Oxford University Comparative Law Forum
The Regulation of Electoral Financing
(2009) Oxford U Comparative L Forum 1 at ouclf.iuscomp.org
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Various governments around the world have sought to pass
legislation regulating electoral campaigns, in particular their
financial aspects. Electoral reform is high on the Australian
Government's agenda. In a Green Paper published in December 2008, the
Australian Government canvasses some possible reforms to Australia's
electoral system, most especially in the funding area.1
These proposals to some extent mirror developments elsewhere. In this
paper, I consider the specific suggestion that caps or bans should be
placed on private funding of political parties. This policy suggestion
is considered primarily from a constitutional point of view in terms of
its validity. In so considering, comparisons will be made with other
jurisdictions in which such reforms have been made, and political
science issues pertinent to the discussion will also be considered. Much
can be learned from experiences in this regard overseas.
Table of contents
Electoral legislation can take many forms. One form is the
requirement for disclosure of donations they receive. I will not
consider the question of disclosure of donations in detail in this
paper, because I have no difficulty with, and see the benefit of,
requiring political parties to publicly disclose funding donations they
receive, including at relatively low levels.2
Nor will I take issue with the existing system by which some public
funding is provided to political parties, although it is important to
acknowledge in the discussion of issues in this article that this source
of funding exists.3 I will focus in this paper on the suggestion that caps or bans should be placed on private funding or expenditure.4
Of course, private donations are just one means by which political
parties derive revenue; they derive revenue from return on the
investment of assets, membership dues, as well as funding from the
Outline of Green Paper Proposals
While the Green Paper makes it clear that many issues need to be
considered and that no final decisions on any possible reforms have been
made, some of the argument in favour of the introduction of a cap or
ban on private funding, or relatedly a cap on the amount of money that a
candidate might spend on an electoral campaign, appear in the paper.
They are sufficiently important to warrant direct quoting:
Australia does not currently limit the amount individuals and
organisations can contribute to political parties, candidates and others
in the political process, on the basis that such support is a
legitimate exercise of the right to freedom of political association and
expression. A criticism of that approach is that permitting donations
of any amount .. risks making the recipients of the donations
potentially dependent on a small number of large donors, vulnerable to
possible undue influence or corruption …6
Banning or capping private funding could assist in addressing concerns
about the effectiveness of Australia's federal public funding and
financial disclosure scheme to achieve the aim of reducing political
parties' and candidates' reliance on donations and other private sources
of funding for contesting elections7…
Eliminating or reducing private funding with bans or caps would address
concerns about undue influence. It is argued that both bans and caps go
towards ensuring that all citizens have equal opportunity to
participate in the political process - either by reducing the level of
permissible donations to that affordable by a larger number of people
through a cap, or with a complete ban, by eliminating private funding
altogether. It is suggested that in such a situation, political
participation and support for the political party of choice would then
be limited for all to the level of volunteer involvement and party
The paper recognises that the effect of such regulation might be to broaden the membership base of parties.9 A critical issue would be the level at which the cap was set.10 Differential arrangements may apply depending on whether the donor is an individual or non-individual.11 It is possible some donors may seek to circumvent caps through indirect means.12
On the related question of the possibility of caps on electoral
spending, the Green Paper again takes no concluded position, however it
includes this comment:
With or without matching caps on private donations, capping expenditure
has the potential to minimise the 'arms race' between major parties in
election campaigning. By imposing an upper limit on election spending,
the need for and advantages in attracting large donations and other
financial support would be removed, and the incentive for any political
party to chase dollars and potentially trade benefits or access for
funding would be minimised.13
As the Green Paper specifically recognises, but does not resolve,
suggestions of funding and/or expenditure caps raise possible
constitutional difficulties in Australia, given the High Court of
Australia's findings of an implied freedom of political speech. I will
now turn to this jurisprudence, and explore how other democracies have
sought to reconcile such freedoms with a perceived need to regulate
Part A: Campaign Finance Regulation and Freedom of Speech
(1) Political Free Speech Cases in Australia14
(a) Australian Capital Television Pty Limited v Commonwealth; State of New South Wales v Commonwealth15 (ACTV)
Interestingly for present purposes, it was in the context of
legislation purporting to limit spending on political advertising that
the High Court of Australia recognised for the first time a
constitutional freedom of political discussion in the ACTV case. There
provisions of the Broadcasting Act 1942 (Cth) introduced by the Political Broadcasts and Political Disclosures Act
1991 (Cth) were challenged on constitutional grounds. In effect, the
provisions prohibited a government or non-government body from political
advertising during election periods, by prohibiting the broadcaster
from broadcasting such advertising. The Act also required broadcasters
to make available free of charge units of time for election broadcasts
to a political party, person or group ('party'), based on the relative
numerical strength of that party in the Parliament that had been
dissolved when the election was called. The Act was claimed by the
relevant Minister to be necessary to 'prevent potential corruption and
undue influence of the political process'. It was said the high cost of
advertising meant that most people could not afford to pay for
declared these provisions to be invalid on the basis that a citizen's
freedom to communicate on political matters, essential for
representative democracy implicit in the Constitution, was
unacceptably infringed by the provisions. The majority judges saw the
freedom as necessary for accountability of elected officials. It was
necessary to allow criticism of public officials, to allow citizens to
seek to bring about change, call for action and otherwise influence
In words particularly relevant for current purposes, Mason CJ was
prepared to concede the possibility that the need to raise substantial
funds to conduct an electoral campaign could lead to a risk of
corruption and undue influence,18 so some regulation might be justified. However, the Court should
scrutinize very carefully any claim that freedom of communication must
be restricted in order to protect the integrity of the political
process. Experience has demonstrated on so many occasions in the past
that, although freedom of communication may have some detrimental
consequences for society, the manifest benefits it brings to an open
society generally outweigh the detriments. All too often attempts to
restrict the freedom in the name of some imagined necessity have tended
to stifle public discussion and criticism of government. The Court
should be astute not to accept at face value claims by the legislature
and the Executive that freedom of communication will, unless curtailed,
bring about corruption and distortion of the political process.19
McHugh J likewise was convinced of the necessity in a representative
democracy that electors be able to communicate their own arguments and
opinions to other members of the community concerning those issues.
Electors needed information to make an informed judgment of governments
(b) Subsequent Australian Cases
Subsequent High Court decisions have clarified the scope and
nature of the freedom and the approach to be applied in determining the
validity of laws said to conflict with the freedom.21
It has been determined that the freedom is a protection from laws which
seek to unjustifiably derogate from the freedom, rather than a source
of positive rights. The High Court in Lange v Australian Broadcasting Corporation22
clarified that a two stage approach was required when assessing laws
against the freedom, asking whether the law effectively burdens freedom
of communication about government or political matters in terms,
operation or effect; and secondly, if so, whether the law is reasonably
appropriate and adapted to serve a legitimate end the fulfilment of
which is compatible with the constitutionally prescribed system of
representative and responsible government.
The High Court has also made clear that the freedom of political
communication in Australia can, like the equivalent provision in the
United States Bill of Rights, include non-verbal communication. Brennan
CJ in Levy v Victoria23
cited American authority for the proposition that silent protests, flag
burning and other communication could fall within the freedom.24 After summarising the American authorities, Smith concludes
Given this case history, it is too late to argue that a gift of money,
at least when made to a political candidate, is not a form of protected
symbolic speech. Such a gift is an action intended to convey support for
a candidate and, one can presume, his or her views.25
While this principle has not been clarified in many of the Australian
cases, given our relatively fewer number of decisions, it seems from the
Levy decision that one can extrapolate that the High Court would
consider a political donation to attract the description of 'political
communication'. Certainly this is the basis on which Australian
commentators have proceeded,26 as have the American cases.27
(2) United States Jurisprudence28
The leading American case in this field is Buckley v Valeo29
where the Supreme Court considered legislation, passed in response to
Watergate, that (a) capped political donations by individuals or groups
to $1,000 for any single federal candidate; (b) limited contributions to
any such candidate by political committees to $5,000; (c) imposed a
$25,000 annual limitation on total contributions by any contributor; (d)
limited independent expenditures by an individual or group advocating
the election or defeat of a federal candidate to $1,000 per year; and
set limits, depending on the office involved, of expenditure by
candidates for federal office during any calendar year, and overall
limits. A disclosure obligation was also imposed in respect of
contributions. The legislation was challenged on the basis of the First
Amendment (freedom of speech) and Fifth Amendment (equal protection).
