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February 5, 1980


The opinion of the court was delivered by: MANSFIELD; GAGLIARDI

In this action for declaratory and injunctive relief against enforcement of certain provisions of the Presidential Election Campaign Fund Act, Ch. 95 of Subtitle H of the Internal Revenue Code of 1954, 26 U.S.C. §§ 9001, et seq. ("Fund Act") and the Federal Election Campaign Act of 1971, as amended, 2 U.S.C. §§ 431, et seq. ("FECA"), we have, by order entered pursuant to 28 U.S.C. § 2284 on November 30, 1978, been convened as a three-judge court in accordance with § 801(b) of the Fund Act, 26 U.S.C. § 9011(b), which expressly grants jurisdiction to such a court to "implement or construe" any provision of the Fund Act.

On February 20, 1979, defendants renewed their motion to dismiss the action after a prior motion before the single-judge district court (Gagliardi, J.) had been denied without prejudice pending the convening of a three-judge court and certification of related issues regarding the constitutionality of FECA by it to the Court of Appeals pursuant to 2 U.S.C. § 437h. See Republican National Committee v. Federal Election Commission, 461 F. Supp. 570, 575-76 (S.D.N.Y.1978). On October 15, 1979, after hearing the parties and accepting submissions of evidence we and the single-judge district court filed "Joint Findings of Fact" (attached hereto as Appendix A).

 Plaintiffs' basic contention before this three-judge court is that certain provisions of the Fund Act violate the constitutional rights of a major-party presidential candidate and his supporters. After review of the evidence in the light of applicable law we are satisfied that these claims must be dismissed.

 The "Joint Findings of Fact," which set forth the nature of this action, the statutory provisions under attack, a summary of plaintiffs' claims and the facts as found by the single-judge district court and this court, need not be repeated here. Suffice it to say that the principal provisions of the Fund Act under attack as unconstitutional are those in 26 U.S.C. § 9003(b), *fn1" which specifies that a presidential candidate, in order to be eligible for payments out of the "Presidential Election Campaign Fund," 26 U.S.C. § 9006, must certify that he or she (1) will not incur expenses in excess of the aggregate to which the candidate is entitled from the Fund under 26 U.S.C. § 9004 *fn2" and 2 U.S.C. § 441a(b)(1)(B) *fn3" and (2) that he will not accept private contributions except to the extent necessary to make up any deficiency in the Fund. Section 9004 prohibits the candidate from receiving payments from the Fund in excess of the amount specified by FECA, 2 U.S.C. § 441a(b)(1)(B), which, in the case of a "major-party" candidate (i. e., one whose party received at least 25% of the popular vote cast in the last presidential election, 26 U.S.C. § 9002(6)) is $ 20,000,000 as adjusted for changes in the consumer price index. *fn4"

 The grant of jurisdiction by § 801(b) of the Fund Act, 26 U.S.C. § 9011(b) to this court to "implement or construe" any provision of that Act would appear to require us initially to construe its constitutionality, whereas circuit courts are granted jurisdiction by 2 U.S.C. § 437h(a) to "construe the constitutionality of any provision" of FECA. Plaintiffs have standing to raise the issue, since they, as committees and voters, may be precluded by the legislation from raising or contributing private funds toward the election of a Republican presidential candidate in 1980 if the candidate opts in favor of accepting payments out of the public Fund. 26 U.S.C. § 9011(b)(1). Cf. Buckley v. Valeo, 424 U.S. 1, 11-12, 96 S. Ct. 612, 630-31, 46 L. Ed. 2d 659 (1976).

 First and Second Causes of Action

 Plaintiffs' First Cause of Action claims that the foregoing statutory provisions violate their First Amendment rights by conditioning eligibility for public campaign funds upon compliance with expenditure limitations. Their Second Cause of Action alleges that the First Amendment is also violated because the Republican presidential candidate in 1980 will be forced, because of "legal and practical factors" to opt in favor of public funding. What plaintiffs seek is the right to solicit, receive and spend both public and private campaign funds, without any limitations, even though the alternative of public financing made available by Congress to candidates was clearly "intended as a substitute for private contributions," Buckley v. Valeo, supra, 424 U.S. at 99, 96 S. Ct. at 673. (Emphasis added).

 Fundamental to both causes of action is the contention that a presidential candidate is somehow or other forced as a practical matter to accept public funding in lieu of unlimited private funding and spending, and that this deprives the candidate and supporters of their First Amendment rights. Neither the statutes under attack nor the evidence adduced by plaintiffs supports this contention.

