Introduction

Freedom of speech and freedom of association are so important that they are enshrined in the First Amendment to the U.S. Constitution. Yet across the nation, in nearly every state, government regulation stifles the ability of citizens to exercise their rights to speak and to associate with one another to discuss the most pressing issues of the day. The culprit? So-called campaign finance laws.

In Citizens United v. FEC, the U.S. Supreme Court recently issued a stirring indictment of campaign finance laws that burden and restrict speech. “If the First Amendment has any force, it prohibits [government] from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.” ¹ Recognizing the rights to speak and associate as fundamental to a free society, the Court struck down a law that banned corporations from spending money on speech. Along with the direct ban went a law that required corporations to establish separate, heavily regulated political committees or “PACs” in order to speak.

Despite an unbroken string of Supreme Court cases emphasizing the importance of political speech, and a First Amendment that says government “shall make no law . . . abridging the freedom of speech,” many states persist in regulating those who wish to speak out about political candidates and ballot issues near an election. In 24 states, citizens who wish to spend money to speak out about ballot issues must register with the state and navigate a complex maze of regulations. ² In 22 states, citizens who wish to spend money to advocate the election or defeat of candidates must comply with complex regulations and limits on the amounts of money they can devote to their speech. ³

These regulations violate the First Amendment. In this nation, no one should have to get the government’s permission and jump through legal hoops before they speak. Nor should government be permitted to limit the amounts of money that citizens may devote to speech that advocates the election or defeat of candidates or ballot issues.

That’s why on September 29, 2010, the Virginia-based Institute for Justice launched its Citizen Speech Campaign, a multi-state effort to restore full protection to political speech about candidates and ballot issues.

Beginning with a lawsuit challenging campaign finance laws in Florida, the campaign will build on IJ’s previous precedent-setting litigation seeking to free political speech from the stranglehold of government red tape. Along with this case, the Institute is releasing a new research report, Keep Out: How State Campaign Finance Laws Erect Barriers to Entry for Political Entrepreneurs. The report, written by University of Missouri economist Jeff Milyo, explains the value of citizen speakers to the vibrancy of American democracy—and shows how campaign finance laws get in their way. Finally, the Institute is launching a public campaign calling on officials in the 22 states that impose both contribution limits and PAC requirements on groups that independently advocate the election or defeat or candidates to bring their laws into compliance with Citizens United.

Political speech is not only a right, it is a profound value. As the Supreme Court stated in Citizens United, “[T]he right of citizens to inquire, to hear, to speak, and to use information to reach consensus is a precondition to enlightened self-government and a necessary means to protect it.” We ought to celebrate the citizens who find effective ways to compete in the marketplace of ideas just as we do their entrepreneurial counterparts in the marketplace of goods and services. Instead, campaign finance laws across our nation erect needless barriers that punish the most effective speakers. If freedom of speech is to be the rule, rather than the exception, these laws must be eliminated.

Are You a “Political Committee”?

Most people think so-called campaign finance laws affect only those running for office. Few are aware that many of these same laws restrict the ability of ordinary Americans to advocate for or against candidates and even ballot issues. These laws impose serious burdens on First Amendment rights and can result in crushing legal costs and penalties when they are violated. The regulations in Florida and other states starkly illustrate how campaign finance laws strangle citizen speech.

Florida’s Regulation of Ballot-Issue Advocacy

At least once a week, Nathan Worley, Pat Wayman, John Scolaro and Robin Stublen talk politics as part of a Tampa-area political group. But in 2010, a proposed amendment to the Florida Constitution prompted them to stop just talking and take political action.

The target of their concern is Amendment 4, which is also known as the “Hometown Democracy Amendment.” Amendment 4 would require municipalities that adopt or amend their local comprehensive land-use plans to submit the changes to a referendum of the voters. ⁴ Opponents argue that this would require Florida voters to decide on hundreds or even thousands of technical amendments annually. ⁵

Nathan, Pat, John and Robin see Amendment 4 as an affront to property rights that will stifle economic growth in Florida—and they think other voters need to hear that view. So the group decided to pool its resources and run a series of radio ads on local talk-radio against Amendment 4. But, because of Florida’s campaign finance laws, that kind of spontaneous grassroots political expression is all but impossible.

Under Florida law, any time two or more people join together to advocate the passage or defeat of a ballot issue, and raise or spend more than $500 for the effort, they become a fully regulated political committee. ⁶ At today’s advertising rates, running even one single newspaper ad could cause them to cross this threshold.

Thus, before even being allowed to speak, the group would have to cut through a slew of red tape. First, Nathan and the others would have to register with the state, appoint a treasurer and establish a separate bank account. ⁷ Then the group could run its ads, but it would have to keep meticulous financial records and report all activity to the government. ⁸ This means that if it accepts even a $1 contribution, it must deposit it into the group’s designated bank account and report the name and address of the contributor to the state. Similarly, every expenditure—even for gas to drive to the radio station to record its ad—must also be reported. And unlike most states, Florida does not place any lower limit on contributions and expenditures that have to be reported; even a one-dollar contribution must be separately itemized, including the contributor’s name and address, and reported to the state. “In-kind” contributions must be reported as well, meaning that if any member of the group decides to use his own car, computer, printers or the like to advance the group’s efforts, the value of those services must be recorded and disclosed. In short, the government regulates virtually all aspects of a political committee’s existence.