A majority of the Supreme Court found the provisions imposing limits on
political donations did not infringe First Amendment speech and were
supported by substantial governmental interests in limiting corruption
and the appearance of corruption. However, provisions limiting
independent political expenditures by individuals and groups and fixing
ceilings on overall campaign expenditures by candidates were
unconstitutional as contrary to the First Amendment, and were not
justified by the government interest in preventing actual or perceived
corruption or from equalisation concerns. For similar reasons,
provisions limiting the amount of personal expenditures by a candidate
were also invalid as conflicting with the First Amendment.
The majority invalidated the expenditure provisions because
A restriction on the amount of money a person or group can spend on
political communication during a campaign necessarily reduces the
quantity of expression by restricting the number of issues discussed,
the depth of their exploration and the size of the audience reached.
This is because virtually every means of communicating ideas in today's
mass society requires the expenditure of money … The electorate's
increasing dependence on television, radio and other mass media for news
and information has made these expensive modes of communication
indispensable instruments of effective political speech. Being free to
engage in unlimited political expression subject to a ceiling on
expenditures is like being free to drive an automobile as far and as
often as one desires on a single tank of gasoline.30
The majority agreed that the act of donating money to a candidate was a form of speech.31
While First Amendment freedoms were not absolute and needed to be
balanced against legitimate government interests, and while the
government interest in preventing corruption or the perception of
corruption was legitimate, the majority found the interest did not
justify the ceiling on expenditures,32
or the limit on candidate's personal expenditure. It was not clear
that such limits were reasonably necessary to prevent corruption,
particularly as they were set at very low levels. Arguments that the
funds available to candidates needed to be 'equalised' were not accepted
by the court as legitimate considerations.33
The majority was not convinced, however, that the contribution
limitations imposed by the Act would have any real effect on the funding
of campaigns and political associations; it would merely lead to
candidates seeking contributions from a broader base.34 As a result, these were valid, reflecting legitimate governmental interests,35 as were the disclosure requirements.36 In dissent on this point, Burger CJ would also have invalidated the private donation limits.37
The Court in Buckley also introduced a distinction between two
types of 'political' speech: communication that expressly advocated the
election or defeat of a clearly identifiable candidate (which would not
be entitled to protection under the First Amendment), and communication
that was issues-based (which would be entitled to a higher level of
protection under the First Amendment). This became known as the 'magic
words' test - ads which avoided the magic words such as 'vote for',
'elect', 'support', 'defeat' etc could not be the subject of regulation.
This distinction would seem to be a difficult one to make, as a later
case would attest. One might wonder whether the distinction between
advocacy and issue-based communication is easy to make, given that often
the issue-based communication was taking place during or near election
As indicated above, subsequent decisions have largely confirmed these
principles, and the Supreme Court struck down a provision whereby if a
self-funding candidate reached a certain spending limit, their opponent
would be able to receive outside donations at treble the normal limit
from individuals. The court found that differential contribution limits
for candidates in competition with one another was not acceptable to
First Amendment rights.38 In some cases, a distinction has been drawn depending on whether the donor is an individual or a large organisation,39
on the basis that an individual might be more constitutionally entitled
to communication through the making of a donation as a democratic
right, compared with an organisation. Further, if an organisation is
larger, then it may be in a position to make a larger donation. The size
of a donation might influence perceptions of corruption or bias.
The status quo changed in 2006 when the Supreme Court decided Randall v Sorrell,40
a case involving a challenge to a Vermont law limiting individual
contributions to state candidates (such limits had been upheld in Buckley)
and imposing campaign spending limits. A majority of the Court struck
down the limits as too low, as well as the limits on total election
spending.41 Although the Court apparently endorsed the Buckley
dichotomy between contributions and spending, this was the first
occasion that the Supreme Court had found that a contribution limit was
unconstitutional, apparently indicating less ability to regulate
contributions than had been thought to be the case in the years after Buckley.42
The majority found the actual limits imposed in the Act to be
disproportionate to the public purposes they were intended to advance.43
In the other recent Supreme Court decision in this area, Federal Election Commission v Wisconsin Right to Life Inc,44 (Wisconsin II)
the court re-affirmed First Amendment principles in this area and
thereby reduced the scope for campaign funding regulation. The case
involved the distinction noted in Buckley between express
advocacy and issues-based discussion. Congress had passed a law that
purported to restrict advertising referring to a candidate for federal
office within 60 days of a general election or 30 days of a primary,
where they were targeted at the candidate's constituency. Ads began
appearing which focussed on a current legislative issue, took a position
on it and tried to convince the public to adopt that position, and then
urged viewers to contact named public officials about that issue to
find out their views, or in some cases told viewers what the views of
public officials was in relation to the issue. In McConnell, the
Supreme Court found that, taking into account the context of such ads,
they were express advocacy so the law regulating them was valid and did
not offend the First Amendment.45 However, a differently constituted court in FEC v Wisconsin II found that they were not express advocacy, so the law could not regulate them consistently with the First Amendment.46
Chief Justice Roberts adopted a narrow view of what was 'express
advocacy': that the ad must be susceptible of no other reasonable
interpretation other than as an appeal to vote for or against a specific
candidate. These ads did not meet the test, so could not be regulated
as 'express advocacy'.47
(3) Canadian Jurisprudence
In Canada, there have been many attempts to regulate electoral financing over the years, some being held contrary to the Charter.48
For those not familiar with the Charter, s2(b) guarantees freedom of
expression and s2(d) guarantees freedom of association. Section 1 of the
Charter clarifies that the rights in the Charter are not
absolute, and must be balanced against 'reasonable limits prescribed by
law as can be demonstrably justified in a free and democratic society'.
In other words, a balancing exercise is called for in assessing the
constitutional validity of laws which impinge on Charter
freedoms, a class which certainly includes electoral financing laws. One
relevant factor is whether the laws are the 'least drastic means' test;
in other words, whether the laws introduced, although invasive of Charter freedoms, were the least intrusive means possible to achieve legitimate objectives.49
More recent reforms have included the Elections Act 2003, which
introduced a limit on contributions by individuals to each political
party, its candidates and associations of $5,000 total. Corporate and
union contributions to national political party organisations were
prohibited, although such bodies could contribute up to $1,000 to
individual candidates. Disclosure obligations in relation to donations
were increased.50 The Accountability Act
2006 went further, reducing the maximum individual contribution from
$5,000 to $1,000, and totally banning corporate and union contributions.
While the constitutionality of such provisions is open to doubt and has been questioned,51 they also run the danger of being seen as self-serving. Using evidence of past political donation activity, Feasby52 argues the changes introduced by the minority Conservative government in the Accountability Act
will impact most seriously on the Liberal Party, the main Opposition
party in Canada. He uses this example to suggest, as others have,53
that electoral laws require particular scrutiny by the judges, given
the obvious tendency of the government in power to pass laws that
advantages the ruling party or parties at the expense of opposition
parties, and the inherent conflict of interest that may actually have
occurred or be perceived to have occurred. In other words, if judicial
deference to choices that the Parliament makes is an important factor in
assessing Charter challenges to legislation, it should be less of a
factor in this context. As Pildes concludes:
Constitutional law must play a role in constraining partisan or
incumbent self-entrenchment that inappropriately manipulates the ground
rules of democracy. That functional justification for judicial review
will be present in all constitutional democracies.54
(4) British Approach
The United Kingdom's scheme was enacted in the Political Parties, Elections
and Referendums Act 2000 (PPERA).55
The Act limits campaign expenditure56
in the year before an election to almost £20 million. The exact amount
allowed is calculated by a formula whereby £30,000 is multiplied by the
number of seats contested in order to provide a maximum spend.57
There was recently a proposal to reduce the £20 million ceiling to £15
provisions work with other legislation which generally prohibits political advertising.59
There are criminal penalties for breach of the limits.60
Extensive disclosure provisions also apply.