 Each candidate remains free under the Fund Act, instead of opting for public funding, to attempt through private funding to raise more than the "$ 20,000,000 plus" public funding limit and to spend any amount of funds raised by private funding, without any ceiling. Indeed, major-party presidential candidates have succeeded in doing so prior to Congress' enactment of the legislation here in issue. For instance, in 1972 candidates Nixon and McGovern raised $ 60.2 million and $ 38.7 million, respectively, through private financing. *fn5" "Plainly, campaigns can be successfully carried out by means other than public financing; they have been up to this date, and this avenue is still open to all candidates." Buckley v. Valeo, supra, 424 U.S. at 101, 96 S. Ct. at 674 (Emphasis added).

 In view of our finding that a presidential candidate is not compelled to accept public financing under the statutes or to accept the limitations imposed by 26 U.S.C. § 9003, we are left with the issue of whether Congress may lawfully condition a presidential candidate's eligibility for public federal campaign funds upon the candidate's voluntary acceptance of limitations on campaign expenditures and private contributions. This question in turn raises three others: Does Congress have the power to enact such a provision, and, if so, is the effect of the law to abridge either (a) the rights of the candidate or (b) the rights of his or her supporters.

 We have no difficulty concluding that the imposition of such conditions lies within Congress' power to legislate under the General Welfare Clause and that, as long as the candidate remains free to engage in unlimited private funding and spending instead of limited public funding, the law does not violate the First Amendment rights of the candidate or supporters.

 Congress' power to enact the very statutes here under attack was recognized by the Supreme Court in Buckley v. Valeo, 424 U.S. 1, 57 n. 65, 96 S. Ct. 612, 653, n. 65, 46 L. Ed. 2d 659 (1976), where the Court stated:

"Congress may engage in public financing of election campaigns and may condition acceptance of public funds on an agreement by the candidate to abide by specified expenditure limitations. Just as a candidate may voluntarily limit the size of the contributions he chooses to accept, he may decide to forgo private fundraising and accept public funding." *fn6" (Emphasis added).
The legislative history of the public financing provision gives evidence of two Congressional concerns: to give candidates the opportunity to lessen the "great drain on (their) time and energies" required by fundraising "at the expense of providing competitive debate of the issues for the electorate" and to "eliminate reliance on large private contributions" and on the implicit obligations to private contributors that may arise from such reliance without decreasing the ability of the candidates to get their message to the people. Senate Report No. 93-689, at pp. 5-6, reprinted in (1974) U.S.Code Cong. & Admin.News, pp. 5587, 5591-92. If the candidate chooses to accept public financing he or she is beholden unto no person and, if elected, should feel no post-election obligation toward any contributor of the type that might have existed as a result of a privately financed campaign.
While Congress may not condition benefit on the sacrifice of protected rights, see Perry v. Sindermann, 408 U.S. 593, 92 S. Ct. 2694, 33 L. Ed. 2d 570 (1972); Shapiro v. Thompson, 394 U.S. 618, 89 S. Ct. 1322, 22 L. Ed. 2d 600 (1969); Frost & Frost Trucking Co. v. Railroad Commission, 271 U.S. 583, 593-94, 46 S. Ct. 605, 607, 70 L. Ed. 1101 (1926), the fact that a statute requires an individual to choose between two methods of exercising the same constitutional right does not render the law invalid, provided the statute does not diminish a protected right or, where there is such a diminution, the burden is justified by a compelling state interest. Sherbert v. Verner, 374 U.S. 398, 403, 83 S. Ct. 1790, 1793, 10 L. Ed. 2d 965 (1963). "(N)ot every burden on the exercise of a constitutional right, and not every pressure or encouragement to waive such a right, is invalid." Corbitt v. New Jersey, 439 U.S. 212, 218, 99 S. Ct. 492, 497, 58 L. Ed. 2d 466 (1978). See also Wyman v. James, 400 U.S. 309, 317-18, 91 S. Ct. 381, 385-86, 27 L. Ed. 2d 408. Where compelling governmental interests exist, Congress' power to place reasonable conditions upon expenditures of public funds, even where they affect exercise of First Amendment rights, has been recognized. See, e.g., Oklahoma v. Civil Service Commission, 330 U.S. 127, 67 S. Ct. 544, 91 L. Ed. 794 (1947) (upholding constitutionality of U.S. Civil Service Commission order under Hatch Act, 53 Stat. 1147, requiring removal from office of federally financed state employees engaged in state politics).
Here the conditions imposed by Congress upon receipt of public campaign financing do not infringe upon the First Amendment rights of candidates. But even if they were so viewed, the burden attributable to the limits imposed by the legislation is fully justified by the compelling state interests described above.
The Fund Act merely provides a presidential candidate with an additional funding alternative which he or she would not otherwise have and does not deprive the candidate of other methods of funding which may be thought to provide greater or more effective exercise of rights of communication or association than would public funding. Since the candidate remains free to choose between funding alternatives, he or she will opt for public funding only if, in the candidate's view, it will enhance the candidate's powers of communication and association. As the Court stated in Buckley v. Valeo, supra, 424 U.S. at 92-93, 96 S. Ct. at 670:
"Subtitle H is a congressional effort, not to abridge, restrict, or censor speech, but rather to use public money to facilitate and enlarge public discussion and participation in the electoral process . . . . Subtitle H furthers, not abridges, pertinent First Amendment values."
Plaintiffs contend they must as a practical matter accept public funding because without it they would raise less money privately and thus have less power to communicate, and at the same time they urge that the effect of public funding is to inhibit the exercise of their First Amendment right to communicate. Even if we accepted their claim that they are in practice compelled to opt for public funding, its effect would be to facilitate and enlarge their exercise of free speech over what it would otherwise be rather than to inhibit or reduce their speaking power. Hence the limitations imposed by § 9003(b) cannot violate the First Amendment rights of the candidate.
Moreover, even if there were some burden on the First Amendment rights of the candidate, the statutory scheme is supported by a compelling state interest. The goals of Congress "to reduce the deleterious influence of large contributions on our political process, to facilitate communication by candidates with the electorate, and to free candidates from the rigors of fundraising," Buckley v. Valeo, supra, 424 U.S. at 91, 96 S. Ct. at 669 represent significant state interests, id. at 95-96, 96 S. Ct. at 671. The public interest purposes behind the decision of Congress to provide for the financing of presidential elections would hardly be served unless some reasonable limits and conditions were imposed. If a candidate were permitted, in addition to receipt of public funds, to raise and expend unlimited private funds, the purpose of public financing would be defeated. Although the total amount raised and spent by each candidate, and hence the candidate's speech power, would be increased by the sums contributed from the public coffers, the candidates would no longer be relieved of the burdens of soliciting private contributions and of avoiding unhealthy obligations to private contributors. Thus the conditions placed on the expenditure of public funds are necessary to the effectiveness of a program which furthers significant state interests.
