investigations—including the 1998 Commission Report, the 2005 Election Report, the 2006 interim report of a study conducted by students at New York University‘s Wagner Graduate School of Public Service, and the Committee on Governmental Operations’ Reports on the challenged laws—all of which attest to the significant role that “doing business” contributions play in elections and in the public perception of corruption. For example, “doing business” contributors were more likely to give large rather than small donations, and disproportionately contributed to incumbents—who are considered to have greater influence on city decisions—than to challengers. 2005 Election Report, 122; see also Pines Decl., Ex. II, Deposition of Martin Malave Dilan at 33-34 (testifying that contributors who do business with the City favor incumbent candidates); Pines Decl., Ex. NN, Deposition of Marlene J. Tapper at 63 (same); Pines Decl., Ex. OO, Deposition of Viviana Vazquez-Hernandez at 44 (same). In 2001 and 2005 respectively, donors with business dealings were 3.8% and 5.3% of all contributors, but accounted for 25.2% and 21.5% of dollars contributed. Based on this evidence, it was entirely appropriate for the Council to find that there is an appearance that larger contributions are made to secure the contract, land use approval, or whatever municipal benefit is at issue.
Moreover, there is direct evidence of a public perception of corruption.15 While
Appellants pretend to be skeptical, their assertions are not credible. Not only is the connection between money and municipal action objectively reasonable, but their own deposition testimony confirms that the public perceives this connection to exist. See, e.g., Pines Decl., Ex. II, Deposition of Martin Malave Dilan at 33-34; Pines Decl., Ex. JJ, Deposition of Thomas V. Ognibene at 31-32; Pines Decl., Ex. LL, Deposition of Fran Reiter at 52; Pines Decl., Ex. NN, Deposition of Marlene J. Tapper at 63; Pines Decl., Ex. OO, Deposition of Viviana Vazquez-Hernandez at 43-44. Appellant Tom Ognibene acknowledges the usual public perception of office holders and candidates for office: “You‘re all a bunch of crooks.” (Pines Decl., Ex. JJ, Deposition of Thomas V. Ognibene at 32). The fact that City voters passed the referendum approving these reforms speaks powerfully to the public perception that further regulation of campaign contributions by those who do business with the City is needed.16 See Shrink Missouri, 528 U.S. at 394 (“And although majority votes do not, as such, defeat First Amendment protections, the statewide vote on Proposition A certainly attested to the perception relied upon here....“). In these circumstances, where people believe that many public officials are corrupt, and there is substantial and material evidence to support that be-
public may specifically lose faith in that legislative body, as well. Ranging from before 2006—when the first of the challenged laws passed—to the present, these scandals have created a climate of distrust that feeds the already-established public perception of corruption. Appellants argue that the City may, in defending the law, rely only on those scandals that predate it. To consider only the scandals that predate the law would lead to an absurd result in cases, unlike this one, where a history of actual corruption is required (e.g., a ban): If the law were struck down as a result, the Council could immediately pass the exact same law, citing the exact same scandals which now would be prior to the passage of the law, and that law would be upheld.
lief, clearly the public may enact preventative measures to address the contaminating belief that everything is for sale and to restore faith in the integrity of the political process.
Appellants assert several rationales for why these provisions are not closely drawn. First, they assert that they are overbroad because they ban legitimate as well as corrupt acts. Buckley expressly rejected a similar argument because “[n]ot only is it difficult to isolate suspect contributions, but more importantly, Congress was justified in concluding that the interest in safeguarding against the appearance of impropriety requires that the opportunity for abuse inherent in the process of raising large monetary contributions be eliminated.” Buckley, 424 U.S. at 30; see also
Appellants also argue that these restrictions are underinclusive because
only about $4.1 million or sixteen percent of that total. (LaRue Decl. Ex. E, New York Times, New Campaign Finance Rules Skip Unions, June, 28, 2007.) Accordingly, the City Council‘s choice of definition for “business dealings” effectively captures the biggest contributors. The provisions are not, therefore, underinclusive of their stated purpose.
Appellants additionally contend that these provisions are overinclusive because they may be applied using the broader definition of “lobbyist.” Appellees concede, however, that the narrower definition applies. (Appellee‘s Br. 11 n. 5). This narrower definition comports with, and is no broader than necessary to address, the interest in eliminating actual and perceived corruption. Appellants acknowledge that the public perceives lobbyists as influencing or attempting to influence elected officials through their campaign contributions. (See Pines Decl., Ex. LL, Deposition of Fran Reiter at 52; Pines Decl., Ex. NN, Deposition of Viviana Vazquez-Hernandez at 44.) Accordingly, the inclusion of people and organizations engaged in lobbying activities does not render these provisions overinclusive.
