Argued and Submitted April 4, 2002 — Seattle, Washington.
PAEZ, Circuit Judge:
In 1996, the Alaska legislature enacted sweeping reforms to its campaign finance system. Corruption and the appearance of corruption had led to low voter turnout and widespread disillusionment with the electoral system. Determined to close loopholes left open by previous attempts to establish meaningful reform, the new act restricted not only contributions to candidates, but also contributions to political parties, including "soft money." Unsurprisingly, these new restrictions have been hotly contested in both state and federal courts.
Although the term "soft money" is often used interchangeably with the phrase "not for the purpose of influencing the election or nomination of a candidate," as we hold today, political parties frequently spend soft money precisely to influence the election or nomination of a candidate. This practice creates a linguistic conundrum in which contributions that are not for the purpose of influencing elections are in fact used to influence elections. In discussing soft money throughout this opinion, we treat it as all money contributed to a political party not expressly earmarked to influence the nomination or election of a candidate.
Party activists Kenneth P. Jacobus, Wayne Ross, and Scott A. Kohlhaas filed suit under 42 U.S.C. § 1983 to challenge the constitutionality of the new limitations on contributions to political parties. The district court ruled that Alaska's $5,000 limit on individual contributions and its ban on corporate and labor union contributions were unconstitutional insofar as they applied to contributions that were not for the purpose of influencing the nomination or election of particular candidates (soft money). The district court also held unconstitutional Alaska's $5,000 limit on the value of professional services that individuals might volunteer to political parties. Alaska appeals the district court's grant of summary judgment against it.
We hold that these issues are still justiciable, despite recent changes in Alaska
We affirm, however, the district court's ruling striking down as unconstitutional Alaska's limit on the value of volunteer professional services that an individual may donate to a political party. By including donations of professional services in the definition of contribution that is subjected to the $5,000 limit, Alaska restricted First Amendment association rights in a way that was different in kind, not just different in degree, from the contribution limits that the Supreme Court found constitutional in Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (per curiam). Although this provision does not operate as an absolute bar to an individual's association with a party through volunteering, we nonetheless hold that Alaska failed to demonstrate that there is an actual danger or appearance of corruption if contributions of volunteer professional services go unrestricted.
Prior to 1996, Alaska campaign finance law consisted of reporting requirements and limitations on certain expenditures and on direct contributions to candidates. 1974 Alaska Sess. Laws 76 § 1 codified at former Alaska Stat. § 15.13.010 et seq. Notwithstanding these restrictions, by 1996 there was considerable concern regarding actual and apparent corruption in Alaska politics, and, as concluded by the Josephson Institute in a report commissioned by the Alaska State Senate, "the level of trust and confidence in the integrity of the legislature is disturbingly low." As a result, in 1996 the Alaska legislature enacted a comprehensive reform of Alaska's campaign finance laws, Senate Bill 191, 1996 Alaska Sess. Laws 48 ("the Act"), declaring, "It is the purpose of this Act to substantially revise Alaska's election campaign finance laws in order to restore the public's trust in the electoral process and to foster good government." 1996 Alaska Sess. Laws 48 § 1(b).
As originally enacted, the Act created an interlocking system designed to restrict the influence of money on politics and prevent easy evasion of the barriers set up by the reforms. First, it banned expenditures advocating the support or defeat of a candidate by corporations, unions, and other business associations.
Most significant for purposes of this appeal were the Act's restrictions on donations to political parties, which limited contributions from individuals to not more than $5,000 per year, Alaska Stat. § 15.13.070(b)(2) (1998) (amended 2002), and banned contributions by corporations, business associations, and unions, Alaska Stat. § 15.13.074(f) (1998).
In 1997, major aspects of the Act were challenged in Alaska state court, eventually reaching the Alaska Supreme Court. In State v. Alaska Civil Liberties Union (Ak-CLU), the Alaska Supreme Court issued a
This suit involves a much narrower challenge, focusing on provisions of the Act that regulate contributions to political parties. The plaintiffs in this action are lawyers and party activists who regularly volunteer their services to specific political parties, and law firms wholly owned by the individual plaintiffs (jointly "Jacobus" or "Plaintiffs"). Jacobus brought this suit against the State of Alaska and the Alaska Public Offices Commission (together "Alaska"), challenging two aspects of the Act. First, he claimed that the Act did not limit, or, in the alternative, that it could not constitutionally limit, either individual or corporate soft money contributions to political parties. Secondly, Jacobus challenged the inclusion of volunteer professional services in the definition of contribution, which subjected such volunteer services to the $5,000 limit on individual contributions and the prohibition on corporate contributions.
Jacobus initiated this suit in 1997, but the district court stayed the case pending the outcome of AkCLU.
The district court granted summary judgment for Jacobus. In its first order, issued April 10, 2001, the district court found that Alaska's restrictions on contributions to political parties donated by individuals were unconstitutional to the extent that they limited donations made to a political party "for a purpose other than influencing the nomination or election of a candidate."
The court initially upheld the ban on corporate contributions to candidates and political parties in its entirety. Id. at 892-93. But in response to Jacobus's motion to amend or clarify the judgment, the district court issued an amended order on June 6, 2001. Jacobus v. Alaska, 182 F.Supp.2d 893 (D.Alaska 2001). In this second order, the district court determined that, like the limit on individual contributions to parties, the ban on corporate contributions was also unconstitutional to the extent that it prohibited soft money contributions. Id. at 895-97.
Alaska timely appealed the amended judgment.
Thus, we must decide three questions. First, is the present challenge to Alaska's now-repealed limitation on soft money contributions to political parties from individuals justiciable, and if so, is it constitutional? Second, is a ban on soft money contributions to political parties from corporations constitutional? Third, is the challenge to Alaska's now-repealed restriction on the provision of volunteer professional services justiciable, and if so, is the provision constitutional?