The PPERA limits third party (including corporations and unions) expenditure
in the year before an election to £10,000 in England, and £5,000
in each of Scotland, Wales and Northern Ireland. Thus, parties wishing to donate
above that limit must register with the Electoral Commission. Once this has
occurred, limits increase to £793,500, in England, £108,000 in Scotland,
£60,000 pounds in Wales and £27,000 pounds in Northern Ireland.61
The United Kingdom Parliament did not act on a recommendation from a 2007 commissioned
report which recommended capping individual donations at £50,000.62
The limits on donations have been criticised for their lack of enforceability.63
The United Kingdom has adopted the European Convention on Human Rights,64
Article 10 of which protects the right to receive and impart
information and ideas without interference by a public authority. It
acknowledges that this right must be balanced against other
considerations, most relevantly here conditions and restrictions
considered necessary in a democratic society. It is similar in this
respect to Article 19 of the International Covenant on Civil and Political Rights,
although that article more strictly protects the right by allowing
derogations from the right only where necessary to protect the
reputation of others, to protect public order, public health or morals.65
The European Court of Human Rights found that a 1983 British Act limiting
political speech amounted to a violation of Article 10.66
Section 75(1) of the Representation Act 1983 (UK) prohibited any expenditure
greater than £5 by a third party to promote a candidate for political
office. Bowman was charged with an offence against s75 after she circulated
a large number of leaflets pointing out the views of particular candidates in
relation to abortion law, together with some material presenting a pro-life
position. This occurred just prior to a general election.
The government sought to justify the provisions on several bases,
including that (a) it stopped wealthy third parties from campaigning for
or against a particular candidate or issuing material; (b) ensured
candidates remained independent of the influence of powerful interest
groups; and (c) it prevented the political debate from being overly
focussed on one issue (which lobby groups would tend to target) rather
than a range of issues.
In declaring the law to be inconsistent with Article 10, the Court found it
was disproportionate to any legitimate end. Free elections and freedom of expression
formed the bedrock of any democratic system, with the latter necessary to make
sure the choice of voters at an election was free.67
There was no evidence Bowman's advocacy would harm any specific candidate, because
readers might use the material to form a range of views about candidates. The
government could not show that the limit of £5 here was necessary to achieve
the legitimate end of securing equality among candidates given there were no
restrictions on the press in supporting or opposing a particular candidate,
or upon parties or candidates advertising, provided it was not intended to promote
or prejudice the electoral prospects of any particular candidate in a particular
I am not aware that the validity of the PPERA has been tested in terms of the
European Convention on Human Rights.
(5) Summary of Jurisprudence on Electoral Finance Laws
In summary then it can be seen that whether or not a country has a
bill of rights, courts in various jurisdictions have closely scrutinised
legislation that limits participation in democratic processes. They
recognise some legitimate government interest in regulating electoral
financing, but in many cases have found that the end did not justify the
means in terms of restrictions on funding contributions, spending etc.
Part B: Arguments in Favour of Limits on Donations/Campaign Spending
I explore here the arguments in favour of and against restrictions,
before concluding with an opinion of which types of restrictions the
Australian Government might be able to introduce that would avoid
constitutional difficulty, given the international experience.
I begin this consideration from a starting point that, as has been
recognised substantially in many jurisdictions, freedom of thought,
speech and communication is an essential aspect of a democracy. It is a
fundamental right that must be accorded due respect. It is not a
desirable extra in a system of representative government where the
sovereignty of the people is accepted. While no right is absolute, and
courts will allow intrusions into fundamental human rights, the clearest
and most cogent justification must be given, and shown. I also bear in
mind the work of public choice theorists who argue that governments will
attempt to maximise their position and power, and must be checked by
independent, outside interests.69
This accords of course with the theory underlying the doctrine of
judicial review and the separation of powers. Thus, arguments as to the
need for such regulation must be very closely scrutinized by the courts.
Finally, I bear in mind the faith we place in the people to be able to
digest communications they receive, to judge whether they are being told
the truth, whether policies are in the best interests of the country
and/or themselves etc. In this way, I am sceptical of the need for the
government to step in to regulate speech to 'protect' the public from
too much, incomplete, or incorrect information.
It might be argued that it is necessary to introduce a limit on the
amount by which an individual can donate to a candidate or political
party in order to reduce the likelihood of, or the perception that, the
donor is somehow buying political candidate or party. Similarly, it
might be argued that it is necessary to limit a candidate's spending in
order to reduce their dependence on donations, which would then reduce
the likelihood they have been 'bought off' by a particular donor. It can
readily be acknowledged that it would not be good in terms of faith in
our political institutions if it were perceived (whether or not it was
actually the case) that politicians or political parties had been
'bought off' by a particular donor, or were doing the bidding of their
most generous donors. Both the High Court of Australia and the Supreme
Court of the United States have recognised this as a legitimate
government interest in the context of regulation of political funding.70
This rationale is also referred to in several places in the Federal
Government's Green Paper on Electoral Reform in support of the case for
I would find this argument convincing if I had seen evidence of a link
between political donations and voting behaviour from politicians.
However, of the many studies that have sought to establish whether such a
link exists, most have found little evidence that a politician's voting
behaviour is in fact affected by donations that might have been made.72 As Hall and Wayman write:
Despite the claims of the institutional critics and the growing public
concern over (lobby groups) during the past decade, the scientific
evidence that political money matters in legislative decision making is
surprisingly weak. Considerable research on members' voting decisions
offers little support for the popular view that (lobby groups) money
permits interests to buy or rent votes on matters that affect them.73
The United Kingdom Ministry of Justice in its White Paper is also not convinced of the corruption argument.74
Some argue that it is necessary to limit the quantum of donations to
candidates or parties, or limit the amount that a candidate can spend,
in order to make elections as 'equal' as possible among candidates.75
These arguments draw support from the principle of voting equality
inherent in our system of democracy, and argue that voting equality
implies participation equality.76
Adherents to the equality argument question the libertarian conception
of free speech as ignoring existing inequalities in private ownership of
wealth and property which impact on participation in the political
Again, in my view evidence of such existing inequality is
necessary before accepting such a view. If there were evidence that
either of the major political parties enjoyed a significant financial
advantage over the other, evidenced by the quantum of private donations,
or their ability to fund election campaigns, it would at least be
arguable that such a disparity could affect the legitimacy of the choice
that electors would be making each time they were asked to vote.
However, in my view there are several difficulties with such an
Firstly, there is little evidence of great funding disparities in
Australia, at least as between the major political parties. The most
recent evidence available to us (which is up to 1996, before disclosure
rules changed) suggests that the Australian Labor Party spent almost $40
million between 1984 and 1996. The Liberal Party during that same time
period spent almost $35 million.79
The Green Paper notes that after the rules changed, and parties were
required to disclose only total expenses rather than total election
expenses, the estimate of electoral expenses in 2004 for the Australian
Labor Party was $19.4 million and the Liberal Party $22 million. These
figures do not indicate that either of the major political parties is at
a real disadvantage, in terms of their ability to fund electoral
Considering private donations to the major political parties,80
according to the Australian Electoral Commission the Australian Labor
Party received approximately $120 million in private funding in the
years between 2002-2003 and 2004-2005, compared with the Liberal Party
which received approximately $104 million. In the years between
1999-2000 and 2001-2002, the Australian Labor Party received about $98
million in private donations, and the Liberal Party approximately $81
Another argument against the so-called need for equality is that
the mere fact that a candidate, or a party, may be able to collect large
levels of donations may in fact reflect the popularity of the platform
or the candidate. One of the impressive things about the political
campaign of United States President Barack Obama in 2008 was his ability
to raise very large levels of donations to his campaign, both to be the
Democratic nominee, and then to run for President. These massive
donation levels showed the extremely large support base from which this
candidate drew, reflecting the voice of the American people. It is hard
to see in this context how limiting the amount that a person could
donate to a candidate would have assisted in making the campaign or the
result more democratic. So far from impeding democracy, the freedom that
an individual has to support a particular candidate or party, and to
express that support by financially donating to that candidate or party,
reflects democracy at work.