Appellants further assert that these provisions are poorly tailored because they are not indexed for inflation and discriminate based on viewpoint. The mere failure to index for inflation, however, does not compel a finding that the provisions are not closely drawn. Randall pointed to the failure to index for inflation as only one of five factors which, taken together, led to its conclusion that certain contribution limits violated the First Amendment. See 548 U.S. at 253-263 (also weighing the fact that the limits applied to contributions by political parties and included volunteers’ expenses). But the real problem in Randall was that the limits
Viewpoint discrimination is a subset of content discrimination in which the government impermissibly targets, not the subject matter itself, but rather particular views taken on the subject. See Rosenberger v. Rector & Visitors of Univ. of Va., 515 U.S. 819, 829, 831 (1995); Make the Road by Walking, Inc. v. Turner, 378 F.3d 133, 150 (2d Cir. 2004). Appellants argue that the challenged provisions discriminate based on viewpoint because neighborhood, community, and labor organizations, which are not necessarily subject to the doing business limitations, share a significantly different viewpoint than do business owners and members of management. Appellants have failed, however, to offer any evidence that these organizations share a single
D. Non-Matching Provisions
The public financing scheme generously matches eligible contributions of up to $175 using tax dollars at the rate of 6 to 1. The program encourages small, individual contributions, and is consistent with Randall‘s interest in discouraging the entrenchment of incumbent candidates. See Randall, 548 U.S. at 248; Anthony W. Crowell, supra, at 77 (noting the public financing scheme‘s “purpose of encouraging grassroots fundraising and diminishing the influence of special interests“). When participation is voluntary and public money is used, stricter restrictions may be imposed, perhaps even restrictions that would normally be impermissible. See Davis, 554 U.S. at 739-40. Candidates who choose not to participate, and their contributors, are not prevented from freely expressing their political speech and associations; the legislature has merely decided not to amplify their contributions with tax dollars. That decision is entirely permissible. Buckley held that Congress “may engage in public financing of election campaigns and may condition acceptance of public funds on an agreement by the candidate to abide by specified expenditure limitations.” 424 U.S. at 57 n. 65; see Bennett, 564 U.S. at 738. As in Buckley, “by forgoing public financing, ... [the candidates here] retain the unfettered right” to receive contributions within the limits from lobbyists, persons associated with lobbyists, and other individuals with business dealings with the City. Davis, 554 U.S. at 739-40.
The matching provision at issue here is clearly distinguishable. First, it applies to contribution limits, which the Supreme Court has recognized to be less onerous restrictions on speech than campaign expenditure limits. Second, while the matching provisions here may burden the candidates who choose to participate in the
Additionally, the use of the broader definition of lobbyist for non-matching purposes does not render it overinclusive. Insofar as the provision reaches some contributors peripheral to the business dealings, such as a lobbyist‘s secretary or spouse, it does so only to prevent circumvention and does not form “a substantial portion of the burden on speech.” Turner Broadcasting System, Inc. v. F.C.C., 512 U.S. 622, 682, 114 S.Ct. 2445, 129 L.Ed.2d 497 (1994) (quoting Simon & Schuster, Inc. v. Members of N.Y. State Crime Victims Bd., 502 U.S. 105, 122 n. *, 112 S.Ct. 501, 116 L.Ed.2d 476 (1991)); Interim Report, at 30 (providing examples of how “a contribution through a spouse with the same last name is one potential way to circumvent donation limits while guaranteeing the contribution is associated with the family name“).20 Otherwise, lobbyists will continue to do what they are doing now—giving money. Indeed, use of the broader definition for non-matching purposes combats circumvention, while use of the narrower definition of lobbyist for the lower contribution limits avoids infringing the speech of people not actually engaged in lobbying activities. This distinction is an appropriate balancing of these competing concerns.
E. Entity Ban
The Supreme Court has held that the “degree of scrutiny turns on the nature of the activity regulated,” not on the fact that contributions are outright banned, as opposed to just limited. Beaumont, 539 U.S. at 162, 123 S.Ct. 2200. Accordingly, the more lenient standard of review also applies to the entity ban. On the other hand, the analysis of whether a restriction imposes a ban or merely a limit is relevant to the closely drawn analysis. See Green Party, 616 F.3d at 206-07.
Beaumont recognized four justifications for the federal ban on corporate contributions: (1) the anti-corruption interest already discussed, 539 U.S. at 154, 123 S.Ct. 2200; (2) the anti-distortion interest, stemming from the “special characteristics of the corporate structure that threaten the
The anti-corruption rationale presents a sufficiently important governmental interest for the reasons already discussed, and applies equally to LLCs, LLPs, and partnerships, as to corporations. In addition,
The record contains sufficient evidence from which one could infer circumvention and perceive corruption. For example, these entities have become more active contributors since the corporate ban; LLC contributions more than doubled from 2.8% in the 2001 election to 6.2% in the 2005 election.23 2005 Election Report, at
Entity contributions also undermine the CFA‘s goal of transparency, because they only have to be attributed to the partner or owner when they exceed $2,500. Committee Report, 29. Transparency is a particular problem for LLCs because many are involved in city business, especially land use, yet there are minimal disclosure requirements and often no publicly available information about the owners.25 See 2005 Election Report, at 121; see also Robert Gearty & Benjamin Lesser, So-called ‘LLCs’ Enable Real Estate Giants to Give Huge Sums to Gov. Paterson, AG Andrew Cuomo, N.Y. Daily News (Feb. 15, 2010), available at http://articles.nydailynews.com/2010-02-15/news/27056260_1_llc-money-limit-individual-donations-contributions (citing examples of how contributors evade the contribution limits by donating through LLCs—“the mother of all loopholes“—which are still permitted in New York State).
