U.S. Supreme Court Strikes Down Arizona’s “Clean Elections” Act

FOR IMMEDIATE RELEASE: June 27, 2011
CONTACT: Christina Walsh

Court Protects Free Speech and Political Participation

Arlington, Va.—In a victory for free speech and political participation, today the U.S. Supreme Court ruled that the “matching funds” provision of Arizona’s so-called “Clean Elections” Act is unconstitutional. The landmark case is Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett, argued by the Institute for Justice. Both IJ and the Goldwater Institute had challenged Arizona’s law in court.

“This case is a clear reminder to government officials that they may not coerce speakers to limit their own speech,” said Bill Maurer, an attorney with the Institute for Justice, who argued the case. “The Court’s decision today, like other recent decisions, makes clear that the First Amendment is not an exception to campaign finance laws; it is the rule.”

Maurer said, “As a result of today’s ruling, government can no longer use public funds to manipulate speech in campaigns to favor government-funded political candidates and turn the speech of traditionally funded candidates into the vehicle by which their entire political goals are undermined.”

Arizona’s “Clean Elections” Act manipulated election speech by favoring candidates who participated in the public funding system over those who chose to forego taxpayer dollars and instead raised funds through voluntary contributions. For every dollar a privately funded candidate spent above a government-dictated amount, the government gave additional funds to his opponent. The Act even matched funds spent by independent groups that supported privately funded candidates, thereby canceling out those independent groups’ speech.

According to the Court, “The direct result of the speech of privately financed candidates and independent expenditure groups is a state-provided monetary subsidy to a political rival. That cash subsidy, conferred in response to political speech, penalizes speech.”

The Court’s decision followed the reasoning of its 2008 decision in Davis v. FEC, in which it struck down unequal contribution limits for candidates. As the Court said in today’s decision, although the penalty imposed by Arizona’s law is different in some respects from the law in Davis “those differences make the Arizona law more constitutionally problematic, not less.”

For example, Arizona’s law matches not only candidate expenditures, but those of independent expenditure groups, such as the clients represented by the Institute for Justice. As the Court put it “the matching funds provision forces privately funded candidates to fight a political hyrdra of sorts. Each dollar they spend generates two adversarial dollars in response.”

At bottom, the matching funds provision was a bald attempt by the state to manipulate speech by forcing speakers to either trigger matching funds, change their message, or refrain from speaking. According to the Court, “forcing that choice . . . certainly contravenes ‘the fundamental rule of protection under the First Amendment, that a speaker has the autonomy to choose the content of his own message.’”

Moreover, the Court recognized that the end result of the matching funds was the total curtailment of political speech, for “If the matching funds provision achieves its professed goal and causes candidates to switch to public financing, . . . there will be less speech: no spending above the initial state-set amount by formerly privately financed candidates, and no associated matching funds for anyone. Not only that, the level of speech will depend on the State’s judgment of the desirable amount, an amount tethered to available (and often scarce) state resources.”

But as the Court strongly reiterated today, “the whole point of the First Amendment is to protect speakers against unjustified restrictions on speech, even when those restrictions reflect the will of the majority. When it comes to protected speech, the speaker is sovereign.”

In finding that matching funds substantially burden speech, Chief Justice Roberts pointed to research by University of Rochester political scientist David Primo, an expert in the case. Contrary to claims of Clean Elections’ backers, Dr. Primo’s original research “found that privately financed candidates facing the prospect of triggering matching funds changed the timing of their fundraising activities, the timing of their expenditures, and, thus, their overall campaign strategy” to avoid sending additional funds to opponents. The research is available at www.ij.org/images/pdf_folder/first_amendment/az_campaign_finance/expert-report-d_primo.pdf.

Today’s ruling is important not just for those states and municipalities that have similar “matching fund” systems. As Maurer explains, “The decision prohibits government from attempting to level the playing field among political speakers by creating disincentives for some and incentives for others. The clear message of the First Amendment to government is: Hands off!”

Although today’s ruling affects only the matching funds provision of the Clean Elections Act, there is a measure on the November 2012 Arizona ballot that would end the whole Clean Elections system by forbidding government support of candidate campaigns.

The Institute for Justice has litigated against this unconstitutional provision since 2004. IJ represents independent political groups the Arizona Free Enterprise Club’s Freedom Club PAC and the Arizona Taxpayers Action Committee as well as political candidates Senator Rick Murphy and former State Treasurer Dean Martin.

“Now that matching funds are no more, we do not have to censor our own speech,” said Steve Voeller of the Arizona Free Enterprise Club’s Freedom Club PAC. “As long as this law was in place, we knew that that speaking out in the election meant that our political opponents would be showered with government money. The more we spoke, the more politicians we opposed benefitted. Now we can actually speak freely.”

