NeIl Katyal and Lawrence Lessig on the Case Against Super PACs

In this episode of The Stakes, host Brad Rourke talks with Kettering Senior Fellow Neal Katyal and Harvard Law Professor Lawrence Lessig on the eve of their First Circuit argument in Dinner Table Action v. Schneider.

They discuss their defense of a Maine law—passed by nearly 75 percent of voters—that caps contributions to super PACs at $5,000.

They argue that Citizens United v. FEC is among the most misunderstood Supreme Court decisions in American history: it never authorized unlimited super PAC contributions.

That came from SpeechNow.org v. FEC, a lower court ruling they say rests on a logical error, one that turned super PACs into cutouts for wealthy donors to buy influence—$86 million in spending in 2010, $6.9 billion now.

Katyal asks, “If Maine can’t act to stop this massive sea change of money into politics, creating the appearance and reality of corruption, who can and when?”

Lessig also lays out an argument aimed at the court’s conservative justices, arguing that the Framers were most concerned with institutional corruption and citing James Madison’s promise of a government “dependent on the people” and “not the rich more than the poor.”

Neal Katyal and Lawrence Lessig on the Case Against Super PACs

NEIL KATYAL: The idea that Maine can, for example, ban contributions—direct contributions—of $10,000 to a candidate because of the risk of corruption, but they can't ban a $10 million contribution to the candidate's super PAC? That just makes no sense. It's totally upside down.

HOST: Welcome to "The Stakes." I'm Brad Rourke with the Charles F. Kettering Foundation.

We're a nonprofit, nonpartisan operating foundation that focuses on advancing and defending inclusive democracy.

Today I'm talking to Kettering Senior Fellow Neil Katyal, a partner at Millbank and their Supreme Court practice head, along with legendary Harvard Law professor Lawrence Lessig.

Neil, Larry, thank you for being here.

LARRY LESSIG: Thanks for having us.

NEIL KATYAL: Thank you.

HOST: We're recording just before you two will stand before the First Circuit Court of Appeals to defend a Maine law that caps contributions to so-called "super PACs" at $5,000, a law Maine voters pass by roughly 3 to 1.

Let's start with the first question to Larry.

Larry, what is a super PAC?

LARRY LESSIG: Well, you know, a political action committee is just a group that gathers money and spends it for some election objective.

An independent political action committee is not allowed to coordinate with the candidate.

And so we've had independent political action committees since the beginning of time, but beginning in 2010, after the decision we're going to be challenging Speech Now, these independent political action committees were unlimited in the size of the contribution they could accept to fund their work.

So before, they were limited at just $5,000.

After, they have an unlimited amount that they can raise to spend, so long as they spend it independently of the candidate.

HOST: The case that you're arguing tomorrow is "Dinner Table Action v. Maine."

It comes out of the creation of super PACs, as you mentioned, and most people think, if I understand it correctly, that Citizens United created super PACs.

As I understand it, did not. Exactly.

Walk us through what actually created them, Neil.

NEIL KATYAL: So, thank you first for having me on with my amazing client, Larry Lessig, who's just a hero in protecting our democracy, and it's such a privilege to be able to speak on his behalf tomorrow in court.

And because I am speaking in court, you know, I do want to just restrict my comments today to the public record and the briefs we filed.

I'm not here to litigate. I'm just here to explain basically what our positions are.

And our position is Citizens United, that very controversial Supreme Court decision, 5 to 4, back in 2010, which said corporations have free speech rights.

Larry and I both think it's one of the more misunderstood decisions in our history because that decision, as I say, was limited really to that corporate question.

But the nation's second highest court, one of the Court of Appeals, the D.C. Circuit, in a case called Speech Now, read Citizens United for something it just doesn't say.

It read it to say you can give unlimited contributions to these super PACs, and that the government is powerless to stop that.

Larry came to me and said, you know, that he didn't think that's what Citizens United said.

Larry was like a dog with a bone, bugging me about this for, like, dinners, lunches, phone calls, emails, for years.

He said to me, "Look, just give me an afternoon so I can explain this to you."

And we had that time, and at the end of it, I was 100% convinced, and I was like, wow, we've all missed this.

Citizens United isn't the evil boogeyman when it comes to super PACs that people had been saying.

So, you know, basically the simple point is this: the D.C. Circuit in that Speech Now case said, well, Citizens United said that independent expenditure limits, which are limits on how much a super PAC can spend, those are generally unconstitutional because they cap speech.

And so it got rid of those with respect to corporate spending and the like.

But it didn't go any further and regulate the contribution side.