The pressing question here is whether the entity ban is closely drawn.26 We hold that it is. The expansion of the corporate ban to include these entities does not render it overinclusive because, as noted, the legal distinctions between these entities
For the reasons that justify the corporate contribution prohibition, therefore, the legislature permissibly determined that there is no room in City campaigns for entity contributions. While limits may minimize circumvention and the appearance of corruption, the City is free to decide that these evils must be eliminated to ensure the public‘s faith in the electorate system.
CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the district court upholding the constitutionality of the contribution limits, non-matching provision, and entity ban.
CALABRESI, Circuit Judge, concurring:
As Jesus looked up, he saw the rich putting their gifts into the temple treasury. He also saw a poor widow put in two very small copper coins. “Truly I tell you,” he said, “this poor widow has put in more than all the others. All these people gave their gifts out of their wealth; but she out of her poverty put in all she had to live on.”
Luke 21:1-4.
I join the majority opinion because it properly describes and follows the current law of campaign finance. But all is not well with this law, and I believe it appropriate to state in a judicial opinion why I think this is so.
Judge Crotty has performed a careful analysis of corruption (actual and its appearance), and only of corruption, as a ground for upholding the regulations at issue in this case.1 His is the necessary analysis under Supreme Court case law. The High Court has told us that the First Amendment protects the right to speak through the use of money, but that the existence of this right does not prevent governments from enacting campaign finance regulations in furtherance of their interest in limiting actual or apparent corruption. McConnell v. FEC, 540 U.S. 93, 143, 124 S.Ct. 619, 157 L.Ed.2d 491 (2003) (“Our cases have made clear that the prevention of corruption or its appearance constitutes a sufficiently important interest to justify political contribution limits.“). At the same time, the Court has rejected the idea that governments may, by campaign finance regulations, pursue the separate interest in what it has rather derisively called “leveling the playing field.” Arizona Free Enterprise Club‘s Freedom Club PAC v. Bennett, — U.S. —, 131 S.Ct. 2806, 2825-26, 180 L.Ed.2d 664 (2011). That is, under current Supreme Court doctrine, governments cannot defend campaign finance regulations on the ground that such regulations take into account and respond to the different capacities of the rich and the poor to speak through money; legislatures—the Court has indicated—have no role to play with respect to that. It is with this position that I wish to take issue here.2
I agree completely with the Supreme Court that the First Amendment protects each person‘s right to express political beliefs through money. Where I disagree
The first benefit of antidistortion measures is not difficult to see. If an external factor, such as wealth, allows some individuals to communicate their political views too powerfully, then persons who lack wealth may, for all intents and purposes, be excluded from the democratic dialogue. In much the same way that anti-noise ordinances help to prevent megaphone users from drowning out all others in the public square, contribution limits can serve to prevent the wealthiest donors from rendering all other donors irrelevant—from, in effect, silencing them. For an articulation of this concern—i.e., that, without regulation, the rich would be able to use their wealth to overwhelm the voices of the poor—one need look no further than the Supreme Court‘s decision in Red Lion Broadcasting Co. v. FCC, where, in upholding the FCC‘s “fairness doctrine,” the High Court long ago explained that, without the rule in place, “station owners and a few networks would have unfettered power to make time available only to the highest bidders” and thereby broadcast only those bidders’ political views. Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 392, 89 S.Ct. 1794, 23 L.Ed.2d 371 (1969); see also id. at 387, 89 S.Ct. 1794 (“Just as the Government may limit the use of sound-amplifying equipment potentially so noisy that it drowns out civilized private speech, so may the Government limit the use of broadcast equipment. The right of free speech of a broadcaster, the user of a sound truck, or any other individual does not embrace a right to snuff out the free speech of others.“).3 The same is true of contribution limits: Without restrictions on the size of campaign contributions, the wealthy could flood the campaign coffers of their preferred political candidates, rendering all other contributions negligible by comparison. Contribution limits, like noise ordinances, still allow those who have the capacity a full opportunity to make their speech widely heard—the wealthy remain able to express their views force-
The second benefit of antidistortion measures is perhaps more subtle, but of no less importance: it relates to the ability of all persons, rich and poor, to express the intensity of their feelings. In many circumstances, the intensity of a speaker‘s expression tells us much about the intensity of that speaker‘s beliefs. Polite applause conveys less enthusiasm than a shouted “Bravo!” Passing criticisms convey weaker disagreement than passionate harangues. And, of course, the tone of a judicial opinion provides some indication of how bleakly a judge views a certain area of the law. But where speech takes the form of a monetary expenditure, the link between intensity of beliefs and intensity of expression, as measured by the amount contributed, can too easily break down. This is a result of the unequal distribution of wealth, which makes the amount of money an individual spends on behalf of a political cause an unreliable measure of the intensity and depth of that individual‘s support for the cause. “In other words, and crucially, a large contribution by a person of great means may influence an election enormously, and yet may represent a far lesser intensity of desire than a pittance given by a poor person.” Landell v. Sorrell, 406 F.3d 159, 161 (2d Cir.2005) (Calabresi, J., concurring in the denial of rehearing en banc), rev‘d sub nom. Randall v. Sorrell, 548 U.S. 230, 126 S.Ct. 2479, 165 L.Ed.2d 482 (2006).
