Campaign-Finance Law Struck Down

A three-judge panel of the DC-based Second Circuit Court of Appeals struck down prohibitions on campaign spending by independent political groups, a move one observer warned “could lead to a more negative campaign season.” The rules, which were put into effect following the 2004 campaign, prohibited outside entities from the unfettered use of so-called “soft money” — money not used in direct advocacy for the election of a particular candidate or issue. These rules came in the wake of a huge wave of political spending by tax-exempt organizations recognized under IRS Code, Section 527, such as the Swift Boat Veterans for Truth and Club for Growth.

While some think that this ruling will largely benefit conservative groups given the recent overwhelming participation in the Tea Party movement, left-leaning groups also stand to prosper, as unions will once again be free to distribute their massive political war chest to a number of new and existing 527 groups such as Moveon.org. In fact, it was the pro-abortion group Emily’s List that filed the suit, claiming the rules restricted their First Amendment rights. We agree — on that point.

Another victory against current unconstitutional campaign-finance rules is pending in the Supreme Court, where the provision banning corporate purchases of political ads 30 days before a primary and 60 days before a general election is undergoing scrutiny through the case of “Hillary: The Movie.” We won’t comment on the merits of the film, but given the withering questioning from several justices, it’s possible that McCain-Feingold itself may be on the ropes.

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