We first address the question of whether, in light of the Alaska Legislature's repeal of two out of the three challenged provisions of the Act, this action is moot with regard to these provisions. A case is moot "when the issues presented are no longer `live' or the parties lack a legally cognizable interest in the outcome." Clark v. City of Lakewood, 259 F.3d 996, 1011 (9th Cir.2001). "`Past exposure to illegal conduct does not in itself show a present case or controversy ... if unaccompanied by any continuing, present adverse effects.'" Renne v. Geary, 501 U.S. 312, 320-21, 111 S.Ct. 2331, 115 L.Ed.2d 288 (1991) (quoting O'Shea v. Littleton, 414 U.S. 488, 495-96, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974)). However, dismissal of a case "on grounds of mootness would be justified only if it were absolutely clear that the litigant no longer had any need of the judicial protection that it sought." Adarand Constructors, Inc. v. Slater, 528 U.S. 216, 224, 120 S.Ct. 722, 145 L.Ed.2d 650
Our circuit, perhaps following the lead of the Supreme Court, has issued somewhat confused pronouncements regarding mootness generally, and mootness in the context of repealed or amended statutes in particular. Thus, we have stated "`if a challenged law is repealed or expires, the case becomes moot.'" Smith v. Univ. of Washington, 233 F.3d 1188, 1195 (9th Cir.2000) (quoting Native Vill. of Noatak v. Blatchford, 38 F.3d 1505, 1510 (9th Cir.1994)); see also Barilla v. Ervin, 886 F.2d 1514, 1521 (9th Cir.1989), overruled on other grounds by Simpson v. Lear Astronics Corp., 77 F.3d 1170, 1174 (9th Cir.1996). However, we have also decreed that in cases involving the amendment or repeal of a statute, "mootness ... is not a jurisdictional issue; rather, we may continue to exercise authority over a purportedly moot case where the balance of interests favors such continued authority." Coral Constr. Co. v. King County, 941 F.2d 910, 927 (9th Cir.1991). As we have explained, "repeal of the objectionable language [does] not deprive the federal courts of jurisdiction to decide the constitutional question because of the well-settled principle that a defendant's voluntary cessation of a challenged practice does not deprive a federal court of its power to determine the legality of the practice." Carreras v. City of Anaheim, 768 F.2d 1039, 1047 (9th Cir.1985) (internal quotation marks omitted); see also City of Mesquite v. Aladdin's Castle, Inc., 455 U.S. 283, 289, 102 S.Ct. 1070, 71 L.Ed.2d 152 (1982) ("[Revision of a statute] is a matter relating to the exercise rather than the existence of judicial power." (emphasis added)); id. at 289 n. 10, 102 S.Ct. 1070 ("Mere voluntary cessation of allegedly illegal conduct does not moot a case; if it did, the courts would be compelled to leave the defendant free to return to his old ways." (alterations and internal quotation marks omitted) (quoting United States v. Concentrated Phosphate Exp. Ass'n., 393 U.S. 199, 203-04, 89 S.Ct. 361, 21 L.Ed.2d 344 (1968))). These concerns are of particular force in a case like the present one, in which the "voluntary cessation" occurred only in response to the district court's judgment. See Coral Constr., 941 F.2d at 928 (noting that likelihood of reenactment is a significant factor in the evaluation of mootness); see also Smith, 233 F.3d at 1194 (indicating that mootness is less appropriate when repeal occurred due to the "prodding effect" of litigation).
Thus, although we have an independent obligation to decide whether we have jurisdiction over a case, Clark, 259 F.3d at 1011, mootness is not jurisdictional in cases such as this. Ordinarily, the "party moving for dismissal on mootness grounds bears a heavy burden." Coral Constr., 941 F.2d at 927-28; see also Friends of the Earth, 528 U.S. at 190, 120 S.Ct. 693 (noting that although it is the plaintiff's affirmative burden to establish standing, "a defendant claiming that its voluntary compliance moots a case bears the formidable burden of showing that it is
We need not rely upon the parties' position, however, because even if we were to hold the parties to inflexible compliance with the dictates of mootness, the matter is not moot. Despite superseding events, an issue is not moot if there are present effects that are legally significant. Smith, 233 F.3d at 1194 (requiring that "interim relief or events have completely and irrevocably eradicated the effects of the alleged violation" (emphasis added)); see also Norman v. Reed, 502 U.S. 279, 288, 112 S.Ct. 698, 116 L.Ed.2d 711 (1992); Reich v. Local 396, Int'l Bhd. of Teamsters, 97 F.3d 1269, 1272 n. 5 (9th Cir.1996). Here, Plaintiffs will likely experience prosecution and civil penalties for their past violations of the repealed provisions of the Act. Under section 11.81.200 of the Alaska Statutes, an individual can be prosecuted for past violations of a criminal statute despite its subsequent repeal or amendment.
Our justiciability inquiry does not end with the conclusion that the case is not moot. As is frequently the case, we must investigate the question of ripeness in addition to that of mootness. Because the existence of a live case or controversy is dependent upon the likelihood of future prosecution for past violations, we must explore whether the case is currently ripe for decision. The requirement of ripeness is intended to ensure that "issues presented are `definite and concrete, not hypothetical or abstract.'" Thomas v. Anchorage Equal Rights Comm'n, 220 F.3d 1134, 1139 (9th Cir.2000) (en banc) (quoting Railway Mail Ass'n v. Corsi, 326 U.S. 88, 93, 65 S.Ct. 1483, 89 L.Ed. 2072 (1945)).