To return to the example of the megaphone in the public square, the problem with its loudness is not just that it drowns out the voices of others, but also that it misrepresents, to an outside observer, the relative intensity of the speaker‘s views. That is, even if the megaphone user cares little about the issue being discussed, his voice gets heard above all others, while the voices (and intensity of feelings) of those who care passionately about the issue (and shout their beliefs at the top of their lungs) seem small in comparison. The one speaker‘s relative loudness—along with the other speakers’ relative softness—obscures the depth of each speaker‘s views, thereby degrading the communicative value of everyone‘s message.
The foregoing example may seem fanciful, but money is not. And there is perhaps no greater a distortive influence on the intensity of expression than wealth differences. The wider the economic disparities in a democratic society, the more difficult it becomes to convey, with financial donations, the intensity of one‘s political beliefs. People who care a little will, if they are rich, still give a lot. People who care a lot must, if they are poor, give only a little. Jesus‘s comment about the rich donors and the poor widow says it all. Today, the amount of an individual‘s campaign contribution reflects the strength of that individual‘s preferences far less than it does the size of his wallet. In this sense, all political donations—by rich and poor alike—lose a crucially important aspect of their communicative value when campaign funds are unrestricted. And that is a problem of profound First Amendment significance.
It is no small irony, then, that in refusing to recognize the existence of a state interest in “leveling the playing field“—an interest which prior Supreme Court precedents had suggested was compelling, and certainly is at least legitimate—the Court
Indeed, if the Court were correct that the level playing field interest does not provide an appropriate reason for regulat-
I am not suggesting that expressing the intensity of one‘s views is the only thing that matters in campaign finance doctrine, or in election law more generally.6 Nor
*
What is at stake here—what everyone knows is at stake here—is what was recognized and expressed so directly, succinctly, and powerfully in the story of the widow‘s mite. The ability to express one‘s feelings with all the intensity that one has—and to be heard—is a central element of the right to speak freely. It is, I believe, something that is so fundamental that sooner or later it is going to be recognized. Whether this
It is with that faith in a better future, along with an understanding of the requirements of our flawed present, that I join the majority opinion.
DEBRA ANN LIVINGSTON, Circuit Judge, concurring in part and concurring in the judgment:
I join in Parts I, II and III.A of the majority opinion. I write separately as to Part III.B-E only to make clear my disagreement with the majority‘s conclusion that improper or undue influence is a form of corruption that may be addressed with closely drawn contribution limits. To the extent that this conclusion is one basis on which the majority upholds the special contribution limits and non-matching provisions that New York City‘s campaign finance law imposes on those “doing business” with the City, I respectfully disagree with its analysis.1 I nevertheless conclude that these provisions pass constitutional muster pursuant to the Supreme Court‘s and this Court‘s precedents. Accordingly,
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Since the enactment of its Campaign Finance Act (“CFA“) in 1988, New York City has imposed limits on the amount of money that may be contributed to a single candidate for public office in a given calendar year.2 These generally applicable limits are $4,950 to each candidate running for mayor, public advocate, or comptroller; $3,850 to each candidate running for borough president; and $2,750 to each candidate running for city council.
The appellants here take no issue with these generally applicable limits, but rather with subsequent limits enacted in 2007 and applicable only to individuals defined in the CFA as “doing business” with the City of New York. For natural persons who are classified as “doing business” with the City, significantly stricter limits apply: $400 to candidates for mayor, public advocate, or comptroller; $320 to can-
“Doing business” contributors include, inter alia, individuals with specified ownership or management roles in entities with valuable City contracts or grants, or relations with the City that concern the acquisition or disposition of real property.3 Lobbyists are also included within the stricter contribution limits.
The City also operates a public campaign financing program in which candidates for the various City offices specified above may choose to participate. In this program, the City matches the campaign contributions of most individuals to candidates who participate in the public funding program at a rate of six to one (with up to $1,050 of public funds available for matching per contributor per candidate).