The American Courts have generally not been impressed with the
argument that in order to protect one person's freedom of speech, it is
necessary to limit another's freedom of speech.82
Fried claims that if it were the position that a government could
silence certain speakers in order to ensure 'others' are heard, 'it is
but a short step to suppression pure and simple'.83
Others claim that far from creating equality, campaign finance
restrictions actually promote inequality by making it tougher for
challengers to incumbents to raise the funding they need, and favour
those who know how the system works, as opposed to fledgeling,
grassroots campaigners who may not be aware of the rules or how to
(legally) circumvent them.84
There is also the view that the mere fact someone spends a lot of money
on their candidacy is no guarantee of electoral success - though it
might purchase more advertising, voters may not like the message.
Researchers of some recent elections have found that many incumbents won
re-election while spending much less than their opponents.85 In any event, experienced participants in this process will often be able to find legal loopholes to avoid limits.86
Part C: Other Issues Relevant to the Constitutionality of Political Funding Reform
Several other issues are raised by the overseas authorities,
particularly the United States cases, in the context of campaign finance
reform, which I now consider.
(1) The Less Drastic Means Doctrine
In several American cases considering First Amendment rights, the
Court has considered as one relevant factor in assessing the
constitutionality of the law, whether there were less drastic means (in
other words, means less intrusive of human rights) that were available
to the government to pursue what may be a legitimate objective. So, for
example, in assessing whether spending limits on candidates are
justified to prevent corruption, the Court might find that they are not
justified because they are intrusive, and the government interest in
preventing corruption could less invasively be met by introducing a
There is some support for this doctrine in the Australian case law. A unanimous court in Lange v Australian Broadcasting Corporation seemed to accept the validity of such an approach, in the current context:
In ACTV for example, a majority of this Court held that a law
seriously impeding discussion during the course of a federal election
was invalid because there were other less drastic means by which the
objectives of the law could be achieved.88
However, Brennan CJ expressly disavowed this approach in Levy:
Under our Constitution, the courts do not assume the power to determine
that some more limited restriction than that imposed by an impugned law
could suffice to achieve a legitimate purpose. The courts acknowledge
that the law-maker's power to determine the sufficiency of the means of
achieving the legitimate purpose, reserving only a jurisdiction to
determine whether the means adopted could reasonably be considered to be
appropriate and adapted to the fulfilment of the purpose.89
I wonder with respect whether such a precise delineation can be made
between what is 'reasonably appropriate and adapted' and whether less
drastic means are available. In other words, perhaps the fact that less
drastic means are available to achieve legitimate ends might suggest
that the law is not reasonably appropriate and adapted to achieving a
legitimate end. It is worth remembering also that the phrase 'reasonably
appropriate and adapted' is itself derived from a United States
Apart from the comments in Lange cited above, the High Court of
Australia clearly has used something akin to (at the very least) the
'less drastic means' test in considering the constitutionality of
legislation, though in different contexts to the one now being
For example, in the Castlemaine Tooheys Ltd v South Australia91 decision regarding s92 of the Constitution, the High Court did consider the possibility of other regulatory options:
Where a law on its face is apt to secure a legitimate object but its
effect is to impose a discriminatory burden upon interstate trade as
against intrastate trade, the existence of reasonable non-discriminatory
alternative means of securing that legitimate object suggests that the
(law is invalid as involving prohibited discrimination).
In another context considering laws providing for bicentennial celebrations in Australia,92
the High Court refused to accept provisions giving the Bicentennial
Authority monopoly use over certain words, given that those words could
be used in other contexts for legitimate commercial reasons. The court
concluded that protection of the integrity of the bicentennial
celebrations did not require such prohibition; that the law was
disproportionate to the need to protect the commemoration powers of the
Though the court did not phrase its reasoning by saying something like
'although the authority has legitimate purposes, there are less drastic
powers it could be given in order to effect its purposes that would be
less invasive of established commercial freedoms, so the law is
unconstitutional', I would submit that the above comments are very
similar in effect. As a result, I believe there is some Australian
support in the constitutional context for such a test.
Proceeding on the basis that this is a relevant doctrine, we should
apply this to the question of limits on campaign funding. It is
difficult of course because no specific limits on political donations or
expenditure by candidates or parties have been suggested in the Green Paper.
However, I would be very sceptical of the need for such laws, and it is
submitted a relevant factor in assessing the constitutional validity of
such laws, given their interference with the freedom of communication,
would be whether other measures are available to achieve the kinds of
purposes said to be achieved by such measures.
The alternatives include a register of political donations and full
disclosure of donations at a very low threshold, enforcement of criminal
provisions dealing with corruptions and bribes, and a system by which
some public funding is provided to political parties (which already
occurs). To the extent that corruption and equality arguments remain a
concern (and I have given my reasons for thinking they are not
justifications for further electoral funding reform), clearly measures
already exist to deal with them, and it is not clear whether measures
more invasive of the freedom of political communication are in fact
necessary. I do not believe that we should defer to Parliament's
judgment about the necessity or otherwise of laws, particularly in this
context where the subject matter being considered is very 'close to the
bone' as it were, and where politicians and political parties can be
expected to act in ways that they think will advantage themselves,
rather than build or maintain a robust democracy.
(2) The Individual/Organisation Distinction
As indicated above, some American cases have drawn a distinction based on whether the donor is an individual or an organisation.94
It is argued that, because freedom of communication (or freedom of
speech) is fundamental to the right of an individual to participate in
the electoral process, that restrictions on the ability of an
organisation to make donations to political candidates or individuals
should be more acceptable. As indicated, the recent Canadian reforms
completely ban donations by organisations, while allowing some donations
The Federal Government's discussion paper canvasses this issue
separately from the general question of caps. In considering the
question of differential treatment of bans or caps on donations from
organisations, the Green Paper considers:
An argument in favour of this approach is that the Government is elected
by individuals and is there to represent the will of its citizens,
rather than organisational interests. In that case, individuals should
be encouraged to contribute to those running for office by allowing them
to give donations to their party of choice, whereas organisations
should not be allowed to influence candidates or parties running for
office. Banning donations from organisations is argued to have the added
advantage of preventing wealthy individuals from donating to political
parties and candidates through a range of different corporations or
organisations, thereby undermining any caps on donations which may be in
An argument against banning donations from organisations is that
different types of organisations play a variety of important roles in
modern society - corporations have legitimate interests in government
decisions; trade unions exist to represent the interests of their
membership base; while community groups can be formed around important
social or environmental issues.95
Given the terms in which the freedom of political communication has been
framed in Australia, it is submitted there is a respectable argument
that the freedom is limited to individuals rather than organisations.96
The freedom exists because the Constitution is based on the principle
of representative democracy. Citizens need to be able to engage in
political discussion in order to give effect to this system. On one
view, then, the freedom is limited to individuals and thus a law banning
political donations by organisations97
would not offend the freedom since such organisations are not
necessarily democratic, are not citizens and do not vote at elections.
