424 U.S. 1 (1976), argued 16 Nov. 1975, decided 30 Jan. 1976 by varying votes on specific questions; opinion was unsigned, Burger, Blackmun, Rehnquist, White, and Marshall all dissented in part, Stevens not participating. Rarely has the Court recast congressional legislation in so many substantial particulars as it did in this case in ruling on the several provisions of the Federal Election Campaign Act (FECA) of 1971, as amended in 1974, and on relevant provisions of the Revenue Act of 1971, as amended in 1974. As the per curiam opinion indicates, different majorities of the eight participating justices decided the various challenges raised by candidates and others seeking to prevent the new campaign legislation from taking effect in the 1976 election.
The Court invalidated a provision of the law that permitted Congress to choose a majority of voting members of the Federal Election Commission (FEC) created to administer and enforce the FECA. Holding that this arrangement violated the Appointments Clause that empowered only the president to nominate such officers, the Court effectively told Congress to rewrite this portion of the FECA (which it promptly did) in order to maintain the FEC's considerable powers. The powers themselves were upheld, as were the FECA's detailed disclosure and reporting requirements.
More complicated were the Court's holdings on the First Amendment challenges to FECA restrictions of contributions and expenditures in federal elections. It upheld the several contribution limits (for example, the thousand-dollar maximum that each individual can contribute to a congressional or presidential candidate in each election campaign) on the ground that they are appropriate legislative weapons against improper influence stemming from the dependence of candidates on large contributions. On the other hand, expenditure limits were invalidated as substantial and direct restrictions on political expression in violation of the First Amendment. The Court thus erased Congress's attempt to fix not only overall limits on a candidate's expenditures, but also the limits on how much others could spend relative to a candidate (apart from direct contributions to the candidate) and the limits on how much candidates could spend from their own or their family's funds.
Invalidation of the last of these limits illustrates the nature of the Court's distinction between contributions and expenditures. Using millions of one's own dollars in a campaign, though effectively substituting for large contributions from others, does not corrupt or even seem to corrupt the candidate. Nevertheless, unwealthy opponents might well regard the Court-granted freedom of a rich candidate to spend millions from family wealth as an especially unfair advantage because they could not now, under the law, so readily compensate by finding a few very large contributors. A larger and more significant legal loophole was created by the Court's invalidation of the provision for limiting how much individuals and groups could spend to help candidates. These expenditures need only be “independent” of the candidate and the candidate's campaign committee in order to be unlimited as contributions to candidates are not.
In contrast to its mixed response to Congress's regulations of private campaign finance, the Court fully upheld the new provisions for public funding of presidential campaigns. These provisions include income tax check-off funds for parties to conduct presidential nominating conventions, for presidential primary candidates (on a matching basis), and for presidential general election candidates (on a virtually full-funding basis). Such funding, the Court held, is within Congress's power to spend under the General Welfare Clause, and it does not violate either the First Amendment or the Fifth Amendment's Due Process Clause. The latter issue arose because the arrangement for distributing funds was more likely to help major parties and their candidates than minor parties, new parties, or independents. But the Court interpreted the law as allowing sufficient opportunity for minor parties and their candidates to qualify for public funds, even though at lower levels.