by Marcia Coyle
Whether Super PACs are really independent of candidates is debatable because a number of former campaign aides moved to create them and then used their funds on behalf of their former bosses. Federal law requires Super PACs to disclose their donors, and the Roberts Court, all except Justice Thomas, affirmed the constitutionality and wisdom of such disclosure and reporting requirements.
However, campaign donors can evade those reporting requirements—and they do—by channeling their money through a 501(c)(4) entity, a tax-exempt, non-profit organization which, under the tax law, must show that its primary purpose is to promote social welfare, not to engage in political campaigning. Those groups include, for example, the Republican Crossroads GPS, a 501(c)(4) entity, and the Super PAC American Crossroads.
By August 5, 2012, 718 groups organized as Super PACs reported total receipts of $319,137,071 and total independent expenditures of $181,176,796 in the 2012 election cycle, according to the non-partisan Center for Responsive Politics.
Together, the Citizens United and SpeechNow decisions created a dual system of financing campaigns. Individuals may contribute directly to candidates, but they are limited to donating a total of $5,000 in an election cycle in order, as the landmark Buckley v. Valeo said, to avoid quid pro quo corruption or the appearance of corruption. And yet, unlimited money may be contributed to Super PACs, and by mid-August 2012, a small group of the wealthiest Americans was dominating Super PAC donations.
Citizens United also contributed to a new dynamic among candidates—whether incumbents or neophytes—running for Congress, said the longtime congressional scholar Norman Ornstein of the American Enterprise Institute, author with Thomas Mann of It’s Even Worse Than It Looks: How the American Constitutional System Collided with the New Politics of Extremism. Candidates tell Ornstein that they now have to raise money not only for their own campaigns and the “team” (their political party) but even more funds to try to counteract the anonymous Super PAC that may parachute into their district to spend unlimited funds to oppose them.6
“Now, I’m all for everybody having a voice in campaigns, but a campaign, if it is a market where voters are consumers and they are trying to make a choice, the core of the dialogue should be between the candidates and those who are making a choice,” added Ornstein, a self-described “raging moderate.” If candidates are drowned out because others have superior monetary resources, he explained, “it’s like saying, ‘Everybody can speak but I’m going to put a gag on you, candidate, and give you a megaphone large enough that you can shatter everybody’s eardrums. Oh, and by the way, you’re both equal.’ That’s what Justice Kennedy helped to bring about in this case. I think it’s troubling, to say the least.”
Ornstein, who was present at the difficult birth of the 2002 McCain-Feingold campaign finance law, argues that what partly motivates the Roberts Court is “an enormously high level of naïveté” based on lack of experience in the real world. “I mean Kennedy as much as anybody,” he added. “He is one of these guys who goes to cocktail parties and dinners around town. He likes to be a part of the Washington fabric.”
With the departure of O’Connor, a former state legislator and elected state judge, Ornstein noted, the Court now has justices who have never been involved in politics. “They don’t know anything about the real world of campaigns. Never been involved in the legislative process. They don’t have any sense of the kind of pressures that exist in campaigns.”
The Citizens United decision, however, changed “every facet of our existence,” from greater name recognition to more donors, said David Bossie, the organization’s president. “We won bigger than we went for. At the end of the day, we got more than we ever hoped to accomplish by going to the Supreme Court. It’s so hard to get to the Supreme Court and so hard to get them to take your case, much less decide it. From about June 2004 up until January 21, 2010, we worked every day to get to that moment.”
Citizens United quickly became the Roberts Court’s most unpopular decision and the centerpiece of critics’ continuing claims that the Court was pro-business. It ranked with the Court’s Seattle-Louisville school decision and Second Amendment gun ruling as the most aggressive decisions yet of the conservative Court. It also would be a major focus in the confirmation hearings of the next nominee to the Court.
The Roberts Court, however, was not done with campaign finance limits after Citizens United. Before the term ended, the justices, in an aggressive and widely criticized act, temporarily blocked Arizona’s public campaign finance system until they could decide whether to hear a constitutional challenge to that system. The Court’s action came in the middle of an election in which a number of candidates for state offices were anticipating the system’s matching funds.
The Court would agree to hear the challenge in the following term. When that time came, it would not be Kennedy locking horns with Stevens on the First Amendment, but Roberts and the Court’s newest justice in what one scholar called “a doctrinal death match between two incompatible world views.”7
PART 4
HEALTH CARE
CHAPTER 13
“From day one, we always had the Supreme Court in the back of our minds. We didn’t want to get waylaid and some other case gets to the Supreme Court first.”
—Former Florida attorney general Bill McCollum, 2012
An exuberant crowd of about three hundred supporters filled the East Room of the White House shortly before noon on March 23, 2010. Just two months after the Roberts Court had jolted the political world with Citizens United, its blockbuster campaign finance ruling, the stakes in the upcoming midterm elections and beyond were about to soar again.
