Sue 'Em Back to the Stone Age: The RNC Files Suit to Reverse the Small Donor Revolution

10/18/2009 05:12 am ET | Updated May 25, 2011

To the millions of grassroots activists and fundraisers who came of age in the 2008 election, the year 2000 seems like the era of the dinosaurs - a time when the fundraising landscape was the fiercely guarded territory of corporate behemoths, whose massive footprints and titanic struggles for dominance made any grassroots level activity seem pathetically minuscule. But last week, a three-judge panel of the D.C. federal court heard oral arguments in a case where the RNC is seeking to turn back the clock to a time when Obama's much-vaunted "small-donor revolution" would have been drowned in a flood of largely unregulated corporate "soft money" donations.

Back in the bad old days of soft money (i.e., donations to political parties to which federal contribution regulations did not apply), neither party had much of an incentive to reach out to small donors. After all, why bother building an entire organizational infrastructure to solicit donations $10 at a time when Enron is thrilled to cut you a six- or seven-figure check? Political fundraising at this time was a noisome swamp of influence peddling - an era in which pharmaceutical companies wrote multimillion dollar soft money checks to kill the Generic Drug Bill in committee, a $1 million soft money contribution preceded a $280 million tax break for Amway, and a torrent of soft money fundraising scandals engulfed both major parties. A soft money donor - unconfined by the strict monetary limits on direct donations to candidates - could give hundreds of thousands of dollars to the party, and enjoy a range of perks including golf outings with Senators and nights in the Lincoln Bedroom.

Cue the meteor -- the Bipartisan Campaign Reform Act of 2002, popularly known as McCain-Feingold, which changed the climate of federal political fundraising by draining the swamp of huge corporate soft money donations. To continue the metaphor, the national parties were forced to adapt to this colder, drier fundraising landscape by turning to the grassroots, and especially to the small donors who had not warranted much attention in the soft money era. McCain-Feingold meant that small donors finally mattered in federal fundraising, and both parties built grassroots machines to harvest small donations. In 2004, the RNC took the initial lead in small donor fundraising, with Bush's bundler rodeo of "Pioneers," "Rangers," and "Mavericks."

But, of course, the small donor revolution went supernova with the 2008 Obama campaign, where hundreds of thousands of first-time donors clicked a button to donate $10, often on a repeat basis. In one of the proliferating ironies of this story, Sen. John McCain's signature achievement - the McCain-Feingold Act - was arguably the instrument that enabled the Obama small-donor fundraising landslide. Obama's fundraising strategy - social networking pages, virtual personalized fundraising thermometers, and blast emails urging supporters to give $5 to "Fight the Smears" - could only have flourished in a fundraising arena where unregulated soft money did not swamp "hard money" donations subject to strict contribution limits.

Now, apparently conceding that it cannot hope to match Obama's small-donor fundraising prowess, the RNC wants to change the rules of the game to let soft money flow back in. Just days after the election, on November 13, 2008, the RNC filed suit to overturn McCain-Feingold, putting poor John McCain in the unenviable position of having to defend his own law against a challenge by his own party.

The RNC's challenge is based on a radical new reading of Article I, Section 4 of the Constitution, which gives Congress the authority to regulate federal elections. The RNC takes an extremist view of this clause, arguing that Congress has the power to regulate only activities "unambiguously related to the campaign of a particular federal candidate" without violating the First Amendment. Thus, according to the RNC's reading, Congress would have no power to regulate political party expenditures on elections in which both federal and state candidates appear on the ballot, or to regulate other expenditures such as redistricting, which arguably does not relate to a particular election. For example, in New York in 2010, races for the governorship and for the U.S. Senate will take place in the same year. If the RNC prevails, a soft money donor could give $1 million to register Republican voters and to fund Republican get-out-the-vote efforts in New York, but the RNC could claim that those expenditures aren't "unambiguously related to the campaign" of the senatorial candidate.

It's obvious that this loophole would swallow the law, and the Supreme Court has consistently ruled that Congress has the power to combat corruption of federal elected officials. Indeed, the three-judge panel treated the RNC's legal arguments with well-deserved skepticism. But now, as with the hotly anticipated Citizens United case, which is scheduled for reargument after Labor Day, opponents of reform appear to be betting that the Supreme Court will change course and usher in a new era of campaign finance deregulation.

For campaign finance reformers, the RNC lawsuit is particularly exasperating because reformers had thought the soft-money fight had already been won. In the 2003 case McConnell v. FEC, a consolidated decision in which RNC had been a plaintiff, the Supreme Court had upheld the soft-money ban by a 5-4 vote, in which Justice Sandra Day O'Connor had written part of the majority opinion. Now that Justice Samuel Alito has replaced O'Connor, the RNC is taking another bite at the apple.

It's a bizarre time for the RNC to be arguing that it needs to be taking more - not less - money from corporate interests. Just last week, Public Citizen released a report showing that bailed-out banks have spent $6 million in federal campaign contributions since the election. If the soft money ban is lifted, we can expect these figures to increase exponentially, for special interest domination of federal politics to attain new heights, and for the small donor revolution to face extinction.

Monica Youn is an attorney at the Brennan Center for Justice at NYU School of Law.