*
I agree with the majority that the “doing business” contribution limitations in this case are subject to scrutiny for whether “they are closely drawn to serve a sufficiently important interest.” Davis v. FEC, 554 U.S. 724, 737, 128 S.Ct. 2759, 171 L.Ed.2d 737 (2008) (internal quotation marks omitted); see Maj. Op. at 185-86. The Supreme Court has repeatedly indicated that, while expenditure limitations are subject to strict scrutiny, which requires courts to assess whether the challenged “restriction ‘furthers a compelling interest and is narrowly tailored to achieve that interest,‘” Citizens United v. FEC, — U.S. —, 130 S.Ct. 876, 898, 175 L.Ed.2d 753 (2010) (quoting FEC v. Wis. Right to Life, Inc., 551 U.S. 449, 464, 127 S.Ct. 2652, 168 L.Ed.2d 329 (2007) (opinion of Roberts, C.J.)), contribution limits are subject to less searching scrutiny because campaign contributions “lie closer to the edges than to the core of political expression.” FEC v. Beaumont, 539 U.S. 146, 161, 123 S.Ct. 2200, 156 L.Ed.2d 179 (2003); see also Nixon v. Shrink Mo. Gov‘t PAC, 528 U.S. 377, 387-88, 120 S.Ct. 897, 145 L.Ed.2d 886 (2000); Buckley v. Valeo, 424 U.S. 1, 25, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (per curiam). At the same time, with regard to contribution no less than expenditure limits, the First Amendment “has its fullest and most urgent application precisely to the conduct of campaigns for political office.” Buckley, 424 U.S. at 15, 96 S.Ct. 612 (quoting Monitor Patriot Co. v. Roy, 401 U.S. 265, 272, 91 S.Ct. 621, 28 L.Ed.2d 35 (1971)) (internal quotation mark omitted). The scrutiny required by the First Amendment is thus both “exacting,” see id. at 16, 96 S.Ct. 612; Shrink Mo., 528 U.S. at 386, 120 S.Ct. 897, and
I likewise agree that the non-matching provisions here are similarly subject to “closely drawn” analysis. See Maj. Op. at 193. At least in the circumstances in this case, matching funds given to a candidate as a result of a contribution from a private donor are the functional equivalent of a contribution, so that limits on such funds are functionally equivalent to contribution limits. See FEC v. Colo. Republican Fed. Campaign Comm., 533 U.S. 431, 456, 121 S.Ct. 2351, 150 L.Ed.2d 461 (2001) (determining that “party coordinated spending [is] the functional equivalent of contributions,” id. at 447, 121 S.Ct. 2351, and accordingly applying “scrutiny appropriate for a contribution limit,” id. at 456, 121 S.Ct. 2351). Therefore, this Court must analyze both sets of provisions to determine whether “they are closely drawn to serve a sufficiently important interest.” Davis, 554 U.S. at 737, 128 S.Ct. 2759 (internal quotation marks omitted). The City bears the burden of proof in this inquiry. Shrink Mo., 528 U.S. at 387-88, 120 S.Ct. 897.
*
I part ways with the majority, not in our shared conclusion as to the constitutionality of the provisions here, but in determining what counts as a “sufficiently important interest” in relation to which the provisions must be judged. Pursuant to the Supreme Court‘s decision in Buckley, preventing “the actuality and appearance of corruption” is such an interest. Buckley, 424 U.S. at 26, 96 S.Ct. 612. The majority, however, goes beyond Buckley in concluding that “improper or undue influence . . . qualifies as a form of corruption” which may be combated via closely drawn contribution limits. Maj. Op. at 186 (emphases omitted). Because recent decisions by the Supreme Court and this Court clearly foreclose this latter determination, I respectfully disagree with it.
In Citizens United, the Supreme Court unequivocally stated that when Buckley identified the prevention of corruption or its appearance as “a sufficiently important governmental interest” to render closely drawn contribution limits acceptable under the First Amendment, “that interest was limited to quid pro quo corruption.” 130 S.Ct. at 909 (emphasis added).6 The Court recognized that favoritism and influence, unlike corruption, are unavoidable in representative politics, in which a legitimate and substantial reason for casting a ballot or making a contribution “is that the candidate will respond by producing those political outcomes the supporter favors.” Id. at 910 (quoting McConnell v. FEC, 540 U.S. 93, 297, 124 S.Ct. 619, 157 L.Ed.2d 491 (2003) (Kennedy, J., concurring in the judgment in part and dissenting in part), overruled in part on other grounds by Citizens United, 130 S.Ct. 876). In a democracy premised on responsiveness, the Court said, the mere fact “that speakers may have influence over or access to elected officials does not mean that these officials are corrupt.” Id. And importantly,
Even if it were not clear after Citizens United (as, in fact, it is) that First Amendment freedoms may not be curtailed to address mere influence or the perception of such influence in the political arena, any question about whether Citizens United‘s pronouncement applies in the context of contribution limits was resolved by this Court in Green Party of Connecticut v. Garfield, 616 F.3d 189 (2d Cir.2010). There, the Court addressed the validity of Connecticut‘s bans on campaign contributions to candidates for state office from state contractors and lobbyists. See id. at 194. Some of the evidence before the Green Party panel “suggest[ed] that many members of the public generally distrust lobbyists and the ‘special attention’ they are believed to receive from elected officials.” Id. at 206. This Court said there that “influence and access,” without more, “are not sinister in nature,” but are part of representative government. 616 F.3d at 207. Citing Citizens United, the Court held that “evidence demonstrating that lobbyist contributions give rise to an appearance of ‘influence’ has no bearing on whether the . . . ban on lobbyist contributions is closely drawn to the state‘s anti-corruption interest.” Id. at 207 (citation omitted).