The Parliament does not represent that organisation. It may be argued
also that an organisation, particularly a well-resourced one, might be
more easily perceived as able to influence government decision making,
in other words the strength in numbers argument. This would justify the
Commonwealth being able to regulate donations from such organisations.98
However, while it may be accepted that an organisation may not directly
have freedom of communication, we need to remember that communication is
two-way - it is a right to be heard but also a right to hear. It might
be argued that, in order for citizens to be able to participate
effectively in a democracy, they must have access to a range of views on
political matters, and some of these views might be expressed by
organisations. As Mason CJ said in ACTV v Commonwealth
Individual judgment … on so many issues turns upon free public discussion in the media of the views of all interested persons, groups and bodies and on public participation in, and access to, that discussion.99
McHugh J agreed that voters had a constitutional right to convey and receive opinions.100 Deane and Toohey JJ in Nationwide News v Willis said that freedom of political discussion necessarily involved the freedom to maintain and consider claims and opinions about political matters.101 And the Court was unanimous in Lange that 'common convenience and welfare of Australian society are advanced by discussion - the giving and receiving of information - about government and political matters'.102
I have concluded that no distinction should be made, in terms of the
constitutional freedom of communication, between donors according to
whether they are individuals or organisations. While it is true that the
freedom is cast in terms of democracy and representative government,
and an organisation does not have a right to vote nor could it expect
Parliament to represent its view, I believe that individual citizens
have a right to receive the views of the organisation, in order to best
exercise their democratic rights. These views might be expressed
directly through payment for political advertising, or indirectly by
funding candidates who express (broadly or narrowly) the views of the
(3) The Donations/Expenditure Distinction
At the heart of the American jurisprudence in this area is the notion
that differential treatment should be applied to donations to
candidates and parties on the one hand, and actual campaign expenditure
on the other.103 The Green Paper treats them as separate policy options.104 As the result in Buckley
demonstrates, the Supreme Court in that decision was prepared to
validate the former, but not the latter, under First Amendment
This distinction has apparently been retained, at least by name,
although some commentators see in the very recent cases an actual (if
not formal) departure from the Buckley dichotomy:
Randall re-affirmed the Court's continued adherence to the
contribution-expenditure distinction, which has long been at the heart
of our campaign finance jurisprudence, while demonstrating that a
majority of the Court rejects the distinction.106
Perhaps the key passage in terms of the explanation of the Buckley court's distinction between the two kinds of limits is this one:
By contrast with a limitation upon expenditures for political
expression, a limitation upon the amount that any one person or group
may contribute to a candidate or political committee entails only a
marginal restriction upon the contributor's ability to engage free
communication. A contribution serves as a general expression of support
for the candidate and his views, but does not communicate the underlying
basis for the support … A limitation on the amount of money a person
may give to a candidate or campaign organisation thus involves little
direct restraint on his political communication, for it permits the
symbolic expression of support evidenced by a contribution but does not
in any way infringe the contributor's freedom to discuss candidates and
issues. While contributions may result in political expression if spent
by a candidate or an association to present views to the voters, the
transformation of contributions into political debate involves speech by
someone other than the contributor.107
I must agree with Burger CJ who dissented from this view in Buckley,
in invalidating both the donation limit and expenditure limit. Too much
should not be made of the distinction. The donations are intended to be
expended, and are expended, by the candidate in communicating a
political view. This communicated view is presumably broadly similar to
the political view with which the donor agrees. On one view, we should
see the candidate as the medium through which the political views of
his/her donors are communicated. In my view, whether the donor speaks
directly to the people, or indirectly through candidates he/she
supports, both are political speech and should be entitled to the same
One also wonders about the constitutional purpose behind the distinction
- the effect of it is to allow limits on donations but not to limit
total spend. It is submitted that one should look at the effects and
consequences when considering the constitutionality of provisions and
the acceptability of suggested distinctions. This distinction is flawed
because the effect of allowing limits on donations will, all other
things being equal, end up limiting campaign expenditure. This was
exactly the thing the Supreme Court said was unacceptable. It is true
that limiting donations might cause candidates to cast the net further
afield in terms of donations, but this is an option open to candidates
whether or not limits exist, so I dismiss it as a 'red herring' in terms
of justification of donation limits.109
I submit that, given the High Court's acceptance that communication can
be non-verbal, the political communication inherent in donating to a
candidate or political party is just as valuable in terms of
representative government as the ability of a candidate to spend money
to communicate the political ideas and views of themselves, their party
and those whom they represent.
(4) Express Advocacy vs Issues-Based Discussion
As discussed above, some of the American cases have drawn a
distinction between these two kinds of speech, finding restrictions on
the former more likely to be compatible with First Amendment rights than
restrictions on the latter. The Green Paper does not expressly refer to
I am not convinced that such a sharp distinction can or should be made
between the two types of speech. As some of the American cases have
shown on their facts, it can be a very difficult line to draw. Is an ad
that advocates a particular view on a contentious topic, and then tells
viewers to 'contact candidates' about it, or tells viewers what
particular candidates think about the issue, in effect advocacy in
favour of a particular candidate? Or is it merely issue-based
discussion? What is the difference, in terms of freedoms, between
expressly advocating for a candidate whose views one supports, and
taking out an ad taking a position about an issue, and telling viewers
or readers that a particular candidate also takes that position? I would
argue that the effect is virtually the same, and that we are resorting
to unjustified distinctions to argue otherwise.
If the distinction served some other purpose which was compatible with
freedom of speech (or freedom of political communication), the fact it
sometimes required fine lines to be drawn might not be fatal. But I am
not convinced that express advocacy of a candidate is any less necessary
to the kind of representative democracy we have, and wish to maintain,
than issue-based advocacy.
I conclude that the introduction of electoral funding legislation
would be a challenge for the Australian Government given the
constitutional freedom of political communication that has been
recognised by the High Court of Australia. Although I cannot of course
comment on any specific proposal as no bill has yet been drafted, the
Court should start, when considering such a law, and the draftsperson
should start, when drafting such a law, with the general principle that
it is fundamental in a democracy that people must have a right to debate
issues, and that includes speech as well as hearing messages from
others. Of course, there must be a very strong and clear case for an
interference with such a right. It cannot be supported based on mere
assertion or platitudes. Some of the arguments given to support such
regulation must be tested in terms of specific evidence. There is
evidence that the introduction of campaign finance regimes, such as in
the United Kingdom, have not in fact achieved the purposes for which
they were introduced. Courts must be mindful of the fact that political
parties may seek to change the funding rules to secure what they
consider to be an electoral advantage to them. A strong independent
umpire must consider any such changes very carefully.
The bill would need to explain cogently how the regulations it
introduced represented the least drastic means to achieve a legitimate
objective. I have concluded that there is no justification for
differential treatment of political donations on the one hand, and
spending on the other. Nor is the distinction between individual donors
on the one hand and group donors on the other justified. Nor is the
distinction sometimes made between express advocacy and issues-based
advocacy one that the bill should embrace. The Australian Government
must tread very carefully if it wishes to proceed on this path.
* PhD UNSW; Associate Professor of Law, University of Southern Queensland.
Government Electoral Reform Green Paper: Donations, Funding and Expenditure
December 2008 (Green Paper).
Further discussion of disclosure rules appears in K D Ewing 'The Legal
Regulation of Electoral Campaign Funding in Australia: A Preliminary
Study' (1992) 22 University of Western Australia Law Review 239.
The system works by reimbursing parties a certain sum for each first
preference vote cast in their favour, provided they gain at least 4% of
those votes: Commonwealth Electoral Act 1918 s294, 297. This regime is
discussed in more detail in Joo-Cheong Tham and David Grove 'Public
Funding and Expenditure Regulation of Australian Political Parties: Some
Reflections' (2004) 32 Federal Law Review 397, 405-415 and Graeme Orr
'The Currency of Democracy: Campaign Finance Law in Australia' (2003) 26
University of New South Wales Law Journal 1; Owen Fiss 'Money and
Politics' (1997) 97 Columbia Law Review 2470.
Until 1980, limits were imposed in Australia on the amount of campaign
expenditure - a good history of electoral funding regulation in
Australia appears in: Deborah Cass and Sonia Burrows 'Commonwealth
Regulation of Campaign Finance - Public Funding, Disclosure and
Expenditure Limits' (2000) 22 Sydney Law Review 477, 491.