While a generalized possibility of prosecution does not satisfy the ripeness requirement, a genuine threat of imminent prosecution does. City of Auburn v. Qwest Corp., 260 F.3d 1160, 1172-73 (9th Cir.2001); see also Babbitt v. United Farm Workers Nat'l Union, 442 U.S. 289, 298, 99 S.Ct. 2301,
First, Plaintiffs have gone far beyond the requirement that they articulate a concrete plan to violate the law, and instead have actually engaged in the illegal behavior at issue. Secondly, while the letter sent to Jacobus does not threaten to initiate enforcement proceedings in so many words, it indicates that APOC is only awaiting the outcome of the litigation to initiate such proceedings. Finally, Alaska alleges that APOC has a general policy of seeking civil fines in response to violations of Alaska campaign finance law. See also, e.g., Definition of Contribution and Reporting Requirements, APOC Advisory Opinion AO97-08-CD (February 27, 1997) ("The Commission views a failure to report such information as a serious violation, and has assessed significant penalties when such activities were not reported correctly or promptly."); Latchem v. State, 1999 WL 587238 (Alaska Ct.App.1999) (unpublished) (affirming in part and reversing in part a defendant's criminal convictions for making campaign contributions in the name of another); VECO Int'l, Inc. v. Alaska Pub. Offices Comm'n, 753 P.2d 703 (Alaska 1988) (reviewing civil penalties for failure to comply with reporting requirements). Because Plaintiffs have already violated the laws in question and it appears that they will be subjected to either criminal or civil penalties for doing so, they face "a realistic danger of sustaining a direct injury as a result of the statute's operation or enforcement" and hence the injury is not "too imaginary or speculative to support jurisdiction." Auburn, 260 F.3d at 1171 (internal quotation marks omitted). As the issues are purely legal and the likelihood of prosecution creates hardship to the parties, the case also satisfies the prudential aspects of ripeness, and is fit for review. See San Diego County Gun Rights Comm. v. Reno, 98 F.3d 1121, 1132-33 (9th Cir.1996); see also Thomas, 220 F.3d at 1141-42.
ALASKA'S REGULATION OF CONTRIBUTIONS OF SOFT MONEY
We review de novo the district court's grant of summary judgment. Delta Sav. Bank v. United States, 265 F.3d 1017, 1021 (9th Cir.2001). We agree with the district court that there are no genuine issues of material fact, Jacobus, 182 F.Supp.2d at 884, and thus, the only question before us is whether the district court correctly applied the relevant substantive law. Delta Sav. Bank, 265 F.3d at 1021.
We hold that the burden on individuals' association rights that resulted from Alaska's soft money limits was justified by the dangers of corruption and the appearance of corruption posed by large donations to political parties, and by the danger that soft money donations to parties would be used to circumvent hard money limits. Although the district court correctly concluded that the Act's contribution limits cover soft money contributions, it erred in holding that it was unconstitutional to limit such contributions.
Additionally, we uphold Alaska's prohibition on corporate soft money contributions.
A. STATUTORY INTERPRETATION
Jacobus argues that, by its terms, the Act does not regulate soft money at all. He points to the definition of contribution in the text of section 15.13.400(3)(A), which states that a contribution is a donation "that is made for the purpose of influencing the nomination or election of a candidate." In interpreting a state statute, we regard the construction rendered by the state's highest court as authoritative. Russell v. Gregoire, 124 F.3d 1079, 1090 (9th Cir.1997). "If there is no such decision available, then we must predict how the highest state court would decide the issue...." S.D. Myers, Inc. v. City & County of San Francisco, 253 F.3d 461, 473 (9th Cir.2001).
Here, the Alaska Supreme Court has interpreted the Act, and has construed it to include restrictions on contributions of soft money. In AkCLU, the Alaska Supreme Court stated that although "federal law allows corporations and other entities to make unlimited contributions to political parties to use in general party activities," 978 P.2d at 608, "[t]he Act, by contrast, bans such contributions," id. at 608 n. 67. This statement was not accompanied by detailed reasoning, but it is clear and does not readily admit of alternate interpretations.
The district court found that the Alaska Supreme Court had not considered the question of whether the Act regulated contributions for general party activities. Instead, the district court declared that, in making the statement quoted above, the Alaska Supreme Court was "simply noting the difference in the laws as they pertained to bans on [corporate] independent expenditures." Jacobus, 182 F.Supp.2d at 885 n. 4. We disagree with this assessment of the Alaska Supreme Court's statement.
B. CONSTITUTIONALITY OF LIMITS ON INDIVIDUALS' SOFT MONEY CONTRIBUTIONS
Having concluded that the Act's contribution limits extend to soft money contributions, we now uphold the constitutionality of these limits and reverse the district court's grant of summary judgment in favor of Jacobus.
1. First Amendment Principles Underlying Restrictions on Contributions of Soft Money
Campaign finance reform presents "a case where constitutionally protected interests lie on both sides of the legal equation." Id. at 400, 120 S.Ct. 897 (Breyer, J., concurring). On the one hand, "[t]he First Amendment affords the broadest protection to [discussion of public issues and debate on the qualifications of candidates] in order to assure [the] unfettered interchange of ideas." Buckley, 424 U.S. at 14, 96 S.Ct. 612 (internal quotation marks omitted). At the same time, a failure to regulate the arena of campaign finance allows the influence of wealthy individuals and corporations to drown out the voices of individual citizens, producing a political system unresponsive to the needs and desires of the public, and causing the public to become disillusioned with and mistrustful of the political system. See Nixon, 528 U.S. at 390, 120 S.Ct. 897.
In Buckley, the Court explained that campaign finance reform affects two different rights protected by the First Amendment: the right of expression (a speech right) and the right of association. Limitations on contributions affect the right of association, but unlike expenditure limits, do not primarily implicate the contributor's speech rights. Contribution limits do not significantly burden speech because the communicative content of the act of contributing is largely symbolic, and therefore is not diminished by limits on the amount of the contribution:
Buckley, 424 U.S. at 21, 96 S.Ct. 612.
Contribution limits do, however, burden the right of association. Id. at 24, 96 S.Ct. 612 ("[T]he primary First Amendment problem raised by ... contribution limitations is their restriction of one aspect of the contributor's freedom of political association."). As the Court explained:
Id. at 22, 96 S.Ct. 612. The Court noted, however, that the Act's contribution limits "leave the contributor free to become a member of any political association and to assist personally in the association's efforts on behalf of candidates." Id.
In contrast, limitations on expenditures "represent substantial rather than merely theoretical restraints on the quantity and diversity of political speech" as well as association. Id. at 19, 96 S.Ct. 612. Because expenditure limits implicate both speech and association rights, they are subject to more rigorous restriction.