Shane Wikfors of the Arizona Taxpayers Action Committee said, “We have always believed that this law was meant to corral not only candidates but also voters by limiting political speech, intimidating organizations like ours and ultimately leading to a political outcome that was tainted by the state’s involvement. We are grateful that the Court protected political expression and struck down this unconstitutional state intervention.”

Rick Murphy said, “I’m grateful a majority of the justices recognized that the government shouldn’t try to ‘level the playing field’ of free speech with public money.”

Dean Martin said, “After nearly a decade, justice has prevailed. Now I am looking forward to November 2012, when the voters have a chance to get rid of the rest of taxpayer money that support politicians.”

Many observers anticipated the Court would strike down the matching funds program. IJ-Arizona Staff Attorney Paul Avelar explained, “It was pretty clear that matching funds violate the First Amendment rights of candidates, citizens and independent groups. The Ninth Circuit’s decision, now overturned, was so inconsistent with protections for free speech in campaigns that two other federal appellate courts almost immediately refused to follow it. In those cases, the courts struck down matching funds systems in Connecticut and Florida.”

“This is yet another example of an important judicial trend the Institute for Justice has advocated since our founding—that of judicial engagement,” said Institute for Justice President and General Counsel Chip Mellor. “The Court looked beyond the state’s claims about Clean Elections to its substance. It recognized that the real purpose of the law was not to eliminate corruption, but to level the playing field by manipulating speech. In the past, the courts have all too often rubberstamped the government’s claims about corruption in elections and upheld campaign finance laws that violated First Amendment rights. The Court seems to be moving in the other direction in campaign finance, and as a result, we are all freer.”

Arizona Free Enterprise Club’s Freedom Club PAC is just one of several challenges the Institute for Justice is litigating against restrictions on free speech by campaign finance laws. Mellor promised that “IJ will continue to fight against laws that reduce speech, silence disfavored speakers and viewpoints, and allow government to manipulate the marketplace of ideas thereby stripping away people’s right to govern themselves.”

Social science research shows that the purported benefits of public funding programs rarely materialize, while the costs to candidates and independent groups are real. Dr. Primo summed up the findings of the best available research in a paper for the Institute for Justice (available at http://www.ij.org/about/3466), and concluded, “Public funding is a program that promises much and delivers little.”

IJ recently won a landmark victory for free speech in federal court on behalf of SpeechNow.org, an independent group that opposes or supports candidates on the basis of their stance on free speech. IJ also won on behalf of a group of neighbors who were prosecuted by their political opponents under Colorado’s byzantine campaign finance laws merely for speaking out against the annexation of their neighborhood to a nearby town. In addition, IJ won recent victories for free speech in Florida when a federal judge struck down the state’s broadest-in-the-nation “electioneering communications” law and in Washington when it stopped an attempt to use the state’s campaign finance laws to regulate talk-radio commentary about a ballot issue.

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Arizona Free Enterprise Club
Arizona Taxpayers Action Committee
Institute for Justice – Arizona Chapter
Goldwater Institute

 

We’re off to the United States Supreme Court!

I’m heading off to Washington, D.C. this morning along with fellow Arizonans, Steve Voeller (Arizona Free Enterprise Club), State Senator Rick Murphy and former State Treasurer, Dean Martin. We are all plaintiffs or co-plaintiffs in a lawsuit against the State of Arizona’s Citizens Clean Election law. (I serve as the Treasurer of the Arizona-registered political action committee, Arizona Taxpayer’s Action Committee.) Our legal team consist of The Institute for Justice and The Goldwater Institute. Lead attorneys are Bill Maurer (IJ) and Clint Bolick (GI). Monday morning our case will be argued before the Justices while the four of us sit in the courtroom. Watch my Twitter feed (AZTaxpayerAct) and posts here on Sonoran Alliance. Here is some additional case information:

Goldwater Institute Case Background
Institute for Justice Litigation Backgrounder

Watch the YouTube video about the case.

Grassroots leaders push to reform city government

March 8, 2011
          
Hon. Russell Pearce
President
Arizona Senate
1700 W. Washington Street
Phoenix, AZ 85007

Hon. Kirk Adams
Speaker
Arizona House of Representatives
1700 W. Washington Street
Phoenix, AZ 85007

Re:  Municipal managed competition reform (SB 1322)

Dear President Pearce and Speaker Adams:

We are writing to you and to the members of your chambers to ask for your support in passing Senate Bill 1322, the municipal managed competition reform. 

