Supreme Court case challenges cap on overall campaign contributions
WASHINGTON -- Twenty years ago, the Federal Election Commission fined New York developer Donald Trump, investor Henry Kravis, financier Ronald O. Perelman and seven others for giving more than the $25,000 limit on an individual's total donations to federal candidates and political committees.
Since then, the campaign funding landscape has changed dramatically.
In last year's general election, one of the 10 donors the FEC fined in 1993 gave $25 million to super PACs, which must act independently of candidates and parties.
The little-known cap on overall contributions that a person makes directly to campaign committees of candidates and political parties still stands.
But the Supreme Court said last month that it would hear a challenge to overturn the cap on grounds that it violates First Amendment rights to free speech and association.
The lawsuit, brought by Alabama political activist and businessman Shaun McCutcheon and the Republican National Committee, represents another attempt to knock down Watergate-era laws to curb the influence of wealthy contributors.
It follows the Supreme Court's landmark 2010 Citizens United decision that for the first time in nearly a century allowed corporations and labor unions to join individual donors in giving unlimited money to fund campaign ads as long as they are independent of federal candidates and parties.
The court last week decided not to extend that right for corporations when it declined to take a case seeking to overturn the 1907 ban on direct corporate contributions to candidates.
The lawsuit was filed by two Nevada businessmen indicted on a charge of reimbursing their employees $156,400 in corporate funds for donating to the presidential campaign of then-U.S. Sen. Hillary Rodham Clinton (D-N.Y.) in 2006 and 2007.
In the case the court did take, McCutcheon says the aggregate individual contribution limit -- adjusted for each election cycle and set at $123,200 for the 2013-14 elections -- is "unconstitutionally low."
He doesn't dispute the limit on each donation -- $2,600 per candidate per election -- as long as he can give to an unlimited number of candidates.
"An individual should be free to associate with as many candidates as he wants," McCutcheon's lawyer, Dan Backer, said when he filed the lawsuit.
The overall cap, he said, does "absolutely nothing to further the anti-corruption interest."
The FEC urged the court to uphold the aggregate limits.
The cap's purpose, the FEC said in a court filing, "was to curtail some of the most egregious Watergate-era abuses that Congress had traced to individual political contributors wielding undue influence over elected officials by virtue of outsized contributions."
There is little evidence of widespread breaking of the contribution cap by individuals.
The FEC doesn't screen for those violations. It audits candidate, party and political action committees, and makes those committees police individual contributions, requiring them to refund contributions that exceed the maximum they can accept. The FEC has fined committees that don't do that. The FEC declined to comment.
Records show the FEC hasn't fined an individual donor for exceeding the cap since 1993.
Those fines were spurred by a 1990 Los Angeles Times report that found 109 donors who had exceeded the then $25,000 cap.
After a three-year investigation, the FEC fined 10 donors, including $15,000 for Trump for exceeding the limit by $47,050; $8,000 for Kravis for going over the limit by $36,961; and $1,800 for Perelman for giving $7,500 too much.
None of those donors exceeded the cap in the 2012 election.
But one of them, Dallas billionaire Harold C. Simmons, showed it wasn't necessary. He paid $19,800 in fines in 1993 for giving $44,926 too much in 1988 and $1,250 over the limit in 1989.
In last year's election, Simmons's $103,900 in donations to candidates and parties easily fit under the FEC's $117,000 cap.
But Simmons still had an outsized impact: he gave $25.7 million to super PACs -- including $20.5 million to American Crossroads and $1.8 million to Restore Our Future, set up to back GOP presidential candidate Mitt Romney.