2. The Appropriate Standard for Evaluating Restrictions on Contributions of Soft Money
As a result of the foregoing analysis, the Court has indicated that the appropriate constitutional standard for limits on contributions is somewhat more relaxed than that applied to limits on expenditures. See FEC v. Beaumont, ___ U.S. ___, ___, 123 S.Ct. 2200, 2210, 156 L.Ed.2d 179 (2003) ("[R]estrictions on political contributions have been treated as merely `marginal' speech restrictions subject to relatively complaisant review under the First Amendment...."); Nixon, 528 U.S. at 387, 120 S.Ct. 897 ("We have consistently held that restrictions on contributions require less compelling justification than restrictions on independent spending." (quoting FEC v. Mass. Citizens for Life, Inc., 479 U.S. 238, 259-60, 107 S.Ct. 616, 93 L.Ed.2d 539 (1986))); Cal. Med. Ass'n v. FEC, 453 U.S. 182, 196, 101 S.Ct. 2712, 69 L.Ed.2d 567 (1981). Although freedom of association is a fundamental right, it is not absolute. See, e.g., Buckley, 424 U.S. at 25, 96 S.Ct. 612. Thus, the standard applied by the Court in assessing the constitutionality of contribution limits established that "[e]ven a `significant interference with protected rights of political association' may be sustained if the State demonstrates a sufficiently important interest and employs means closely drawn to avoid unnecessary abridgment of associational freedoms." Id. (quoting Cousins v. Wigoda, 419 U.S. 477, 488, 95 S.Ct. 541, 42 L.Ed.2d 595 (1975)) (some internal quotation marks omitted).
The Court has applied this standard in every case in which it has considered restrictions on contributions. See, e.g., Beaumont, ___ U.S. at ___, 123 S.Ct. at 2210; Colorado Republican II, 533 U.S. at 456, 121 S.Ct. 2351; Nixon, 528 U.S. at 387-88, 120 S.Ct. 897; Buckley, 424 U.S. 1, 96 S.Ct. 612. In fact, in Colorado Republican II the Court specifically rejected the contention that party contributions merited a stricter standard of scrutiny, concluding that "[w]e accordingly apply to a party's coordinated spending limitation the same scrutiny we have applied to the other political actors, that is, scrutiny appropriate for a contribution limit." 533 U.S. at 456, 121 S.Ct. 2351; see also McConnell v. FEC, No. 02-582, slip op. by Leon, J., at 13-15 (D.D.C. 3-judge court 2003) (stating the holding of the court); id., slip op. by Kollar-Kotelly, J., at 489-90; but see id., slip op. by Henderson, J., at 258-59.
Jacobus has wholly failed to explain why this framework does not apply here. Thus, limitations on contributions of soft money will be sustained as long as the state demonstrates a sufficiently important governmental interest and the limits employed are closely tailored to achieve that interest.
3. Sufficiently Important Government Interests
As the following discussion establishes, preventing corruption, avoiding the appearance of corruption, and averting the circumvention of provisions intended to combat corruption are sufficiently important governmental interests to justify Alaska's former limits on soft money contributions. There is ample support for this conclusion in both recent case law and in the practical realities of modern party fundraising.
Despite criticism in the literature and by some courts,
The Court originally emphasized the quid pro quo aspect of corruption. See, e.g., id. at 497, 105 S.Ct. 1459 ("Corruption is a subversion of the political process. Elected officials are influenced to act contrary to their obligations of office by the prospect of financial gain to themselves or infusions of money into their campaigns."); Buckley, 424 U.S. at 26-27, 96 S.Ct. 612 (explaining that because contributions are necessary to conduct a successful campaign, "[t]o the extent that large contributions are given to secure a political quid pro quo from current and potential office holders, the integrity of our system of representative democracy is undermined"). However, the Court's definition of corruption has since expanded to include more subtle and insidious types of inappropriate influence. Thus, the Court subsequently explained that "[i]n speaking [in Buckley] of `improper influence' and `opportunities for abuse' in addition to `quid pro quo arrangements,' we recognized a concern not confined to bribery of public officials, but extending to the broader threat from politicians too compliant with the wishes of large contributors." Nixon, 528 U.S. at 389, 120 S.Ct. 897; see also Colorado Republican II, 533 U.S. at 441, 121 S.Ct. 2351 (defining corruption broadly as "not only  quid pro quo agreements, but also undue influence on an officeholder's judgment").
The Court has recognized three means by which the danger of corruption can have a destructive impact on the political system. First, corruption itself undermines democracy when political victories occur not because of the wishes of the public or the independent judgment of the people's elected representatives, but because of the influence of money. Nixon, 528 U.S. at 389, 120 S.Ct. 897; Buckley, 424 U.S. at 26-27, 96 S.Ct. 612. Second, the appearance of corruption may cause "confidence in the system of representative Government ... to be eroded to a disastrous extent." Nixon, 528 U.S. at 389, 120 S.Ct. 897 (quoting Buckley, 424 U.S. at 27, 96 S.Ct. 612); see also id. at 388, 120 S.Ct. 897 (noting further that the "impact of the appearance of corruption stemming from public awareness of the opportunities for abuse inherent in a regime of large individual financial contributions" is "[o]f almost equal concern" to corruption itself). The Court cautioned:
Id. at 390, 120 S.Ct. 897 (quoting United States v. Miss. Valley Generating Co., 364 U.S. 520, 562, 81 S.Ct. 294, 5 L.Ed.2d 268 (1961)). Third, and most recently, the Court has also recognized that "circumvention is a valid theory of corruption." Colorado Republican II, 533 U.S. at 456, 121 S.Ct. 2351; see also Cal. Med. Ass'n, 453
Thus, Alaska can establish a sufficiently important governmental interest if it is able to show that any one of the three theories of corruption identified by the Court is implicated by the unrestricted flow of soft money contributions. The Supreme Court in Colorado Republican II was not faced with the issue of the constitutionality of soft money limitations. Nonetheless, by recognizing that political parties serve as a conduit from contributors to candidates, the Court effectively resolved the question of whether corruption constitutes a sufficiently important governmental interest in the context of the regulation of soft money. There is no reason to expect that the dangers described in Colorado Republican II will be avoided simply because powerful donors are making soft money contributions to parties, rather than parties contributing to candidates.
