So those are the principles that come off of Buckley and 25 years of decisions by the Supreme Court and lower court since Buckley. I should note, since Senator Dodd mentioned the recent Supreme Court decision, that none of these principles that I have described is impacted in any way by the Court's decision in the Nixon v. Shrink Missouri Government PAC case. That case involved contributions, not expenditures, of hard money, not soft money, made directly to candidates, not to parties, not to independent groups or certainly not to issue organizations.

What the court did in Shrink was to maintain the constitutional status quo on limiting hard money contributions. The case had nothing to do with the constitutionality of regulating soft money or issue advocacy, and nothing in the Court's opinion says otherwise or alters the constitutional landscape.

What that case did do, of course, is perpetuate the unfortunate situation we have now. Contributions made directly to candidates are limitable. Everything else is free speech.

The latter proposition is wonderful. That is what we need, but the idea that then you limit candidates, you make it harder for candidates to raise funds to get their own message out, while at the same time everyone else gets to use their funds and their resources and their organizations and their newspapers to get their message out, as a First Amendment matter as well as an equality matter, what is the fairness in all that?

Now, in the wake of Nixon v. Shrink Missouri, some people say what we have to do is close all those other loopholes, limit the candidates and limit everybody else. Well, I think Ira has made the case that that is just totally unacceptable, and let me just translate it into three points before I conclude.

Number one, soft money. Soft money is money spent by political parties that does not involve express electoral advocacy of the election or defeat of candidates. It is issue advocacy, and our position is that as a constitutional matter, issue advocacy by parties, by issue organizations, by the press, by anyone else is totally protected by the First Amendment.

When we hear that the parties are raising a lot of money this year for issue advocacy, I do not fear that. I welcome that. This is an election year, and the last I have been told, it is an important election year. The Presidency is up for grabs. The House and Senate may be up for grabs. Governorships and State representatives all over the country are on the line. This is the year when we need

Senator Dodd. Could you explain the language "being up for grabs"?

Mr. Gora. Pardon me?

Senator Dodd. "Being up for grabs" has a certain connotation. Mr. Gora. Well, I am sorry. We are having elections for all those offices.

Senator Dodd. Thank you.

Mr. Gora. Thank you, Senator.

This is a year when I think we need more discussion of these issues and not less. This is a year when we need more issue advocacy and not less.

So I think soft money, spending, and activities by political parties is presumptively entitled to the same constitutional protection as it is by anybody else.

Beyond that, issue advocacy by other groups and organizations, as I said before, is wholly protected by the First Amendment, and regulation of that would be flatly inconsistent with the First Amendment. The kinds of proposals that Ira has alluded to, which would outlaw groups from speaking about issues within 60 days of an election, would be, I think, to my mind, flatly unconstitutional. The courts have spoken with one voice on that issue for more than 25 years.

In conclusion, I think there are three things that you can do. Number one, I do think as a practical matter, raising the hardmoney contribution limits would help some. That is within your power. That does not raise any constitutional problems, and it would ease the fund-raising burdens of candidates.

I think secondly, disclosure of large contributions to candidates remains an important democratic antidote to the concerns with corruption or undue influence.

Then finally, to second Ira, I think rather than go down the path of limits, which as he so aptly put it is strewn with constitutional land mines, I think we have to start serious consideration of forms of public funding or public support for candidacies, which to my mind is the kind of reform that is in keeping with the First Amendment, rather than contrary to it.

[The prepared statement of Mr. Gora follows:]

PREPARED STATEMENT OF JOEL M. GORA, PROFESSOR OF LAW, BROOKLYN LAW SCHOOL, BROOKLYN, NY

Good morning. My name is Joel M. Gora, and I am a Professor of Law at Brooklyn Law School, where I teach constitutional law. I am also a General Counsel of the New York Civil Liberties Union. It is a privilege to appear before this Committee to discuss the constitutional questions raised by campaign finance laws.

For almost thirty years I have been addressing the ferocious First Amendment problems caused by government controls of political funding. I was privileged to have been one of the ACLU lawyers for the plaintiffs in the landmark Supreme Court case of Buckley v. Valeo, U.S. 1 (1976). There we argued that the key provisions of the Federal Election Campaign Act (FECA) were fundamentally unconstitutional because they cut to the heart of the First Amendment's protections of political freedom. By severely restricting political contributions and expenditures, we contended, the Act limited the ability of individuals and groups, candidates and causes to get their message out to the voters and to the public. The Court, for the most part, agreed, and ruled that the First Amendment, which states that "Congress shall make no law...abridging the freedom of speech; or of the press..." denied Congress the power to do much of what it had done.