The majority distinguishes between “mere influence or access to elected officials” and “improper or undue influence,” suggesting that while the former may be an insufficient basis on which to limit First
This is no unimportant point. By requiring that a regulation suppressing political speech and association be closely drawn to address the threat of quid pro quo corruption (or the perception that large contributors will secure their quid), courts strive to draw a principled constitutional line—a line that permits legislatures to address the significant danger corruption poses to representative democracy while it vigorously protects political speech by ensuring that First Amendment principles are enforced. The generic influence theory is, in contrast—and as the Citizens United Court recognized—“susceptible to no limiting principle.” Citizens United, 130 S.Ct. at 910 (quoting McConnell, 540 U.S. at 296, 124 S.Ct. 619 (Kennedy, J., concurring in the judgment in part and dissenting in part)) (internal quotation mark omitted). Today it disfavors “doing business” contributors. But all those who seek to influence politicians are vulnerable
*
Focusing properly only on the prevention of quid pro quo corruption or its appearance, I next conclude that the New York City restrictions at issue are “closely drawn” to serve the interest which justifies the limitations they place on First Amendment rights. Because I find this question more difficult than my colleagues, however, I write briefly to explain my position.
The Supreme Court has not yet addressed the First Amendment implications of campaign finance laws that impose stricter contribution limits on the political contributions of some individuals who are seen to pose a particularly serious threat to the government‘s interest in preventing the appearance or actuality of quid pro quo corruption. Federal law has long prohibited government contractors from making contributions to “any political party, committee, or candidate for public office or to any person for any political purpose or use” while these contractors are seeking or performing pursuant to a contract. The relevant provision, however—
The law at issue, to survive First Amendment scrutiny, must both serve the City‘s anticorruption interest and be “closely drawn” to achieve this interest. There is reason to question whether New York City‘s “doing business” restrictions satisfy this test. Thousands of New Yorkers are severely restricted in the amounts they may contribute or have matched as a result of these restrictions, some by virtue of no more than a family relationship or their leadership positions in institutions such as the Metropolitan Museum of Art or the Cathedral Church of St. John the Divine. See Joseph Goldstein, City Blacklist Limits Giving by 12,000, N.Y. Sun, August 14, 2008, http://www.nysun.com/new-york/city-blacklist-limits-giving-by-12000/83868. By contrast, other New Yorkers who would qualify as “doing business” with the City under any ordinary understanding of the term (such as those leading municipal labor unions) are subject only to the higher limits. Furthermore, New York‘s law restricts “doing business” contributions to campaigns for specified City offices regardless of whether the particular office at stake plays any role in the business relationship that is the trigger for the stricter limits.7 Despite the magnitude of
The majority relies in part on the “objective[] reasonable[ness]” of “the connection between money and municipal action” to uphold the strict limits New York City‘s law places upon the free speech and associational rights of those “doing business.” Maj. Op. at 190. The Supreme Court has stated, however, that “[w]hen the Government defends a regulation on speech as a means to redress past harms or prevent anticipated harms, it must do more than simply posit the existence of the disease sought to be cured. It must demonstrate that the recited harms are real, not merely conjectural.” Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 664, 114 S.Ct. 2445, 129 L.Ed.2d 497 (1994) (plurality opinion) (citation omitted); see also Colo. Republican Fed. Campaign Comm. v. FEC, 518 U.S. 604, 618, 116 S.Ct. 2309, 135 L.Ed.2d 795 (1996)
On balance, however, and upon a close examination of the record, I agree with the majority‘s conclusion that the City has adequately demonstrated that its “doing business” contribution limits address a real and not a conjectural corruption concern. First, a report prepared for the Campaign Finance Board (“CFB“) in 2006 reported that those “doing business” with the City tend to give larger contributions to candidates (albeit within the 1988 contribution limits) as compared to those lacking such business relationships. See Loprest Decl., Ex. A, Municipal Campaign Finance and “Pay-to-Play“: An Analysis of Doing Business Contributions in New York City (“Pay-to-Play Report“) at 12.9
Granted, the record also contains troubling indications that at least some of the proponents of the “doing business” limits may have aimed at curtailing the influence of “doing business” contributors as much as corruption or its appearance. See, e.g., Pines Decl., Ex. F, Report of the New York City Charter Revision Comm‘n at 19 (noting that donations by “doing business” contributors “at a minimum . . . create the perception that [such] donors have the opportunity and desire to exercise undue influence over elected officials“). The anticorruption interest pressed by the City in
First, those “doing business” within the meaning of the law are held to the stricter contribution limits only while doing business and for a short period thereafter—strongly suggesting that the law is aimed at the particular danger of real or apparent quid pro quo arrangements, rather than mere influence. See McConnell, 540 U.S. at 167, 124 S.Ct. 619 (noting that certain “regulations . . . are reasonably tailored, with various temporal . . . limitations designed to focus the regulations on the important anticorruption interests to be served“). The Supreme Court has said, moreover, that contribution limits, as opposed to bans, “involve[] little direct restraint on [a contributor‘s] political communication, for [they] permit[] the symbolic expression of support evidenced by a
*
Despite some disagreement with the majority in terms of the analysis here, I share much common ground with the majority opinion. I agree that the ban on contributions by LLCs, LLPs, and partnerships
Notes
Of course, the majority opinion also discusses the state‘s “anticircumvention” interest in connection with the entity ban, but that interest is largely derivative of the state‘s “anticorruption” interest.