While our conclusion that soft money poses a significant danger of corruption is explained in more depth immediately below, we note that it is supported by the fact that the Supreme Court has consistently interpreted campaign finance law with an eye toward the actual functioning of the system of campaign finance. See Colorado Republican II, 533 U.S. at 443, 121 S.Ct. 2351 ("Congress drew a functional, not a formal, line between contributions and expenditures"); see also id. at 438, 450-52, 452 n. 14, 121 S.Ct. 2351; Buckley, 424 U.S. at 46-47, 96 S.Ct. 612. Likewise, the genesis of Alaska's Act was the failure of its original, more formalistic, finance reform laws to counter corruption and the appearance of corruption. As APOC has recognized through its advisory opinions, regulations, and in the course of this litigation, the Act similarly mandates a functional rather than formal approach to campaign finance reform.
a) Preventing Corruption and the Appearance of Corruption
In light of modern campaign practices, it is not necessary that money funneled through political parties be specifically designated for the election or nomination of a candidate to have a corrupting influence. Colorado Republican II offers a compelling account of the danger of corruption inherent in unlimited soft money contributions to parties, one that accounts for "how the power of money actually works in the political structure." 533 U.S. at 450, 121 S.Ct. 2351. Parties centralize fundraising for a broad set of candidates and programs, and therefore act as magnets for special interest groups who are looking for the most efficient ways to "advanc[e] their narrow interests." Id. at 451, 121 S.Ct. 2351 (alteration marks omitted).
Id. at 451-52, 121 S.Ct. 2351 (footnotes and citation omitted). Such practices lead to two types of inappropriate influence by large soft money contributors.
Second, candidates and officeholders who are party members may become directly beholden to the party's donors, even if the benefit that they receive from a large donation to the party is indirect. Contributing to parties is an extremely efficient way for a special interest group "to produce obligated officeholders," because it allows such a group to obligate anyone and everyone in a political party, rather than limiting its influence to specific candidates. Colorado Republican II, 533 U.S. at 452, 121 S.Ct. 2351. Candidates and officeholders are likely to feel obligated to major party donors because they are already beholden to the party as a result of the benefits that flow from party membership. See Colorado Republican I, 518 U.S. at 648, 116 S.Ct. 2309 (Stevens, J., dissenting) ("A party shares a unique relationship with the candidate it sponsors because their political fates are inextricably linked. That interdependency creates a special danger that the party — or the persons that control the party — will abuse the influence it has over the candidate by virtue of its power to spend."). The Court in Colorado Republican II even noted that influence within the party itself was a significant benefit for which candidates and officeholders might be willing to trade influence over the legislative process. See 533 U.S. at 460 n. 23, 121 S.Ct. 2351.
As Colorado Republican II recognized, special interests contribute to candidates competing against each other in the same
Amicus curiae Republican National Committee notes that some political parties have functions other than simply electing candidates to office. Although this position is contrary to that taken by its state affiliates in previous litigation, see, e.g., Colorado Republican I & II, it may well be accurate. However, even where contributions to a political party are expressly earmarked for the purpose of administrative costs or off-year issue advocacy, and even if political parties do not use donations for these purposes to shift funds into election campaigns, the perception of corruption decried by the Supreme Court may still persist when contributors provide large sums of money to political parties, regardless of the purpose and ultimate use of the funds. As noted above, this perception of corruption was a matter of particular concern to Alaska legislators in enacting the Act. 1996 Alaska Sess. Laws 48 § 1(b).
b) Preventing Circumvention of Hard Money Limits
In Colorado Republican II, the Supreme Court recognized a closely-related additional governmental interest that might justify contribution limits — the interest in preventing "circumvention of contribution limits designed to combat the corrupting influence of large contributions to candidates." 533 U.S. at 456 n. 18, 121 S.Ct. 2351; see also id. at 456, 121 S.Ct. 2351; Beaumont, ___ U.S. at ___, 123 S.Ct. at 2207 ("[R]ecent cases have recognized that restricting contributions by various organizations hedges against their use as conduits for `circumvention of [valid] contribution limits.'" (quoting Colorado Republican II, 533 U.S. at 456 & n. 18, 121 S.Ct. 2351) (second alteration in original)); Cal. Med. Ass'n, 453 U.S. at 197-99, 101 S.Ct. 2712 (holding that limits on contributions to multicandidate committees are "an appropriate means by which Congress could seek to protect the integrity of the contribution restrictions upheld by this Court in Buckley"); Buckley, 424 U.S. at 35-36, 38, 96 S.Ct. 612.
As the Supreme Court found in Colorado Republican II, faced with federal limits on direct contributions to candidates, powerful donors have used "contributions to a party ... as a funnel from donors to candidates." 533 U.S. at 461, 121 S.Ct. 2351. This response shows how soft money contributions are used to circumvent contribution limits.
Id. at 458, 121 S.Ct. 2351. This practice is so common, the Court went on to note, that "[a]lthough the understanding between donor and party may involve no definite commitment and may be tacit on the donor's part," the National Democratic Party has developed a "manner of informal bookkeeping" known as "tallying" to ensure that the amount of money that a candidate receives from the party corresponds to the amount that the candidate raised for the party. Id. at 459, 121 S.Ct. 2351. The theory that soft money contributions are a means of circumventing limits on contributions to candidates is bolstered by the extensive role that candidates play in party fundraising.
Many of the "party-building" activities claimed by Jacobus to be unrelated to electing candidates are easily targeted to a particular candidate, such as the promotion of a Get Out the Vote initiative in a candidate's district, or sponsorship of a legislative initiative that a candidate has made part of his or her campaign platform. Thus, these activities provide a low effort, low-risk way to circumvent contribution limits. See Republican Party v. Pauly, 63 F.Supp.2d at 1016 ("The [Republican Party of Minnesota] often provided administrative and strategic support to the candidates. The party coordinated candidate appearances and voter registration drives, and helped to recruit volunteer assistance.").