The Australian Government estimates that approximately 20% of the
funding of the Labor Party and the Liberal Party is derived from the
scheme by which the public funds parties based on their results at the
last election: Green Paper p12.
6 7.7 -7.8.
12 7.11. The experience in other jurisdictions will be noted later in the paper.
Commentary on these cases appears in several articles, for example
Adrienne Stone 'Rights, Personal Rights and Freedoms: The Nature of the
Freedom of Political Communication Under the Australian Constitution'
(2001) 25 Melbourne University Law Review 374; 'Freedom of Political
Communication, the Constitution and the Common Law' (1998) 26 Federal
Law Review 219; James Stellios 'Using Federalism to Protect Political
Communication: Implications from Federal Representative Government'
(2007) 31 Melbourne University Law Review 239; Michael Coper 'The High
Court and Free Speech: Visions of Democracy or Delusions of Grandeur?
(1994) 16 Sydney Law Review 185; Nicholas Aroney 'A Seductive
Plausibility: Freedom of Speech in the Constitution' (1995) 18(2)
University of Queensland Law Journal 249; Jeffrey Goldsworthy
'Constitutional Implications and Freedom of Political Speech' (1997) 23
Monash University Law Review 362; H P Lee 'The Australian High Court and
Implied Fundamental Guarantees' (1993) Public Law 606.
15 (1992) 177 CLR 106.
16 Mason CJ Deane Toohey Gaudron McHugh JJ, Brennan and Dawson JJ dissenting).
17 Mason CJ p137-138.
145; Deane and Toohey JJ were similarly unconvinced that the desire to
eliminate corruption justified the legislation's impact on political
communication during an election period (175)
20 231; to like effect Gaudron J 211-212.
21 Eg Theophanous
v Herald and Weekly Times Limited (1994) 182 CLR 104; Levy v Victoria
(1997) 189 CLR 579; Lange v Australian Broadcasting Corporation (1997)
189 CLR 520; Coleman v Power (2004).
22 (1997) 189 CLR 520, 567.
23 (1997) 189 CLR 579, 594; to like effect McHugh J (622) and Kirby J (638) (both also citing American cases).
cases have found the following to be 'speech' within the First Amendment: refusing
to salute the American flag (West Virginia State Board of Education v
Barnette (1943) 319 US 624, 642; displaying a flag (Stromberg v California
(1931) 283 US 359, 369; burning a flag (Texas v Johnson (1989)
491 US 397, 405; wearing an armband to protest war (Tinker v Des Moines
Independent Community School District (1969) 393 US 503, 505-506; displaying
a swastika (National Socialist Party of America v Village of Skokie
(1977) 432 US 43, 44; holding a parade although it had no particular theme (Hurley
v Irish-American Gay, Lesbian and Bisexual Group of Boston (1995) 515
US 557, 570.
25 Bradley Smith 'Money Talks: Speech, Corruption, Equality and Campaign Finance' (1997) 86 Georgetown Law Journal 45, 50.
Deborah Cass and Sonia Burrows 'Commonwealth Regulation of Campaign
Finance: Public Funding, Disclosure and Expenditure Limits' (2000) 22
Sydney Law Review 447, 456-460; Joo-Cheung Tham and David Grove 'Public
Funding and Expenditure Regulation of Australian Political Parties: Some
Reflections' (2004) 32 Federal Law Review 397, 420-421.
27 Eg Central
Hudson Gas and Electric Corp v Public Service Commission of New York
(1980) 447 US 557, the court finding that a corporation's advertising amounted
We must exercise the usual caution here with international comparisons -
the provisions are not identical. For example, the United States
provision is applied to speech, while the Australian version relates to
communication; in the United States the provision is a source of
positive rights, while in Australia the right is a negative one, in that
it is a freedom from laws that (unreasonably) interfere; the American
right is express, while the Australian freedom is implicitly derived
from the text and structure of the Constitution. Another view regarding
the use of United States materials in interpreting the freedom of
political communication appears in Dan Meagher 'The Fighting Words
Doctrine: Off the First Amendment Canvas and Into the Implied Freedom
Ring?' (2005) 28 University of New South Wales Law Journal 852.
(1976) 424 US 1; see for detailed discussion Frank Sorauf 'Politics,
Experience and the First Amendment: The Case of American Campaign
Finance' (1994) 94 Columbia Law Review 1348; J Skelly Wright 'Money and
the Pollution of Politics: Is the First Amendment an Obstacle to
Political Equality?' (1982) 82 Columbia Law Review 609; and Kenneth
Levit 'Campaign Finance Reform and the Return of Buckley v Valeo' (1993)
103 Yale Law Journal 469.
19 (Burger CJ, Brennan Stewart Powell Blackmun Rehnquist JJ) (Marshall J
agreed the provisions limiting independent political expenditures by
individual groups and fixing overall ceilings on expenditure by
candidates was unconstitutional, but would have upheld limits on the
amount of personal expenditure by a candidate); White J dissenting and
Stevens J not participating.
'The plain effect of the (section) is to prohibit all individuals …
from voicing their views relative to a clearly identified candidate
through means that entail expenditures of more than $1000 during a
calendar year' (39).
45; for further discussion of the case see Deborah Goldberg and Brenda
Wright 'Defending Campaign Contribution Limits After Randall v Sorrell
(2008) 63 New York University Annual Survey of American Law 661.and
Richard Briffault 'The Return of Spending Limits: Campaign Finance After
Landell v Sorrell (2005) 32 Fordham Urban Law Journal 399.
33 54; the
Supreme Court was similarly unimpressed with such arguments in the recent decision
of Davis v Federal Election Commission (2008) 128 S Ct 2759,
35 The Supreme
Court had a similar view of limits on campaign contributions by an individual
in Nixon v Shrink Missouri Government Pac et al (2000) 528 US
36 The Supreme
Court recently clarified in Davis that disclosure requirements impact privacy
of donors so a clear justification is required: Davis v Federal Electoral
Commission (2008) 128 S Ct 2759, 2774.
'We do little but engage in word games unless we recognise that people -
candidates and contributors - spend money on political activity because
they wish to communicate ideas, and their constitutional interest in
doing so is precisely the same whether they or someone else utters the
v Federal Election Commission (2008) 128 S Ct 2759 (per Roberts CJ Scalia
Kennedy Thomas and Alito JJ, Stevens, Souter, Ginsburg and Breyer JJ dissenting
v Michigan Chamber of Commerce (1990) 494 US 652.
40 (2006) 126 S Ct 2479.
Of the majority, three (Scalia Thomas and Kennedy JJ (more
contentiously) indicated their view that the First Amendment forbids any
limits on donations or spending), while three others including Roberts
CJ, Breyer and Alito JJ apparently endorsed the differential treatment
of spending and donations, but found the donation limits here too low).
In dissent, Stevens Souter and Ginsburg JJ would have upheld the
The majority proposed a two-step test to determine validity of an
electoral finance law: (1) whether there were danger signs that the
limits imposed may harm the electoral process by preventing challengers
from mounting effective campaigns against incumbents, threatening
accountability; and then (2) an assessment of relevant factors including
what the limit was, whether the limit on party contributions to
candidates was the same as the limit on individual contributions to
candidates, whether exceptions existed for volunteer expenses, whether
the ceiling was adjusted for inflation, and whether there was any
special justification for the donation limits (2495-99).
44 (2007) 127 S Ct 2652.
v FEC (2003) 540 US 93.