But even before working on that landmark case, I helped defend a small group of dissenters who were the very first victims of modern campaign finance "reforms." They were hauled into court by the United States government under the brand new Federal Election Campaign Act in 1972. What was their crime? They had sponsored a full-page advertisement in The New York Times criticizing the incumbent President of the United States, Richard Nixon and calling for his impeachment. Since it was an election year, the government insisted, the ad's criticism of the President might "influence the outcome" of the election, thus demanding that the sponsors be subject to all the heavy-duty provisions of the new law. It almost seemed as if the repressive 18th century Alien & Sedition laws, which made it a crime to criticize the gov ernment and which were finally repudiated by the Framers of the First Amendment, had come back in the guise of campaign finance reform. The courts quickly held that it would be "abhorrent" and "intolerable" to subject such citizen criticism of government to campaign finance laws and ruled that such discussions of public issues, even though they criticized incumbent politicians during an election season,

were beyond the proper pale of those laws. That's how constitutionally protected "issue advocacy" was born.

That case was a wake-up call to the severe First Amendment problems posed by campaign finance controls, which we have been addressing ever since. I would like to set forth the central constitutional principles that should guide your consideration of any campaign finance proposal. These are principles which were recognized and established in Buckley, and which have been basically reaffirmed ever since.

Let me briefly describe the Buckley ruling and then discuss the principles upon which it was based.

As is well known, the Supreme Court in Buckley determined that any regulation of political spending is a regulation of political speech, subject to the strictest constitutional scrutiny. Governmental limitations on political expenditures by candidates, campaigns or independents flatly violate the First Amendment. Nothing could justify the government's telling the people how much they can spend to promote their candidacies or causes.

The Court also agreed that, apart from candidates and their campaign committees, the only political funding that could be regulated was that which was used for "express advocacy," i.e., for speech that expressly advocates the election or defeat of an identified candidate. All other speech was deemed, in effect, "issue advocacy,' and its funding was rendered totally immune from any government controls. That's how constitutionally protected "soft money" was born. Campaign finance reformers complain that these rules are all "loopholes" for big money and corrupt influence and must be closed. But these aren't loopholes. They are the very essence of the First Amendment: full and open discussion and criticism of official policy and the officials who make it.

Finally, the Court did uphold the Act's limits of $1,000 for contributions made directly to federal candidates, i.e. "hard money," because of the concern that unlimited contributions to candidates might cause corruption or the appearance of corruption. That aspect of Buckley was recently reaffirmed in Nixon v. Shrink Missouri Government PAC, 120 S.Ct. 897 (2000), which upheld a Missouri limit of $1,075 on hard money contributions to state-wide candidates. This split-decision aspect of Buckley-limiting contributions to candidates, while permitting unlimited political spending by wealthy candidates, well-heeled campaigns, independent groups, party organizations, issue groups, corporations and unions, and the news media, all of which is necessary to preserve First Amendment rights- is responsible for many of the campaign finance issues that now confront us.

What are the established constitutional principles that must guide any effort to resolve those issues?

Principle Number 1-Limits on campaign funding are limits on political speech and cut to the very heart of the First Amendment.

Despite the popular misconception that the Buckley decision said that "money equals speech," that was not the Court's reasoning at all. The Court's analysis of why limits on political funding are limits on political speech was straightforward and sensible: "Clontribution and expenditure limitations operate in an area of the most fundamental First Amendment activities. Discussion of public issues and debate on the qualifications of candidates are integral to the system of government established by our Constitution." For this reason, restrictions on the funding of such discussion and debate are constitutionally intolerable: "A restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration and the size of the audience reached." The Court has reaffirmed the inextricable link between political funding and political speech in numerous decisions ever since.

Principle Number 2-Limits on political campaign expenditures by candidates, campaigns, parties and independents violate the First Amendment.