In sum, "parties ... function for the benefit of donors whose object is to place candidates under obligation." Colorado Republican II, 533 U.S. at 455, 121 S.Ct. 2351. Prevention of the corruption and appearance of corruption that result from this inescapable reality is a sufficiently important governmental interest to support limiting soft money contributions.
4. Close Tailoring
Jacobus argues that even if Alaska has established a sufficiently important interest in limiting soft money contributions, the Act is not closely tailored to serve the State's purpose. In the context of contribution limits, the requirement of "close tailoring" does not require "the least restrictive alternative." See, e.g., Cal. Med. Ass'n, 453 U.S. at 199 n. 20, 101 S.Ct. 2712 ("Congress was not required to select the least restrictive means of protecting the integrity of its legislative scheme."). Indeed, the Supreme Court has stated that courts must not "second guess a legislative determination as to the need for prophylactic measures where corruption is the evil feared." FEC v. Nat'l Right to Work Comm., 459 U.S. 197, 210, 103 S.Ct. 552, 74 L.Ed.2d 364 (1982).
Jacobus argues that limits on soft money contributions are overbroad because not all of these contributions will be spent in ways
Id. (emphasis added). The Court explained that the earmarking provision
Id. (quoting FEC v. Colorado Republican Fed. Campaign Comm., 213 F.3d 1221, 1241 (10th Cir.2000) (Seymour, Chief Judge, dissenting)). The district court's judgment here reduces the Act to little more than an earmarking scheme, which suffers from the same limitations identified by the Supreme Court.
In fact, Colorado Republican II strongly suggests that the Court would have accepted limits on contributions to political parties as a narrower (and therefore presumably constitutional) solution to the danger of circumvention of individual contribution limits. See 533 U.S. at 464-65, 121 S.Ct. 2351 ("The choice is between limiting contributions [to political parties] and limiting expenditures whose special value as expenditures is also the source of their power to corrupt. Congress is entitled to its choice.").
If there is a danger or a perceived danger that large contributions to political parties will circumvent direct limitations and influence candidates because candidates are obligated to their parties, then candidates may become obligated to large party donors whether or not those donations directly benefit them. If there is a danger or perceived danger that the parties themselves will deliver influence or access in exchange for money, then Alaska cannot be required to regulate only some
b) Amount of the Limit
A contribution limit level will be accepted unless it is "so radical in effect as to render political association ineffective, drive the sound of a candidate's voice below the level of notice, and render contributions pointless." Nixon, 528 U.S. at 397, 120 S.Ct. 897; see also Buckley, 424 U.S. at 30, 96 S.Ct. 612 ("[I]f it is satisfied that some limit on contributions is necessary, a court has no scalpel to probe, whether, say, a $2,000 ceiling might not serve as well as $1,000."). In Buckley, the Supreme Court approved the limits established by FECA: a $1,000 individual contribution limit and a $5,000 political committee contribution limit. As the Alaska Supreme Court affirmed, Alaska's $5,000 individual contribution limit to political parties is well within these limits. See AkCLU, 978 P.2d at 624-25.
5) Additional Considerations
Amicus Republican National Committee ("RNC") argues strenuously that the constitutionality of political party donation limits depends upon how the donated funds are used. The basis of this claim is the theory that Buckley established "an express advocacy test" that only allows contributions to be limited where they will be used for speech advocating the election or defeat of a candidate. See Buckley, 424 U.S. at 44 & n. 52, 96 S.Ct. 612. In accepting this argument, the district court cited the Washington Supreme Court's decision in Washington State Republican Party v. Washington State Public Disclosure Commission, which is one of the few cases published to date to address the constitutionality of limitations on soft money contributions.
This seriously flawed interpretation reflects a basic misreading of Buckley. Buckley distinguished between express advocacy and issue advocacy in order to avoid unconstitutional vagueness that might chill protected speech, not to establish
Additionally, the express advocacy test erected by the Court in Buckley related only to expenditures and reporting requirements, not to contributions.
First, it noted that "[i]f unlimited contributions for administrative support are permissible, individuals and groups like CMA could completely dominate the operations and contribution policies of independent political committees such as CALPAC." Id. Thus, "the individual or group that finances the committee's operations" might affect the election to a degree "far greater than [he or she] would be able to do acting alone." Id.
Secondly, the Court emphasized the likelihood that fancy bookkeeping and transfers would lead donations "for administrative support" ultimately to increase the money available for the support of candidates, and hinted that such an exception would corrode the rationale behind allowing PACs (and parties) to contribute larger amounts of money than individuals by eroding the representative nature of these organizations:
Id.; see also Beaumont, ___ U.S. at ___, 123 S.Ct. at 2207 ("To the degree that a corporation could contribute to political candidates, the individuals `who created it, who own it, or whom it employs,' could exceed the bounds imposed on their own contributions by diverting money through the corporation." (citations omitted)); Buckley, 424 U.S. at 56, 96 S.Ct. 612 (noting that contribution limits help ensure that a candidate's resources "vary with the size and intensity of the candidate's support"). In the wake of Colorado Republican II, the applicability of these concerns to contributions to political parties is clear. We reject the notion that the purpose of a contribution to a party limits Alaska's ability to regulate it.