46 Roberts CJ, Scalia Thomas Kennedy and Alito JJ, Souter Stevens Ginsburg and Breyer JJ dissenting (2673).
The decision has had a generally hostile reception among writers: see
for example Richard Briffault 'WRTL and Randall: The Roberts Court and
the Unsettling of Campaign Finance Law' (2007) 68 Ohio State Law Journal
807; 'WRTL II: The Sharpest Turn in Campaign Finance's Long and Winding
Road' (2008) 1 Albany Governmental Law Review 101; Daniel Ortiz 'The
Difference Two Justices Make: FEC v Wisconsin Right to Life Inc II and
the Destabilisation of Campaign Finance Regulation' (2008) 1 Albany
Governmental Law Review 141; Kurt Hohenstein 'Clio, Meet Buckley -
Buckley, Clio: Reintroducing History to Unravel the Tangle of Campaign
Finance Reform' (2008) 1 Albany Governmental Law Review 63; and Deborah
Goldberg and Brenda Wright 'Defending Campaign Contribution Limits After
Randall v Sorrell (2008) 63 New York University Annual Survey of
American Law 661.
include National Citizens' Coalition AG Canada (1984) 11 D.L.R.
(4th) 481 (Alta QB)(amendments prohibiting anyone who was not a candidate
for election and who was not acting on behalf of a registered party or candidate
for election from incurring election expenses during an election period struck
down as an unjustified breach of the guarantee of freedom of expression); and
Somerville v Canada (1996) 136 D.L.R. (4th) 205, where
a limit on third party expenditure of $1000 was struck down on the same basis.
The Supreme Court of Canada validated a ceiling on third party election expenditures
of $150,000, and a maximum of $3,000 in each electorate (known as a 'riding'
in Canada) as reasonable regulation.
this test, the Supreme Court of Canada validated a ceiling on third party election
expenditure of $150 000, and a maximum of $3000 in each electorate: Harper
v Canada (2004) 1 SCR 827; cf Libman v Quebec (1997)
3 SCR 569.
50 As a partial trade-off, the amount of public funding of Canadian political parties was increased.
51 Colin Feasby 'Constitutional Questions About Canada's New Political Finance Regime' (2007) 45 Osgoode Hall Law Journal 513.
Colin Feasby 'Constitutional Questions About Canada's New Political
Finance Regime' (2007) 45 Osgoode Hall Law Journal 513, 542-543.
53 Eg John
Hart Ely Democracy and Distrust: A Theory of Judicial Review
(1980); Samuel Issacharoff and Richard Pildes 'Politics as Markets: Partisan
Lockups of the Democratic Process' (1998) 50 Stanford Law Review 643; Richard
Pildes 'The Theory of Political Communication' (1999) 85 Virginia Law Review
54 'The Supreme Court 2003 Term - Foreword: Constitutionalization of Democratic Politics' (2004) 118 Harvard Law Review 29, 154.
55 See for
detailed discussion Keith Ewing, The Cost of Democracy: Party Funding
in Modern British Politics (2007).
Defined to include party political broadcasts, advertising, unsolicited
material sent to electors, any document setting out the party's
policies, market research conducted on the electorate, press conference
or other media expenses, transport of party leaders and officials, and
rallies and public meetings.
57 Schedule 9 Part II s3.
Kingdom Ministry of Justice Party Finance and Expenditure in the United Kingdom:
The Government's Proposals (2008) p40 ('White Paper').
Act 2003 (UK) s321, Chapter 21.
60 See also the Political Parties and Elections Bill 2008 (UK).
61 Schedule 10 Part II s3.
62 Sir Hayden
Phillips, The Review of the Funding of Political Parties Strengthening
Democracy: Fair and Sustainable Funding of Political Parties (2007)
p10. A previous major review in the United Kingdom recommended against a cap
on private funding: The Committee on Standards in Public Life: the Funding
of Parties in the United Kingdom (1998) (Neill Committee)
cites three loopholes with such limits, as demonstrated by conduct since the
introduction of the United Kingdom restrictions - money can be disaggregated
so as not to breach limits, money can be spread around and money can be given
to unregulated recipients: The Cost of Democracy (2007) p229-230.
He concludes of the new regime that 'extensive and detailed controls have been
found to be very porous, allowing ample opportunity for financial support for
parties to be concealed in various perfectly lawful ways' (87).
64 Human Rights Act 1998 (UK).
Article 25 provides for a right of all citizens to take part in the
conduct of public affairs on a non-discriminatory basis without
v United Kingdom  ECHR 4 (24839/94); see also Linens v
Austria (8/7/86) Series A No 103, p26 ss41-42 and Mathieu-Mohan
and Clerfayt Belgium (2/3/87) Series A No.113, p22 s47.
67 Para 42.
68 Para 47.
69 Randall Holcombe, Public Policy and the Quality of Life (1995) p5-6; Dwight Lee and Richard McKenzie, Regulating Government (1987) p10-13.
70 ACTV v Cth (1992) 177 CLR 106 and Buckley v Valeo (1976) 424 US 1.
Para 7.37 'eliminating or reducing private funding with bans or caps
would address concerns about undue influence'; para 7.35 'In the
Australian federal electoral system, no restrictions on donations
currently exist. It has been argued that this could result in a
situation where influence and access can be purchased', and para 8.28
'By imposing an upper limit on election spending, the need for and
advantages in attracting large donations and other financial support
would be removed, and the incentive for any political party to chase
dollars and potentially trade benefits or access for funding would be
Henry Chappell 'Campaign Contributions and Congressional Voting: A
Simultaneous Probit-Tobit Model' (1982) 62 Review of Economics and
Statistics p77-83; Janet Grenzke 'Shopping in the Congressional
Supermarket: The Currency is Complex' (1989) 33 American Journal of
Political Science 1; William Welch 'Campaign Contributions and
Legislative Voting: Milk Money and Diary Price Supports' (1982) 35
Western Political Quarterly 478; John Wright 'PACs, Contributions and
Roll Calls: An Organisational Perspective' 1985) 79 American Political
Science Review 400; John Lott 'Empirical Evidence in the Debate on
Campaign Finance Reform' (2001) 24 Harvard Journal of Law and Public
Policy 9; Sorauf, F, Money in American Elections (1983) p285-290; S Moussalli, Campaign Finance Reform: The Case for Deregulation
4 (1990); Bradley Smith 'Faulty Assumptions and Undemocratic
Consequences of Campaign Finance Reform' (1996) 105 Yale Law Journal
1049; Bradley Smith 'Money Talks: Speech, Corruption, Equality and
Campaign Finance' (1998) 86 Georgetown Law Journal 45; and Frank Souraff
'Politics, Experience and the First Amendment: The Case of American
Campaign Finance' (1994) 94 Columbia Law Review 1348.
'Buying Time: Moneyed Interests and the Mobilization of Bias in
Congressional Committees' (1990) 84(3) American Political Science Review
797, 798, Kathleen Sullivan 'Political Money and Freedom of Speech'
(1997) 30 University of California Davis Law Review 663, 679. For a
contrary view, see Richard Briffault 'The Political Parties and Campaign
Finance Reform' (2000) 100 Columbia Law Review 620, and J Skelly Wright
'Money and the Pollution of Politics: Is the First Amendment an
Obstacle to Political Equality?' (1982) 82 Columbia Law Review 609.
'There is no evidence to suggest that the overwhelming majority of
people who give to political parties do so with the intention of
securing improper influence' (p53).
'It is argued that both bans and caps go towards ensuring that all
citizens have equal opportunity to participate in the political process'
(p61) Green Paper; J Skelly Wright 'Money and the Pollution of
Politics: Is the First Amendment an Obstacle to Political Equality?'
(1982) 82 Columbia Law Review 609.
76 Ronald Dworkin 'The Curse of American Politics' (1996) New York Review Books
p19,23; Kathleen Sullivan 'Political Money and Freedom of Speech'
(1997) 30 University of California Davis Law Review 663, 674.