The majority relies principally on the Supreme Court‘s decision in FEC v. Beaumont, 539 U.S. 146, 123 S.Ct. 2200, 156 L.Ed.2d 179 (2003), to uphold the City‘s ban on political contributions by partnerships, LLPs, and LLCs. To the extent it also relies on its conclusion regarding undue influence in reaching this determination, however, I similarly disagree.
As the case before us involves contribution restrictions, I will speak primarily of such restrictions here. But much of what I say applies with equal force to restrictions on independent expenditures.
The relevant provision phrases the limits as ceilings on the amount each candidate may accept from a single contributor.
The fact that the FCC no longer enforces the fairness doctrine is not relevant to the Court‘s constitutional analysis in Red Lion. Indeed, what it shows is that bodies other than courts (administrative and legislative bodies) are perfectly capable of taking into account the facts and circumstances that determine what kinds of speech restrictions are inappropriate, undesirable, or even constitutionally problematic. Cf. Syracuse Peace Council v. FCC, 867 F.2d 654, 661 (D.C.Cir.1989) (upholding the FCC‘s determination that the fairness doctrine no longer served the public interest, and noting, inter alia, the FCC‘s conclusions that the doctrine chilled “the expression of unorthodox or ‘fringe’ views on controversial issues” and that the doctrine was no longer needed in light of the “dramatic increase in broadcasting outlets since [the year of its implementation]“). In contrast with the nuanced handling of the issues by the FCC as upheld by the D.C. Circuit, courts acting on their own and indulging in undemocratic decisionmaking create the danger not only of wrong solutions to difficult constitutional problems, but also of rigid answers to questions that by their nature demand flexible, adaptive, and democratically informed responses.
The intricacies of the full statutory definition of “doing business” are not relevant here. Generally speaking, however, “doing business” includes any relationship with the City or its affiliated agencies involving: (1) contracts valued at $100,000 or more (except for emergency contracts or contracts procured through competitive bidding),
The same would be true of payments by the government that match or otherwise increase the contributions of the poor; that is, rather than putting in noise ordinances, the government might prefer to make megaphones widely available.
These activities involve zoning requests pursuant to
Moreover, to the extent that campaign contributions cannot be regulated so as to leave them free to reflect intensity of feeling, the pressure for greater economic equality will increase, and this may be detrimental to those efficiencies that flow from an unequal distribution of wealth. Put another way, if campaign finance doctrine fails to recognize the value of a level playing field in the political realm, there may arise stronger pressures to create a more level playing field in the economy as a whole. The effect of such pressures on incentives and on overall economic wellbeing I leave to others to evaluate.
Contributions from a lobbyist‘s spouse, domestic partner, and unemancipated children are also deemed ineligible for matching.
If it were, we might expect the ballot to be structured so as to give maximum effect to preference intensity, through such devices as “cumulative voting” or “single-transferrable voting.” See Samuel Issacharoff, Pamela S. Karlan & Richard H. Pildes, The Law of Democracy: Legal Structure of the Political Process 1137-75 (3d ed. 2007). Although some jurisdictions have experimented with cumulative voting models, see id. at 1163-67, 1172-75, most still adhere to the traditional model, in which each individual—regardless of the strength of her preferences—may cast one (and only one) vote for one (and only one) candidate per electoral contest. The infrequent use of these alternative voting systems does not, of course, demonstrate any lack of importance to the expression of preference intensity. It suggests only that, in the context of elections, the need to recognize this value is balanced against other considerations.
Thus, contrary to the majority‘s contention, see Maj. Op. at 186 n. 13, the Court‘s conclusion in Citizens United cannot be confined to the context of expenditure limits, even though Citizens United itself involved such limits, see 130 S.Ct. at 908. Indeed, Buckley‘s very determination that preventing quid pro quo corruption and its appearance (but not real or perceived influence) may justify trenching on First Amendment freedoms took place in the contribution, not expenditure, context. See Buckley, 424 U.S. at 26-27, 96 S.Ct. 612; see also Citizens United, 130 S.Ct. at 908 (“In Buckley, the Court found this interest [in preventing corruption and its appearance] ‘sufficiently important’ to allow limits on contributions but did not extend that reasoning to expenditure limits.“).
In my life as a scholar, I have proposed some solutions to this problem. See, e.g., Philip Bobbit & Guido Calabresi, Tragic Choices 98-117 (1978) (discussing wealth-distribution-neutral markets); Guido Calabresi, Inaugural Lecture of the Academic Year of the International University College (IUC) of Torino: Merit Goods, the Commons, and Their Significance for Justice, Efficiency, and Equality (May 19, 2011) (video available at http://www.youtube.com/watch?v=iQnLakWMycM).
For instance, the owner of a small apartment complex with an application pursuant to
In fact, the Charter Revision Commission (“CRC“) specifically noted in 1998 that since the City enacted the general limits prohibiting the large contributions of the past, “[g]enerally there is no evidence that . . . campaign contributions [by those “doing business” with the City] actually influence the award of a particular contract or passage of a bill.” Pines Decl., Ex. F, Report of the N.Y.C. Charter Revision Comm‘n at 19.