We similarly conclude that the limitations imposed by § 9003 do not abridge the rights of supporters. The plaintiffs have shown that the effect of the public funding alternative is to decrease the importance of "grass roots" political activity compared to privately financed campaigns. Private individuals are unable to make expenditures coordinated with the campaign organizations, such as renting vans to distribute literature, paying the cost of photocopying and distributing campaign materials received from the candidate's organization, and expressing support by contributing money to the campaign. On the other hand, supporters are left with a wide range of ways to express their support. Certain activities in coordination with the campaign are excluded from the definitions of "contribution" and "expenditure," see 2 U.S.C. § 431(8)(B), 9(B); supporters may contribute their time and effort. Most important, uncoordinated expenditures are permitted without limit. Limitations on uncoordinated expenditures were held unconstitutional in Buckley v. Valeo, supra, 424 U.S. at 39-51, 96 S. Ct. at 645-650.
We note first that since the candidate has a legitimate choice whether to accept public funding and forego private contributions, the supporters may not complain that the government has deprived them of the right to contribute. There is nothing improper or unusual in recognizing that a candidate rather than his or her supporters should control the method of financing the campaign. In this respect the statute simply reflects the basic right of any person to accept or reject campaign contributions from any other person or committee, or not to run for office at all. As in Marchioro v. Chaney, 442 U.S. 191, 99 S. Ct. 2243, 2248, 60 L. Ed. 2d 816 (1979), the complaint of the contributors should be addressed to the candidate who has chosen to forego private financing, rather than to the courts. Cf. Rowan v. Post Office Dept., 397 U.S. 728, 738, 90 S. Ct. 1484, 1491, 25 L. Ed. 2d 736 (1970) ("no one has a right to press even "good' ideas on an unwilling recipient"). Moreover, it may reasonably be anticipated that in making such a decision, including whether or not to accept public financing with its statutory conditions, the candidate will ordinarily first consult representatives of his principal supporters. In short, it would be unreasonable to preclude a candidate who prefers public financing from using it instead of private financing merely because some supporters believe that the decision deprives them of the ability to contribute to the candidate's election in the precise way they would if the campaign were privately financed.
Even if the restrictions on coordinated contributions and expenditures were seen as a restriction imposed by the government on the contributor's ability to communicate freely, those restrictions, limited as they are, could still be upheld. The "free speech" component of a contribution lies in the "symbolic expression of support" it evidences. Buckley v. Valeo, supra, 424 U.S. at 20-21, 96 S. Ct. at 631. The Supreme Court in Buckley upheld the $ 1,000 contribution limitation in part because it left individuals "free to engage in independent political expression" and to express support by volunteering their services. 424 U.S. at 28, 96 S. Ct. at 639. Cf. Kovacs v. Cooper, 336 U.S. 77, 88-89, 69 S. Ct. 448, 454, 93 L. Ed. 513 (1949) (upholding ordinance regulating use of sound trucks when "(t)here is no restriction upon the communication of ideas or discussion of issues by the human voice, by newspapers, by pamphlets, by dodgers"). The public interest in enacting a public funding program and in limiting coordinated contributions in order to effectuate that program is a considerable one. These limitations "do not undermine to any material degree the potential for robust and effective discussion of candidates and campaign issues by individual citizens, associations, the institutional press, candidates, and political parties." 424 U.S. at 29, 96 S. Ct. at 639-640. The statute is "within the constitutional power of the Government"; it "furthers an important or substantial governmental interest"; that interest is "unrelated to the suppression of free expression"; and "the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest." United States v. O'Brien, 391 U.S. 367, 377, 88 S. Ct. 1673, 1679, 20 L. Ed. 2d 672 (1968). Accordingly, we conclude that § 9003 does not violate the First Amendment rights of the plaintiffs.
Third Cause of Action
Plaintiffs' Third Cause of Action is that the statutory public financing limitations operate in a way that discriminates in favor of an incumbent candidate to the disadvantage of a challenger and thus violates the First Amendment and the Due Process Clause of the Fifth Amendment. It is claimed that incumbent Presidents can, with less campaign expenditures and through exercise of their official powers and use of public facilities, command more national attention than can challengers, who do not have such free facilities available and must spend money to gain the public's eyes and ears. As a result, plaintiffs argue, the statutory limit on the amount of campaign expenditures that may be made by a challenger who accepts public funding gives him or her less public exposure than that gained by the incumbent.
If, as the Court assumes in Buckley v. Valeo, "an incumbent usually begins the race with significant advantages," 424 U.S. at 31 n. 33, 96 S. Ct. at 640 n. 33, and "the Government makes available other material resources to incumbents," id. at 33 n. 38, 96 S. Ct. at 641 n. 38, leading to the possible conclusion that "the limitations may have a significant effect on particular challengers or incumbents," id. at 33, 96 S. Ct. at 641, there is no indication that inequalities would be less under private financing. Indeed, regardless of whether a campaign is publicly or privately funded, it is inevitable that some candidates will have advantages over others. To require that public funding equalize these differences would distort its purpose, which is to facilitate political communication by providing an alternative to private funding with its burdens and unhealthy influences. See Buckley v. Valeo, supra, 424 U.S. at 91, 96 S. Ct. at 669. It would not only be contrary to the American democratic political process, which is founded upon a public choice between parties and candidates of varying strengths, some facing greater odds and burdens than others, see American Party v. White, 415 U.S. 767, 787-88, 94 S. Ct. 1296, 1309, 39 L. Ed. 2d 744 (1974), but would represent a departure from fundamental concepts of equal treatment. As the Court stated in Buckley v. Valeo, supra:
"(I)t is important at the outset to note that the Act applies the same limitations on contributions to all candidates regardless of their present occupations, ideological views, or party affiliations. Absent record evidence of invidious discrimination against challengers as a class, a court should generally be hesitant to invalidate legislation which on its face imposes evenhanded restrictions. Cf. James v. Valtierra, 402 U.S. 137 (, 91 S. Ct. 1331, 28 L. Ed. 2d 678) (1971)." 424 U.S. at 31, 96 S. Ct. at 640-641.
As long as it has a legitimate public purpose a public campaign funding law should not be required to remedy pre-existing inequalities between candidates, cf. Ross v. Moffitt, 417 U.S. 600, 611, 94 S. Ct. 2437, 2444, 41 L. Ed. 2d 341 (1974); San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 93 S. Ct. 1278, 36 L. Ed. 2d 16 (1973), any more than the "equal time" requirement of the 1934 Communications Act, 47 U.S.C. § 315, should be altered to remedy disparities between parties or candidates using public media. The statutes here under attack have a lawful purpose. They are neutral on their face and in operation. Accordingly we must conclude that the Fund Act does not unlawfully discriminate in favor of incumbent candidates against challengers or deny equal protection to presidential candidates.
Fourth Cause of Action
Plaintiffs' Fourth Cause of Action alleges that the Fund Act and FECA, by reason of the campaign expenditure limitation imposed as a condition on public funding, discriminate against candidates not politically allied with a substantial number of labor organizations, and thus violate both the First Amendment and the Due Process Clause of the Fifth Amendment. It is claimed that FECA and the Fund Act allow unions to raise and spend unlimited amounts of money on "a variety of partisan political activities which can be an integral part of a presidential candidate's campaign"; that this gives a substantial advantage to candidates with labor organizational support; that it is likely that in 1980 the Democratic presidential candidate will have support from more labor organizations than the Republican candidate; that FECA, 2 U.S.C. § 441b, *fn7" permits labor organizations to spend unlimited amounts, financed out of the union treasury, on communications with members which are designed to influence the presidential election, including "campaign material prepared or suggested by a candidate for President," and that corporations and other groups entitled under 2 U.S.C. § 441b to spend money for partisan activities are unable for practical reasons to do so as effectively as labor organizations.
Under 2 U.S.C. § 441b(b)(2) a labor organization's communication with its members and their families on any subject and its non-partisan voter registration and "get out the vote" drives aimed at union members and their families are exempt from the statutory definition of "contribution" and "expenditure." However, the same statute permits corporations to engage in the same communication with their stockholders, executive and administrative personnel and their families.
The provisions of the Fund Act and FECA prohibiting certain activities and permitting others on the part of labor unions and corporations are even-handed and entirely neutral on their face. Both corporations and labor organizations are prohibited by 2 U.S.C. § 441b(a) from making any contribution or expenditure in connection with a presidential election. (See footnote 7, supra ). Moreover, as plaintiffs themselves concede, any expenditure made in "coordination" with a candidate's campaign must be treated as a "contribution" to the candidate under 2 U.S.C. § 441a(a)(7) *fn8" and would be illegal in the case of a candidate who opted for public funding under the Fund Act.
Thus, to the extent that plaintiffs allege that unions spend money on political activities forming an integral part of a president's campaign (Compl. P 57) or which "can be fully coordinated with and integrated into the activities of the principal campaign committee of a presidential candidate" (Compl. P 64), their attack is not upon the constitutionality of the Fund Act or on FECA but upon alleged non-enforcement of the provisions of these statutes, which is not an issue to be resolved by a three-judge court. To the extent that plaintiffs base their claim of unconstitutionality of the statutes upon the practical advantages of union support, such advantages can hardly be attributed to the statutes' public financing provisions, which make an equal amount of money available to each major-party presidential candidate. The same advantage, if any, would exist under private financing, which each candidate is free to choose in lieu of public financing. Lastly, the evidence adduced by plaintiffs fails to show that presidential candidates supported by labor organizations have enjoyed any substantial advantage over opponents; that labor unions would necessarily support the Democratic presidential candidate or that, if they did so, any advantage would not be offset by corporate support for the Republican candidate. In short, the statutory provisions are neutral on their face and the claim of discrimination in favor of candidates having labor union support, being based on speculation rather than facts, must be dismissed for failure to demonstrate any denial of free speech or equal protection to presidential candidates and their supporters.
Fifth Cause of Action
Plaintiffs' Fifth Cause of Action, which alleges that the Fund Act and FECA violate the First and Fifth Amendments because the statutes are overbroad, must also be rejected. As we have shown, the public funding provisions of these statutes violate neither the First nor the Fifth Amendments. Public funding, as the Supreme Court noted in Buckley, supra, "furthers, not abridges, pertinent First Amendment values." 424 U.S. at 93, 96 S. Ct. at 670. It offers the presidential candidate an alternative that may enhance his or her First Amendment powers of communication, "free(s the) candidates from the rigors of fundraising," 424 U.S. at 91, 96 S. Ct. at 669, and eliminates the "danger of corruption," id. at 33, 96 S. Ct. at 641, without barring a candidate from deciding to adhere to private rather than public financing. Thus there is no basis for suggesting that the statute's "sweep (is) unnecessarily ...

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