The money that a donor gives to a candidate-aligned super PAC, I mean, and so really there's just a logical error in the decision.

And it's one that's understandable because when Speech Now was written back in 2010, Citizens United had just been decided three months ago, and there was no record of super PAC contributions or anything like that.

It was about $86 million back then.

Now, Brad, it is $6.9 billion.

And this is all because of Speech Now.

Everyone who wants influence basically says, "I'm going to give the money to a super PAC instead of directly to a candidate," which has all sorts of limitations in both state and federal law, and they can buy influence that way.

And the people of Maine said, "Hey, we're not doing that anymore. That causes corruption. It causes the appearance of corruption."

And as you noted, in a referendum, the vote passed by 74.9% of Mainers, with more votes voting for it than anything in the state's 206-year history.

They wanted to put a stop to it.

HOST: Larry, you've spent years on this issue, well before the case existed.

What made you think that Maine was the right vehicle?

LARRY LESSIG: Well, you know, the problem is you've got to find a circuit where the question has not been addressed so far, where the question could actually be raised because there would be a law that would actually try to regulate super PACs.

So the only real way to get this as a law that could be defended is through an initiative.

I was at dinner with a really great Republican state senator from Maine, Rick Bennett, and Rick said, "Why don't we do it in Maine?"

Because Maine has a really simple ballot process, and it's a very purple state.

And I agreed with him that it would actually be better to win this in Maine, where you can't say this is just a lefty idea.

And 74.9% of Mainers agreed.

HOST: What would a win look like after your arguments tomorrow, Neil?

NEIL KATYAL: So we'd hope that the Court of Appeals says that this Maine law is permissible, that Maine can limit contributions to super PACs to $5,000.

That still funds a lot of speech.

And I do want to pick up on one thing that Larry said here, because I think it's really important.

This is not a political case.

Just as many Trump people hate super PACs as Democrats, indeed President Trump himself was against super PACs for a long time, saying they undermine our democracy.

And what you have with this money coming in is it tends to create more extremism in politics, more negative ads in politics.

We have brief after brief filed in the Court of Appeals by different friends of the court that are pointing that out.

People like Mark Cuban on one side, and the Campaign Legal Center and the Brennan Center on the other, all making that fundamental point, which is, "This amount of money in our politics is totally distorting our system."

And one thing we're pleased with from the trial court is, for the first time, the trial court looked at the record and said something very different than the eight courts of appeals who ruled right after Citizens United and found no risk of corruption.

What this court said is, "Yeah, you know, there may be a risk of corruption, but Maine is powerless to do anything about it because of the First Amendment."

And that just can't be right.

The idea that Maine can, for example, ban contributions—direct contributions—of $10,000 to a candidate because of the risk of corruption, but they can't ban a $10 million contribution to the candidate's super PAC?

That just makes no sense.

It's totally upside down.

Larry is, you know, one of our nation's top constitutional scholars, and he's developed, I think, an incredibly powerful argument aimed at Justice Thomas in particular, but also the other conservative justices on the court who used the original understanding.

Because he has painstakingly explained why this Maine law wouldn't be a violation of the First Amendment under the original understanding of the amendment.

HOST: Are we able to go into that argument a little bit?

I'm curious why, on what basis you all think that the Supreme Court might go your way eventually.

LARRY LESSIG: You know, the point is we've got six justices on the court who say that they are originalists, and it just so happens they've not yet applied their originalism in the context of the First Amendment.

Justice Thomas has been trying to get them to apply originalism in the context of the First Amendment.

And under his view, what you should do is ask the question, in 1791, how would the courts have ruled on the question you're pushing before them?

The framers of our constitution understood freedom of speech to be the sort of freedom that the people themselves could define through their representative bodies or through something like a referendum.

Now, that's a radically different First Amendment from the one we have right now, which is, I think, why the court has steered away from going in this direction.

But what we've been arguing is, look, you have this standard announced by the Supreme Court in 1976 in a case called Buckley v. Vallejo at the height of the Burger Court.

Buckley just declares a principle.

And the principle is you can only regulate if you're regulating corruption.

Well, one of the arguments we developed is, okay, if you're going to adopt corruption as the framework, we should at least be looking at the corruption our framers were most concerned about.

They were focused primarily on what we could think of as a kind of institutional corruption, the kind of influences that make the institutions of representative democracy fail.

And they would see, overwhelmingly, that a system that depends on a tiny number of citizens to fund campaigns is a system that corrupts the basic design of representative democracy.

Madison told us in Federalist 52 we would have a government, quote, "dependent on the people alone," and in Federalist 57 he said, "by the people," he meant, quote, "not the rich more than the poor."