As Democratic congressional leaders, cabinet members, and friends hovered around him, President Barack Obama, using twenty-two different pens, signed into law the signature success of his domestic agenda—a success that many of his predecessors going back to Teddy Roosevelt had failed to achieve. The Patient Protection and Affordable Care Act (ACA for short, or Obamacare to its critics) had survived a contentious partisan battle in Congress to offer the hope of health insurance to 50 million uninsured Americans.
Seven minutes after Obama put down his pen, a lawyer in the office of Florida Republican attorney general Bill McCollum electronically filed the first lawsuit challenging the new law’s constitutionality in a federal district court in Pensacola, Florida.1 By the 5 pm close of business that day, three additional challenges had been lodged with federal courts in Richmond, Virginia; Lynchburg, Virginia; and Detroit, Michigan. They had discharged the opening volley in a fierce legal and political battle over the most sweeping social legislation in decades.
Besides their legal arguments, those separate lawsuits shared a common pedigree: the architects of the four challenges were some of the most conservative members of the Republican Party and associated organizations.
There was McCollum, leading ten other Republican state attorneys general whose numbers eventually would swell to twenty-six; Tea Party favorite Ken Cuccinelli, the attorney general of Virginia; Liberty University, founded by the evangelical fundamentalist Jerry Falwell and run by his son, Jerry Falwell Jr.; and the Thomas More Law Center, a conservative Christian legal organization created in 1999 by a prominent Roman Catholic and the founder of Domino Pizza, Tom Monaghan.
Regardless of the courts in which the lawsuits were filed, all four had one ultimate, planned destination—the U.S. Supreme Court—and one time frame: as fast as possible. Although the lawsuits raised similar constitutional challenges, each of their leaders, anticipating a historic showdown with the White House, wanted to have the case that the justices would review. However, conventional wisdom favored the suit by the Republican attorneys general because of its broad attack on the law; and this time, conventional wisdom was right.
Before becoming Florida’s top legal officer, Bill McCollum served in the U.S. House of Representatives for twenty years. He held a number of Republican leadership positions while representing much
of Orlando, and he was one of the House managers of President Bill Clinton’s impeachment trial in the Senate. In 2006, he was elected Florida’s attorney general. Slight in stature and with a calm, soft-spoken manner, McCollum jumped into the health care fight while the legislation was working its way through Congress. He was part of a working group of about twelve state attorneys general, led by South Carolina Republican attorney general Henry McMaster, who were outraged by the so-called Cornhusker kickback amendment, a proposal to give Nebraska $100 million to help pay for the bill’s Medicaid expansion.2 The amendment never made it into the final health care bill.
In September 2009, six months before health care reform became law, McCollum spotted an op-ed column in the Wall Street Journal by his former law firm partner, David Rivkin, and another lawyer, Lee Casey, both of whom were partners in a Washington, D.C., law firm. Rivkin and Casey had served in the administrations of Ronald Reagan and George H. W. Bush. Rivkin already was advising the Cornhusker group of state attorneys general when he and Casey wrote the Wall Street Journal article.
The op-ed piece targeted the proposed requirement that eligible Americans purchase health insurance—the so-called individual mandate.3 Although the mandate was a “hardy perennial” in health care reform proposals dating back to Hillary Clinton’s reform effort in the 1990s, it was unconstitutional back then and “profoundly unconstitutional” now, they argued. The two men had published an article in 1993 raising similar questions about the Clinton proposal. Setting up what would be key arguments in the coming attacks on the Obama administration’s health care law, they said the mandate could not be justified as an exercise of Congress’s power to regulate economic activity because there was no activity here to regulate.
“Simply being an American would trigger [the mandate],” they contended. And even though the Senate version of health care labeled the mandate a “tax,” it could not be based on Congress’s taxing power, they added, because the mandate was really a penalty beyond Congress’s taxing authority.
McCollum took the article and gave it to his legal staff with instructions to research the constitutional issues to see if there was a legitimate argument that the health care proposal was unconstitutional. “These are career people whose judgment I respect,” recalled McCollum. “I don’t know whether they’re Democrats or Republicans. And they said, ‘Yeah, we think he’s got a really good point about this, and here’s why, and secondly, we think there are other problems, like the Medicaid issue.’ Medicaid was a huge issue for us.” McCollum and other Republican attorneys general and governors believed the expansion of Medicaid coverage to low-income parents and other adults would impose a heavy financial burden on state budgets even though the Congressional Budget Office estimated that the federal government would cover nearly 93 percent of the cost during the first nine years and never less than 90 percent permanently.
In November of that year, McCollum, armed with his staff’s research, went to the Cornhusker group of attorneys general and proposed a lawsuit challenging the health care act if it became law. And McCollum wanted to take the lead. Most of the group said they would join in such a lawsuit. McCollum then began approaching other state attorneys general around the country.
“Most of the time was spent on trying to corral as many attorneys general as we could,” he recalled. “I actually thought we were going to get several Democrats at that point. We ended up getting one who later switched to Republican. I think I know the political pressure they felt.” He also brought Rivkin and Casey on board to help with the drafting of a lawsuit.