Penalties for violating the law are severe. If Nathan and the others speak without complying with the law, they can face civil or criminal fines of up to $1,000 per violation and even up to one year in jail. ⁹ The chilling effect these potential penalties have on political speech is undeniable. As Pat Wayman said, “These laws make politics inaccessible to common citizens; you need to hire an attorney to make sure you don’t get in trouble with the government.”

A Nationwide Problem

Laws like Florida’s are not unique. Indeed, during the past 35 years, burdensome state regulations of political speech have become more the rule than the exception, with virtually every state adopting some form of campaign finance regulation.

In Colorado, for example, groups that spend as little as $200 to speak out for or against a ballot issue or candidate must register with the government and comply with regulations similar to Florida’s. To make matters worse, any Colorado resident is permitted to bring a private lawsuit to enforce these laws, meaning that individuals who speak can be sued by their political opponents for alleged violations of the laws. ¹⁰ Six residents of Parker North, Colo., found this out the hard way when they opposed the proposed annexation of their neighborhood into a nearby town. For merely speaking to their neighbors and putting up lawn signs, they were sued by the proponents of the annexation and forced to defend themselves in court. The Institute for Justice filed a First Amendment challenge to Colorado’s campaign finance laws on behalf of the Colorado neighbors. That case is currently on appeal to the Tenth U.S. Circuit Court of Appeals. ¹¹

Similarly, in Washington state, simply calling on fellow citizens to contact their representatives and urge them to take positions on public policy can be regulated. Washington is one of 36 states across the country that regulates “grassroots lobbying.” ¹² Under Washington law, if you spend as little as $500 to ask fellow citizens to contact their representatives about government policies, you must register with the state and comply with onerous regulations. Violations can lead to investigations, fines, attorney’s fees and even a ban on engaging in further “grassroots lobbying.” ¹³

Many other states impose burdensome regulations and even fundraising limits on groups that wish to speak out in candidate elections. In Rhode Island, for example, groups that wish to spend money to speak independently of candidates must register as “political action committees” or PACs ¹⁴ PACs are heavily regulated and may accept no more than $1,000 from any one person per year. ¹⁵ As a result, although individuals acting alone may spend unlimited funds, those who exercise their rights of association and attempt to pool their funds to amplify their voices are limited to $1,000 apiece. With advertising costs as high as they are, this places a serious limit on the ability of grassroots groups to be heard during elections.

All of these regulations contradict the clear language of the First Amendment that government “shall make no law . . . abridging the freedom of speech.” As the U.S. Supreme Court has made clear, the First Amendment protects the right to “speak one’s mind . . . on all public institutions, and this opportunity is to be afforded for vigorous advocacy no less than abstract discussion.” ¹⁶

There is something terribly wrong when, in a nation that cherishes the right to free speech and self-government, states can hamstring citizens with regulations, red tape, and the threat of civil and criminal penalties simply for speaking out. The Supreme Court recently made clear just how important First Amendment rights are in this nation. It is time for the states to get the message.

The First Amendment Guarantees the Right to Speak about Politics

As the Court stated in Citizens United, “The First Amendment protects speech and speaker, and the ideas that flow from each.” ¹⁷ Because “[d]iscussion of public issues and debate on the qualifications of candidates are integral to the operation of the system of government established by our Constitution,” ¹⁸ according to the Court, the First Amendment “has its fullest and most urgent application precisely to the conduct of [political] campaigns.” ¹⁹

Thus, in America, free speech is supposed to be the rule, not the exception. If speech is to be regulated or even burdened, government must show that it has a compelling reason to do so. Individuals have no obligation to justify their right to speak. In short, as the Court has stated, “the tie goes to the speaker, not the censor.” ²⁰

Under the guise of campaign finance restrictions, however, citizens are increasingly expected to explain, justify and even apologize for their desire to speak out in order to influence the outcome of elections. As a result, the law requires citizens to register with their government and disclose all of their activities as a condition of speaking out, as though speech is a dangerous weapon to be regarded with suspicion, rather than a basic right to be celebrated. Until recently, federal law limited the ability of citizens to speak out through corporations and even unincorporated associations by placing strict limits on the funds they could raise and spend. In many states, however, campaign finance laws still limit the ability of citizen groups to pool funds and spend as much as they want on their own speech.

