Supreme Court Upholds 'Soft Money' Limits WASHINGTON — A sharply divided Supreme Court (search) upheld key features of the nation's new law intended to lessen the influence of money in politics, ruling Wednesday that the government may ban unlimited donations to political parties.
Those donations, called "soft money" and totaling hundreds of millions of dollars,had become a mainstay of modern political campaigns, used to rally voters to the polls and to pay for sharply worded television ads.
Congress may regulate campaign money to prevent the real or perceived corruption of political candidates, the court ruled in a 5-4 decision. That goal and most of the rules Congress drafted to meet it outweigh limitations on the free speech of candidates and others in politics, the majority said.
• Raw Data: Opinion, McConnell v. FEC (pdf)
At the same time, the court said the 2002 law will not stop the flow of campaign cash.
"We are under no illusion that (the law) will be the last congressional statement on the matter. Money, like water, will always find an outlet. What problems will arise, and how Congress will respond, are concerns for another day," Justices John Paul Stevens and Sandra Day O'Connor wrote for the majority.
The court also voted 5-4 to uphold restrictions on political ads in the weeks before an election. The television and radio ads often feature harsh attacks by one politician against another or by groups running commercials against candidates.
Rep. Marty Meehan (search), D-Mass., a co-author of the law, called the decision a "major victory for American democracy." He acknowledged the law won't stop all forms of abuse in the system, but it ends the era when "special interest groups could control the national political parties and underwrite federal campaigns by writing unlimited checks."
The justices struck down only two provisions of the Bipartisan Campaign Reform Act (search) — a ban on political contributions from those too young to vote and a limitation on some party spending that is independent of a particular candidate.
The law hasn't stopped the flow of big money, but it has changed its course. In the months since the law took effect, several partisan interest groups have popped up to collect corporate, union and unlimited individual donations to try to influence next year's elections, including several on the Democratic side focused on the presidential race.
Supporters of the new law said the donations from corporations, unions and wealthy individuals capitalized on a loophole in the existing, Watergate-era campaign money system.
"Soft money" is a catchall term for money that is not subject to existing federal caps on the amount individuals may give and which is outside the old law prohibiting corporations and labor unions from making direct campaign donations.
Federal election regulators had allowed soft money donations outside those restrictions so long as the money went to pay for get-out-the-vote activities and other party building programs run by the political parties.
Soft money allowed the three national Democratic Party committees to match their GOP rivals nearly dollar-for-dollar on get-out-the-vote and issue ad resources in the 2002 election.
The Democratic committees raised about $246 million in soft money in the last election cycle, compared with $250 million for the Republicans.
Supporters of the new law said that in practice, soft money was funneled to influence specific races for the House, Senate or the White House, and that donors, parties and candidates all knew it.
In addition to Stevens and O'Connor, Justices David Souter, Ruth Bader Ginsburg and Stephen Breyer signed the main opinion. Chief Justice William H. Rehnquist and Justices Antonin Scalia, Anthony Kennedy and Clarence Thomas dissented on most issues. Swing voter Kennedy struck a compromise on one portion of the law. He said he would vote to uphold a soft money ban only as it applies to federal candidates and officeholders.
The majority's ruling bars candidates for federal office, including incumbent members of Congress or an incumbent president, from raising soft money.
The majority also barred the national political parties from raising this kind of money, and said their affiliates in the individual states may not serve as conduits for soft money.
Without soft money, politicians and political parties may only take in donations that are already allowed in limited amounts, such as a private individual's small re-election donation to his or her local member of Congress.
That means no more huge checks from wealthy donors, and no contributions from the treasuries of corporations or labor unions.
The Supreme Court's 300-page ruling on the 2002 campaign finance overhaul settles legal and constitutional challenges from both the political right and the left. Although the reform effort was passed by Congress and signed into law by President Bush, many politicians and others in the business of politics were leery of it.
The law is often known as "McCain-Feingold" — named for its chief Senate sponsors, Sens. John McCain (search), R-Ariz., and Russ Feingold (search), D-Wis. McCain built his maverick 2000 presidential campaign largely around the assertion that the old system of political money laws was full of holes.
The new rules have been in force during the early stages of preparation for the 2004 elections for president and Congress. The high court ruling means those rules remain largely untouched as the political seasons heats up. The first delegate-selection contests are just weeks away, in January.
A lower court panel of federal judges had issued its own, fractured ruling on the new law earlier this year, but the Supreme Court got the last word.
The justices cut short their summer vacation to hear an extraordinary four hours of oral arguments on the issue in early September. The court's regular term began a month later.
The case marked the court's most detailed look in a generation at the complicated relationships among those who give and receive campaign cash. The case also presented a basic question about the wisdom of the government policing political give and take.
The court has given government an extensive role in the area on grounds that there is a fundamental national interest in rooting out corruption or even the appearance of it. That concern justifies limitations on the freedom of speech, the court has said.
The case is McConnell v. FEC, 02-1674.