Well, we have exactly the opposite of that.

We have a government dependent on the rich more than the poor.

So the point here is that if you're a consistent originalist, at the very least you should allow this form of corruption to be a kind that Congress and the states can pursue, and if that's true, then we clearly win.

HOST: If you're successful, in what ways would this return meaningful power to ordinary citizens?

LARRY LESSIG: Well, I mean, I think the biggest thing it would do is it would steer the politicians away from focusing exclusively on the super wealthy.

I mean, they would need to focus more on what ordinary people think.

Remove the super PACs.

And as Rick Bennett, one of the other interveners in this case, says, then candidates can focus once again on what their voters want, rather than what these outside interests come in and start filling the airways with issues that really only the outside interests care about.

HOST: Neil, what would a good day look like tomorrow?

NEIL KATYAL: A good day tomorrow would be if I have the time to explain what Larry explained to me on that afternoon where he finally convinced me.

Because Larry said, and what I hope to say tomorrow is, look, there are three relevant parties here.

There's the donor, the woman or man with the money, there's the candidate, and there is the PAC.

And the Citizens United decision says that coordination rules bar candidates from coordinating with the PAC.

So if there's no coordination, there's no corruption.

Great. We agree with that.

This case tomorrow is about donors and candidates where there is no equivalent bar on coordination.

And so the PAC is really just a cutout.

When they get a million-dollar check from a donor, they don't know if it's the product of any sort of corrupt bargain between the donor and the candidate.

It's totally unlike an independent expenditure where the super PAC has all sorts of incentives to comply with the law.

They monitor their own spending and the like.

And that's why Citizens United reached the decision it did in saying that by definition, it's impossible for an independent expenditure to be corrupting.

That's just not at all true of donors.

And I'd leave you with this: if Maine can't act to stop this massive sea change of money into politics, creating the appearance and reality of corruption, who can and when?

LARRY LESSIG: Yeah, the bigger question is whether the judges are going to recognize the significance of what they're deciding tomorrow.

It's very easy for a judge to think, look, I don't want to be overturned.

Eight circuits have gone this way.

It's really bold for me to go the other way.

But I hope they realize this is really the last shot we've got to get to a place where the Supreme Court will have to consider this question and have the opportunity to clarify what Neil called this most misunderstood opinion.

The real error here was not Citizens United.

It was Speech Now.

And because of that, we have lost the ability to believe our government cares about us.

Brennan Center just three weeks ago released an extraordinary study about public attitudes about corruption.

And in like seven different dimensions, more than 90% of Americans think that the system is corrupt.

How high does it have to be before we can recognize exactly how consequential this corrupt system for funding campaigns has become?

Because Americans are not idiots.

They look at a system where somebody spends hundreds of millions of dollars in a campaign and they think they know exactly what's going on.

And I don't think they're wrong.

And that reality is something we have to change.

HOST: On behalf of my fellow Americans, let me wish you the best of luck in your arguments tomorrow and great success.

Neil Katyal, Larry Lessig, thank you for being with us on The Stakes.

NEIL KATYAL: Thank you.

LARRY LESSIG: Thank you.

Transcript

This transcript discusses a legal challenge to a Maine law that caps contributions to super PACs at $5,000.

The core argument is that the Supreme Court decision in Speech Now, which allowed unlimited contributions to super PACs, was a misinterpretation of the Citizens United ruling and that states should be able to regulate such contributions to prevent corruption or the appearance of corruption.

Key Points

• Maine voters passed a law by a significant margin to cap contributions to super PACs at $5,000.

• The legal argument posits that the D.C. Circuit's decision in Speech Now incorrectly interpreted Citizens United, extending its ruling on independent expenditures to contribution limits for super PACs.

• Before Speech Now, super PAC contributions were limited to $5,000; after, they became unlimited, leading to a massive increase in money flowing into politics.

• The case aims to argue that the framers of the Constitution were concerned about institutional corruption and the failure of representative democracy due to reliance on a small number of wealthy donors.

• Proponents believe that allowing states to cap super PAC contributions would steer politicians to focus more on ordinary citizens rather than wealthy donors and outside interests.

Takeaways

• The current interpretation of campaign finance law, stemming from Speech Now, allows unlimited contributions to super PACs, which is argued to be a misapplication of Supreme Court precedent.

• There is a significant public perception that the current campaign finance system is corrupt, with over 90% of Americans believing so across multiple dimensions.

• The case represents an effort to restore the ability of states to regulate campaign finance and address the distorting influence of large sums of money in politics.

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