SB 1322 would require Arizona cities with populations of 500,000 or more to open up city services to competition from the private sector.  The bill has three main policy objectives:

• Create jobs.  By requiring an open and competitive bidding process, SB 1322 will allow private businesses, public-private partnerships, and city employees to compete to provide services to city residents at the lowest prices compatible with the highest quality and most reliable performance.  Competitive bidding will help to moderate the costs of all productive factors, including labor, thus allowing thousands of new workers to be hired.  (For example, in Fiscal Year 2010, the City of Phoenix paid its average worker a salary, benefit, and overhead package of $97,707.  That was up from $83,231 in FY 2007—a 17-percent increase in just three short years, at a time when private-sector workers were suffering pay cuts and layoffs.  Even if we take out police officers and firefighters—who would be exempt from SB 1322—competitive labor costs could allow the Phoenix economy to employ one and a half times the current number of city workers, at the average private-sector salary-and-benefit level.) 

• Save money for city governments and city taxpayers.  By saving money on maintenance and operations costs, SB 1322 would free up scarce budget resources at a time when cities are facing tough budget constraints.  The combined savings in Phoenix and Tucson could soon be over $500 million a year—savings that could be passed on to taxpayers through rollback and repeal of recent tax and fee hikes.     

• Create opportunities for small business.  SB 1322 will help to inject hundreds of millions of dollars a year into the local economies in Phoenix and Tucson.  By requiring those cities to bid out services costing above $75,000, SB 1322 would create opportunities for dozens of small businesses to win contracts to perform city services. 

SB 1322 gives city councils opportunities to disapprove statements of work presented to those councils by city managers, and allows city councils to award longer-term contracts to independent contractors and public-private contractors that provide significant capital investments to the cities. 

SB 1322 includes several key protections for taxpayers and several provisions designed to ensure that contractors serve as faithful stewards of public resources:

• Transparency in bidding and performance.  SB 1322 stipulates that all bid-related communications and supporting materials submitted for consideration by the affected cities shall be public records, and mandates that the city managers and all city departments of affected cities shall conduct annual performance audits for contracted services, the cost of which must be accounted for and incorporated into all bids.  SB 1322 requires city managers of affected cities to seek independent performance audits every five years to evaluate the accuracy and completeness of the municipalities’ performance audits, and stipulates that all performance audits shall be public records.

• Protection of city resources.  SB 1322 requires that all bidders, public or private, must be able to provide bonding or other forms of security to adequately protect cities, and requires that all bidders maintain an adequate level of liability insurance consistent with the city risk management requirements.

• Public safety provisions.  SB 1322 requires that independent contractors have appropriate safety policies and procedures in place to protect the public and its employees, and requires that independent contractors perform background checks on employees performing any service for which the affected cities require background checks of municipal employees.

• Breach-of-contract protections.  SB 1322 mandates that independent contractors acknowledge that the affected cities may rightfully terminate and rescind contracts awarded to independent contractors in the event of material breaches of those contracts.

• Term limits for service contracts.  SB 1322 provides that service contracts may not have terms longer than five years, with three one-year renewals, before the related services must be submitted again to open and competitive bidding.

• Term limits for capitalization projects.  To address policy concerns voiced in committee, the proposed floor amendment to SB 1322 allows for longer terms to be awarded for contracts with independent contractors or public-private partnerships that involve significant capital investments.  But the proposed amendment also limits the terms of those contracts to the length of the amortization schedules prevailing in those industries.

Given the wide latitude allowed to city councils and city managers in designing service contracts, SB 1322 includes a taxpayer standing clause that allows taxpayers residing in the affected cities to bring special actions in court to enforce the protections afforded in the legislation.

Once the success of this managed competition reform has been demonstrated in Phoenix and Tucson, it is our firm hope that future Legislatures will expand the reform to include all of the municipalities and counties in Arizona, thus providing its protections to all Arizona taxpayers. 

Upon request, we will provide you with a copy of the draft floor amendment which incorporates changes suggested during the Senate committee hearings and changes suggested by stakeholders. 

Signed,

Sal DiCiccio     
Phoenix City Council     

Tom Jenney    
Americans for Prosperity – Arizona    

Lee Earle
Arizona 2012 Project

Steve Voeller    
Arizona Free Enterprise Club   

Vera Anderson   
Daisy Mountain Tea Party Patriots

Michael Davis
Deer Valley Tea Party

Farrell Quinlan       
National Federation of Independent Business – Arizona     

Wesley Harris
North Phoenix Tea Party

Honey Marques   
Tea Party Patriots of Scottsdale  

Marcus Huey    
Tea Party Patriots of Glendale

Shawnna L.M. Bolick
Grassroots Organizer