In Citizens United, the Supreme Court saw these laws for what they are—bans on speech. As the Court recognized, “[a]s additional rules are created for regulating political speech, any speech arguably within their reach is chilled.” ²¹ The Court, therefore, held that the federal government cannot require even corporations to become heavily regulated political committees or PACs in order to speak. “PACs” the Court held, “are burdensome alternatives; they are expensive to administer and subject to extensive regulations.” ²² PACs must register with the state, appoint treasurers, open separate bank accounts, keep detailed records of all of their activities and report everything they do to the state. “PACs,” the Court noted, “have to comply with these regulations just to speak.” ²³

Nevertheless, the state of Florida still imposes similar burdens, not on large corporations that wish to spend millions in candidate elections, but on small citizen groups that wish to spend thousands on speech opposing a controversial ballot issue. In Citizens United, the Court went as far as to liken the campaign finance laws to a prior restraint, because they give the government “power analogous to licensing laws implemented in 16th- and 17th-century England, laws and governmental practices of the sort that the First Amendment was drawn to prohibit.” ²⁴ Yet the state of Florida right now requires citizen groups to register as PACs before speaking out. Apparently, what the Supreme Court believes is too burdensome for General Motors, Florida has concluded is not too burdensome for the Institute for Justice’s clients: Nathan Worley, Pat Wayman, John Scolaro and Robin Stublen.

Laws like Florida’s are not the only unconstitutional laws that remain on the books, however. Shortly after the Court decided Citizens United, the U.S. Court of Appeals for the D.C. Circuit extended that precedent to unincorporated groups in SpeechNow.org v. Federal Election Commission. ²⁵ SpeechNow.org is a group of individuals who want to spend their own money on their own speech advocating the election or defeat of candidates. Federal law, however, required the group to register as a PAC and limited the contributions it could accept from its own members. Following Citizens United, the D.C. Circuit held that the government could not limit the money that the group could raise in order to finance its independent advocacy. ²⁶ Since the decision, nearly three dozen “SpeechNow” groups have formed to raise unlimited funds for independent advocacy in federal elections.

Unfortunately, these groups will not be forming under the laws of 22 states, which place strict limits on the amounts that independent groups can raise to fund their political advocacy. In defiance of Citizens United, these states also require these groups to register as PACs in order to speak, meaning that federal law now treats corporations better than many states treat small groups of citizens.

At least two states, though, have begun to get the message the Supreme Court recently sent. Kentucky’s campaign finance regulators have recently issued an “advisory opinion” stating that they will not enforce existing contribution limits against SpeechNow-type groups. Massachusetts has introduced revised regulations that would eliminate contribution limits for SpeechNow groups.

With the approaching elections, however, the changes in Kentucky and Massachusetts are too little, too late. As federal courts have noted, “timing is of the essence in politics.” ²⁷ “It is well known that the public begins to concentrate on elections only in the weeks immediately before they are held.” ²⁸ Citizens that cannot speak out during the next month will forever lose their opportunity to affect the outcome of this year’s elections.

All states that still impose contribution limits and PAC requirements on SpeechNow groups should repeal their laws and protect citizen speech immediately. The government has no authority to require citizens to register with the government and jump through legal hoops simply to speak.

The Litigation Team

The lead attorney in the Florida challenge is IJ Senior Attorney Paul Sherman, who is joined in the litigation by Senior Attorney Bert Gall. Senior Attorney Steve Simpson and IJ Staff Attorney Darpana Sheth join Paul and Bert on IJ’s Citizen Speech Initiative.

Darren A. Schwartz, a partner with Rumberger, Kirk & Caldwell, P.A., will ably serve as local counsel in the Florida challenge.

The Institute for Justice: A History of Protecting Political Speech

The Institute for Justice is a public interest law firm that brings challenges nationwide in support of fundamental individual liberties, including free speech. IJ has successfully challenged restrictions on political speech across the nation, including:

SpeechNow.org v. Federal Election Commission, ²⁹ striking down federal political committee requirements that restrict individuals from donating more than $5,000 to citizen groups that want to independently advocate for or against a candidate.

Arizona Freedom Club PAC v. Bennett, ³⁰ in which the Supreme Court reinstated the district court’s injunction against Arizona’s unconstitutional “matching funds” law—part of Arizona’s so-called “Clean Elections Act.” That law punishes candidates who reject the political welfare of public funding by burying them in red tape, giving extra tax-payer money to their publicly funded opponents, and setting stricter limits on how much they can raise.

Broward Coalition of Condominiums v. Browning, ³¹ declaring unconstitutional Florida’s electioneering communication law, which required any organization speaking out about public issues to register and report their activities to the government.

San Juan County v. No New Gas Tax, ³² securing a unanimous opinion from the Washington Supreme Court halting efforts by the government to treat on-air radio commentary about an initiative campaign as “in-kind” contributions subject to regulation under the state campaign finance laws.

The Institute for Justice is based in Arlington, Va. IJ has state chapters in Arizona, Minnesota, Texas, and Washington, as well as a Clinic on Entrepreneurship at the University of Chicago Law School.

For more information, contact:

Shira Rawlinson
Communications Coordinator
Institute for Justice
901 North Glebe Road, Suite 900
Arlington, VA 22203-1854
Phone: (703) 682-9320 ext. 229
srawlinson@ijstaging.wpengine.com

* On December 1, 2010, Robin Stublen voluntarily withdrew as a plaintiff in this lawsuit. He has testified, however, that he still wishes to pool his resources with the remaining plaintiffs to speak out in future elections.