Rivkin has a “personal passion” for constitutional issues, said McCollum. Rivkin and Casey, friends since 1987, have written about or been involved in numerous constitutional cases and issues since their days in the Reagan and Bush administrations. They confess to “eating, drinking, and breathing” those issues whenever they are not handling their regular law practices. Rivkin, at first glance, appears to be something of a dandy, or at least eccentric, dressed in a purple-striped shirt, purple tie, red suspenders, and purple and green socks. His law office is crammed with antiques on his desk, shelves, and table; an antique rug warms the floor and old maps cover the walls. A chiming clock makes its presence known intermittently. However, he is neither dandy nor fool.
Accepting McCollum’s invitation, he and Casey tackled the first, immediate hurdle to bringing a lawsuit in federal court—what is known as standing to sue. A person filing a federal lawsuit must show that he or she has suffered an injury that the court can remedy in order to get into the front door. Although the state attorneys general could argue that the health care law injured them in their sovereign capacities as states, Rivkin and Casey wanted to be sure they had more than that to fight back an inevitable standing challenge by the federal government which, if successful, would kick them out of court.
And so they went hunting for individuals who could claim to be injured by the mandate to buy health insurance, and they also wanted to bring in some organization that could claim standing because its members would be injured by the mandate.
“We had to look for the best possible plaintiffs,” recalled Rivkin. “You need to find people genuinely injured, but you also need presentable people, people who look okay and, if need be, can go through a deposition. And then you need an association with sufficient language in its articles of incorporation and bylaws so [the lawsuit] will be germane to its purposes. This is not exciting, but it’s necessary.”4
They found their plaintiffs in two private individuals: Mary Brown, who owned a small auto repair business in Florida; and Kaj Ahlburg, a retired New York investment banker living in Washington State, as well as the National Federation of Independent Business, a small business association.
The question of where to file their lawsuit when the time came also topped their list of strategic issues. They looked for which federal circuit offered the best opportunity for success not only at the district—trial—court level, but also at the appellate level because someone was going to lose and file an appeal.
“There was a considerable amount of thinking on the front end about this,” recalled Rivkin. “But the Eleventh Circuit was really the one.” That circuit includes federal courts in Alabama, Florida, and Georgia, and its court of appeals is considered one of the most conservative courts in the country.
Because McCollum was the lead state attorney general, Florida became the venue; and the most logical district court was just down the street from his office in Tallahassee. However, logic does not always dictate legal strategy. The lawyers, instead, decided that the court in Pensacola—nearly two hundred miles away—would be their starting point.
“You look at the bench. You look at their opinions and the caseload,” explained Rivkin. “You go to the southern district [of Florida] and they’ve got all the drugs and thug cases and you get stuck there for a long time. And the idea was to punch through quickly.” Casey agreed, saying, “Pensacola did not have that caseload and it would be done quickly.” And, perhaps most important, they liked the bench: the three federal judges in Pensacola, they noted, were Reagan-Bush appointees.
“So much of the time between the moment this all got started and the time we filed the lawsuit was really developing strategy and trying to build the appropriate parties to the lawsuit,” said McCollum. “From day one, we always had the Supreme Court in the back of our minds. We didn’t want to get waylaid and some other case gets to the Supreme Court first.”
As McCollum increased his efforts to bring more state attorneys general to the lawsuit and held weekly conference calls with those already committed to it, two other key events occurred to support the coming legal challenges. The Tea Party movement, a loosely formed coalition of conservatives and libertarians angry over bank bailouts, rising budget deficits, stimulus spending, and big government in general, emerged seemingly overnight. It successfully backed Republican Scott Brown in the Massachusetts U.S. Senate primary race that November, and his subsequent el
ection dramatically changed the vote calculus for health care legislation in the Senate. Brown won the seat of the late Senator Ted Kennedy, which reduced the Democratic majority in the Senate by one critical vote. Defeating the president’s health care proposal soon became the Tea Party’s primary goal.5
The second key event occurred early that December. The Heritage Foundation, the conservative think tank that in 1989 proposed a health insurance individual mandate but later changed its position, published a “Legal Memorandum” on why the mandate was “unprecedented and unconstitutional.” The article was written by three lawyers: Randy Barnett, the libertarian law professor at Georgetown University Law Center; Nathaniel Stewart of the White & Case law firm; and Todd Gaziano of the Heritage Foundation.6
Barnett, who would rise to national prominence with his dogged campaign against the health care law, and the two other lawyers carefully laid out their arguments, complete with “talking points,” on why the mandate exceeded Congress’s powers to regulate interstate commerce and to tax for the general welfare. They created what would become the core argument against the mandate—an “activity-inactivity” distinction: Congress may regulate economic activity pursuant to its lawmaking powers under the Constitution’s commerce clause, but an individual’s decision to forgo health insurance was both inactivity and non-economic.