The Pay-to-Play Report reaches this conclusion using a different definition than the one eventually adopted by the City, including only “[f]irms or individuals who are principals of firms who have contracts with the City valued at $100,000 or more[,] and/or . . . [r]egistered lobbyists and lobbyist clients.” Id. at 4. However, the Report‘s conclusions still provide evidence in support of the lowered campaign
As the majority opinion notes, appellants make no argument that the “doing business” restrictions prevent candidates from amassing sufficient funds to run effective campaigns, as
For example, a plaintiff in this proceeding, who is the spouse of a lobbyist, testified that she had no knowledge of a contribution made jointly on her and her husband‘s behalf to a candidate who is unknown to her. See Pines Decl., Ex. GG, Deposition of Sheila Andersen-Ricci at 8 (“Q: Have you ever made [or directed anyone to make] any contributions to any candidates for political office in your lifetime? A: No.“); id. at 33 (“Q: To the best of your understanding who is Thomas White? A: I don‘t know.“); Horowitz Decl. ¶ 4 (discussing a check drawn on the account of Ms. Andersen-Ricci and her husband, payable to “Friends of Tom White, Jr.,” in the amount of $500—twice the limit for a single contribution).
Citizens United preserves the anti-corruption justification for regulating corporate contributions, based on its clear distinction between expenditures and contributions, and the lack of an express rejection of the corporate ban, which has existed since the first federal campaign finance law in 1907. 1998 Commission Report, 16. We are aware of United States v. Danielczyk, 788 F.Supp.2d 472 (E.D.Va.2011), which struck down a ban on corporate contributions, based on what it called an “inescapable” expansion of Citizens United‘s logic. Id. at 494; United States v. Danielczyk, 791 F.Supp.2d 513 (E.D.Va.2011) (denying reconsideration). The role of an appellate court is to apply to law as it exists. Since the Supreme Court reaffirmed the validity of the 100-year old corporate ban just 8 years ago, Beaumont, 539 U.S. at 154-55, 123 S.Ct. 2200, and declined to overrule this holding in Citizens United, we will not do so here. Indeed, Citizens United confirms that the anti-corruption interest is a legitimate justification for campaign contribution restrictions. Citizens United also does not disturb the validity of the anti-circumvention interest. See Thalheimer v. City of San Diego, 645 F.3d 1109, 1125 (9th Cir.2011) (concluding that “nothing in the explicit holdings or broad reasoning” of Citizens United invalidates the anti-circumvention interest in the context of contribution limits); Minn. Citizens Concerned for Life, Inc. v. Swanson, 640 F.3d 304, 318 (8th Cir.2011), vacated on July 12, 2011 for rehearing en banc (”Citizens United never doubted the government‘s strong interest in preventing quid pro quo corruption or materially questioned the ability of corporations to serve as conduits for circumventing valid contributions limits.“). As a result, we need not consider the extent to which the entity ban could have been justified by the anti-distortion and dissenting-shareholder rationales, which Citizens United rejected with respect to independent corporate expenditures.
Since the entity ban is justified both by anti-corruption and anti-circumvention interests, and simply extends the already-existing corporate ban to other functionally similar entities, Green Party‘s requirement of a recent history of actual corruption does not apply.
Following the ban on corporate contributions, organizational contributions rose from thirteen percent in 2001 to sixteen percent in 2005. 2005 Election Report, at 120.
In the 2005 election, the average incumbent collected seventy-eight contributions from organizations, totaling $43,500, whereas challengers averaged only two contributions, totaling $1,800. 2005 Election Report, at 120.
New York State Senator Daniel Squadron stated that the LLC loophole effectively means that “you don‘t have contribution limits.” Gearty & Lesser, supra. The following examples demonstrate how easily campaign contribution can be bundled to circumvent limits: (1) a real estate developer, his wife, and two executives from his LLC all gave maximum contribution to the same incumbent candidate for City Council, see Interim Report, at 32-33; (2) the same developer, his immediate family, his LLC, and officers of his LLC contributed nearly $100,000 in the 2001 and 2005 City election cycles, id. at 32; (3) two real estate developers and their newly-formed LLC gave nearly ten times the amount of donations they had given in the past after initiating a particular project, id. at 35; (4) the owner of a parent company of the construction company that received a contract to build a major transportation hub in Manhattan, his children, and the owner of the parent company‘s marketing firm all gave significant contributions to an incumbent candidate for Borough President, see generally Doing Business Portal, http://www.nyc.gov/html/doingbiz/home.html (last visited Aug. 10, 2011). The lack of disclosure requirements for LLCs makes it especially difficult to track the extent of bundling that occurs.
We reject Appellants’ argument that the entity ban is underinclusive because it does not apply to contributions from doctors, lawyers, and Certified Public Accountants. The LLC, LLP, and partnership forms pose a risk of circumvention, not because of the nature of the profession for which they are organized, but because they create the opportunity for the same individuals to contribute up to the limits more than once—as an individual and again as an entity. Because Appellants do not provide any connection between these professions and the risk of corruption, this argument is unpersuasive. Moreover, their argument appears to be based on a misunderstanding of