At the core of Buckley was the principle that government cannot use campaign funding limits to dictate how much political speech candidates or campaigns may have. Government cannot do so to "level the playing field," to "equalize" political participation, or because the government thinks there is "too much" political speech and that most of it is "too negative." Here too the Court's reasoning was clear and convincing: "In the free society ordained by our Constitution, it is not the government but the people-individually as citizens and candidates and collectively as associations and political committees who must retain control over the quantity and range of debate on public issues in a political campaign." By the same token, "[t]he concept that government may restrict the speech of some elements of our society in order to enhance the relative voice of others is wholly foreign to the First Amendment, which was designed to secure the widest possible dissemination of informa

tion from diverse and antagonistic sources and to assure unfettered exchange of ideas for the bringing about of political ans societal changes desired by the people." Likewise, independent expenditures are also fully protected against limitations. Even in an election where candidates have accepted public funding and agreed to limits on their own campaigns, their independent supporters remain free to speak their mind in support of that candidate. See FEC v. National Conservative PAC, 470 U.S. 480 (1985). This principle also protects certain kinds of ideological corporations which directly support candidates through express advocacy of their election or defeat. See FEC v. Massachusetts Citizens for Life, 479 U.S. 238 (1986). (Business corporations or associations and labor unions, however, cannot use their treasury funds for independent "express advocacy" expenditures.) Likewise, independent hard money expenditures by political parties to support their candidates are protected by the First Amendment and the Buckley principles as well. See Colorado Republican Federal Campaign Committee v. FEC, 518 U.S. 614 (1996). None of these principles was called into question by the recent Shrink Missouri Government PAC which did not deal with expenditure limits.

To be sure, there are some who disagree with these well-settled principles, who don't believe in the "unfettered exchange of ideas," who think it is the government, not the people, that should decide how much political speech the people shall be allowed. Most campaign finance "reformers" fall into that camp. Many academics do as well. Unfortunately, even some Supreme Court Justices take that position. But that view is not and never has been held by a majority of the Supreme Court, and, if the Court remains faithful to the First Amendment, hopefully, it never will be. And that view is not held by a majority of Americans when the constitutional free speech issues posed by campaign finance “reform" are explained to them.

Principle Number 3-Issue advocacy is absolutely protected by the First Amendment and wholly beyond any campaign finance controls, no matter who the speaker is or how the speech is funded.

Apart from candidates and their campaigns, campaign finance laws can only be applied to speech which "expressly advocates" the election or defeat of identified federal candidates. The funding of any speech that falls short of such "express advocacy” is wholly immune from regulation. Speech which comments on, criticizes or praises, applauds or condemns the public records and actions of public officials and political candidates or speech that discusses whether we need more or less of a tax cut, more or less regulation of tobacco, more or less regulation of abortion, more or less regulation of flag-burning, more or less regulation of campaign finance and identifies the stands of candidates on those issues-all of those discussions, even though they discuss candidates, and even though they occur during an election year or even an election season are wholly protected by the First Amendment. No limits, no disclosure, no forms, no filings, no controls. Whether the speaker is a political party, an issue organization, a labor union, a corporation, a foundation, a newspaper or an individual, that is all protected "issue advocacy," and the money that funds it is all, in effect, "soft money." Those who advocate government controls on what they call "sham" or "phony" or "so-called" issue ads, and those who advocate outlawing or severely restricting "soft money" should realize how broad their proposals would sweep and how much First Amendment law they would undo.

The Court made that crystal clear in Buckley when it fashioned the express advocacy doctrine, which holds that the FECA can constitutionally regulate only "communications that in express terms advocate the election or defeat of a clearly identified candidate," that include "explicit words of advocacy of election or defeat." The Court was greatly concerned that giving any broader scope to FECA, and allowing it to control the funding of all discussion of policy and issues that even mentioned a public official or political candidate, would improperly stifle vital criticism of government because speakers would fear running afoul of the FECA's prohibitions: "The distinction between discussion of issues and candidates and advocacy of election or defeat of candidates may often dissolve in practical operation. Candidates, especially incumbents, are intimately tied to public issues involving legislative proposals and government actions. Not only do candidates campaign on the basis of their positions on various public issues, but campaigns themselves generate issues of public interest." If any reference to a candidate in the context of advocacy of an issue rendered the speech or the speaker subject to campaign finance controls, the consequences for the First Amendment would be intolerable.

