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Limitations on candidate expenditures and other measures in Vermont’s election reform law are constitutional, the 2nd U.S. Circuit Court of Appeals ruled Wednesday. In a case that has brought national attention because of the severity of Vermont’s limits on spending, the 2nd Circuit said the restrictions are appropriate to further a significant governmental interest: the corrosive influence of money on elections and the political discourse. But the court, in Landell v. Vermont Public Interest Research Group, 00-9159, also struck down as unconstitutional a provision limiting out-of-state campaign contributions to 25 percent of all candidate contributions. The court said the limit is a violation of the First Amendment, adding that the state had “asserted no government interest sufficient to justify” it. The decision upholding limits on expenditures split the court, with Senior Judge Ralph K. Winter dissenting and Judges Chester J. Straub and Rosemary S. Pooler in the majority. “Fundamentally, Vermont has shown, without expenditure limits, its elected officials have been forced to provide privileged access to contributors IN EXCHANGE for campaign money,” Straub said. “Vermont’s interest in ending this state of affairs is compelling: the basic democratic requirements of accessibility, and thus accountability, are imperiled when the time of public officials is dominated by those who pay for such access with campaign contributions.” In its 66-page opinion, the court reversed the decision of U.S. District Judge William K. Sessions III of Vermont blocking enforcement of portions of the law limiting expenditures by candidates and capping contributions to candidates by political parties. “In particular, Act 64′s expenditure limitations serve to safeguard Vermont’s democratic process from the corrupting influence of excessive and unbridled fund raising,” Judge Straub said. The court affirmed Sessions’ finding that Act 64′s limit on contributions to candidates by individuals and political action committees to between $200 and $400 was constitutional. The contribution limitations, Straub said, “survive exacting scrutiny, including the treatment of a third party’s related expenditures as contributions and the application of contribution limitations to political party donations to candidates.” Straub set the stage for the rulings by quoting Vermont Gov. Howard Dean, who told the Vermont General Assembly in 1997, “As I’ve said before, money does buy access and we’re kidding ourselves and Vermonters if we deny it.” SWEEPING REFORMS The Assembly’s response was Act 64, one of the most sweeping election reforms for statewide and local candidates in the nation. The act limits gubernatorial candidates to spending $300,000, candidates for lieutenant governor $100,000, and all other statewide candidates to $45,000. State representative candidates from single districts can spend no more than $2,000, and incumbents are limited to spending no more than 85 percent or 90 percent of the caps. The first of three suits challenging the law was brought by the Vermont Right to Life Committee, and two suits followed by the Vermont Republican State Committee. All three alleged that the provisions infringed on their rights to free speech and political association. Following a 10-day bench trial in 2000, Judge Sessions upheld the bulk of the act’s provisions, but struck down as unconstitutional the expenditure limitations, the limitations on contributions by political parties to candidates and the restriction on contributions from out-of-state residents. Judge Straub said the question was whether “each of the provisions survives the ‘exacting scrutiny’ standard: the provision must be narrowly tailored to serve a sufficiently strong government interest.” And because expenditure limitations are more “severe” than limits on contributions, he said, they require closer scrutiny and “relatively speaking, the government interest must meet a more demanding test.” While the seminal case of Buckley v. Valeo, 424 U.S. 1 (1976) demands much more from the government in justifying expenditure limits, Straub said, the 2nd Circuit disagreed with Judge Sessions’ belief that Buckley categorically prohibits limits on campaign expenditures. And Vermont had adequately justified expenditure limits even under the exacting standard of the Buckley case, he said. The Assembly had demonstrated, he said, that campaigns are too expensive, that candidates spent too much time fund raising and were forced to give preferred access to contributors, and that the current system had “hindered the robust debate of issues, candidate interaction with the electorate, and public involvement and confidence in the electoral process.” And while contribution limits may address part of the problem, he said, they do not address the “noxious effects of an unrelenting drive for campaign funds.” On campaign contribution limits, Straub said the law was narrowly tailored to the government’s interest — fighting corruption. Judge Sessions had upheld limitations on contributions to and by political action committees (PACS) and political parties, except for those that political parties make to their own candidates. But the 2nd Circuit upheld all of the limitations, saying it rejected Sessions’ “conclusion that political parties cannot be prohibited from contributing to candidates in excess of generally applicable limitations.” In addition to vacating Sessions’ injunction of enforcement against the expenditure limitations and the limits on contributions by political parties to candidates, the court also vacated other rulings by the judge and remanded the case for further proceedings on the constitutionality of regulating contributions by the Vermont Right to Life Committee and limitations on transfers of funds from national to state political party affiliates. In his 88-page dissent, 2nd Circuit Senior Judge Ralph K. Winter disagreed with the majority on two of Act 64′s provisions, its “limits on expenditures, including related expenditures, and its restrictions on fund raising by state, county and local committees of a political party.” Judge Winter began by stating that the Buckley Court “held that government may not limit campaign expenditures by candidates for electoral office.” “Act 64′s limits on expenditures by candidates violate the First Amendment because they limit political speech … for no permissible purpose, and entrust those who enforce the law with unfettered, and unconstitutional, discretion to determine what acts of political advocacy are permitted and prohibited,” he said. “Moreover, the treatment of a contribution to a local party affiliate — be it state, county, or local — as a contribution to all affiliates violates both freedom of speech and freedom of association.” Winter said that on the other issues, he concurred with his colleagues on the result. Assistant Attorneys General Timothy B. Tomasi, Richard A. Johnson Jr. and Christopher G. Jernigan represented the defendants. Brenda Wright of the National Voting Rights Institute represented the Vermont Public Interest Research Group and several other Vermont organizations. James Bopp Jr., of Bopp, Coleson & Bostrom in Terre Haute, Ind., represented the Vermont Right to Life Committee and the Vermont Republican State Committee.

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