Jeffrey Blum neatly summarises this divide: 'The libertarian
conception of free speech is best seen as integral to the libertarian
strategy of seeking a minimal state in which paternalistic and
regulatory functions are severely limited … By promoting speech
entitlements that are coextensive with the private ownership of wealth
and property, the libertarian approach facilitates an upward
redistribution of political power and initiative that tends to
strengthen the political base for reducing the regulatory and welfare
programs despised by libertarian theorists. By contrast, the equal
liberty and collective right conception is integral to a strategy
designed to achieve ends that are in many respects the opposite of those
that libertarians favor. By using absolutist protection to guarantee
sufficient social space for movements to form and enter the established
political system, the Supreme Court has enhanced the political
initiative, and thus the political power, of groups that lack control
over significant wealth and property. This limited redistribution of
political power has helped to create a political base for the
paternalistic, regulatory welfare state': 'The Divisible First
Amendment: A Critical Functionalist Approach to Freedom of Speech and
Electoral Campaign Spending' (1983) 58 New York University Law Review
Ewing dismisses the argument as a 'fiction': '(another) objective of a
party funding regime is based on the principle of political equality
which lies at the heart of liberal democracy. In practice, this
principle is little more than a fiction, undermined by the great
disparities of wealth .. that exist between individuals in a liberal
version of democracy': The Cost of Democracy (2007) p27.
79 Australian Electoral Commission, figures reproduced in the Green Paper p10.
The amount of public funding available to political parties, based as
it is on the party's support at the previous federal election, is
excluded as irrelevant for the purposes of the present discussion.
81 Green Paper
p12, see also Joo-Cheong Tham and David Grove 'Public Funding and
Expenditure Regulation of Australian Political Parties: Some
Reflections' (2004) 32 Federal Law Review 397, 401-405.
82 Buckley v Valeo
(1976) 424 US 1; Stephen Gottleib 'The Dilemma of Electoral Finance
Campaign Finance Reform' (1989) 18 Hofstra Law Review 213, 289.
83 Charles Fried 'The New First Amendment Jurisprudence: A Threat to Liberty' in Stone, G et al eds, The Bill of Rights in a Modern State 225, 226-227.
Bradley Smith 'Faulty Assumptions and Undemocratic Consequences of
Campaign Finance Reform' (1995) 105 Yale Law Journal 1049, 1072-1084;
''Money Talks: Speech, Corruption, Equality and Campaign Finance' (1997)
86 Georgetown Law Journal 45, 88; Joel Gora 'Campaign Finance Reform:
Still Searching Today for a Better Way' (1998) 6 Journal of Law and
Policy 137, 145-146, Clarisa Long 'Shouting Down the Voice of the
People: Political Parties, Powerful PACs and Concerns About Corruption'
(1993) 46 Stanford Law Review 1161, 1181-1183.
85 Smith, n71, p1065; Late Money in Key House Races (1995) Political Financing and Lobbying Report 3, 5-6 (January 11).
Ewing points out many of the loopholes that have been exploited in
campaign finance regulation, including making donations over extended
periods rather than in lump sums, channelling money to assist candidates
indirectly rather than directly, considering the precise timing of a
donation carefully to avoid difficulties, providing benefits to
candidates and parties through loans rather than donations, providing
benefits to candidates and parties through in-kind support rather than a
donation, testing the limits of what 'election expenses' are: The Cost
of Democracy (2007)
87 See for example Buckley v Valeo (1976) 424 US 1, 55-56; City of Cincinnati v Discovery Network Inc (1993) 113 S Ct 1505.
88 (1997) 189 CLR 520, 568.
89 Levy v Victoria(1997) 189 CLR 579, 598; as did Gleeson CJ in Coleman v Power (2004) 220 CLR 1, 31.
90 McCullough v Maryland
(1819) 4 Wheat 316, 421: 'let the end be legitimate, let it be within
the scope of the Constitution, and all means which are appropriate,
which are plainly adapted to that end, what are not prohibited, but
consist with the letter and spirit of the Constitution are
constitutional' (Marshall CJ); expressly adopted and applied by the High
Court of Australia in Grannall v Marrickville Margarine Pty Ltd (1955) 93 CLR 55, 76; expressly approved of recently by Gummow and Crennan JJ in Thomas v Mowbray  HCA 33, .
91 (1990) 169 CLR 436, 471-472 (Mason CJ Brennan Deane Dawson and Toohey JJ).
92 Davis v Commonwealth (1988) 166 CLR 79.
94 Eg Austin v Michigan Chamber of Commerce
(1990) 494 US 652; see Linda Berger 'Of Metaphor, Metonymy, and
Corporate Money: Rhetorical Choices in Supreme Court Decisions on
Campaign Finance Regulation' (2007) 58 Mercer Law Review 949; and C
Edwin Baker 'Campaign Expenditures and Free Speech' (1998) 33 Harvard
Civil Rights-Civil Liberties Law Review 1, 32-33, Adam Winkler 'Beyond
Bellotti' (1999) 32 Loyola Los Angeles Law Review 133.
95 P59 Green Paper.
96 This issue did not arise in ACTV v Commonwealth since the Act applied only to governments and persons; it did not refer to non-government organisations.
More detailed discussion of this issue from a company perspective
appears in Ian Ramsay, Geof Stapledon and Joel Vernon 'Political
Donations by Australian Companies' (2001) 29 Federal Law Review 179.
If this were the position taken, another relevant issue might be how
'democratic' the organisation was. For example, if its office bearers
were voted in by members, the organisation might be argued to be
democratic and hence be entitled to freedom of communication, as
genuinely representing the views of its members, whereas if the
organisation was not perceived to be democratic in nature, its claim to
be able to speak out about political matters might on one view be
diminished. However, due to the conclusion I reach on the suggested
distinction, I need not explore this peripheral issue here.
100 232 (emphasis added).
101 (1992) 177 CLR 1, 75.
102 Lange v Australian Broadcasting Corporation (1997) 189 CLR 520, 571. Subsequent to my development of this argument, I learned that the United States Supreme Court in First National Bank v Bellotti
(1978) 435 US 765 dismissed arguments that the worth of speech depended
on whether an individual or corporation was doing the talking, on the
basis that both could equally inform the public. The McConnell v Federal Election Commission
case (2003) 540 US 93 upheld limits on corporate spending, but the
continuing acceptance of this decision is a matter of doubt after Sorrell:
Richard Briffault 'WRTL II: The Sharpest Turn in Campaign Finance's
Long and Winding Road' (2008) 1 Albany Governmental Law Review 101.
103 Buckley v Valeo (1976) 424 US 1.
104 Chapter 7 is about Bans or Caps on Funding, Chapter 8 about Caps on Expenditure.
105 Buckley v Valeo (1976) 424 US 1.
Richard Briffault 'WRTL and Randall: The Roberts Court and the
Unsettling of Campaign Finance Law' (2007) 68 Ohio State Law Journal
807, 825; 'The Return of Spending Limits: Campaign Finance After Landell
v Sorrell' (2005) 32 Fordham Urban Law Journal 399; 'WRTL II: The
Sharpest Turn in Campaign Finance's Long and Winding Road' (2008) 1
Albany Government Law Review 101; Daniel Ortiz 'The Difference Two
Justices Make: FEC v Wisconsin Right to Life, Inc II and the
Destabilisation of Campaign Finance Regulation' (2008) 1 Albany
Government Law Review 141; Kurt Hohenstein 'Clio, Meet Buckley -
Buckley, Clio: Re-Introducing History to Unravel the Tangle of Campaign
Finance Reform' (2008) 1 Albany Government Law Review 63.
As Burger CJ put it, 'we do little but engage in word games unless we
recognise that people - candidates and contributors - spend money on
political activity because they wish to communicate ideas, and their
constitutional interest in doing so is precisely the same whether they
or someone else utters the words' (242).
If it be thought that relatively low donation limits might make a
candidacy more 'democratic', others disagree. Smith, for example,
claims many previous presidential elections in the United States have
shown that candidates often able to best raise campaign dollars in small
contributions often turned out to be disastrous candidates, citing
Barry Goldwater and George McGovern as examples: Bradley Smith 'Faulty
Assumptions and Undemocratic Consequences of Campaign Finance Reform'
(1995) 105 Yale Law Journal 1049, 1063.
110 As a result, I explore this argument in less detail than otherwise might be appropriate.
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