In fashioning the express advocacy doctrine, the Court was not naive. It knew that groups could devise "expenditures that skirted the restriction on express advocacy of election or defeat but nevertheless benefitted the candidate's campaign." But it was willing to take that risk for the First Amendment: "So long as persons and groups eschew expenditures that in express terms advocate the election or defeat of a clearly identified candidate, they are free to spend as much as they want to

promote the candidate and his views." Based on that reasoning, for almost thirty years the courts have been of almost one voice on this issue, repeatedly condemning any efforts to weaken the "express advocacy" doctrine and subject issue advocacy to controls.

Issue advocacy is freed from government control through a number of other constitutional doctrines as well. First, the constitutional right to engage in unfettered issue advocacy is not limited to individuals or cause organizations. Business corporations can speak publicly and without limit on anything short of express advocacy of a candidate's election. See First National Bank of Boston v. Bellotti, 435 U. S. 765 (1978). (Of course, media corporations can speak publicly and without limitation on any subject, including editorial endorsements of the election or defeat of candidates, i.e. "express advocacy," see Mills v. Alabama, 384 U.S.214 (1966).) Contributions to issue advocacy campaigns cannot be limited in any way, either. See Citizens Against Rent Control v. Berkeley, 454 U.S. 290 (1981). Finally, issue advocacy cannot even be subject to registration and disclosure. See McIntyre v. Ohio Elections Commission, 514 U.S.334 (1995); Buckley v. Valeo, 519 F.2d 821, 843–44 (1975)(holding unconstitutional a portion of the FECA which required reporting and disclosure by issue organizations that publicized any voting record or other information "referring to a candidate"). The rationale for these principles is not just that these various groups have a right to speak, but also that the public has a right to know and a need to hear what they have to say. How else can we have an informed electorate capable of governing its own affairs.

Once again, nothing in the Court's recent Shrink Missouri Government PAC opinion in any way calls any of these principles into question, because that case did not deal with issue advocacy or soft money.

Principle Number 4-Contributions made directly to political candidates and their campaigns can be limited as to amount and source.

This, of course, means hard money. In Buckley, the Court held that campaign contributions to candidates could be subject to legislative limitations of $1,000, because of the concern with corruption and the appearance of corruption. This January, in Shrink Missouri Government PAC, the Court reaffirmed that ruling and once again upheld legislative limits on hard money contributions. The Court majority ignored the problem that by limiting the amount that could be given directly to candidates, but allowing almost all other forms of funding of political speech to be totally unrestrained, the Court had created a situation, as one Justice put it, of "covert speech," i.e. speech which seeks to avoid the contribution limits by taking the form of soft money or issue advocacy, the funding of which cannot be limited.

This dual regime-contributions to candidates or to support "express advocacy” are severely limited while most other political funding and communication is unrestrained, and properly so-has helped create a situation that is unacceptable under the First Amendment.

The Congress, of course, can do something about this situation. The Shrink Missouri decision does not require you to perpetuate the ridiculously low $1,000 contribution limit. You have the authority to raise that limit, and you should do so at least to keep up with inflation, if nothing else. That would make it easier for candidates, especially challengers, to mount a decent campaign. That would be a positive reform.

But beyond that, how do these core principles apply to the legislative proposals you will likely be considering this year?

1. Soft Money

The only political funding that can be subject to control is either contributions given directly to candidates and their campaigns (or partisan expenditures explicitly coordinated with campaigns) or communications that constitute express advocacy. These can be subject to source limitations (no corporations or unions or comparable entities) or amount restraints ($1,000, or $5,000 in the case of PACs). All other funding of political activity and communication is beyond presumptive constitutional control. That would include soft money activities by political parties.

Remember that soft money spending by political parties does not involve direct and express electoral support for federal candidates, even though it may exert some influence on the outcome of elections in the broadest sense of that term. Parties are both advocates for their candidates electoral success and issue organizations that influence the public debate. Get-out-the-vote drives, voter-registration drives, issue advocacy, policy discussion, grass-roots development and the like are all activities fundamentally protected by the First Amendment and engaged in by a wide variety of individuals and organizations. An issue ad by the ACLU criticizing an incumbent Mayor on police brutality is an example of soft money activity, in the broadest sense of that term, as is an editorial on the same subject in The New York Times. We need