Jacobus also relies on cases holding that it is unconstitutional to restrict the amount of money an individual can donate to a PAC organized to advocate in favor of or against a ballot initiative. However, these cases themselves emphasize that ballot initiatives differ from candidate elections, because the fear of corruption and the appearance of corruption that constitutes a sufficient governmental interest in the context of candidate elections is not present. See, e.g., Citizens Against Rent Control/Coalition for Fair Housing v. City of Berkeley, 454 U.S. 290, 301, 102 S.Ct. 434, 70 L.Ed.2d 492 (1981) ("In Buckley, this Court upheld limitations on contributions to candidates as necessary to prevent contributors from corrupting the representatives to whom the people have delegated political decisions. But curtailment of speech and association in a ballot measure campaign, where the people themselves render the ultimate political decision, cannot
Contributions to an initiative advocacy committee do not create beholden candidates, except perhaps in the most attenuated fashion. Such contributions are designed to "persuade the electorate" rather than to influence the committee itself, and an individual or corporation contributing to a campaign for or against a ballot initiative cannot receive subsequent political favors as a consequence. While the public may object to the disproportionate influence on electoral outcomes of corporate advertising or large individual donations to ballot initiative committees, such objections simply do not reflect a danger of corruption or the appearance of corruption. See, e.g., Bellotti, 435 U.S. at 789, 98 S.Ct. 1407 ("According to appellee, corporations are wealthy and powerful and their views may drown out other points of view. If appellee's arguments were supported by record or legislative findings ... these arguments would merit our consideration."). In contrast, the danger of corruption is always implicated by contributions to political parties because of the possibility that political parties and candidates will be coopted by special interests that are unrepresentative of their constituents.
In sum, we reject the additional arguments advanced by Jacobus and the RNC.
C. CONSTITUTIONALITY OF BAN ON CORPORATE SOFT MONEY CONTRIBUTIONS
We have concluded that the limitations on individuals' soft money contributions to political parties are constitutional. The issue of the constitutionality of the Act's restriction on corporate soft money contributions presents a somewhat different question, however, because it involves a ban on contributions to political parties, rather than simply a limitation.
A prohibition on contributions presents a considerably more severe First Amendment burden than that occasioned by a limitation alone. As Buckley held, a limitation on contributions, while burdening First Amendment rights, allows both the symbolic expression of support and the ability to associate with a candidate or party. 424 U.S. at 20, 22, 96 S.Ct. 612. In contrast, a ban on contributions prevents the realization of either of these First Amendment interests through the medium of contributions.
Corporations have rights under the First Amendment. Austin, 494 U.S. at 657, 110 S.Ct. 1391. However, as the Court has recently noted, "[w]ithin the realm of contributions generally, corporate contributions are furthest from the core of political expression, since corporations' First Amendment speech and association interests are derived largely from those of their members and of the public in receiving information." Beaumont, ___ U.S. at ___ n. 8, 123 S.Ct. at 2210 n. 8 (citations omitted). As a result, the power of the state to regulate corporate participation in elections is well established. See Mass. Citizens for Life, 479 U.S. at 252, 256-60, 107 S.Ct. 616; Buckley, 424 U.S. at 25-29, 96 S.Ct. 612; AkCLU, 978 P.2d at 614, 634. The breadth of this power was confirmed in Austin, when the Supreme Court upheld a Michigan ban on independent expenditures from corporations' general treasuries, finding that the ban withstood strict scrutiny despite the fact that expenditures are protected more rigorously than contributions. 494 U.S. at 660, 110 S.Ct. 1391; see also Beaumont, ___ U.S. at ___, 123 S.Ct. at 2205 (noting "the current of a century of congressional efforts to curb corporations' potentially `deleterious influences on federal elections'"). The Court found that restricting "the corrosive and distorting effects of immense aggregations of wealth" on the political process constituted a compelling governmental interest, providing a rationale for state regulation of corporate political speech separate from the ordinary danger of corruption:
Austin, 494 U.S. at 659, 110 S.Ct. 1391 (citation omitted). This rationale encompasses not only corporate money contributed directly to candidates, but any corporate political speech that could distort "the integrity of the marketplace of political ideas." Mass. Citizens for Life, 479 U.S. at 257, 107 S.Ct. 616. Despite the broad sweep of the ban on corporate expenditures in Austin, the Court found the ban to be justified, 494 U.S. at 661, 110 S.Ct. 1391,
In this case, the ban on corporate soft money contributions to political parties is justified by both the danger of corruption and the corrosive effects of wealth accumulated with the aid of the corporate structure. Because the prohibition here is only on contributions, rather than on expenditures, it comprises less of a constitutional burden than the prohibition upheld in Austin. See Austin, 494 U.S. at 660, 110 S.Ct. 1391 ("Corporate wealth can unfairly influence elections when it is deployed in the form of independent expenditures, just as it can when it assumes the guise of political contributions." (emphasis added)). "A ban on direct corporate contributions leaves individual members of corporations free to make their own contributions, and deprives the public of little or no material information." Beaumont, ___ U.S. at ___ n. 8, 123 S.Ct. at 2210 n. 8. We hold that the ban passes constitutional scrutiny.
LIMITS ON VOLUNTEER PROFESSIONAL SERVICES
Although, for the reasons discussed in the preceding section, we affirm Alaska's $5,000 limit on individuals' contributions to political parties as a general matter, we agree with Jacobus that Alaska may not constitutionally regulate volunteer legal services as contributions that fall within the $5,000 individual limit. We therefore affirm the district court's ruling that the inclusion of volunteer professional services in the Act's former definition of what constituted a "contribution" violated the First Amendment.
A. FIRST AMENDMENT RIGHTS AND LIMITATIONS ON VOLUNTEERING SERVICES
The First Amendment's protection of freedom of expression and association includes the right to volunteer services. See Barker v. State of Wis. Ethics Bd., 841 F.Supp. 255, 258 (W.D.Wis.1993); Soto v. State (In re Soto), 236 N.J.Super. 303, 565 A.2d 1088, 1094 (N.J.Super.Ct.App.Div.1989) ("[O]ur system of government is predicated upon the premise that every citizen shall have the right to engage in political activity."); cf. United States Civil Serv. Comm'n v. Nat'l Ass'n of Letter Carriers, 413 U.S. 548, 564, 567, 93 S.Ct. 2880, 37 L.Ed.2d 796 (1973). In fact, in Buckley the Court justified the regulation of donors' monetary contributions by pointing to the fact that the ability to "actively associate through volunteering their services" was an avenue of political association left open to potential donors. 424 U.S. at 28, 96 S.Ct. 612; accord Nixon, 528 U.S. at 396 n. 7, 120 S.Ct. 897. Nonetheless, despite the value placed on volunteering, "[n]either the right to associate nor the right to participate in political activities is absolute." Letter Carriers, 413 U.S. at 567, 93 S.Ct. 2880.
The speech and association interests of both donor and donee are more substantially implicated by restrictions on contributions of volunteer services than by monetary contribution limits. Cf. Barker, 841 F.Supp. at 262 (stating that "the ability to contribute money to campaigns" is not equivalent to "the right to associate in person with campaigns"). An individual's investment of his or her time, energy, creativity, and passion to support a political campaign is at the heart of the association protected by the First Amendment. And, whereas the expressive value of monetary
In Soto, in the course of upholding a restriction on the provision of professional services by casino "key employees," the New Jersey state appellate court reasoned that professional services, unlike other volunteer services, are fungible, and that limits on them are therefore identical to limits on monetary contributions:
565 A.2d at 1101 (adopting ruling by Casino Control Commission). The Soto court's logic is unconvincing. Buckley held that in the context of monetary contributions "the overall effect of the Act's contribution ceilings is merely to require candidates and political committees to raise funds from a greater number of persons." 424 U.S. at 21-22, 96 S.Ct. 612. But donees affected by volunteer limits cannot simply obtain more donations and be as well off as they would have been in the absence of the limits. Not only do the skills, enthusiasm, and efficacy of one volunteer differ from those of another, but there are unavoidable costs to splitting the provision of professional services between multiple donors.
Clearly, a complete prohibition on an individual's ability to volunteer services would constitute a severe encroachment upon that individual's First Amendment rights, and would require the weightiest of justifications in order to survive constitutional scrutiny. See, e.g., Letter Carriers, 413 U.S. at 556, 564-67, 93 S.Ct. 2880 (holding the prohibition on federal employees' participation in political campaigns to be justified by the government's interests, absent as to the citizenry in general, in averting the transformation of the large federal workforce into a "powerful, invincible, and perhaps corrupt political machine" as well as avoiding the danger of favoritism by government employees). But an absolute prohibition on volunteer services was not present under Alaska's former provision. Two aspects of the provision blunted its impact on the rights of association and expression. First, the Act limited only professional services. Although Jacobus showed some confusion on this point in his briefing, the notion that professionals were free to volunteer unlimited nonprofessional services was supported by the language of the statute and the position taken by Alaska in this litigation. See, e.g., Reporting of Legal Services to a Party, APOC Advisory Opinion A097-10-CD (June 3, 1997) (issued in response to a request by Jacobus).
Thus, we must consider whether the burden on First Amendment rights imposed by preventing individuals from donating more than $5,000 worth of professional services can be sustained under the standard of scrutiny applied to contribution limits: whether the "regulation was `closely drawn' to match a `sufficiently important interest.'" Nixon, 528 U.S. at 387-88, 120 S.Ct. 897 (quoting Buckley, 424 U.S. at 25).
Alaska claims that the restriction on volunteer professional services was justified by the governmental interest in avoiding corruption and the appearance of corruption, because otherwise contribution limits could be circumvented. This position receives inadvertent support from Jacobus, who, in the course of emphasizing the extent of this provision's interference with his volunteer work for the Republican Party, declared that he contributed legal services worth between $43,000 and $82,000 each year between 1997 and 2000.
Although the Soto court overstated its case when it claimed that there is "no distinction" between contributions of professional services and monetary contributions, it was quite right in noting that in terms of the financial benefit to the donee, "providing money to a political organization to pay for the professional services of an attorney" is virtually indistinguishable from "providing professional legal services directly without requiring payment for them."
B. CORPORATE DONATIONS OF PROFESSIONAL SERVICES
Our holding regarding the unconstitutionality of limits on individuals' donations of professional services should not be read to invalidate limitations on corporate donations of professional services, restrictions that remain unaltered by the aforementioned amendments to the Act. In the context of corporate donations, none of the distinctions between monetary donations and in-kind donations discussed above apply, because corporations have no services of their own to volunteer, but merely buy services from their employees. Jacobus admits in his briefs that if a third-party paid for a professional's time, that act would constitute a donation under Alaska law.
For the reasons set forth above, we REVERSE the district court's ruling that section 15.13.074(f), former section 15.13.070(b)(2), and former section 15.13.400(3)
Each side to bear their own costs on appeal.
Jacobus relies upon the affidavit of Randy Ruedrich, which declares that some contributions to political parties are not for the purpose of influencing the nomination or election of a candidate, to imply that APOC's interpretation is not reasonable. This conclusory affidavit is insufficient to undermine the reasonableness of APOC's interpretation. Nor is APOC's rationale undercut by the Supreme Court's discussion in Colorado Repubilican II of the "weakness in the seemingly unexceptionable premise that parties are organized for the purpose of electing candidates." 533 U.S. 431, 450, 121 S.Ct. 2351, 150 L.Ed.2d 461 (2001). The Court made this comment in the course of emphasizing that "whether they like it or not, [parties] act as agents for spending on behalf of those who seek to produce obligated officeholders." Id. at 452, 121 S.Ct. 2351. In so holding, the Court accepted the notion that the goals and activities of parties revolve around the election of candidates.
Thus, the Alaska Supreme Court would defer — and, in fact, has deferred — to APOC's reasonable interpretation of the statute.
Id. at 21, 96 S.Ct. 612.
The Court has recognized additional interests in upholding other aspects of campaign finance reform. The Court viewed three interests as vindicated by disclosure requirements: 1) "provid[ing] the electorate with information ... to aid the voters in evaluating" candidates; 2) deterring corruption and the appearance of corruption; and 3) "gathering the data necessary to detect violations of contribution limitations." Id. at 66-68, 96 S.Ct. 612. In Austin, the Court also recognized the sufficiency of the interest in restricting the ability of corporate wealth to unfairly influence elections. 494 U.S. at 659-60, 110 S.Ct. 1391.
63 F.Supp.2d 1008, 1016 (D.Minn.1999).